Exhibit 10.3(b)

 

Execution Copy

 

 

 

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VARIETAL DISTRIBUTION HOLDINGS, LLC

 

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LIMITED LIABILITY COMPANY AGREEMENT

 

Dated as of June 29, 2007

 

THE COMPANY INTERESTS REPRESENTED BY THIS LIMITED LIABILITY COMPANY AGREEMENT
HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED OR UNDER ANY OTHER APPLICABLE SECURITIES LAWS. SUCH INTERESTS MAY NOT BE
SOLD, ASSIGNED, PLEDGED OR OTHERWISE DISPOSED OF AT ANY TIME WITHOUT EFFECTIVE
REGISTRATION UNDER SUCH ACT AND LAWS OR EXEMPTION THEREFROM, AND COMPLIANCE WITH
THE OTHER SUBSTANTIAL RESTRICTIONS ON TRANSFERABILITY SET FORTH HEREIN.

 

THE COMPANY INTERESTS REPRESENTED BY THIS LIMITED LIABILITY COMPANY AGREEMENT
ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER SPECIFIED IN THE
SECURITYHOLDERS AGREEMENT, DATED ON OR ABOUT THE DATE SET FORTH ABOVE, AS
AMENDED OR MODIFIED FROM TIME TO TIME, AMONG THE ISSUER (THE “COMPANY”) AND
CERTAIN INVESTORS, AND THE COMPANY RESERVES THE RIGHT TO REFUSE THE TRANSFER OF
SUCH INTERESTS UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED WITH RESPECT TO ANY
TRANSFER. A COPY OF SUCH CONDITIONS SHALL BE FURNISHED BY THE COMPANY TO THE
HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT CHARGE.

 

 

 

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TABLE OF CONTENTS

 

 

 

 

 

Page

 

 

 

 

 

ARTICLE I CERTAIN DEFINITIONS

 

1

 

 

 

 

 

ARTICLE II ORGANIZATIONAL MATTERS

 

8

Section 2.1

 

Formation

 

8

Section 2.2

 

The Certificate

 

8

Section 2.3

 

Name

 

8

Section 2.4

 

Purpose and Powers

 

8

Section 2.5

 

Merger

 

8

Section 2.6

 

Foreign Qualification

 

9

Section 2.7

 

Principal Office; Registered Office

 

9

Section 2.8

 

Term

 

9

Section 2.9

 

No State-Law Partnership

 

9

Section 2.10

 

No UBTI; Effectively Connected Income or Commercial Activity

 

9

 

 

 

ARTICLE III UNITS; CAPITAL ACCOUNTS

 

10

Section 3.1

 

Unitholders

 

10

Section 3.2

 

Unitholder Meetings

 

11

Section 3.3

 

Action of Unitholders by Written Consent or Telephone Conference

 

13

Section 3.4

 

Issuance of Additional Units and Interests

 

14

Section 3.5

 

Incentive Units

 

14

Section 3.6

 

Capital Accounts

 

16

Section 3.7

 

Negative Capital Accounts

 

17

Section 3.8

 

No Withdrawal

 

17

Section 3.9

 

Loans From Unitholders

 

17

 

 

 

 

 

ARTICLE IV DISTRIBUTIONS; REDEMPTIONS AND ALLOCATIONS

 

17

Section 4.1

 

Distributions

 

17

Section 4.2

 

Allocations

 

20

Section 4.3

 

Special Allocations

 

20

Section 4.4

 

Tax Allocations

 

21

Section 4.5

 

Indemnification and Reimbursement for Payments on Behalf of a Unitholder

 

22

Section 4.6

 

Transfer of Capital Accounts

 

22

Section 4.7

 

Certain Repurchases and Redemptions

 

22

 

 

 

 

 

ARTICLE V BOARD OF MANAGERS; OFFICERS

 

23

Section 5.1

 

Management by the Board of Managers

 

23

Section 5.2

 

Composition and Election of the Board of Managers

 

24

Section 5.3

 

Board Meetings and Actions by Written Consent

 

25

Section 5.4

 

Committees; Delegation of Authority and Duties

 

27

 

i

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Section 5.5

 

Officers

 

27

 

 

 

 

 

ARTICLE VI GENERAL RIGHTS AND OBLIGATIONS OF UNITHOLDERS

 

28

Section 6.1

 

Limitation of Liability

 

28

Section 6.2

 

Lack of Authority

 

29

Section 6.3

 

No Right of Partition

 

29

Section 6.4

 

Unitholders Right to Act

 

29

Section 6.5

 

Investment Opportunities; Conflicts of Interest

 

29

Section 6.6

 

Transactions Between the Company and the Unitholders

 

30

 

 

 

 

 

ARTICLE VII EXCULPATION AND INDEMNIFICATION

 

30

Section 7.1

 

Exculpation

 

30

Section 7.2

 

Right to Indemnification

 

31

Section 7.3

 

Advance Payment

 

31

Section 7.4

 

Indemnification of Employees and Agents

 

31

Section 7.5

 

Appearance as a Witness

 

32

Section 7.6

 

Nonexclusivity of Rights

 

32

Section 7.7

 

Insurance

 

32

Section 7.8

 

Savings Clause

 

32

 

 

 

 

 

ARTICLE VIII BOOKS, RECORDS, ACCOUNTING AND REPORTS

 

32

Section 8.1

 

Records and Accounting

 

32

Section 8.2

 

Fiscal Year

 

33

Section 8.3

 

Tax Information

 

33

Section 8.4

 

Transmission of Communications

 

33

Section 8.5

 

Company Funds

 

33

 

 

 

 

 

ARTICLE IX TAXES

 

 

 

33

Section 9.1

 

Tax Returns

 

33

Section 9.2

 

Tax Elections

 

33

Section 9.3

 

Tax Matters Partner

 

33

Section 9.4

 

Code Section 83 Safe Harbor Election

 

34

 

 

 

 

 

ARTICLE X TRANSFER OF COMPANY INTERESTS

 

34

Section 10.1

 

Transfers by Unitholders

 

34

Section 10.2

 

Effect of Assignment

 

35

Section 10.3

 

Restriction on Transfer

 

35

Section 10.4

 

Transfer Fees and Expenses

 

36

Section 10.5

 

Void Transfers

 

36

 

 

 

 

 

ARTICLE XI ADMISSION OF UNITHOLDERS

 

36

 

 

 

 

 

Section 11.1

 

Substituted Unitholders

 

36

Section 11.2

 

Additional Unitholders

 

36

Section 11.3

 

Derivative Securities

 

36

 

 

 

 

 

ARTICLE XII WITHDRAWAL AND RESIGNATION OF UNITHOLDERS

 

37

Section 12.1

 

Withdrawal and Resignation of Unitholders

 

37

 

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Section 12.2

 

Withdrawal of a Unitholder

 

37

 

 

 

 

 

ARTICLE XIII DISSOLUTION AND LIQUIDATION

 

37

Section 13.1

 

Dissolution

 

37

Section 13.2

 

Liquidation and Termination

 

37

Section 13.3

 

Cancellation of Certificate

 

38

Section 13.4

 

Reasonable Time for Winding Up

 

38

Section 13.5

 

Return of Capital

 

38

Section 13.6

 

Reserves Against Distributions

 

38

 

 

 

 

 

ARTICLE XIV VALUATION

 

39

Section 14.1

 

Fair Market Value

 

39

 

 

 

 

 

ARTICLE XV GENERAL PROVISIONS

 

39

Section 15.1

 

Power of Attorney

 

39

Section 15.2

 

Amendments

 

40

Section 15.3

 

Title to the Company’s Assets

 

40

Section 15.4

 

Remedies

 

40

Section 15.5

 

Successors and Assigns

 

41

Section 15.6

 

Severability

 

41

Section 15.7

 

Change in Business Form

 

41

Section 15.8

 

Opt-in to Article 8 of the Uniform Commercial Code

 

41

Section 15.9

 

Notice to Unitholder of Provisions

 

42

Section 15.10

 

Counterparts

 

42

Section 15.11

 

Consent to Jurisdiction

 

42

Section 15.12

 

Descriptive Headings; Interpretation

 

42

Section 15.13

 

Applicable Law

 

42

Section 15.14

 

Mutual Waiver of Jury Trial

 

43

Section 15.15

 

Addresses and Notices

 

43

Section 15.16

 

Creditors

 

44

Section 15.17

 

Waiver

 

44

Section 15.18

 

Further Action

 

44

Section 15.19

 

Entire Agreement

 

44

Section 15.20

 

Electronic Delivery

 

44

Section 15.21

 

Survival

 

45

 

iii

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VARIETAL DISTRIBUTION HOLDINGS, LLC
LIMITED LIABILITY COMPANY AGREEMENT

 

THIS LIMITED LIABILITY COMPANY AGREEMENT, dated as of June 29, 2007, is entered
into by and among Varietal Distribution Holdings, LLC (the “Company”) and the
Unitholders.

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally bound, hereby
agree as follows:

 

ARTICLE I

 

CERTAIN DEFINITIONS

 

Capitalized terms used but not otherwise defined herein shall have the following
meanings:

 

“Additional MDCP Manager” shall have the meaning set forth in Section 5.2(a).

 

“Additional Unitholder” means a Person admitted to the Company as a Unitholder
pursuant to Section 11.2.

 

“Additional Securities” shall have the meaning set forth in Section 3.4.

 

“Adjusted Capital Account Deficit” means with respect to any Capital Account as
of the end of any Taxable Year, the amount by which the balance in such Capital
Account is less than zero. For this purpose, such Person’s Capital Account
balance shall be

 

(I)            REDUCED FOR ANY ITEMS DESCRIBED IN TREASURY REGULATION SECTION
1.704-1(B)(2)(II)(D)(4), (5), AND (6), AND

 

(II)           INCREASED FOR ANY AMOUNT SUCH PERSON IS OBLIGATED TO CONTRIBUTE
OR IS TREATED AS BEING OBLIGATED TO CONTRIBUTE TO THE COMPANY PURSUANT TO
TREASURY REGULATION SECTION 1.704-1(B)(2)(II)(C) (RELATING TO PARTNER
LIABILITIES TO A PARTNERSHIP) OR 1.704-2(G)(1) AND 1.704-2(I) (RELATING TO
MINIMUM GAIN).

 

“Affiliate” of any particular Person means any other Person controlling,
controlled by, or under common control with such particular Person, where
“control” means the possession, directly or indirectly, of the power to direct
the management and policies of a Person whether through the ownership of voting
securities, by contract, or otherwise.

 

“Agreement” means this Limited Liability Company Agreement, as amended or
modified from time to time in accordance with the terms hereof.

 

“Assumed Tax Rate” shall have the meaning set forth in Section 4.1(b).

 

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“Board” means the Board of Managers established pursuant to Sections 5.1 and
5.2.

 

“Book Value” means, with respect to any property of the Company, the Company’s
adjusted basis for federal income tax purposes, adjusted from time to time to
reflect the adjustments required or permitted by Treasury Regulation Section
1.704-1(b)(2)(iv)(d)-(g).

 

“Capital Account” means the capital account maintained for a Unitholder pursuant
to Section 3.6.

 

“Capital Contributions” means the Fair Market Value of property that a
Unitholder contributes or is deemed to have contributed to the Company with
respect to any Unit pursuant to Sections 3.1 or 3.4.

 

“Certificate” means the Company’s Certificate of Formation as filed with the
Secretary of State of Delaware.

 

“Class A Common Unit” means a Unit representing a fractional part of the
interest of a Unitholder in Profits, Losses and Distributions and having the
rights and obligations specified with respect to the Class A Common Units in
this Agreement.

 

“Class A Preferred Unit” means a Unit representing a fractional part of the
interest of a Unitholder in Profits, Losses and Distributions and having the
rights and obligations specified with respect to the Class A Preferred Units in
this Agreement.

 

“Class A Preferred Unpaid Yield” of any Class A Preferred Unit means, as of any
date, an amount equal to the excess, if any, of (a) the aggregate Class A
Preferred Yield accrued on such Class A Preferred Unit for all periods prior to
such date (including partial periods), over (b) the aggregate amount of prior
Distributions made by the Company that constitute payment of Class A Preferred
Yield on such Class A Preferred Unit.

 

“Class A Preferred Unreturned Capital” of any Class A Preferred Unit means, as
of any date, the aggregate Capital Contributions made or deemed to be made in
exchange for such Class A Preferred Unit reduced by all Distributions made by
the Company that constitute a return of Class A Preferred Unreturned Capital
under Section 4.1(a)(ii).

 

“Class A Preferred Yield” means, with respect to each Class A Preferred Unit,
the amount accruing on such Class A Preferred Unit on a daily basis, at the rate
of 8% per annum, compounded on the last day of each calendar quarter, on (a) the
Class A Preferred Unreturned Capital of such Class A Preferred Unit plus (b) the
Class A Preferred Unpaid Yield thereon for all prior quarterly periods. In
calculating the amount of any Distribution to be made during a period, the
portion of the Class A Preferred Yield with respect to such Class A Preferred
Unit for the portion of the quarterly period elapsing before such Distribution
is made shall be taken into account in determining the amount of such
Distribution.

 

“Class B Common Unit” means a Unit representing a fractional part of the
interest of a Unitholder in Profits, Losses and Distributions and having the
rights and obligations specified with respect to the Class B Common Units in
this Agreement.

 

2

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“Code” means the United States Internal Revenue Code of 1986, as amended. Such
term shall be deemed to include any future amendments to the Code and any
corresponding provisions of succeeding Code provisions.

 

“Common Unitholder” means a holder of Common Units.

 

“Common Units” means Class A Common Units and Class B Common Units.

 

“Company” means Varietal Distribution Holdings, LLC, a Delaware limited
liability company.

 

“Company Income Amount” shall have the meaning set forth in Section 4.1(b).

 

“Conversion” shall have the meaning set forth in Section 15.7.

 

“Delaware Act” means the Delaware Limited Liability Company Act, 6 Del. L. §
18-101, et seq., as it may be amended from time to time, and any successor to
the Delaware Act.

 

“Distribution” means each distribution made by the Company to a Unitholder,
whether in cash, property or securities of the Company and whether by
liquidating distribution or otherwise; provided that any recapitalization,
exchange, conversion, repurchase or redemption of securities of the Company, and
any subdivision (by Unit split or otherwise) or any combination (by reverse Unit
split or otherwise) of any outstanding Units shall not be deemed a Distribution.

 

“Executive Manager” shall have the meaning set forth in Section 5.2(a).

 

“Fair Market Value” means, with respect to any asset or equity interest, its
fair market value determined according to Article XIV.

 

“Fiscal Year” means the Company’s annual accounting period established pursuant
to Section 8.2.

 

“Governmental Entity” means the United States of America or any other nation,
any state or other political subdivision thereof, or any entity exercising
executive, legislative, judicial, regulatory or administrative functions of
government or any agency or department or subdivision of any governmental
authority, including the United States federal government or any state or local
government.

 

“Grossed-Up Amount” has the meaning set forth in Section 4.1(a).

 

“Incentive Unit Grant Agreement” has the meaning set forth in Section 3.5.

 

“Investor Managers” shall have the meaning set forth in Section 5.2(a).

 

“Liquidation Value” shall mean, with respect to a Unit, the amount of cash that
would be distributed to a Unitholder in respect of such Unit if the Company sold
all of its assets for an amount of cash equal to their Fair Market Value and
distributed the proceeds pursuant to Sections 4.1 and 13.2.

 

3

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“Losses” means items of loss and deduction of the Company determined according
to Section 3.6(b).

 

“Management Services Agreement” means that certain Management Services
Agreement, dated on or about the date hereof, by and between Madison Dearborn
Partners V-B, L.P., a Delaware limited partnership and an Affiliate of MDP, and
CDRV Investors, Inc., a Delaware corporation (to be renamed VWR Funding, Inc.),
which is a Subsidiary of the Company.

 

“Management Unit Purchase Agreement” means any Management Unit Purchase
Agreement entered into from time to time among the Company, any Subsidiary of
the Company and/or an employee of the Company or its Subsidiaries, as the same
may be amended from time to time pursuant to the terms thereof (including,
without limitation, any other agreements designated as Management Unit Purchase
Agreements for the sale of equity securities between the Company and any
employees or other service providers of the Company or its Subsidiaries and any
Incentive Unit Agreements, all as approved by the Board).

 

“Management Unitholder” means each Executive (as defined in the Securityholders
Agreement).

 

“Manager” means any person designated to serve as a member of the Board pursuant
to Section 5.2 of this Agreement, but does not include any person who has ceased
to be a member of the Board.

 

“MDCP-A” means Madison Dearborn Capital Partners V-A, L.P., a Delaware limited
partnership.

 

“MDCP-A Manager” shall have the meaning set forth in Section 5.2(a).

 

“MDCP-C” means Madison Dearborn Capital Partners V-C, L.P., a Delaware limited
partnership.

 

“MDCP-C Manager” shall have the meaning set forth in Section 5.2(a).

 

“MDCP Co-Invest 1” means MDCP Co-Investors (Varietal), L.P., a Delaware limited
partnership.

 

“MDCP-Co-Invest 1 Manager” shall have the meaning set forth in Section 5.2(a).

 

“MDCP Co-Invest 2” means MDCP Co-Investors (Varietal-2), L.P., a Delaware
limited partnership.

 

“MDCP Executive” means Madison Dearborn Capital Partners V Executive-A, L.P., a
Delaware limited partnership.

 

4

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“MDP” means MDCP-A, MDCP-C, MDCP Executive, MDCP Co-Invest 1 and MDCP Co-Invest
2.

 

“MDP LLC” means Madison Dearborn Partners, LLC, a Delaware limited liability
company.

 

“MDP Purchase Agreement” means that certain Unit Purchase Agreement, dated as of
the date hereof, by and among MDP, MDCP Co-Investors (Varietal), L.P. and the
Company, as amended from time to time in accordance with its terms.

 

“Minimum Gain” means the partnership minimum gain determined pursuant to
Treasury Regulation Section 1.704-2(d).

 

“Notice” shall have the meaning set forth in Section 9.4.

 

“Officers” means each person designated as an officer of the Company to whom
authority and duties have been delegated pursuant to Section 5.5, subject to any
resolution of the Board appointing such person as an officer or relating to such
appointment.

 

“Other Business” shall have the meaning set forth in Section 6.5(c).

 

“Other Unitholder” means each Unitholder other than a Management Unitholder;
provided that the Company shall be entitled to designate or, upon admission of a
Substituted Unitholder or Additional Unitholder, refuse to designate a
Unitholder as an “Other Unitholder.”

 

“Participating Class B Common Unit” means, with respect to any Distribution
pursuant to Section 4.1(a)(iii), a Class B Common Unit that has a Participation
Threshold that is less than the amount determined by dividing (a) the sum of (i)
the amount of such Distribution pursuant to Section 4.1(a)(iii) and (ii) the sum
of the Participation Thresholds of all outstanding Class B Common Units
(including the Participating Class B Common Unit) that have an equal or lesser
Participation Threshold to such Class B Common Unit by (b) the sum of (i) the
number of outstanding Class A Common Units and (ii) the number of outstanding
Class B Common Units that have an equal or lesser Participation Threshold to
such Class B Common Unit.

 

“Participating Common Unit” means, with respect to any Distribution pursuant to
Section 4.1(a)(iii), a Class A Common Unit or a Participating Class B Common
Unit.

 

“Participating Threshold” means, with respect to each outstanding Class B Common
Unit, an amount determined in accordance with Section 3.5.

 

“Person” means an individual, a partnership, a corporation, a limited liability
company, an association, a joint stock company, a trust, a joint venture, an
unincorporated organization, any other business entity, or a Governmental
Entity.

 

“Proceeding” has the meaning set forth in Section 7.2.

 

“Profits” means items of income and gain of the Company determined according to
Section 3.6(b).

 

5

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“Regulatory Allocations” has the meaning set forth in Section 4.3(e).

 

“Related Persons” shall have the meaning set forth in Section 6.5(c).

 

“Required Interest” means, as of a given time, a majority of the Class A Common
Units outstanding at such time.

 

“Reserve Amount” shall have the meaning set forth in Section 4.1(a).

 

“Securities Act” means the Securities Act of 1933, as amended, and applicable
rules and regulations thereunder, and any successor to such statute, rules, or
regulations.

 

“Securities Exchange Act” means the Securities Exchange Act of 1934, as amended,
and applicable rules and regulations thereunder, and any successor to such
statute, rules, or regulations.

 

“Securityholders Agreement” means the Securityholders Agreement, dated as of the
date hereof, by and among the Company, MDP and the other Persons party thereto
from time to time, as the same may be amended from time to time pursuant to the
terms thereof.

 

“Subsidiary” means, with respect to any Person, any corporation, limited
liability company, partnership, association, or business entity of which (i) if
a corporation, a majority of the total voting power of shares of stock entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, managers, or trustees thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries
of that Person or a combination thereof, or (ii) if a limited liability company,
partnership, association, or other business entity (other than a corporation), a
majority of  partnership or other similar ownership interest thereof is at the
time owned or controlled, directly or indirectly, by that Person or one or more
Subsidiaries of that Person or a combination thereof. For purposes hereof, a
Person or Persons shall be deemed to have a majority ownership interest in a
limited liability company, partnership, association, or other business entity
(other than a corporation) if such Person or Persons shall be allocated a
majority of limited liability company, partnership, association, or other
business entity gains or losses or shall be or control any managing director or
general partner of such limited liability company, partnership, association, or
other business entity. For purposes hereof, references to a “Subsidiary” of any
Person shall be given effect only at such times that such Person has one or more
Subsidiaries, and, unless otherwise indicated, the term “Subsidiary” refers to a
Subsidiary of the Company.

 

“Substituted Unitholder” means a Person that is admitted as a Unitholder to the
Company pursuant to Section 11.1.

 

“Tax” or “Taxes” means any federal, state, local, or foreign income, gross
receipts, franchise, estimated, alternative minimum, add-on minimum, sales, use,
transfer, registration, value added, excise, natural resources, severance,
stamp, occupation, premium, windfall profit, environmental, customs, duties,
real property, personal property, capital stock, social security, unemployment,
disability, payroll, license, employee, or other withholding, or other tax, of
any kind whatsoever, including any interest, penalties, or additions to tax or
additional amounts in respect of the foregoing.

 

6

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“Tax Distribution” has the meaning set forth in Section 4.1(b).

 

“Tax Matters Partner” has the meaning set forth in Section 9.3.

 

“Taxable Year” means the Company’s Fiscal Year unless the Board determines
otherwise in compliance with applicable laws.

 

“Transaction Documents” means this Agreement, the Securityholders Agreement and
all other agreements, instruments, certificates, and other documents to be
entered into or delivered by any Unitholder in connection with the transactions
contemplated to occur pursuant to this Agreement, the Securityholders Agreement
and any side agreements related to the foregoing.

 

“Transfer” means any sale, transfer, assignment, pledge, mortgage, exchange,
hypothecation, grant of a security interest or other direct or indirect
disposition or encumbrance of an interest (including, without limitation, by
operation of law) or the acts thereof, but explicitly excluding conversions or
exchanges of one class of Unit to or for another class of Unit. The terms
“Transferee,” “Transferred,” and other forms of the word “Transfer” shall have
correlative meanings.

 

“Treasury Regulations” means the income tax regulations promulgated under the
Code and effective as of the date hereof. Such term shall be deemed to include
any future amendments to such regulations and any corresponding provisions of
succeeding regulations.

 

“Unit” means an interest of a Unitholder in Profits, Losses and Distributions
representing a fractional part of the interests of all Unitholders in Profits,
Losses and Distributions and shall include Class A Preferred Units and Common
Units; provided that any class or group of Units issued shall have the relative
rights, powers, and duties set forth in this Agreement and the interest in
Profits, Losses and Distributions represented by such class or group of Units
shall be determined in accordance with such relative rights, powers, and duties
set forth in this Agreement.

 

“Unvested Common Units” means, as of any given time, any Common Units that are
subject to vesting or a similar forfeiture provision pursuant to any Management
Unit Purchase Agreement and which have not yet vested or are still subject to a
similar forfeiture provision in accordance with the terms of such Management
Unit Purchase Agreement.

 

“Unit Ownership Ledger” meaning set forth in Section 3.1(b).

 

“Unitholder” means any owner of one or more Units as reflected on the Company’s 
books and records, and any person admitted to the Company as an Additional
Unitholder or Substituted Unitholder; but only for so long as such person is
shown on the Company’s books and records as the owner of one or more Units. The
Unitholders shall constitute the “members” (as that term is defined in the
Delaware Act) of the Company.

 

“Vested Common Units” means all Common Units other than Unvested Common Units.

 

7

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ARTICLE II

 

ORGANIZATIONAL MATTERS

 

Section 2.1            Formation. The Company has been organized as a Delaware
limited liability company by the filing with the Secretary of State of the State
of Delaware of the Certificate under and pursuant to the Delaware Act and shall
be continued in accordance with this Agreement. The rights and liabilities of
the Unitholders shall be determined pursuant to the Delaware Act, this Agreement
and the Securityholders Agreement. To the extent that the rights or obligations
of any Unitholder are different by reason of any provision of this Agreement or
the Securityholders Agreement than they would be in the absence of such
provision, this Agreement and the Securityholders Agreement, to the extent not
prohibited by the Delaware Act, shall control over the Delaware Act, and the
provisions of the Securityholders Agreement shall control over this Agreement.
This Agreement and the Securityholders Agreement together shall constitute the
“limited liability agreement” for purposes of the Delaware Act.

 

Section 2.2            The Certificate. The Certificate was filed with the
Secretary of State of the State of Delaware on April 13, 2007. The Unitholders
hereby agree to execute, file and record all such other certificates and
documents, including amendments to the Certificate, and to do such other acts as
may be appropriate to comply with all requirements for the formation,
continuation and operation of a limited liability company, the ownership of
property, and the conduct of business under the laws of the State of Delaware
and any other jurisdiction in which the Company may own property or conduct
business.

 

Section 2.3            Name. The name of the Company shall be Varietal
Distribution Holdings, LLC. The Board may change the name of the Company at any
time and from time to time. Notification of any such change shall be given to
all Unitholders. The Company’s business may be conducted under its name and/or
any other name or names deemed advisable by the Board.

 

Section 2.4            Purpose and Powers. The purpose and business of the
Company shall be to engage in any lawful act or activity which may be conducted
by a limited liability company formed pursuant to the Delaware Act and engaging
in all activities necessary or incidental to the foregoing. Notwithstanding
anything herein to the contrary, nothing set forth herein shall be construed as
authorizing the Company to possess any purpose or power, or to do any act or
thing, forbidden by law to a limited liability company organized under the laws
of the State of Delaware. The Company shall have any and all powers necessary or
desirable to carry out the purposes and business of the Company, to the extent
that the same may be lawfully exercised by limited liability companies under the
Delaware Act.

 

Section 2.5            Merger. Subject to the provisions of this Agreement, the
Company may, with the approval of the Board and MDP and without the need for any
further act, vote or approval of any Unitholder, merge with, or consolidate
into, another limited liability company (organized under the laws of Delaware or
any other state), a corporation (organized under the laws of Delaware or any
other state) or other business entity (as defined in Section 18-209(a) of the
Delaware Act), regardless of whether the Company or such other entity is the
survivor. If a merger is used as a means of effecting the intent of Section 15.7
of this Agreement, then the provisions of that Section shall apply to such
transaction.

 

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Section 2.6            Foreign Qualification. Prior to the Company’s conducting
business in any jurisdiction other than Delaware, the Company shall comply, to
the extent procedures are available and those matters are reasonably within the
control of the Company, with all requirements necessary to qualify the Company
as a foreign limited liability company in that jurisdiction. At the request of
the Board or any Officer, each Unitholder shall execute, acknowledge, swear to
and deliver all certificates and other instruments conforming with this
Agreement that are necessary or appropriate to qualify, continue and terminate
the Company as a foreign limited liability company in all such jurisdictions in
which the Company may conduct business.

 

Section 2.7            Principal Office; Registered Office. The principal office
of the Company shall be located at such place as the Board may from time to time
designate, and all business and activities of the Company shall be deemed to
have occurred at its principal office. The Company may maintain offices at such
other place or places as the Board deems advisable. Notification of any such
change shall be given to all Unitholders. The registered office of the Company
required by the Delaware Act to be maintained in the State of Delaware shall be
the office of the initial registered agent named in the Certificate or such
other office (which need not be a place of business of the Company) as the Board
may designate from time to time in the manner provided by law. The registered
agent of the Company in the State of Delaware shall be the initial registered
agent named in the Certificate or such other Person or Persons as the Board may
designate from time to time in the manner provided by law.

 

Section 2.8            Term. The term of the Company commenced upon the filing
of the Certificate in accordance with the Delaware Act and shall continue in
existence until termination and dissolution thereof in accordance with the
provisions of Article XIII.

 

Section 2.9            No State-Law Partnership. The Unitholders intend that the
Company not be a partnership (including, without limitation, a limited
partnership) or joint venture, and that no Unitholder be a partner or joint
venturer of any other Unitholder by virtue of this Agreement (except for tax
purposes as set forth in the next succeeding sentence of this Section 2.9), and
neither this Agreement nor any other document entered into by the Company or any
Unitholder relating to the subject matter hereof shall be construed to suggest
otherwise. The Unitholders intend that the Company shall be treated as a
partnership for federal and, if applicable, state or local income tax purposes,
and that each Unitholder and the Company shall file all tax returns and shall
otherwise take all tax and financial reporting positions in a manner consistent
with such treatment.

 

Section 2.10         No UBTI; Effectively Connected Income or Commercial
Activity. The Company shall not engage in any transaction which would cause (or
create any significant risk of causing) the Unitholders or any of their direct
or indirect limited partners which are exempt from income taxation under Section
501(a) of the Code to recognize unrelated business taxable income as defined in
Section 512 and Section 514 of the Code. The Company shall not engage in, or
directly (or indirectly, through one or more Persons treated as flow-through
entities for U.S. federal income tax purposes) invest in any Person that is
treated as a flow-through entity for U.S. federal income tax purposes that
engages in, (a) any “commercial activity” as defined in Section 892(a)(2)(i) of
the Code or any activity that would create a significant risk of causing the
Company to be treated as engaged in a “commercial activity” or (b) transactions
which will cause

 

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(or create any significant risk of causing) the Company to incur income that is
effectively connected with a “trade or business within the United States” as
defined in Section 864(b) of the Code.

 

ARTICLE III

 

UNITS; CAPITAL ACCOUNTS

 

Section 3.1            Unitholders.

 

(a)           Unitholders in General. Each Unitholder’s interest in the Company,
including such Unitholder’s interest in Profits, Losses and Distributions of the
Company and the right to vote on certain matters as provided in this Agreement,
shall be represented by the Units owned by such Unitholder. The ownership of
Units shall entitle each Unitholder to allocations of Profits and Losses and
other items and distributions of cash and other property as set forth in Article
IV hereof. A Substituted Unitholder that acquires Units from another Unitholder
in an acquisition permitted by this Agreement shall be deemed to have made the
Capital Contributions in respect of such Units that the predecessor Unitholder
made or was deemed to have made. Any reference in this Agreement to a Capital
Contribution of, or Distribution to, a Substituted Unitholder shall include any
Capital Contributions or Distributions previously made by or to the former
Unitholder on account of the interest of such former Unitholder transferred to
such Substituted Unitholder. The Board may if it so determines issue
certificates to the Unitholders representing the Units held by each Unitholder.

 

(b)           Unit Ownership Ledger. The Company shall create and maintain a
ledger (the “Unit Ownership Ledger”) setting forth the name of each Unitholder,
the number of each class of Units held by each such Unitholder, and the amount
of the Capital Contribution made for each class of Units. Each Person acquiring
Units on the date hereof pursuant to a written agreement between the Company and
such Person shall be admitted to the Company as a Unitholder and the Capital
Contribution made in respect of Class A Common Units acquired on the date here
shall be $1.00 per unit and the Capital Contribution made in respect of Class A
Preferred Units acquired on the date hereof shall be $1,000.00 per unit. Upon
any change in the number or ownership of outstanding Units (whether upon an
issuance of Units, a transfer of Units, a cancellation of Units or otherwise),
the Company shall amend and update the Unit Ownership Ledger and shall deliver a
copy of such updated ledger to each holder of Units upon request. Absent
manifest error, the ownership interests recorded on the Unit Ownership Ledger
shall be conclusive record of the Units that have been issued and are
outstanding. Notwithstanding anything to the contrary contained in this
Agreement, with respect to any Unitholder that holds less than 2% of the issued
and outstanding Class A Common Units, except to the extent otherwise determined
by the Board or the Company’s chief executive officer from time to time in its
or his discretion, such Unitholder shall only have the right to obtain a version
of the Unit Ownership Ledger that contains the information to be set forth
thereon for such Unitholder and that contains the information to be set forth
thereon for all other Unitholders in a summary format that includes that total
amount of outstanding Units and Capital Contributions for each class held by
Unitholders that are institutional investors and by Unitholders that are not
institutional investors in a format as approved from time to time by the Board;
provided that the Company’s chief executive officer may obtain a full version of
the Unit Ownership Ledger.

 

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(C)           REPRESENTATIONS AND WARRANTIES OF UNITHOLDERS. EACH UNITHOLDER
HEREBY REPRESENTS AND WARRANTS TO THE COMPANY AND ACKNOWLEDGES THAT:  (I) SUCH
UNITHOLDER HAS KNOWLEDGE AND EXPERIENCE IN FINANCIAL AND BUSINESS MATTERS AND IS
CAPABLE OF EVALUATING THE MERITS AND RISKS OF AN INVESTMENT IN THE COMPANY AND
MAKING AN INFORMED INVESTMENT DECISION WITH RESPECT THERETO; (II) SUCH
UNITHOLDER HAS REVIEWED AND EVALUATED ALL INFORMATION NECESSARY TO ASSESS THE
MERITS AND RISKS OF HIS, HER OR ITS INVESTMENT IN THE COMPANY AND HAS HAD
ANSWERED TO SUCH UNITHOLDER’S SATISFACTION ANY AND ALL QUESTIONS REGARDING SUCH
INFORMATION; (III) SUCH UNITHOLDER IS ABLE TO BEAR THE ECONOMIC AND FINANCIAL
RISK OF AN INVESTMENT IN THE COMPANY FOR AN INDEFINITE PERIOD OF TIME; (IV) SUCH
UNITHOLDER IS ACQUIRING INTERESTS IN THE COMPANY FOR INVESTMENT ONLY AND NOT
WITH A VIEW TO, OR FOR RESALE IN CONNECTION WITH, ANY DISTRIBUTION TO THE PUBLIC
OR PUBLIC OFFERING THEREOF; (V) THE INTERESTS IN THE COMPANY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES LAWS OF ANY JURISDICTION AND CANNOT BE DISPOSED
OF UNLESS THEY ARE SUBSEQUENTLY REGISTERED AND/OR QUALIFIED UNDER APPLICABLE
SECURITIES LAWS AND THE PROVISIONS OF THIS AGREEMENT HAVE BEEN COMPLIED WITH;
(VI) TO THE EXTENT APPLICABLE, THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS
AGREEMENT HAVE BEEN DULY AUTHORIZED BY SUCH UNITHOLDER AND DO NOT REQUIRE SUCH
UNITHOLDER TO OBTAIN ANY CONSENT OR APPROVAL THAT HAS NOT BEEN OBTAINED AND DO
NOT CONTRAVENE OR RESULT IN A DEFAULT UNDER ANY PROVISION OF ANY LAW OR
REGULATION APPLICABLE TO SUCH UNITHOLDER OR OTHER GOVERNING DOCUMENTS OR ANY
AGREEMENT OR INSTRUMENT TO WHICH SUCH UNITHOLDER IS A PARTY OR BY WHICH SUCH
UNITHOLDER IS BOUND; (VII) THE DETERMINATION OF SUCH UNITHOLDER TO PURCHASE
INTERESTS IN THE COMPANY HAS BEEN MADE BY SUCH UNITHOLDER INDEPENDENT OF ANY
OTHER UNITHOLDER AND INDEPENDENT OF ANY STATEMENTS OR OPINIONS AS TO THE
ADVISABILITY OF SUCH PURCHASE, WHICH MAY HAVE BEEN MADE OR GIVEN BY ANY OTHER
UNITHOLDER OR BY ANY AGENT OR EMPLOYEE OF ANY OTHER UNITHOLDER; AND (VIII) THIS
AGREEMENT IS VALID, BINDING AND ENFORCEABLE AGAINST SUCH UNITHOLDER IN
ACCORDANCE WITH ITS TERMS.

 

Section 3.2            Unitholder Meetings.

 

(A)           VOTING OF UNITHOLDERS. A QUORUM SHALL BE PRESENT AT A MEETING OF
UNITHOLDERS IF THE UNITHOLDERS HOLDING THE REQUIRED INTEREST ARE REPRESENTED AT
THE MEETING IN PERSON OR BY PROXY. WITH RESPECT TO ANY MATTER, OTHER THAN A
MATTER FOR WHICH THE AFFIRMATIVE VOTE OF THE HOLDERS OF A SPECIFIED PORTION OF
ALL UNITHOLDERS ENTITLED TO VOTE IS REQUIRED BY THE DELAWARE ACT OR BY THIS
AGREEMENT, THE AFFIRMATIVE VOTE OF THE UNITHOLDERS HOLDING THE REQUIRED INTEREST
AT A MEETING OF UNITHOLDERS AT WHICH A QUORUM IS PRESENT SHALL BE THE ACT OF THE
UNITHOLDERS.

 

(B)           PLACE. ALL MEETINGS OF THE UNITHOLDERS SHALL BE HELD AT THE
PRINCIPAL PLACE OF BUSINESS OF THE COMPANY OR AT SUCH OTHER PLACE WITHIN OR
WITHOUT THE STATE OF DELAWARE AS SHALL BE SPECIFIED OR FIXED IN THE NOTICES OR
WAIVERS OF NOTICE THEREOF; PROVIDED THAT ANY OR ALL UNITHOLDERS MAY PARTICIPATE
IN ANY SUCH MEETING BY MEANS OF CONFERENCE TELEPHONE OR SIMILAR COMMUNICATIONS
EQUIPMENT PURSUANT TO SECTION 3.3(D).

 

(C)           ADJOURNMENT. NOTWITHSTANDING THE OTHER PROVISIONS OF THE
CERTIFICATE OR THIS AGREEMENT, THE CHAIRMAN OF THE MEETING OR THE UNITHOLDERS
HOLDING THE REQUIRED INTEREST SHALL HAVE THE POWER TO ADJOURN SUCH MEETING FROM
TIME TO TIME, WITHOUT ANY NOTICE OTHER THAN ANNOUNCEMENT AT THE MEETING OF THE
TIME AND PLACE OF THE HOLDING OF THE ADJOURNED MEETING. IF SUCH MEETING IS
ADJOURNED BY THE UNITHOLDERS, SUCH TIME AND PLACE SHALL BE DETERMINED BY A VOTE
OF THE UNITHOLDERS HOLDING THE REQUIRED INTEREST. UPON THE RESUMPTION OF SUCH
ADJOURNED

 

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MEETING, ANY BUSINESS MAY BE TRANSACTED THAT MIGHT HAVE BEEN TRANSACTED AT THE
MEETING AS ORIGINALLY CALLED.

 

(D)           MEETINGS. MEETINGS OF THE UNITHOLDERS FOR ANY PROPER PURPOSE OR
PURPOSES MAY BE CALLED AT ANY TIME BY ANY MEMBER OF THE BOARD OR THE UNITHOLDERS
HOLDING THE REQUIRED INTEREST. IF NOT OTHERWISE STATED IN OR FIXED IN ACCORDANCE
WITH THE REMAINING PROVISIONS HEREOF, THE RECORD DATE FOR DETERMINING
UNITHOLDERS ENTITLED TO CALL A MEETING IS THE DATE ANY UNITHOLDER FIRST SIGNS
THE NOTICE OF THAT MEETING. ONLY BUSINESS WITHIN THE PURPOSE OR PURPOSES
DESCRIBED IN THE NOTICE (OR WAIVER THEREOF) REQUIRED BY THIS AGREEMENT MAY BE
CONDUCTED AT A MEETING OF THE UNITHOLDERS.

 

(E)           NOTICE. A WRITTEN OR PRINTED NOTICE STATING THE PLACE, DAY AND
HOUR OF THE MEETING AND, IN THE CASE OF A SPECIAL MEETING, THE PURPOSE OR
PURPOSES FOR WHICH THE MEETING IS CALLED, SHALL BE DELIVERED TO EACH UNITHOLDER
HOLDING COMMON UNITS AND TO EACH OTHER UNITHOLDER ENTITLED TO VOTE AT SUCH
MEETING NOT LESS THAN FIVE OR MORE THAN 30 DAYS BEFORE THE DATE OF THE MEETING,
EITHER PERSONALLY, BY MAIL OR BY FACSIMILE, BY OR AT THE DIRECTION OF THE BOARD
OR THE UNITHOLDERS CALLING THE MEETING. IF MAILED, ANY SUCH NOTICE SHALL BE
DEEMED TO BE DELIVERED WHEN DEPOSITED IN THE UNITED STATES MAIL, ADDRESSED TO
THE UNITHOLDER AT ITS ADDRESS PROVIDED FOR IN THE COMPANY’S BOOKS AND RECORDS,
OR TO SUCH OTHER ADDRESS OR TO THE ATTENTION OF SUCH OTHER PERSON AS THE
RECIPIENT PARTY HAS SPECIFIED BY PRIOR WRITTEN NOTICE TO THE SENDING PARTY.

 

(F)            RECORD DATE. UNLESS OTHERWISE DETERMINED BY THE BOARD, THE DATE
ON WHICH NOTICE OF A MEETING OF UNITHOLDERS IS MAILED OR THE DATE ON WHICH THE
RESOLUTION OF THE BOARD DECLARING A DISTRIBUTION IS ADOPTED, AS THE CASE MAY BE,
SHALL BE THE RECORD DATE FOR THE DETERMINATION OF THE UNITHOLDERS ENTITLED TO
NOTICE OF OR TO VOTE AT SUCH MEETING (INCLUDING ANY ADJOURNMENT THEREOF) OR THE
UNITHOLDERS ENTITLED TO RECEIVE SUCH DISTRIBUTION.

 

(G)           REQUIRED INTEREST. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED FOR IN
THIS AGREEMENT, ALL MATTERS TO BE VOTED ON PURSUANT TO THIS AGREEMENT SHALL
REQUIRE THE VOTE OF UNITHOLDERS HOLDING THE REQUIRED INTEREST, WHICH VOTE SHALL
ONLY BE VALID AND BINDING IF A NOTICE OF THE MEETING AT WHICH SUCH VOTE IS TAKEN
IS GIVEN IN ACCORDANCE WITH SECTION 3.2(E).

 

(H)           PROXIES. A UNITHOLDER MAY VOTE EITHER IN PERSON OR BY PROXY
EXECUTED IN WRITING BY THE UNITHOLDER. AN E-MAIL TRANSMISSION OR A PHOTOGRAPHIC,
PHOTOSTATIC, FACSIMILE OR SIMILAR REPRODUCTION OF A WRITING EXECUTED BY THE
UNITHOLDER SHALL BE TREATED AS AN EXECUTION IN WRITING FOR PURPOSES OF THIS
SECTION 3.2(H). PROXIES FOR USE AT ANY MEETING OF UNITHOLDERS OR IN CONNECTION
WITH THE TAKING OF ANY ACTION BY WRITTEN CONSENT PURSUANT TO SECTION 3.3 SHALL
BE FILED WITH THE SECRETARY OF THE COMPANY, BEFORE OR AT THE TIME OF THE MEETING
OR EXECUTION OF THE WRITTEN CONSENT AS THE CASE MAY BE. ALL PROXIES SHALL BE
RECEIVED AND TAKEN CHARGE OF AND ALL BALLOTS SHALL BE RECEIVED AND CANVASSED BY
THE SECRETARY OF THE COMPANY, WHO SHALL DECIDE ALL QUESTIONS CONCERNING THE
QUALIFICATION OF VOTERS, THE VALIDITY OF THE PROXIES AND THE ACCEPTANCE OR
REJECTION OF VOTES, UNLESS AN INSPECTOR OR INSPECTORS SHALL HAVE BEEN APPOINTED
BY THE CHAIRMAN OF THE MEETING, IN WHICH EVENT SUCH INSPECTOR OR INSPECTORS
SHALL DECIDE ALL SUCH QUESTIONS. NO PROXY SHALL BE VALID AFTER 11 MONTHS FROM
THE DATE OF ITS EXECUTION UNLESS OTHERWISE PROVIDED IN THE PROXY. A PROXY SHALL
BE REVOCABLE UNLESS THE PROXY FORM CONSPICUOUSLY STATES THAT THE PROXY IS
IRREVOCABLE AND THE PROXY IS COUPLED WITH AN INTEREST. SHOULD A PROXY DESIGNATE
TWO OR MORE PERSONS TO ACT AS PROXIES, UNLESS THAT INSTRUMENT SHALL PROVIDE TO
THE CONTRARY, A MAJORITY OF SUCH

 

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PERSONS PRESENT AT ANY MEETING AT WHICH THEIR POWERS THEREUNDER ARE TO BE
EXERCISED SHALL HAVE AND MAY EXERCISE ALL THE POWERS OF VOTING OR GIVING
CONSENTS THEREBY CONFERRED, OR IF ONLY ONE BE PRESENT, THEN SUCH POWERS MAY BE
EXERCISED BY THAT ONE; OR, IF AN EVEN NUMBER ATTEND AND A MAJORITY DO NOT AGREE
ON ANY PARTICULAR ISSUE, THE COMPANY SHALL NOT BE REQUIRED TO RECOGNIZE SUCH
PROXY WITH RESPECT TO SUCH ISSUE IF SUCH PROXY DOES NOT SPECIFY HOW THE UNITS
THAT ARE THE SUBJECT OF SUCH PROXY ARE TO BE VOTED WITH RESPECT TO SUCH ISSUE.

 

(I)            CONDUCT OF UNITHOLDER MEETINGS. ALL MEETINGS OF THE UNITHOLDERS
SHALL BE PRESIDED OVER BY THE CHAIRMAN OF THE MEETING, WHO SHALL BE A MANAGER
DESIGNATED FROM TIME TO TIME BY THE HOLDERS OF THE REQUIRED INTEREST OR, AT ANY
TIME WHEN NO MANAGER IS SO DESIGNATED TO BE CHAIRMAN, THE EXECUTIVE MANAGER. THE
CHAIRMAN OF ANY MEETING OF UNITHOLDERS SHALL DETERMINE THE ORDER OF BUSINESS AND
THE PROCEDURE AT THE MEETING, INCLUDING SUCH REGULATION OF THE MANNER OF VOTING
AND THE CONDUCT OF DISCUSSION AS SEEM TO HIM IN ORDER.

 

(J)            VOTING RIGHTS. SUBJECT TO THE RESTRICTIONS SET FORTH IN THIS
AGREEMENT, IN ANY MATTER SUBMITTED TO THE HOLDERS OF COMMON UNITS FOR A VOTE,
EACH HOLDER OF COMMON UNITS SHALL BE ENTITLED TO ONE VOTE FOR EACH COMMON UNIT
OWNED. IN ANY MATTER SUBMITTED TO THE HOLDERS OF CLASS A PREFERRED UNITS FOR A
VOTE, EACH HOLDER OF CLASS A PREFERRED UNITS SHALL BE ENTITLED TO ONE VOTE FOR
EACH CLASS A PREFERRED UNIT OWNED. EXCEPT AS OTHERWISE REQUIRED BY THIS
AGREEMENT OR LAW, THE UNITHOLDERS SHALL NOT HAVE THE RIGHT TO VOTE ON ANY MATTER
EXCEPT TO THE EXTENT PROVIDED IN SECTIONS 3.2(A) OR (G) HEREOF.

 

Section 3.3            Action of Unitholders by Written Consent or Telephone
Conference.

 

(A)           WRITTEN CONSENT IN LIEU OF MEETING. ANY ACTION REQUIRED OR
PERMITTED TO BE TAKEN AT ANY MEETING OF UNITHOLDERS MAY BE TAKEN WITHOUT A
MEETING, WITHOUT PRIOR NOTICE AND WITHOUT A VOTE, IF A CONSENT OR CONSENTS IN
WRITING, SETTING FORTH THE ACTION SO TAKEN, SHALL BE SIGNED BY THE UNITHOLDER OR
UNITHOLDERS HOLDING NOT LESS THAN THE MINIMUM PERCENTAGES OF UNITS THAT WOULD BE
NECESSARY TO TAKE SUCH ACTION AT A MEETING AT WHICH ALL UNITHOLDERS ENTITLED TO
VOTE ON THE ACTION WERE PRESENT AND VOTED. EVERY WRITTEN CONSENT SHALL BEAR THE
DATE OF SIGNATURE OF EACH UNITHOLDER WHO SIGNS THE CONSENT. NO WRITTEN CONSENT
SHALL BE EFFECTIVE TO TAKE THE ACTION THAT IS THE SUBJECT TO THE CONSENT UNLESS,
WITHIN 60 DAYS AFTER THE DATE OF THE EARLIEST DATED CONSENT DELIVERED TO THE
COMPANY IN THE MANNER REQUIRED BY THIS SECTION 3.3(A), A CONSENT OR CONSENTS
SIGNED BY THE UNITHOLDER OR UNITHOLDERS HOLDING NOT LESS THAN THE MINIMUM UNITS
THAT WOULD BE NECESSARY TO TAKE THE ACTION THAT IS THE SUBJECT OF THE CONSENT
ARE DELIVERED TO THE COMPANY BY DELIVERY TO ITS REGISTERED OFFICE, ITS PRINCIPAL
PLACE OF BUSINESS OR THE CHIEF EXECUTIVE OFFICER IN EACH CASE, IN ACCORDANCE
WITH SECTION 15.15. ANY SUCH DELIVERY TO THE COMPANY’S PRINCIPAL PLACE OF
BUSINESS SHALL BE ADDRESSED TO THE CHIEF EXECUTIVE OFFICER. AN E-MAIL
TRANSMISSION OR A PHOTOGRAPHIC, PHOTOSTATIC, FACSIMILE OR SIMILAR REPRODUCTION
OF A WRITING SIGNED BY A UNITHOLDER SHALL BE REGARDED AS SIGNED BY THE
UNITHOLDER FOR PURPOSES OF THIS SECTION 3.3(A). PROMPT NOTICE OF THE TAKING OF
ANY ACTION BY UNITHOLDERS WITHOUT A MEETING BY LESS THAN UNANIMOUS WRITTEN
CONSENT SHALL BE GIVEN TO THOSE UNITHOLDERS WHO DID NOT CONSENT IN WRITING TO
THE ACTION.

 

(B)           RECORD DATE FOR WRITTEN CONSENT IN LIEU OF MEETING. THE RECORD
DATE FOR DETERMINING UNITHOLDERS ENTITLED TO CONSENT TO ACTION IN WRITING
WITHOUT A MEETING SHALL BE THE FIRST DATE ON WHICH A SIGNED WRITTEN CONSENT
SETTING FORTH THE ACTION TAKEN OR PROPOSED TO BE TAKEN IS DELIVERED TO THE
COMPANY BY DELIVERY TO ITS REGISTERED OFFICE, ITS PRINCIPAL PLACE OF BUSINESS,
OR

 

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THE CHIEF EXECUTIVE OFFICER, IN EACH CASE, IN ACCORDANCE WITH SECTION 15.15. ANY
SUCH DELIVERY TO THE COMPANY’S PRINCIPAL PLACE OF BUSINESS SHALL BE ADDRESSED TO
THE CHIEF EXECUTIVE OFFICER.

 

(C)           FILINGS. IF ANY ACTION BY UNITHOLDERS IS TAKEN BY WRITTEN CONSENT,
ANY CERTIFICATE OR DOCUMENTS FILED WITH THE SECRETARY OF STATE OF DELAWARE AS A
RESULT OF THE TAKING OF THE ACTION SHALL STATE, IN LIEU OF ANY STATEMENT
REQUIRED BY THE DELAWARE ACT CONCERNING ANY VOTE OF UNITHOLDERS, THAT WRITTEN
CONSENT HAS BEEN GIVEN IN ACCORDANCE WITH THE PROVISIONS OF THE DELAWARE ACT AND
THAT ANY WRITTEN NOTICE REQUIRED BY THE DELAWARE ACT HAS BEEN GIVEN.

 

(D)           TELEPHONE CONFERENCE. UNITHOLDERS MAY PARTICIPATE IN AND HOLD A
MEETING BY MEANS OF CONFERENCE TELEPHONE OR SIMILAR COMMUNICATIONS EQUIPMENT BY
MEANS OF WHICH ALL PERSONS PARTICIPATING IN THE MEETING CAN HEAR EACH OTHER, AND
PARTICIPATION IN SUCH MEETING SHALL CONSTITUTE ATTENDANCE AND PRESENCE IN PERSON
AT SUCH MEETING, EXCEPT WHERE A PERSON PARTICIPATES IN THE MEETING FOR THE
EXPRESS PURPOSE OF OBJECTING TO THE TRANSACTION OF ANY BUSINESS ON THE GROUND
THAT THE MEETING IS NOT LAWFULLY CALLED OR CONVENED.

 

Section 3.4            Issuance of Additional Units and Interests. Subject to
compliance with the provisions of this Agreement and the Securityholders
Agreement, the Board shall have the right to cause the Company to issue or sell
to any Person (including Unitholders and Affiliates) any of the following (which
for purposes of this Agreement shall be “Additional Securities”):  (i)
additional Units or other interests in the Company (including other classes or
series thereof having different rights), (ii) obligations, evidences of
indebtedness, or other securities or interests convertible or exchangeable into
Units or other interests in the Company, and (iii) warrants, options, or other
rights to purchase or otherwise acquire Units or other interests in the Company.
Subject to the provisions of this Agreement, the Board shall determine the terms
and conditions governing the issuance of such Additional Securities, including
the number and designation of such Additional Securities, the preference (with
respect to distributions, liquidations, or otherwise) over any other Units and
any required or deemed contributions in connection therewith. Any Person who
acquires Units may be admitted to the Company as a Unitholder pursuant to the
terms of Section 11.2 hereof. If any Person acquires additional Units or other
interests in the Company or is admitted to the Company as an additional
Unitholder, the Unit Ownership Ledger shall be amended to reflect such
additional issuance and/or Unitholder, as the case may be.

 

Section 3.5            Incentive Units.

 

(A)           THE COMPANY MAY ISSUE CLASS B COMMON UNITS TO EXISTING OR NEW
EMPLOYEES, OFFICERS, DIRECTORS, OTHER SERVICE PROVIDERS OR CONSULTANTS OF THE
COMPANY OR ITS SUBSIDIARIES (EACH, A “MANAGEMENT UNITHOLDER”) PURSUANT TO
WRITTEN AGREEMENTS APPROVED BY THE BOARD (EACH SUCH AGREEMENT, REGARDLESS OF ITS
ACTUAL TITLE, AS AMENDED, MODIFIED AND WAIVED FROM TIME TO TIME IN ACCORDANCE
WITH ITS TERMS, IS REFERRED TO HEREIN AS AN “INCENTIVE UNIT GRANT AGREEMENT”).
THE COMPANY MAY MAKE THE CLASS B COMMON UNITS AND ANY ISSUANCE THEREOF AND ANY
INCENTIVE UNIT GRANT AGREEMENT SUBJECT TO THE TERMS AND CONDITIONS OF ANY EQUITY
OR UNIT INCENTIVE PLAN, AS THE SAME MAY BE AMENDED OR MODIFIED FROM TIME TO TIME
IN ACCORDANCE WITH ITS TERMS, AS MAY HAVE BEEN ADOPTED BY THE COMPANY OR ITS
SUBSIDIARIES ON OR BEFORE THE DATE OF SUCH ISSUANCE OR INCENTIVE UNIT GRANT
AGREEMENT. ON THE DATE OF EACH GRANT OF CLASS B COMMON UNITS TO A MANAGEMENT
UNITHOLDER WHO IS, OR AS A RESULT OF SUCH GRANT BECOMES, A HOLDER OF CLASS

 

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B COMMON UNITS PURSUANT TO A GRANT MADE UNDER AN INCENTIVE UNIT GRANT AGREEMENT
OR SIMILAR AGREEMENT, THE BOARD SHALL ESTABLISH AN INITIAL “PARTICIPATION
THRESHOLD” AMOUNT WITH RESPECT TO EACH CLASS B COMMON UNIT GRANTED ON SUCH DATE.
UNLESS OTHERWISE DETERMINED BY THE BOARD, THE PARTICIPATION THRESHOLD WITH
RESPECT TO A CLASS B COMMON UNIT SHALL BE EQUAL TO OR GREATER THAN THE
LIQUIDATION VALUE OF A CLASS A COMMON UNIT ON THE DATE OF GRANT OF SUCH CLASS B
COMMON UNIT. THE BOARD MAY DESIGNATE A SERIES NUMBER FOR EACH SUBSET OF CLASS B
COMMON UNITS CONSISTING OF CLASS B COMMON UNITS HAVING THE SAME PARTICIPATION
THRESHOLD, WHICH PARTICIPATION THRESHOLD DIFFERS FROM THE PARTICIPATION
THRESHOLDS OF ALL CLASS B COMMON UNITS NOT INCLUDED IN SUCH SUBSET. IF THE BOARD
ELECTS TO SO DESIGNATE CLASS B COMMON UNITS, THEN THE FIRST CLASS B COMMON UNIT
ISSUED ON OR AFTER THE DATE HEREOF SHALL BE DESIGNATED A “SERIES 1 CLASS B
COMMON UNIT.”  EACH CLASS B COMMON UNIT’S PARTICIPATION THRESHOLD SHALL BE
ADJUSTED AFTER THE GRANT OF SUCH CLASS B COMMON UNIT IN THE FOLLOWING MANNER:

 

(I)            IN THE EVENT OF ANY DISTRIBUTION PURSUANT TO SECTION 4.1(A)(III),
THE PARTICIPATION THRESHOLD OF EACH CLASS B COMMON UNIT OUTSTANDING AT THE TIME
OF SUCH DISTRIBUTION SHALL BE REDUCED (BUT NOT BELOW ZERO) BY THE AMOUNT THAT
EACH CLASS A COMMON UNIT RECEIVES IN SUCH DISTRIBUTION (WITH SUCH REDUCTION
OCCURRING IMMEDIATELY AFTER THE DETERMINATION OF THE PORTION OF SUCH
DISTRIBUTION, IF ANY, THAT SUCH CLASS B COMMON UNIT IS ENTITLED TO RECEIVE). FOR
THIS PURPOSE, DISTRIBUTIONS SHALL INCLUDE TAX DISTRIBUTIONS MADE PURSUANT TO
SECTION 4.1(B) ONLY (I) TO THE EXTENT SUCH TAX DISTRIBUTIONS ARE MADE AS A
RESULT OF THE RECOGNITION OF THE BUILT-IN GAIN IN ANY ASSET THAT EXISTED AT THE
TIME THE RELEVANT CLASS B COMMON UNIT WAS ISSUED OR (II) TO THE EXTENT THAT THE
RELEVANT CLASS B COMMON UNIT IS NOT ALSO ENTITLED TO A TAX DISTRIBUTION WITH
RESPECT TO THE ITEM OR TIER OF TAXABLE INCOME GIVING RISE TO THE TAX
DISTRIBUTION. FOR THIS PURPOSE, THE TAX DISTRIBUTION THAT ARISES FROM THE
RECOGNITION OF THE BUILT-IN GAIN IN AN ASSET MAY BE BIFURCATED BETWEEN THE TAX
DISTRIBUTION THAT RELATES TO THE BUILT-IN GAIN THAT EXISTED AT THE TIME THE
RELEVANT CLASS B COMMON UNIT WAS ISSUED AND THE TAX DISTRIBUTION THAT RELATES TO
ANY ADDITIONAL GAIN IN THE ASSET THAT ACCRUED SINCE THE TIME THE RELEVANT CLASS
B COMMON UNIT WAS ISSUED. IN ORDER TO PRESERVE THE ECONOMIC RESULTS INTENDED BY
THIS AGREEMENT, THE BOARD MAY, IN ITS REASONABLE DISCRETION, DETERMINE WHETHER
ANY TAX DISTRIBUTION OR PORTION OF ANY TAX DISTRIBUTION SHOULD REDUCE THE
PARTICIPATION THRESHOLD OF A CLASS B COMMON UNIT.

 

(II)           IN THE EVENT OF ANY CAPITAL CONTRIBUTION WITH RESPECT TO
OUTSTANDING CLASS A COMMON UNITS THAT OCCURS AFTER THE ISSUANCE OF A SERIES OF
CLASS B COMMON UNITS, THE PARTICIPATION THRESHOLD OF EACH CLASS B COMMON UNIT
OUTSTANDING AT THE TIME OF SUCH CAPITAL CONTRIBUTION SHALL BE INCREASED BY THE
AMOUNT CONTRIBUTED WITH RESPECT TO EACH CLASS A COMMON UNIT.

 

(III)          IF THE COMPANY AT ANY TIME SUBDIVIDES (BY ANY UNIT SPLIT OR
OTHERWISE) THE CLASS A COMMON UNITS INTO A GREATER NUMBER OF UNITS, THE
PARTICIPATION THRESHOLD OF EACH CLASS B COMMON UNIT OUTSTANDING IMMEDIATELY
PRIOR TO SUCH SUBDIVISION SHALL BE PROPORTIONATELY REDUCED, AND IF THE COMPANY
AT ANY TIME COMBINES (BY REVERSE UNIT SPLIT OR OTHERWISE) THE CLASS A COMMON
UNITS INTO A SMALLER NUMBER OF UNITS, THE PARTICIPATION THRESHOLD OF EACH CLASS
B COMMON UNIT OUTSTANDING IMMEDIATELY PRIOR TO SUCH COMBINATION SHALL BE
PROPORTIONATELY INCREASED.

 

(IV)          NO ADJUSTMENT SHALL BE MADE IN CONNECTION WITH (A) ANY REDEMPTION
OR REPURCHASE BY THE COMPANY OR ANY UNITHOLDER OF ANY UNITS OR ANY FORFEITURE BY

 

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ANY UNITHOLDER OF ANY UNITS OR (B) ANY CAPITAL CONTRIBUTION BY ANY UNITHOLDER IN
EXCHANGE FOR NEWLY ISSUED UNITS.

 

(B)           THE PARTICIPATION THRESHOLDS OF EACH UNITHOLDER’S CLASS B COMMON
UNITS SHALL BE SET FORTH ON THE UNIT OWNERSHIP LEDGER, AND UNIT OWNERSHIP LEDGER
SHALL BE AMENDED FROM TIME TO TIME BY THE COMPANY AS NECESSARY TO REFLECT ANY
ADJUSTMENTS TO THE PARTICIPATION THRESHOLDS OF OUTSTANDING CLASS B COMMON UNITS
REQUIRED PURSUANT TO THIS SECTION 3.5.

 

(C)           NOTWITHSTANDING ANYTHING IN THIS SECTION 3.5 TO THE CONTRARY, THE
BOARD SHALL HAVE THE POWER TO AMEND THE PROVISIONS OF THIS SECTION 3.5 AND
SECTION 4.1(A) TO ACHIEVE THE ECONOMIC RESULTS INTENDED BY THIS AGREEMENT,
INCLUDING THAT (A) EACH CLASS A COMMON UNIT HAS IDENTICAL ENTITLEMENT TO
DISTRIBUTIONS UNDER SECTION 4.1(A) AND (B) THE CLASS B COMMON UNITS ARE PROFITS
INTERESTS WHEN ISSUED FOR UNITED STATES FEDERAL INCOME TAX PURPOSES.

 

Section 3.6            Capital Accounts.

 

(A)           THE COMPANY SHALL MAINTAIN A SEPARATE CAPITAL ACCOUNT FOR EACH
UNITHOLDER ACCORDING TO THE RULES OF TREASURY REGULATION SECTION
1.704-1(B)(2)(IV). FOR THIS PURPOSE, THE COMPANY MAY (IN THE DISCRETION OF THE
BOARD), UPON THE OCCURRENCE OF THE EVENTS SPECIFIED IN TREASURY REGULATION
SECTION 1.704-1(B)(2)(IV)(F), INCREASE OR DECREASE THE CAPITAL ACCOUNTS IN
ACCORDANCE WITH THE RULES OF SUCH REGULATION AND TREASURY REGULATION SECTION
1.704-1(B)(2)(IV)(G) TO REFLECT A REVALUATION OF THE COMPANY’S PROPERTY. WITHOUT
LIMITING THE FOREGOING, EACH UNITHOLDER’S CAPITAL ACCOUNT SHALL BE ADJUSTED:

 

(I)            BY ADDING ANY ADDITIONAL CAPITAL CONTRIBUTIONS MADE BY SUCH
UNITHOLDER IN CONSIDERATION FOR THE ISSUANCE OF UNITS;

 

(II)           BY DEDUCTING ANY AMOUNTS PAID TO SUCH UNITHOLDER IN CONNECTION
WITH THE REDEMPTION OR OTHER REPURCHASE BY THE COMPANY OF UNITS;

 

(III)          BY ADDING ANY PROFITS ALLOCATED IN FAVOR OF SUCH UNITHOLDER AND
SUBTRACTING ANY LOSSES ALLOCATED IN FAVOR OF SUCH UNITHOLDER; AND

 

(IV)          BY DEDUCTING ANY DISTRIBUTIONS PAID IN CASH OR OTHER ASSETS TO
SUCH UNITHOLDER BY THE COMPANY.

 

(B)           FOR PURPOSES OF COMPUTING THE AMOUNT OF ANY ITEM OF THE COMPANY’S
INCOME, GAIN, LOSS, OR DEDUCTION TO BE ALLOCATED PURSUANT TO ARTICLE IV AND TO
BE REFLECTED IN THE CAPITAL ACCOUNTS, THE DETERMINATION, RECOGNITION, AND
CLASSIFICATION OF ANY SUCH ITEM SHALL BE THE SAME AS ITS DETERMINATION,
RECOGNITION, AND CLASSIFICATION FOR FEDERAL INCOME TAX PURPOSES (INCLUDING ANY
METHOD OF DEPRECIATION, COST RECOVERY, OR AMORTIZATION USED FOR THIS PURPOSE);
PROVIDED THAT:

 

(I)            THE COMPUTATION OF ALL ITEMS OF INCOME, GAIN, LOSS, AND DEDUCTION
SHALL INCLUDE THOSE ITEMS DESCRIBED IN CODE SECTION 705(A)(L)(B) OR CODE SECTION
705(A)(2)(B) AND TREASURY REGULATION SECTION 1.704-1(B)(2)(IV)(I), WITHOUT
REGARD TO THE FACT THAT SUCH ITEMS ARE NOT INCLUDABLE IN GROSS INCOME OR ARE NOT
DEDUCTIBLE FOR FEDERAL INCOME TAX PURPOSES.

 

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(II)           IF THE BOOK VALUE OF ANY OF THE COMPANY’S PROPERTY IS ADJUSTED
PURSUANT TO TREASURY REGULATION SECTION 1.704-1(B)(2)(IV)(E) OR (F), THE AMOUNT
OF SUCH ADJUSTMENT SHALL BE TAKEN INTO ACCOUNT AS GAIN OR LOSS FROM THE
DISPOSITION OF SUCH PROPERTY.

 

(III)          ITEMS OF INCOME, GAIN, LOSS, OR DEDUCTION ATTRIBUTABLE TO THE
DISPOSITION OF THE COMPANY’S PROPERTY HAVING A BOOK VALUE THAT DIFFERS FROM ITS
ADJUSTED BASIS FOR TAX PURPOSES SHALL BE COMPUTED BY REFERENCE TO THE BOOK VALUE
OF SUCH PROPERTY.

 

(IV)          ITEMS OF DEPRECIATION, AMORTIZATION, AND OTHER COST RECOVERY
DEDUCTIONS WITH RESPECT TO THE COMPANY’S PROPERTY HAVING A BOOK VALUE THAT
DIFFERS FROM ITS ADJUSTED BASIS FOR TAX PURPOSES SHALL BE COMPUTED BY REFERENCE
TO THE PROPERTY’S BOOK VALUE IN ACCORDANCE WITH TREASURY REGULATION SECTION
1.704-1(B)(2)(IV)(G).

 

(V)           TO THE EXTENT AN ADJUSTMENT TO THE ADJUSTED TAX BASIS OF ANY ASSET
OF THE COMPANY PURSUANT TO CODE SECTIONS 732(D), 734(B) OR 743(B) IS REQUIRED,
PURSUANT TO TREASURY REGULATION SECTION 1.704-1(B)(2)(IV)(M), TO BE TAKEN INTO
ACCOUNT IN DETERMINING CAPITAL ACCOUNTS, THE AMOUNT OF SUCH ADJUSTMENT TO THE
CAPITAL ACCOUNTS SHALL BE TREATED AS AN ITEM OF GAIN (IF THE ADJUSTMENT
INCREASES THE BASIS OF THE ASSET) OR LOSS (IF THE ADJUSTMENT DECREASES SUCH
BASIS).

 

Section 3.7            Negative Capital Accounts. No Unitholder shall be
required to pay to any other Unitholder or the Company any deficit or negative
balance which may exist from time to time in such Unitholder’s Capital Account
(including upon and after dissolution of the Company).

 

Section 3.8            No Withdrawal. No Person shall be entitled to withdraw
any part of such Person’s Capital Contributions or Capital Account or to receive
any Distribution from the Company, except as expressly provided herein or in the
other agreements referred to herein.

 

Section 3.9            Loans From Unitholders. Loans by Unitholders to the
Company shall not be considered Capital Contributions. If any Unitholder shall
loan funds to the Company, the making of such loans shall not result in any
increase in the amount of the Capital Account of such Unitholder. The amount of
any such loans shall be a debt of the Company to such Unitholder and shall be
payable or collectible in accordance with the terms and conditions upon which
such loans are made.

 

ARTICLE IV

 

DISTRIBUTIONS; REDEMPTIONS
AND ALLOCATIONS

 

Section 4.1            Distributions.

 

(A)           DISTRIBUTIONS GENERALLY. EXCEPT AS OTHERWISE SET FORTH IN THIS
SECTION 4.1, AND SUBJECT TO THE PROVISIONS OF SECTION 18-607 OF THE DELAWARE
ACT, THE BOARD MAY MAKE DISTRIBUTIONS AT ANY TIME OR FROM TIME TO TIME. ALL
DISTRIBUTIONS SHALL BE MADE ONLY IN THE FOLLOWING ORDER AND PRIORITY:

 

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(I)            FIRST, TO THE UNITHOLDERS HOLDING CLASS A PREFERRED UNITS, AN
AMOUNT EQUAL TO THE AGGREGATE CLASS A PREFERRED UNPAID YIELD (IN THE PROPORTION
THAT EACH UNITHOLDER’S SHARE OF CLASS A PREFERRED UNPAID YIELD BEARS TO THE
AGGREGATE CLASS A PREFERRED UNPAID YIELD) UNTIL EACH SUCH UNITHOLDER HAS
RECEIVED DISTRIBUTIONS IN RESPECT OF SUCH UNITHOLDER’S CLASS A PREFERRED UNITS
IN AN AMOUNT EQUAL TO THE AGGREGATE CLASS A PREFERRED UNPAID YIELD ON SUCH
UNITHOLDER’S OUTSTANDING CLASS A PREFERRED UNITS AS OF THE TIME OF SUCH
DISTRIBUTION, AND NO DISTRIBUTION OR ANY PORTION THEREOF MAY BE MADE PURSUANT TO
SECTIONS 4.1(A)(II) OR (III) BELOW UNTIL THE ENTIRE AMOUNT OF THE CLASS A
PREFERRED UNPAID YIELD ON THE OUTSTANDING CLASS A PREFERRED UNITS AS OF THE TIME
OF SUCH DISTRIBUTION (AS LIMITED BY THE NEXT OCCURRING PROVISO BELOW) HAS BEEN
PAID IN FULL; PROVIDED THAT NO DISTRIBUTION SHALL BE MADE PURSUANT TO THIS
SECTION 4.1(A)(I) IN RESPECT OF A CLASS A PREFERRED UNIT TO THE EXTENT SUCH
DISTRIBUTION, WHEN COMBINED WITH ALL PREVIOUS DISTRIBUTIONS MADE PURSUANT TO
THIS SECTION 4.1(A)(I), WOULD EXCEED THE AGGREGATE AMOUNT BY WHICH PROFITS OF
THE COMPANY EXCEED LOSSES OF THE COMPANY SINCE THE DATE OF ISSUANCE OF SUCH
CLASS A PREFERRED UNIT (FOR THIS PURPOSE UNLESS OTHERWISE DETERMINED BY THE
BOARD, TO THE EXTENT THAT ANY CLASS A PREFERRED UNIT IS ISSUED AFTER THE DATE
HEREOF, PROFITS AND LOSSES OF THE COMPANY WITH RESPECT TO THAT UNIT SHALL BE
DETERMINED AS IF THE COMPANY HAD WRITTEN UP ITS ASSETS UNDER TREASURY REG.
§1.704-1(B)(2)(IV)(F) IN CONNECTION WITH THE ISSUANCE OF SUCH CLASS A PREFERRED
UNIT).

 

(II)           SECOND, TO THE UNITHOLDERS HOLDING CLASS A PREFERRED UNITS, AN
AMOUNT EQUAL TO THE AGGREGATE CLASS A PREFERRED UNRETURNED CAPITAL WITH RESPECT
TO SUCH UNITS (IN THE PROPORTION THAT EACH UNITHOLDER’S SHARE OF CLASS A
PREFERRED UNRETURNED CAPITAL WITH RESPECT TO SUCH CLASS A PREFERRED UNITS BEARS
TO THE AGGREGATE AMOUNT OF CLASS A PREFERRED UNRETURNED CAPITAL WITH RESPECT TO
ALL CLASS A PREFERRED UNITS) UNTIL EACH SUCH UNITHOLDER HAS RECEIVED
DISTRIBUTIONS IN RESPECT OF SUCH UNITHOLDER’S CLASS A PREFERRED UNITS IN AN
AMOUNT EQUAL TO THE AGGREGATE CLASS A PREFERRED UNRETURNED CAPITAL WITH RESPECT
TO SUCH UNITHOLDER’S CLASS A PREFERRED UNITS AS OF THE TIME OF SUCH DISTRIBUTION
(AT WHICH TIME SUCH CLASS A PREFERRED UNIT SHALL BE DEEMED REDEEMED AND
CANCELLED IN FULL WITHOUT ANY FURTHER ACTION ON THE PART OF THE COMPANY OR ANY
UNITHOLDER OR OTHERWISE), AND NO DISTRIBUTION OR ANY PORTION THEREOF MAY BE MADE
PURSUANT TO SECTION 4.1(A)(III) BELOW UNTIL THE ENTIRE AMOUNT OF CLASS A
PREFERRED UNRETURNED CAPITAL WITH RESPECT TO THE OUTSTANDING CLASS A PREFERRED
UNITS AS OF THE TIME OF SUCH DISTRIBUTION HAS BEEN PAID IN FULL.

 

(III)          THIRD, ALL REMAINING AMOUNTS SHALL BE DISTRIBUTED TO THE
UNITHOLDERS HOLDING PARTICIPATING COMMON UNITS IMMEDIATELY PRIOR TO SUCH
DISTRIBUTION AS FOLLOWS:  WITH RESPECT TO EACH CLASS A COMMON UNIT, AN AMOUNT
EQUAL TO THE AMOUNT DETERMINED BY DIVIDING THE GROSSED-UP AMOUNT BY THE NUMBER
OF PARTICIPATING COMMON UNITS, AND, WITH RESPECT TO EACH PARTICIPATING CLASS B
COMMON UNIT, AN AMOUNT EQUAL TO THE EXCESS OF THE (A) THE AMOUNT DETERMINED BY
DIVIDING THE GROSSED-UP AMOUNT BY THE NUMBER OF PARTICIPATING COMMON UNITS OVER
(B) THE PARTICIPATION THRESHOLD WITH RESPECT TO SUCH PARTICIPATING CLASS B
COMMON UNIT. FOR PURPOSES OF THIS AGREEMENT, “GROSSED-UP AMOUNT” MEANS, WITH
RESPECT TO ANY DISTRIBUTION PURSUANT TO THIS SECTION 4.1(A)(III), THE SUM OF (A)
THE AMOUNT OF THE DISTRIBUTION PURSUANT TO THIS SECTION 4.1(A)(III) AND (B) THE
SUM OF THE PARTICIPATION THRESHOLDS OF ALL PARTICIPATING CLASS B COMMON UNITS.

 

Notwithstanding the foregoing, the portion of any Distribution that would
otherwise be made with respect to any Unvested Common Unit shall not be
distributed with

 

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respect to such Unvested Common Unit (provided that Tax Distributions shall be
made with respect to Unvested Common Units pursuant to Section 4.1(b)), but
shall instead be retained by the Company and a “Reserve Amount” shall be created
on the books and records of the Company with respect to such Unvested Common
Unit (or the Reserve Amount with respect to such Unvested Common Unit shall be
increased, if a Reserve Amount already exists with respect to such Unvested
Common Unit) in an amount equal to the amount so retained by the Company in
respect of such Unvested Common Unit. The Reserve Amount created (or increased)
for each Unvested Common Unit shall be treated as Distributed for purposes of
this Section 4.1(a) and shall be treated as an amount the holder of such
Unvested Common Unit is entitled to receive for purposes of Section 4.2. If such
Unvested Common Unit subsequently becomes a Vested Common Unit, the Reserve
Amount attributable to such Unvested Common Unit shall be distributed (in
connection with the first Distribution that is not a Tax Distribution that
occurs after such vesting) without interest to the holder of such Common Unit,
and if such Unvested Common Unit is repurchased or forfeited, the Reserve Amount
attributable to such Unvested Common Unit shall be cancelled and no longer
treated as an amount the holder of such Unvested Common Unit is entitled to
receive for purposes of Section 4.2.

 

(B)           TAX DISTRIBUTIONS. NOTWITHSTANDING ANY OTHER PROVISION HEREIN TO
THE CONTRARY, SO LONG AS THE COMPANY IS TREATED AS A PARTNERSHIP FOR FEDERAL AND
STATE INCOME TAX PURPOSES, THE COMPANY SHALL DISTRIBUTE TO THE UNITHOLDERS IN
RESPECT OF THEIR UNITS, IN THE PROPORTIONS SPECIFIED HEREIN, TO THE EXTENT THAT
FUNDS ARE LEGALLY AVAILABLE THEREFOR AND WOULD NOT BE PROHIBITED UNDER ANY
CREDIT FACILITY TO WHICH THE COMPANY OR ANY SUBSIDIARY IS A PARTY, FOR EACH
FISCAL YEAR AN AMOUNT (ANY SUCH AMOUNT, A “TAX DISTRIBUTION”) IN CASH EQUAL TO
THE PRODUCT OF: (I) THE COMPANY INCOME AMOUNT FOR THE FISCAL YEAR, MULTIPLIED BY
(II) THE ASSUMED TAX RATE FOR SUCH FISCAL YEAR. THE “COMPANY INCOME AMOUNT” FOR
A FISCAL YEAR SHALL BE AN AMOUNT, IF POSITIVE, EQUAL TO THE NET TAXABLE INCOME
OF THE COMPANY FOR SUCH FISCAL YEAR, MINUS ANY NET TAXABLE LOSS OF THE COMPANY
FOR ANY PRIOR FISCAL YEAR NOT PREVIOUSLY TAKEN INTO ACCOUNT FOR PURPOSES OF THIS
SECTION 4.2 TO THE EXTENT SUCH LOSS WOULD BE AVAILABLE UNDER THE CODE TO OFFSET
INCOME OF THE UNITHOLDERS (OR, AS APPROPRIATE, THE DIRECT OR INDIRECT PARTNERS
OR MEMBERS OF THE UNITHOLDERS) DETERMINED AS IF INCOME AND LOSS FROM THE COMPANY
WAS THE ONLY INCOME AND LOSS OF THE UNITHOLDERS (OR, AS APPROPRIATE, THE DIRECT
OR INDIRECT PARTNERS OR MEMBERS OF THE UNITHOLDERS) IN SUCH FISCAL YEAR AND ALL
PRIOR FISCAL YEARS. THE “ASSUMED TAX RATE” FOR A FISCAL YEAR SHALL BE EQUAL TO
THE SUM OF THE HIGHEST MARGINAL FEDERAL, STATE, AND LOCAL INCOME TAX RATES
APPLICABLE TO ANY UNITHOLDER RESIDING IN THE UNITED STATES OR ITS PARTNERS OR
MEMBERS, AS DETERMINED BY THE BOARD BASED ON THE INFORMATION AVAILABLE TO IT
(TAKING INTO ACCOUNT THE CHARACTER OF THE COMPANY’S INCOME AND THE DEDUCTIBILITY
OF STATE AND LOCAL TAXES FOR FEDERAL INCOME TAX PURPOSES). SUCH TAX
DISTRIBUTIONS SHALL BE MADE TO UNITHOLDERS ON AN ESTIMATED BASIS EACH QUARTER AS
DETERMINED BY THE BOARD. THE BOARD SHALL BE ENTITLED TO ADJUST SUBSEQUENT TAX
DISTRIBUTIONS UP OR DOWN TO REFLECT ANY VARIATION BETWEEN SUCH ESTIMATED
QUARTERLY TAX DISTRIBUTIONS AND THE TAX DISTRIBUTIONS THAT WOULD HAVE BEEN
COMPUTED UNDER THIS SECTION 4.1(B) BASED ON SUBSEQUENT TAX INFORMATION. TAX
DISTRIBUTIONS SHALL BE MADE TO THE UNITHOLDERS IN THE PROPORTION THAT THE AMOUNT
OF THE COMPANY’S TAXABLE INCOME ALLOCATED TO SUCH UNITHOLDER PURSUANT TO THIS
ARTICLE IV FOR SUCH FISCAL YEAR (NET OF ANY TAXABLE LOSSES PREVIOUSLY ALLOCATED
TO SUCH HOLDER THAT ARE TAKEN INTO ACCOUNT IN DETERMINING THE COMPANY INCOME
AMOUNT FOR SUCH FISCAL YEAR) BEARS TO THE COMPANY’S TOTAL TAXABLE INCOME
ALLOCATED TO ALL UNITHOLDERS PURSUANT TO THIS ARTICLE IV FOR SUCH FISCAL YEAR
(NET OF ANY TAXABLE LOSSES PREVIOUSLY ALLOCATED TO ALL UNITHOLDER THAT ARE TAKEN
INTO ACCOUNT IN DETERMINING THE COMPANY INCOME AMOUNT FOR SUCH

 

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FISCAL YEAR). TAX DISTRIBUTIONS SHALL BE CONSIDERED ADVANCES ON DISTRIBUTIONS TO
UNITHOLDERS UNDER SECTION 4.1(A).

 

(C)           PERSONS RECEIVING DISTRIBUTIONS. EACH DISTRIBUTION SHALL BE MADE
TO THE PERSONS SHOWN ON THE COMPANY’S BOOKS AND RECORDS AS UNITHOLDERS AS OF THE
DATE OF SUCH DISTRIBUTION; PROVIDED, HOWEVER, THAT ANY TRANSFEROR AND TRANSFEREE
OF UNITS MAY MUTUALLY AGREE AS TO WHICH OF THEM SHOULD RECEIVE PAYMENT OF ANY
DISTRIBUTION UNDER SECTION 4.1. IN THE EVENT THAT RESTRICTIONS ON TRANSFER OR
CHANGE IN BENEFICIAL OWNERSHIP OF UNITS SET FORTH HEREIN OR IN THE
SECURITYHOLDERS AGREEMENT HAVE BEEN BREACHED, THE COMPANY MAY WITHHOLD
DISTRIBUTIONS IN RESPECT OF THE AFFECTED UNITS UNTIL SUCH BREACH HAS BEEN CURED.

 

(D)           DISTRIBUTIONS OF IN KIND PROPERTY. IF THE COMPANY DISTRIBUTES
PROPERTY IN KIND THAT WAS CONTRIBUTED TO THE COMPANY (OR RECEIVED IN A TAX-FREE
EXCHANGE FOR PROPERTY CONTRIBUTED TO THE COMPANY), THE COMPANY SHALL, IF
POSSIBLE, DISTRIBUTE (AND BE DEEMED TO DISTRIBUTE) SUCH PROPERTY TO THE
UNITHOLDER WHO CONTRIBUTED SUCH PROPERTY, TO THE EXTENT THAT SUCH UNITHOLDER IS
ENTITLED TO RECEIVE A DISTRIBUTION AT SUCH TIME UNDER THE ECONOMIC PRIORITIES
SET OUT IN THIS SECTION 4.1.

 

Section 4.2            Allocations. Except as otherwise provided in Section 4.3,
Profits and Losses for any Fiscal Year shall be allocated among the Unitholders
in such a manner that, as of the end of such Fiscal Year, the sum of (i) the
Capital Account of each Unitholder, (ii) such Unitholder’s share of Minimum Gain
(as determined according to Treasury Regulation Section 1.704-2(g)), and (iii)
such Unitholder’s partner nonrecourse debt minimum gain (as defined in Treasury
Regulation Section 1.704-2(i)(2)) shall be equal to the respective net amounts,
positive or negative, which would be distributed to them, determined as if the
Company were to (i) liquidate the assets of the Company for an amount equal to
their Book Value, and (ii) distribute the proceeds of liquidation pursuant to
Section 13.2.

 

Section 4.3            Special Allocations.

 

(A)           LOSSES ATTRIBUTABLE TO PARTNER NONRECOURSE DEBT (AS DEFINED IN
TREASURY REGULATION SECTION 1.704-2(B)(4)) SHALL BE ALLOCATED IN THE MANNER
REQUIRED BY TREASURY REGULATION SECTION 1.704-2(I). IF THERE IS A NET DECREASE
DURING A FISCAL YEAR IN PARTNER NONRECOURSE DEBT MINIMUM GAIN (AS DEFINED IN
TREASURY REGULATION SECTION 1.704-2(I)(3)), PROFITS FOR SUCH FISCAL YEAR (AND,
IF NECESSARY, FOR SUBSEQUENT FISCAL YEARS) SHALL BE ALLOCATED TO THE UNITHOLDERS
IN THE AMOUNTS AND OF SUCH CHARACTER AS DETERMINED ACCORDING TO, AND SUBJECT TO
THE EXCEPTIONS CONTAINED IN, TREASURY REGULATION SECTION 1.704-2(I)(4).

 

(B)           IF THERE IS A NET DECREASE IN MINIMUM GAIN DURING ANY FISCAL YEAR,
EACH UNITHOLDER SHALL BE ALLOCATED PROFITS FOR SUCH FISCAL YEAR (AND, IF
NECESSARY, FOR SUBSEQUENT FISCAL YEARS) IN THE AMOUNTS AND OF SUCH CHARACTER AS
DETERMINED ACCORDING TO, AND SUBJECT TO THE EXCEPTIONS CONTAINED IN, TREASURY
REGULATION SECTION 1.704-2(F). THIS SECTION 4.3(B) IS INTENDED TO BE A MINIMUM
GAIN CHARGEBACK PROVISION THAT COMPLIES WITH THE REQUIREMENTS OF TREASURY
REGULATION SECTION 1.704-2(F), AND SHALL BE INTERPRETED IN A MANNER CONSISTENT
THEREWITH.

 

(C)           IF ANY UNITHOLDER THAT UNEXPECTEDLY RECEIVES AN ADJUSTMENT,
ALLOCATION, OR DISTRIBUTION DESCRIBED IN TREASURY REGULATION SECTION
1.704-1(B)(2)(II)(D)(4), (5) AND (6) HAS AN

 

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ADJUSTED CAPITAL ACCOUNT DEFICIT AS OF THE END OF ANY TAXABLE YEAR, COMPUTED
AFTER THE APPLICATION OF SECTIONS 4.3(A) AND 4.3(B) BUT BEFORE THE APPLICATION
OF ANY OTHER PROVISION OF THIS ARTICLE IV, THEN PROFITS FOR SUCH TAXABLE YEAR
SHALL BE ALLOCATED TO SUCH UNITHOLDER IN PROPORTION TO, AND TO THE EXTENT OF,
SUCH ADJUSTED CAPITAL ACCOUNT DEFICIT. THIS SECTION 4.3(C) IS INTENDED TO BE A
QUALIFIED INCOME OFFSET PROVISION AS DESCRIBED IN TREASURY REGULATION SECTION
1.704-1(B)(2)(II)(D) AND SHALL BE INTERPRETED IN A MANNER CONSISTENT THEREWITH.

 

(D)           PROFITS AND LOSSES SHALL BE ALLOCATED IN A MANNER CONSISTENT WITH
THE MANNER THAT THE ADJUSTMENTS TO THE CAPITAL ACCOUNTS ARE REQUIRED TO BE MADE
PURSUANT TO TREASURY REGULATION SECTION 1.704-1(B)(2)(IV)(J), (K), AND (M).

 

(E)           THE ALLOCATIONS SET FORTH IN SECTIONS 4.3(A)-(D) (THE “REGULATORY
ALLOCATIONS”) ARE INTENDED TO COMPLY WITH CERTAIN REQUIREMENTS OF SECTIONS
1.704-1(B) AND 1.704-2 OF THE TREASURY REGULATIONS. THE REGULATORY ALLOCATIONS
MAY NOT BE CONSISTENT WITH THE MANNER IN WHICH THE UNITHOLDERS INTEND TO
ALLOCATE PROFIT AND LOSS OF THE COMPANY OR MAKE DISTRIBUTIONS BY THE COMPANY.
ACCORDINGLY, NOTWITHSTANDING THE OTHER PROVISIONS OF THIS ARTICLE IV, BUT
SUBJECT TO THE REGULATORY ALLOCATIONS, INCOME, GAIN, DEDUCTION, AND LOSS SHALL
BE REALLOCATED AMONG THE UNITHOLDERS SO AS TO ELIMINATE THE EFFECT OF THE
REGULATORY ALLOCATIONS AND THEREBY CAUSE THE RESPECTIVE CAPITAL ACCOUNTS OF THE
UNITHOLDERS TO BE IN THE AMOUNTS (OR AS CLOSE THERETO AS POSSIBLE) THEY WOULD
HAVE BEEN IF PROFIT AND LOSS (AND SUCH OTHER ITEMS OF INCOME, GAIN, DEDUCTION,
AND LOSS) HAD BEEN ALLOCATED WITHOUT REFERENCE TO THE REGULATORY ALLOCATIONS. IN
GENERAL, THE UNITHOLDERS ANTICIPATE THAT THIS WILL BE ACCOMPLISHED BY SPECIALLY
ALLOCATING OTHER PROFIT AND LOSS (AND SUCH OTHER ITEMS OF INCOME, GAIN,
DEDUCTION, AND LOSS) AMONG THE UNITHOLDERS SO THAT THE NET AMOUNT OF THE
REGULATORY ALLOCATIONS AND SUCH SPECIAL ALLOCATIONS TO EACH SUCH UNITHOLDER IS
ZERO.

 

Section 4.4            Tax Allocations.

 

(A)           THE INCOME, GAINS, LOSSES, DEDUCTIONS, AND CREDITS OF THE COMPANY
WILL BE ALLOCATED, FOR FEDERAL, STATE, AND LOCAL INCOME TAX PURPOSES, AMONG THE
UNITHOLDERS IN ACCORDANCE WITH THE ALLOCATION OF SUCH INCOME, GAINS, LOSSES,
DEDUCTIONS, AND CREDITS AMONG THE UNITHOLDERS FOR COMPUTING THEIR CAPITAL
ACCOUNTS; EXCEPT THAT, IF ANY SUCH ALLOCATION IS NOT PERMITTED BY THE CODE OR
OTHER APPLICABLE LAW, THEN THE COMPANY’S SUBSEQUENT INCOME, GAINS, LOSSES,
DEDUCTIONS, AND CREDITS WILL BE ALLOCATED AMONG THE UNITHOLDERS SO AS TO REFLECT
AS NEARLY AS POSSIBLE THE ALLOCATION SET FORTH HEREIN IN COMPUTING THEIR CAPITAL
ACCOUNTS.

 

(B)           ITEMS OF THE COMPANY’S TAXABLE INCOME, GAIN, LOSS, AND DEDUCTION
WITH RESPECT TO ANY PROPERTY CONTRIBUTED TO THE CAPITAL OF THE COMPANY SHALL BE
ALLOCATED AMONG THE UNITHOLDERS IN ACCORDANCE WITH CODE SECTION 704(C) SO AS TO
TAKE ACCOUNT OF ANY VARIATION BETWEEN THE ADJUSTED BASIS OF SUCH PROPERTY TO THE
COMPANY FOR FEDERAL INCOME TAX PURPOSES AND ITS BOOK VALUE, USING ANY METHOD
ALLOWED BY CODE SECTION 704(C) AND THE TREASURY REGULATIONS THEREUNDER SELECTED
BY THE BOARD.

 

(C)           IF THE BOOK VALUE OF ANY ASSET OF THE COMPANY IS ADJUSTED PURSUANT
TO THE REQUIREMENTS OF TREASURY REGULATION SECTION 1.704-1(B)(2)(IV)(E) OR (F)
SUBSEQUENT ALLOCATIONS OF ITEMS OF TAXABLE INCOME, GAIN, LOSS, AND DEDUCTION
WITH RESPECT TO SUCH ASSET SHALL TAKE ACCOUNT OF ANY VARIATION BETWEEN THE
ADJUSTED BASIS OF SUCH ASSET FOR FEDERAL INCOME TAX PURPOSES AND ITS

 

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BOOK VALUE IN THE SAME MANNER AS UNDER CODE SECTION 704(C), USING ANY METHOD
ALLOWED BY CODE SECTION 704(C) AND THE TREASURY REGULATIONS THEREUNDER SELECTED
BY THE BOARD.

 

(D)           ALLOCATIONS OF TAX CREDITS, TAX CREDIT RECAPTURE, AND ANY ITEMS
RELATED THERETO SHALL BE ALLOCATED TO THE UNITHOLDERS ACCORDING TO THEIR
INTERESTS IN SUCH ITEMS AS DETERMINED BY THE BOARD TAKING INTO ACCOUNT THE
PRINCIPLES OF TREASURY REGULATION SECTION 1.704-1(B)(4)(II).

 

(E)           ALLOCATIONS PURSUANT TO THIS SECTION 4.4 ARE SOLELY FOR PURPOSES
OF FEDERAL, STATE, AND LOCAL TAXES AND SHALL NOT AFFECT, OR IN ANY WAY BE TAKEN
INTO ACCOUNT IN COMPUTING, ANY UNITHOLDER’S CAPITAL ACCOUNT OR UNIT OF PROFITS,
LOSSES, DISTRIBUTIONS, OR OTHER ITEMS OF THE COMPANY PURSUANT TO ANY PROVISION
OF THIS AGREEMENT.

 

Section 4.5            Indemnification and Reimbursement for Payments on Behalf
of a Unitholder. If the Company is required by law to make any payment that is
specifically attributable to a Unitholder or a Unitholder’s status as such
(including, but not limited to, federal, state, and local withholding taxes,
personal property taxes, personal property replacement taxes, and unincorporated
business taxes), then such Unitholder shall indemnify the Company in full for
the entire amount paid (including interest, penalties and related expenses). The
Company may pursue and enforce all rights and remedies it may have against each
Unitholder under this Section 4.5, including instituting a lawsuit to collect
such indemnification and contribution with interest calculated at a rate equal
to 10% per annum, compounded as of the last day of each year (but not in excess
of the highest rate per annum permitted by law) or reducing Distributions which
would otherwise be made to such Unitholder until the Company has recovered the
amount required to be indemnified (provided that the amount of any such
reduction shall be deemed to have been distributed to such Unitholder for all
purposes under this Agreement).

 

Section 4.6            Transfer of Capital Accounts. If a Unitholder transfers
an interest in the Company to a new or existing Unitholder, the transferee
Unitholder shall succeed to that portion of the transferor’s Capital Account
that is attributable to the transferred interest.

 

Section 4.7            Certain Repurchases and Redemptions. Notwithstanding
anything to the contrary in this Agreement, the Company may, at its option,
exercise its repurchase or redemption rights, if any, and fulfill its repurchase
or redemption obligations, if any, to a holder of Units pursuant to this
Agreement or any Management Unit Purchase Agreement, in whole or in part, by
distributing to such holder securities issued by VWR Investors, Inc. or any
other direct Subsidiary of the Company, so long as VWR Investors, Inc. or such
Subsidiary directly or indirectly owns all or substantially all of the assets of
the Company on a consolidated basis, with a value equal to the redemption or
repurchase price of the Units of such holder to be redeemed or repurchased;
provided that, following such distribution VWR Investors, Inc. or such
Subsidiary shall redeem or repurchase such securities from such holder within
one business day following such distribution and the purchase price for such
redemption or repurchase shall be paid by VWR Investors, Inc. or such Subsidiary
(i) for cash to the extent that the Company would have been obligated (but for
the Company’s exercise of its option under this Section 4.7) to pay for such
repurchase or redemption in cash and/or (ii) by issuance of a subordinated
promissory note to the extent that the Company would have been obligated (but
for the Company’s exercise of its option under this Section 4.7) to pay for such
repurchase or redemption by the issuance of a

 

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subordinated promissory note.  Any such subordinated promissory note issued
pursuant to this Section 4.7 shall have substantially the same terms and
conditions as the subordinated promissory note that the Company was otherwise
obligated to issue would have had.  Each holder of Units agrees to take such
actions and to enter into such agreements as the Company may reasonably request
in order to carryout the intent and provisions of this Section 4.7.  The Company
and the holder agree to treat any such distribution as a distribution of
securities of the Subsidiary under Code Section 731(a).

 

ARTICLE V

 

BOARD OF MANAGERS; OFFICERS

 

Section 5.1            Management by the Board of Managers.

 

(A)           NO MANAGEMENT BY UNITHOLDERS.  THE UNITHOLDERS SHALL NOT MANAGE
AND CONTROL THE BUSINESS AND AFFAIRS OF THE COMPANY, EXCEPT FOR SITUATIONS IN
WHICH THE APPROVAL OF UNITHOLDERS IS REQUIRED BY THIS AGREEMENT OR BY
NON-WAIVABLE PROVISIONS OF APPLICABLE LAW.

 

(B)           MANAGEMENT BY BOARD OF MANAGERS.  IN MANAGING THE BUSINESS AND
AFFAIRS OF THE COMPANY AND EXERCISING THEIR POWERS, THE MANAGERS SHALL BE
MEMBERS OF AND SHALL ACT AS A BOARD OF MANAGERS (THE “BOARD”).  THE BOARD MAY
ACT (A) BY RESOLUTIONS ADOPTED AT A MEETING AND BY WRITTEN CONSENTS PURSUANT TO
SECTION 5.3, (B) BY DELEGATING POWER AND AUTHORITY TO COMMITTEES PURSUANT TO
SECTION 5.4, AND (C) BY DELEGATING POWER AND AUTHORITY TO ANY OFFICER PURSUANT
TO SECTION 5.5(A).  EXCEPT AS OTHERWISE PROVIDED IN ANY OTHER WRITTEN AGREEMENT
TO WHICH A MANAGER IS A PARTY, EACH UNITHOLDER ACKNOWLEDGES AND AGREES THAT NO
MANAGER SHALL, AS A RESULT OF BEING A MANAGER (AS SUCH), BE BOUND TO DEVOTE ALL
OF HIS OR HER BUSINESS TIME TO THE AFFAIRS OF THE COMPANY, AND THAT HE OR SHE
AND HIS OR HER AFFILIATES DO AND WILL CONTINUE TO ENGAGE FOR THEIR OWN ACCOUNT
AND FOR THE ACCOUNTS OF OTHERS IN OTHER BUSINESS VENTURES.

 

(C)           AUTHORITY OF BOARD OF MANAGERS.  EXCEPT FOR SITUATIONS IN WHICH
THE APPROVAL OF THE UNITHOLDERS OR ANY SPECIFIC UNITHOLDER IS REQUIRED BY THE
TERMS OF THIS AGREEMENT OR THE SECURITYHOLDERS AGREEMENT AND SUBJECT TO THE
PROVISIONS OF THIS SECTION 5.1(B), (I) THE BOARD SHALL CONDUCT, DIRECT AND
EXERCISE FULL CONTROL OVER ALL ACTIVITIES OF THE COMPANY, (II) ALL MANAGEMENT
POWERS OVER THE BUSINESS AND AFFAIRS OF THE COMPANY SHALL BE VESTED IN THE BOARD
AND (III) THE BOARD SHALL HAVE THE POWER TO BIND OR TAKE ANY ACTION ON BEHALF OF
THE COMPANY, OR TO EXERCISE IN ITS SOLE DISCRETION ANY RIGHTS AND POWERS
(INCLUDING THE RIGHTS AND POWERS TO TAKE CERTAIN ACTIONS, GIVE OR WITHHOLD
CERTAIN CONSENTS OR APPROVALS, OR MAKE CERTAIN DETERMINATIONS, OPINIONS,
JUDGMENTS, OR OTHER DECISIONS) GRANTED TO THE BOARD OR THE COMPANY UNDER THIS
AGREEMENT, OR ANY OTHER AGREEMENT, INSTRUMENT, OR OTHER DOCUMENT TO WHICH THE
COMPANY IS A PARTY OR BY VIRTUE OF ITS HOLDING THE EQUITY INTERESTS OF ANY
SUBSIDIARY THEREOF.  THE BOARD SHALL BE THE “MANAGER” OF THE COMPANY FOR THE
PURPOSES OF THE DELAWARE ACT.

 

(D)           OFFICERS.  THE MANAGEMENT OF THE BUSINESS AND AFFAIRS OF THE
COMPANY BY THE OFFICERS AND THE EXERCISING OF THEIR POWERS SHALL BE CONDUCTED
UNDER THE SUPERVISION OF AND SUBJECT TO THE APPROVAL OF THE BOARD.

 

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Section 5.2            Composition and Election of the Board of Managers.

 

(A)           NUMBER AND DESIGNATION.  THE NUMBER OF MANAGERS ON THE BOARD SHALL
BE INITIALLY ESTABLISHED AT FIVE (5), BUT SHALL THEREAFTER BE COMPRISED OF SUCH
NUMBER OF MANAGERS AS TO BE THE NUMBER NECESSARY TO ALLOW FOR THE DESIGNATIONS
PROVIDED FOR PURSUANT TO SECTION 5.2(A)(I) THROUGH (IV) BELOW.  THE BOARD SHALL
AT ALL TIMES BE COMPRISED OF THE FOLLOWING PERSONS:

 

(I)            ONE (1) REPRESENTATIVE DESIGNATED BY MDCP-A FROM TIME TO TIME,
WHO SHALL INITIALLY BE TIMOTHY P. SULLIVAN (THE “MDCP-A MANAGER”);

 

(II)           ONE (1) REPRESENTATIVE DESIGNATED BY MDCP-C FROM TIME TO TIME,
WHO SHALL INITIALLY BE NICHOLAS W. ALEXOS (THE “MDCP-C MANAGER”);

 

(III)          ONE (1) REPRESENTATIVE DESIGNATED BY MDCP-CO-INVEST 1 FROM TIME
TO TIME, WHO SHALL INITIALLY BE TIMOTHY D. SHEEHAN (THE “MDCP-CO-INVEST 1
MANAGER”);

 

(IV)          SUCH NUMBER OF ADDITIONAL REPRESENTATIVES AS ARE DESIGNATED BY MDP
FROM TIME TO TIME, WHO INITIALLY SHALL BE HARRY M. JANSEN KRAEMER (EACH AN
“ADDITIONAL MDCP MANAGER” AND COLLECTIVELY WITH THE MDCP-A MANAGER, THE MDCP-C
MANAGER AND THE MDCP CO-INVEST 1 MANAGER, THE “INVESTOR MANAGERS”); AND

 

(V)           THE COMPANY’S CHIEF EXECUTIVE OFFICER, WHO SHALL INITIALLY BE JOHN
BALLBACH (THE “EXECUTIVE MANAGER”).

 

(B)           TERM.  MEMBERS OF THE BOARD SHALL SERVE FROM THEIR DESIGNATION IN
ACCORDANCE WITH THE TERMS HEREOF UNTIL THE EARLIER OF THEIR RESIGNATION, DEATH
OR REMOVAL IN ACCORDANCE WITH THE TERMS HEREOF.  MEMBERS OF THE BOARD NEED NOT
BE UNITHOLDERS AND NEED NOT BE RESIDENTS OF THE STATE OF DELAWARE.  A PERSON
SHALL BECOME A MEMBER OF THE BOARD EFFECTIVE UPON RECEIPT BY THE COMPANY AT ITS
PRINCIPAL PLACE OF BUSINESS OF A WRITTEN NOTICE ADDRESSED TO THE BOARD (OR AT
SUCH LATER TIME OR UPON THE HAPPENING OF SOME OTHER EVENT SPECIFIED IN SUCH
NOTICE) OF SUCH PERSON’S DESIGNATION FROM THE PERSON OR PERSONS ENTITLED TO
DESIGNATE SUCH MANAGER PURSUANT TO SECTION 5.2(A) ABOVE.  A MEMBER OF THE BOARD
MAY RESIGN AS SUCH BY DELIVERING HIS, HER OR ITS WRITTEN RESIGNATION TO THE
COMPANY AT THE COMPANY’S PRINCIPAL OFFICE ADDRESSED TO THE BOARD.  SUCH
RESIGNATION SHALL BE EFFECTIVE UPON RECEIPT UNLESS IT IS SPECIFIED TO BE
EFFECTIVE AT SOME OTHER TIME OR UPON THE HAPPENING OF SOME OTHER EVENT.

 

(C)           REMOVAL.  IF AN EXECUTIVE MANAGER CEASES TO SERVE AS THE COMPANY’S
CHIEF EXECUTIVE OFFICER, SUCH EXECUTIVE MANAGER SHALL AUTOMATICALLY UPON SUCH
CESSATION CEASE TO SERVE AS A MANAGER AND AS A MEMBER OF ANY COMMITTEE OF THE
BOARD.  THE REMOVAL FROM THE BOARD OR ANY OF ITS COMMITTEES (WITH OR WITHOUT
CAUSE) OF ANY INVESTOR MANAGER SHALL BE UPON (AND ONLY UPON) THE WRITTEN REQUEST
OF MDP.

 

(D)           VACANCIES.  IN THE EVENT THAT ANY DESIGNEE UNDER SECTION 5.2(A)
FOR ANY REASON CEASES TO SERVE AS A MEMBER OF THE BOARD, (I) THE RESULTING
VACANCY ON THE BOARD SHALL BE FILLED BY A PERSON DESIGNATED BY THE PERSON OR
PERSONS ORIGINALLY ENTITLED TO DESIGNATE SUCH MANAGER PURSUANT TO SECTION 5.2(A)
ABOVE OR, IN THE CASE OF THE EXECUTIVE MANAGER, FILLED BY THE COMPANY’S NEXT
ELECTED CHIEF EXECUTIVE OFFICER (PROVIDED THAT, IF ANY PARTY FAILS TO DESIGNATE
A PERSON TO FILL A VACANCY ON THE BOARD PURSUANT TO THE TERMS OF THIS SECTION
5.2 OR, IN THE CASE OF THE EXECUTIVE MANAGER, NO NEW CHIEF EXECUTIVE OFFICER HAS
BEEN ELECTED, SUCH VACANT MANAGERSHIP SHALL REMAIN VACANT UNTIL SUCH MANAGERSHIP
IS FILLED PURSUANT TO THIS SECTION 5.2(D)

 

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OR MDP DETERMINES THAT SUCH VACANCY WILL NOT BE FILLED), AND (II) SUCH DESIGNEE
SHALL BE REMOVED PROMPTLY AFTER SUCH TIME FROM EACH COMMITTEE OF THE BOARD.

 

(E)           REIMBURSEMENT.  THE COMPANY SHALL PAY ALL REIMBURSABLE
OUT-OF-POCKET COSTS AND EXPENSES INCURRED BY EACH MEMBER OF THE BOARD INCURRED
IN THE COURSE OF THEIR SERVICE HEREUNDER, INCLUDING IN CONNECTION WITH ATTENDING
REGULAR AND SPECIAL MEETINGS OF THE BOARD, ANY BOARD OF MANAGERS OR BOARD OF
DIRECTORS OF EACH OF THE COMPANY’S SUBSIDIARIES AND/OR ANY OF THEIR RESPECTIVE
COMMITTEES; PROVIDED THAT, SO LONG AS THE MANAGEMENT SERVICES AGREEMENT IS IN
EFFECT, INVESTOR MANAGERS WHO ARE EMPLOYEES OF MDP LLC SHALL NOT BE ENTITLED TO
REIMBURSEMENT BY THE COMPANY OF OUT-OF-POCKET TRAVEL EXPENSES IN CONNECTION WITH
ATTENDING REGULAR AND SPECIAL MEETINGS OF THE BOARD, ANY BOARD OF MANAGERS OR
BOARD OF DIRECTORS OF EACH OF THE COMPANY’S SUBSIDIARIES AND/OR ANY OF THEIR
RESPECTIVE COMMITTEES.

 

(F)            COMPENSATION OF MANAGERS.  EXCEPT AS APPROVED BY THE HOLDERS OF
THE REQUIRED INTEREST, MANAGERS SHALL RECEIVE NO COMPENSATION FOR SERVING IN
SUCH CAPACITY.

 

(G)           RELIANCE BY THIRD PARTIES.  ANY PERSON DEALING WITH THE COMPANY,
OTHER THAN A UNITHOLDER, MAY RELY ON THE AUTHORITY OF THE BOARD (OR ANY OFFICER
AUTHORIZED BY THE BOARD) IN TAKING ANY ACTION IN THE NAME OF THE COMPANY WITHOUT
INQUIRY INTO THE PROVISIONS OF THIS AGREEMENT OR COMPLIANCE HEREWITH, REGARDLESS
OF WHETHER THAT ACTION ACTUALLY IS TAKEN IN ACCORDANCE WITH THE PROVISIONS OF
THIS AGREEMENT.  EVERY AGREEMENT, INSTRUMENT OR DOCUMENT EXECUTED BY THE BOARD
(OR ANY OFFICER AUTHORIZED BY THE BOARD) IN THE NAME OF THE COMPANY WITH RESPECT
TO ANY BUSINESS OR PROPERTY OF THE COMPANY SHALL BE CONCLUSIVE EVIDENCE IN FAVOR
OF ANY PERSON RELYING THEREON OR CLAIMING THEREUNDER THAT (I) AT THE TIME OF THE
EXECUTION OR DELIVERY THEREOF, THIS AGREEMENT WAS IN FULL FORCE AND EFFECT, (II)
SUCH AGREEMENT, INSTRUMENT OR DOCUMENT WAS DULY EXECUTED ACCORDING TO THIS
AGREEMENT AND IS BINDING UPON THE COMPANY AND (III) THE BOARD OR SUCH OFFICER
WAS DULY AUTHORIZED AND EMPOWERED TO EXECUTE AND DELIVER SUCH AGREEMENT,
INSTRUMENT OR DOCUMENT FOR AND ON BEHALF OF THE COMPANY.

 

(H)           SUBSIDIARY BOARD OF MANAGERS OR BOARD OF DIRECTORS.  THE COMPANY
SHALL AT ALL TIMES, UNLESS OTHERWISE DETERMINED BY THE BOARD, CAUSE THE BOARD OF
MANAGERS OR BOARD OF DIRECTORS OF EACH OF THE COMPANY’S SUBSIDIARIES TO BE
COMPRISED OF THE SAME PERSONS WHO ARE THEN MANAGERS OF THE BOARD PURSUANT TO
SECTION 5.2(A) ABOVE.

 

Section 5.3            Board Meetings and Actions by Written Consent.

 

(A)           QUORUM; VOTING.  A MAJORITY OF THE TOTAL NUMBER OF MANAGERS THEN
SERVING ON THE BOARD (I.E., EXCLUDING ANY VACANCIES ON THE BOARD) MUST BE
PRESENT (INCLUDING FOR PURPOSES OF ACTIONS TAKEN PURSUANT TO SECTION 5.3(F)) IN
ORDER TO CONSTITUTE A QUORUM FOR THE TRANSACTION OF BUSINESS OF THE BOARD, AND
EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT, THE ACT OF A MAJORITY OF THE
MANAGERS PRESENT AT A MEETING OF THE BOARD AT WHICH A QUORUM IS PRESENT SHALL BE
THE ACT OF THE BOARD.  WHEN A QUORUM IS ONCE PRESENT TO COMMENCE A MEETING OF
THE BOARD, IT IS BROKEN IF LESS THAN ONE INVESTOR MANAGER SHALL REMAIN PRESENT
AT SUCH MEETING AND NO FURTHER BUSINESS MAY BE TRANSACTED AT SUCH MEETING UNTIL
SUCH TIME AS A QUORUM SHALL AGAIN BE PRESENT.  IF A QUORUM SHALL NOT BE PRESENT
DURING A MEETING OF THE BOARD, THE MANAGERS PRESENT THEREAT MAY ADJOURN THE
MEETING FROM TIME TO TIME, WITHOUT NOTICE OTHER THAN ANNOUNCEMENT AT THE
MEETING, UNTIL A QUORUM SHALL BE PRESENT.  A MANAGER WHO IS PRESENT AT A MEETING
OF THE

 

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BOARD AT WHICH ACTION ON ANY MATTER IS TAKEN SHALL BE PRESUMED TO HAVE ASSENTED
TO THE ACTION UNLESS HIS DISSENT SHALL BE ENTERED IN THE MINUTES OF THE MEETING
OR UNLESS HE SHALL FILE HIS WRITTEN DISSENT TO SUCH ACTION WITH THE PERSON
ACTING AS SECRETARY OF THE MEETING BEFORE THE ADJOURNMENT THEREOF OR SHALL
DELIVER SUCH DISSENT TO THE COMPANY IMMEDIATELY AFTER THE ADJOURNMENT OF THE
MEETING.  SUCH RIGHT TO DISSENT SHALL NOT APPLY TO A MANAGER WHO VOTED IN FAVOR
OF SUCH ACTION.

 

(B)           PLACE; ATTENDANCE.  MEETINGS OF THE BOARD MAY BE HELD AT SUCH
PLACE OR PLACES AS SHALL BE DETERMINED FROM TIME TO TIME BY RESOLUTION OF THE
BOARD.  AT ALL MEETINGS OF THE BOARD, BUSINESS SHALL BE TRANSACTED IN SUCH ORDER
AS SHALL FROM TIME TO TIME BE DETERMINED BY RESOLUTION OF THE BOARD.  ATTENDANCE
OF A MANAGER AT A MEETING SHALL CONSTITUTE A WAIVER OF NOTICE OF SUCH MEETING,
EXCEPT WHERE A MANAGER ATTENDS A MEETING FOR THE EXPRESS PURPOSE OF OBJECTING TO
THE TRANSACTION OF ANY BUSINESS ON THE GROUND THAT THE MEETING IS NOT LAWFULLY
CALLED OR CONVENED.

 

(C)           MEETING IN CONNECTION WITH UNITHOLDER MEETING.  IN CONNECTION WITH
ANY MEETING OF UNITHOLDERS, THE MANAGERS MAY, IF A QUORUM IS PRESENT, HOLD A
MEETING FOR THE TRANSACTION OF BUSINESS IMMEDIATELY AFTER AND AT THE SAME PLACE
AS SUCH MEETING OF THE UNITHOLDERS.  NOTICE OF SUCH MEETING AT SUCH TIME AND
PLACE SHALL NOT BE REQUIRED.

 

(D)           TIME, PLACE AND NOTICE.  REGULAR MEETINGS OF THE BOARD SHALL BE
HELD AT SUCH TIMES AND PLACES AS SHALL BE DESIGNATED FROM TIME TO TIME BY
RESOLUTION OF THE BOARD.  NOTICE OF SUCH MEETINGS SHALL NOT BE REQUIRED.

 

(E)           SPECIAL MEETINGS.  SPECIAL MEETINGS OF THE BOARD MAY BE CALLED BY
ANY MANAGER ON AT LEAST 24 HOURS’ NOTICE TO EACH OTHER MANAGER OR BY THE HOLDERS
OF THE REQUIRED INTEREST ON AT LEAST 24 HOURS’ NOTICE TO EACH MANAGER.  ANY SUCH
NOTICE NEED NOT STATE THE PURPOSE OR PURPOSES OF, NOR THE BUSINESS TO BE
TRANSACTED AT, SUCH MEETING, EXCEPT AS MAY OTHERWISE BE REQUIRED BY LAW OR
PROVIDED FOR IN THIS AGREEMENT.

 

(F)            ACTION BY WRITTEN CONSENT OR TELEPHONE CONFERENCE.  ANY ACTION
PERMITTED OR REQUIRED BY THE DELAWARE ACT, THE CERTIFICATE OR THIS AGREEMENT TO
BE TAKEN AT A MEETING OF THE BOARD OR ANY COMMITTEE DESIGNATED BY THE BOARD MAY
BE TAKEN WITHOUT A MEETING IF A CONSENT IN WRITING, SETTING FORTH THE ACTION TO
BE TAKEN, IS SIGNED BY ALL THE MANAGERS OR MEMBERS OF SUCH COMMITTEE, AS THE
CASE MAY BE.  AN E-MAIL TRANSMISSION OR A PHOTOGRAPHIC, PHOTOSTATIC, FACSIMILE
OR SIMILAR REPRODUCTION OF A WRITING SIGNED BY A MANAGER SHALL BE REGARDED AS
SIGNED BY THE MANAGER FOR PURPOSES OF THIS SECTION 5.3(F).  SUCH CONSENT SHALL
HAVE THE SAME FORCE AND EFFECT AS A UNANIMOUS VOTE AT A MEETING AND MAY BE
STATED AS SUCH IN ANY DOCUMENT OR INSTRUMENT FILED WITH THE SECRETARY OF STATE
OF DELAWARE, AND THE EXECUTION OF SUCH CONSENT SHALL CONSTITUTE ATTENDANCE OR
PRESENCE IN PERSON AT A MEETING OF THE BOARD OR ANY SUCH COMMITTEE, AS THE CASE
MAY BE.  SUBJECT TO THE REQUIREMENTS OF THE DELAWARE ACT, THE CERTIFICATE OR
THIS AGREEMENT FOR NOTICE OF MEETINGS, UNLESS OTHERWISE RESTRICTED BY THE
CERTIFICATE, THE MANAGERS OR MEMBERS OF ANY COMMITTEE DESIGNATED BY THE BOARD
MAY PARTICIPATE IN AND HOLD A MEETING OF THE BOARD OR ANY COMMITTEE, AS THE CASE
MAY BE, BY MEANS OF A CONFERENCE TELEPHONE OR SIMILAR COMMUNICATIONS EQUIPMENT
BY MEANS OF WHICH ALL PERSONS PARTICIPATING IN THE MEETING CAN HEAR EACH OTHER,
AND PARTICIPATION IN SUCH MEETING SHALL CONSTITUTE ATTENDANCE AND PRESENCE IN
PERSON AT SUCH MEETING, EXCEPT WHERE A PERSON PARTICIPATES IN THE MEETING FOR
THE EXPRESS PURPOSE OF

 

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OBJECTING TO THE TRANSACTION OF ANY BUSINESS ON THE GROUND THAT THE MEETING IS
NOT LAWFULLY CALLED OR CONVENED.

 

Section 5.4            Committees; Delegation of Authority and Duties.

 

(A)           COMMITTEES; GENERALLY.  THE BOARD MAY, FROM TIME TO TIME,
DESIGNATE ONE OR MORE COMMITTEES.  ANY SUCH COMMITTEE, TO THE EXTENT PROVIDED IN
THE ENABLING RESOLUTION OR IN THE CERTIFICATE OR THIS AGREEMENT, SHALL HAVE AND
MAY EXERCISE ALL OF THE AUTHORITY OF THE BOARD.  AT EVERY MEETING OF ANY SUCH
COMMITTEE, THE PRESENCE OF A MAJORITY OF ALL THE MEMBERS THEREOF SHALL
CONSTITUTE A QUORUM, AND THE AFFIRMATIVE VOTE OF A MAJORITY OF THE MEMBERS
PRESENT SHALL BE NECESSARY FOR THE ADOPTION OF ANY RESOLUTION.  THE BOARD MAY
DISSOLVE ANY COMMITTEE AT ANY TIME, UNLESS OTHERWISE PROVIDED IN THE CERTIFICATE
OR THIS AGREEMENT.

 

(B)           AUDIT COMMITTEE.  THE BOARD MAY ESTABLISH AN AUDIT COMMITTEE TO
SELECT THE COMPANY’S INDEPENDENT ACCOUNTANTS AND TO REVIEW THE ANNUAL AUDIT OF
THE COMPANY’S FINANCIAL STATEMENTS CONDUCTED BY SUCH ACCOUNTANTS.

 

(C)           DELEGATION; GENERALLY.  THE BOARD MAY, FROM TIME TO TIME, DELEGATE
TO ONE OR MORE PERSONS (INCLUDING ANY MANAGER OR OFFICER) SUCH AUTHORITY AND
DUTIES AS THE BOARD MAY DEEM ADVISABLE IN ADDITION TO THOSE POWERS AND DUTIES
SET FORTH IN SECTION 5.1(B) HEREOF.  THE BOARD ALSO MAY ASSIGN TITLES (INCLUDING
CHAIRMAN, CHIEF EXECUTIVE OFFICER, PRESIDENT, VICE PRESIDENT, SECRETARY,
ASSISTANT SECRETARY, TREASURER AND ASSISTANT TREASURER) TO ANY MANAGER,
UNITHOLDER OR OTHER INDIVIDUAL AND MAY DELEGATE TO SUCH MANAGER, UNITHOLDER OR
OTHER INDIVIDUAL CERTAIN AUTHORITY AND DUTIES.  ANY NUMBER OF TITLES MAY BE HELD
BY THE SAME MANAGER, UNITHOLDER OR OTHER INDIVIDUAL.  ANY DELEGATION PURSUANT TO
THIS SECTION 5.4(C) MAY BE REVOKED AT ANY TIME BY THE BOARD.

 

(D)           THIRD-PARTY RELIANCE.  ANY PERSON DEALING WITH THE COMPANY, OTHER
THAN A UNITHOLDER, MAY RELY ON THE AUTHORITY OF ANY OFFICER IN TAKING ANY ACTION
IN THE NAME OF THE COMPANY WITHOUT INQUIRY INTO THE PROVISIONS OF THIS AGREEMENT
OR COMPLIANCE HEREWITH, REGARDLESS OF WHETHER THAT ACTION ACTUALLY IS TAKEN IN
ACCORDANCE WITH THE PROVISIONS OF THIS AGREEMENT.

 

Section 5.5            Officers.

 

(A)           DESIGNATION AND APPOINTMENT.  THE BOARD MAY (BUT NEED NOT), FROM
TIME TO TIME, DESIGNATE AND APPOINT ONE OR MORE PERSONS AS AN OFFICER OF THE
COMPANY.  NO OFFICER NEED BE A RESIDENT OF THE STATE OF DELAWARE, A UNITHOLDER
OR A MANAGER.  ANY OFFICERS SO DESIGNATED SHALL HAVE SUCH AUTHORITY AND PERFORM
SUCH DUTIES AS THE BOARD MAY, FROM TIME TO TIME, DELEGATE TO THEM.  THE BOARD
MAY ASSIGN TITLES TO PARTICULAR OFFICERS.  UNLESS THE BOARD OTHERWISE DECIDES,
IF THE TITLE IS ONE COMMONLY USED FOR OFFICERS OF A BUSINESS CORPORATION FORMED,
THE ASSIGNMENT OF SUCH TITLE SHALL CONSTITUTE THE DELEGATION TO SUCH OFFICER OF
THE AUTHORITY AND DUTIES THAT ARE NORMALLY ASSOCIATED WITH THAT OFFICE, SUBJECT
TO (I) ANY SPECIFIC DELEGATION OF AUTHORITY AND DUTIES MADE TO SUCH OFFICER BY
THE BOARD PURSUANT TO THE THIRD SENTENCE OF THIS SECTION 5.5(A) OR (II) ANY
DELEGATION OF AUTHORITY AND DUTIES MADE TO ONE OR MORE OFFICERS PURSUANT TO THE
TERMS OF SECTION 5.4(C).  EACH OFFICER SHALL HOLD OFFICE UNTIL SUCH OFFICER’S
SUCCESSOR SHALL BE DULY DESIGNATED AND SHALL QUALIFY OR UNTIL SUCH OFFICER’S
DEATH OR UNTIL

 

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SUCH OFFICER SHALL RESIGN OR SHALL HAVE BEEN REMOVED IN THE MANNER HEREINAFTER
PROVIDED.  ANY NUMBER OF OFFICES MAY BE HELD BY THE SAME INDIVIDUAL.  THE
SALARIES OR OTHER COMPENSATION, IF ANY, OF THE OFFICERS AND AGENTS OF THE
COMPANY SHALL BE FIXED FROM TIME TO TIME BY THE BOARD.

 

(B)           RESIGNATION; REMOVAL; VACANCIES.  ANY OFFICER (SUBJECT TO ANY
CONTRACT RIGHTS AVAILABLE TO THE COMPANY, IF APPLICABLE) MAY RESIGN AS SUCH AT
ANY TIME. SUCH RESIGNATION SHALL BE MADE IN WRITING AND SHALL TAKE EFFECT AT THE
TIME SPECIFIED THEREIN, OR IF NO TIME BE SPECIFIED, AT THE TIME OF ITS RECEIPT
BY THE BOARD.  THE ACCEPTANCE OF A RESIGNATION SHALL NOT BE NECESSARY TO MAKE IT
EFFECTIVE, UNLESS EXPRESSLY SO PROVIDED IN THE RESIGNATION.  ANY OFFICER MAY BE
REMOVED AS SUCH, EITHER WITH OR WITHOUT CAUSE, BY THE BOARD IN ITS DISCRETION AT
ANY TIME OR BY THE HOLDERS OF THE REQUIRED INTEREST IN THEIR DISCRETION AT ANY
TIME; PROVIDED, HOWEVER, THAT SUCH REMOVAL SHALL BE WITHOUT PREJUDICE TO THE
CONTRACT RIGHTS, IF ANY, OF THE INDIVIDUAL SO REMOVED.  DESIGNATION OF AN
OFFICER SHALL NOT OF ITSELF CREATE CONTRACT RIGHTS.  ANY VACANCY OCCURRING IN
ANY OFFICE OF THE COMPANY MAY BE FILLED BY THE BOARD AND SHALL REMAIN VACANT
UNTIL FILLED BY THE BOARD.

 

(C)           DUTIES OF OFFICERS; GENERALLY.  THE OFFICERS, IN THE PERFORMANCE
OF THEIR DUTIES AS SUCH, SHALL OWE TO THE UNITHOLDERS DUTIES OF LOYALTY AND DUE
CARE OF THE TYPE OWED BY THE OFFICERS OF A CORPORATION TO SUCH CORPORATION AND
ITS STOCKHOLDERS UNDER THE LAWS OF THE STATE OF DELAWARE.

 

ARTICLE VI

 

GENERAL RIGHTS AND OBLIGATIONS OF UNITHOLDERS

 

Section 6.1            Limitation of Liability.

 

(A)           EXCEPT AS OTHERWISE PROVIDED BY APPLICABLE LAW, THE DEBTS,
OBLIGATIONS, AND LIABILITIES OF THE COMPANY, WHETHER ARISING IN CONTRACT, TORT,
OR OTHERWISE, SHALL BE SOLELY THE DEBTS, OBLIGATIONS, AND LIABILITIES OF THE
COMPANY, AND NO UNITHOLDER SHALL BE OBLIGATED PERSONALLY FOR ANY SUCH DEBT,
OBLIGATION, OR LIABILITY OF THE COMPANY SOLELY BY REASON OF BEING A UNITHOLDER
OF THE COMPANY; PROVIDED THAT A UNITHOLDER SHALL BE REQUIRED TO RETURN TO THE
COMPANY ANY DISTRIBUTION MADE TO IT IN CLEAR AND MANIFEST ACCOUNTING OR SIMILAR
ERROR AND MAY BE REQUIRED TO PROVIDE INDEMNIFICATION PURSUANT TO AN APPROVED
SALE PURSUANT TO SECTION 5 OF THE SECURITYHOLDERS AGREEMENT OR A TRANSFER
PURSUANT TO SECTION 2 OF THE SECURITYHOLDERS AGREEMENT.  THE IMMEDIATELY
PRECEDING SENTENCE SHALL CONSTITUTE A COMPROMISE TO WHICH ALL UNITHOLDERS HAVE
CONSENTED WITHIN THE MEANING OF THE DELAWARE ACT.  NOTWITHSTANDING ANYTHING
CONTAINED HEREIN TO THE CONTRARY, THE FAILURE OF THE COMPANY TO OBSERVE ANY
FORMALITIES OR REQUIREMENTS RELATING TO THE EXERCISE OF ITS POWERS OR MANAGEMENT
OF ITS BUSINESS AND AFFAIRS UNDER THIS AGREEMENT OR THE DELAWARE ACT SHALL NOT
BE GROUNDS FOR IMPOSING PERSONAL LIABILITY ON THE UNITHOLDERS FOR LIABILITIES OF
THE COMPANY.

 

(B)           EXCEPT AS SET FORTH IN SECTION 6.1(C) OR AS OTHERWISE AGREED IN A
SEPARATE WRITING BETWEEN A UNITHOLDER AND THE COMPANY WITH RESPECT TO SUCH
UNITHOLDER, IN NO EVENT SHALL ANY UNITHOLDER BE REQUIRED TO MAKE ANY ADDITIONAL
CAPITAL CONTRIBUTION TO THE COMPANY OR BE SUBJECT TO ANY FORM OF CAPITAL CALL.

 

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(C)           IN ACCORDANCE WITH THE DELAWARE ACT AND THE LAWS OF THE STATE OF
DELAWARE, A UNITHOLDER OF A LIMITED LIABILITY COMPANY MAY, UNDER CERTAIN
CIRCUMSTANCES, BE REQUIRED TO RETURN AMOUNTS PREVIOUSLY DISTRIBUTED TO SUCH
UNITHOLDER.  IT IS THE INTENT OF THE UNITHOLDERS THAT NO DISTRIBUTION TO ANY
UNITHOLDER PURSUANT TO ARTICLE IV HEREOF SHALL BE DEEMED A RETURN OF MONEY OR
OTHER PROPERTY PAID OR DISTRIBUTED IN VIOLATION OF THE DELAWARE ACT.  THE
PAYMENT OF ANY SUCH MONEY OR DISTRIBUTION OF ANY SUCH PROPERTY TO A UNITHOLDER
SHALL BE DEEMED TO BE A COMPROMISE WITHIN THE MEANING OF THE DELAWARE ACT, AND
THE UNITHOLDER RECEIVING ANY SUCH MONEY OR PROPERTY SHALL NOT BE REQUIRED TO
RETURN TO ANY PERSON ANY SUCH MONEY OR PROPERTY.  HOWEVER, IF ANY COURT OF
COMPETENT JURISDICTION HOLDS THAT, NOTWITHSTANDING THE PROVISIONS OF THIS
AGREEMENT, ANY UNITHOLDER IS OBLIGATED TO MAKE ANY SUCH PAYMENT, SUCH OBLIGATION
SHALL BE THE OBLIGATION OF SUCH UNITHOLDER AND NOT OF ANY OTHER UNITHOLDER.

 

Section 6.2            Lack of Authority.  No Unitholder in his, her, or its
capacity as such (other than the members of the Board acting as the Board or an
authorized Officer of the Company) has the authority or power to act for or on
behalf of the Company in any manner, to do any act that would be (or could be
construed as) binding on the Company or to make any expenditures on behalf of
the Company, and the Unitholders hereby consent to the exercise by the Board of
the powers conferred on it by law and this Agreement.

 

Section 6.3            No Right of Partition.  No Unitholder shall have the
right to seek or obtain partition by court decree or operation of law of any of
the Company’s property, or the right to own or use particular or individual
assets of the Company.

 

Section 6.4            Unitholders Right to Act.  For situations which the
approval of any Unitholders or class thereof (rather than the approval of the
Board on behalf of the Unitholders) is required, the Unitholders shall act
through meetings and written consents as described in Section 3.2.

 

Section 6.5            Investment Opportunities; Conflicts of Interest.

 

(A)           MANAGERS.  SUBJECT TO THE OTHER PROVISIONS OF THIS AGREEMENT OR
ANY OTHER AGREEMENT TO WHICH SUCH MANAGER IS A PARTY, EACH MANAGER OF THE
COMPANY (OTHER THAN A MANAGER THAT IS ALSO AN EMPLOYEE OF THE COMPANY OR ANY OF
ITS SUBSIDIARIES) AT ANY TIME AND FROM TIME TO TIME MAY ENGAGE IN AND OWN
INTERESTS IN OTHER BUSINESS VENTURES OF ANY AND EVERY TYPE AND DESCRIPTION,
INDEPENDENTLY OR WITH OTHERS (INCLUDING ONES IN COMPETITION WITH THE COMPANY)
WITH NO OBLIGATION TO OFFER TO THE COMPANY OR ANY OTHER UNITHOLDER, MANAGER OR
OFFICER THE RIGHT TO PARTICIPATE THEREIN.

 

(B)           MANAGEMENT UNITHOLDERS.  EACH UNITHOLDER THAT IS AN EXECUTIVE (AS
DEFINED IN THE SECURITYHOLDERS AGREEMENT) SHALL, AND SHALL CAUSE EACH OF ITS
AFFILIATES TO, BRING ALL INVESTMENT OR BUSINESS OPPORTUNITIES TO THE COMPANY OF
WHICH ANY OF THE FOREGOING BECOME AWARE DURING THE PERIOD OF HIS OR HER
EMPLOYMENT WITH THE COMPANY OR ITS SUBSIDIARIES AND WHICH THEY REASONABLY
BELIEVE ARE WITHIN THE SCOPE AND INVESTMENT OBJECTIVES OF THE COMPANY OR ANY OF
ITS SUBSIDIARIES OR ARE OTHERWISE COMPETITIVE WITH THE BUSINESS OF THE COMPANY
OR ANY OF ITS SUBSIDIARIES BUT ONLY TO THE EXTENT REQUIRED BY THE CORPORATE
OPPORTUNITY DOCTRINE AS APPLIED TO CORPORATIONS ORGANIZED UNDER THE LAWS OF THE
STATE OF DELAWARE.

 

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(C)           OTHER UNITHOLDERS.  THE UNITHOLDERS EXPRESSLY ACKNOWLEDGE THAT,
SUBJECT TO THE OTHER EXPRESS PROVISIONS OF THIS AGREEMENT, (A) THE OTHER
UNITHOLDERS AND THEIR RESPECTIVE AFFILIATES AND STOCKHOLDERS, DIRECTORS,
MANAGERS, OFFICERS, CONTROLLING PERSONS, PARTNERS AND EMPLOYEES (COLLECTIVELY,
“RELATED PERSONS”) ARE PERMITTED TO HAVE, AND MAY PRESENTLY OR IN THE FUTURE
HAVE, INVESTMENTS OR OTHER BUSINESS RELATIONSHIPS WITH ENTITIES ENGAGED IN THE
BUSINESS OF THE COMPANY OR ITS SUBSIDIARIES (INCLUDING IN AREAS IN WHICH THE
COMPANY OR ANY OF ITS SUBSIDIARIES MAY IN THE FUTURE ENGAGE IN BUSINESS), AND IN
RELATED BUSINESSES OTHER THAN THROUGH THE COMPANY OR ANY OF ITS SUBSIDIARIES (AN
“OTHER BUSINESS”), (B) THE OTHER UNITHOLDERS AND THEIR RESPECTIVE AFFILIATES AND
RELATED PERSONS HAVE AND MAY DEVELOP A STRATEGIC RELATIONSHIP WITH BUSINESSES
THAT ARE AND MAY BE COMPETITIVE WITH THE COMPANY OR ANY OF ITS SUBSIDIARIES, (C)
NONE OF THE OTHER UNITHOLDERS OR THEIR RESPECTIVE AFFILIATES OR RELATED PERSONS
(INCLUDING THEIR RESPECTIVE REPRESENTATIVES SERVING ON THE BOARD) WILL BE
PROHIBITED BY VIRTUE OF THEIR INVESTMENTS IN THE COMPANY OR ITS SUBSIDIARIES OR
THEIR SERVICE ON THE BOARD OR ANY BOARD OF DIRECTORS OR OTHER GOVERNING BODY OF
ANY SUBSIDIARY FROM PURSUING AND ENGAGING IN ANY SUCH ACTIVITIES, (D) NONE OF
THE OTHER UNITHOLDERS OR THEIR RESPECTIVE AFFILIATES OR RELATED PERSONS
(INCLUDING THEIR RESPECTIVE REPRESENTATIVES SERVING ON THE BOARD) WILL BE
OBLIGATED TO PRESENT TO THE COMPANY, OR ANY UNITHOLDER, MANAGER, OR OFFICER OR
INFORM ANY OF THEM OF ANY SUCH OPPORTUNITY, RELATIONSHIP OR INVESTMENT, (E)
NEITHER THE COMPANY NOR ANY OTHER UNITHOLDER, MANAGER OR OFFICER OR SUBSIDIARY
OF THE COMPANY WILL ACQUIRE OR BE ENTITLED TO ANY INTEREST OR PARTICIPATION IN
ANY OTHER BUSINESS AS A RESULT OF THE PARTICIPATION THEREIN OF ANY OF THE OTHER
UNITHOLDERS OR THEIR RESPECTIVE AFFILIATES OR RELATED PERSONS AND (F) THE
INVOLVEMENT OF THE OTHER UNITHOLDERS OR THEIR RESPECTIVE AFFILIATES OR RELATED
PERSONS (INCLUDING THEIR RESPECTIVE REPRESENTATIVES SERVING ON THE BOARD) IN ANY
OTHER BUSINESS WILL NOT CONSTITUTE A CONFLICT OF INTEREST BY SUCH PERSONS WITH
RESPECT TO THE COMPANY, ANY OF ITS SUBSIDIARIES OR ITS UNITHOLDERS.  NO
AMENDMENT OR REPEAL OF THIS SECTION 6.5 SHALL APPLY TO OR HAVE ANY EFFECT ON THE
LIABILITY OR ALLEGED LIABILITY OF ANY OFFICER, MANAGER OR UNITHOLDER OF THE
COMPANY FOR OR WITH RESPECT TO ANY OPPORTUNITIES OF WHICH SUCH OFFICER, MANAGER
OR UNITHOLDER BECOMES AWARE PRIOR TO SUCH AMENDMENT OR REPEAL.

 

Section 6.6            Transactions Between the Company and the Unitholders. 
Notwithstanding that it may constitute a conflict of interest, the Unitholders
or their Affiliates may engage in any contract or transaction (including the
purchase, sale, lease or exchange of any property or rendering of any service or
the establishment of any salary, other compensation or other terms of
employment) with the Company so long as such contract or transaction is approved
by a majority of the disinterested members of the Board (even though the
disinterested members are less than a quorum) or the contract or transaction is
at arm’s length at the time that it is authorized or ratified by the Board.  By
its execution hereof, each Unitholder acknowledges and consents to performance
by the Company and/or its Subsidiaries of its obligations under that the
Management Services Agreement, which was entered into with an Affiliate of MDP.

 

ARTICLE VII

 

EXCULPATION AND INDEMNIFICATION

 

Section 7.1            Exculpation.  No Officer or Manager shall be liable to
any other Officer, Manager, the Company or to any Unitholder for any loss
suffered by the Company or any Unitholder unless such loss is caused by such
Person’s gross negligence, willful misconduct, violation of law or material
breach of this Agreement.  The Officers and Managers shall not be

 

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liable for errors in judgment or for any acts or omissions that do not
constitute gross negligence, willful misconduct, violation of law or material
breach of this Agreement.  Any Officer or Manager may consult with counsel and
accountants in respect of the Company’s affairs, and provided such Person acts
in good faith reliance upon the advice or opinion of such counsel or
accountants, such Person shall not be liable for any loss suffered by the
Company or any Unitholder in reliance thereon.

 

Section 7.2            Right to Indemnification.  Subject to the limitations and
conditions as provided in this Article VII, each Person who was or is made a
party or is threatened to be made a party to or is involved in any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative, arbitrative (hereinafter a “Proceeding”), or any appeal in such
a Proceeding or any inquiry or investigation that could lead to such a
Proceeding, by reason of the fact that he or she, or a Person of whom he or she
is the legal representative, is or was a Unitholder, Manager or Officer, or
while a Unitholder, Manager or Officer is or was serving at the request of the
Company as a manager, director, officer, partner, venturer, proprietor, trustee,
employee, agent or similar functionary of another foreign or domestic limited
liability company, corporation, partnership, joint venture, sole proprietorship,
trust, employee benefit plan or other enterprise shall be indemnified by the
Company to the fullest extent permitted by the Delaware Act, as the same exist
or may hereafter be amended (but, in the case of any such amendment, only to the
extent that such amendment permits the Company to provide broader
indemnification rights than said law permitted the Company to provide prior to
such amendment) against judgments, penalties (including excise and similar taxes
and punitive damages), fines, settlements and reasonable expenses (including
attorneys’ fees) actually incurred by such Person in connection with such
Proceeding, and indemnification under this Article VII shall continue as to a
Person who has ceased to serve in the capacity which initially entitled such
Person to indemnity hereunder.  The rights granted pursuant to this Article VII
shall be deemed contract rights, and no amendment, modification or repeal of
this Article VII shall have the effect of limiting or denying any such rights
with respect to actions taken or Proceedings arising prior to any amendment,
modification or repeal.  It is expressly acknowledged that the indemnification
provided in this Article VII could involve indemnification for negligence or
under theories of strict liability.

 

Section 7.3            Advance Payment.  Reasonable expenses incurred by a
Person of the type entitled to be indemnified under Section 7.2 who was, is or
is threatened to be made a named defendant or respondent in a Proceeding shall
be paid by the Company in advance of the final disposition of the Proceeding
upon receipt of an undertaking by or on behalf of such Person to repay such
amount if it shall ultimately be determined that he or she is not entitled to be
indemnified by the Company.

 

Section 7.4            Indemnification of Employees and Agents.  The Company, by
adoption of a resolution of the Board, may indemnify and advance expenses to an
employee or agent of the Company to the same extent and subject to the same
conditions under which it may indemnify and advance expenses to Persons who are
not or were not Managers or Officers but who are or were serving at the request
of the Company as a manager, director, officer, partner, venturer, proprietor,
trustee, employee, agent or similar functionary of another foreign or domestic
limited liability company, corporation, partnership, joint venture, sole
proprietorship, trust, employee benefit plan or other enterprise against any
liability asserted against him and

 

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incurred by him in such a capacity or arising out of his status as such a Person
to the same extent that it may indemnify and advance expenses to Managers and
Officers under this Article VII.

 

Section 7.5            Appearance as a Witness.  Notwithstanding any other
provision of this Article VII, the Company shall pay or reimburse reasonable
out-of-pocket expenses incurred by a Manager or Officer in connection with his
appearance as a witness or other participation in a Proceeding at a time when he
is not a named defendant or respondent in the Proceeding.

 

Section 7.6            Nonexclusivity of Rights.  The right to indemnification
and the advancement and payment of expenses conferred in this Article VII shall
not be exclusive of any other right which a Manager, Officer or other Person
indemnified pursuant to Section 7.2 may have or hereafter acquire under any law
(common or statutory), provision of the Certificate or this Agreement,
agreement, vote of Unitholders or disinterested Managers or otherwise.

 

Section 7.7            Insurance.  The Company shall, if available on
commercially reasonable terms, purchase and maintain insurance, or cause its
Subsidiaries to purchase and maintain insurance, at its or their expense, to
protect itself and any Person who is or was serving as a Manager, Officer or
agent of the Company or is or was serving at the request of the Company as a
manager, director, officer, partner, venturer, proprietor, trustee, employee,
agent or similar functionary of another foreign or domestic limited ability
company, corporation, partnership, joint venture, sole proprietorship, trust,
employee benefit plan or other enterprise against any expense, liability or
loss, whether or not the Company would have the power to indemnify such Person
against such expense, liability or loss under this Article VII.

 

Section 7.8            Savings Clause.  If this Article VII or any portion
hereof shall be invalidated on any ground by any court of competent
jurisdiction, then the Company shall nevertheless indemnify and hold harmless
each Manager, Officer or any other Person indemnified pursuant to this Article
VII as to costs, charges and expenses (including attorneys’ fees), judgments,
fines and amounts paid in settlement with respect to any action, suit or
proceeding, whether civil, criminal, administrative or investigative to the full
extent permitted by any applicable portion of this Article VII that shall not
have been invalidated and to the fullest extent permitted by applicable law.

 

ARTICLE VIII

 

BOOKS, RECORDS, ACCOUNTING AND REPORTS

 

Section 8.1            Records and Accounting.  The Company shall keep, or cause
to be kept, appropriate books and records with respect to the Company’s
business, including all books and records necessary to provide any information,
lists, and copies of documents required to be provided pursuant to Section 8.3
or pursuant to applicable laws.  The unit ledger for the Company and any unit
certificates held by the Company, and the stock or unit ledgers and equity
certificates for each of its Subsidiaries, shall be maintained at the Chicago
offices of Kirkland & Ellis LLP, or at such other place as directed by the
holders of the Required Interest in writing from time to time hereafter.  All
matters concerning (i) the determination of the relative amount of allocations
and distributions among the Unitholders pursuant to Articles III and IV and (ii)
accounting procedures and determinations, and other determinations not
specifically and

 

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expressly provided for by the terms of this Agreement, shall be determined by
the Board, whose determination shall be final and conclusive as to all of the
Unitholders absent manifest clerical error.

 

Section 8.2            Fiscal Year.  The fiscal year (the “Fiscal Year”) of the
Company shall constitute the 12-month period ending on December 31 of each
calendar year, or such other annual accounting period as may be established by
the Board.

 

Section 8.3            Tax Information.  The Company shall use commercially
reasonable efforts to deliver or cause to be delivered, within 75 days after the
end of each Fiscal Year, to each Person who was a Unitholder at any time during
such Fiscal Year all information regarding the Company necessary for the
preparation of such Person’s United States federal and state income tax returns.

 

Section 8.4            Transmission of Communications.  Each Person that owns or
controls Units on behalf of, or for the benefit of, another Person or Persons
shall be responsible for conveying any report, notice, or other communication
received from the Board to such other Person or Persons.

 

Section 8.5            Company Funds.  The Board and Officers may not commingle
the Company’s funds with the funds of any Unitholder or Manager.

 

ARTICLE IX

 

TAXES

 

Section 9.1            Tax Returns.  The Company shall prepare and file all
necessary federal and state income tax returns, including making the elections
described in Section 9.2.  Each Unitholder shall furnish to the Company all
pertinent information in its possession relating to the Company’s operations
that is necessary to enable the Company’s income tax returns to be prepared and
filed.

 

Section 9.2            Tax Elections.  The Board shall be entitled to cause the
Company to make any Tax election the Board may deem appropriate and in the best
interests of the Unitholders.

 

Section 9.3            Tax Matters Partner. MDCP-A shall be the “tax matters
partner” of the Company pursuant to Section 6231(a)(7) of the Code (the “Tax
Matters Partner”).  The Tax Matters Partner shall take such action as may be
necessary to cause each other Unitholder to become a “notice partner” within the
meaning of Section 6223 of the Code.  The Tax Matters Partner shall inform each
other Unitholder of all significant matters that may come to its attention in
its capacity as Tax Matters Partner by giving notice thereof on or before the
fifth business day after becoming aware thereof and, within that time, shall
forward to each other Unitholder copies of all significant written
communications he may receive in that capacity.  The Tax Matters Partner may not
take any action contemplated by Sections 6222 through 6232 of the Code without
the consent of the Board, but this sentence does not authorize the Tax Matters
Partner (or any Manager) to take any action left to the determination of an
individual Unitholder under Sections 6222 through 6232 of the Code.

 

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Section 9.4            Code Section 83 Safe Harbor Election.

 

(A)           BY EXECUTING THIS AGREEMENT, EACH UNITHOLDER AUTHORIZES AND
DIRECTS THE COMPANY TO ELECT TO HAVE THE “SAFE HARBOR” DESCRIBED IN THE PROPOSED
REVENUE PROCEDURE SET FORTH IN INTERNAL REVENUE SERVICE NOTICE 2005 43 (THE
“NOTICE”) APPLY TO ANY INTEREST IN THE COMPANY TRANSFERRED TO A SERVICE PROVIDER
BY THE COMPANY ON OR AFTER THE EFFECTIVE DATE OF SUCH REVENUE PROCEDURE IN
CONNECTION WITH SERVICES PROVIDED TO THE COMPANY.  FOR PURPOSES OF MAKING SUCH
SAFE HARBOR ELECTION, THE TAX MATTERS PARTNER IS HEREBY DESIGNATED AS THE
“PARTNER WHO HAS RESPONSIBILITY FOR FEDERAL INCOME TAX REPORTING” BY THE COMPANY
AND, ACCORDINGLY, EXECUTION OF SUCH SAFE HARBOR ELECTION BY THE TAX MATTERS
PARTNER CONSTITUTES EXECUTION OF A “SAFE HARBOR ELECTION” IN ACCORDANCE WITH
SECTION 3.03(1) OF THE NOTICE.  THE COMPANY AND EACH UNITHOLDER HEREBY AGREES TO
COMPLY WITH ALL REQUIREMENTS OF THE SAFE HARBOR DESCRIBED IN THE NOTICE,
INCLUDING, WITHOUT LIMITATION, THE REQUIREMENT THAT EACH UNITHOLDER SHALL
PREPARE AND FILE ALL FEDERAL INCOME TAX RETURNS REPORTING THE INCOME TAX EFFECTS
OF EACH INTEREST IN THE COMPANY ISSUED BY THE COMPANY COVERED BY THE SAFE HARBOR
IN A MANNER CONSISTENT WITH THE REQUIREMENTS OF THE NOTICE.

 

(B)           THE COMPANY AND ANY UNITHOLDER MAY PURSUE ANY AND ALL RIGHTS AND
REMEDIES IT MAY HAVE TO ENFORCE THE OBLIGATIONS OF THE COMPANY AND THE
UNITHOLDERS (AS APPLICABLE) UNDER SECTION 9.4(A), INCLUDING, WITHOUT LIMITATION,
SEEKING SPECIFIC PERFORMANCE AND/OR IMMEDIATE INJUNCTIVE OR OTHER EQUITABLE
RELIEF FROM ANY COURT OF COMPETENT JURISDICTION (WITHOUT THE NECESSITY OF
SHOWING ACTUAL MONEY DAMAGES, OR POSTING ANY BOND OR OTHER SECURITY) IN ORDER TO
ENFORCE OR PREVENT ANY VIOLATION OF THE PROVISIONS OF SECTION 9.4(A).  A
UNITHOLDER’S OBLIGATIONS TO COMPLY WITH THE REQUIREMENTS OF THIS SECTION 9.4
SHALL SURVIVE SUCH UNITHOLDER’S CEASING TO BE A UNITHOLDER OF THE COMPANY AND/OR
THE TERMINATION, DISSOLUTION, LIQUIDATION AND WINDING UP OF THE COMPANY, AND,
FOR PURPOSES OF THIS SECTION 9.4, THE COMPANY SHALL BE TREATED AS CONTINUING IN
EXISTENCE.

 

(C)           EACH UNITHOLDER AUTHORIZES THE TAX MATTERS PARTNER TO AMEND
SECTIONS 9.4(A) AND 9.4(B) TO THE EXTENT NECESSARY TO ACHIEVE SUBSTANTIALLY THE
SAME TAX TREATMENT WITH RESPECT TO ANY INTEREST IN THE COMPANY TRANSFERRED TO A
SERVICE PROVIDER BY THE COMPANY IN CONNECTION WITH SERVICES PROVIDED TO THE
COMPANY AS SET FORTH IN SECTION 4 OF THE NOTICE (E.G., TO REFLECT CHANGES FROM
THE RULES SET FORTH IN THE NOTICE IN SUBSEQUENT INTERNAL REVENUE SERVICE
GUIDANCE), PROVIDED THAT SUCH AMENDMENT IS NOT MATERIALLY ADVERSE TO SUCH
UNITHOLDER (AS COMPARED WITH THE AFTER TAX CONSEQUENCES THAT WOULD RESULT IF THE
PROVISIONS OF THE NOTICE APPLIED TO ALL INTERESTS IN THE COMPANY TRANSFERRED TO
A SERVICE PROVIDER BY THE COMPANY IN CONNECTION WITH SERVICES PROVIDED TO THE
COMPANY).

 

ARTICLE X

 

TRANSFER OF COMPANY INTERESTS

 

Section 10.1         Transfers by Unitholders.

 

(A)           NO UNITHOLDER SHALL TRANSFER ANY INTEREST IN ANY UNITS EXCEPT IN
COMPLIANCE WITH THIS ARTICLE X.  EXCEPT FOR TRANSFERS MADE IN COMPLIANCE WITH
THE SECURITYHOLDERS AGREEMENT AND, WITH RESPECT TO A UNITHOLDER SUBJECT TO A
MANAGEMENT UNIT

 

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PURCHASE AGREEMENT, SUCH MANAGEMENT UNIT PURCHASE AGREEMENT, NO UNITHOLDER SHALL
TRANSFER, OR OFFER OR AGREE TO TRANSFER, ALL OR ANY PART OF ANY INTEREST OF SUCH
PERSON’S UNITS WITHOUT THE PRIOR WRITTEN CONSENT OF THE BOARD. WITH THE BOARD’S
CONSENT, A UNITHOLDER MAY TRANSFER ALL OR ANY PART OF SUCH PERSON’S UNITS,
SUBJECT TO COMPLIANCE WITH THIS AGREEMENT (INCLUDING, WITHOUT LIMITATION,
SECTION 10.1(B)) AND ANY OTHER AGREEMENT BINDING UPON SUCH UNITHOLDER WHICH
RESTRICTS THE TRANSFER OF UNITS (INCLUDING, WITHOUT LIMITATION, THE
SECURITYHOLDERS AGREEMENT AND THE MANAGEMENT UNIT PURCHASE AGREEMENTS).

 

(B)           EACH TRANSFEREE OF UNITS OR OTHER INTEREST IN THE COMPANY SHALL,
AS A CONDITION PRECEDENT TO SUCH TRANSFER, EXECUTE A COUNTERPART TO THIS
AGREEMENT PURSUANT TO WHICH SUCH TRANSFEREE SHALL AGREE TO BE BOUND BY THE
PROVISIONS OF THIS AGREEMENT.

 

Section 10.2         Effect of Assignment.

 

(A)           ANY UNITHOLDER WHO SHALL ASSIGN ANY UNITS OR OTHER INTEREST IN THE
COMPANY SHALL CEASE TO BE A UNITHOLDER OF THE COMPANY WITH RESPECT TO SUCH UNITS
OR OTHER INTEREST AND SHALL NO LONGER HAVE ANY RIGHTS OR PRIVILEGES OF A
UNITHOLDER WITH RESPECT TO SUCH UNITS OR OTHER INTEREST.

 

(B)           ANY PERSON WHO ACQUIRES IN ANY MANNER WHATSOEVER ANY UNITS OR
OTHER INTEREST IN THE COMPANY, IRRESPECTIVE OF WHETHER SUCH PERSON HAS ACCEPTED
AND ADOPTED IN WRITING THE TERMS AND PROVISIONS OF THIS AGREEMENT, SHALL BE
DEEMED BY THE ACCEPTANCE OF THE BENEFITS OF THE ACQUISITION THEREOF TO HAVE
AGREED TO BE SUBJECT TO AND BOUND BY ALL OF THE TERMS AND CONDITIONS OF THIS
AGREEMENT THAT ANY PREDECESSOR IN SUCH UNITS OR OTHER INTEREST IN THE COMPANY OF
SUCH PERSON WAS SUBJECT TO OR BY WHICH SUCH PREDECESSOR WAS BOUND.

 

Section 10.3         Restriction on Transfer.  Anything in this Agreement to the
contrary notwithstanding, no Unitholder (other than the Investors) shall
Transfer a Unit (including any Transfer of an interest in Profits, Losses or
Distributions) if the Transfer would (i) unless the Board otherwise consents
(such consent not to be unreasonably withheld), cause the aggregate Transfer of
Unitholder interests for a given Company taxable year to exceed 2% of total
Unitholder interests (excluding for this purpose, any Transfer by a Unitholder
described in Treasury Reg. §1.7704-1(e), (f) or (g)), (ii) cause the Company to
be treated as a publicly traded partnership within the meaning of Code §7704 and
Treasury Reg. §1.7704-1, or (iii) create a significant risk of causing the
results contemplated by either clause (i) or (ii) above, in the Board’s sole
discretion.  Any Transfer that violates this Section 10.3 shall be void and the
purported buyer, assignee, transferee, pledgee, mortgagee, or other recipient
shall have no interest in or rights to Company assets, Profits, Losses or
Distributions, and neither the Board nor the Company shall be required to
recognize any such interest or rights.  If the Board at any time determines that
a Transfer or foreseeable future Transfers of Units would or may reasonably be
expected to cause the Company or a Subsidiary thereof to become required to
register or file periodic reports with the United States Securities and Exchange
Commission or any other securities regulatory body or organization in a
non-United States jurisdiction, the Board may adopt such additional reasonable
rules and restrictions, which shall be binding on the Unitholders, regarding
Transfers of Units in order to avoid such registration or reporting
requirements.

 

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Section 10.4         Transfer Fees and Expenses.  The transferor and transferee
of any Units or other interest in the Company shall be jointly and severally
obligated to reimburse the Company for all reasonable expenses (including
attorneys’ fees and expenses) of any Transfer or proposed Transfer, whether or
not consummated.

 

Section 10.5         Void Transfers.  Any Transfer by any Unitholder of any
Units or other interest in the Company in contravention of this Agreement
(including, without limitation, the failure of the transferee to execute a
counterpart in accordance with Section 10.1(b)) or which would cause the Company
to not be treated as a partnership for U.S. federal income tax purposes shall be
void and ineffectual and shall not bind or be recognized by the Company or any
other party.  No purported assignee shall have any right to any profits, losses
or distributions of the Company.

 

ARTICLE XI

 

ADMISSION OF UNITHOLDERS

 

Section 11.1         Substituted Unitholders.  In connection with the transfer
of Units permitted under the terms of this Agreement and the other Transaction
Documents, the transferee shall become a Substituted Unitholder on the effective
date of such Transfer, which effective date shall not be earlier than the date
of compliance with or waiver of the conditions to such Transfer (unless one of
the conditions to such Transfer is that Board or Unitholder consent is required
for the admission of such transferee, in which case such consent must first be
obtained), including executing counterparts of, and become a party to, this
Agreement and the other Transaction Documents to which the transferor Unitholder
was a party, and such admission shall be shown on the books and records of the
Company.

 

Section 11.2         Additional Unitholders.  A Person may be admitted to the
Company as an Additional Unitholder only as contemplated under, and in
compliance with, the terms of this Agreement, including furnishing to the Board
(a) a letter of acceptance, in form satisfactory to the Board, of all the terms
and conditions of this Agreement, including the power of attorney granted in
Section 15.1, and (b) such other documents or instruments as may be necessary or
appropriate to effect such Person’s admission as a Unitholder (including
counterparts or joinders to all applicable Transaction Documents).  Such
admission shall become effective on the date on which the Board determines that
such conditions have been satisfied and when any such admission is shown on the
books and records of the Company.

 

Section 11.3         Derivative Securities.  Except as set forth in this
Agreement, no Person that holds securities (including  options, warrants, or
rights) exercisable, exchangeable, or convertible into Units shall have any
rights with respect to such Units until such Person is actually issued Units
upon such exercise, exchange, or conversion and, if such Person is not then a
Unitholder, is admitted as a Unitholder pursuant to Section 11.2.

 

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ARTICLE XII

 

WITHDRAWAL AND RESIGNATION OF UNITHOLDERS

 

Section 12.1         Withdrawal and Resignation of Unitholders.  No Unitholder
shall have the power or right to withdraw or otherwise resign or be expelled
from the Company prior to the dissolution and winding up of the Company pursuant
to Article XII, except as otherwise expressly permitted by this Agreement or any
of the other agreements contemplated hereby.  Notwithstanding that payment on
account of a withdrawal may be made after the effective time of such withdrawal,
any completely withdrawing Unitholder will not be considered a Unitholder for
any purpose after the effective time of such complete withdrawal, and, in the
case of a partial withdrawal, such Unitholder’s Capital Account (and
corresponding voting and other rights) shall be reduced for all other purposes
hereunder upon the effective time of such partial withdrawal.

 

Section 12.2         Withdrawal of a Unitholder.  No Unitholder shall have the
power or right to withdraw or otherwise resign from the Company except,
simultaneous with the Transfer of all of a Unitholder’s Units in a Transfer
permitted by this Agreement and, if such Transfer is to a person or entity that
is not a Unitholder, the admission of such person or entity as a Unitholder
pursuant to Section 11.1.

 

ARTICLE XIII

 

DISSOLUTION AND LIQUIDATION

 

Section 13.1         Dissolution.  The Company shall not be dissolved by the
admission of Additional Unitholders or Substituted Unitholders, or by the death,
retirement, expulsion, bankruptcy or dissolution of a Unitholder.  The Company
shall dissolve, and its affairs shall be wound up upon the first to occur of the
following:

 

(A)           AT ANY TIME BY THE BOARD WITH THE PRIOR WRITTEN CONSENT OF MDP; OR

 

(B)           THE ENTRY OF A DECREE OF JUDICIAL DISSOLUTION OF THE COMPANY UNDER
SECTION 35-5 OF THE DELAWARE ACT OR AN ADMINISTRATIVE DISSOLUTION UNDER SECTION
18-802 OF THE DELAWARE ACT.

 

Except as otherwise set forth in this Article XIII, the Company is intended to
have perpetual existence.  The death, retirement, resignation, expulsion,
bankruptcy or dissolution of a Unitholder or the occurrence of any other event
that terminates the continued membership of a Unitholder in the Company shall
not cause a dissolution of the Company and the Company shall continue in
existence subject to the terms and conditions of this Agreement.

 

Section 13.2         Liquidation and Termination.  On dissolution of the
Company, the Board shall act as liquidator or may appoint one or more
representatives or Unitholders as liquidator.  The liquidators shall proceed
diligently to wind up the affairs of the Company, sell all or any portion of the
Company assets for cash or cash equivalents as they deem appropriate, and make
final distributions as provided herein and in the Delaware Act.  The costs of
liquidation shall be borne as an expense of the Company.  Until final
distribution, the liquidators shall continue to operate the Company properties
with all of the power and authority of the Board. 

 

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The liquidators shall pay, satisfy, or discharge from the Company’s funds all of
the debts, liabilities, and obligations of the Company (including all expenses
incurred in liquidation) or otherwise make adequate provision for payment and
discharge thereof (including the establishment of a cash fund for contingent
liabilities in such amount and for such term as the liquidators may reasonably
determine) and shall promptly distribute the remaining assets to the holders of
Units in accordance with Section 4.1(a).  Any non-cash assets will first be
written up or down to their Fair Market Value, thus creating Profit or Loss (if
any), which shall be allocated in accordance with Sections 4.2 and 4.3.  In
making such distributions, the liquidators shall allocate each type of asset
(i.e., cash, cash equivalents, securities, etc.) among the Unitholders ratably
based upon the aggregate amounts to be distributed with respect to the Units
held by each such holder.  Any such distributions in kind shall be subject to
(x) such conditions relating to the disposition and management of such assets as
the liquidators deem reasonable and equitable and (y) the terms and conditions
of any agreement governing such assets (or the operation thereof or the holders
thereof) at such time.

 

The distribution of cash and/or property to a Unitholder in accordance with the
provisions of this Section 13.2 constitutes a complete return to the Unitholder
of its Capital Contributions and a complete distribution to the Unitholder of
its interest in the Company and all the Company’s property and constitutes a
compromise to which all Unitholders have consented within the meaning of the
Delaware Act.  To the extent that a Unitholder returns funds to the Company, it
has no claim against any other Unitholder for those funds.

 

Section 13.3         Cancellation of Certificate.  On completion of the
distribution of assets of the Company as provided herein, the Company shall be
terminated (and the Company shall not be terminated prior to such time), and the
Board (or such other Person or Persons as the Delaware Act may require or
permit) shall file a certificate of cancellation with the Secretary of State of
Delaware, cancel any other filings made pursuant to this Agreement that are or
should be canceled, and take such other actions as may be necessary to terminate
the Company.  The Company shall be deemed to continue in existence for all
purposes of this Agreement until it is terminated pursuant to this Section 13.3.

 

Section 13.4         Reasonable Time for Winding Up.  A reasonable time shall be
allowed for the orderly winding up of the business and affairs of the Company
and the liquidation of its assets pursuant to Section 13.2 in order to minimize
any losses otherwise attendant upon such winding up.

 

Section 13.5         Return of Capital.  The liquidators shall not be personally
liable for the return of Capital Contributions or any portion thereof to the
Unitholders (it being understood that any such return shall be made solely from
the Company’s assets).

 

Section 13.6         Reserves Against Distributions.  The Board shall have the
right to withhold from Distributions payable to any Unitholder under this
Agreement amounts sufficient to pay and discharge any reasonably anticipated
contingent liabilities of the Company.  Any amounts remaining after payment and
discharge of any such contingent liabilities of the Company will be paid to the
Unitholders from whom the Distributions were withheld.

 

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ARTICLE XIV

 

VALUATION

 

Section 14.1         Fair Market Value.

 

(A)           THE “FAIR MARKET VALUE” OF ANY ASSETS OR UNITS TO BE VALUED UNDER
THIS AGREEMENT SHALL BE DETERMINED IN ACCORDANCE WITH THIS ARTICLE XIV.

 

(B)           THE FAIR MARKET VALUE OF ANY ASSET CONSTITUTING CASH OR CASH
EQUIVALENTS SHALL BE EQUAL TO THE AMOUNT OF SUCH CASH OR CASH EQUIVALENTS.

 

(C)           THE FAIR MARKET VALUE OF ANY ASSET CONSTITUTING PUBLICLY TRADED
SECURITIES SHALL BE THE AVERAGE, OVER A PERIOD OF 21 DAYS CONSISTING OF THE DATE
OF VALUATION AND THE 20 CONSECUTIVE BUSINESS DAYS PRIOR TO THAT DATE, OF THE
AVERAGE OF THE CLOSING PRICES OF THE SALES OF SUCH SECURITIES ON THE PRIMARY
SECURITIES EXCHANGE ON WHICH SUCH SECURITIES MAY AT THAT TIME BE LISTED, OR, IF
THERE HAVE BEEN NO SALES ON SUCH EXCHANGE ON ANY DAY, THE AVERAGE OF THE HIGHEST
BID AND LOWEST ASKED PRICES ON SUCH EXCHANGES AT THE END OF SUCH DAY, OR, IF ON
ANY DAY SUCH SECURITIES ARE NOT SO LISTED, THE AVERAGE OF THE REPRESENTATIVE BID
AND ASKED PRICES QUOTED IN THE NASDAQ SYSTEM AS OF 4:00 P.M., NEW YORK TIME, OR,
IF ON ANY DAY SUCH SECURITIES ARE NOT QUOTED IN THE NASDAQ SYSTEM, THE AVERAGE
OF THE HIGHEST BID AND LOWEST ASKED PRICES ON SUCH DAY IN THE DOMESTIC OVER THE
COUNTER MARKET AS REPORTED BY THE NATIONAL QUOTATION BUREAU INCORPORATED, OR ANY
SIMILAR SUCCESSOR ORGANIZATION.

 

(D)           THE FAIR MARKET VALUE OF ANY ASSETS OTHER THAN CASH, CASH
EQUIVALENTS, OR PUBLICLY TRADED SECURITIES SHALL BE THE FAIR VALUE OF SUCH
ASSETS, AS DETERMINED IN GOOD FAITH BY THE BOARD (OR, IF PURSUANT TO SECTION
13.2, THE LIQUIDATORS), WHICH DETERMINATION SHALL TAKE INTO ACCOUNT ANY FACTORS
THAT THEY DEEM RELEVANT, INCLUDING, WITHOUT LIMITATION, THE APPLICATION OF THE
PRIORITY OF DISTRIBUTIONS DESCRIBED IN SECTION 4.1(A) HEREOF.

 

ARTICLE XV

 

GENERAL PROVISIONS

 

Section 15.1         Power of Attorney.

 

(A)           EACH UNITHOLDER HEREBY CONSTITUTES AND APPOINTS EACH MEMBER OF THE
BOARD AND THE LIQUIDATORS, WITH FULL POWER OF SUBSTITUTION, AS HIS TRUE AND
LAWFUL AGENT AND ATTORNEY-IN-FACT, WITH FULL POWER AND AUTHORITY IN HIS OR ITS
NAME, PLACE AND STEAD, TO EXECUTE, SWEAR TO, ACKNOWLEDGE, DELIVER, FILE, AND
RECORD IN THE APPROPRIATE PUBLIC OFFICES (I) THIS AGREEMENT, ALL CERTIFICATES,
AND OTHER INSTRUMENTS AND ALL AMENDMENTS (IN THE MANNER SET FORTH HEREIN)
THEREOF IN ACCORDANCE WITH THE TERMS HEREOF WHICH THE BOARD DEEMS APPROPRIATE OR
NECESSARY TO FORM, QUALIFY, OR CONTINUE THE QUALIFICATION OF, THE COMPANY AS A
LIMITED LIABILITY COMPANY IN THE STATE OF DELAWARE AND IN ALL OTHER
JURISDICTIONS IN WHICH THE COMPANY MAY CONDUCT BUSINESS OR OWN PROPERTY; (II)
ALL INSTRUMENTS WHICH THE BOARD DEEMS APPROPRIATE OR NECESSARY TO REFLECT ANY
AMENDMENT, CHANGE, MODIFICATION, OR RESTATEMENT OF THIS AGREEMENT IN ACCORDANCE
WITH ITS TERMS; (III) ALL CONVEYANCES AND OTHER INSTRUMENTS OR DOCUMENTS WHICH
THE BOARD DEEMS APPROPRIATE OR NECESSARY TO REFLECT THE DISSOLUTION AND
LIQUIDATION OF THE COMPANY

 

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PURSUANT TO THE TERMS OF THIS AGREEMENT, INCLUDING A CERTIFICATE OF
CANCELLATION; AND (IV) ALL INSTRUMENTS RELATING TO THE ADMISSION, WITHDRAWAL, OR
SUBSTITUTION OF ANY UNITHOLDER PURSUANT TO ARTICLE XI AND XII.

 

(B)           THE FOREGOING POWER OF ATTORNEY IS IRREVOCABLE AND COUPLED WITH AN
INTEREST, AND SHALL SURVIVE THE DEATH, DISABILITY, INCAPACITY, DISSOLUTION,
BANKRUPTCY, INSOLVENCY, OR TERMINATION OF ANY UNITHOLDER AND THE TRANSFER OF ALL
OR ANY PORTION OF HIS OR ITS UNITS AND SHALL EXTEND TO SUCH UNITHOLDER’S HEIRS,
SUCCESSORS, ASSIGNS, AND PERSONAL REPRESENTATIVES.

 

Section 15.2         Amendments.  This Agreement may be amended from time to
time as set forth elsewhere in this Agreement and this Agreement may be amended
from time to time by a written consent of the holders of the Required Interest;
provided that no amendment pursuant to this Section 15.2 that would alter or
change the powers, preferences, or special rights hereunder of a class of Units
or group of Unitholders (as the case may be) so as to affect them adversely in a
manner adversely different than any other class of Units or group of Unitholders
(as the case may be) shall be effective against the holders of such class of
Units or group of Unitholders (as the case may be) without the prior written
consent of the holders of at least a majority of the outstanding Units of such
class of Units or group of Unitholders (as the case may be); provided further
that no amendment pursuant to this Section 15.2 that would alter or change
adversely the special rights hereunder of a Unitholder or group of Unitholders
(as the case may be) specifically granted such rights by name hereunder shall be
effective against such Unitholder or group of Unitholders (as the case may be)
without that Unitholder’s (or a majority of that group of Unitholders’) prior
written consent; provided further that the amendment or modification of the Unit
Ownership Ledger for the purpose of adding an Additional Unitholder or a
Substituted Unitholder or deleting a former Unitholder or reflecting a transfer
of Units, in each case, in accordance with this Agreement, shall not be deemed
to be an amendment of this Agreement requiring the consent of any Unitholder.

 

Section 15.3         Title to the Company’s Assets.  The Company’s assets shall
be deemed to be owned by the Company as an entity, and no Unitholder,
individually or collectively, shall have any ownership interest in such assets
of the Company or any portion thereof.  Legal title to any or all assets of the
Company may be held in the name of the Company or one or more nominees, as the
Board may determine.  The Board hereby declares and warrants that any assets of
the Company for which legal title is held in its name or the name of any nominee
shall be held in trust by the Board or such nominee for the use and benefit of
the Company in accordance with the provisions of this Agreement.  All assets of
the Company shall be recorded as the property of the Company on its books and
records, irrespective of the name in which legal title to such assets is held.

 

Section 15.4         Remedies.  Each Unitholder and the Company shall have all
rights and remedies set forth in this Agreement and all rights and remedies
which such Person has been granted at any time under any other agreement or
contract and all of the rights which such Person has under any law.  Any Person
having any rights under any provision of this Agreement or any other agreements
contemplated hereby shall be entitled to enforce such rights specifically
(without posting a bond or other security), to recover damages by reason of any
breach of any provision of this Agreement and to exercise all other rights
granted by law.

 

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Section 15.5         Successors and Assigns.  All covenants and agreements
contained in this Agreement shall bind and inure to the benefit of the parties
hereto and their respective heirs, executors, administrators, successors, legal
representatives, and permitted assigns, whether so expressed or not.

 

Section 15.6         Severability.  Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal, or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality, or unenforceability will not affect
any other provision or the effectiveness or validity of any provision in any
other jurisdiction, and this Agreement will be reformed, construed, and enforced
in such jurisdiction as if such invalid, illegal, or unenforceable provision had
never been contained herein.

 

Section 15.7         Change in Business Form.  Each Unitholder hereby
irrevocably delegates and cedes to the Board the sole authority and power to, in
its sole discretion, in preparation for or contemplation of an anticipated
Qualified Public Offering (as defined in the Securityholders Agreement) (i)
convert the Company into a corporation (by a conversion pursuant to Section
18-216 of the Delaware Act or other conversion statute, merger or otherwise) or
another form of business entity at any time, in which event the terms and
conditions contained herein (including the terms and conditions relating to the
Units and Capital Accounts) shall be, as closely as possible, adopted by the new
entity or (ii) notwithstanding Section 2.9 or anything else in this Agreement to
the contrary, make an election to have the Company be treated as a corporation
for federal income tax purposes and, if applicable, state income or franchise
tax purposes, rather than as a partnership (each, a “Conversion”).  Without
limiting the generality of the foregoing, it is anticipated that a Conversion
would occur prior to, or in connection with, a Qualified Public Offering (as
defined in the Securityholders Agreement).  In connection with any Conversion,
the Board may cause a recapitalization, reorganization, incorporation and/or
exchange of the Units into securities which reflect and are substantially
consistent with the Units and Capital Accounts as in effect immediately prior to
such transaction and shall provide for the Unitholders to have the benefits and
burdens of agreements that are substantially consistent with the Securityholders
Agreement and other equity agreements.  No Unitholder shall have the right or
power to veto, vote for or against, amend, modify or delay any such Conversion. 
Further, each Unitholder shall execute and deliver any documents and instruments
and perform any additional acts that may be necessary or appropriate, as
determined by the Board, to effectuate and perform any such Conversion
(including, without limitation, in the case of any Management Unitholder,
executing an agreement with the successor providing for the continued vesting
of, and repurchase rights respecting, any equity securities issued in respect of
Unvested Common Units in form and substance similar to the provisions and
restrictions with respect to vesting and repurchase rights set forth in any
Management Unit Purchase Agreement or option grant agreement, as the case may
be).

 

Section 15.8         Opt-in to Article 8 of the Uniform Commercial Code.  The
Unitholders hereby agree that the Units shall be securities governed by Article
8 of the Uniform Commercial Code of the State of Delaware (and the Uniform
Commercial Code of any other applicable jurisdiction).

 

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Section 15.9         Notice to Unitholder of Provisions.  By executing this
Agreement, each Unitholder acknowledges that it has actual notice of (a) all of
the provisions hereof (including the restrictions on the transfer set forth
herein), and (b) all of the provisions of the Certificate.

 

Section 15.10       Counterparts.  This Agreement may be executed in multiple
counterparts with the same effect as if all signing parties had signed the same
document.  All counterparts shall be construed together and constitute the same
instrument.

 

Section 15.11       Consent to Jurisdiction.  Each Unitholder irrevocably
submits to the nonexclusive jurisdiction of the United States District Court for
the State of Delaware and the state courts of the State of Delaware for the
purposes of any suit, action or other proceeding arising out of this Agreement
or any transaction contemplated hereby.  Each Unitholder further agrees that
service of any process, summons, notice or document by United States certified
or registered mail to such Unitholder’s respective address set forth in the
Company’s books and records or such other address or to the attention of such
other person as the recipient party has specified by prior written notice to the
sending party shall be effective service of process in any action, suit or
proceeding in Delaware with respect to any matters to which it has submitted to
jurisdiction as set forth above in the immediately preceding sentence.  Each
Unitholder irrevocably and unconditionally waives any objection to the laying of
venue of any action, suit or proceeding arising out of this Agreement or the
transactions contemplated hereby in the United States District Court for the
State of Delaware or the state courts of the State of Delaware and hereby
irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such action, suit or proceeding brought in such court has
been brought in an inconvenient forum.

 

Section 15.12       Descriptive Headings; Interpretation.  The descriptive
headings of this Agreement are inserted for convenience only and do not
constitute a substantive part of this Agreement.  Whenever required by the
context, any pronoun used in this Agreement shall include the corresponding
masculine, feminine, or neuter forms, and the singular form of nouns, pronouns,
and verbs shall include the plural and vice versa.  The use of the word
“including” in this Agreement shall be by way of example rather than by
limitation.  Reference to any agreement, document, or instrument means such
agreement, document, or instrument as amended or otherwise modified from time to
time in accordance with the terms thereof, and, if applicable, hereof.  Wherever
required by the context, references to a Fiscal Year shall refer to a portion
thereof.  The use of the words “or,” “either,” and “any” shall not be
exclusive.  The parties hereto have participated jointly in the negotiation and
drafting of this Agreement.  In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties hereto, and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any of the
provisions of this Agreement.  Wherever a conflict exists between this Agreement
and any other agreement, this Agreement shall control but solely to the extent
of such conflict.

 

Section 15.13       Applicable Law.  This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, without giving
effect to any choice of law or conflict of law rules or provisions (whether of
the State of Delaware or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Delaware.

 

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Section 15.14       Mutual Waiver of Jury Trial.  Because disputes arising in
connection with complex transactions are most quickly and economically resolved
by an experienced and expert person and the parties wish applicable state and
federal laws to apply (rather than arbitration rules), the parties desire that
their disputes be resolved by a judge applying such applicable laws.  Therefore,
to achieve the best combination of the benefits of the judicial system and of
arbitration, each party to this agreement (including the Company) hereby waives
all rights to trial by jury in any action, suit, or proceeding brought to
resolve any dispute between or among any of the parties hereto, whether arising
in contract, tort, or otherwise, arising out of, connected with, related or
incidental to this agreement, the transactions contemplated hereby and/or the
relationships established among the parties hereunder.

 

Section 15.15       Addresses and Notices.  All notices, demands, or other
communications to be given or delivered under or by reason of the provisions of
this Agreement shall be in writing and shall be deemed to have been given or
made (i) when delivered personally to the recipient, (ii) when telecopied to the
recipient (with hard copy sent to the recipient by reputable overnight courier
service (charges prepaid) that same day) if telecopied before 5:00 p.m. Chicago,
Illinois time on a business day, and otherwise on the next business day after
being telecopied, (iii) one business day after being sent to the recipient by
reputable overnight courier service (charges prepaid), or (iv) when received via
electronic mail by the recipient (with hard copy sent to the recipient by
reputable overnight courier service (charges prepaid) that same day) if received
via electronic mail before 5:00 p.m. Chicago, Illinois time on a business day,
and otherwise on the next business day after such receipt.  Such notices,
demands, and other communications shall be sent to the Company at the following
address and to any Unitholders at the address for such Unitholder set forth in
the Company’s books and records, or to such other address or to the attention of
such other person as the recipient party has specified by prior written notice
to the sending party.

 

Varietal Distribution Holdings, LLC

c/o VWR International, Inc.

1310 Goshen Parkway

PO Box 2656

West Chester, Pennsylvania 19380

Facsimile:  (610) 701-9896

Telephone:  (610) 719-7072

Electronic mail: George_VanKula@vwr.com

Attention:  George Van Kula, Esq.

 

with copies to (which shall not constitute notice):

 

Madison Dearborn Capital Partners

Three First National Plaza

38th Floor

Chicago, Illinois  60602

Facsimile:  (312) 895-1056

Telephone:  (312) 895-1000

Electronic mail:  mtresnowski@MDCP.com

Attention:  General Counsel

 

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and

 

Kirkland & Ellis LLP

200 East Randolph Drive

Chicago, IL 60601

Facsimile:  (312) 861-2200

Telephone: (312) 861-2000

Electronic mail:  sperl@kirkland.com; mfennell@kirkland.com

Attention:  Sanford E. Perl, P.C.

    Mark A. Fennell

 

Section 15.16       Creditors.  None of the provisions of this Agreement shall
be for the benefit of or enforceable by any creditors of the Company or any of
its Affiliates, and no creditor who makes a loan to the Company or any of its
Affiliates may have or acquire at any time as a result of making the loan any
direct or indirect interest in the Company’s Profits, Losses, Distributions,
capital, or property other than as a secured creditor.

 

Section 15.17       Waiver.  No failure by any party to insist upon the strict
performance of any covenant, duty, agreement, or condition of this Agreement or
to exercise any right or remedy consequent upon a breach thereof shall
constitute a waiver of any such breach or any other covenant, duty, agreement,
or condition.  Notwithstanding the other provisions of this Agreement, Section
18-305(a) of the Delaware Act shall not apply to the Company and no Unitholder
shall have any rights thereunder.

 

Section 15.18       Further Action.  The parties shall execute and deliver all
documents, provide all information, and take or refrain from taking such actions
as may be necessary or appropriate to achieve the purposes of this Agreement.

 

Section 15.19       Entire Agreement.  This Agreement, those documents expressly
referred to herein, the other documents of even date herewith, and the other
Transaction Documents embody the complete agreement and understanding among the
parties and supersede and preempt any prior understandings, agreements, or
representations by or among the parties, written or oral, which may have related
to the subject matter hereof in any way (including, without limitation, the
Limited Liability Company Agreement of the Company, dated April 30, 2007, as
amended).

 

Section 15.20       Electronic Delivery.  This Agreement, the agreements
referred to herein, and each other agreement or instrument entered into in
connection herewith or therewith or contemplated hereby or thereby, and any
amendments hereto or thereto, to the extent signed and delivered by means of a
photographic, photostatic, facsimile or similar reproduction of such signed
writing using a facsimile machine or electronic mail shall be treated in all
manner and respects as an original agreement or instrument and shall be
considered to have the same binding legal effect as if it were the original
signed version thereof delivered in person.  At the request of any party hereto
or to any such agreement or instrument, each other party hereto or thereto shall
reexecute original forms thereof and deliver them to all other parties.  No
party hereto or to any such agreement or instrument shall raise the use of a
facsimile machine or electronic mail to

 

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deliver a signature or the fact that any signature or agreement or instrument
was transmitted or communicated through the use of a facsimile machine or
electronic mail as a defense to the formation or enforceability of a contract
and each such party forever waives any such defense.

 

Section 15.21       Survival. Sections 4.5, 6.1, 7.1, 7.2 and 7.3 shall survive
and continue in full force in accordance with its terms notwithstanding any
termination of this Agreement or the dissolution of the Company.

 

*          *          *          *          *

 

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IN WITNESS WHEREOF, the undersigned have executed or caused to be executed on
their behalf this Limited Liability Company Agreement as of the date first above
written.

 

 

VARIETAL DISTRIBUTION HOLDINGS, LLC

 

 

 

By:

 

 

 

Its:

 

 

 

 

 

MADISON DEARBORN CAPITAL PARTNERS
V-A, L.P.

 

 

 

By: Madison Dearborn Partners V-A&C, L.P.

 

Its: General Partner

 

 

 

By: Madison Dearborn Partners, LLC

 

Its: General Partner

 

 

 

By:

 

 

 

Its: Managing Director

 

 

 

 

 

MADISON DEARBORN CAPITAL PARTNERS
V-C, L.P.

 

 

 

By: Madison Dearborn Partners V-A&C, L.P.

 

Its: General Partner

 

 

 

By: Madison Dearborn Partners, LLC

 

Its: General Partner

 

 

 

By:

 

 

 

Its: Managing Director

 

 

 

 

 

MADISON DEARBORN CAPITAL PARTNERS V
EXECUTIVE-A, L.P.

 

 

 

By: Madison Dearborn Partners V-A&C, L.P.

 

Its: General Partner

 

 

 

By: Madison Dearborn Partners, LLC

 

Its: General Partner

 

 

 

By:

 

 

 

Its: Managing Director

 

--------------------------------------------------------------------------------

 

 

MDCP CO-INVESTORS (VARIETAL), L.P.

 

 

 

By: Madison Dearborn Partners V-A&C, L.P.

 

Its: General Partner

 

 

 

By: Madison Dearborn Partners, LLC

 

Its: General Partner

 

 

 

By:

 

 

 

Its: Managing Director

 

 

 

 

 

MDCP CO-INVESTORS (VARIETAL-2), L.P.

 

 

 

By: Madison Dearborn Partners V-A&C, L.P.

 

Its: General Partner

 

 

 

By: Madison Dearborn Partners, LLC

 

Its: General Partner

 

 

 

By:

 

 

 

Its: Managing Director

 

[Continuation of Signature Pages to Limited Liability Company Agreement of
Varietal Distribution Holdings, LLC]

 

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