exv4w3






EXHIBIT 4.3




 





FIFTH AMENDED AND RESTATED




LIMITED LIABILITY COMPANY AGREEMENT




OF




GENERAL MILLS CEREALS, LLC,




a Delaware Limited Liability Company




 






 









 








TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page
	TABLE OF CONTENTS
	 	 	i	 
	SECTION 1. THE COMPANY
	 	 	1	 
	1.1 Formation; Amendment of Original Limited Liability Company Agreement
	 	 	1	 
	1.2 Name
	 	 	3	 
	1.3 Purpose; Powers
	 	 	3	 
	1.4 Principal Place of Business
	 	 	4	 
	1.5 Term
	 	 	4	 
	1.6 Filings; Agent for Service of Process
	 	 	4	 
	1.7 Title to Assets
	 	 	5	 
	1.8 Payments of Individual Obligations
	 	 	5	 
	1.9 Independent Activities; Transactions with Affiliates
	 	 	5	 
	1.10 Definitions
	 	 	6	 
	1.11 Other Terms
	 	 	45	 
	SECTION 2. MEMBERS’ CAPITAL CONTRIBUTIONS AND CAPITAL ACCOUNTS
	 	 	46	 
	2.1 Initial Capital Contribution
	 	 	46	 
	2.2 Additional Contributions
	 	 	48	 
	2.3 Other Matters
	 	 	48	 
	SECTION 3. ALLOCATIONS
	 	 	49	 
	3.1 Profits
	 	 	49	 
	3.2 Losses
	 	 	51	 
	3.3 Special Allocations
	 	 	51	 
	3.4 Curative Allocations
	 	 	57	 
	3.5 Other Allocation Rules
	 	 	57	 
	3.6 Tax Allocations: Code Section 704(c)
	 	 	58	 
	3.7 Adjustment of Allocations Upon Conversion of Class A Limited Membership Interests
	 	 	59	 
	SECTION 4. DISTRIBUTIONS
	 	 	59	 
	4.1 Amounts Distributed
	 	 	59	 
	4.2 Amounts Withheld
	 	 	62	 
	4.3 Limitations on Distributions
	 	 	62	 
	4.4 Distributions and Payments to Members
	 	 	62	 
	SECTION 5. MANAGEMENT
	 	 	62	 
	5.1 Authority of the Managing Member
	 	 	62	 
	5.2 Duties and Obligations of the Managing Member
	 	 	63	 
	5.3 Restrictions on Authority of Managing Member
	 	 	67	 
	5.4 Compensation; Expenses
	 	 	70	 
	5.5 Indemnification of the Managing Member
	 	 	70	 
	5.6 Withdrawal
	 	 	72	 
	5.7 SPE Covenant re Status of Managing Member; Independent Director and Management Limitations
	 	 	72	 
	5.8 Indemnification by the Managing Member
	 	 	74	 
	5.9 Portfolio Requirements
	 	 	74	 
	5.10 Board of Directors
	 	 	75	 






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	 	 	Page
	SECTION 6. ROLE OF MEMBERS
	 	 	76	 
	6.1 Rights or Powers
	 	 	76	 
	6.2 Voting Rights
	 	 	76	 
	6.3 Meetings and Consents of the Members
	 	 	76	 
	6.4 Procedure for Consent
	 	 	77	 
	6.5 Withdrawal/Resignation
	 	 	78	 
	6.6 Member Compensation
	 	 	78	 
	6.7 Indemnification of Limited Members
	 	 	78	 
	6.8 Members’ Liability
	 	 	78	 
	6.9 Partition
	 	 	79	 
	6.10 Transactions Between a Member and the Company
	 	 	79	 
	SECTION 7. PREFERRED RETURN RESETS AND REMARKETINGS
	 	 	79	 
	7.1 Class A Preferred Return Rate Reset
	 	 	79	 
	7.2 Class B Remarketings
	 	 	83	 
	SECTION 8. REPRESENTATIONS AND WARRANTIES; COVENANTS
	 	 	88	 
	8.1 In General
	 	 	88	 
	8.2 Representations and Warranties
	 	 	88	 
	8.3 Covenant Regarding Tax Matters
	 	 	91	 
	SECTION 9. ACCOUNTING, BOOKS, AND RECORDS
	 	 	92	 
	9.1 Accounting, Books, and Records
	 	 	92	 
	9.2 Reports
	 	 	93	 
	9.3 Tax Matters
	 	 	98	 
	SECTION 10. AMENDMENTS
	 	 	99	 
	10.1 Amendments
	 	 	99	 
	SECTION 11. TRANSFERS; PURCHASE
	 	 	100	 
	11.1 Restriction on Transfers
	 	 	100	 
	11.2 Permitted Transfers
	 	 	101	 
	11.3 Conditions to Permitted Transfers
	 	 	102	 
	11.4 Prohibited Transfers
	 	 	110	 
	11.5 Rights of Unadmitted Assignees
	 	 	110	 
	11.6 Admission as Substituted Members
	 	 	111	 
	11.7 Distributions and Allocations in Respect of Transferred Membership Interests
	 	 	112	 
	11.8 Class A Limited Membership Interest Purchase Option
	 	 	112	 
	11.9 Purchase of Class B Limited Membership Interests
	 	 	115	 
	11.10 Form and Transfers of Class B Limited Membership Interests
	 	 	116	 
	SECTION 12. POWER OF ATTORNEY
	 	 	117	 
	12.1
Managing Member as Attorney-In-Fact
	 	 	117	 
	12.2 Nature of Special Power
	 	 	118	 
	SECTION 13. DISSOLUTION AND WINDING UP
	 	 	118	 
	13.1 Liquidating Events
	 	 	118	 
	13.2 Winding Up
	 	 	119	 
	13.3 Compliance With Certain Requirements of Regulations; Deficit Capital Accounts 
	 	 	120	 
	13.4 Deemed Contribution and Distribution
	 	 	121	 
	13.5 Rights of Members
	 	 	121	 
	13.6 Notice of Dissolution
	 	 	121	 
	13.7 Guaranteed Payments During Period of Liquidation
	 	 	121	 






ii 









 








	 	 	 	 	 
	 	 	Page
	13.8 Allocations and Distributions During Period of Liquidation
	 	 	122	 
	13.9 Character of Liquidating Distributions
	 	 	122	 
	13.10 The Liquidator
	 	 	122	 
	13.11
Mark-to-Market Methodology
	 	 	123	 
	SECTION 14. CLASS A NOTICE EVENTS; PURCHASE OPTIONS
	 	 	124	 
	14.1 Class A Notice Events
	 	 	124	 
	14.2 Liquidation Notice
	 	 	125	 
	SECTION 15. MISCELLANEOUS
	 	 	125	 
	15.1 Notices
	 	 	125	 
	15.2 Binding Effect
	 	 	126	 
	15.3 Construction
	 	 	126	 
	15.4 Time
	 	 	126	 
	15.5 Headings
	 	 	126	 
	15.6 Severability
	 	 	126	 
	15.7 Incorporation by Reference
	 	 	126	 
	15.8 Governing Law
	 	 	127	 
	15.9 Consent to Jurisdiction
	 	 	127	 
	15.10 WAIVER OF JURY TRIAL
	 	 	127	 
	15.11 Counterpart Execution
	 	 	127	 
	15.12 Specific Performance
	 	 	127	 
	15.13 No Material Impairment
	 	 	127	 
	15.14 Entire Agreement
	 	 	128	 
	15.15 No Third Party Beneficiaries
	 	 	128	 
	15.16 Waiver
	 	 	128	 
	Valuation of Fixed Assets
	 	 	2	 
	Valuation of Intellectual Property
	 	 	3	 






iii 









 






EXHIBITS




	 	 	 
	Exhibit A

	 	Finance Note
	Exhibit B

	 	GMI Guaranty
	Exhibit C

	 	Permitted Intellectual Property License Agreement
	Exhibit D

	 	Permitted PP&E License Agreement
	Exhibit E

	 	Transferor Certificate
	Exhibit F

	 	Transferee Certificate
	Exhibit G

	 	Purchaser’s Letter
	Exhibit H

	 	Series B-1 Preferred Certificate
	Exhibit I

	 	Series B-2 Preferred Certificate
	Exhibit J

	 	Budgeted Capital Expenditures






SCHEDULES




	 	 	 
	Schedule A

	 	Membership Registry
	Schedule B

	 	Baseline Amount
	Schedule C

	 	Permitted Liens
	Schedule D

	 	Valuation Methodology







iv 









 








FIFTH AMENDED AND RESTATED




LIMITED LIABILITY COMPANY AGREEMENT




OF




GENERAL MILLS CEREALS, LLC




     This FIFTH AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this “Agreement”) is
entered into as of the 25th day of May 2008, by and among GM CEREALS OPERATIONS, INC., a
Delaware corporation (“GMCO”), as the Managing Member, RBDB, INC., a Delaware corporation (“RBDB”),
as the Class A Limited Member, GENERAL MILLS SALES, INC., a Delaware corporation (“GM Sales”), as a
Class B Limited Member, and GM CEREALS HOLDINGS, INC., a Delaware corporation (“Cereals Holdings”),
as a Class B Limited Member, pursuant to the provisions of the Act, on the following terms and
conditions (capitalized terms used herein without definition shall have the meanings specified in
Section 1.10):



SECTION 1.




THE COMPANY




     1.1 Formation; Amendment of Original Limited Liability Company Agreement.



     General Mills Operations, Inc., a Delaware corporation (“GMOI”), The Pillsbury Company, a
Delaware corporation (“TPC”), and Cereals Holdings (collectively, the “Original Members”) formed
General Mills Cereals, LLC (the “Company”) as a limited liability company under and pursuant to the
provisions of the Act and upon the terms and conditions set forth in the Limited Liability Company
Agreement of the Company, dated as of April 2, 2002 (the “Original LLC Agreement”). The fact that
the Certificate of Formation is on file in the office of the Secretary of State of the State of
Delaware shall constitute notice that the Company is a limited liability company. Pursuant to
Section 18-201(d) of the Act, the Original LLC Agreement was effective as of the date of the filing
of the Certificate of Formation. Simultaneously with the execution of the Original LLC Agreement
and the formation of the Company, each of the Original Members was admitted as a member of the
Company, and GMOI was admitted as the manager (within the meaning of the Act) of the Company.



     The Original LLC Agreement was amended and restated in its entirety in connection with the
sale by TPC to RBDB of a portion of TPC’s Class A Limited Membership Interests, pursuant to the
Amended and Restated Limited Liability Company Agreement of General Mills Cereals, LLC, dated as of
May 24, 2002 (the “Amended and Restated LLC Agreement”). In addition, GMOI Transferred to GMCO,
100% of the Managing Membership Interest of the Company and GMCO became the manager (within the
meaning of the Act) of the Company, as evidenced by that certain Transferor Certificate dated May
24, 2002 by GMOI and that certain Transferee Certificate dated May 24, 2002 by GMCO. Pursuant to
the Signature Page Addendum to the Amended and Restated Limited Liability Company Agreement of
General Mills Cereals, LLC dated as of May 24, 2002, GMCO became a party to the Amended and
Restated LLC Agreement.



1









 





     Pursuant to the First Amendment to the Amended and Restated Limited Liability Company
Agreement of General Mills Cereals, LLC dated as of July 24, 2002 (the “First Amendment”), the
Amended and Restated LLC Agreement was amended to make technical corrections to certain definitions
contained therein. Pursuant to the Second Amendment to the Amended and Restated Limited Liability
Company Agreement of General Mills Cereals, LLC entered into as of November 28, 2003 (the “Second
Amendment”), the Amended and Restated LLC Agreement was further amended to amend and restate
Section 13.1(a)(i).



     The Amended and Restated LLC Agreement was amended and restated in its entirety pursuant to
the Second Amended and Restated Limited Liability Company Agreement of General Mills Cereals, LLC,
dated as of October 6, 2004 (the “Second Amended and Restated LLC Agreement”) to (i) make further
changes to the Amended and Restated LLC Agreement, (ii) convert a portion of the Class A Limited
Membership Interests held by TPC into Series B-1 Limited Membership Interests, and (iii) convert
the Class B Limited Membership Interests held by Cereals Holdings into Series B-1 Limited
Membership Interests and Series B-2 Limited Membership Interests.



     As evidenced by (i) that certain Transferor Certificate dated October 7, 2004 by Cereals
Holdings and that certain Transferee Certificate dated October 7, 2004 by GM Class B, (ii) that
certain Transferor Certificate dated October 7, 2004 by TPC and that certain Transferee Certificate
dated October 7, 2004 by GM Class B, and (iii) Signature Page Addendum to the Second Amended and
Restated LLC Agreement, dated as of October 7, 2004, executed by GM Class B, Cereals Holdings and
TPC Transferred all of the Series B-1 Limited Membership Interests of the Company to GM Class B and
GM Class B was admitted to the Company as a Series B-1 Limited Member and became a party to the
Second Amended and Restated LLC Agreement. In order to facilitate the sale by GM Class B of all of
the Series B-1 Limited Membership Interests held by GM Class B, the Second Amended and Restated LLC
Agreement was amended and restated in its entirety pursuant to the Third Amended and Restated
Limited Liability Company Agreement of General Mills Cereals, LLC, dated as of October 8, 2004 (the
“Third Amended and Restated LLC Agreement”).



     As evidenced by (i) that certain Purchase Agreement dated October 8, 2004 by GMI, the Company,
GM Class B and LBSFI, as amended by that certain Amendment No. 1 to the Purchase Agreement dated
October 8, 2004 by GMI, the Company, GM Class B and LBSFI, (ii) that certain Transferor Certificate
dated October 8, 2004 by GM Class B and that certain Transferee Certificate dated October 8, 2004
by LBSFI, and (iii) Signature Page Addendum to the Third Amended and Restated LLC Agreement, dated
as of October 8, 2004, executed by LBSFI, GM Class B Transferred all of the Series B-1 Limited
Membership Interests of the Company to LBSFI and LBSFI was admitted to the Company as a Series B-1
Limited Member and became a party to the Third Amended and Restated LLC Agreement.



     As evidenced by (i) that certain Deposit Trust Agreement dated October 7, 2004 by LBSFI, The
Bank of New York (Delaware), and The Bank of New York, as amended by that certain Amendment to the
Deposit Trust Agreement, dated as of October 8, 2004, (ii) that certain Transferee Certificate
dated October 8, 2004 by Capital Trust, a statutory trust organized under Delaware Law (“Capital
Trust”), and (iii) Signature Page Addendum to the Third Amended and Restated LLC Agreement, dated
as of October 8, 2004, executed by Capital Trust, LBSFI



2









 







Transferred all of the Series B-1 Limited Membership Interests of the Company to Capital Trust
and Capital Trust was admitted to the Company as a Series B-1 Limited Member and became a party to
the Third Amended and Restated LLC Agreement.



     As evidenced by that certain Rate Reset Agreement dated May 29, 2007 by the Company, GMCO,
RBDB and TPC, the Class A Limited Members agreed upon the Class A Preferred Return Rate for the
June 28, 2007 initial Class A Reset Date as required by Section 7.1(b) of the Third Amended and
Restated LLC Agreement and made certain related amendments to the Third Amended and Restated LLC
Agreement.



     As evidenced by (i) that certain Securities Purchase Agreement dated June 28, 2007 by GMI,
TPC, Cereals Holdings, GMOI, GMCO, the Company, IP Holdings I, IP Holdings II, Cereals Properties
and RBDB and (ii) that certain Transferor Certificate dated June 28, 2007 by TPC and that certain
Transferee Certificate dated June 28, 2007 by RBDB, TPC Transferred all of its Class A Limited
Membership Interests to RBDB and RBDB was admitted to the Company in respect of such Class A
Limited Membership Interests.



     In order to incorporate the provisions of the Rate Reset Agreement and make certain agreed
upon changes to the terms of the Series B-1 Limited Membership Interests, and to make certain other
changes to the Third Amended and Restated LLC Agreement, the Third Amended and Restated LLC
Agreement was amended and restated in its entirety pursuant to the Fourth Amended and Restated
Limited Liability Company Agreement of General Mills Cereals, LLC, dated August 1, 2007 (the
“Fourth Amended and Restated LLC Agreement”).



     As evidenced by (i) that certain Transferee Certificate dated August 7, 2007 by GM Sales and
(ii) Signature Page Addendum to the Fourth Amended and Restated LLC Agreement, dated as of August
7, 2007, executed by GM Sales, Capital Trust Transferred all of the Series B-1 Limited Membership
Interests of the Company to GM Sales and GM Sales was admitted to the Company as a Series B-1
Limited Member and became a party to the Fourth Amended and Restated LLC Agreement.



     In order to reflect the admission of GM Sales to the Company as a Series B-1 Limited Member
and make certain other changes to the Fourth Amended and Restated LLC Agreement, the Members have
agreed to amend and restate the Fourth Amended and Restated LLC Agreement as set forth in this
Agreement. From the date hereof, the rights and liabilities of the Members and Managing Member
shall be as provided under the Act, the Certificate of Formation, and this Agreement.



     1.2 Name.



     The name of the Company shall continue to be GENERAL MILLS CEREALS, LLC and all business of
the Company shall be conducted in such name or, with the affirmative written consent of all of the
Members, under any other name.



     1.3 Purpose; Powers.



     (a) The purposes of the Company are:



3









 





          (i) to acquire, either directly or from the Members, and to own, hold, vote, manage, protect,
conserve, assign, sell, or otherwise dispose of, either directly, or indirectly through one or more
wholly owned Subsidiaries, the Permitted Assets, all in accordance with this Agreement and the
other Transaction Documents;




          (ii) to conduct the Permitted Lines of Business;




          (iii) to receive and, subject to Sections 4 and 13.2, distribute to the Members (A) the
proceeds of any sale, lease, license, or any other disposition of the Company’s Permitted Assets
received by the Company or (B) any distributions or payments received by the Company; and




          (iv) to do such other things and engage in any other activities that the Managing Member of
the Company determines to be necessary, convenient, or incidental to any of the foregoing purposes.




     (b) The Company has the power to do any and all acts necessary, appropriate, proper,
advisable, incidental, or convenient to, and in furtherance of, the purposes of the Company set
forth in this Section 1.3 and has, without limitation, any and all powers that may be exercised on
behalf of the Company by the Managing Member pursuant to Section 5.



     1.4 Principal Place of Business.



     The principal place of business of the Company shall be at c/o GMI, Number One General Mills
Boulevard, Minneapolis, Minnesota, 55426. The Managing Member may change the principal place of
business of the Company to any other place within or without the State of Delaware with the
affirmative written consent of all of the Members. The initial registered office of the Company in
the State of Delaware is located at Corporation Trust Center, 1209 Orange Street, in the City of
Wilmington, County of New Castle, Delaware, 19801.



     1.5 Term.



     The term of the Company commenced on the date the Certificate of Formation was filed in the
office of the Secretary of State of the State of Delaware in accordance with the Act and shall
continue until the dissolution and the completion of the winding up of the Company in accordance
with Section 13. The existence of the Company as a separate legal entity and this Agreement shall
continue until the cancellation of the Certificate of Formation in accordance with the Act.



     1.6 Filings; Agent for Service of Process.



     (a) GMOI, or an agent of GMOI, was authorized to execute and cause the Certificate of
Formation to be filed in the office of the Secretary of State of the State of Delaware as an
authorized person within the meaning of, and otherwise in accordance with, the Act. The Managing
Member shall take any and all other actions reasonably necessary to perfect and maintain the status
of the Company as a limited liability company under the laws of the State of Delaware, including
the preparation, execution, and filing of such amendments to the Certificate



4









 







of Formation and such other assumed name certificates, documents, instruments, and
publications as may be required by law, including action to reflect:



          (i) A change in the Company name;




          (ii) A correction of false or erroneous statements in the Certificate of Formation or the
desire of the Members to make a change in any statement therein in order that it shall accurately
represent the agreement among the Members; or




          (iii) A change in the time for dissolution of the Company as stated in the Certificate of
Formation and in this Agreement.




     (b) The Managing Member shall execute and cause to be filed original or amended certificates
and shall take any and all other actions as may be reasonably necessary to perfect and maintain the
status of the Company as a limited liability company or similar type of entity under the laws of
any other jurisdictions in which the Company engages in business.



     (c) The registered agent for service of process on the Company in the State of Delaware shall
be The Corporation Trust Company or any successor as appointed by the Members in accordance with
the Act.



     (d) Upon the dissolution and completion of the winding up of the Company in accordance with
Section 13, the Liquidator, as an authorized person within the meaning of the Act, shall promptly
execute and cause to be filed a Certificate of Cancellation in accordance with the Act and the laws
of any other jurisdictions in which the Liquidator deems such filing or any similar filing to be
necessary or advisable.



     1.7 Title to Assets.



     All Property owned by the Company shall be owned by the Company as an entity, and all Property
owned by any Subsidiary of the Company shall be owned by such Subsidiary, and no Member shall have
any ownership interest in such assets in its individual name. Each Member’s Interest in the
Company shall be personal property for all purposes. The Company shall hold title to all of its
assets in the name of the Company, and each Subsidiary of the Company shall hold title to all of
its assets in the name of such Subsidiary, and in each case not in the name of any Member.



     1.8 Payments of Individual Obligations.



     The Company’s credit and assets shall be used solely for the benefit of the Company and its
Subsidiaries, and no asset of the Company or its Subsidiaries shall be Transferred in satisfaction
of, or encumbered for, or in payment of, any individual obligation of any Member.



     1.9 Independent Activities; Transactions with Affiliates.



     (a) The Managing Member (and any Director) shall be required to devote such time to the
affairs of the Company as may be necessary properly to manage and operate the Company, but



5









 







otherwise shall be free to serve any other Person or enterprise in any capacity that it may
deem appropriate in its discretion.



     (b) Subject to clause (c) of this Section 1.9, insofar as permitted by applicable law, neither
this Agreement nor any activity undertaken pursuant hereto shall prevent any Member or its
Affiliates from engaging in whatever activities they choose; provided that any such activities may
be undertaken without having or incurring any obligation to offer any interest in such activities
to the Company or any Member, or require any Member to permit the Company or any other Member or
its Affiliates to participate in any such activities, and as a material part of the consideration
for the execution of this Agreement by each Member, each Member hereby waives, relinquishes, and
renounces any such right or claim of participation.



     (c) Notwithstanding clause (b) of this Section 1.9, the Managing Member shall not, and shall
procure that no GMI Entity shall, carry on or be engaged or interested economically or otherwise in
any manner whatsoever (whether alone or jointly with another and whether directly or indirectly) in
any business which competes with the Cereals Business or the Pet Business.



     (d) To the extent permitted by applicable law, but subject to the provisions of this Agreement
and the Transaction Documents, in furtherance of the purposes of the Company set forth in
Section 1.3, the Managing Member is hereby authorized to cause the Company to purchase, lease, and
license Property (whether real, personal, or mixed) from, sell, lease, and license Property to, or
otherwise deal with in ways contemplated by the Transaction Documents, any Member, acting on its
own behalf, or any Affiliate of any Member; provided that any such purchase, sale, lease, license,
or other transaction shall be made on terms and conditions that are no less favorable to the
Company than if the purchase, sale, lease, license, or other transaction had been made with an
independent third party.



     (e) Notwithstanding any provision in this Agreement, including Section 1.9(d) and Section 5,
the Managing Member or any officer of the Company, on behalf of the Company, is hereby authorized
to cause the Company to execute and deliver, and perform its obligations under, the Transaction
Documents to which the Company is a party, all without any further action, consent, or approval of
any Person.



     1.10 Definitions.



     Unless otherwise specifically stated, the capitalized terms used in this Agreement shall have
the following meanings:



     “Act” means the Delaware Limited Liability Company Act, 6 Del. Code Ann. § 18-101, et seq., as
amended from time to time (or any corresponding provisions of succeeding law).



     “Adjustable Rate” means, for any Class B Distribution Period during a Floating Rate Period, a
rate equal to the highest of LIBOR, the 10-year Treasury CMT and the 30-year Treasury CMT for such
Class B Distribution Period.



     “Adjusted Capital Account” means, with respect to any Member, the balance in such Member’s
Capital Account as of the end of the relevant Allocation Year, after giving effect to the following
adjustments:



6









 





          (i) Credit to such Capital Account any amounts which such Member is deemed obligated to
restore pursuant to the penultimate sentences of Regulations Sections 1.704-2(g)(1) and
1.704-2(i)(5); and




          (ii) Debit to such Capital Account the items described in Regulations Sections
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and 1.704-1(b)(2)(ii)(d)(6).




     The foregoing definition of Adjusted Capital Account is intended to comply with the provisions
of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.



     “Adjusted Capital Account Deficit” means, with respect to any Member, the deficit balance, if
any, in such Member’s Adjusted Capital Account as of the end of the relevant Allocation Year.



     “Affiliate” means, with respect to any specified Person, (i) any Person directly or indirectly
controlling, controlled by, or under common control with such specified Person, (ii) any Person,
directly or indirectly, owning or controlling ten percent (10%) or more of the outstanding voting
interests or other ownership interests of such specified Person, (iii) any Person ten percent (10%)
of the outstanding voting stock or other ownership interests of which is, directly or indirectly,
owned or controlled by such specified Person, (iv) any officer, director, general partner, managing
member or manager, trustee of, or Person serving in a similar capacity with respect to, such
specified Person, or (v) any Person who is an officer, director, general partner, managing member
or manager, trustee, or holder of ten percent (10%) or more of the voting interests or other
ownership interests of any Person described in clauses (i), (ii), (iii), or (iv) of this sentence.
For purposes of this definition, the terms “controlling”, “controlled by,” or “under common control
with” shall mean the possession, direct or indirect, of the power to direct or cause the direction
of the management and policies of a Person or entity, whether through the ownership of voting
securities, by contract, or otherwise.



     “Agreement” has the meaning set forth in the preamble.



     “Albuquerque Documents” means (i) the Lease Agreement, dated as of January 15, 1991, by and
between the City of Albuquerque, New Mexico and GMI, which has been assigned to GMOI pursuant to
the Assignment Agreement (the “First Albuquerque Assignment”), dated May 27, 1996, by and between
GMI and GMOI, and which has been further assigned by GMOI to Cereal Properties pursuant to the
Second Assignment, dated April 3, 2002, by and between GMOI and Cereals Properties (the “Second
Albuquerque Assignment”), (ii) the Indenture, dated January 15, 1991, among the City of
Albuquerque, New Mexico, General Mills Products Corp., and Norwest Bank Minnesota, N.A., which has
been assigned to GMOI pursuant to the Assignment Agreement, and which has been further assigned to
Cereals Properties pursuant to the Second Albuquerque Assignment, and (iii) the Bond Purchase
Agreement, dated January 30, 1991, among the City of Albuquerque, New Mexico, General Mills
Products, Inc., and GMI, which has been assigned to GMOI pursuant to the First Albuquerque
Assignment, and which has been further assigned to Cereals Properties pursuant to the Second
Albuquerque Assignment.



7









 





     “Allocation Year” means (i) the period commencing on May 24, 2002 and ending on May 26, 2002,
(ii) any subsequent twelve (12) month period commencing on the day after the last day of the prior
Allocation Year and ending on the last Sunday of May of each subsequent year, or (iii) any portion
of the period described in clauses (i) or (ii) for which the Company is required to allocate
Profits, Losses, and other items of Company income, gain, loss, or deduction pursuant to Section 3.



     “Amended and Restated Contract Marketing Agreement” means the Amended and Restated Contract
Marketing Agreement, dated May 24, 2002, between the Company and General Mills Marketing, Inc., as
(i) amended May 1, 2003 in accordance with the terms thereof and the terms of the Amended and
Restated LLC Agreement and (ii) the same may be further amended from time to time in accordance
with the terms thereof and hereof.



     “Amended and Restated Contract Operating Agreement” means the Amended and Restated Contract
Operating Agreement, dated May 24, 2002, between the Company and GMOI, as the same may be amended
from time to time in accordance with the terms thereof and hereof.



     “Amended and Restated Contract Sales Agreement” means the Amended and Restated Contract Sales
Agreement, dated May 24, 2002, between the Company and General Mills Sales, Inc., as the same may
be amended from time to time in accordance with the terms thereof and hereof.



     “Amended and Restated Employee Seconding Agreement” means the Amended and Restated Employee
Seconding Agreement, dated as of May 24, 2002, between the Company and GMI, as the same may be
amended from time to time in accordance with the terms thereof and hereof.



     “Amended and Restated LLC Agreement” has the meaning set forth in Section 1.1.



     “Amended and Restated Receivables Purchase and Sale Agreement” means the Second Amended and
Restated Receivables Purchase and Sale Agreement, dated as of June 28, 2007, by and between the
Company and General Mills Finance, Inc., as the same may be amended from time to time in accordance
with the terms thereof and hereof.



     “Amended and Restated Services Agreement” means the Second Amended and Restated Services
Agreement, dated as of July 24, 2002, by and among GMI, General Mills Sales, Inc., GMOI, General
Mills Services, Inc., General Mills Direct Marketing, Inc., General Mills Missouri, Gardetto’s
Bakery, Inc., Lloyd’s Barbeque Company, Small Planet Foods, Inc., General Mills Finance, Inc.,
General Mills Factoring, LLC, General Mills Marketing, Inc., General Mills Entertainment, Inc.,
General Mills Properties, Inc., The Pillsbury Company, HDIP, Inc., HD JV Holding Company, The
Haagen Dazs Shoppe Company, Inc., The Haagen Dazs International Shoppe Company, Inc., Pet,
Progresso Quality Foods Company, TPC-RF, Inc., Roush Products Company, Inc., IP Holdings I, IP
Holdings II, Cereals Holdings, Cereals Properties, Cereals Operations, General Mills Capital, Inc.,
and the Company, as (i) amended on May 1, 2003 in accordance with the terms thereof and the terms
of the Amended and Restated LLC Agreement and (ii) the same may be further amended from time to
time in accordance with the terms thereof and hereof.



8









 





     “Applicable Class B Credit Spread” means, with respect to the Series B-1 Limited Membership
Interests and the Series B-2 Limited Membership Interests, (i) prior to the first successful Class
B Optional Remarketing, 1.61% and (ii) thereafter, the percentage determined by the Class B
Remarketing Agent in connection with the most recent successful Class B Optional Remarketing.



     “Applicable Tax Rate” means, with respect to any Limited Member for any Allocation Year, the
aggregate tax rate (expressed as a percentage) described in clause (i) of Section 8.3(c) hereof.



     “Appraiser 1” has the meaning set forth in Section 13.11(b).



     “Appraiser 2” has the meaning set forth in Section 13.11(b).



     “Appraiser 3” has the meaning set forth in Section 13.11(b).



     “A-Rated Securities” means commercial paper and publicly traded bonds, debentures, or other
debt obligations (including municipal bonds and other tax-exempt obligations) of issuers, other
than GMI or any of its Affiliates, organized under the laws of the United States or any State that
are: (i) commercial paper or other short-term debt rated A-1+ by S&P and P-1 by Moody’s;
(ii) medium or long-term debt rated at least A by S&P and A2 by Moody’s; or (iii) readily
marketable (A) direct obligations of the Government of the United States, (B) direct obligations of
any agency or instrumentality thereof rated AAA by S&P and Aaa by Moody’s, or (C) non-callable,
non-amortizing U.S. Dollar-denominated senior debt securities of fixed maturity in book entry form,
issued by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation
and rated AAA by S&P and Aaa by Moody’s; provided, that all obligations and securities described in
clauses (i) through (iii) above (1) are eligible for public sale or other distribution without
registration under the Securities Act, (2) will not include any obligations or securities
denominated in currency other than Dollars, (3) will not include any obligations or securities the
payment or repayment of principal in respect of which is in an amount determined by reference to
any formula or index, or which is subject to any contingency, (4) will not include any obligations
or securities that require the holder thereof to make advances to, or to purchase additional
obligations or securities issued by, the issuer of such obligations or securities after the
original date of issuance of such obligations or securities, and (5) have a remaining maturity of
not more than one (1) year.



     “Bankruptcy” means, with respect to any Person, a “Voluntary Bankruptcy” or an “Involuntary
Bankruptcy.” A “Voluntary Bankruptcy” means, with respect to any Person (i) the inability of such
Person generally to pay its debts as such debts become due, or an admission in writing by such
Person of its inability to pay its debts generally or a general assignment by such Person for the
benefit of creditors, (ii) the filing of any petition or answer by such Person seeking to
adjudicate itself as bankrupt or insolvent, or seeking for itself any liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition of such Person or its
debts under any law relating to bankruptcy, insolvency, or reorganization or relief of debtors, or
seeking, consenting to, or acquiescing in the entry of an order for relief or the appointment of a
receiver, trustee, custodian, or other similar official for such Person or for any substantial part
of its property, or (iii) action taken by such Person to



9









 







authorize any of the actions set forth above. An “Involuntary Bankruptcy” means, with respect
to any Person, without the consent or acquiescence of such Person, the entering of an order for
relief or approving a petition for relief or reorganization or any other petition seeking any
reorganization, arrangement, composition, readjustment, liquidation, dissolution, or other similar
relief under any present or future bankruptcy, insolvency, or similar statute, law, or regulation,
or the filing of any such petition against such Person, which petition shall not be dismissed
within sixty (60) days, or without the consent or acquiescence of such Person, the entering of an
order appointing a trustee, custodian, receiver, or liquidator of such Person or of all or any
substantial part of the property of such Person, which order shall not be dismissed within sixty
(60) days. The foregoing is intended to supersede and replace the events listed in Sections 18-101
and 18-304 of the Act with respect to any Member.



     “Benchmark Rates” means, collectively, the LIBOR, the 10-year Treasury CMT and the 30-year
CMT.



     “Bid” means an irrevocable offer to purchase in any Class A Remarketing all but not a portion
of the outstanding Class A Limited Membership Interests at a price per Class A Limited Membership
Interest equal to the Class A Mandatory Purchase Price with the applicable Class A Preferred Return
Rate equal to the Bid Rate specified in such Bid.



     “Bid Rate” means a rate per annum equal to (i) the LIBOR in effect from time to time plus
(ii) a spread, where such spread is proposed by bidders in connection with a Class A Remarketing
and made with respect to the Preferred Return Capital amount set forth in the Class A Remarketing
Notice.



     “Board of Directors” has the meaning set forth in Section 5.10(a).



     “Board Triggering Event” has the meaning set forth in Section 5.10(a).



     “Budgeted Capital Expenditures” means the capital expenditures set forth on Exhibit J.



     “Buffalo Lease” means the Master Lease Agreement, dated as of April 2, 2002, by and between
General Mills Properties, Inc., as lessor, and the Company, as lessee, as amended pursuant to the
First Amendment to Master Lease Agreement, dated as of May 24, 2002, by and between General Mills
Properties, Inc. and the Company.



     “Business Day” means any day that is not a Saturday, a Sunday, or a day on which banking
institutions located in New York, New York, or Minneapolis, Minnesota are authorized or obligated
by law to close.



     “Calendar Period” means a period of 180 calendar days.



     “Capital Account” means, with respect to any Member of the Company, the Capital Account
maintained for such Member in accordance with the following provisions:



          (i) To each Member’s Capital Account there shall be credited (A) such Member’s Capital
Contributions, (B) such Member’s distributive share of Profits and any items in the nature of
income or gain that are specially allocated to such Member pursuant to



10









 






Sections 3.3 or 3.4, and (C) the amount of any Company liabilities assumed by such Member or that
are secured by any Property distributed to such Member;




          (ii) To each Member’s Capital Account there shall be debited (A) the amount of Cash and the
Gross Asset Value of any Company Property distributed to such Member pursuant to any provision of
this Agreement, (B) such Member’s distributive share of Losses and any items in the nature of
deduction, expense, or loss which are specially allocated to such Member pursuant to Sections 3.3
or 3.4, and (C) the amount of any liabilities of such Member assumed by the Company or that are
secured by any Property contributed by such Member to the Company;




          (iii) In the event an Interest is Transferred in accordance with the terms of this Agreement,
the transferee shall succeed to the Capital Account of the transferor to the extent it relates to
the Transferred Interest; and




          (iv) In determining the amount of any liability for purposes of subparagraphs (i) and (ii)
above there shall be taken into account Code Section 752(c) and any other applicable provisions of
the Code and Regulations.




     The foregoing provisions and the other provisions of this Agreement relating to the
maintenance of Capital Accounts are intended to comply with Regulations Section 1.704-1(b), and
shall be interpreted and applied in a manner consistent with such Regulations. In the event the
Managing Member shall determine in good faith and on a commercially reasonable basis that it is
prudent to modify the manner in which the Capital Accounts, or any debits or credits thereto are
computed in order to comply with such Regulations, the Managing Member may make such modification;
provided that the Managing Member shall promptly give each other Member written notice of such
modification. The Managing Member also shall, in good faith and on a commercially reasonable
basis, (i) make any adjustments to the Capital Accounts that are necessary or appropriate to
maintain equality between the aggregate Capital Accounts of the Members and the amount of capital
reflected on the Company’s balance sheet, as computed for book purposes, in accordance with
Regulations Section 1.704-1(b)(2)(iv)(q) and (ii) make any appropriate modifications to the Capital
Accounts in the event unanticipated events might otherwise cause this Agreement not to comply with
Regulations Section 1.704-1(b).



     “Capital Contributions” means, with respect to any Member of the Company, the amount of Cash
and the initial Gross Asset Value of any Property (other than Cash) contributed to the Company by
such Member.



     “Capital Lease Obligations” means, with respect to any Person, the obligations of such Person
to pay rent or other amounts under any lease of (or other arrangement conveying the right to use)
real or personal property, or a combination thereof, which obligations are required to be
classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and
the amount of such obligations shall be the capitalized amount thereof determined in accordance
with GAAP.



     “Capital Trust” means the trust established pursuant to that certain Deposit Trust Agreement
(the “Capital Trust Agreement”), dated as of October 8, 2004, among Lehman



11









 







Brothers Special Financing Inc., as Depositor, Lehman Brothers Inc., as Broker-Dealer, The
Bank of New York (Delaware), as Delaware trustee, and The Bank of New York, as Owner Trustee.



     “Capital Trust Agreement” has the meaning set forth in the definition of “Capital Trust.”



     “Cash” means funds denominated in United States currency.



     “Cash Available for Distribution” means, for any Class A Distribution Period, Class B
Distribution Period, or Managing Member Distribution Period, the gross Cash proceeds of the Company
less the portion thereof used to pay or establish reasonable reserves for all Company Expenses
(including Taxes), all as determined by the Managing Member in good faith and in its commercially
reasonable judgment. Cash Available for Distribution will not be reduced by Depreciation or
similar non-Cash allowances, and will be increased by any reductions of reserves previously
established pursuant to the first sentence of this definition.



     “Cash Equivalents” shall mean Cash and any of the following: (i) readily marketable (x) direct
obligations of the Government of the United States or (y) direct obligations of any agency or
instrumentality thereof rated AAA by S&P and Aaa by Moody’s or (ii) insured certificates of deposit
of or time or demand deposits with any commercial bank that is a member of the Federal Reserve
System, the parent of which issues commercial paper rated P-1 (or the then equivalent grade) by
Moody’s and A-1+ (or the then equivalent grade) by S&P, is organized under the laws of the United
States or any State thereof and the long term unsecured debt of which is rated A2 or better by
Moody’s and A or better by S&P; provided that all obligations and securities described in clauses
(i) and (ii) above (1) will not have an original maturity of longer than ninety (90) days, (2) will
not include any obligations or securities denominated in a currency other than Dollars, (3) will
not include any obligations or securities that provide for the extension of the original stated
maturity thereof without the consent of any holder thereof affected thereby, (4) will not include
any obligations or securities the payment or repayment of principal in respect of which is an
amount determined by reference to any formula or index, or which is subject to any contingency,
(5) will not include any obligations or securities that require the holder thereof to make advances
to, or to purchase additional obligations or securities issued by, the issuer of such obligations
or securities after the original date of issuance of such obligations or securities, and (6) will
not include any obligation of or security issued by GMI or any of its Affiliates.



     “Cash Flow” means, for any period with respect to the Company and its Subsidiaries (determined
on a consolidated basis in accordance with GAAP) the excess, if any, of (i) the sum of (A) net
income (or net loss) and (B) the sum of (1) Taxes deducted in determining net income (or net loss)
under GAAP, (2) interest expense deducted (net of interest income received) in determining net
income (or net loss) under GAAP, (3) depreciation and amortization expense and other non-cash
expenses, and (4) decreases in working capital, over (ii) the sum of (A) Taxes actually paid and
(B) capital expenditures, charitable contributions, and increases in working capital.



12









 





     “Cereals Business” means the manufacture and sale by the Company and its Subsidiaries of
packaged cereals products, other than organic cereal products, for sale in the United States,
directly or indirectly, to consumers, other than in connection with the Food Service Business.



     “Cereals Holdings” has the meaning set forth in the preamble.



     “Cereals Properties” means General Mills Cereals Properties, LLC, a Delaware limited liability
company.



     “Cereals Properties Interest” means 100% of the limited liability company interest in Cereals
Properties.



     “Certificate of Cancellation” means a certificate filed in accordance with 6 Del. Code Ann.
§ 18-203.



     “Certificate of Formation” means the Certificate of Formation filed with the Secretary of
State of the State of Delaware pursuant to the Act to form the Company, as originally executed and
as amended, modified, supplemented, or restated from time to time, as the context requires.



     “Class A Adjustment Factor” means (a) for any Class A Distribution Period or portion thereof
occurring during the period beginning on and including May 24, 2002 and ending on and including the
day before the initial Class A Reset Date, (i) 96.5%, in the case of Class A Limited Membership
Interests owned by RBDB during any such Class A Distribution Period and (ii) 100.0%, in the case of
the Class A Limited Membership Interests owned by TPC during any such Class A Distribution Period
and (b) thereafter, 100.0%.



     “Class A Distribution Date” means the last Business Day of any Fiscal Quarter occurring prior
to the Fiscal Quarter in which a Liquidating Event occurs.



     “Class A Distribution Period” means the applicable period from (and including) a Class A
Distribution Date to (but excluding) the next subsequent Class A Distribution Date.



     “Class A Limited Member” means (i) RBDB (unless it has ceased to be a Class A Limited Member)
(ii) TPC (during the period it was a Class A Limited Member), and (iii) any Person who has become a
substituted Class A Limited Member pursuant to the terms of this Agreement and has not ceased to be
a Class A Limited Member.



     “Class A Limited Member Preferred Return” means, with respect to any Class A Limited Member,
the return that will accrue during each Class A Distribution Period or portion thereof (if such
Class A Distribution Period is a Floating Rate Period, computed using the actual number of days
elapsed over a 360 day year, and if such Class A Distribution Period is a Fixed Rate Period,
computed on the basis of a 360-day year of twelve 30-day months) on the amount of such Class A
Limited Member’s Preferred Return Capital during such Class A Distribution Period, at a rate per
annum equal to the applicable Class A Preferred Return Rate.



     “Class A Limited Membership Interests” has the meaning set forth in Section 2.1(a).



13









 





     “Class A Mandatory Purchase Price” means, with respect to a Class A Remarketing, an amount per
Class A Limited Membership Interest determined pursuant to Section 7.1(d)(i) and set forth in the
Class A Remarketing Notice.



     “Class A Mandatory Remarketing” has the meaning set forth in Section 7.1(b).



     “Class A Mandatory Remarketing Date” means the date on which a Class A Mandatory Remarketing
is conducted.



     “Class A Notice Events” has the meaning set forth in Section 14.1.



     “Class A Preferred Return Rate” means, with respect to the Class A Limited Membership
Interests,



          (i)  for any Class A Distribution Period or portion thereof occurring during the period
beginning May 24, 2002 and ending on the initial Class A Reset Date and during which the Class A
Limited Preferred Return is stated herein to accrue, a rate per annum equal to (a) the sum of
(x) the LIBOR for the Fiscal Quarter or portion thereof constituting such Class A Distribution
Period or portion thereof plus (y) the Class A Spread then in effect, divided by (b) the Class A
Adjustment Factor, and




          (ii)  for any Class A Distribution Period or portion thereof occurring after the initial
Class A Reset Date during which the Class A Limited Member Preferred Return is stated herein to
accrue, a rate per annum equal to the sum of (a) the LIBOR for the Fiscal Quarter or portion
thereof constituting such Class A Distribution Period or portion thereof plus (b) the Class A
Spread then in effect.




     “Class A Purchase” means a purchase of the Class A Limited Membership Interests pursuant to
Section 11.8.



     “Class A Purchase Date” has the meaning set forth in Section 11.8(d)(ii)(A).



     “Class A Purchase Election Date” has the meaning set forth in Section 11.8(b).



     “Class A Purchase Notice” has the meaning set forth in Section 11.8(a).



     “Class A Purchase Option” has the meaning set forth in Section 11.8(a).



     “Class A Purchase Premium” means amounts that would have accrued as Class A Limited Member
Preferred Return on the Preferred Return Capital attributable to the Class A Limited Membership
Interests being purchased (without regard to Undistributed Preferred Return included therein) for
the period from and including the Class A Purchase Date to but excluding the next occurring Class A
Reset Date if such amounts were to accrue at a rate per annum equal to 0.25% (computed on the basis
of a year of 360 days and actual days elapsed).



     “Class A Purchase Price” has the meaning set forth in Section 11.8(c).



     “Class A Purchase Valuation Date” has the meaning set forth in Section 11.8(c).



14









 





     “Class A Remarketing” means a Class A Mandatory Remarketing or a Class B Interim Remarketing.



     “Class A Remarketing Agent” means, with respect to any Class A Remarketing, a remarketing
agent selected by the Company that would qualify as a Reference Corporate Dealer.



     “Class A Remarketing Agreement” means a remarketing agreement to be entered into by the
Company and the Class A Remarketing Agent on such terms as are customary in the remarketing of
securities such as the Class A Limited Membership Interests, and including a Class A Remarketing
Fee acceptable to the Company.



     “Class A Remarketing Fee” means the fee due to the Class A Remarketing Agent under the Class A
Remarketing Agreement.



     “Class A Remarketing Notice” has the meaning set forth in Section 7.1(c)(i).



     “Class A Reset Date” means, with respect to the Class A Limited Membership Interests,
(i) June 28, 2007 and (ii) thereafter, July 15, 2012 and each 60-month anniversary of such date;
provided that if such anniversary is not a Business Day, the Class A Reset Date shall be the first
Business Day preceding such anniversary.



     “Class A Spread” means (i) for any Class A Distribution Period or portion thereof occurring
during the period beginning on and including October 6, 2004 and ending on and including the day
before the initial Class A Reset Date, a rate per annum equal to 0.90%, (ii) for any Class A
Distribution Period or portion thereof occurring during the period beginning on and including the
initial Class A Reset Date and ending on and including the day before the second Class A Reset
Date, a rate per annum equal to 0.65%, and (iii) for any subsequent Class A Distribution Period,
the rate per annum determined pursuant to Section 7.1.



     “Class B Distribution Date” means January 15, April 15, July 15 and October 15 of each year;
provided that, if such Class B Distribution Date is not a Business Day, payment shall be made on
the next succeeding Business Day; and, provided, further, that no Class B Distribution Date shall
occur after the date on which a Liquidating Event occurs.



     “Class B Distribution Period” means the applicable period from (and including) a Class B
Distribution Date to (but excluding) the next subsequent Class B Distribution Date.



     “Class B Exchange” means any exchange of Class B Limited Membership Interests for preferred
stock of GMI pursuant to the terms of the Exchange Agreement.



     “Class B Limited Member” means a Series B-1 Limited Member or a Series B-2 Limited Member, as
the case may be.



     “Class B Limited Member Preferred Return” means the Series B-1 Limited Member Preferred Return
or the Series B-2 Limited Member Preferred Return, as the case may be.



     “Class B Limited Membership Interests” has the meaning set forth in Section 2.1(a).



15









 





     “Class B Mandatory Purchase Price” means, with respect to a Class B Remarketing of any Series
of Class B Limited Membership Interests held by any Class B Limited Member, an amount per Class B
Limited Membership Interest being remarketed determined pursuant to Section 7.2(b) and set forth in
the Class B Remarketing Notice.



     “Class B Interim Remarketing” has the meaning set forth in Section 7.2(a).



     “Class B Notice of Election” has the meaning set forth in Section 7.2(c)(i).



     “Class B Optional Remarketing” has the meaning set forth in Section 7.2(a).



     “Class B Optional Remarketing Date” means any date on which a Class B Optional Remarketing is
conducted.



     “Class B Preferred Distribution” means any amount distributable to a Class B Limited Member
pursuant to Section 4.1(a)(ii) with respect to any Series of Class B Limited Membership Interests.



     “Class B Purchase” means a purchase of Class B Limited Membership Interests pursuant to
Section 11.9.



     “Class B Purchase Date” has the meaning set forth in Section 11.9(d).



     “Class B Purchase Election Date” has the meaning set forth in Section 11.9(b).



     “Class B Purchase Notice” has the meaning set forth in Section 11.9(a).



     “Class B Purchase Option” has the meaning set forth in Section 11.9(a).



     “Class B Purchase Price” has the meaning set forth in Section 11.9(c).



     “Class B Purchase Valuation Date” has the meaning set forth in Section 11.9(c).



     “Class B Remarketing” means a Class B Optional Remarketing or a Class B Interim Remarketing.



     “Class B Remarketing Agent” means (1) solely with respect to the initial Class B Optional
Remarketing, Lehman Brothers Inc. as exclusive remarketing agent until such time as Lehman Brothers
Inc. resigns or is removed in accordance with the Class B Remarketing Agreement entered into by
Lehman Brothers Inc. and the Company, and (ii) with respect to any other Class B Remarketing, any
Person that would qualify as a Reference Corporate Dealer, selected by the Company with the
consent of holders of Series B-1 Limited Membership Interests representing at least two-thirds of
any outstanding Series B-1 Limited Membership Interests that are held by holders other than GMI and
its Affiliates.



     “Class B Remarketing Agreement” means a remarketing agreement to be entered into by the
Company and the Class B Remarketing Agent on such terms as are customary in the



16









 







remarketing of securities such as the Series B-1 Limited Membership Interests, and including a
Class B Remarketing Fee acceptable to the Company.



     “Class B Remarketing Date” means any Business Day no later than the third Business Day prior
to any Class B Settlement Date.



     “Class B Remarketing Election Date” has the meaning set forth in Section 7.2(b).



     “Class B Remarketing Fee” means the fee due to the Class B Remarketing Agent under the Class B
Remarketing Agreement.



     “Class B Remarketing Notice” has the meaning set forth in Section 7.2(b).



     “Class B Reset Date” has the meaning set forth in Section 7.2(a).



     “Class B Settlement Date” has the meaning set forth in Section 7.2(b).



     “Code” means the United States Internal Revenue Code of 1986, as amended from time to time or
any successor legislation.



     “Combined Receivables Purchase and Sale Agreement” means the Receivables Purchase and Sale
Agreement, dated as of July 24, 2002, by and among General Mills Finance, Inc., General Mills
Sales, Inc., and the Company, as the same may be amended from time to time in accordance with the
terms thereof and hereof.



     “Company” has the meaning set forth in Section 1.1.



     “Company Minimum Gain” has the same meaning as “partnership minimum gain” set forth in
Regulations Sections 1.704-2(b)(2) and 1.704-2(d).



     “Conveyance Agreements” means (i) the Stock Transfer Agreement, dated as of April 2, 2002, by
and between GMI and Popcorn Distributors, Inc., (ii) the Contribution Agreement, dated as of April
2, 2002, by and between GMI and IP Holdings I, (iii) the Contribution Agreement, dated as of April
2, 2002, by and between GMI and IP Holdings II, (iv) the Contribution Agreement, dated as of April
2, 2002, by and between GMOI and Cereals Properties, (v) the Subscription Agreement, dated as of
April 2, 2002, by and between GMI and Cereals Holdings, (vi) the Transfer Agreement, dated as of
April 2, 2002, by and among GMI, Popcorn Distributors, Inc., and GMOI, (vii) the Contribution
Agreement, dated as of April 2, 2002, by and among GMOI, TPC, Cereals Holdings, and the Company,
and (viii) the Contribution Agreement, dated as of April 5, 2002, by and between GMI and General
Mills Rights Holdings, LLC, in each case, as the same may be amended from time to time in
accordance with the terms thereof and hereof.



     “Corporate SPE” has the meaning set forth in Section 5.7(a).



     “Custodial Agreement” has the meaning set forth in Section 5.2(c)(i).



     “Custodian” has the meaning set forth in Section 5.2(c)(i).



17









 





     “Damages” means, without duplication, claims, demands, damages, costs, and Expenses (including
reasonable fees and disbursements of counsel), liabilities, Liens, losses, fines, penalties,
charges and administrative, judicial and arbitration awards, judgments, settlement payments, and
deficiencies or other charges.



     “Depreciation” means, for each Allocation Year, an amount equal to the depreciation,
amortization, depletion or other cost recovery deduction allowable with respect to an asset for
such Allocation Year for federal income tax purposes, except that (i) with respect to any asset
whose Gross Asset Value differs from its adjusted tax basis for federal income tax purposes and
which difference is being eliminated by use of the “remedial allocation method” defined by
Regulations Section 1.704-3(d), Depreciation for such Allocation Year shall be the amount of book
basis recovered for such Fiscal Year under the rules prescribed by Regulations
Section 1.704-3(d)(2), and (ii) with respect to any other asset whose Gross Asset Value differs
from its adjusted basis for federal income tax purposes at the beginning of such Allocation Year,
Depreciation shall be an amount that bears the same ratio to such beginning Gross Asset Value as
the federal income tax depreciation, amortization, or other cost recovery deduction for such
Allocation Year bears to such beginning adjusted tax basis; provided, however, that if the adjusted
basis for federal income tax purposes of an asset at the beginning of such Allocation Year is zero,
Depreciation shall be determined with reference to such beginning Gross Asset Value using any
reasonable method selected by the Managing Member.



     “Designee” has the meaning set forth in Section 7.2(c)(i).



     “Director” has the meaning set forth in Section 5.10(b).



     “Dollars” means United States dollars.



     “11.8(a)(i) Purchase Date” has the meaning set forth in Section 11.8(d)(i).



     “11.8(a)(ii) Purchase Date” has the meaning set forth in Section 11.8(d)(ii)(A).



     “Estimated Profits and Losses” means:



          (i)  With respect to any Reset Valuation Allocation Year, the estimated Profits or Losses for
such Reset Valuation Allocation Year. Such estimate shall be made by the Managing Member in
consultation with a nationally recognized accounting firm selected in accordance with Section
9.1(d) and based on the actual results of operations through the end of the third Fiscal Quarter of
such Reset Valuation Allocation Year, as reasonably extrapolated through the end of the Reset
Valuation Allocation Year.




          (ii)  With respect to any Purchase Valuation Allocation Year, the estimated Profits or Losses
for such Purchase Valuation Allocation Year. Such estimate shall be made by the Managing Member in
consultation with a nationally recognized accounting firm selected in accordance with Section
9.1(d) and based on the actual results of operations through the end of the Fiscal Quarter in which
the Purchase Valuation Date occurs, as reasonably extrapolated through the end of the Purchase
Valuation Allocation Year.




18









 








          (iii)  With respect to any Exchange Valuation Allocation Year, the estimated Profits or Losses
for such Exchange Valuation Allocation Year. Such estimate shall be made by the Managing Member in
consultation with a nationally recognized accounting firm selected in accordance with Section
9.1(d) and based on the actual results of operations through the end of the third Fiscal Quarter
immediately preceding the Fiscal Quarter in which the Exchange Valuation Date occurs, as reasonably
extrapolated through the end of the Exchange Valuation Allocation Year.




     “Excess Cash Flow” means, for any period with respect to the Company and its Subsidiaries
(determined on a consolidated basis in accordance with GAAP), the excess, if any, of (i) the sum of
(A) Cash Flow for such period plus (B) capital expenditures for such period in excess of Budgeted
Capital Expenditures for such period over (i) the sum of (A) all interest paid in cash during such
period on Indebtedness (net of interest income received in cash during such period) plus (B) the
aggregate amount of principal repayments of long-term Indebtedness scheduled to be paid during such
period.



     “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.



     “Exchange Agreement” means the Amended and Restated Exchange Agreement dated as of November
29, 2004 and effective as of October 8, 2004 by and among GMI and LBSFI, as amended by the
Amendment to the Amended and Restated Exchange Agreement dated as of August 1, 2007.



     “Exchange Valuation Allocation Year” means, with respect to any Allocation Year in which an
Exchange Valuation Date occurs, the period beginning on the first day of such Allocation Year and
ending on the Exchange Valuation Date.



     “Exchange Valuation Date” means, with respect to a Class B Exchange, the last day of the
Fiscal Quarter immediately prior to the Fiscal Quarter in which such exchange occurs.



     “Expenses” means any and all costs, liabilities, obligations, losses, Damages, penalties,
interest, Taxes, claims (including, but not limited to negligence, strict or absolute liability,
liability in tort and liabilities arising out of violation of laws or regulatory requirements of
any kind), actions, suits, costs, expenses, and disbursements (including, without duplication,
reasonable legal fees and expenses).



     “Failed Class A Remarketing” has the meaning set forth in Section 7.1(c)(iv).



     “Federal Reserve Board” means the Board of Governors of the Federal Reserve System.



     “Finance Note” has the meaning specified in the definition of Permitted Loans.



     “Financial Covenant” means any covenant in any agreement or instrument that relates to
information included or required to be included in the balance sheet, statement of income,
stockholders’ equity, or cash flows of any Person (excluding any such covenant relating solely to
the delivery of financial information).



19









 





     “First Baseline Amount” means, with respect to any Allocation Year, an amount equal to the sum
of (i) the amount set forth opposite such Allocation Year on Schedule B plus (ii) the
amount of interest income included in Profits for such Allocation Year.



     “First Tier Factor” means, with respect to the Permitted Operating Assets for any relevant
Measurement Period, as of any date of determination, 1.05 to the x power where x is equal to the
quotient of (i) the number of days from the date on which any such Permitted Operating Assets were
acquired by the Company to the date of determination divided by (ii) 360. If the Consumer Price
Index during the period described in (i) increased at an annual rate greater than five percent
(5%), then the amount by which such increase exceeded five percent (5%) (expressed as a decimal)
shall be added to 1.05. For example, if the annual increase in the Consumer Price Index for the
relevant period is six percent (6%), the amount added to 1.05 is .01, and the x power set forth in
clause (i) shall be applied to 1.06. For purposes of this definition of “First Tier Factor,” the
acquisition date of all Permitted Operating Assets shall be deemed to be the first day of the
relevant Measurement Period except to the extent such Permitted Operating Assets were acquired by
the Company subsequent to such date in connection with a significant expansion or acquisition of
one of the Permitted Lines of Business, in which case the acquisition date shall be the date of
such expansion or acquisition.



     “First Tier Growth Value” means, with respect to all Permitted Assets as of any date of
determination during any relevant Measurement Period, the sum of (i) the sum of the products
derived by multiplying the initial Gross Asset Value of each Permitted Operating Asset times the
applicable First Tier Factor, plus (ii) the aggregate Gross Asset Value of all Permitted Financial
Assets. For purposes of this definition of “First Tier Growth Value,” (x) the acquisition date of
all Permitted Operating Assets shall be deemed to be the first day of such Measurement Period
except to the extent such Permitted Operating Assets were acquired by the Company subsequent to
such date in connection with a significant expansion or acquisition of one of the Permitted Lines
of Business, in which case the acquisition date shall be the date of such expansion or acquisition
and (y) the initial Gross Asset Value of each Permitted Operating Asset held by the Company on the
first day of such Measurement Period shall be (1) with respect to the initial Measurement Period
beginning on May 24, 2002 the initial Gross Asset Value of such Permitted Operating Asset on such
date and (2) with respect to any subsequent Measurement Period, the Mark-to-Market Value of such
Permitted Operating Asset as of such day. The initial Gross Asset Value of any Permitted Operating
Asset not held by the Company on the first day of any Measurement Period shall be determined in
accordance with subparagraph (i) of the definition of “Gross Asset Value”; provided that, for
purposes of this definition of “First Tier Growth Value,” the initial Gross Asset Value of
Inventory shall be deemed to equal the Gross Asset Value of Inventory at the end of the immediately
preceding Fiscal Year.



     “Fiscal Quarter” means (i) the period commencing on May 24, 2002 and ending on May 26, 2002
and (ii) each subsequent three-month period commencing on the day after the last day of the prior
Fiscal Quarter and ending on the last Sunday in August, November, February, and May next to occur,
through the date on which all Company Property is distributed to the Members pursuant to
Section 13.



     “Fiscal Year” means (i) the period commencing on May 24, 2002 and ending on May 26, 2002 and
(ii) each subsequent twelve-month period commencing on the day after the last day of




20











 





the prior Fiscal Year and ending on the last Sunday in May, through the date on which all Company
Property is distributed to the Members pursuant to Section 13.




     “Five-Year Credit Agreement” means the Five-year Credit Agreement, dated as of October 21,
2005, among GMI, JPMorgan Chase Bank, as Administrative Agent, and the several financial
institutions party thereto, as amended, replaced, or modified from time to time; provided that (i)
if any replacement shall fail to provide for extensions of credit (or commitments to extend credit)
in an amount at least equal to $500 million, then “Five-Year Credit Agreement” shall mean the
relevant credit agreement as in effect immediately prior to such replacement and (ii) if the
Five-Year Credit Agreement shall be amended or otherwise modified in contemplation of any
termination or expiration of commitments to extend credit thereunder or any material voluntary
reduction in the aggregate amount of extensions of credit (or commitments to extend credit)
thereunder, then “Five-Year Credit Agreement” shall mean the relevant credit agreement as in effect
immediately prior to such amendment or other modification. Any reference herein to “Offshore Rate”
or “Applicable Margin” as defined in the Five-Year Credit Agreement shall, in the case of any
replacement Five-Year Credit Agreement, refer to the comparable defined terms in such replacement
Five-Year Credit Agreement (and, if there is no such comparable defined term, to the Five-Year
Credit Agreement in effect prior to such replacement (subject to the foregoing provisos)).



     “Fixed Rate” means, with respect to any Series of Class B Limited Membership Interests, a
Fixed Rate of return determined in accordance with Section 7.2.



     “Fixed Rate Period” means, with respect to any Series of Class B Limited Membership Interests,
a Fixed Rate Period determined in accordance with Section 7.2.



     “Floating Rate” means, for any Floating Rate Period for any Series of Class B Limited
Membership Interests, the Adjustable Rate plus the Applicable Class B Credit Spread then in effect.
In the event that the Company determines in good faith that for any reason:



          (i) any one of the Benchmark Rates cannot be determined for any Class B Distribution Period,
the Adjustable Rate for such distribution period will be equal to the higher of whichever two of
such rates can be so determined;



          (ii) only one of the Benchmark Rates can be determined for any Class B Distribution Period,
the Adjustable Rate for such distribution period will be equal to whichever such rate can be so
determined; or



          (iii) none of the Benchmark Rates can be determined for any Class B Distribution Period, the
Adjustable Rate for the preceding Class B Distribution Period will be continued for such
distribution period.



          “Floating Rate Period” means any Class B Distribution Period for which a Floating Rate is in
effect pursuant to Section 7.2.



          “Flow-Through Entity” has the meaning set forth in Section 11.3(c).



21









 





     “Food Service Business” means the manufacture and sale by GMI Entities of products marketed to
retail and wholesale bakeries and offered to the commercial and non-commercial foodservice sectors
throughout the United States and Canada, such as restaurants and school cafeterias.



     “Fourth Amended and Restated LLC Agreement” has the meaning set forth in Section 1.1.



     “GAAP” means generally accepted accounting principles in the United States in effect from time
to time.



     “Gardetto’s” means Gardetto’s Bakery, Inc., a Wisconsin corporation.



     “Gardetto’s Stock” means 100% of the issued and outstanding capital stock of Gardetto’s.



     “General Mills Missouri” means General Mills Missouri, Inc., a Minnesota corporation.



     “General Mills Missouri Stock” means 100% of the issued and outstanding capital stock of
General Mills Missouri.



     “GM Class B” means GM Class B, Inc., a Delaware corporation.



     “GMCO” has the meaning set forth in the preamble.



     “GMI” means General Mills, Inc., a Delaware corporation.



     “GMI Entity” means GMI or any of its Subsidiaries (other than the Company and its
Subsidiaries).



     “GMI Event” means there shall have occurred and remain continuing (i) a default by any GMI
Entity (individually or collectively) in making one or more payments on the due date thereof under
or in respect of any Permitted Loan (subject to the satisfaction of any applicable notice
requirement and the lapse of any applicable grace period), (ii) a default, event of default, or
other similar condition or event (however described) in respect of any GMI Entity under one or more
agreements or instruments relating to Indebtedness of any of them (individually or collectively) in
an aggregate principal amount of not less than $50,000,000 which has resulted in such Indebtedness
becoming, or in the case of any Financial Covenant becoming capable at such time of being declared,
due and payable under such agreements or instruments, before it would otherwise have been due and
payable, (iii) a default by any GMI Entity (individually or collectively) in making one or more
payments on the due date thereof in an aggregate principal amount of not less than $50,000,000
under such agreements or instruments (subject to the satisfaction of any applicable notice
requirement and the lapse of any applicable grace period), or (iv) a Bankruptcy occurs with respect
to GMI or any of its Material Subsidiaries.



     “GMI Guaranty” means an unconditional guaranty by GMI, in the form of Exhibit B, of
the obligations of any other GMI Entity under any Transaction Document.



22









 





     “GMI Member” means GMCO, TPC, Cereals Holdings, and any other Affiliate of GMI that may from
time to time own an Interest hereunder.



     “GMOI” has the meaning set forth in Section 1.1.



     “Government Obligations” means readily marketable direct obligations of (i) the Government of
the United States, (ii) any agency or instrumentality thereof rated AAA by S&P and Aaa by Moody’s,
or (iii) the Federal Home Loan Mortgage Corporation or the Federal National Mortgage Association
rated AAA by S&P and Aaa by Moody’s.



     “Gross Asset Value” means, with respect to any asset, the asset’s adjusted basis for federal
income tax purposes, except as follows:



          (i) The initial Gross Asset Value of any Property contributed by a Member to the Company shall
be the gross fair market value of such asset as agreed to by each Member or, in the absence of any
such agreement, as determined pursuant to the methodology set forth in Section 13.11; provided that
the initial Gross Asset Values of the Property contributed to the Company on April 2, 2002 shall be
as set forth in Section 2.1(b);




          (ii) The Gross Asset Values of all items of Property shall be adjusted to equal their
respective Mark-to-Market Value as determined in accordance with Section 13.11 as of the following
times: (A) the acquisition of an additional interest in the Company by any new or existing Member
in exchange for more than a de minimis Capital Contribution (other than pursuant to Section 2.2(a)
or 2.2(b)), (B) the distribution by the Company to a Member of more than a de minimis amount of
Property as consideration for an interest in the Company, and (C) the liquidation of the Company
within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g);




          (iii) The Gross Asset Value of any item of Property distributed to any Member shall be
adjusted to equal the Mark-to-Market Value of such item on the date of distribution as determined
in accordance with Section 13.11; and




          (iv) The Gross Asset Value of each item of Property shall be increased (or decreased) to
reflect any adjustments to the adjusted basis of such assets pursuant to Code Sections 734(b) or
743(b), but only to the extent that such adjustments are taken into account in determining Capital
Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m) and subparagraph (vi) of the
definition of “Profits” and “Losses"; provided, however, that Gross Asset Values shall not be
adjusted pursuant to this subparagraph (iv) to the extent that an adjustment pursuant to
subparagraph (ii) is required in connection with a transaction that would otherwise result in an
adjustment pursuant to this subparagraph (iv).




     If the Gross Asset Value of an asset has been determined or adjusted pursuant to subparagraph
(i), (ii), or (iv), such Gross Asset Value shall thereafter be adjusted by the Depreciation taken
into account with respect to such asset, for purposes of computing Profits and Losses. For the
purposes of this definition of “Gross Asset Value,” a Capital Contribution or distribution shall be
considered de minimis if its value is less than $250,000.



23









 





     “Guarantee” means a guarantee, an endorsement, a contingent agreement to purchase or to
furnish funds for the payment or maintenance of, or otherwise to be or become contingently
liable under or with respect to, the Indebtedness, other obligations, net worth, working
capital, or earnings of any Person, or a guarantee of the payment of dividends or other
distributions upon the shares or equity interests of any Person, or an agreement to purchase, sell,
or lease (as lessee or lessor) property, products, materials, supplies, or services primarily for
the purpose of enabling a debtor to make payment of such debtor’s obligations or an agreement to
assure a creditor against loss, and including, without limitation, causing a bank or other
financial institution to issue a letter of credit or other similar instrument for account of the
guaranteeing Person for the benefit of another Person, but excluding endorsements for collection or
deposit in the ordinary course of business. The words “Guarantee” and “Guaranteed” used as a verb
shall have a correlative meaning.



     “Immateriality Exception” means any threshold, exclusion, exception, or qualification to, or
limitation on, any representation and warranty, or any covenant, which threshold, exclusion,
exception, qualification, or limitation is qualified by use of the term “Material Adverse Effect.”



     “Indebtedness” means, with respect to a specified Person, (i) all indebtedness of such Person
for borrowed money, (ii) all obligations of such Person for the deferred purchase price of property
or services, (iii) all obligations of such Person evidenced by bonds, notes, debentures, or other
similar instruments, (iv) all indebtedness of such Person created or arising under any conditional
sale or other title retention agreement (whether or not the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession or sale of such
property), (v) all obligations of such Person as lessee under leases that have been or should be,
in accordance with GAAP, recorded as leases, including Capital Lease Obligations, (vi) all
obligations, contingent or otherwise, of such Person under acceptance, letter of credit or similar
facilities, (vii) all obligations of such Person to purchase, redeem, retire, defease, or otherwise
acquire for value any partnership interests of such Person, and (viii) all Indebtedness referred to
in clauses (i) through (vii) above guaranteed directly or indirectly by such Person through an
agreement (A) to pay or purchase such Indebtedness or to advance or supply funds for the payment or
purchase of such Indebtedness, (B) to purchase, sell or lease (as lessee or lessor) property, or to
purchase or sell services, primarily for the purpose of enabling the debtor to make payment of such
Indebtedness or to assure the holder of such Indebtedness against loss, (C) to supply funds to or
in any other manner invest in the debtor (including any agreement to pay for property or services
irrespective of whether such property is received or such services are rendered), or (D) otherwise
to assure (i) through (vii) above secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien on property (including, without
limitation, accounts and contract rights) owned by such Person, even though such Person has not
assumed or become liable for payment of such Indebtedness.



     “Indemnified Taxes” has the meaning set forth in Section 8.3(b).



     “Indemnitee” has the meaning set forth in Section 5.5(d)(i).



     “Indemnitor” has the meaning set forth in Section 5.5(d)(i).



24









 





     “Independent Director” has the meaning set forth in Section 5.7(a).



     “Initial Fixed Rate Period” means the period commencing on October 8, 2004 to and including
the initial Scheduled Reset Date.



     “Initial GMI Intangibles” means (i) the patents, trademarks and other Intellectual Property
Rights conveyed by GMI to IP Holdings I and IP Holdings II pursuant to the Contribution Agreement,
dated as of April 2, 2002, between GMI and IP Holdings I, and the Contribution Agreement, dated as
of April 2, 2002, between GMI and IP Holdings II, in each case, as the same may be amended from
time to time in accordance with the terms thereof and hereof, (ii) the Old El Paso Patents and
Progresso Patents, and (iii) the other Pet Intangibles.



     “Initial PP&E” means (i) the property, plant and equipment and all other interests, rights,
duties, and obligations (including under the Albuquerque Documents) conveyed by GMOI to Cereals
Properties pursuant to the Contribution Agreement, dated as of April 2, 2002, between GMOI and
Cereals Properties and (ii) the leasehold interests of the company under the Buffalo Lease.



     “Initial Series B-1 Preferred Distribution Rate” means four and one-half percent (4.5%) per
annum.



     “Initial Series B-2 Preferred Distribution Rate” means four and one-half percent (4.5%) per
annum.



     “Intellectual Property Rights” means patents, trademarks, service marks, logos, trade dress,
trade names, internet domain names, rights in designs, inventions and discoveries (whether
patentable or not), copyrights and moral rights, database rights, trade secrets, semi-conductor
topography rights, utility models, rights in know-how and other intellectual property rights, in
each case whether registered or unregistered and including applications for registration, any and
all continuations, continuations-in-part, divisions, reissues, re-examinations, extensions and
renewals and all rights or forms of protection having equivalent or similar effect anywhere in the
world.



     “Interest” means any limited liability company interest in the Company authorized by Section
2.1(a) representing the Capital Contributions made by a Member or its predecessors in interest, and
including, except as set forth in Section 11.5, any and all benefits to which the holder of such an
interest may be entitled as provided in this Agreement, together with all obligations of such
Person to comply with the terms and provisions of this Agreement. Each Interest and a certificate,
if any, representing such Interest shall constitute a “security” within the meaning of (i) Article
8 of the Uniform Commercial Code (including Section 8-102(a)(15) thereof) as in effect from time to
time in the States of Delaware and New York and (ii) the Uniform Commercial Code of any other
applicable jurisdiction that now or hereafter substantially includes the 1994 revisions to Article
8 thereof as adopted by the American Law Institute and the National Conference of Commissioners on
Uniform State Laws (as amended in 1999 by the American Law Institute and the National Conference of
Commissioners on Uniform State Laws). In its capacity as issuer of the “securities” constituting
Interests, the “issuer’s



25









 







jurisdiction” (within the meaning of Section 8-110(d) of the Uniform
Commercial Code) is the State of Delaware.



     “Inventory” means any work in process consumed in, and any finished goods produced or sold in,
any Permitted Line of Business.



     “Investment Company Act” means the Investment Company Act of 1940, as amended, and the rules
and regulations promulgated thereunder.



     “Involuntary Bankruptcy” has the meaning set forth in the definition of “Bankruptcy.”



     “IP Holdings I” means General Mills IP Holdings I, LLC, a Delaware limited liability company.



     “IP Holdings II” means General Mills IP Holdings II, LLC, a Delaware limited liability
company.



     “IP Holdings I Interest” means 100% of the limited liability company interest in IP Holdings
I.



     “IP Holdings II Interest” means 100% of the limited liability company interest in IP Holdings
II.



     “LBSFI” means Lehman Brothers Special Financing Inc, a Delaware corporation.



     “LBSFI Purchase Agreement” means the Purchase Agreement dated October 4, 2004 by and among
LBSFI, the Company, GMI, and GM Class B.



     “LIBOR” means, for any Fiscal Quarter or other period during which the Limited Member
Preferred Return is stated herein to accumulate, the rate for deposits in Dollars for a period of
three months which appears on the Telerate Page 3750 (or such other page as may replace that page
on that service, or such other service as may be nominated as the information vendor, for the
purpose of displaying comparable rates) as of 11:00 a.m., London time, on the day that is two (2)
London Banking Days preceding the first day of such Fiscal Quarter or other period; provided that,
if such rate does not appear on Telerate Page 3750 (or such other page as may replace that page on
that service, or such other service as may be nominated as the information vendor, for the purpose
of displaying comparable rates), the rate for such date will be determined on the basis of the
rates at which deposits in Dollars are offered by four (4) major banks in the London interbank
market selected in good faith by the Managing Member at approximately 11:00 a.m., London time, on
the day that is two (2) London Banking Days preceding the first day of such Fiscal Quarter or other
period to prime banks in the London interbank market for a period of three months commencing on the
first day of such Fiscal Quarter or other period and in an amount of $10,000,000.



     “Lien” means, with respect to any asset, (i) any mortgage, deed of trust, lien, pledge,
hypothecation, encumbrance, charge, or security interest in, on or of such asset, (ii) the interest
of a vendor or a lessor under any conditional sale agreement, capital lease, or title retention
agreement (or any financing lease having substantially the same economic effect as any of the



26









 







foregoing) relating to such asset, and (iii) in the case of securities, any purchase option, call,
or similar right of a third party with respect to such securities.



     “Limited Member” means any Person who is a Class A Limited Member or a Class B Limited Member.



     “Limited Member Indemnitee” has the meaning set forth in Section 6.7(a).



     “Limited Member Preferred Return” means the Class A Limited Member Preferred Return and the
Class B Limited Member Preferred Return, as applicable.



     “Limited Membership Interests” means (A) the Class A Limited Membership Interests and (B) the
Class B Limited Membership Interests, as applicable.



     “Liquidating Event” has the meaning set forth in Section 13.1(a).



     “Liquidation Notice” has the meaning set forth in Section 14.2.



     “Liquidation Period” has the meaning set forth in Section 13.7.



     “Liquidation Period Guaranteed Payment” has the meaning set forth in Section 13.7.



     “Liquidation Period Guaranteed Payment Date” means, with respect to the (i) Class A Limited
Members, the last day of each Fiscal Quarter occurring during the Liquidation Period and on the
date on which all of the assets of the Company are distributed to the Members, and (ii) Class B
Limited Members, each January 15, April 15, July 15, and August 15 occurring during the Liquidation
Period and on the date on which all of the assets of the Company are distributed to the Members.



     “Liquidator” has the meaning set forth in Section 13.10(a).



     “LLC SPE” has the meaning set forth in Section 5.7(d).



     “London Banking Day” means any day on which commercial banks are open for general business
(including dealings in foreign exchange and foreign currency deposits) in London.



     “Losses” has the meaning set forth in the definition of “Profits” and “Losses.”



     “Managing Member” means GMCO so long as it continues to serve in such capacity and has not
been replaced by a successor Managing Member in accordance with Section 5.6 and shall also refer to
any Person that is admitted to the Company as a successor Managing Member of the Company in
accordance with Section 5.6, in its capacity as a manager of the Company.



     “Managing Member Distribution Date” means any date on which the Managing Member makes (or
proposes to make) a distribution to itself pursuant to Section 4.1(c)(i).



     “Managing Member Distribution Period” means the applicable period from (and including) a
Managing Member Distribution Date to (but excluding) the next subsequent Managing Member
Distribution Date.



27









 





     “Managing Member Indemnitee” has the meaning set forth in Section 5.5(a).



     “Managing Membership Interest” has the meaning set forth in Section 2.1(a).



     “Mark-to-Market Capital Account” means the Capital Account determined with respect to each
Limited Membership Interest pursuant to (i) with respect to a Class A Reset Date, Section
7.1(d)(ii), and (ii) with respect to a Scheduled Reset Date, Section 7.2(b)(iii).



     “Mark-to-Market Valuation” has the meaning set forth in Section 13.11(a).



     “Mark-to-Market Value” has the meaning set forth in Section 13.11(a).



     “Material Adverse Effect” means, with respect to any Person, a material adverse effect on (i)
the business, operations, properties, or condition (financial or otherwise) of such Person and its
Subsidiaries taken as a whole, (ii) the ability of such Person to perform its obligations under any
of the Transaction Documents to which it is a party, or (iii) any of the rights or remedies
available against such Person under any of the Transaction Documents to which such Person is a
party.



     “Material Subsidiary” means (i) in the case of the Company, any Subsidiary of the Company and
(ii) in the case of GMI, any Subsidiary of GMI that as of such time meets the definition of
“significant subsidiary” contained as of the date of the Amended and Restated LLC Agreement in
Regulation S-X of the Securities and Exchange Commission; provided that notwithstanding the
foregoing, each GMI Entity (other than GMI) that is a party to any Transaction Document shall be
deemed to be a “Material Subsidiary.”



     “Measurement Period” means (i) the period commencing on May 24, 2002 and ending on May 27,
2007 and (ii) each subsequent five (5) year period commencing on the day after the last day of the
prior Measurement Period and ending on the last Sunday in May in the fifth year of such five (5)
year period.



     “Member” means a Limited Member or the Managing Member. A Member is a “member” of the Company
for purposes of the Act.



     “Member Indemnitee” has the meaning set forth in Section 5.8(a).



     “Membership Interests” means the Limited Membership Interests and the Managing Membership
Interest.



     “Member Nonrecourse Debt” has the same meaning as the term “partner nonrecourse debt” set
forth in Regulations Section 1.704-2(b)(4).



     “Member Nonrecourse Debt Minimum Gain” means an amount, with respect to each Member
Nonrecourse Debt, equal to the Company Minimum Gain that would result if such Member Nonrecourse
Debt were treated as a Nonrecourse Liability, determined in accordance with Regulations Section
1.704-2(i)(3).



28









 





     “Member Nonrecourse Deductions” has the same meaning as the term “partner nonrecourse
deductions” set forth in Regulations Sections 1.704-2(i)(1) and 1.704-2(i)(2).



     “Membership Registry” means the registry of the Company containing the names and addresses of
the Members, as such registry is revised from time to time, and as attached hereto as Schedule
A.



     “Minimum Transfer Amount” means 10,000 Series B-1 Limited Membership Interests.



     “Moody’s” means Moody’s Investor Service, Inc. or its successor.



     “Nonrecourse Deductions” has the meaning set forth in Regulations Sections 1.704-2(b)(1) and
1.704-2(c).



     “Nonrecourse Liability” has the meaning set forth in Regulations Section 1.704-2(b)(3).



     “Old El Paso Patents” means the Old El Paso patents used in the sale of packaged food products
in the United States and identified in the Intellectual Property License Agreement, dated May 24,
2002, by and between the Company, as licensor, and GMI, as licensee, as (i) amended on May 1, 2003
in accordance with the terms thereof and the terms of the Amended and Restated LLC Agreement and
(ii) the same may be further amended from time to time in accordance with the terms thereof and
hereof.



     “Original LLC Agreement” has the meaning set forth in Section 1.1.



     “Original Members” has the meaning set forth in Section 1.1.



     “Other GMI Entity Agreement” means any agreement entered into after the date of the Amended
and Restated LLC Agreement by and between the Company or any of its Subsidiaries and any GMI
Entity.



     “Other Lines of Business” means any line of business that is not a Permitted Line of Business.



     “Other Products” means any products, other than the products manufactured, marketed, imported,
distributed, or sold by, or on behalf of, the Company or any of its Subsidiaries or otherwise
relating to the Cereals Business or the Pet Business.



     “Permitted Assets Requirement” means the requirement of the Company to hold only assets that
are Permitted Assets.



     “Permitted Assets” means:




	 	(i)	 	Permitted Intangible Assets;
	 
	 	(ii)	 	Permitted PP&E Assets;
	 
	 	(iii)	 	Raw Materials;




29









 






	 	(iv)	 	Inventory;
	 
	 	(v)	 	Permitted Intellectual Property Licenses;
	 
	 	(vi)	 	Permitted PP&E Licenses;
	 
	 	(vii)	 	Permitted Loans;
	 
	 	(viii)	 	the Pet Stock;
	 
	 	(ix)	 	the Cereals Properties Interest;
	 
	 	(x)	 	the IP Holdings I Interest;
	 
	 	(xi)	 	the IP Holdings II Interest;
	 
	 	(xii)	 	the General Mills Missouri Stock;
	 
	 	(xiii)	 	the Gardetto’s Stock;
	 
	 	(xiv)	 	Cash and Cash Equivalents; and
	 
	 	(xv)	 	A-Rated Securities.





     “Permitted Financial Assets” means all Permitted Assets other than Permitted Operating Assets.



     “Permitted Indebtedness” means Indebtedness of the Company or any Subsidiary (i) existing on
May 24, 2002 and set forth on Schedule D of the Amended and Restated LLC Agreement, or (ii)
incurred to finance the acquisition, construction, or improvement of any fixed or capital assets,
including Capital Lease Obligations, and any Indebtedness assumed in connection with the
acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition
thereof, and extensions, renewals, and replacements of any such Indebtedness that do not increase
the outstanding principal amount thereof; provided that, with respect to clause (ii), that (x) such
Indebtedness is incurred prior to or within ninety (90) days after such acquisition or the
completion of such construction or improvement, (y) the aggregate principal amount of all such
Indebtedness shall not exceed $100 million at any time outstanding, and (z) the aggregate principal
amount of such Indebtedness does not exceed 100% of the cost of such fixed or capital assets.



     “Permitted Intangible Assets” means the Initial GMI Intangibles and any other patents,
trademarks or other Intellectual Property Rights (or a 100% interest in any limited liability
company holding such patents, trademarks, or other Intellectual Property Rights) contributed to the
Company by any GMI Member or purchased or created by the Company or any of its Subsidiaries and (i)
used by the Company or any of its Subsidiaries in a Permitted Line of Business or (ii) licensed to
GMI, consolidated Subsidiaries of GMI, or to third parties for use in an Other Lines of Business
pursuant to a Permitted Intellectual Property License.



30









 





     “Permitted Intellectual Property License Agreements” means (i) a license agreement
substantially in the form attached hereto as 
Exhibit 
C-1 pursuant to which Permitted
Intangible Assets may be licensed to GMI and its consolidated Subsidiaries or to third parties for
use in connection with the production and sale of Other Products, (ii) a license agreement
substantially
in the form attached hereto as Exhibit C-1 pursuant to which Permitted Intangible
Assets may be licensed to GMI and its consolidated Subsidiaries or to third parties for use in
connection with the research and development of materials and products related to a Permitted Line
of Business, and (iii) license agreements in the form attached hereto as Exhibit C-2
related to Intellectual Property Rights with respect to the PET Business used outside the United
States.



     “Permitted Intellectual Property Licenses” means the intellectual property licenses that are
the subject of the Permitted Intellectual Property License Agreements.



     “Permitted Liens” means any of the following:



          (i) any Lien existing on the Property of the Company or its Subsidiaries existing on May 24,
2002 and set forth on Schedule C securing Indebtedness outstanding on such date;




          (ii) Liens for taxes, fees, assessments, or other governmental charges that are not delinquent
or are being contested in good faith by appropriate proceedings and against which adequate reserves
have been established in accordance with GAAP;




          (iii) mechanics’, workmen’s, repairmen’s, materialmen’s, carrier’s, warehousemen’s, vendors’
Liens, and other like Liens imposed by law, arising in the ordinary course of business and securing
obligations that are not overdue by more than thirty (30) days;




          (iv) pledges and deposits made in the ordinary course of business in compliance with workers’
compensation, unemployment insurance, and other social security laws or regulations;




          (v) good faith deposits in connection with bids, tenders, contracts (other than for the
payment of money), or leases to which the Company or any Subsidiary is a party, or deposits to
secure public or statutory obligations of the Company or any Subsidiary, or deposits in connection
with obtaining or maintaining self-insurance, or to obtain the benefits of any law, regulation, or
arrangement pertaining to unemployment insurance, old age pensions, social security, or similar
matters, or deposits of cash or obligations of the United States of America to secure surety,
appeal, or customs bonds to which the Company or any Subsidiary is a party, in each case, made in
the ordinary course of business and not securing any Indebtedness;




          (vi) easements, rights-of-way, zoning restrictions, restrictions on the use of real property,
and defects and irregularities in the title thereto, landlords’ liens, and other similar liens and
encumbrances none of which (A) secure Indebtedness, (B) interfere materially with the use of the
property covered thereby in the ordinary course of the business of the Company or such Subsidiary
or (C) materially detract from the value of such properties;




          (vii) Liens on any fixed or capital assets, including Capital Lease Obligations, acquired,
constructed, or improved by the Company or any Subsidiary after May 24, 2002 that




31









 







are created or
assumed contemporaneously with such acquisition, construction, or improvement, or within ninety
(90) days after the completion thereof, to secure or provide for the payment of all or any part of
the cost of such acquisition, construction, or improvement (including related expenditures
capitalized for Federal income tax purposes in connection therewith) incurred after
the date of the Amended and Restated LLC Agreement, provided that (A) such Liens secure Permitted
Indebtedness and (B) such Liens do not apply to any other property or assets of the Company or any
of its Subsidiaries;




          (viii) Liens created by or resulting from any litigation or other proceeding which is being
contested in good faith by appropriate proceedings, including Liens arising out of judgments or
awards against the Company or any Subsidiary with respect to which the Company or such Subsidiary
is in good faith prosecuting an appeal or proceedings for review; or Liens incurred by the Company
or any Subsidiary for the purpose of obtaining a stay or discharge in the course of any litigation
or other proceeding to which the Company or such Subsidiary is a party; provided that the aggregate
amount of obligations or potential obligations secured by such Liens shall not exceed $10,000,000;




          (ix) Liens on any property created, assumed, or otherwise brought into existence in
contemplation of the sale or other disposition of the underlying property, whether directly or
indirectly, by way of disposition of limited liability company membership interests or otherwise;
provided that (A) 180 days from the creation of such Liens the Company or the relevant Subsidiary
must have disposed of such property and (B) any Indebtedness secured by such Lien shall be without
recourse to the Company or any Subsidiary;




          (x) any extension, renewal, or replacement (or successive extensions, renewals, or
replacements), as a whole or in part, of any Lien existing on the date of the Amended and Restated
LLC Agreement or of any Lien referred to in the foregoing clauses (i), (vi) and (viii); provided
that (1) such extension, renewal, or replacement Lien shall be limited to all or a part of the same
property, limited liability company membership interests, shares of stock, or Indebtedness that
secured the Lien extended, renewed or replaced (plus improvements on such property) and (2) the
Indebtedness secured by such Lien at such time is not increased; and




          (xi) Liens granted to General Mills Finance, Inc. and General Mills Capital, Inc. pursuant to
the Receivables Purchase and Sale Agreements.




     “Permitted Lines of Business” means the Pet Business and Cereals Business.



     “Permitted Loans” means loans that: (i) are arm’s length, Dollar-denominated, demand loans
made by the Company or General Mills Missouri, to any GMI Entity or any other Person chosen by the
Managing Member and, with respect to loans made other than to any GMI Entity, approved by the
unanimous written consent of the Class A Limited Members and the Required Class B Limited Members,
(ii) bear interest, at any given time, at a floating rate of interest per annum equal to the
Offshore Rate plus the Applicable Margin (such terms having the meaning specified in the Five-Year
Credit Agreement); (iii) evidenced by a note substantially in the form attached hereto as
Exhibit A (the “Finance Note”); (iv) are eligible to be Transferred to any “qualified
institutional buyer” under and in accordance with Rule 144A under the Securities Act;



32









 







and (v) in
the case of loans to any GMI Entity (other than GMI), are unconditionally guaranteed by GMI
pursuant to a GMI Guaranty.



     “Permitted Operating Assets” means all Permitted Assets other than those described in clauses
(vii), (xiv), and (xv) of the definition of “Permitted Assets.”



     “Permitted PP&E Assets” means the Initial PP&E and any other property, plant, and equipment
(or a 100% sole limited liability company interest in any limited liability company holding such
property, plant, and equipment) contributed to the Company by any GMI Member or purchased or
constructed by the Company or any of its Subsidiaries and (i) used by the Company or any of its
Subsidiaries in a Permitted Line of Business or (ii) leased to GMI, consolidated Subsidiaries of
GMI, or third parties for use in an Other Line of Business pursuant to a Permitted PP&E License.



     “Permitted PP&E License Agreement” means a license agreement substantially in the form
attached hereto as Exhibit D, pursuant to which Permitted PP&E Assets may be licensed to
GMI and its consolidated Subsidiaries or to third parties for use in connection with the production
and sale of Other Products.



     “Permitted PP&E Licenses” means the permitted property, plant, and equipment licenses that are
the subject of the Permitted PP&E License Agreements.



     “Permitted Transfer” has the meaning set forth in Section 11.2(d).



     “Permitted Transferee” has the meaning set forth in Section 11.2(d).



     “Person” means any individual, partnership (whether general or limited), limited liability
company, corporation, trust, estate, association, nominee, or other entity.



     “Pet” means Pet Incorporated, a Delaware corporation.



     “Pet Business” means the manufacture and sale by the Company and its Subsidiaries of packaged
food products, other than organic food products, for sale, directly or indirectly, to consumers
under the “Progresso” and “Old El Paso” brand names (or any variation thereof), other than in
connection with the Food Service Business.



     “Pet Intangibles” means all Intellectual Property Rights owned by Pet.



     “Pet Stock” means 100% of the capital stock of Pet.



     “Portfolio Compliance Certificate” means a written certificate of the Managing Member signed
by a Responsible Officer stating whether or not, as of the date stated therein and for the period
covered thereby, the Company satisfied the Permitted Assets Requirement and the Portfolio
Requirements (showing all calculations necessary to determine such compliance); provided that, with
respect to the certification regarding the asset coverage ratio set forth in Section 5.9(a)(i),
such certificate shall be based on the Managing Member’s determination as to the fair market value
of the Company’s Permitted Assets in a manner consistent with the Mark-to-Market Valuation
methodology set forth in Section 13.11.



33









 





     “Portfolio Requirements” has the meaning set forth in Section 5.9(a).



     “Portfolio Value” has the meaning set forth in Section 5.9(b).



     “Preferred Return Capital” means:



          (i) with respect to a Class A Limited Member, (A) for the initial Preferred Return Period, the
sum of (1) such Class A Limited Member’s initial Capital Account; provided that the initial Capital
Account of TPC with respect to its Class A Limited Membership Interest for purposes of this clause
(a) shall be, (I) prior to October 6, 2004, $392,151,000 and (II) on an after October 6, 2004,
$88,851,000, plus (2) Undistributed Preferred Return, and (B) for any subsequent Preferred Return
Period, the sum of (1) the product of (a) the amount of the Mark-to-Market Capital Account per
Class A Limited Membership Interest determined in connection with the relevant Reset Valuation Date
with respect to the Class A Reset Date constituting the first day of such Preferred Return Period
(increased or decreased to the extent necessary to account for any adjustments described in the
proviso at the end of Section 9.2(d)), times (b) the number of Class A Limited Membership Interests
held by such Class A Limited Member, plus (2) Undistributed Preferred Return; and




          (ii) with respect to any Class B Limited Member and for any Series of Class B Limited
Membership Interests held by such Member (A) for the initial Preferred Return Period, the sum of
(1) such Class B Limited Member’s initial Capital Account attributable to such Series of Interests;
provided that, for purposes of this definition of Preferred Return Capital, TPC’s Capital
Contributions shall equal (i) prior to October 6, 2004, zero, and (ii) on an after October 6, 2004,
$303,300,000, plus (2) Undistributed Preferred Return, (B) for any subsequent Preferred Return
Period, the sum (1) the product of (a) the amount of the Mark-to-Market Capital Account per Class B
Limited Membership Interest determined in connection with the Class B Optional Remarketing of such
Series of Class B Limited Membership Interests as of the Reset Valuation Date with respect to the
Class B Optional Remarketing Date constituting the first day of such Preferred Return Period
(increased or decreased to the extent necessary to account for any adjustments described in the
proviso at the end of Section 9.2(e)), times (b) the number of Class B Limited Membership Interests
of such Series held by such Member, plus (2) Undistributed Preferred Return.




     In the event Class A Limited Membership Interests or Class B Limited Membership Interests are
Transferred in accordance with the terms of this Agreement (other than in a Class A Remarketing or
a Class B Remarketing), the transferee shall succeed to the Preferred Return Capital of the
transferor to the extent it relates to the Transferred Interests.



     The aggregate Preferred Return Capital of the Class A Members as of the initial Class A Reset
Date is $248,120,718. The aggregate Preferred Return Capital of the Series B-1 Limited Members as
of the first Scheduled Reset Date will be $849,348,230. The aggregate Preferred Return Capital of
the Series B-2 Limited Members as of the first Scheduled Reset Date will be $1,080,838,853.



     “Preferred Return Period” means:



34









 





          (i) with respect to the Class A Limited Membership Interests, (a) the period commencing on and
including May 24, 2002 and ending on and including the day before the first
Class A Reset Date and (ii) each subsequent five (5) year period commencing on and including
the day after the last day of the prior Preferred Return Period and ending on and including the day
before the next Class A Reset Date; and




          (ii) with respect to the Class B Limited Membership Interests, (a) the period commencing on
and including May 24, 2002 and ending on and including the day before the initial Scheduled Reset
Date and (ii) each subsequent five (5) year period commencing on and including the day after the
last day of the prior Preferred Return Period and ending on and including the day before the next
Scheduled Reset Date.




     “Preferred Securities” means any preferred securities represented by the Limited Membership
Interests.



     “Profits” and “Losses” mean, for each Allocation Year, an amount equal to the Company’s
taxable income or loss for such Allocation Year, determined in accordance with Code Section 703(a)
(for this purpose, all items of income, gain, loss, or deduction required to be stated separately
pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the following
adjustments (without duplication):



          (i) Any income of the Company that is exempt from federal income tax and not otherwise taken
into account in computing Profits or Losses pursuant to this definition of “Profits” and “Losses”
shall be added to such taxable income or loss;




          (ii) Any expenditures of the Company described in Code Section 705(a)(2)(B) or treated as Code
Section 705(a)(2)(B) expenditures pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and not
otherwise taken into account in computing Profits or Losses pursuant to this definition of
“Profits” and “Losses” shall be subtracted from such taxable income or loss;




          (iii) In the event the Gross Asset Value of any item of Property is adjusted pursuant to
subparagraph (ii) or (iii) of the definition of Gross Asset Value, the amount of such adjustment
shall be treated as an item of gain (if the adjustment increases the Gross Asset Value of the item
of Property) or an item of loss (if the adjustment decreases the Gross Asset Value of the item of
Property) from the disposition of such asset and shall be taken into account for purposes of
computing Profits or Losses;




          (iv) Gain or loss resulting from any disposition of any Property with respect to which gain or
loss is recognized for federal income tax purposes shall be computed by reference to the Gross
Asset Value of the item of Property disposed of, notwithstanding that the adjusted tax basis of
such Property differs from its Gross Asset Value;




          (v) In lieu of the depreciation, amortization, and other cost recovery deductions taken into
account in computing such taxable income or loss, there shall be taken into account Depreciation
for such Allocation Year, computed in accordance with the definition
of “Depreciation”;





35









 








          (vi) To the extent an adjustment to the adjusted tax basis of any item of Property pursuant to
Code Sections 734(b) or 743(b) is required, pursuant to Regulations
Section


1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts as a result of a
distribution other than in liquidation of a Member’s Interest, the amount of such adjustment shall
be treated as an item of gain (if the adjustment increases the basis of the item of Property) or
loss (if the adjustment decreases such basis) from the disposition of such item of Property and
shall be taken into account for purposes of computing Profits or Losses; and




          (vii) Notwithstanding any other provision of this definition, any items that are specially
allocated pursuant to Section 3.3 or 3.4 shall not be taken into account in computing Profits or
Losses.




     The amounts of the items of Company income, gain, loss, or deduction available to be specially
allocated pursuant to Section 3.3 or 3.4 shall be determined by applying rules analogous to those
set forth in subparagraphs (i) through (vii) above.



     “Progresso Patents” means the Progresso patents used in the sale of packaged food products in
the United States and owned by Pet and licensed by Pet to the Company pursuant to the Intellectual
Property License Agreement, dated May 24, 2002, by and between the Company, as licensor, and GMI,
as licensee.



     “Property” means all real and personal property acquired by the Company and its Subsidiaries,
including Cash, and any improvements thereto, and shall include both tangible and intangible
property.



     “PTP” means a “publicly traded partnership,” as defined in Code Section 7704, taxable as a
corporation for U.S. federal income tax purposes.



     “Public Utility Holding Company Act” means the Public Utility Holding Company Act of 1935, as
amended, and the rules and regulations promulgated thereunder.



     “Purchase Valuation Allocation Year” means, with respect to any Allocation Year in which a
Purchase Valuation Date occurs, the period beginning on the first day of such Allocation Year and
ending on the Purchase Valuation Date.



     “Purchase Valuation Date” means a Class A Purchase Valuation Date or a Class B Purchase
Valuation Date, as applicable.



     “Purchaser’s Letter” has the meaning set forth in Section 11.3(f).



     “Rating Agency” means Moody’s or S&P, as the case may be.



     “Raw Materials” means raw materials, including, without limitation, ingredients and packaging
materials used in any Permitted Line of Business.



     “RBDB” has the meaning set forth in the preamble.



36









 





     “Receivables Purchase and Sale Agreements” means the Amended and Restated Receivables Purchase
and Sale Agreement and the Combined Receivables Purchase and Sale Agreement.



     “Reconstitution Period” has the meaning set forth in Section 13.1(b).



     “Regulations” means the Income Tax Regulations, including Temporary Regulations, promulgated
under the Code, as such regulations are amended from time to time.



     “Regulatory Allocations” has the meaning set forth in Section 3.4.



     “Reference Corporate Dealer” means a leading dealer of publicly traded debt securities
selected by the Company, which dealer shall be a Qualified Institutional Buyer (as defined in Rule
144A under the Securities Act).



     “Required Class A Limited Members” means the holder or holders of more than fifty percent
(50%) of any outstanding Class A Limited Membership Interests. If, at any relevant time, some but
not all of the outstanding Class A Limited Membership Interests are owned by GMI or any of its
Affiliates, then in determining whether holders of the requisite percentage of the Class A Limited
Membership Interests have given any request, demand, authorization, direction, notice, consent, or
waiver hereunder, the Class A Limited Membership Interests owned by GMI or any of its Affiliates
shall be disregarded and deemed not to be outstanding.



     “Required Class B Limited Members” means (i) the holder or holders representing more than
two-thirds of any outstanding Series B-1 Limited Membership Interests and (ii) the holder or
holders representing more than two-thirds of any outstanding Series B-2 Limited Membership
Interests. If, at any relevant time, some but not all of the outstanding Class B Limited
Membership Interests, or any Series of Class B Limited Membership Interests, are owned by GMI or
any of its Affiliates, then in determining whether holders of the requisite percentage of the Class
B Limited Membership Interests have given any request, demand, authorization, direction, notice,
consent, or waiver hereunder, the Class B Limited Membership Interests owned by GMI or any of its
Affiliates shall be disregarded and deemed not to be outstanding.



     “Reset Valuation Allocation Year” means any Allocation Year ending on a Reset Valuation Date.



     “Reset Valuation Date” means (i) the last day of the Fiscal Year ending in May 2007, and (ii)
the last day of each fifth Fiscal Year thereafter.



     “Responsible Officer” means an executive officer of the Managing Member familiar with the
financial affairs of the Company.



     “S&P” means Standard & Poor’s Rating Services, a division of The McGraw-Hill Corporation or
its successor.



     “Scheduled Reset Date” means, with respect to the Class B Interests, (i) August 7, 2007, and
(ii) each 60-month anniversary of such date; provided that if such anniversary is not a



37









 







Business Day, the Scheduled Reset Date shall be the first Business Day preceding such anniversary.



     “Second Amended and Restated LLC Agreement” has the meaning set forth in Section 1.1.



     “Second Amendment” has the meaning set forth in Section 1.1.



     “Secondary Purchase Agreement” means an agreement containing customary terms and conditions to
be dated as of the applicable Class A Reset Date (or such other date permitted by applicable law)
among the Company, the Selling Class A Holders, the Class A Remarketing Agent, and the Secondary
Purchasers (selected in the manner provided in Section 7.1(c)) providing for the purchase of the
Class A Limited Membership Interests by the Secondary Purchasers; provided that (i) the only
representations by a holder will be due authorization, power and authority, validity,
enforceability, no approval, and good and marketable title to the Class A Limited Membership
Interests, (ii) the only obligation of a Selling Class A Holder shall be to sell the Class A
Limited Membership Interests pursuant to a successful Class A Remarketing and (iii) such agreement
is otherwise acceptable to the Selling Class A Holders.



     “Secondary Purchasers” has the meaning set forth in Section 7.1(c)(ii).



     “Second Baseline Amount” means, with respect to any Allocation Year, an amount equal to the
sum of (i) the amount set forth opposite such Allocation Year on Schedule B plus (ii) the
amount of interest income included in Profits for such Allocation Year.



     “Second Tier Factor” means, with respect to any Permitted Operating Asset for any relevant
Measurement Period, as of any date of determination, 1.06 to the x power where x is equal to the
quotient of (i) the number of days from the date on which any such Permitted Operating Assets were
acquired by the Company to the date of determination divided by (ii) 360. If the Consumer Price
Index during the period described in (i) increased at an annual rate greater than five percent
(5%), then the amount by which such increase exceeded five percent (5%) (expressed as a decimal)
shall be added to 1.06. For example, if the annual increase in the Consumer Price Index for the
relevant period is six percent (6%), the amount added to 1.06 is .01, and the x power set forth in
clause (i) shall be applied to 1.07. For purposes of this definition of “Second Tier Factor,” the
acquisition date of all Permitted Operating Assets shall be deemed to be the first day of the
relevant Measurement Period except to the extent such Permitted Operating Assets were acquired by
the Company subsequent to such date in connection with a significant expansion or acquisition of
one of the Permitted Lines of Business, in which case the acquisition date shall be the date of
such expansion or acquisition.



     “Second Tier Growth Value” means, with respect to all Permitted Assets as of any date of
determination during any relevant Measurement Period, the sum of (i) the sum of the products
derived by multiplying the initial Gross Asset Value of each Permitted Operating Asset times the
applicable Second Tier Factor, plus (ii) the aggregate Gross Asset Value of all Permitted Financial
Assets. For purposes of this definition of “Second Tier Growth Value,” (x) the acquisition date of
all Permitted Operating Assets shall be deemed to be the first day of such Measurement Period
except to extent such Permitted Operating Assets were acquired by the



38









 







Company subsequent to such date in connection with a significant expansion or acquisition of one of the Permitted Lines of
Business, in which case the acquisition date shall be the date of such expansion or acquisition and
(y) the initial Gross Asset Value of each Permitted Operating Asset held by the Company on the
first day of such Measurement Period shall be (1) with respect to the initial Measurement Period
beginning on May 24, 2002 the initial Gross Asset Value of such Permitted Operating Asset on such
date and (2) with respect to any subsequent
Measurement Period, the Mark-to-Market Value of such Permitted Operating Asset as of such day.
The initial Gross Asset Value of any Permitted Operating Asset not held by the Company on the
first day of any Measurement Period shall be determined in accordance with subparagraph (i) of the
definition of “Gross Asset Value"; provided that, for purposes of this definition of “Second Tier
Growth Value,” the initial Gross Asset Value of Inventory shall be deemed to equal the Gross Asset
Value of Inventory at the end of the immediately preceding Fiscal Year.



     “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.



     “Securities Purchase Agreements” means (i) the securities purchase agreement dated as of May
24, 2002, by and among the Company and its Subsidiaries, GMI and certain of its Affiliates and RBDB
and (ii) the securities purchase agreement dated as of June 28, 2007, by and among GMI, TPC,
Cereals Holdings, GMOI, GMCO, the Company, IP Holdings I, IP Holdings II, Cereals Properties and
RBDB.



     “Selling Class A Holders” has the meaning set forth in Section 7.1(c)(iii).



     “Series” has the meaning set forth in Section 2.1(a).



     “Series B-1 Limited Membership Interests” has the meaning set forth in Section 2.1(b)(iii).



     “Series B-2 Limited Membership Interests” has the meaning set forth in Section 2.1(b)(iii).



     “Series B-1 Limited Members” means (i) GM Sales (unless it has ceased to be a Series B-1
Limited Member) and (ii) any Person who has become a substituted Series B-1 Limited Member pursuant
to the terms of this Agreement and has not ceased to be a Series B-1 Limited Member.



     “Series B-2 Limited Members” means (i) Cereals Holdings (unless it has ceased to be a Series
B-2 Limited Member) and (ii) any Person who has become a substituted Series B-2 Limited Member
pursuant to the terms of this Agreement and has not ceased to be a Series B-2 Limited Member.



     “Series B-1 Limited Member Preferred Return” means, with respect to any Series B-1 Limited
Member, the return that will accrue during each Class B Distribution Period or portion thereof (if
such Class B Distribution Period is a Fixed Rate Period, computed on the basis of a 360-day year of
twelve 30-day months, and if such Class B Distribution Period is a Floating Rate Period, computed
using the actual number of days elapsed, including the first and excluding the



39









 







last days thereof, over a 360 day year) on the amount of such Series B-1 Limited Member’s Preferred Return Capital
during such Class B Distribution Period, at a rate per annum equal to the applicable Series B-1
Preferred Return Rate.



     “Series B-2 Limited Member Preferred Return” means, with respect to any Series B-2 Limited
Member, the return that will accrue during each Class B Distribution Period or portion thereof (if
such Class B Distribution Period is a Fixed Rate Period,
computed on the basis of a


360-day year of twelve 30-day months, and if such Class B Distribution Period is a Floating
Rate Period, computed using the actual number of days elapsed, including the first and excluding
the last days thereof, over a 360 day year) on the amount of such Series B-2 Limited Member’s
Preferred Return Capital during such Class B Distribution Period, at a rate per annum equal to the
applicable Series B-2 Preferred Return Rate.



     “Series B-1 Preferred Certificate” means a certificate substantially in the form of
Exhibit H hereto, evidencing the Series B-1 Limited Membership Interests held by a Series
B-1 Limited Member.



     “Series B-2 Preferred Certificate” means a certificate substantially in the form of
Exhibit I hereto, evidencing the Series B-2 Limited Membership Interests held by a Series
B-2 Limited Member.



     “Series B-1 Preferred Return Rate” means, with respect to the Series B-1 Limited Membership
Interests (i) during the Initial Fixed Rate Period, the Initial Series B-1 Preferred Distribution
Rate and (ii) thereafter, such Fixed Rate or Floating Rate as shall be determined in accordance
with Section 7.2.



     “Series B-2 Preferred Return Rate” means, with respect to the Series B-2 Limited Membership
Interests (i) during the Initial Fixed Rate Period, the Initial Series B-2 Preferred Distribution
Rate and (ii) thereafter, such Fixed Rate or Floating Rate as shall be determined in accordance
with Section 7.2.



     “Special Securities” means securities which can, at the option of the holder, be surrendered
at face value in payment of any Federal estate tax or which provide tax benefits to the holder and
are priced to reflect such tax benefits or which were originally issued at a deep or substantial
discount.



     “Specified Financial Assets” means: (i) Permitted Loans, (ii) Cash and Cash Equivalents, and
(iii) A-Rated Securities.



     “Specified Financial Investment Level” means $600,000,000.



     “Subsidiary”
means, with respect to any Person (the “parent”) at any date, any corporation,
limited liability company, partnership, association, or other entity, the accounts of which would
be consolidated with those of the parent in the parent’s consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association, or other entity (i) of which
securities or other ownership interests representing more than fifty percent (50%) of the equity or
more than fifty percent (50%) of the ordinary voting power or, in the case



40









 







of a partnership, more
than fifty percent (50%) of the general partnership interests are, as of such date, owned,
Controlled, or held or (ii) that is, as of such date, otherwise Controlled, by the parent or one or
more subsidiaries of the parent. For this purpose, “Control” means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract, or otherwise, and
“Controlled” has a meaning correlative thereto.



     “Taxes” means any and all taxes (including net income, gross income, franchise, ad valorem,
gross receipts, sales, use, property, and stamp taxes), levies, imposts, duties, charges,
assessments, or withholdings of any nature whatsoever, general or special, ordinary or
extraordinary, now existing or hereafter created or adopted, together with any and all penalties,
fines, additions to tax, and interest thereon.



     “Tax Matters Member” has the meaning set forth in Section 9.3(a).



     “Telerate Page 3750” means the display designated on page 3750 on Bridge Telerate Inc. (or
such other page as may replace the 3750 page on the service or such other service as may be
nominated by the British Bankers’ Association for the purpose of displaying London interbank
offered rates for Dollars deposits).



     “10-year Average Yield” means the average yield to maturity for actively traded marketable
U.S. fixed interest rate securities (adjusted to constant maturities of 10 years).



     “10-year Treasury CMT” for each Class A Distribution Period or Class B Distribution Period,
the arithmetic average of the two most recent weekly per annum 10-year Average Yields (as defined
below) (or the total weekly per annum 10-year Average Yields, if less than two such yields are
published during the relevant Calendar Period), as published weekly by the Federal Reserve Board
during the Calendar Period immediately preceding the Class A Distribution Period or Class B
Distribution Period for which the Preferred Return Rate on the Preferred Securities is being
determined. In the event that the Federal Reserve Board does not publish such a weekly per annum
10-year Average Yield during any such Calendar Period, the 10-year Treasury CMT for such Class A
Distribution Period or Class B Distribution Period will be the arithmetic average of the two most
recent weekly per annum 10-year Average Yields (or the total weekly per annum 10-year Average
Yields if less than two such yields are published during the relevant Calendar Period), as
published weekly during such Calendar Period by any Federal Reserve Bank or by any U.S. Government
department or agency selected by the Company. In the event that a per annum 10-year Average Yield
is not published by the Federal Reserve Board or by any Federal Reserve Bank or by any U.S.
Government department or agency during such Calendar Period, the 10-year Treasury CMT for such
Class A Distribution Period or Class B Distribution Period will be the arithmetic average of the
two most recent weekly per annum average yields to maturity (or the total weekly per annum average
yields to maturity, if less than two such yields are published during the relevant Calendar Period)
for all of the actively traded marketable U.S. Treasury fixed interest rate securities (other than
Special Securities) then having remaining maturities of not less than eight nor more than twelve
years, as published during such Calendar Period by the Federal Reserve Board or, if the Federal
Reserve Board does not publish such yields, by any Federal Reserve Bank or by any U.S. Government
department or agency selected by the Company. In the event that the Company



41









 







cannot determine the
10-year Treasury CMT for any Class A Distribution Period or Class B Distribution Period as provided
above in this paragraph, then the 10-year Treasury CMT for such Class A Distribution Period or
Class B Distribution Period will be the arithmetic average of the per annum average yields to
maturity based upon the closing bids during such Calendar Period for each of the issues of actively
traded marketable U.S. Treasury fixed interest rate securities (other than Special Securities) with
a final maturity date not less than eight nor more than twelve years from the date of each such
quotation, as chosen and quoted daily for each
business day during such Calendar Period in New York City (or less frequently if daily
quotations are not generally available) to the Company by at least three recognized dealers in U.S.
Government securities selected by the Company. The 10-year Treasury CMT shall be rounded to the
nearest hundredth of a percent.



     “Third Amended and Restated LLC Agreement” has the meaning set forth in Section 1.1.



     “Third Tier Factor” means, with respect to any Permitted Operating Assets for any relevant
Measurement Period, as of any date of determination, 1.08 to the x power where x is equal to the
quotient of (i) the number of days from the date on which any such Permitted Operating Assets were
acquired by the Company to the date of determination divided by (ii) 360. If the Consumer Price
Index during the period described in (i) increased at an annual rate greater than five percent
(5%), then the amount by which such increase exceeded five percent (5%) (expressed as a decimal)
shall be added to 1.08. For example, if the annual increase in the Consumer Price Index for the
relevant period is six percent (6%), the amount added to 1.08 is .01, and the x power set forth in
clause (i) shall be applied to 1.09. For purposes of this definition of “Third Tier Factor,” the
acquisition date of all Permitted Operating Assets shall be deemed to be the first day of the
relevant Measurement Period except to the extent such Permitted Operating Assets were acquired by
the Company subsequent to such date in connection with a significant expansion or acquisition of
one of the Permitted Lines of Business, in which case the acquisition date shall be the date of
such expansion or acquisition.



     “Third Tier Growth Value” means, with respect to all Permitted Assets as of any date of
determination during any relevant Measurement Period, the sum of (i) the sum of the products
derived by multiplying the initial Gross Asset Value of each Permitted Operating Asset times the
applicable Third Tier Factor, plus (ii) the aggregate Gross Asset Value of all Permitted Financial
Assets. For purposes of this definition of “Third Tier Growth Value,” (x) the acquisition date of
all Permitted Operating Assets shall be deemed to be the first day of such Measurement Period
except to extent such Permitted Operating Assets were acquired by the Company subsequent to such
date in connection with a significant expansion or acquisition of one of the Permitted Lines of
Business, in which case the acquisition date shall be the date of such expansion or acquisition and
(y) the initial Gross Asset Value of each Permitted Operating Asset held by the Company on the
first day of such Measurement Period shall be (1) with respect to the initial Measurement Period
beginning on May 24, 2002 the initial Gross Asset Value of such Permitted Operating Asset on such
date and (2) with respect to any subsequent Measurement Period, the Mark-to-Market Value of such
Permitted Operating Asset as of such day. The initial Gross Asset Value of any Permitted Operating
Asset not held by the Company on the first day of any Measurement Period shall be determined in
accordance with subparagraph (i) of the definition of “Gross Asset Value"; provided that, for
purposes of this definition of “Third Tier Growth Value,” the initial



42









 







Gross Asset Value of
Inventory shall be deemed to equal the Gross Asset Value of Inventory at the end of the immediately
preceding Fiscal Year.



     “30-year Average Yield” means the average yield to maturity for actively traded marketable
U.S. Treasury fixed interest rate securities (adjusted to constant maturities of 30 years).



     “30-year Treasury CMT” for each Class A Distribution Period or Class B Distribution Period,
the arithmetic average of the two most recent weekly per annum 30-year Average Yields (as defined
below) (or the total weekly per annum 30-Year Average Yields, if less than two such yields are
published during the relevant Calendar Period), as published weekly by the Federal Reserve Board
during the Calendar Period immediately preceding the Class A Distribution Period or Class B
Distribution Period for which the Preferred Return Rate on the Preferred Securities is being
determined. In the event that the Federal Reserve Board does not publish such a weekly per annum
30-year Average Yield during any such Calendar Period, the 30-year Treasury CMT for such Class A
Distribution Period or Class B Distribution Period will be the 30-year Average Yield (or total
weekly per annum 30-year Average Yields, if less than two such yields are published during the
relevant Calendar Period), as published weekly during such Calendar Period by any Federal Reserve
Bank or by any U.S. Government department or agency selected by the Corporation. In the event that
a per annum 30-year Average Yield is not published by the Federal Reserve Board or by any Federal
Reserve Bank or by any U.S. Government department or agency during such Calendar Period, the
30-year Treasury CMT for such Class A Distribution Period or Class B Distribution Period will be
the arithmetic average of the two most recent weekly per annum average yields to maturity (or total
weekly per annum average yields to maturity, if less than two such yields are published during the
relevant Calendar Period) for all of the actively traded marketable U.S. Treasury fixed interest
rate securities (other than Special Securities) then having remaining maturities of not less than
28 nor more than 30 years, as published during such Calendar Period by the Federal Reserve Board
or, if the Federal Reserve Board does not publish such yields, by any Federal Reserve Bank or by
any U.S. Government department or agency selected by the Company. In the event that the Company
determines in good faith that for any reason the Company cannot determine the 30-year treasury CMT
for any Class A Distribution Period or Class B Distribution Period as provided above in this
paragraph, then the 30-year Treasury CMT for such Class A Distribution Period or Class B
Distribution Period will be the arithmetic average of the per annum average yields to maturity
based upon the closing bids during such Calendar Period for each of the issues of actively traded
marketable U.S. Treasury fixed interest rate securities (other than Special Securities) with a
final maturity date of not less than 28 nor more than 30 years from the date of each such
quotation, as chosen and quoted daily for each business day during such Calendar Period in New York
City (or less frequently if daily quotations are not generally available) to the Company by at
least three recognized dealers in U.S. Government securities selected by the Company. The 30-year
Treasury CMT shall be rounded to the nearest hundredth of a percent.



     “TPC” has the meaning set forth in Section 1.1.



     “Transaction Documents” means, collectively, this Agreement, the Conveyance Agreements, the
Limited Liability Company Agreement of Cereals Properties, dated as of April



43









 







2, 2002, the Limited
Liability Company Agreement of IP Holdings I, dated as of April 2, 2002, the Limited Liability
Company Agreement of IP Holdings II, dated as of April 2, 2002, the Contribution Agreement between
the Company and General Mills Missouri, dated as of May 25, 2008, the Securities Purchase
Agreements, the LBSFI Purchase Agreement, the Conveyance Agreements, the Buffalo Lease, the Master
Lease Agreement between Cereals Properties and the Company, dated as of April 2, 2002, the Amended
and Restated Employee Seconding Agreement, the Amended and Restated Contract Marketing Agreement,
the Amended and
Restated Contract Operating Agreement, the Amended and Restated Contract Sales Agreement, the
Amended and Restated Services Agreement, the Receivables Purchase and Sale Agreement, the Finance
Notes, the Other GMI Entity Agreements, the Permitted Intellectual Property License Agreements, the
Permitted PP&E Licenses, the GMI Guarantees, the Class A Remarketing Agreement, and each
assignment, transfer, license or other agreement, document or certificate referred to or
contemplated therein. Each of such documents shall constitute a “Transaction Document” at such
time as such document is executed and delivered by all of the necessary parties thereto.



     “Transfer” means, as a noun, any voluntary or involuntary transfer, sale, exchange, any
instrument that seeks to transfer an economic interest, or other disposition, and any
hypothecation, pledge or other encumbrance, and, as a verb, voluntarily or involuntarily to
transfer, sell, exchange, enter into any instrument that seeks to transfer an economic interest, or
otherwise dispose of, and, except when used in reference to any Interest, to hypothecate, pledge or
otherwise encumber. The word “Transferred” has a meaning correlative thereto. For purposes of
Sections 11.3(b), 11.3(c), 11.3(d), 11.3(e), 11.3(f) and 11.3(g), the term “Transfer” shall include
the use of a participation, derivative (such as a total return swap, credit linked note or credit
default swap), financial instrument or similar contract the value of which is determined in whole
or in part by reference to some or all of the Limited Membership Interests for the purpose of
either (i) transferring the benefit of gain and/or risk of loss on such Limited Membership
Interests or (ii) hedging such Limited Membership Interests.



     “Transfer Agent” means Wells Fargo Shareowner Services or its successor.



     “Transferee Certificate” has the meaning set forth in Section 11.3(e).



     “Transferor Certificate” has the meaning set forth in Section 11.3(e).



     “Undistributed Preferred Return” means, with respect to any Class A Limited Member, Series B-1
Limited Member or Series B-2 Limited Member, the aggregate amount of Class A Limited Member
Preferred Return, Series B-1 Limited Member Preferred Return, or Series B-2 Limited Member
Preferred Return, as applicable, not distributed on a Class A Distribution Date or Class B
Distribution Date, as applicable, pursuant to Section 4.1(a) and, with respect to any Class B
Limited Member Preferred Return, without regard to whether the distribution of such Class B Limited
Member Preferred Return was prohibited pursuant to the proviso set forth in Section 4.1(a)(ii);
provided that such amounts shall be included in Undistributed Preferred Return only during the
period from the date such distribution was required to be made to the date such distribution is
made.



     “Valuation Methodology” has the meaning set forth in Schedule D.



44









 





     “Voluntary Bankruptcy” has the meaning set forth in the definition of “Bankruptcy.”



     “Wholly-Owned Affiliate” of any Person means an Affiliate of such Person (i) one hundred
percent (100%) of the voting stock or beneficial ownership interests of which is owned directly by
such Person, or by any Person who, directly or indirectly, owns one hundred percent (100%) of the
voting stock or beneficial ownership interests of such Person, (ii) an Affiliate to such Person
who, directly or indirectly, owns one hundred percent (100%) of the voting stock or
beneficial ownership interests of such Person, and (iii) any Wholly-Owned Affiliate of any
Affiliate described in clause (i) or clause (ii).



     “Winning Bid Rate” has the meaning set forth in Section 7.1(c)(i).



     1.11 Other Terms.



     Unless the content shall require otherwise:



     (a) Words importing the singular number or plural number shall include the plural number and
singular number respectively;



     (b) Words importing the masculine gender shall include the feminine and neuter genders and
vice versa;



     (c) Reference to “include,” “includes,” and “including” shall be deemed to be followed by the
phrase “without limitation”; and



     (d) Reference in this Agreement to “herein,” “hereby,” “hereof,” or “hereunder,” or any
similar formulation, shall be deemed to refer to this Agreement; provided that such reference shall
be deemed to include exhibits, schedules, annexes, or appendices only as provided in Section 15.14.



     (e) Except as otherwise expressly provided for herein with respect to the Required Class A
Limited Members or Required Class B Limited Members, references in this Agreement to the consent of
the “Limited Members” or to the consent of the “Class A Limited Members” or “Class B Limited
Members” shall be deemed to be a reference to the consent of each Limited Member or each Member
holding a Class A Limited Membership Interest or Class B Limited Membership Interest, as the case
may be.



     (f) All references herein to Articles, Sections, Exhibits and Schedules shall be deemed
references to Articles and Sections of, and Exhibits and Schedules to, this Agreement unless the
context requires otherwise.




45











 





SECTION 2.




MEMBERS’ CAPITAL CONTRIBUTIONS AND CAPITAL ACCOUNTS




     2.1 Initial Capital Contribution.



     (a) The Company is authorized to issue three classes of Interests. One such Interest shall be
designated as the “Managing Membership Interest,” the second such Interest shall be designated as
the “Class A Limited Membership Interests,” and the third such Interest shall be designated as the
“Class B Limited Membership Interests.” The Class A Limited Membership Interests and the Class B
Limited Membership Interests may be issued in one or more series (“Series”), each having such
rights, powers, preferences and designations as shall be set forth herein or as shall be otherwise
approved from time to time by the Managing Member, the Required Class A Limited Members and the
Required Class B Limited Members. The Class B Limited Membership Interests are divided into two
Series known as “Series B-1 Limited Membership Interests” and “Series B-2 Limited Membership
Interests” and having the respective rights, powers, preferences and designations set forth in this
Agreement.



     (b) (i) On April 2, 2002, (A) GMOI contributed the Cereals Properties Interest, with an
initial Gross Asset Value of $998,606,146, subject to debt of $132,255,351, the IP Holdings II
Interest, with an initial aggregate Gross Asset Value of $808,423,000, the General Mills Missouri
Stock, with an initial aggregate Gross Asset Value of $280,329,000, and all the Inventory located
at any of the Initial PP&E, having an initial aggregate Gross Asset Value of $204,712,513, solely
in exchange for all of the Managing Membership Interest and was admitted to the Company as the
Managing Member, (B) TPC contributed the Pet Stock, the Old El Paso Patents, and the Progresso
Patents, with an initial aggregate Gross Asset Value of $542,151,000 solely in exchange for all of
the Class A Limited Membership Interests and was admitted to the Company as a Class A Limited
Member, and (C) Cereals Holdings contributed the IP Holdings I Interest, with an initial aggregate
Gross Asset Value of $1,594,280,000, solely in exchange for all of the Class B Limited Liability
Company Interests and was admitted to the Company as a Class B Limited Member.



          (ii) On May 24, 2002, (A) RBDB purchased from TPC 150,000 Class A Limited Membership Interests
and was admitted to the Company as a Class A Limited Member, immediately whereafter TPC withdrew in
respect thereof and (B) GMOI Transferred to GMCO, as a capital contribution, 100% of the Managing
Membership Interest and GMCO was admitted to the Company as the Managing Member, immediately
whereafter GMOI withdrew in respect thereof.




          (iii) On October 6, 2004, (A) a portion of the Class A Limited Membership Interests then owned
by TPC were converted into 303,300 Series B-1 Limited Membership Interests, all of which were
designated as Series B-1 Limited Membership Interests, and (B) the Class B Limited Membership
Interests owned by Cereals Holdings were converted into 531,700 Series B-1 Limited Membership
Interests and 1,062,580 Series B-2 Limited Membership Interests. On October 7, 2004, TPC and
Cereals Holdings transferred all of their respective Series B-1 Limited Membership Interests to GM
Class B.




46









 








          (iv) On October 8, 2004, LBSFI purchased from GM Class B all of its 835,000 Class B Limited
Membership Interests, all of which constituted Series B-1 Limited Membership Interests, and LBSFI
was admitted to the Company as a Class B Limited Member, immediately whereafter GM Class B withdrew
as a Member of the Company.




          (v) On October 8, 2004, LBSFI contributed to Capital Trust all of its 835,000 Class B Limited
Membership Interests, all of which constituted Series B-1 Limited Membership Interests, and Capital
Trust was admitted to the Company as a Class B Limited Member, immediately whereafter LBSFI
withdrew as a Member of the Company.




          (vi) On June 28, 2007, RBDB purchased from TPC all of its 88,851 Class A Limited Membership
Interests, and RBDB was admitted to the Company as a Class A Limited Member in respect thereof,
immediately whereafter TPC withdrew as a Member of the Company.




          (vii) On August 7, 2007, GM Sales purchased from Capital Trust all of its 835,000 Class B
Limited Membership Interests, all of which constituted Series B-1 Limited Membership Interests, and
GM Sales was admitted to the Company as a Class B Limited Member in respect thereof, immediately
whereafter Capital Trust withdrew as a Member of the Company.




          (viii) As of the date hereof, the name, address, and Membership Interests of each Member is as
follows:




	 	 	 
	Name and Address	 	Membership Interests
	GM Cereals Operations, Inc.

Number One General Mills Blvd.

Minneapolis, Minnesota 55426

	 	Managing Membership Interest
	 
	 	 
	RBDB, Inc.

c/o Rabobank New York

245 Park Avenue

New York, NY 10167

	 	238,851 Class A Limited Membership Interests
	 
	 	 
	General Mills Sales, Inc.

Number One General Mills Blvd.

Minneapolis, Minnesota 55426


	 	835,000 Class B Limited Membership
Interests, all of which constitute
Series B-1 Limited Membership Interests






47









 






	 	 	 
	Name and Address	 	Membership Interests
	GM Cereals Holdings, Inc.

Number One General Mills Blvd.

Minneapolis, Minnesota 55426

	 	1,062,580 Class B Limited
Membership
Interests, all of which constitute
Series B-2 Limited Membership Interests






     2.2 Additional Contributions.



     (a) Each GMI Member may, at any time it owns an Interest hereunder, contribute from time to
time such additional Cash or other property as it may determine; provided that any Capital
Contribution made by any GMI Member pursuant to this Section 2.2 shall consist of Permitted Assets
and the Company shall at all times satisfy, both before and after giving effect to the additional
contribution, the Portfolio Requirements.



     (b) At such times as a GMI Member contributes assets consisting of Permitted Assets (other
than Cash), such GMI Member shall enter into an additional contribution agreement substantially
similar to the Conveyance Agreements; provided that the representations and warranties set forth in
such additional contribution agreement shall be substantially the same as the representations and
warranties contained in the Conveyance Agreements, and such GMI Member shall indemnify the Company
and hold it wholly harmless for any Expenses or losses incurred by the Company resulting from or
attributable to any representation or warranty made by such GMI Member pursuant to this
Section 2.2(b) proving to have been incorrect in any material respect when made.



     (c) The Managing Member shall be required to contribute $250,000 of Cash to the capital of the
Company on the Business Day immediately preceding (i) the initial Class A Reset Date and
(ii) thereafter, the last Business Day of the Fiscal Year ending in May 2012 and the last Business
Day of each fifth Fiscal Year thereafter.



     2.3 Other Matters.



     (a) Except as otherwise provided in Sections 4, 7, 11, and 13, or in the Act, no Member shall
demand or receive a return of its Capital Contributions or withdraw from the Company without the
consent of all Members. Under circumstances requiring a return of any Capital Contributions, no
Member shall have the right to receive property other than Cash except as may be specifically
provided in this Agreement.



     (b) No Member shall receive any interest or draw with respect to its Capital Contributions or
its Capital Account, except as otherwise provided in this Agreement.



     (c) The Members shall not be liable for the debts, liabilities, contracts, or any other
obligations of the Company. Except as otherwise provided by mandatory provisions of applicable
state law and except with respect to the obligation of the Members to return to the Company a
distribution made to any Member in violation of the Act at a time when such Member knew the
distribution would violate the Act, such Member shall be liable only to make its Capital
Contribution and shall not be required to lend any funds to the Company or, after its Capital
Contribution has been made, to make any additional Capital Contributions to the Company.



48









 




Except as otherwise provided in Section 9.2(f), the Managing Member shall not have any
personal liability for the repayment of any Capital Contributions of the Members.




SECTION 3.




ALLOCATIONS




     3.1 Profits.



     After giving effect to the special allocations set forth in Sections 3.3 and 3.4, Profits for
any Allocation Year shall be allocated in the following order and priority:



     (a) First, to the Class A Limited Members in proportion to, and to the extent of, an
amount equal to the excess, if any, of (i) the cumulative amount of the Class A Limited Member
Preferred Return for each such Class A Limited Member from May 24, 2002 through the last day of
such Allocation Year, over (ii) the cumulative Profits allocated to such Class A Limited Member
pursuant to this Section 3.1(a) for all prior Allocation Years;



     (b) Second, to the Class A Limited Members in proportion to, and to the extent of, an
amount equal to the excess, if any, of (i) the excess, if any, of (A) the cumulative Depreciation
specially allocated to each such Class A Limited Member pursuant to Section 3.3(h) for the current
and all prior Allocation Years during the then current Measurement Period, over (B) the cumulative
items of gain specially allocated to such Class A Limited Member pursuant to Section 3.3(j)(v)(1)
for the current and all prior Allocation Years during the then current Measurement Period, over
(ii) the cumulative Profits allocated to such Class A Limited Member pursuant to this
Section 3.1(b) for all prior Allocation Years during the then current Measurement Period;



     (c) Third, to the Class B Limited Members in proportion to, and to the extent of, an
amount equal to the excess, if any, of (i) the cumulative amount of each such Class B Limited
Member Preferred Return from May 24, 2002 through the last day of such Allocation Year, over
(ii) the cumulative Profits allocated to such Class B Limited Member pursuant to this
Section 3.1(c) for all prior Allocation Years;



     (d) Fourth, to the Class B Limited Members in proportion to, and to the extent of, an
amount equal to the excess, if any, of (i) the excess, if any, of (A) the cumulative Depreciation
specially allocated to each such Class B Limited Member pursuant to Section 3.3(h) for the current
and all prior Allocation Years during the then current Measurement Period, over (B) the cumulative
items of gain specially allocated to such Class B Limited Member pursuant to Section 3.3(j)(v)(2)
for the current and all prior Allocation Years during the then current Measurement Period, over
(ii) the cumulative Profits allocated to such Class B Limited Member pursuant to this
Section 3.1(d) for all prior Allocation Years during the then current Measurement Period;



     (e) Fifth, to the Class A Limited Members in proportion to, and to the extent of, an
amount equal to the excess, if any, of (i) the cumulative Losses allocated to each such Class A
Limited Member pursuant to Sections 3.2(d), 3.2(e), and 3.2(f) for all prior Allocation Years
during the then current Measurement Period, over (ii) the cumulative Profits allocated to such



49









 




Class A Limited Member pursuant to this Section 3.1(e) for all prior Allocation Years during
the then current Measurement Period;




     (f) Sixth, to the Class B Limited Members in proportion to, and to the extent of, an
amount equal to the excess, if any, of (i) the cumulative Losses allocated to each such Class B
Limited Member pursuant to Sections 3.2(d) and 3.2(e) for all prior Allocation Years during the
then current Measurement Period, over (ii) the cumulative Profits allocated to such Class B Limited
Member pursuant to this Section 3.1(f) for all prior Allocation Years during the then current
Measurement Period;



     (g) Seventh, to the Managing Member in an amount equal to the excess, if any, of (i)
the First Baseline Amount for the Allocation Year, over (ii) the cumulative Profits allocated
pursuant to Section 3.1(a) through (f), inclusive, for the current Allocation Year;



     (h) Eighth, 95% to the Managing Member, 0.57% to the Class A Limited Members in
proportion to their Preferred Return Capital, and 4.43% to the Class B Limited Members in
proportion to their Preferred Return Capital in an amount equal to the excess, if any, of (i) the
Second Baseline Amount for the Allocation Year, over (ii) the First Baseline Amount for the
Allocation Year; provided that, for the Allocation Year beginning on May 31, 2004 and ending on May
29, 2005, the Profits allocable pursuant to this Section 3.1(h) shall be allocated as follows:



          (i) An amount equal to the product of (x) such Profits times (y) a fraction, the numerator of
which is the number of days from (and including) the first day of such Allocation Year to (but
excluding) October 6, 2004, and the denominator of which is the total number of days in such
Allocation Year, shall be specially allocated 95% to the Managing Member, 1.3% to the Class A
Limited Members in proportion to their Preferred Return Capital, and 3.7% to the Class B Limited
Members in proportion to their Preferred Return Capital; and




          (ii) An amount equal to the excess of (x) the amount of such Profits over (y) the amount of
such Profits allocated pursuant to clause (i) above, shall be specially allocated 95% to the
Managing Member, 0.57% to the Class A Limited Members in proportion to their Preferred Return
Capital, and 4.43% to the Class B Limited Members in proportion to their Preferred Return Capital;
and




     (i) Ninth, the balance, if any, 96% to the Managing Member, 0.46% to the Class A
Limited Members in proportion to their Preferred Return Capital, and 3.54% to the Class B Limited
Members in proportion to their Preferred Return Capital provided that, for the Allocation Year
beginning on May 31, 2004 and ending on May 29, 2005, the Profits allocable pursuant to this
Section 3.1(i) shall be allocated as follows:



          (i) An amount equal to the product of (x) such Profits times (y) a fraction, the numerator of
which is the number of days from (and including) the first day of such Allocation Year to (but
excluding) October 6, 2004, and the denominator of which is the total number of days in such
Allocation Year, shall be specially allocated 96% to the Managing Member, 1.04% to the Class A
Limited Members in proportion to their Preferred Return Capital, and 2.96% to the Class B Limited
Members in proportion to their Preferred Return Capital; and




50









 








          (ii) An amount equal to the excess of (x) the amount of such Profits over (y) the amount of
such Profits allocated pursuant to clause (i) above, shall be specially allocated 96% to the
Managing Member, 0.46% to the Class A Limited Members in proportion to their Preferred Return
Capital, and 3.54% to the Class B Limited Members in proportion to their Preferred Return Capital.




     3.2 Losses.



     After giving effect to the special allocations set forth in Sections 3.3 and 3.4, Losses for
any Allocation Year shall be allocated in the following order and priority:



     (a) First, to the Members in proportion to, and to extent of, an amount equal to the
excess, if any, of (i) the cumulative Profits allocated to each such Member pursuant to
Section 3.1(i) for all prior Allocation Years during the then current Measurement Period, over
(ii) the cumulative Losses allocated to such Member pursuant to this Section 3.2(a) for all prior
Allocation Years during the then current Measurement Period;



     (b) Second, to the Members in proportion to, and to the extent of, an amount equal to
the excess, if any, of (i) the cumulative Profits allocated to each such Member pursuant to
Section 3.1(h) for all prior Allocation Years during the then current Measurement Period, over
(ii) the cumulative Losses allocated to such Member pursuant to this Section 3.2(b) for all prior
Allocation Years during the then current Measurement Period;



     (c) Third, to the Managing Member in an amount equal to the excess, if any, of (i) the
cumulative Profits allocated to the Managing Member pursuant to Section 3.1(g) for all prior
Allocation Years during the then current Measurement Period, over (ii) the cumulative Losses
allocated to the Managing Member pursuant to this Section 3.2(c) for all prior Allocation Years
during the then current Measurement Period;



     (d) Fourth, 98% to the Managing Member, 1% to the Class A Limited Members in
proportion to their Preferred Return Capital, and 1% to the Class B Limited Members in proportion
to their Preferred Return Capital until the Adjusted Capital Account of the Managing Member is
equal to zero;



     (e) Fifth, 99% to the Class B Limited Members in proportion to their Preferred Return
Capital and 1% to the Class A Limited Members in proportion to their Preferred Return Capital until
the Adjusted Capital Account of each Class B Limited Member is equal to zero;



     (f) Sixth, 100% to the Class A Limited Members in proportion to their Preferred Return
Capital until the Adjusted Capital Account of each Class A Limited Member is equal to zero; and



     (g) Seventh, 100% to the Managing Member.



     3.3 Special Allocations.



     The following special allocations shall be made in the following order:



51









 





     (a) Minimum Gain Chargeback. Except as otherwise provided in Regulations Section 1.704-2(f),
notwithstanding any other provision of this Section 3, if there is a net decrease in Company
Minimum Gain during any Allocation Year, each Member shall be specially allocated items of Company
income and gain for such Allocation Year (and, if necessary, subsequent Allocation Years) in an
amount equal to such Member’s share of the net decrease in Company Minimum Gain, determined in
accordance with Regulations Section 1.704-2(g). Allocations pursuant to the previous sentence
shall be made in proportion to the respective amounts required to be allocated to each Member
pursuant thereto. The items to be so allocated shall be determined in accordance with Regulations
Sections 1.704-2(f)(6) and 1.704-2(j)(2). This Section 3.3(a) is intended to comply with the
minimum gain chargeback requirement in Regulations Section 1.704-2(f) and shall be interpreted
consistently therewith.



     (b) Member Minimum Gain Chargeback. Except as otherwise provided in Regulations
Section 1.704-2(i)(4), notwithstanding any other provision of this Section 3, if there is a net
decrease in Member Nonrecourse Debt Minimum Gain attributable to a Member Nonrecourse Debt during
any Allocation Year, each Member who has a share of the Member Nonrecourse Debt Minimum Gain
attributable to such Member Nonrecourse Debt, determined in accordance with Regulations
Section 1.704-2(i)(5), shall be specially allocated items of Company income and gain for such
Allocation Year (and, if necessary, subsequent Allocation Years) in an amount equal to such
Member’s share of the net decrease in Member Nonrecourse Debt Minimum Gain attributable to such
Member Nonrecourse Debt, determined in accordance with Regulations Section 1.704-2(i)(4).
Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts
required to be allocated to each Member pursuant thereto. The items to be so allocated shall be
determined in accordance with Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2). This
Section 3.3(b) is intended to comply with the minimum gain chargeback requirement in Regulations
Section 1.704-2(i)(4) and shall be interpreted consistently therewith.



     (c) Qualified Income Offset. In the event that any Member unexpectedly receives any
adjustments, allocations, or distributions described in Regulations Sections
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6), items of Company
income and gain shall be allocated to such Member in an amount and manner sufficient to eliminate,
to the extent required by the Regulations, the Adjusted Capital Account Deficit of such Member as
quickly as possible; provided that an allocation pursuant to this Section 3.3(c) shall be made only
if and to the extent that such Member would have an Adjusted Capital Account Deficit after all
other allocations provided for in this Section 3 have been tentatively made as if this
Section 3.3(c) were not in this Agreement.



     (d) Gross Income Allocation. In the event that any Member has an Adjusted Capital Account
Deficit at the end of any Allocation Year, each such Member shall be allocated items of Company
income and gain in the amount of such deficit as quickly as possible; provided that an allocation
pursuant to this Section 3.3(d) shall be made only if and to the extent that such Member would have
an Adjusted Capital Account Deficit after all other allocations provided for in this Section 3 have
been tentatively made as if Section 3.3(c) and this Section 3.3(d) were not in this Agreement.



     (e) Nonrecourse Deductions. Nonrecourse Deductions for any Allocation Year shall be specially
allocated 90% to the Managing Member, 1.1% to the Class A Limited Members in



52









 




proportion to their Preferred Return Capital, and 8.9% to the Class B Limited Members in
proportion to their Preferred Return Capital; provided that, for the Allocation Year beginning on
May 31, 2004 and ending on May 29, 2005, Nonrecourse Deductions shall be allocated as follows:




          (i) An amount equal to the product of (x) the Nonrecourse Deductions for such Allocation Year
times (y) a fraction, the numerator of which is the number of days from (and including) the first
day of such Allocation Year to (but excluding) October 6, 2004, and the denominator of which is the
total number of days in such Allocation Year, shall be specially allocated 90% to the Managing
Member, 2.5% to the Class A Limited Members in proportion to their Preferred Return Capital, and
7.5% to the Class B Limited Members in proportion to their Preferred Return Capital; and




          (ii) An amount equal to the excess of (x) the amount of Nonrecourse Deductions for such
Allocation Year over (y) the amount of Nonrecourse Deductions for such Allocation Year allocated
pursuant to clause (i) above, shall be specially allocated 90% to the Managing Member, 1.1% to the
Class A Limited Members in proportion to their Preferred Return Capital, and 8.9% to the Class B
Limited Members in proportion to their Preferred Return Capital.




     (f) Member Nonrecourse Deductions. Any Member Nonrecourse Deductions for any Allocation Year
shall be specially allocated to the Member who bears the economic risk of loss with respect to the
Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance
with Regulations Section 1.704-2(i)(1).



     (g) Section 754 Adjustments. To the extent an adjustment to the adjusted tax basis of any
Company asset, pursuant to Code Section 734(b) or Code Section 743(b) is required, pursuant to
Regulations Section 1.704-1(b)(2)(iv)(m)(2) or 1.704-1(b)(2)(iv)(m)(4), to be taken into account in
determining Capital Accounts as the result of a distribution to a Member in complete liquidation of
such Member’s Interest, the amount of such adjustment to 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) and such gain or loss shall be specially allocated to the Members in
accordance with their interests in the Company in the event Regulations
Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Member to whom such distribution was made in the
event Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.



     (h) Depreciation. All items of Depreciation of the Company shall be specially allocated 90%
to the Managing Member, 1.1% to the Class A Limited Members in proportion to their Preferred Return
Capital, and 8.9% to the Class B Limited Members in proportion to their Preferred Return Capital;
provided that, for the Allocation Year beginning on May 31, 2004 and ending on May 29, 2005,
Nonrecourse Deductions shall be allocated as follows:



          (i) An amount equal to the product of (x) the Depreciation for such Allocation Year times
(y) a fraction, the numerator of which is the number of days from (and including) the first day of
such Allocation Year to (but excluding) October 6, 2004, and the denominator of which is the total
number of days in such Allocation Year, shall be specially allocated 90% to the Managing Member,
2.5% to the Class A Limited Members in proportion to their Preferred



53









 






Return Capital, and 7.5% to the Class B Limited Members in proportion to their Preferred
Return Capital; and




          (ii) An amount equal to the excess of (x) the amount of Depreciation for such Allocation Year
over (y) the amount of Depreciation for such Allocation Year allocated pursuant to
clause (i) above, shall be specially allocated 90% to the Managing Member, 1.1% to the Class A
Limited Members in proportion to their Preferred Return Capital, and 8.9% to the Class B Limited
Members in proportion to their Preferred Return Capital.




     (i) Interest Income. Ninety percent (90%) of the interest income attributable to the
Permitted Loans made by the Company to GMI or its Affiliates shall be specially allocated to the
Managing Member, and the remaining 10% of such interest income shall be allocated under Sections
3.1 and 3.2.



     (j) Gain from Disposition of All or Substantially All of Permitted Assets. In the event that,
in any Allocation Year, the Company realizes, or is deemed to realize, gain from the sale,
disposition, or adjustment to the Gross Asset Value of all or substantially all of its Permitted
Assets, such gain shall be specially allocated as follows:



          (i) First, 100% to the Managing Member in an amount equal to the excess, if any, of
(A) the cumulative loss specially allocated to the Managing Member pursuant to Section 3.3(k)(viii)
for all prior Allocation Years during the then current Measurement Period, over (B) the cumulative
gain specially allocated to the Managing Member pursuant to this Section 3.3(j)(i) for all prior
Allocation Years during the then current Measurement Period;




          (ii) Second, 100% to the Class A Limited Members in proportion to, and to the extent
of, an amount equal to the excess, if any, of (A) the cumulative loss specially allocated to each
such Class A Limited Member pursuant to Sections 3.3(k)(v), 3.3(k)(vi), and 3.3(k)(vii) for all
prior Allocation Years during the then current Measurement Period, over (B) the cumulative gain
specially allocated to such Class A Limited Member pursuant to this Section 3.3(j)(ii) for all
prior Allocation Years during the then current Measurement Period;




          (iii) Third, 100% to the Class B Limited Members in proportion to, and to the extent
of, an amount equal to the excess, if any, of (A) the cumulative loss specially allocated to each
such Class B Limited Member pursuant to Sections 3.3(k)(v) and 3.3(k)(vi) for all prior Allocation
Years during the then current Measurement Period, over (B) the cumulative gain specially allocated
to such Class B Limited Member pursuant to this Section 3.3(j)(iii) for all prior Allocation Years
during the then current Measurement Period;




          (iv) Fourth, 100% to the Managing Member in an amount equal to the excess, if any, of
(A) the cumulative loss specially allocated to the Managing Member pursuant to Section 3.3(k)(v)
for all prior Allocation Years during the then current Measurement Period, over (B) the cumulative
gain specially allocated to the Managing Member pursuant to this Section 3.3(j)(iv) for all prior
Allocation Years during the then current Measurement Period;




          (v) Fifth, an amount equal to the excess, if any, of (A) the aggregate initial Gross
Asset Value of such Permitted Assets, over (B) the aggregate Gross Asset Value of such Permitted
Assets shall be allocated:




54









 






          (1) first, 100% to the Class A Limited Members in proportion to, and to the
extent of, an amount equal to the excess, if any, of (x) the cumulative Depreciation
specially allocated to each such Class A Limited Member pursuant to Section 3.3(h) for the
current and all prior Allocation Years during the then current Measurement Period, over
(y) the sum of (i) the cumulative Profits allocated to such Class A Limited Member pursuant
to Section 3.1(b) for all prior Allocation Years during the then current Measurement Period
plus (ii) the cumulative gain specially allocated to such Class A Limited Member pursuant to
this Section 3.3(j)(v)(1) for all prior Allocation Years during the then current Measurement
Period;




          (2) second, 100% to the Class B Limited Members in proportion to, and to the
extent of, an amount equal to the excess, if any, of (x) the cumulative Depreciation
specially allocated to each such Class B Limited Member pursuant to Section 3.3(h) for the
current and all prior Allocation Years during the then current Measurement Period, over
(y) the sum of (i) the cumulative Profits allocated to such Class B Limited Member pursuant
to Section 3.1(d) for all prior Allocation Years during the then current Measurement Period
plus (ii) the cumulative gain specially allocated to such Class B Limited Member pursuant to
this Section 3.3(j)(v)(2) for all prior Allocation Years during the then current Measurement
Period; and




          (3) third, the balance, if any, 100% to the Managing Member;



          (vi) Sixth, 98.7% to the Managing Member, 0.29% to the Class A Limited Members in
proportion to their Preferred Return Capital, and 1.01% to the Class B Limited Members in
proportion to their Preferred Return Capital in an amount equal to the excess, if any, of (A) the
aggregate First Tier Growth Value for such Permitted Assets, over (B) the aggregate Gross Asset
Value of such Permitted Assets determined as of the beginning of the then current Measurement
Period in a manner consistent with the calculation of the First Tier Growth Value;




          (vii) Seventh, 96% to the Managing Member, 0.88% to the Class A Limited Members in
proportion to their Preferred Return Capital, and 3.12% to the Class B Limited Members in
proportion to their Preferred Return Capital in an amount equal to the excess, if any, of (A) the
lesser of (x) the amount realized or deemed realized from disposition of such Permitted Assets or
(y) the Second Tier Growth Value for such Permitted Assets, over (B) the First Tier Growth Value
for such Permitted Assets;




          (viii) Eighth, 95% to the Managing Member, 1.1% to the Class A Limited Members in
proportion to their Preferred Return Capital, and 3.9% to the Class B Limited Members in proportion
to their Preferred Return Capital in an amount equal to the excess, if any, of (A) the lesser of
(x) the amount realized or deemed realized from the disposition of such Permitted Assets or (y) the
Third Tier Growth Value for such Permitted Assets, over (B) the Second Tier Growth Value of such
Permitted Assets; and




          (ix) Ninth, the balance, if any, 98.7% to the Managing Member, 0.29% to the Class A
Limited Members in proportion to their Preferred Return Capital, and 1.01% to the Class B Limited
Members in proportion to their Preferred Return Capital.




55









 





     (k) Loss from Disposition of All or Substantially All of Permitted Assets. In the event that,
in any Allocation Year, the Company realizes, or is deemed to realize, a loss from the sale,
disposition, or adjustment to the Gross Asset Value of all or substantially all of its Permitted
Assets, such loss shall be specially allocated as follows:



          (i) First, to the Members in proportion to, and to the extent of, an amount equal to
the excess, if any, of (A) the cumulative gain specially allocated to each such Member pursuant to
Section 3.3(j)(ix) for the current and all prior Allocation Years during the then current
Measurement Period, over (B) the cumulative loss specially allocated to such Member pursuant to
this Section 3.3(k)(i) for all prior Allocation Years during the then current Measurement Period;




          (ii) Second, to the Members in proportion to, and to the extent of, an amount equal to
the excess, if any, of (A) the cumulative gain specially allocated to each such Member pursuant to
Section 3.3(j)(viii) for the current and all prior Allocation Years during the then current
Measurement Period, over (B) the cumulative loss specially allocated to such Member pursuant to
this Section 3.3(k)(ii) for all prior Allocation Years during the then current Measurement Period;




          (iii) Third, to the Members in proportion to, and to the extent of, an amount equal to
the excess, if any, of (A) the cumulative gain specially allocated to each such Member pursuant to
Section 3.3(j)(vii) for the current and all prior Allocation Years during the then current
Measurement Period, over (B) the cumulative loss specially allocated to such Member pursuant to
this Section 3.3(k)(iii) for all prior Allocation Years during the then current Measurement Period;




          (iv) Fourth, to the Members in proportion to, and to the extent of, an amount equal to
the excess, if any, of (A) the cumulative gain specially allocated to each such Member pursuant to
Section 3.3(j)(vi) for the current and all prior Allocation Years during the then current
Measurement Period, over (B) the cumulative loss specially allocated to such Member pursuant to
this Section 3.3(k)(iv) for all prior Allocation Years during the then current Measurement Period;




          (v) Fifth, 98% to the Managing Member, 1% to the Class A Limited Members in proportion
to their Preferred Return Capital and 1% to the Class B Limited Members in proportion to their
Preferred Return Capital until the Adjusted Capital Account of the Managing Member is equal to
zero;




          (vi) Sixth, 99% to the Class B Limited Members in proportion to their Preferred Return
Capital and 1% to the Class A Limited Members in proportion to their Preferred Return Capital until
the Adjusted Capital Account of each Class B Limited Member is equal to zero;




          (vii) Seventh, 100% to the Class A Limited Members in proportion to their Preferred
Return Capital until the Adjusted Capital Account of each Class A Limited Member is equal to zero;
and




          (viii) Eighth, 100% to the Managing Member.




56









 





     (l) Loss from Other Dispositions of Permitted Assets. In the event that, in any Allocation
Year, the Company realizes a loss from (i) the sale or disposition of any Permitted Asset (other
than Inventory) in the ordinary course of the Company’s business or (ii) a bulk sale or general
liquidation of Inventory (other than in connection with the sale of all or substantially all of the
Company’s Permitted Assets), such loss shall be specially allocated to the Managing Member.



     (m) Charitable Contribution Expenses. All items of Expense attributable to charitable
contributions made by the Company during any Allocation Year shall be specially allocated 100% to
the Managing Member.



     (n) Tax Indemnity Payments. In the event that, in any Allocation Year, the Company makes a
tax indemnity payment pursuant to Section 8.3, the deduction attributable to such payment shall be
specially allocated to the Managing Member.



     3.4 Curative Allocations.



     The allocations set forth in Sections 3.3(a), 3.3(b), 3.3(c), 3.3(d), 3.3(e), 3.3(f), and
3.3(g) (the “Regulatory Allocations”) are intended to comply with certain requirements of the
Regulations. It is the intent of the Members that, to the extent possible, the Regulatory
Allocations shall be offset either with special allocations of other items of Company income, gain,
loss, or deduction pursuant to this Section 3.4. Therefore, notwithstanding any other provision of
this Section 3 (other than the Regulatory Allocations), the Managing Member shall make such
offsetting special allocations of Company income, gain, loss, or deduction in whatever manner it
determines appropriate so that, after such offsetting allocations are made, each Member’s Capital
Account balance is, to the extent possible, equal to the Capital Account balance such Member would
have had if the Regulatory Allocations were not part of this Agreement and all Company items were
allocated pursuant to Sections 3.1, 3.2, and 3.3 (other than the Regulatory Allocations). In
exercising its discretion under this Section 3.4, the Managing Member shall take into account
future Regulatory Allocations under Sections 3.3(a) and 3.3(b) that, although not yet made, are
likely to offset other Regulatory Allocations previously made under Sections 3.3(e) and 3.3(f).



     3.5 Other Allocation Rules.



     (a) Profits, Losses, and any other items of income, gain, loss, or deduction shall be
allocated to the Members pursuant to this Section 3 as of the last day of each Fiscal Year;
provided that Profits, Losses, and such other items shall also be allocated at such times as the
Gross Asset Values of the Company’s assets are adjusted pursuant to subparagraph (ii) of the
definition of “Gross Asset Value” in Section 1.10.



     (b) Allocations made for the Allocation Year beginning on May 31, 2004 and ending on May 29,
2005 shall take into account the conversion of a portion of TPC’s Class A Limited Membership
Interest into 303,300 Series B-1 Limited Membership Interests.



     (c) In the event that, for any Allocation Year, (i) one or more Limited Members have been
allocated an amount of Estimated Profits and Losses, and other items of Company income, gain, loss,
or deduction in connection with a Class A Remarketing, Class B Purchase, Class B



57









 




Remarketing, or Class B Exchange and (ii) the amount so allocated (the “Estimated Allocation”)
differed from the amount actually allocated (the “Actual Allocation”) to such Limited Members
pursuant to Sections 3.1 or 3.2 and Section 3.3 for such Allocation Year, the Managing Member shall
be allocated an amount of Profits or Losses, as applicable, otherwise allocable to such Limited
Members equal to the difference between the Estimated Allocation and the Actual Allocation, and the
Actual Allocation made to such Limited Members shall be adjusted accordingly. Any amounts
reallocated pursuant to this Section 3.5(c) shall be deemed for all purposes hereunder to have been
actually allocated to the Managing Member and not allocated to such Limited Members.




     (d) For purposes of determining the Profits, Losses, or any other items allocable to any
period, Profits, Losses, and any such other items shall be determined on a daily proration basis by
the Managing Member under Code Section 706 and the Regulations thereunder.



     (e) The Members are aware of the income tax consequences of the allocations made by this
Section 3 and hereby agree to be bound by the provisions of this Section 3 in reporting their
shares of Company income and loss for income tax purposes, except as otherwise required by law.



     3.6 Tax Allocations: Code Section 704(c).



     In accordance with Code Section 704(c) and the Regulations thereunder, income, gain, loss, and
deduction with respect to any Property contributed to the capital of the Company shall, solely for
tax purposes, be allocated among the Members 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 initial
Gross Asset Value (computed in accordance with the definition of Gross Asset Value). Such
allocation shall be made in accordance with the remedial allocation method described by Regulations
Section 1.704-3(d). Notwithstanding any provision in this Agreement to the contrary, in the event
that any such Property is subject to the “anti-churning” rules of Code Section 197(f)(9), no
remedial allocations of income or deduction shall be made to any Member with respect to such
Property until such time at which such asset is sold by the Company.



     In the event the Gross Asset Value of any Property is adjusted pursuant to subparagraph (ii)
of the definition of Gross Asset Value, subsequent allocations of income, gain, loss, and deduction
with respect to such Property shall take account of any variation between the adjusted basis of
such Property for federal income tax purposes and its Gross Asset Value in the same manner as under
Code Section 704(c) and the Regulations thereunder. Such allocation shall be made in accordance
with the remedial allocation method described by Regulations Section 1.704-3(d).



     Any elections or other decisions relating to such allocations shall be made by the Managing
Member in any manner that reasonably reflects the purpose and intention of this Agreement.
Allocations pursuant to this Section 3.6 are solely for purposes of federal, state, and local Taxes
and shall not affect, or in any way be taken into account in computing, any Member’s Capital
Account or share of Profits, Losses, other items, or distributions pursuant to any provision of
this Agreement.



58









 





     3.7 Adjustment of Allocations Upon Conversion of Class A Limited Membership Interests.



     In the event that any Class A Limited Membership Interests are converted into Class B Limited
Membership Interests at any time in the future, the sharing percentages set forth in Sections
3.1(h), 3.1(i), 3.3(e), 3.3(h), 3.3(j)(vi), 3.3(j)(vii), 3.3(j)(viii), and 3.3(j)(ix) shall be
adjusted to reflect such conversion in accordance with this Section 3.7. The percentage of
Profits, Losses, gain, or loss otherwise allocated to the Class A Limited Members pursuant to any
of the above listed provisions shall be reduced by subtracting from the relevant pre-conversion
percentage an amount (expressed as a percentage) equal to the product of (i) the relevant
pre-conversion percentage, times (ii) a fraction (expressed as a percentage), the numerator of
which is the Preferred Return Capital attributable to the Class A Limited Member ship Interests
being converted, and the denominator of which is the aggregate Preferred Return Capital of the
Class A Limited Members immediately prior to such conversion. The amount derived in the preceding
sentence shall be added to the relevant pre-conversion percentage applicable to the Class B Limited
Membership Interests. By way of example, if Class A Limited Membership Interests with an aggregate
Preferred Return Capital of $50 million were converted into Class B Limited Membership Interests at
a time when the aggregate Preferred Return Capital of all Class A Limited Membership Interests was
$200 million, the percentage of Profits allocated to the Class A Limited Members pursuant to
Section 3.1(h) hereof subsequent to the conversion would be reduced from 0.57% to 0.43% (i.e.,
0.57% - [0.57 x ($50 million  ̧ $200 million]).



SECTION 4.




DISTRIBUTIONS




     4.1 Amounts Distributed.



     (a) Preferred Return Distributions. Except as otherwise provided in Section 13, the Managing
Member shall cause the Company to distribute Cash Available for Distribution (determined as of the
time such distributions are required to be made pursuant to this Section 4.1(a)) to the Limited
Members as follows:



          (i) First, on each Class A Distribution Date, to the Class A Limited Members in
proportion to, and to the extent of, an amount equal to the excess, if any, of (i) the cumulative
amount of the Class A Limited Member Preferred Return accrued during the period from and including
May 24, 2002 to but excluding the last day of the Fiscal Quarter ending on or immediately following
such Class A Distribution Date for each such Class A Limited Member, over (ii) the cumulative
amount of Cash previously distributed to such Class A Limited Member pursuant to this
Section 4.1(a)(i); and




          (ii) Second, on each Class B Distribution Date, commencing January 15, 2005, to the
Class B Limited Members in proportion to, and to the extent of, an amount equal to the excess, if
any, of (i) the cumulative amount of the Class B Limited Member Preferred Return accrued during the
period from and including the May 24, 2002 to but excluding Class B Distribution Date, over
(ii) the cumulative amount of Cash previously distributed to such Class B



59









 






Limited Member pursuant to this Section 4.1(a)(ii); provided that no distributions shall be
made pursuant to this Section 4.1(a)(ii) unless (A) at the time such distribution is otherwise
required to be made and as of the immediately preceding Class A Distribution Date, Cash Available
for Distribution was at least equal to the sum of (x) the amounts required to be distributed on
such preceding Class A Distribution Date pursuant to Section 4.1(a)(i) plus (y) the amounts
required to be distributed on the current Class B Distribution Date pursuant this
Section 4.1(a)(ii); (B) Profits of the Company for the current Allocation Year through such Class B
Distribution Date (calculated as if such date were the last day of the Allocation Year) equal or
exceed the amounts required to be distributed pursuant to Section 4.1(a)(i) and (a)(ii) as of such
Class B Distribution Date; and (C) at the time of such distribution no Class A Notice Event,
Liquidating Event or other event or condition that, but for the requirement that time elapse or
notice be given, or both, would constitute a Class A Notice Event or Liquidating Event has occurred
and is continuing.




     Distributions pursuant to this Section 4.1(a) (including any distributions made subsequent to
the Class A Distribution Date or Class B Distribution Date, as applicable, on which they were
required to be made but prior to the succeeding Class A Distribution Date or Class B Distribution
Date, as applicable, on which distributions are required to be made) shall be made to Members of
record fifteen (15) days prior to the relevant Class A Distribution Date or Class B Distribution
Date, as applicable. Notwithstanding any provision to the contrary in this Section 4.1(a), the
Managing Member shall cause, to the extent there is sufficient Cash Available for Distribution,
there to be distributed to the Limited Members as constituted immediately prior to the sale by GM
Class B of all of its Series B-1 Limited Membership Interests, any accrued but undistributed
Limited Member Preferred Return with respect to such Limited Membership Interests and such
distributions shall for all purposes of this Agreement be deemed to have been made pursuant to
Section 4.1(a).



     (b) Annual Distribution of Certain Profits and Gains. Except as otherwise provided in
Section 13 and provided all distributions required to be made pursuant to Section 4.1 have been
made, the Managing Member shall cause the Company to notify, within 150 days after the end of each
Allocation Year, each Member of the amount to be distributed to it pursuant to this Section 4.1(b),
and to distribute Cash Available for Distribution no later than 180 days after the end of each
Allocation Year, such distribution to be made, except as otherwise provided in Section 4.1(e) with
respect to the Series B-1 Limited Membership Interests, to the Members of record during such
Allocation Year in proportion to the number of days such Members held their respective Limited
Membership Interests during such Allocation Year, in the following order and priority:



          (i) First, to the Class A Limited Members and any other Person that was a Class A
Limited Member during the relevant Allocation Year in an amount equal to the sum of (x) the
Profits, if any, allocated to such Class A Limited Member or other Person pursuant to
Sections 3.1(h) and 3.1(i) for such Allocation Year, plus (y) if the Company sold or disposed of
all or substantially all of its Permitted Assets during the Allocation Year, the aggregate amount
of gain, if any, from such sales or dispositions that was allocated to such Class A Limited Member
or other Person pursuant to Sections 3.3(j)(vi), 3.3(j)(vii), 3.3(j)(viii), and 3.3(j)(ix) for such
Allocation Year; and




60









 








          (ii) Second, to the Class B Limited Members and any other Person that was a Class B
Limited Member during the relevant Allocation Year in an amount equal to the sum of (x) the
Profits, if any, allocated to such Class B Limited Member or other Person pursuant to
Sections 3.1(h) and 3.1(i) for such Allocation Year plus (y) if the Company sold or disposed of all
or substantially all of its Permitted Assets during the Allocation Year, the aggregate amount of
gain, if any, from such sales or dispositions that was allocated to such Class B Limited Member or
other Person pursuant to Sections 3.3(j)(vi), 3.3(j)(vii), 3.3(j)(viii), and 3.3(j)(ix) for such
Allocation Year;



provided that any distributions of Cash Available for Distribution required to be made to a GMI
Member pursuant to this Section 4.1(b) shall be made at such times as are determined by the
Managing Member in its sole discretion and any amounts otherwise distributable to a GMI Member
pursuant to this Section 4.1(b) that are deferred by the Managing Member shall be added to the
distribution to which such GMI Member is entitled to receive at such times as the Managing Member
makes distribution to the GMI Member pursuant to this Section 4.1(b); provided, further, that any
such deferred distributions shall not be made until all distributions otherwise required to be made
pursuant to this Section 4.1(b) have been made. To the extent there is insufficient Cash Available
for Distribution to make the distributions required by this Section 4.1(b), the amount not
distributed shall be distributed as soon as there is sufficient Cash Available for Distribution,
such distributions to be made after any distributions required pursuant to Section 4.1(a) but prior
to any other distributions required under this Section 4.




     (c) Requirements Regarding Undistributed Cash. Cash Available for Distribution that is not
distributed pursuant to Sections 4.1(a) and 4.1(b) shall, unless used by the Company to satisfy a
requirement set forth herein, either be (i) distributed to the Managing Member on a weekly basis,
or at such other times as are determined by the Managing Member, in such amounts as are determined
by the Managing Member; provided that no distributions shall be made pursuant to this
Section 4.1(c)(i) unless (A) at the time such distribution is otherwise permitted to be made, Cash
Available for Distribution is at least equal to the sum of (x) the amounts required to be
distributed on the following Class A Distribution Date pursuant to Section 4.1(a)(i) plus (y) the
amounts required to be distributed on the following Class B Distribution Date pursuant to
Section 4.1(a)(ii) plus (z) the amounts proposed to be distributed to the Managing Member on the
current Managing Member Distribution Date pursuant this Section 4.1(c)(i); (B) Profits of the
Company for the current Allocation Year through such Managing Member Distribution Date (calculated
as if such date were the last day of the Allocation Year) equal or exceed the amounts required to
be distributed pursuant to Section 4.1(a)(i) and (a)(ii) as of such Managing Member Distribution
Date; and (C) at the time of such distribution no Class A Notice Event, Liquidating Event or other
event or condition that, but for the requirement that time elapse or notice be given, or both,
would constitute a Class A Notice Event or Liquidating Event has occurred and is continuing or
would result from any such distribution, or (ii) invested in Permitted Assets.



     (d) Limitation. Notwithstanding any provision to the contrary contained in this Agreement,
the Company shall not make a distribution to a Member on account of its Membership Interests if
such distribution would violate the Act or other applicable law.



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     4.2 Amounts Withheld.



     All amounts properly withheld pursuant to the Code or any provision of any state, local, or
foreign tax law with respect to any payment, distribution, or allocation to the Company or the
Members shall be treated as amounts paid or distributed, as the case may be, to the Members with
respect to which such amount was withheld pursuant to this Section 4.2 for all purposes under this
Agreement. The Company is authorized to withhold from payments and distributions, or with respect
to allocations, to the Members, and to pay over to any federal, state, and local government or any
foreign government, any amounts required to be so withheld pursuant to the Code or any provisions
of any other federal, state, or local law or any foreign law, and shall allocate any such amounts
to the Members with respect to which such amount was withheld.



     4.3 Limitations on Distributions.



     The Company shall make no distributions to the Members except (i) as provided in this
Section 4 and Section 13, or (ii) to the extent not inconsistent with Section 4 and Section 13 or
with the provisions of any of the Transaction Documents, as agreed to by all of the Members.



     4.4 Distributions and Payments to Members.



     It is the intent of the Members that no distribution or payment to any Member (including
distributions under Sections 4.1 and 13.2) shall be deemed a return of money or other property in
violation of the Act. The payment or distribution of any such money or property to a Member shall
be deemed to be a compromise within the meaning of Section 18-502(b) of the Act, and the Member
receiving any such money or property shall not be required to return any such money or property to
the Company, any creditor of the Company or any other Person. However, if any court of competent
jurisdiction holds that, notwithstanding the provisions of this Agreement, any Member is obligated
to return such money or property, such obligation shall be the obligation of such Member and not of
the Company, any other Member or the Managing Member. Any amounts required to be paid under such
obligation shall be treated as a permitted additional Capital Contribution pursuant to Section 2.2.



SECTION 5.




MANAGEMENT




     5.1 Authority of the Managing Member.



     The Managing Member constitutes a “manager” of the Company for purposes of the Act. The
Members acknowledge that the Company shall be managed by the Managing Member, in its capacity as a
manager of the Company, in accordance with Section 18-402 of the Act and subject to any
restrictions set forth in the Certificate of Formation or this Agreement, all powers to control and
manage the business and affairs of the Company and to bind the Company shall be exclusively vested
in the Managing Member, in such capacity, and the Managing Member may exercise all powers of the
Company and do all such lawful acts as are not by statute, the Certificate of Formation or this
Agreement directed or required to be exercised or done by the Members and in so doing shall have
the right and authority to take all actions that the Managing Member deems necessary, useful, or
appropriate for the management and conduct of the



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Company’s business and affairs and in the pursuit of the purposes of the Company, including
delegating the right and authority to take such actions to employees of the Managing Member as are
designated by the Managing Member or officers or employees of the Company (whether employed
directly or seconded from another GMI Entity); provided, however that any officers of the Company
shall have the authority to enter into the Transaction Documents or any other document as may be
contemplated from time to time. The Managing Member and each such employee or officer and any
other “manager,” including the Independent Director, if any, shall be an “authorized person” on
behalf of the Company, as such term is used in the Act.




     5.2 Duties and Obligations of the Managing Member.



     (a) The Managing Member shall take all actions that may be necessary or appropriate for the
(i) continuation of the Company’s and the Subsidiaries’ valid existence as a limited liability
company or corporation, as applicable, under the laws of the State of Delaware and of each other
jurisdiction in which such existence is necessary to protect the limited liability of the Members
or to enable the Company to conduct the business in which it is engaged, (ii) accomplishment of the
Company’s and the Subsidiaries’ purposes, including the acquisition, development, maintenance, and
preservation of the Permitted Assets, and operation of Property in accordance with the provisions
of this Agreement, the Transaction Documents and applicable laws and regulations, (iii) provision
or arrangement for all of the Company’s and the Subsidiaries’ management, reporting, legal, and tax
services, (iv) causation of the Company’s and the Subsidiaries’ business and assets to be
maintained separate and apart from the business and assets of each of the Members and their
Affiliates and any other Person, and (v) the making available of the books and records of the
Company and the Subsidiaries for the Members’ inspection.



     (b) Except as provided in Section 1.9(c), the Managing Member shall be under a fiduciary duty
to conduct the affairs of the Company and its Subsidiaries in the best interests of the Company and
of the Members, including the safekeeping and use of all of the Property and the use thereof for
the exclusive benefit of the Company. Without limiting the foregoing, the Managing Member agrees
to perform its duties hereunder in good faith and in accordance with prudent industry practices for
the consumer food business (and in any event using a degree of skill and attention no less than
which GMI exercises with respect to assets of such character that it manages for itself). The
Managing Member shall not take any affirmative action, and shall not fail to take any action
required of it under this Agreement or any Transaction Document, that would result in a breach or
violation by the Company or any of its Subsidiaries of, or conflict with, any provision of any
Transaction Document.



     (c) The Managing Member shall cause the Company and its Subsidiaries to conduct the business
and operations of the Company and its Subsidiaries separate and apart from that of any Member, any
Affiliates of the Company and its Subsidiaries, and any other Person. The Managing Member shall
take any action necessary to cause the Company and its Subsidiaries to satisfy the foregoing
obligations, including:



          (i) Segregating the assets of the Company and its Subsidiaries and not allowing funds or other
assets of the Company and its Subsidiaries to be commingled with the funds or other assets of, held
by, or registered in the name of, any Member, any Affiliates of the Company and its Subsidiaries,
or any other Person, and maintaining the assets of the Company



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and its Subsidiaries such that the assets of the Company and its Subsidiaries are readily
identifiable as assets of the Company and its Subsidiaries and not those of any other Person,
including maintaining bank accounts of the Company and its Subsidiaries separate from any other
Person and maintaining a custodial account with a financial institution (the “Custodian”) whose
unsecured and unsupported long-term debt or other similar obligations is at all times rated “A2” or
better by Moody’s and “A” or better by S&P or that is a wholly owned subsidiary of a bank holding
company whose unsecured and unsupported long-term debt or other similar obligations is at all times
rated “A2” or better by Moody’s and “A” or better by S&P pursuant to a custodial agreement
regularly employed by the Custodian (the “Custodial Agreement”) pursuant to which the Company
shall, upon acquiring any interest in a Finance Note, promptly cause the instrument evidencing such
Finance Note to be delivered to the Custodian to be held by the Custodian subject to and in
accordance with the Custodial Agreement, provided that the Managing Member shall cause the
Custodial Agreement to provide that all Finance Notes held by the Custodian shall be delivered to
the Liquidator upon its request;




          (ii) Maintaining books and financial statements and records of the Company and its
Subsidiaries separate from the books and financial statements and records of any Member, any
Affiliates of the Company and its Subsidiaries, or any other Person, and observing all procedures
and organizational formalities of the Company and its Subsidiaries, including those required by
this Agreement or the Act, including maintaining minutes of meetings of the Company and its
Subsidiaries and acting on behalf of the Company and its Subsidiaries only pursuant to due
authorization of the managers or directors of the Company and its Subsidiaries or the Members, as
applicable;




          (iii) Maintaining the A-Rated Securities and other certificated ownership securities and
interests of the Company and its Subsidiaries to be held in a custodial account at a reputable
financial institution located in the United States established for the safekeeping of such
certificated ownership securities and interests and separate from the certificated ownership
securities and interests of any Member, any Affiliates of the Company and its Subsidiaries or the
Members, as applicable;




          (iv) Conducting their dealings with third parties, including the Members and Affiliates of the
Company and its Subsidiaries, and otherwise holding the Company and its Subsidiaries out to the
public, in the Company’s and its Subsidiaries own name, as separate and independent entities;




          (v) Using separate telephone numbers and separate stationery, invoices, and checks or, in the
case of invoices, (A) purchase invoices which clearly distinguish the obligations of the Company
and its Subsidiaries from the obligations of any other Person and (B) sales invoices which clearly
distinguish products sold by the Company and its Subsidiaries from products sold by any other
Person, and, to the extent reasonably required in light of its contemplated business operations,
maintaining offices separate from the offices of any Affiliate of the Company and its Subsidiaries
or other Person and conspicuously identifying such office as offices of the Company and its
Subsidiaries;




          (vi) Conducting their dealings with third parties, including the Members and Affiliates of the
Company and its Subsidiaries, on an arm-length’s basis by, among other things,




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paying to any such third party fair value for shared overhead or for any services or leased
premises provided by such third party or any of their employees or agents;




          (vii) For purposes of transacting business on an arm’s-length basis with a GMI Entity,
(x) maintain and periodically update transfer pricing schedules in accordance with the principles
outlined in Code Section 482 and the corresponding Regulations and (y) incorporate rates prescribed
in such schedules in such business; provided that such actions cannot reasonably be anticipated to,
and do not, (a) cause a decrease in the revenue or an increase in the expense of more than 10% in
the underlying intercompany transaction or (b) cause or result in any Class A Notice Event,
Liquidating Event or other event or condition that, but for the requirement that time elapse or
notice be given, or both, would constitute a Class A Notice Event or Liquidating Event;




          (viii) Filing their own tax returns, if any, as may be required under applicable law, to the
extent not part of a consolidated group or treated as a division of another taxpayer;




          (ix) Paying liabilities of the Company and its Subsidiaries out of the funds of the Company
and its Subsidiaries and not paying the liabilities of any other Person out of the funds of the
Company and its Subsidiaries;




          (x) Not guaranteeing, becoming obligated on, holding itself out as being obligated or
available to satisfy, acquiring or assuming the liabilities of any Member, any Affiliates of the
Company and its Subsidiaries, or any other Person, or pledging the assets of the Company and its
Subsidiaries for the benefit of any Member, any Affiliate of the Company and its Subsidiaries, or
any other Person;




          (xi) Correcting any known misunderstanding regarding the Company’s and its Subsidiaries’
separate and distinct legal identity and refraining from engaging in any activity that compromises
the separate legal identity of the Company and its Subsidiaries or the separateness of the assets;




          (xii) Not forming, or causing to be formed, any Subsidiaries, except wholly owned Subsidiaries
engaged in a Permitted Line of Business or wholly owned Subsidiaries that hold Permitted Assets;




          (xiii) Ensuring that the Company at all times controls each of its Subsidiaries and that the
Managing Member at all times has the authority to act on behalf of each of the Company’s
Subsidiaries for purposes of this Section 5.2;




          (xiv) Ensuring that its capitalization is adequate in light of its business and purpose;




          (xv) Allocating fairly and reasonably the salaries of, and the expenses related to providing
the benefits of, officers or other employees shared with any Member or any other Affiliate of the
Company and its Subsidiaries;




          (xvi) If the business of the Company and its Subsidiaries is so limited as to reasonably be
conducted from the premises of an Affiliate of the Company and its Subsidiaries,




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allocating fairly and reasonably any overhead for office space shared with any Member or any
other Affiliate of the Company and its Subsidiaries;




          (xvii) Not identifying itself as being a division or a part of any other Person other than for
purposes of consolidated financial reporting under GAAP, and, except to the extent such
characterization is required for purposes of GAAP financial reporting of another Person, not
permitting any Person to identify the Company and its Subsidiaries as being a division or a part of
such Person;




          (xviii) Not acquiring any securities or obligations of any Affiliate of the Company and its
Subsidiaries, other than as contemplated by this Agreement and the Transaction Documents;




          (xix) Causing the financial statements of the Company and its Subsidiaries to be prepared in
accordance with GAAP in a manner that indicates the separate existence of the Company and its
Subsidiaries and the assets and liabilities, including marking in any consolidated financial
statements of any Member or any Affiliate of the Company and its Subsidiaries that includes the
financial statements of the Company and its Subsidiaries with notes that clearly state that the
Company and its Subsidiaries are separate legal entities and that the assets will be available
first and foremost to satisfy the claims of the creditors of the Company and its Subsidiaries; and




          (xx) Not being bound by the business decisions of its Members or its managers unless such
business decisions have been approved in accordance with the governance procedures set forth
herein; provided that failure by the Company and its Subsidiaries to comply with any of the
foregoing shall not affect the status of the Company and its Subsidiaries as separate legal
entities.




     (d) The Managing Member shall notify the Members of the occurrence of any Class A Notice Event
or Liquidating Event or any event which with notice or lapse of time or both would constitute a
Class A Notice Event or Liquidating Event and the action which the Managing Member has taken or
proposes to take with respect thereto, promptly but no later than five (5) Business Days, after the
Managing Member has actual knowledge of such occurrence.



     (e) The Managing Member has provided to the Company a certificate of an officer or authorized
representative naming the Responsible Officer that will be responsible for the management and
operations of the Company in accordance with this Section 5 until such time as the Managing Member
has provided to the Company another certificate naming others of its officers or authorized
representatives to be Responsible Officers, and the Managing Member hereby covenants and agrees
that such Responsible Officers shall maintain the separateness of the Company’s operations and
otherwise comply with all of the terms of this Agreement.



     (f) The Managing Member shall, upon the request of a Class A Limited Member, convert such
Member’s Class A Limited Membership Interests to Series B-2 Limited Membership Interests or a new
Series of Class B Limited Membership Interests. Any amendments to this Agreement necessary to
effect such a conversion shall be subject to the provisions of Section 10.



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     5.3 Restrictions on Authority of Managing Member



     (a) Notwithstanding any other provision of this Agreement, without the consent of all of the
Class A Limited Members (and, in the case of clauses (v), (ix), (xiv), (xv), (xvi) and (xvii)
below, without the consent of the Independent Director, if any), the Company shall not, and the
Managing Member shall not be authorized to, nor shall the Managing Member permit or cause the
Company to, nor shall the Company permit or cause any of its Subsidiaries to, take any of the
following actions:



          (i) Any act that would be in contravention of the Agreement or any Transaction Document or, if
on behalf of the Company or any of its Subsidiaries, inconsistent with the purposes of the Company
or any of its Subsidiaries;




          (ii) Any act that would, to the Managing Member’s knowledge, make it impossible to carry on
the normal business of the Company or any of its Subsidiaries;




          (iii) Possess or assign rights in the Property for other than a purpose of the Company or any
of its Subsidiaries;




          (iv) Perform any act that would subject any Member to liability for the liabilities or
obligations of the Company or any of its Subsidiaries;




          (v) Cause or permit the Company or any of its Subsidiaries to incur, assume, Guarantee, or
otherwise become liable for any Indebtedness (other than Permitted Indebtedness) or create any
Liens (other than Permitted Liens) on any Property;




          (vi) Make any loan or other advance of money to any Person (other than Permitted Loans) or
Guarantee obligations of any Person;




          (vii) Acquire, by purchase or contribution: (A) any assets other than Permitted Assets,
(B) any Permitted Asset that is in default at the time of its acquisition, (C) the capital stock
issued by any Subsidiary other than a direct or indirect wholly owned Subsidiary, or (D) in the
case of any Subsidiary of the Company, Permitted Assets described in clauses (vii) through (xii)
and clause (xv) of the definition of “Permitted Assets”;




          (viii) Make, purchase or acquire by contribution any Permitted Loans unless (A) the borrowing
evidenced by such Permitted Loan has been duly authorized by all required corporate action, such
action has been duly certified by the secretary or assistant secretary of the borrower, and such
certification has been delivered to the Company together with certificates as to incumbency and due
authorization of the officers of the borrower authorized to execute and deliver such Permitted
Loan, (B) such Permitted Loan is legal, valid, binding and enforceable in accordance with its terms
against the borrower, and (C) the GMI Guaranty with respect to such Permitted Loan, if any (1) has
been duly authorized by all required corporate action, such action has been duly certified by the
secretary or assistant secretary of GMI and such certification has been delivered to the Company
together with certificates as to incumbency and due authorization of the officers of GMI authorized
to execute and deliver such guaranty, (2) ranks at least pari passu with all other unsecured
Indebtedness of GMI, and (3) is legal, valid, binding, and enforceable in accordance with its terms
against GMI;




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          (ix) Commit or authorize any act of Voluntary Bankruptcy with respect to the Company or any of
its Subsidiaries, acquiesce in any act of Involuntary Bankruptcy with respect to the Company or any
of its Subsidiaries, or cause or permit the Company or any of its Subsidiaries to admit in writing
its inability to pay its debts generally;




          (x) Cause the Company to distribute to any Member any asset, other than as provided in this
Agreement and in the course of the liquidation of the Company;




          (xi) Cause or permit the Company or any of its Subsidiaries to merge, consolidate, or engage
in any other business consolidation with, or sell all or any substantial part of its assets to, any
Person; provided that the foregoing restriction shall not apply to transactions between any
Subsidiary of the Company and the Company or any other Subsidiary of the Company;




          (xii) Cause or permit the admission of any Member other than in accordance with Sections 2, 7,
or 11, issue any Membership Interests that rank senior to or pari passu with the Class A Limited
Membership Interests, or issue any ownership interests in any Subsidiary of the Company to any
Person other than the Company or any other Subsidiary of the Company;




          (xiii) Except as otherwise provided in Section 5.2(c)(vii), cause or consent to any amendment
to, modification of, or waiver of any of the rights and obligations of the Company or any of its
Subsidiaries under, or any termination of, or any assignment or delegation by any Person other than
the Company or any of its Subsidiaries of such Person’s rights or obligations under, or give any
consent or make any election under, or fail to enforce any of the material rights or remedies of
the Company or any of its Subsidiaries under, any Transaction Document; provided that any such
amendment, modification, waiver, consent, or election may be made without the consent of the
Class B Limited Members, in respect of any of the Amended and Restated Employee Seconding
Agreement, the Amended and Restated Contract Marketing Agreement, the Amended and Restated Contract
Operating Agreement, the Amended and Restated Contract Sales Agreement, the Amended and Restated
Services Agreement, the Permitted Intellectual Property License Agreements, the Permitted PP&E
License Agreement, the Receivables Purchase and Sale Agreements, and the Other GMI Entity
Agreements so long as no such amendment, modification, waiver, consent, or election, either
individually or in the aggregate, would have a Material Adverse Effect with respect to the Company
or any of its Subsidiaries;




          (xiv) Make discretionary distributions to the Members, except as expressly permitted herein;




          (xv) Change its independent accountants to other than a “Big Four” accounting firm;




          (xvi) Adopt or change a significant tax or accounting practice or principle, make any
significant tax or accounting election, or adopt any position for purposes of any tax return that
will have a Material Adverse Effect or a material adverse effect on any Limited Member (unless the
making of such election is expressly contemplated by this Agreement);




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          (xvii) To the fullest extent permitted by law, cause or permit the dissolution, winding up or
termination of the Company;




          (xviii) Cause or permit the Company to change its Fiscal Year;




          (xix) Fail to preserve and maintain the legal name, permits, licenses, approvals, privileges,
and franchises of the Company or any of its Subsidiaries or fail to comply with the requirements of
any applicable laws, rules, regulations, and orders of governmental or regulatory authorities, if
such failure, either individually or in the aggregate, has or could reasonably be expected to have
a Material Adverse Effect with respect to the Company;




          (xx) Lease, sublease, assign, license, or grant any other rights with respect to any of the
Properties (except as otherwise provided in the Transaction Documents); or




          (xxi) Enter into any Other GMI Entity Agreement without receiving a GMI Guaranty with respect
to such Other GMI Entity Agreement.




          (xxii) Without limiting the foregoing, cause or permit General Mills Missouri to (A) incur,
assume, Guarantee, or otherwise become liable for any Indebtedness or create any Liens or
(B) acquire, by purchase or contribution, any asset other than Permitted Loans.




     (b) Notwithstanding any other provision of this Agreement, without the consent of the Required
Class B Limited Members, the Company shall not, and the Managing Member shall not be authorized to,
nor shall the Managing Member permit or cause the Company to, nor shall the Company permit or cause
any of its Subsidiaries to, take any of the following actions:




          (i) Amend, modify or waive the Permitted Assets Requirement;




          (ii) Amend, modify or waive the Portfolio Requirements;




          (iii) Amend, modify or waive any of GMI’s obligations under the Exchange Agreement, provided
that the consent of the Required Class B Limited Members shall be determined solely with reference
to the holder or holders of the Series B-1 Limited Membership Interests for purposes of this
Section 5.3(b)(iii);




          (iv) Convert the Managing Membership Interest into any other Class or Series of Membership
Interests;




          (v) Make, purchase or acquire any Permitted Loans, other than Permitted Loans to GMI Entities;




          (vi) Issue any Membership Interests that rank senior to or pari passu with the Class B Limited
Membership Interests, provided that notwithstanding the foregoing, (x) additional Membership
Interests may be issued regardless of the ranking of such Membership Interests if such issuance
does not cause a downgrade of the credit ratings by Moody’s or S&P of the Series B-1 Limited
Membership Interests and (y) Class A Limited Membership Interests may be converted pursuant to
Section 5.2(f);




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          (vii) Issue any Membership Interests or sell or authorize or consent to the sale of any
Membership Interests if such action would cause the number of holders of Membership Interests,
excluding the holders of the Series B-1 Memberships Interests, to exceed thirty-five.




          (viii) Sell or authorize or consent to the sale of any Series B-2 Limited Membership Interests
currently outstanding to any Person that is not GMI or an Affiliate of GMI or another GMI Entity
if, subsequent to such sale, such Series B-2 Limited Membership Interests rank senior to the
Series B-1 Limited Membership Interests or Series B-2 Limited Membership Interests; provided that
notwithstanding this clause (viii), to the extent not otherwise prohibited by this Agreement,
currently outstanding Membership Interests may be sold regardless of the ranking of such Membership
Interests subsequent to such sale if such sale does not cause a downgrade of the credit ratings by
Moody’s or S&P of the Series B-1 Limited Membership Interests; and




          (ix) Issue any Indebtedness to third Persons in excess of an amount equal to fifteen percent
(15%) of the Capital Account of the Managing Member.




     (c) The Managing Member shall not amend Section 5.3(a) without the consent of all of the
Members. The Managing Member shall not amend Section 5.3(b) without the consent of the Required
Class B Limited Members and any amendment of Section 5.3(b) that is consented to by the Required
Class B Limited Members shall not require the consent of the Class A Limited Members.



     5.4 Compensation; Expenses.



     (a) Except as otherwise provided in Sections 5.4(b) and 5.5, the Managing Member shall not
receive any salary, fee, or draw for services rendered to, or on behalf of, the Company or any of
its Subsidiaries or otherwise in its capacity as a manager of the Company or a Member, nor shall
the Managing Member be reimbursed for any Expenses incurred by the Managing Member on behalf of the
Company or any of its Subsidiaries or otherwise in its capacity as a manager of the Company or a
Member.



     (b) The Managing Member will be paid an annual fee not to exceed $100,000 as compensation for
providing administrative and managerial services to the Company. The Managing Member may charge
the Company, and shall be reimbursed, for all reasonable out-of-pocket operating expenses necessary
for running the business of the Company and its Subsidiaries. Such reimbursement shall be treated
as operating expenses of the Company and its Subsidiaries and shall not be deemed to constitute
distributions to any Member of profit, loss, or capital of the Company or any of its Subsidiaries.



     5.5 Indemnification of the Managing Member.



     (a) Subject to Section 5.5(b), the Company, its receiver, or its trustee (in the case of its
receiver or trustee, to the extent of the Company’s assets) shall indemnify, save harmless, and pay
any and all reasonable out-of-pocket expenses incurred by the Managing Member or any officers,
directors, employees, or agents (each, a “Managing Member Indemnitee”) of the Managing Member in
connection with (i) the performance under this Agreement of its obligations as the




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manager of the Company, or (ii) for any extraordinary liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses, or disbursements of any kind or
nature whatsoever by reason of any act performed or omitted to be performed by the Managing Member
Indemnitee in connection with the business of the Company including attorneys’ fees incurred by a
Managing Member Indemnitee, in connection with the defense of any action based on any such act or
omission, which attorneys’ fees may be paid as incurred; provided that any payment for
indemnification owed by the Company to such Managing Member Indemnitee shall be subordinate in
right of payments to the payment in full of the Limited Member Preferred Return and any amount
owing or distributable to the Limited Members upon any liquidation of the Company.




     (b) Section 5.5(a) shall be enforced only to the maximum extent permitted by law and no
Managing Member Indemnitee shall be indemnified (i) for any liability for the fraud, bad faith,
willful misconduct, gross negligence, or failure to perform in accordance with this Agreement, of
itself or any of its Affiliates, (ii) for any Taxes or (iii) for any expenses, obligations, losses,
damages, penalties, actions, judgments, suits, costs or disbursements arising from or in connection
with any matter described in clause (d), (e) or (f) in Section 14.1.



     (c) Notwithstanding anything to the contrary in this Agreement, in no event will any
indemnification obligation of the Company or a receiver or trustee to indemnify, save harmless, or
pay all Expenses set forth in this Section 5.5 subject any Member to personal liability.



     (d) Indemnification Procedures.



          (i) In the event any claim is made by a third party against the Company, the Managing Member,
a Class A Limited Member, a Class B Limited Member, the Independent Director, the Liquidator, or
any affiliate, officer, director, agent, employee, successor or assign of any of them (each of them
being referred to as an “Indemnitee”), with respect to an actual or potential liability for which
any such Person is otherwise entitled to be indemnified under any provisions of Sections 5.5(a),
5.8(a), 6.7(a), and 13.10(b), and any such Person wishes to be indemnified with respect thereto,
such Person shall promptly notify the appropriate indemnitor(s) as provided in each such
Section (the “Indemnitor”); provided that the failure of any such Person to notify any Indemnitor
shall not relieve such Indemnitor from any liability which it otherwise may have to such Person
hereunder.




          (ii) Each Indemnitee may by notice to the Indemnitor take control of all aspects of the
investigation and defense of all claims asserted against it and may employ counsel of its choice
and at the expense of the Indemnitor; provided that (A) the amount of any settlement such
Indemnitee may enter into must be consented to by the Indemnitor, and no Indemnitee may in
connection with any such investigation, defense or settlement, without the consent of the
Indemnitor, require the Indemnitor or any of its Subsidiaries to take or refrain from taking any
action (other than payment of such a settlement amount) or to make any public statement, which such
Person reasonably considers to materially adversely affect its interest, (B) such Indemnitee may
not take control of any investigation, defense or settlement which could entail a risk of criminal
liability to the Indemnitor or any of its Subsidiaries, and (C) no Indemnitor may take control of
any investigation, defense or settlement, without the consent of any Indemnitee, if the liabilities
involved in such proceedings involve any material risk of the




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sale, forfeiture or loss of, or the creation of any Lien on, any property of such Indemnitee.
Upon the request of any Indemnitee, the Indemnitor shall use its best efforts to keep such
Indemnitee reasonably apprised of the status of those aspects of such investigation and defense
controlled by such Indemnitor and shall provide such information with respect thereto as such
Indemnitee may reasonably request. The Indemnitees shall cooperate with the Indemnitor in all
reasonable respects with respect thereto.




     5.6 Withdrawal.



     (a) The Managing Member may at any time deliver to the Members written notice of the Managing
Member’s intent to withdraw as a manager of the Company (within the meaning of the Act).



     (b) In the event that the Managing Member seeks to withdraw as a manager of the Company, the
Managing Member shall remain as a manager until a successor manager is appointed. A successor
manager shall be appointed by the Managing Member; provided that (i) any successor manager shall be
an Affiliate of GMI, (ii) at least 30 days’ written notice of such appointment is given to all the
Class A Limited Members and Class B Limited Members, and (iii) the Required Class A Limited Members
and the Required Class B Limited Members have approved of such appointment.



     (c) Any withdrawal of the Managing Member as a manager shall not affect the status of such
Managing Member as a Member, except to the extent otherwise provided in this Agreement, including,
without limitation, Section 11.



     Notwithstanding the foregoing, while GMI or any of its Subsidiaries is the Managing Member,
upon any Transfer by the Managing Member of all or any portion of the Managing Membership Interest
to GMI or any of its Subsidiaries satisfying the requirements set forth in Section 11.2(a), such
Permitted Transferee may, at the election of the Managing Member, succeed to the rights of the
Managing Member hereunder to be the manager of the Company (within the meaning of the Act), without
obtaining the consent of the Required Class A Limited Members and Required Class B Limited Members
and, in such event, such successor shall be deemed admitted to the Company as a manager (within the
meaning of the Act) and shall have all rights of the Managing Member hereunder.



     5.7 SPE Covenant re Status of Managing Member; Independent Director and Management
Limitations.



     (a) The Managing Member covenants that, unless the Required Class A Limited Members otherwise
consent, it shall at all times be a special purpose bankruptcy remote entity (an “SPE”) that is,
except as otherwise provided in subsection (e) below, a corporation (a “Corporate SPE”) whose
articles of incorporation: (1) limit the activities of the Corporate SPE to acting as the Managing
Member of the Company; (2) contain separateness covenants and limitations on activities
substantially similar to those set forth in Section 5.2(c); (3) require that one member of its
board of directors be an Independent Director; and (4) require the affirmative vote of the
Independent Director to approve, with respect to the Corporate SPE or the Company, any Bankruptcy,
sale of substantially all of the assets, merger or consolidation, change of accountants,



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or adoption or change of significant tax or accounting principle. The “Independent Director”
shall at all times be a Person who at the time of such appointment, at any time during the
preceding five (5) years, or at any time thereafter while serving as the Independent Director is
not (i) other than serving as an Independent Director or director of the Managing Member, a
director, officer, or employee of any Member or any Affiliate thereof, or of any creditor, customer
or supplier thereof that, in the case of a customer, accounted for more than a de minimis amount
(not to exceed 5%) of such Member’s or Affiliate’s gross revenues or, in the case of a creditor or
supplier, received more than a de minimis amount (not to exceed 5% of its gross revenues from
payments for goods and services sold to such Member or Affiliate, (ii) the direct or indirect legal
or beneficial owner of more than a de minimis amount (not to exceed 5% of ownership interests in
any Member or any Affiliate thereof, or (iii) any member of the immediate family of a Person
described in clause (i) or (ii). For purposes of this Agreement, any action that requires the
affirmative written consent of the Independent Director shall refer also to the consent of the
Corporate SPE or the LLC SPE, as appropriate, with the affirmative written consent of the
Independent Director. To the fullest extent permitted by applicable law, the Independent Director
shall consider only the interests of the Company, including, whether or not the Company is
insolvent, its respective creditors, in acting or otherwise voting on the matters referred to in
Section 5.3(a).



     (b) The Managing Member covenants that, unless the Required Class A Limited Members have
consented to it no longer being an SPE, its governing documents will provide that the Independent
Director shall have no duties or functions except as expressly provided in this Agreement or
pursuant to the certificate of incorporation of the Managing Member. In the event that the
Managing Member or any other Member approves of any action set forth in Section 5.3(a), or any
other action described in this Agreement, expressly requiring the consent or approval of the
Independent Director, it shall be a condition precedent to the taking of any such action that the
Independent Director approves such action. Unless any such proposed action is duly approved by the
Independent Director, the approval by the Managing Member or any other Member of such action shall
have no force or effect and the Company and such Members shall be prohibited from taking any action
to implement, or give effect to, such action. In the event that any such proposed action is
adopted by the Company or such Members, but is not approved by the Independent Director as provided
herein, and the Managing Member or any other Member or the Company takes any action to implement,
or give effect to, such action, the Independent Director shall have full power and authority to
enforce the provisions of this Agreement prohibiting the Company from implementing, or giving
effect to, such action; provided, however, that the Independent Director shall not have a duty, or
be under an obligation, to seek such enforcement.



     (c) The Managing Member covenants that, unless the Required Class A Limited Members have
consented to it no longer being an SPE, its governing documents will provide that (i) the
Independent Director may not delegate its duties, authorities, or responsibilities herein and
(ii) no resignation, retirement, or removal of the Independent Director, and no appointment of a
successor Independent Director, shall be effective until the successor Independent Director shall
have accepted his or her appointment.



     (d) The Managing Member may, if it so elects, convert to a limited liability company (the “LLC
SPE”) formed under the laws of the State of Delaware in which one of the members of the



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limited liability company is a Corporate SPE and whose limited liability agreement: (1) limits
the activities of the LLC SPE to acting as the Managing Member of the Company; (2) contains
separateness covenants and limitations on activities substantially similar to those set forth in
Section 5.2(c); and (3) requires the affirmative vote of the Independent Director of the Corporate
SPE to approve, with respect to the LLC SPE or the Company, any Bankruptcy, sale of substantially
all of the assets, merger, or consolidation, change of accountants, or adoption or change of
significant tax or accounting principle.



     5.8 Indemnification by the Managing Member.



     (a) Subject to Section 5.8(b), the Managing Member shall indemnify, save harmless, and pay all
Expenses of any Member, or any members, managers, partners, stockholders, officers, directors,
employees, and agents of such Member (each, a “Member Indemnitee”) against any reasonable
out-of-pocket costs paid directly by such Member or Member Indemnitee (including the reasonable
costs of investigation and litigation and of enforcing this Section 5.8) and resulting from any of
the activities of the Company. The indemnification contemplated by this Section 5.8(a) shall not
include any items of Loss allocated to any Limited Member in accordance with the Allocations.



     (b) Section 5.8(a) shall be enforced only to the maximum extent permitted by law and the
Members shall not be indemnified from any liability for fraud, bad faith, willful misconduct, gross
negligence, or a failure to perform in accordance with this Agreement.



     5.9 Portfolio Requirements.



     (a) Portfolio Requirements. The Company and, with respect to clause (iii) below, its
Subsidiaries (on a consolidated basis) shall at all times comply with the requirements of this
Section 5.9(a) (the “Portfolio Requirements”).



          (i) Asset Coverage. The (x) ratio of the aggregate Mark-to-Market Values of the Permitted
Assets held by the Company to the aggregate Preferred Return Capital of the Class A Limited Members
shall not, as of any given day, be less than 2:1 and (y) the ratio of the Portfolio Values (as
determined pursuant to Section 5.9(b)) of the Permitted Assets held by the Company to the aggregate
Preferred Return Capital of the Limited Members shall not, as of any given day, be less than 2:1.




          (ii) Financial Assets. The aggregate Mark-to-Market Value of Specified Financial Assets held
by the Company shall at all times be at least equal to the Specified Financial Investment Level at
such time; provided that the aggregate Mark-to-Market Value of Specified Financial Assets (other
than (i) Government Obligations and (ii) obligations issued or fully and unconditionally guaranteed
by GMI) held by the Company that are obligations of or issued by any single issuer or any of its
Affiliates shall not at any time exceed 5% of the aggregate Mark-to-Market Value of Specified
Financial Assets held by the Company at such time.




          (iii) Cash Flow. The ratio of the Cash Flow of the Company and its Subsidiaries for the four
most recent Fiscal Quarters to the Limited Member Preferred Return for the same four Fiscal
Quarters shall not be less than 1.5:1.




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          (iv) Profits. As of the end of each Fiscal Quarter, the ratio of (A) the Profits of the
Company for the current Allocation Year to such date (calculated as if such date were the last day
of the Allocation Year) to (B) the Limited Member Preferred Return for such period shall not be
less than 1:1.




     (b) Determination of Portfolio Values. For purposes of this Section 5.9, the Managing Member
shall determine a value (“Portfolio Value”) for each Permitted Asset held by the Company in a
manner reasonably consistent with the Mark-to-Market Methodology set forth in Section 13.11.



     (c) Sale or Pledge of the Permitted Assets. Subject to the limitations set forth in
Section 5.2, the Company and the Company’s Subsidiaries may sell or transfer Permitted Assets, or
cause any Permitted Assets to be sold or transferred on its or their behalf, to the extent such
sale or Transfer is permitted under the Transaction Documents and provided that (i) the proceeds of
such sale or Transfer are promptly reinvested in Permitted Assets and (ii) after giving effect to
any such sale or Transfer the Portfolio Requirements shall be satisfied.



     5.10 Board of Directors.



     (a) Board Triggering Events. In the event that, notwithstanding the proviso in
Section 4.1(a)(ii) prohibiting distributions of Class B Limited Member Preferred Return in certain
circumstances, the Company fails for six consecutive Class B Distribution Periods to distribute the
full amount of Series B-1 Limited Member Preferred Return for such Class B Distribution Period; (a
“Board Triggering Event”), the Managing Member will cause the Company to create a board of
directors (the “Board of Directors”).



     (b) Directors. The Board of Directors shall consist of up to nine (9) directors (each, a
“Director”) or such other number of Directors as the Members shall agree upon, of which: (i) the
Required Class A Limited Members, voting as a separate class, will have the right (but not the
obligation) to appoint one (1) Director; (ii) the holders of two-thirds of any outstanding
Series B-1 Limited Membership Interests that are held by holders other than GMI and its Affiliates,
voting as a separate class, will have the right (but not the obligation) to appoint one (1)
Director; (iii) the holders of two-thirds of any outstanding Series B-2 Limited Membership
Interests that are held by holders other than GMI and its Affiliates, voting as a separate class,
will have the right (but not the obligation) to appoint two (2) Directors; and (iv) the Managing
Member will appoint five (5) Directors or as many Directors as shall be necessary to provide the
Managing Member with a majority of the votes on the Board of Directors. No individual Director
shall constitute a “manager” within the meaning of the Act.



     (c) Management Responsibilities. Following the creation of a Board of Directors, the Board of
Directors will automatically succeed to all of the Managing Member’s management responsibilities
under this Agreement (other than under this Section 5.10) and shall have all of the rights of the
Managing Member under this Section 5 including, without limitation, the right to delegate the right
and authority to manage and conduct the Company’s business and affairs to officers or employees
(whether employed directly or seconded from another GMI Entity) of the Company. The
responsibilities and authority of the Board of Directors shall be subject to the limitations and
restrictions on the authority of the Managing Member (including the restrictions



75









 







set forth in Section 5.3). All actions taken by the Board of Directors shall require the
affirmative vote of a majority of its Directors.



     (d) Meetings of the Board of Directors. The Board of Directors shall meet at such times and
places as shall be determined by the Board of Directors at its initial meeting. The Board of
Directors also shall determine notice, quorum, voting, and meeting requirements and procedures at
the initial meeting.



     (e) Compensation. Each Director who is not an Affiliate of GMI or Company or otherwise
associated with any of the Company’s Affiliates or service providers will be paid a modest fee for
attendance at meetings of the Board of Directors, such amount to be determined by the Board of
Directors in accordance with customary market practices.



     (f) Indemnification. Each Director shall be indemnified to the same extent as the Managing
Member and for such purposes, each Director shall be deemed to be a “Managing Member Indemnitee”
for purposes of Section 5.5.



     (g) Dissolution. Upon the determination by the Board of Directors of the satisfaction of the
Board Triggering Event that gave rise to the creation of a Board of Directors, the Board of
Directors shall be dissolved, each Director shall be removed, and all management responsibilities
and restrictions under this Agreement shall revert back to the Managing Member.



SECTION 6.




ROLE OF MEMBERS




     6.1 Rights or Powers.



     Other than the rights and powers expressly granted to the Managing Member pursuant to
Section 5 and the rights expressly granted to the Members pursuant to Section 5.10, the Members, in
their capacities as members of the Company, hereby agree not to exercise any right or power to take
part in the management or control of the Company or its business and affairs and shall not have any
right or power to act for or bind the Company in any way. Without limiting the generality of the
foregoing, the Members, in such capacities, have all of the rights and powers specifically set
forth in this Agreement and, to the extent not inconsistent with this Agreement, in the Act.



     6.2 Voting Rights.



     No Member has any voting right except with respect to those matters specifically reserved for
a Member vote that are set forth in this Agreement and as required in the Act.



     6.3 Meetings and Consents of the Members.



     (a) Meetings of the Members may be called by the Managing Member and shall be called upon the
written request of the Required Class A Limited Members or the Required Class B Limited Members.
The call shall state the nature of the business to be transacted. Notice of any such meeting shall
be given to all Members not less than five (5) Business Days nor more than



76









 







thirty (30) days prior to the date of such meeting; provided that the Members may agree in
writing to a shorter notice period than five (5) Business Days. Members may vote in person, by
proxy or by telephone at such meeting and may waive advance notice of such meeting. Whenever the
vote or consent of Members is permitted or required under this Agreement, such vote or consent may
be given at a meeting of the Members or may be given in accordance with the procedure prescribed in
Section 6.4. Except as otherwise expressly provided in this Agreement, the unanimous vote or
consent of the Members (or any Class or Series of Limited Membership Interests) shall be required
to constitute the act of the Members (or any Class or Series of Limited Membership Interests) or
the consent of the Members (or any Class or Series of Limited Membership Interests).



     (b) For the purpose of determining the Members entitled to vote on, or to vote at, any meeting
of the Members or any adjournment thereof, the Managing Member or the Member requesting such
meeting may fix, in advance, a date as the record date for any such determination. Such date shall
not be more than thirty (30) days nor less than five (5) Business Days before any such meeting.



     (c) Each Member may vote in any manner permitted under the Act. Each Member may authorize any
Person or Persons to act for it by proxy on all matters in which a Member is entitled to
participate, including waiving notice of any meeting, or voting, or participating at a meeting.
Every proxy must be signed by the Member or its attorney-in-fact or delivered by means of
electronic communication. No proxy shall be valid after the expiration of eleven (11) months from
the date thereof unless otherwise provided in the proxy. Every proxy shall be revocable at the
pleasure of the Member executing it.



     (d) Each meeting of Members shall be conducted by the Managing Member or such other individual
Person as the Managing Member deems appropriate pursuant to such rules for the conduct of the
meeting as the Managing Member or such other Person deems appropriate.



     6.4 Procedure for Consent.



     In any circumstances requiring the agreement, approval, or consent of the Members specified in
this Agreement, such agreement, approval, or consent may, except where a standard for such
agreement, approval, or consent is provided for expressly in this Agreement and notwithstanding any
provisions of law or in equity to the contrary, be given or withheld in the sole and absolute
discretion of the Members in any manner permitted under the Act, and each Member shall be entitled
to consider only such factors and interests as it desires, including its own interests, and shall
have, to the fullest extent permitted by applicable law, no duty or obligation to give any
consideration to any interest of or factors affecting the Company or any other Person. If the
Managing Member receives the necessary agreement, approval, or consent of the Members to such
action, the Managing Member shall be authorized and empowered to implement such action without
further authorization by the Members. Such agreement, approval, or consent must be obtained in
writing or by facsimile or electronic communication.



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     6.5 Withdrawal/Resignation.



     Except as otherwise provided in Sections 4, 7, 11, and 13, no Member shall demand or receive a
return on or of its Capital Contributions or withdraw or resign as a Member from the Company
without the affirmative written consent of all Members. If any Member resigns or withdraws from
the Company in breach of this Section 6.5, such resigning or withdrawing Member shall not be
entitled to receive any distribution under this Agreement. Under circumstances requiring a return
of any Capital Contribution, no Member has the right to receive Property other than Cash except as
may be specifically provided herein.



     6.6 Member Compensation.



     No Member shall receive any interest, salary, or draw for services rendered on behalf of the
Company, or otherwise, in its capacity as a Member, except as otherwise provided in Section 5.4(b).



     6.7 Indemnification of Limited Members.



     (a) Subject to Section 6.7(b), the Company, its receiver or its trustee (in the case of its
receiver or trustee, to the extent of Property) shall indemnify, save harmless, and pay all
Expenses of any Limited Member, and any members, managers, partners, stockholders, officers,
directors, employees, or agents of such Limited Member (each, a “Limited Member Indemnitee”)
relating to any liability or damage incurred by reason of any act performed or omitted to be
performed by such Limited Member or Limited Member Indemnitee in connection with the business of
the Company, including attorneys’ fees incurred by such Limited Member or Limited Member
Indemnitee in connection with the defense of any action based on any such act or omission, which
attorneys’ fees may be paid as incurred, including all such liabilities under federal and state
securities laws (including the Securities Act) as permitted by law.



     (b) Section 6.7(a) shall be enforced only to the maximum extent permitted by law and the
Limited Members shall not be indemnified from any liability for fraud, bad faith, willful
misconduct, gross negligence, or a failure to perform in accordance with this Agreement.



     6.8 Members’ Liability.



     (a) Except as otherwise provided herein and by applicable law, no Member shall be liable under
a judgment, decree, or order of a court, or in any other manner for any other obligations or
liabilities of the Company solely by reason of being a Member. A Member shall be liable only to
make its Capital Contribution pursuant to Section 2.1 and shall not be required to restore a
deficit balance in its Capital Account (other than pursuant to Section 13.3) or to lend any funds
to the Company or, after its Capital Contribution has been made pursuant to Section 2.1, to make
any additional contributions, assessments, or payments to the Company; provided that a Member may
be required to repay distributions made to it as provided in the Act, subject to Section 4.4.



     (b) Notwithstanding anything to the contrary in this Agreement, in no event will any
indemnification obligation of the Company or a receiver or trustee to indemnify, save harmless, or
pay all Expenses set forth in Section 6.7 subject any Member to personal liability.



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     6.9 Partition.



     While the Company remains in effect or is continued and prior to the occurrence of a
Liquidating Event, each Member agrees not to have any Property partitioned or file a complaint or
institute any suit, action, or proceeding at law or in equity to have any Property partitioned, and
each Member, on behalf of itself, its successors, and its assigns hereby waives any such right.



     6.10 Transactions Between a Member and the Company.



     (a) Except as otherwise provided by applicable law, any Member may, but shall not be obligated
to, enter into the transactions described in Sections 1.9(c) and 1.9(d) and transact other business
contemplated by the Transaction Documents with the Company and have the same rights and obligations
when transacting such business with the Company as a Person or entity who is not a Member. A
Member, any Affiliate thereof or an employee, stockholder, agent, director, manager, or officer of
a Member or any Affiliate thereof, may also be an employee or a manager of the Company.



     (b) No Member shall, or shall permit its Affiliates to, guarantee any liabilities of the
Company or become obligated on, or hold itself out as being obligated or available to satisfy, any
liabilities of the Company.



SECTION 7.




PREFERRED RETURN RESETS AND REMARKETINGS




     7.1 Class A Preferred Return Rate Reset.



     (a) In General. The Class A Preferred Return Rate is subject to reset as provided herein on
each Class A Reset Date on which any Class A Membership Interests are outstanding; provided that
(i) in the case of a Failed Class A Mandatory Remarketing (as defined below) on any Class A Reset
Date, a reset date shall occur on the three (3) month anniversary of such Class A Reset Date; and
provided, further, that, notwithstanding any provision to the contrary in this Section 7.1(a)(i),
in the event of a Failed Class A Mandatory Remarketing that occurs as a result of any failure of
(i) the Class A Remarketing Agent to completely perform its obligations under the Class A
Remarketing Agreement or (ii) a Secondary Purchaser to settle the purchase and sale of the Class A
Limited Membership Interests on or before the relevant Class A Reset Date, the Company shall cause
a new Class A Mandatory Remarketing to be held as soon as practicable (and, in no event, more than
10 Business Days) after such Failed Class A Mandatory Remarketing. The Class A Preferred Return
Rate so determined on such Class A Reset Date shall remain in effect until the following Class A
Reset Date. In connection with each Class A Reset Date, the Capital Accounts of all the Members
(including the Class A Limited Members) shall be redetermined as set forth in Section 7.1(d).



     (b) Class A Reset Procedure. During the period commencing ninety (90) days and ending
forty-five (45) days prior to each Class A Reset Date, the Company and the holders of all the
Class A Limited Membership Interests shall consult with one another to determine whether they are
able to agree upon a Class A Preferred Return Rate in advance of such Class A Reset



79









 







Date. In the event agreement is reached at least forty-five (45) days before such Class A
Reset Date, the Class A Preferred Return Rate will be reset as of such Class A Reset Date pursuant
to such agreement and will remain in effect until the following Class A Reset Date. In the event
no agreement pursuant to this Section 7.1(b) is reached at least forty-five (45) days before the
relevant Class A Reset Date, the Company shall, on a date no later than such Class A Reset Date,
conduct an auction or mandatory remarketing (a “Class A Mandatory Remarketing”) to set the
applicable Class A Preferred Return Rate pursuant to Section 7.1(c)(i). In the event of any
Class A Mandatory Remarketing, each holder of Class A Limited Membership Interests hereby agrees
that the Company shall have the right to, and the Company shall, enter into a Class A Remarketing
Agreement with the Class A Remarketing Agent to effect the sale of the Class A Limited Membership
Interests to the Person or Persons providing the Winning Bid Rate in such Class A Mandatory
Remarketing, and each holder of Class A Limited Membership Interests shall be bound by the Class A
Remarketing Agreement; provided that any Class A Remarketing Agreement shall not obligate any
holder to make or provide any representation, warranty, or covenant, or take any action or enter
into an agreement other than to sell the Class A Limited Membership Interests, pursuant to a
Secondary Purchase Agreement, if there is a successful Class A Mandatory Remarketing.



     (c) Class A Remarketing Procedure. Any Class A Mandatory Remarketing of the Class A Limited
Membership Interests shall be conducted pursuant to the provisions of this Section 7.1(c).



          (i) In the event that any such Class A Mandatory Remarketing occurs, the Company shall, by
notice (the “Class A Remarketing Notice”) delivered to the Class A Remarketing Agent and the
Class A Members no later than five (5) Business Days prior to the relevant Class A Mandatory
Remarketing Date, select and specify three (3) Reference Corporate Dealers. The Class A
Remarketing Notice shall set forth such information as is necessary to facilitate the Class A
Mandatory Remarketing, including, without limitation, the Class A Remarketing Date and the Class A
Mandatory Purchase Price and Preferred Return Capital per Class A Limited Membership Interest. The
Class A Remarketing Agent shall request that Bids be received from such Reference Corporate Dealers
and all other bidders by 3:00 p.m., New York City time, on the Business Day immediately preceding
the relevant Class A Mandatory Remarketing Date. The Company, any holder of Class A Limited
Membership Interests, the Class A Remarketing Agent, or an Affiliate of any such Person may, at its
option, enter a Bid but shall have no obligation to do so. The Class A Remarketing Agent shall
disclose to the Company the Bids obtained and determine the lowest single Bid Rate at which the
Class A Remarketing Agent will be able to remarket all of the Class A Limited Membership Interests
at a purchase price equal to the Class A Mandatory Purchase Price to at least one (1), but in no
event more than ten (10), purchasers (the “Winning Bid Rate”), from among the Bids obtained by 3:00
p.m., New York City time, on the Business Day immediately preceding the relevant Class A Mandatory
Remarketing Date; provided that in connection with any sale to such bidders, the Class A Limited
Membership Interests held by RBDB shall be deemed at all times to be held by ten (10) Persons. The
Winning Bid Rate determined by the Class A Remarketing Agent, absent manifest error, shall be
binding and conclusive upon the Company and all holders of the Class A Limited Membership
Interests; provided that each of the holders of the Class A Limited Membership Interests shall have
the option to decline to accept the Winning Bid Rate and may



80









 






continue to hold their Class A Limited Membership Interests with the current Class A Preferred
Return Rate remaining in effect until the following Class A Reset Date.




          (ii) On the Business Day immediately preceding the relevant Class A Mandatory Remarketing
Date, the Class A Remarketing Agent, in consultation with the Company, shall designate as the
Secondary Purchasers (the “Secondary Purchasers”) the Persons providing Bids at the Winning Bid
Rate. If the Winning Bid Rate is specified in Bids submitted by two or more bidders, the Class A
Remarketing Agent shall, in consultation with the Company, designate such bidders as it deems
appropriate to be the Secondary Purchasers; provided, however, that there may not be more than ten
(10) Secondary Purchasers and such purchases must be made in accordance with the conditions of
Transfer set forth in this Agreement. If any holder of the Class A Limited Membership Interests
submitted a Bid containing the Winning Bid Rate, it shall continue to hold the Class A Limited
Membership Interests with the Preferred Return Rate equal to the Winning Bid Rate; provided that
the provisions of Section 7.1(c)(iii) shall not apply to such holder. Settlement of the sale of
the Class A Limited Membership Interests to the Secondary Purchaser shall occur on the relevant
Class A Reset Date, all as provided in Section 7.1(c)(iii).




          (iii) On or before the Class A Mandatory Remarketing Date, each Secondary Purchaser shall
enter into a Secondary Purchase Agreement for the purchase by such Secondary Purchaser, at the
Class A Mandatory Purchase Price, of the applicable number of Class A Limited Membership Interests
with a Class A Preferred Return Rate equal to the Winning Bid Rate. If, for any reason, (i) a
successful Class A Mandatory Remarketing does not occur, (ii) a successful Class A Mandatory
Remarketing shall have occurred pursuant to this Section 7.1(c) but settlement of the purchase and
sale of any Class A Limited Membership Interest does not occur on or before the corresponding
Class A Reset Date, or (iii) a Class A Limited Member is not provided reasonable opportunity to
enter a Bid in connection with the relevant Class A Mandatory Remarketing, then, in any such case,
a Failed Class A Mandatory Remarketing shall be deemed to have occurred on such Class A Mandatory
Remarketing Date. To consummate the settlement of the purchase and sale of the Class A Limited
Membership Interests, each Secondary Purchaser shall on the relevant Class A Reset Date pay to the
holders selling the applicable Class A Limited Membership Interests (the “Selling Class A Holders”)
an amount in Dollars and immediately available funds equal to the Class A Mandatory Purchase Price
for such Class A Limited Membership Interests. Delivery of the Class A Limited Membership
Interests shall be made on a delivery when payment is made basis. Any outstanding Class A Limited
Membership Interests purchased on the relevant Class A Reset Date shall be deemed to be Transferred
to each of the applicable Secondary Purchasers; provided that payment has been timely received from
all such Secondary Purchasers pursuant to this Section 7.1(c)(iii). Upon consummation of the
purchase and sale of the Class A Limited Membership Interests, the Secondary Purchasers shall be
admitted as Class A Limited Members with respect to the Class A Limited Membership Interests
purchased pursuant to the Secondary Purchase Agreements, and the Selling Class A Holders shall be
deemed to have withdrawn with respect to such Class A Limited Membership Interests, and the Company
shall cause the Membership Registry attached hereto as Schedule A to reflect the Secondary
Purchasers’ ownership of the Class A Limited Membership Interests that they purchased pursuant to
the Secondary Purchase Agreements.




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          (iv) If for any reason (including failure of the Class A Remarketing Agent to receive a Bid
from any of the three (3) Reference Corporate Dealers) settlement of the purchase and sale of all
of the Class A Limited Membership Interests as provided in Section 7.1(c)(iii) does not occur on or
before the corresponding Class A Reset Date (a “Failed Class A Remarketing”), the holders of the
Class A Limited Membership Interests shall continue to hold their Class A Limited Membership
Interests and the Class A Spread shall be increased by 0.75% until the next Class A Reset Date.



          (v) The Company shall be responsible for payment of the Class A Remarketing Fee and all other
fees associated with any Class A Remarketing, including customary fees for trust companies and
brokers, as well as any placement fee required in respect of the first Class A Remarketing.




     (d) Purchase Price; Capital Accounts.



          (i) Class A Mandatory Remarketing. In connection with any Class A Remarketing that is a
Class A Mandatory Remarketing, the purchase price per Class A Limited Membership Interest being
remarketed (the “Class A Mandatory Purchase Price”) shall be equal to the amount derived by
dividing (x) sum of (1) the aggregate Capital Accounts of the Class A Limited Members determined
pursuant to Section 7.1(d)(ii)), plus (2) any accrued but undistributed Class A Limited Member
Preferred Return with respect to such Class A Limited Membership Interest from and including the
relevant Reset Valuation Date to but excluding the relevant Class A Reset Date, by (y) the number
of Class A Limited Membership Interests then outstanding; provided that if, at the time of the
Class A Mandatory Remarketing, there are any amounts owing to the Selling Class A Holders from the
Company, then the amount of the Class A Mandatory Purchase Price shall include such amounts and the
Secondary Purchasers shall succeed to all rights of the Selling Class A Holders to receive such
amounts from the Company. In the event the Class A Limited Membership Interests are being
remarketed to more than one purchaser, the Class A Mandatory Purchase Price shall be appropriately
apportioned among such purchasers based on the relative number of Class A Limited Membership
Interests being purchased by each such purchaser.




          (ii) Determination of Capital Account. For purposes of this Section 7.1(d), the Class A
Limited Members’ Capital Accounts shall be determined as of the applicable Reset Valuation Date by
(x) determining the Mark-to-Market Value of the Company’s Permitted Assets pursuant to
Section 13.11 as of the last day of the Fiscal Quarter preceding the Fiscal Quarter in which the
Reset Valuation Date occurs and adjusting the Gross Asset Values of all the Company’s Property
pursuant to subparagraph (ii) of the definition of “Gross Asset Value” in Section 1.10 as of the
Reset Valuation Date (assuming, for purposes of this Section 7.1(d)(ii), that, except as otherwise
provided in this Section 7.1(d)(ii), such Mark-to-Market Value remained unchanged since the last
day of such preceding Fiscal Quarter as of the applicable Reset Valuation Date and that the
Mark-to-Market Value of any Inventory or any asset acquired during the Fiscal Quarter in which the
Reset Valuation Date occurs is equal to the Gross Asset Value of such asset on the Reset Valuation
Date), and (y) allocating the Estimated Profits and Losses, and other items of Company income,
gain, loss, or deduction for the relevant Reset Valuation Allocation Year pursuant to Section 3;
provided that any amount included in the Capital Account of a Class A Limited Member as a result of
an allocation pursuant to Sections 3.1(h), 3.1(i), or 3.3(j) for



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which such Class A Limited Member is entitled to receive a distribution pursuant to
Section 4.1(b)(i) shall be deemed to have been distributed to such Class A Limited Member for
purposes this Section 7.1(d)(ii). Notwithstanding the provisions of the parenthetical in clause
(x) of the immediately preceding sentence, the Mark-to-Market Value of the Company’s Permitted
Assets shall take into account any financial activity during the Fiscal Quarter in which the Reset
Valuation Date occurs to the extent necessary to account for (i) any asset dispositions during such
Fiscal Quarter and (ii) with respect to any Subsidiary of the Company that is a “subchapter C”
corporation under the Code, any earnings and profits of such Subsidiary during such Fiscal Quarter.
In the event that a Class A Mandatory Remarketing is held, as provided in Section 7.1(a), on the
three (3) month anniversary of any Class A Reset Date with respect to which a Failed Class A
Mandatory Remarketing occurred or subsequent to a Failed Mandatory Remarketing that occurred as a
result of any failure of (i) the Class A Remarketing Agent to completely perform its obligations
under the Class A Remarketing Agreement or (ii) a Secondary Purchaser to settle the purchase and
sale of the Class A Limited Membership Interests on or before the relevant Class A Reset Date, the
Capital Accounts of the Members shall be deemed to equal the amount determined pursuant to this
Section 7.1(d)(ii) in connection with such Failed Class A Mandatory Remarketing.




     7.2 Class B Remarketings.



     (a) In General. If the Managing Member or its designee does not elect to purchase the Series
B-1 Limited Membership Interests on a Scheduled Reset Date (including the initial Scheduled Reset
Date) pursuant to Section 11.9, the Managing Member may, but is not required, to conduct a
remarketing (a “Class B Optional Remarketing”) of the Series B-1 Limited Membership Interests to
reset the Series B-1 Preferred Return Rate on such Scheduled Reset Date. If the Managing Member
elects not to remarket any Series of Class B Limited Membership Interests, distributions on the
applicable Series of Class B Limited Membership Interests will be made at the Floating Rate until
such time as Class B Limited Membership Interests are purchased pursuant to Section 11.9 or
successfully remarketed in a Class B Interim Remarketing or a Class B Optional Remarketing at the
next Scheduled Reset Date. Notwithstanding any provision to the contrary herein, if the Managing
Member does not elect to purchase the Series B-1 Limited Membership Interests on the initial
Scheduled Reset Date, then the Managing Member shall elect to conduct a Class B Optional
Remarketing to reset the Series B-1 Preferred Return Rate on the initial Scheduled Reset Date. At
any time during a Floating Rate Period, the Managing Member may elect to reset the Class B
Preferred Return with respect to any Series of Class B Limited Membership Interests by remarketing
such Series (a “Class B Interim Remarketing”). A Fixed Rate that is determined pursuant to a Class
B Remarketing shall be in effect on the first day after the expiration of the then current Fixed
Rate Period or Floating Rate Period (in each case, a “Class B Reset Date”).



     (b) Election to Remarket; Determination of Preferred Return Capital and Mandatory Purchase
Price. If the Managing Member elects to reset the Class B Preferred Return Rate with respect to
any Series of Class B Limited Membership Interests to a new Fixed Rate on an applicable Class B
Reset Date, the Managing Member shall provide written notice (a “Class B Remarketing Notice”) of a
remarketing of such Series of Class B Limited Membership Interests to the applicable Class B
Remarketing Agent, and each holder of the Series of Class B Interests being remarketed, not more
than thirty-five (35) Business Days nor less than twenty



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(20) Business Days prior to the proposed Class B Remarketing Date. Such Class B Remarketing
Notice will: (1) describe the remarketing; (2) indicate that the new Fixed Rate Period will begin
on (and include) the applicable Class B Reset Date and end on (but exclude) the next occurring
Scheduled Reset Date; (3) indicate the proposed Class B Remarketing Date, which shall be a date not
more than thirty (30) Business Days nor less than one (1) Business Day prior to the related Class B
Reset Date; provided that, in the case of the first Class B Optional Remarketing, the Class B
Remarketing Date shall occur three (3) Business Days prior to the first Scheduled Reset Date and
settlement shall occur on such Scheduled Reset Date; (4) set forth the Class B Mandatory Purchase
Price per Class B Interest being remarketed, as determined pursuant to (1) in the case of a Class B
Optional Remarketing, Section 7.2(b)(i), and (2) in the case of a Class B Interim Remarketing,
Section 7.2(b)(ii); (5) indicate the Preferred Return Capital per Class B Interest being remarketed
determined as of the Reset Valuation Date; (6) indicate that the remarketing settlement date (the
“Class B Settlement Date”) shall be on the applicable Class B Reset Date; and (7) specify a date
not more than five (5) Business Days prior to the Class B Remarketing Date (the “Class B
Remarketing Election Date”) by which the holders of the applicable Class B Limited Membership
Interests must deliver a Class B Notice of Election (as defined below). The Managing Member shall
be permitted to terminate any such Class B Remarketing (other than the Class B Optional Remarketing
required to be held with respect to the initial Scheduled Reset Date) at any time prior to the
Class B Remarketing Election Date by providing notice of such termination to the applicable Class B
Remarketing Agent; provided that the Class B Mandatory Purchase Price and Preferred Return Capital
per Class B Limited Membership Interest set forth in the Class B Remarketing Notice may be
estimated so long as a supplemental Class B Remarketing Notice with the final Class B Mandatory
Purchase Price and Preferred Return Capital per Class B Limited Membership Interest is delivered no
later than ten (10) Business Days prior the proposed Class B Remarketing Date.




          (i) Class B Optional Remarketing. In connection with any Class B Remarketing of a Series of
Class B Limited Membership Interests that is a Class B Optional Remarketing, the purchase price per
Class B Limited Membership Interest being remarketed (the “Class B Mandatory Purchase Price”) shall
be equal to the amount derived by dividing (x) the sum of (1) the aggregate Capital Accounts of the
Class B Limited Members with respect to such Series determined pursuant to Section 7.2(b)(iii),
plus (2) any accrued but undistributed Class B Limited Member Preferred Return with respect to such
Class B Limited Membership Interests from and including the Reset Valuation Date to but excluding
the Class B Optional Remarketing Date, by (y) the number of Class B Limited Membership Interests of
such Series then outstanding; provided that, in the case of the Class B Optional Remarketing of the
Series B-1 Limited Membership Interests required to be held with respect to the initial Scheduled
Reset Date, if the Class B Mandatory Purchase Price is less than the amount derived by dividing
(x) the sum of (1) ninety percent of the initial Capital Account for such Series B-1 Limited
Membership Interests, plus (2) any accrued but undistributed Class B Limited Member Preferred
Return with respect to such Series B-1 Limited Membership Interests from and including the Reset
Valuation Date to but excluding the Class B Optional Remarketing Date by (y) the number of
Series B-1 Limited Membership Interests, the Class B Remarketing Agent shall terminate such Class B
Optional Remarketing and it shall be deemed for all purposes to constitute a failed remarketing.




          (ii) Class B Interim Remarketing. In connection with any Class B Interim Remarketing, the
Class B Mandatory Purchase Price per Class B Limited Membership Interest of



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a Series being remarketed shall be equal to the amount derived by dividing (x) the then
aggregate Preferred Return Capital of the Class B Limited Members with respect to such Series (or
if less, the aggregate Capital Accounts of the Class B Limited Members with respect to such
Series determined in accordance with Section 7.2(b)(iii) as if the Class B Interim Remarketing were
a Class B Optional Remarketing), by (y) the number of Class B Limited Membership Interests with
respect to such Series then outstanding. If the Preferred Return Capital per Class B Limited
Membership Interest of a Series being remarketed is the amount set forth in the parenthetical in
clause (x)(1) of the second preceding sentence, the Managing Member must deliver a certificate
issued by an appraiser of national standing selected in good faith by the Managing Member stating
that if the Capital Accounts of the Class B Limited Members with respect to the Series of Class B
Limited Membership Interests being remarketed were determined pursuant to Section 7.2(b)(iii), the
aggregate amount of such Capital Accounts so determined would be less than the then aggregate
Preferred Return Capital of the Class B Limited Members with respect to the Series of Class B
Limited Membership Interests being remarketed. The Preferred Return Capital per Class B Limited
Membership Interest being remarketed shall be equal to the amount derived by dividing (x) the then
aggregate Preferred Return Capital of the Class B Limited Members with respect to such Series being
remarketed, by (y) the number of Class B Limited Membership Interests of such Series then
outstanding.




          (iii) Determination of Capital Account. For purposes of this Section 7.2(b), the Class B
Limited Members’ Capital Accounts with respect to the Series of Class B Limited Membership
Interests being remarketed shall be determined as of the Reset Valuation Date by (x) determining
the Mark-to-Market Value of the Company’s Permitted Assets pursuant to Section 13.11 as of the last
day of the Fiscal Quarter preceding the Fiscal Quarter in which the Reset Valuation Date occurs and
adjusting the Gross Asset Values of all the Company’s Property pursuant to subparagraph (ii) of the
definition of “Gross Asset Value” in Section 1.10 as of the Reset Valuation Date (assuming, for
purposes of this Section 7.2(b)(iii), that, except as otherwise provided in this
Section 7.2(b)(iii), such Mark-to-Market Value remained unchanged since the last day of such
preceding Fiscal Quarter as of the Reset Valuation Date and that the Mark-to-Market Value of any
Inventory or any asset acquired during the Fiscal Quarter in which the Reset Valuation Date occurs
is equal to the Gross Asset Value of such asset on the Reset Valuation Date), and (y) allocating
the Estimated Profits and Losses, and other items of Company income, gain, loss, or deduction for
the relevant Reset Valuation Allocation Year pursuant to Section 3; provided that any amount
included in the Capital Account of a Class B Limited Member as a result of an allocation pursuant
to Sections 3.1(h), 3.1(i), or 3.3.(j) for which such Class B Limited Member is entitled to receive
a distribution pursuant to Section 4.1(b)(ii) shall be deemed to have been distributed to such
Class B Limited Member for purposes this Section 7.1(b)(iii). Notwithstanding the provisions of
the parenthetical in clause (x) of the immediately preceding sentence, the Mark-to-Market Value of
the Company’s Permitted Assets shall take into account any financial activity during the Fiscal
Quarter in which the Reset Valuation Date occurs to the extent necessary to account for (i) any
asset dispositions during such Fiscal Quarter and (ii) with respect to any Subsidiary of the
Company that is a “subchapter C” corporation under the Code, any earnings and profits of such
Subsidiary during such Fiscal Quarter. In the event a Class B Limited Member holds a Series of
Class B Limited Membership Interests other than the Series being remarketed, the calculations
described in this Section 7.2(b)(iii) shall be performed in a manner that determines the Capital
Account solely with respect to the Series being remarketed.




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     (c) Remarketing Procedures.



          (i) Upon receipt of a Class B Remarketing Notice, each holder of Class B Limited Membership
Interests subject to such Class B Remarketing Notice shall have until 3:00 p.m., New York City
time, on the Class B Remarketing Election Date, to deliver to the applicable Class B Remarketing
Agent or such other Person as is provided for in the applicable Class B Remarketing Agreement (a
“Designee”), notice of such holder’s election (“Class B Notice of Election”) to either (i) retain
and not have all or any portion of the applicable Class B Limited Membership Interests held by such
holder remarketed in the remarketing or (ii) to retain a portion and tender a portion of the
applicable Class B Limited Membership Interests held by such holder for purchase in the
remarketing; provided that it shall not tender, nor retain, less than the Minimum Transfer Amount.
Any applicable Class B Limited Membership Interest for which no Class B Notice of Election is
delivered on or prior to the Class B Remarketing Election Date will be deemed tendered for purchase
in such Class B Remarketing. Each Class B Notice of Election shall be irrevocable and shall not be
conditioned upon the level at which the Fixed Rate is established in the remarketing. Any holder
of Class B Limited Membership Interests subject to a Class B Remarketing Notice that desires to
continue to retain a number of such Class B Limited Membership Interests (but not less than the
Minimum Transfer Amount), but only if the Fixed Rate is not less than a specified rate per annum,
should submit a Class B Notice of Election to tender such Class B Limited Membership Interests and
separately notify the Class B Remarketing Agent or its Designee of its interest at the telephone
number set forth in the Class B Remarketing Notice. If such holder so notifies the Class B
Remarketing Agent or its Designee, the Class B Remarketing Agent or such Designee will give
priority to such holder’s purchase of such number of Class B Limited Membership Interests providing
that the Fixed Rate is not less than such specified rate; provided that the Class B Remarketing
Agent shall not (nor shall it be obligated to) give priority to such holder’s purchase if doing so
would cause the Company to be classified as a PTP; and provided, further, that if such holder
purchases such Class B Limited Membership Interests pursuant to this Section 7.2(c)(i), it shall be
deemed for all purposes to have continued as a Class B Limited Member to the extent of the Class B
Limited Membership Interests so purchased.




          (ii) All applicable Class B Limited Membership Interests for which the holders thereof have
properly and timely delivered Class B Notices of Election stating that such Class B Limited
Membership Interests will be tendered for purchase in the remarketing will be deemed tendered for
purchase in the remarketing, notwithstanding any failure by any such holders to properly and timely
deliver to the Class B Remarketing Agent or its Designee such Class B Limited Membership Interests
for purchase in the Class B Remarketing.




          (iii) Promptly after 4:30 p.m., New York City time, on each Class B Remarketing Election Date,
the Class B Remarketing Agent or its Designee will notify the Managing Member of the number of
applicable Class B Limited Membership Interests to be retained by the Class B Limited Members and
the number of applicable Class B Limited Membership Interests to be tendered for purchase in the
Class B Remarketing.




          (iv) If all of the holders of Class B Limited Membership Interests subject to a Class B
Remarketing Notice deliver Class B Notices of Election indicating that they wish to retain all of
such Class B Limited Membership Interests, the new Fixed Rate will be the rate



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determined by the Remarketing Agent or its Designee, in its sole discretion, as the rate that
would have been established with respect to the Preferred Return Capital set forth in the Class B
Remarketing Notice had a Class B Remarketing been held on the applicable Class B Remarketing Date.




          (v) On each Class B Remarketing Date, the Class B Remarketing Agent or its Designee will use
commercially reasonable efforts to remarket, at a price equal to the Class B Mandatory Purchase
Price at a Fixed Rate determined with respect to the Preferred Return Capital set forth in the
Class B Remarketing Notice, the applicable Class B Limited Membership Interests tendered or deemed
tendered for purchase. If, as a result of such efforts, the Class B Remarketing Agent or its
Designee determines that it will be able to remarket all of the applicable Class B Limited
Membership Interests tendered or deemed tendered for purchase in such Class B Remarketing at a
Fixed Rate and at the Class B Mandatory Purchase Price, then prior to 3:00 p.m., New York City
time, on such Class B Remarketing Date, the Class B Remarketing Agent or its Designee will
determine (i) the Fixed Rate, which will be the rate per annum (rounded to the nearest
one-thousandth (0.001) of one percent per annum) which the Class B Remarketing Agent or its
Designee determines, in its sole judgment, to be the lowest fixed rate per annum, if any, that will
enable it to remarket all of the applicable Class B Limited Membership Interests tendered or deemed
tendered for remarketing at the Class B Mandatory Repurchase Price and (ii) the Applicable Class B
Credit Spread.




          (vi) If the Class B Remarketing Agent or its Designee is unable to remarket by 4:00 p.m., New
York City time, on the third Business Day prior to the Class B Settlement Date, all of the
applicable Class B Limited Membership Interests tendered or deemed tendered for purchase at the
Class B Mandatory Purchase Price, the Class B Preferred Return Rate for the applicable Series of
Class B Limited Membership Interests shall be the Floating Rate. In such case, none of the
applicable Class B Limited Membership Interests will be sold in the Class B Remarketing and each
holder thereof will continue to hold such Class B Limited Membership Interests at the Floating
Rate.




          (vii) If any holder selling Class B Limited Membership Interests in a Class B Remarketing
fails to deliver such Class B Limited Membership Interests, then the selling holder shall be deemed
to not have tendered any of its Class B Limited Membership Interests, such sale and purchase shall
fail, and such holder shall be solely liable for any damages suffered by its purchaser or
purchasers as a result of such failure to deliver.




          (viii) Neither the Class B Remarketing Agent nor its Designee is obligated to purchase any
Class B Limited Membership Interests that would otherwise remain unsold in a remarketing. Neither
the Class B Remarketing Agent nor its Designee will be obligated in any case to provide funds to
make payment upon tender of Class B Limited Membership Interests for a Class B Remarketing.




          (ix) The right of each holder of Class B Limited Membership Interests subject to a Class B
Remarketing Notice shall be limited to the extent that: (i) the Class B Remarketing Agent or its
Designee conducts a Class B Remarketing pursuant to the terms of the applicable Class B Remarketing
Agreement; (ii) the applicable Class B Limited Membership Interests have not been called for
purchase pursuant to Section 11.9; (iii) the Class B Remarketing Agent or its



87









 




Designee is able to find a purchaser or purchasers for all of the tendered Class B Limited
Membership Interests; (iv) the number of such purchasers will not cause the Company to be
classified as a PTP; and (v) such purchaser or purchasers deliver the purchase price and the
Purchaser’s Letter therefor to the Class B Remarketing Agent or its Designee.




          (x) Upon a successful Class B Remarketing, the new Fixed Rate so established will be in effect
for the applicable Fixed Rate Period, which Fixed Rate Period shall begin on the applicable Class B
Reset Date and end on the day before the next Scheduled Reset Date but in no event shall such Fixed
Rate Period be less than 6 months in duration. Class B Preferred Distributions with respect to the
applicable Series of Class B Limited Membership Interests will be made quarterly in arrears
determined based on the Class B Remarketing Date.




          (xi) If the Managing Member elects not to remarket any Series of Class B Limited Membership
Interests to a new Fixed Rate on any Class B Reset Date occurring at the end of any Fixed Rate
Period (other than the Initial Fixed Rate Period), or if the Company is unable to successfully
remarket all of the Class B Limited Membership Interests tendered for sale in a Class B
Remarketing, distributions on the applicable Series of Class B Limited Membership Interests will
thereafter be made at the Floating Rate, subject to the right of the Company to subsequently
remarket such Series of Class B Limited Membership Interests. The Company may elect to remarket
such Series of Class B Limited Membership Interests prior to any Class B Distribution Date in order
to again establish a Fixed Rate for a Fixed Rate Period (to be in effect after the expiration of
the then current Class B Distribution Period).




     (d) The Company shall be responsible for payment of the Class B Remarketing Fee and all other
fees associated with any Class B Remarketing, including customary fees for trust companies, brokers
and counsel to the Class B Remarketing Agent.



SECTION 8.




REPRESENTATIONS AND WARRANTIES; COVENANTS




     8.1 In General.



     Each Member hereby severally makes each of the representations and warranties applicable to
such Member (but as to no other Member) as set forth in Section 8.2, and such representations and
warranties shall survive the execution of this Agreement.



     8.2 Representations and Warranties.



     (a) Due Formation or Incorporation; Authorization of Agreement. Each Member hereby represents
and warrants that such Member is a corporation, partnership, or limited liability company duly
organized, validly existing, and in good standing under the laws of its jurisdiction of
organization and has the organizational power and authority to own its property and carry on its
business as owned and carried on as of the date hereof and as of May 24, 2002. Each Member hereby
represents and warrants that such Member is duly licensed or qualified to do business and is in
good standing in each of the jurisdictions in which the failure to be so licensed or qualified,
either individually or in the aggregate with all other Immateriality Exceptions, has or could
reasonably be expected to have, a Material Adverse Effect. Each



88









 







Member hereby represents and warrants that such Member has the organizational power and
authority to execute and deliver this Agreement and to perform its obligations hereunder. Each
Member hereby represents and warrants that the execution, delivery, and performance by such Member
of this Agreement have been duly authorized by all necessary organizational action. Each Member
hereby represents and warrants that this Agreement constitutes the legal, valid, and binding
obligation of such Member and is enforceable against such Member in accordance with its terms
(except to the extent that enforcement is affected by laws pertaining to bankruptcy,
reorganization, insolvency, and creditors’ rights and by the availability of injunctive relief,
specific performance, and other equitable remedies).



     (b) No Conflict with Restrictions; No Default. Each Member hereby represents and warrants
that neither the execution and delivery by each Member of this Agreement nor such Member’s
performance and compliance with the terms and provisions hereof, (i) will conflict with, violate or
result in a breach of any of the terms, covenants, conditions, or provisions of any law or
governmental regulation in effect on the date hereof applicable to, or any order, writ, injunction,
decree, determination or award of any court, governmental department, board, agency or
instrumentality, domestic or foreign, or arbitrator directed to or binding on such Member or any of
its Material Subsidiaries which conflict, violation, or breach, either individually or in the
aggregate with all other Immateriality Exceptions, has or could reasonably be expected to have, a
Material Adverse Effect, (ii) will conflict with, violate, result in a breach of, or constitute a
default under any agreement or instrument to which such Member is a party or by which such Member
is or may be bound or to which any of its properties or assets is subject which conflict,
violation, breach or default, either individually or in the aggregate with all other Materiality
Exceptions, has or could reasonably be expected to have, a Material Adverse Effect, or any of the
terms or provisions of the limited liability company agreement, certificate of incorporation or
bylaws of such Member or any of its Material Subsidiaries, (iii) will conflict with, violate,
result in a breach of, constitute a default under (whether with notice or lapse of time or both),
accelerate or permit the acceleration of the performance required by, or require any consent,
authorization, or approval under any of the terms or provisions of any material indenture,
mortgage, lease, agreement, or instrument to which such Member is a party or by which such Member
or such Member’s property or assets is or may be bound, or (iv) will result in the creation or
imposition of any material Lien upon any of the properties or assets of such Member or any of its
Material Subsidiaries.



     (c) Existence of the Company. Each Member hereby represents and warrants to the Company and
each other Member that prior to the time that the Certificate of Formation was filed, such Member
neither represented to third parties the existence of the Company nor held himself or herself out
as a member or manager of the Company.



     (d) Governmental Authorizations. Each Member hereby represents and warrants that no
registration, declaration or filing with, or consent, approval, license, permit, or other
authorization or order by, any governmental or regulatory authority, domestic or foreign, is
required in connection with the valid execution, delivery, and performance by such Member of this
Agreement, which, if not obtained, either individually or in the aggregate with all other
Immateriality Exceptions, has or could reasonably be expected to have, a Material Adverse Effect.



89









 





     (e) Litigation. Each Member hereby represents and warrants that (i) there are no actions,
suits, proceedings, or investigations pending or, to the knowledge of such Member, threatened
against or affecting such Member or any of its Material Subsidiaries or any of their respective
properties, assets, rights or businesses, in any court or before or by any governmental department,
board, agency or instrumentality, domestic or foreign, or any arbitrator which could (or, in the
case of an investigation, could lead to any action, suit or proceeding, which could) reasonably be
expected to impair such Member’s ability to perform its obligations under this Agreement or to have
a Material Adverse Effect or bring into question the validity of this Agreement or the transactions
contemplated hereby; and (ii) no Member or any of its Material Subsidiaries has received any
currently effective notice of any default, and such Member is not in default, under any applicable
order, writ, injunction, decree, permit, determination or award of any court, any governmental
department, board, agency or instrumentality, domestic or foreign, or any arbitrator which could
reasonably be expected to impair its ability to perform its obligations under this Agreement or to
have a Material Adverse Effect.



     (f) Investment Company Act; Public Utility Holding Company Act. Each Member hereby represents
and warrants that such Member is a “qualified purchaser” within the meaning given to such term
under Section 2(a)(51) of the Investment Company Act and the rules of the Securities and Exchange
Commission thereunder. Each Member hereby represents and warrants that such Member is not a
“holding company,” “an affiliate of a holding company,” or a “subsidiary of a holding company” as
defined in, or subject to regulation under, the Public Utility Holding Company Act.



     (g) Investigation; Intent. Each Member hereby represents and warrants that (i) such Member
acquired and continues to hold its Membership Interests based upon its own investigation, and the
exercise by such Member of its rights and the performance of its obligations under this Agreement
will be based upon its own investigation, analysis and expertise, (ii) its acquisition of its
Membership Interests was made and continues to be made for its own account for investment, and not
with a view to the sale or distribution thereof, and (iii) it intends to continue to participate as
a member in a Delaware limited liability company in accordance with this Agreement for the purpose
of making an economic profit from the transactions entered into or proposed to be entered into by
the Company.



     (h) Sole Owner. Each Member hereby represents and warrants that it acquired its Membership
Interests for its own account and is, and will remain, the sole beneficial owner of such Membership
Interests at all times unless and until it Transfers ownership of all, or some part, of such
Membership Interests in accordance with and only to the extent permitted under Section 11.2.



     (i) No Intent to Avoid PTP Rules. Each Member hereby represents and warrants that (i) it is
not, and will not become, a trust, estate, partnership, or “S corporation” (within the meaning of
Code Section 1361(a)) for U.S. federal income tax purposes or (ii) if it is, or if it becomes, a
trust, estate, partnership, or S corporation for such purposes, then (x) less than 50% of the value
of any direct or indirect equity or other beneficial interest in such trust, estate, partnership or
S corporation is, and will at all times continue to be, attributable to its Membership Interests or
any other Interest in the Company and (y) the principal purpose of the purchase of the Membership
Interests was not to permit the Company or any entity of which the Company is a



90









 







direct or indirect partner to satisfy the 100 partner limitation set forth in Treasury
Regulation Section 1.7704-1(h)(1)(ii).



     (j) No Sales on Established Securities Market. Each Member agrees that it will not sell,
market, transfer, assign, participate, pledge, or otherwise dispose of its Membership Interests (or
any interest therein) on or through an “established securities market” within the meaning of Code
Section 7704(b)(1) and the Treasury Regulations promulgated thereunder, including, without
limitation, an over-the-counter market or an interdealer quotation system that regularly
disseminates firm buy or sell quotations.



     8.3 Covenant Regarding Tax Matters.



     (a) Character of Company Items. The Managing Member hereby covenants to the Limited Members
that, for U.S. federal, state, and local income tax purposes, the Company’s items of income, gain,
deduction, and loss will consist solely of (i) ordinary income from the sale of goods manufactured
by the Company, (ii) interest income, (iii) dividends paid by any Subsidiary of the Company,
(iv) rent received with respect to any Permitted PP&E Licenses, (v) royalties received with respect
to Permitted Intellectual Property Licenses, (vi) Code Section 162 ordinary and necessary expenses
paid or incurred in connection with carrying on the trade or business of the Company, (vii) Code
Section 1231 gain or loss from the disposition of property used in the trade or business of the
Company, (viii) depreciation and amortization deductions under Code Sections 167, 168, and 197, and
(ix) capital gain or loss from the sale of A-Rated Securities, the Pet Stock, or the General Mills
Missouri Stock, and will not include expenditures described in Code Section 705(a)(2)(B) or treated
as Code Section 705(a)(2)(B) expenditures pursuant to Regulations Section 1.704-1(b)(2)(iv)(i).



     (b) Cash and Taxable Income of Limited Members. The Managing Member hereby covenants to the
Limited Members that, for U.S. federal, state, and local income tax purposes, the net taxable
income includible by each such Limited Member with respect to its Limited Membership Interests
(excluding, for the avoidance of doubt, any such income solely attributable to a sale or
disposition of such Limited Membership Interests) will not exceed the amount of Cash distributed to
such Limited Member with respect to such Allocation Year (disregarding for this purpose any
allocations of (x) loss pursuant to Section 3.3 and (y) Profits pursuant to Sections 3.1(h) and
3.1(i); provided that, the covenant set forth herein shall not apply to a Class B Limited Member to
the extent the net taxable income described in this Section 8.3(b) is attributable to gain
(including income arising from remedial allocations associated with such gain) allocated to the
Capital Account of a Member pursuant to Sections 7.1(d)(ii) or 7.2(b)(iii) in connection with a
successful Class B Optional Remarketing and such Member elected not to sell its Class B Limited
Membership Interests in such Class B Optional Remarketing. The product of (i) any excess described
in the previous sentence times (ii) the Applicable Tax Rate shall be the Limited Member’s
“Indemnified Taxes.”



     (c) Indemnification. The Company and the Managing Member, jointly and severally, shall
indemnify each Limited Member who held a Limited Membership Interest during any Allocation Year for
any breach or falsity of the covenant set forth in this Section 8.3 on the basis that (i) such
Limited Member is subject to tax on its net income at the highest marginal federal income tax rate,
the highest generally applicable state and local rates in the jurisdiction where



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such Limited Member has its primary place of business, and any actually applicable foreign tax
rates, and (ii) such Limited Member has no available items of loss, capital gain, or other tax
attributes not attributable to its investment in the Company, and any charitable contribution
deductions or expenses of the Company are nondeductible expenses for U.S. federal income tax
purposes.



     (d) Automatic Indemnification Payment. In the event that the information provided on U. S.
Internal Revenue Service K-1 to Form 1065 for a Limited Member (or successor form or similar state
or local form) is inconsistent with the covenant set forth in Section 8.3(b) with respect to any
Allocation Year, the Managing Member shall (i) make a written request of each Limited Member within
150 days after such Allocation Year that each such Limited Member provide the Managing Member with
a certificate setting forth the Applicable Tax Rate described in clause (i) of Section 8.3(c), and
(ii) cause the Company to pay to each Limited Member, no later than 180 days after such Allocation
Year or, if later, 10 days after such Limited Member has provided the information timely requested
pursuant to clause (i), an amount equal to the quotient of (i)  Indemnified Taxes, divided by
(ii) 100% minus the Applicable Tax Rate.



     (e) Other Indemnification Payments.  The Company and the Managing Member, jointly and
severally, shall indemnify each Limited Member for any (i) U.S. federal, state, and local income
taxes incurred by such Limited Member as a result of a breach of the covenants set forth in
Sections 8.3(a) and 8.3(b) (to the extent not previously paid pursuant to Section 8.3(d)) and
(ii) any interest and penalties incurred by such Limited Member in connection with taxes
indemnified for pursuant to this Section 8.3. The Company or the Managing Member shall pay any
amounts indemnified for pursuant to this Section 8.3(e) not later than 30 days after a Limited
Member has provided a statement and detailed calculation of the amounts required to be paid under
this Section 8.3(e).  Any such indemnity shall include interest on such amounts described in
clauses (i) and (ii) above required to be paid by a Limited Member at a rate equal to the
applicable Limited Member Preferred Return as in effect from time to time from the date the amounts
indemnified for were paid by the Limited Member through the date payment under this Section 8.3(e)
is received by the Limited Member.



SECTION 9.




ACCOUNTING, BOOKS, AND RECORDS




     9.1 Accounting, Books, and Records.



     (a) The Company shall keep on site at its principal place of business each of the following:



          (i) Separate books of account for the Company and its Subsidiaries which shall show a true and
accurate record in Dollars of all costs and Expenses incurred, all charges made, all credits made
and received, and all income derived in connection with the conduct of the Company and its
Subsidiaries and the operation of their business in accordance with GAAP;




          (ii) Separate books of account that reflect the Capital Accounts of the Members as maintained
pursuant to the provisions of this Agreement;




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          (iii) The Membership Registry and a list of the full name and last known business, residence,
or mailing address of each past and present Member;




          (iv) A copy of the Certificate of Formation and all amendments thereto, together with executed
copies of any powers of attorney pursuant to which any amendment has been executed;




          (v) A copy of the Company’s federal, state, and local income tax returns and reports, if any,
for the six most recent years;




          (vi) A copy of this Agreement;




          (vii) A copy of any writings permitted or required under Section 18-502 of the Act regarding
the obligation of a Member to perform any enforceable promise to contribute Cash or property or to
perform services as consideration for such Member’s Membership Interests; and




          (viii) Any written consents obtained from the Members pursuant to Section 6.3 of this
Agreement and Section 18-302(d) of the Act regarding action taken by the Members without a meeting.




     (b) The Company shall use the accrual method of accounting in preparation of its financial
reports and for tax purposes and shall keep its books and records accordingly.



     (c) Any Member or its designated representative has the right at the Company’s cost and
expense, upon reasonable notice, to have access to and inspect and copy the contents of the books
or records of the Company or any of its Subsidiaries and to make inquiries with regard to the
contents of the books or records at any time and on as many occasions as such Member reasonably
considers necessary or desirable; provided that so long as no Class A Notice Event shall have
occurred and be continuing, the Company shall only be required to bear the cost and expense of
(i) one such inspection per Fiscal Year requested by any Class A Limited Member and (ii) one such
inspection per Fiscal Year requested by any Class B Limited Member.



     (d) The books of account and records of the Company and its Subsidiaries shall be audited as
of the end of each Fiscal Year by a “Big Four” independent certified public accounting firm
designated from time to time by the Managing Member.



     9.2 Reports.



     (a) In General. The Managing Member shall be responsible for the preparation of financial
reports of the Company and the coordination of financial matters of the Company with the Company’s
accountants. Each report delivered by the Company to the Members pursuant to this Section 9 shall
be accompanied by a written certification of the Company executed by a Responsible Officer familiar
with the affairs of the Company that (x) such report has been prepared and fairly stated in all
material respects in accordance with GAAP or, to the extent inconsistent therewith, in accordance
with this Agreement and (y) with respect to the reports described in Sections 9.2(b) and (c), no
Liquidating Event or Class A Notice Event or event that with notice or lapse of time or both would
constitute a Liquidating Event or Class A Notice Event



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has occurred and is continuing or, if any such event has occurred and is continuing, the
action that the Managing Member has taken or proposes to take with respect thereto.



     (b) Annual Reports. Within 120 days after the end of each Fiscal Year (or in the case of
clause (vi) below, 180 days after the end of each taxable year of the Company), the Managing Member
shall cause to be prepared and furnished to each Member the following:



          (i) A balance sheet as of the last day of such Fiscal Year and an income statement and
statement of cash flows for the Company and its consolidated Subsidiaries for such Fiscal Year and
notes associated with each;




          (ii) A statement of the Members’ Capital Accounts and changes therein for such Fiscal Year;




          (iii) A Portfolio Compliance Certificate for such Fiscal Year;




          (iv) A certificate of a nationally recognized accounting firm selected in accordance with
Section 9.1(d) stating that the statements referred to in clause (ii) above have been prepared in
accordance with the Agreement;




          (v) A report by a nationally recognized accounting firm selected in accordance with
Section 9.1(d) (without a “going concern” or like qualification or exception and without any
qualification or exception as to the scope of such audit) to the effect that the unconsolidated and
consolidated financial statements in clause (i) above present fairly in all material respects the
financial position and results of operations of the Company on an unconsolidated basis, and the
financial condition and results of operations of the Company and its Subsidiaries on a consolidated
basis, in accordance with GAAP consistently applied; and




          (vi) The information required to be provided on a U.S. Internal Revenue Service Schedule K-1
to Form 1065 for each Limited Member, provided that the Managing Member shall, upon the request of
any Limited Member, provide to any such Limited Member any information reasonably necessary for
such Limited Member to compute its estimated income tax payments.




     (c) Quarterly Reports. Within sixty (60) days after the close of each of the first three
Fiscal Quarters of each year, the Managing Member shall cause to be prepared and each Limited
Member to be furnished with (i) a balance sheet for the Company and its consolidated Subsidiaries
as of the end of such Fiscal Quarter, (ii) a related income statement and statement of cash flows
of the Company and its consolidated Subsidiaries for such Fiscal Quarter and for the Fiscal Year to
date, and (iii) a Portfolio Compliance Certificate for such Fiscal Quarter; provided that such
Certificate is not required to include any statement regarding the asset coverage ratio described
in Section 5.9(a)(i).



     (d) Class A Remarketing Reports; Reset Reports. Simultaneously with the Company’s delivery of
a Class A Remarketing Notice, the Managing Member shall cause to be delivered to the Class A
Limited Members and the Class A Remarketing Agent a statement setting forth the Preferred Return
Capital and Class A Mandatory Purchase Price for each Class A Limited Membership Interest being
remarketed in the Class A Remarketing, together with a certificate of



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a nationally recognized accounting firm selected in accordance with Section 9.1(d) stating
that such statement has been prepared in accordance with this Agreement (such statement, together
with such certificate, being the “Class A Remarketing Report”).



     In the event that, on any Class A Reset Date, a Class A Mandatory Remarketing is not required
to be conducted, the Managing Member shall cause to be delivered to each Class A Member a statement
setting forth the Capital Account for each Class A Limited Member as determined pursuant to Section
7.1(d)(ii) and the Preferred Return Capital for each Class A Limited Member, in each case as of
such Class A Reset Date, together with a certificate of a nationally recognized accounting firm
selected in accordance with Section 9.1(d) stating that such statement has been prepared in
accordance with this Agreement; provided that, if (i) the amount of Estimated Profits and Losses,
and other items of Company income, gain, loss, or deduction included in the determination of such
Capital Account and Preferred Return Capital differs from the actual amount of Profits and Losses,
and other items of Company income, gain, loss, or deduction for the relevant Reset Valuation
Allocation Year and (ii) such difference results in the Capital Accounts and Preferred Return
Capital of the Class A Limited Members differing from that set forth in the aforementioned
statement, then the Managing Member shall deliver to each Class A Limited Member a revised
statement of the Capital Account and Preferred Return Capital of each Class A Limited Member within
five (5) Business Days after the determination of such actual amounts.



     (e) Class B Remarketing Reports; Reset Reports. Simultaneously with the Company’s delivery of
a Class B Remarketing Notice, the Managing Member shall cause to be delivered to the Class B
Limited Members and the Class B Remarketing Agent a statement setting forth the Preferred Return
Capital and Class B Mandatory Purchase Price for each Class B Limited Membership Interest being
remarketed in the Class B Remarketing, together with a certificate of a nationally recognized
accounting firm selected in accordance with Section 9.1(d) stating that such statement has been
prepared in accordance with this Agreement. A Class B Remarketing Report prepared in accordance
with this Section 9.2(e) shall be prepared and delivered to the Class B Limited Members on each
Class B Optional Remarketing Date irrespective of whether or not the Class B Optional Remarketing
on such Class B Optional Remarketing Date is, in fact, held or is successful.



     In the event that, on any Scheduled Reset Date, a Class B Optional Remarketing is not
conducted, the Managing Member shall cause to be delivered to each Class B Limited Member a
statement setting forth the Capital Account for each Class B Limited Member as determined pursuant
to Section 7.2(b)(iii) and the Preferred Return Capital for each Class B Limited Member, in each
case as of such Scheduled Reset Date, together with a certificate of a nationally recognized
accounting firm selected in accordance with Section 9.1(d) stating that such statement has been
prepared in accordance with this Agreement; provided that, if (i) the amount of Estimated Profits
and Losses, and other items of Company income, gain, loss, or deduction included in the
determination of such Capital Account and Preferred Return Capital differs from the actual amount
of Profits and Losses, and other items of Company income, gain, loss, or deduction for the relevant
Reset Valuation Allocation Year and (ii) such difference results in the Capital Accounts and
Preferred Return Capital of the Class B Limited Members differing from that set forth in the
aforementioned statement, then the Managing Member shall deliver to each Class B Limited Member a
revised statement of the Capital Account and Preferred Return



95









 







Capital of each Class B Limited Member within five (5) Business Days after the determination
of such actual amounts.



     (f) Class A Purchase Option Reports. Simultaneously with the Managing Member’s delivery of a
Class A Purchase Notice in connection with a Class A Purchase on a date other than a Class A Reset
Date, the Managing Member shall deliver to each Class A Limited Member whose Class A Limited
Membership Interests are being purchased a statement of the balance in the Capital Account of such
Class A Limited Member determined in accordance with this Section 9.2(f), together with a
certificate of a nationally recognized accounting firm selected in accordance with Section 9.1(d)
stating that such statement has been prepared in accordance with this Agreement; provided that, if
the Class A Purchase Notice is delivered within the ten (10) day period prior to the effectiveness
of a Liquidation Notice, the report required by this Section 9.2(f) shall be delivered not later
than fifty (50) days after the Class A Purchase Election Date. If such nationally recognized
accounting firm determines that the balance of the Class A Limited Member’s Capital Account is
greater than that determined by the Managing Member, then the Managing Member shall pay the
difference between such determinations to such Class A Limited Member in immediately available
funds within five (5) Business Days of the Managing Member’s receipt of such accounting firm’s
determination.



     For purposes of this Section 9.2(f), the Class A Limited Members’ Capital Accounts shall be
determined as of the Class A Purchase Valuation Date by taking into account the adjustments that
would result from (x) determining the Mark-to-Market Value of the Company’s Permitted Assets
pursuant to Section 13.11 as of the Class A Purchase Valuation Date and (y) allocating the Profits
and Losses, and other items of Company income, gain, loss, or deduction for the relevant Purchase
Valuation Allocation Year pursuant to Section 3. Such Capital Accounts shall reflect all
distributions made to such Class A Limited Members during or with respect to such period.



     (g) Class B Purchase Option Reports. Simultaneously with the Managing Member’s delivery of a
Class B Purchase Notice in connection with a Class B Purchase on a Distribution Date during a
Floating Rate Period (but not in connection with a Class B Purchase on a Scheduled Reset Date), the
Managing Member shall deliver to each Class B Limited Member whose Class B Limited Membership
Interests are being purchased a statement of the balance in the Capital Account of such Class B
Limited Member determined in accordance with this Section 9.2(g), together with a certificate of a
nationally recognized accounting firm selected in accordance with Section 9.1(d) stating that such
statement has been prepared in accordance with this Agreement.



     For purposes of this Section 9.2(g), the Class B Limited Members’ Capital Accounts shall be
determined as of the Class B Purchase Valuation Date by taking into account the adjustments that
would result from (x) determining the Mark-to-Market Value of the Company’s Permitted Assets
pursuant to Section 13.11 as of the Class B Purchase Valuation Date and (y) allocating the
Estimated Profits and Losses, and other items of Company income, gain, loss, or deduction for such
Purchase Valuation Allocation Year pursuant to Section 3. Such Capital Accounts shall reflect all
distributions made to such Class B Limited Members during or with respect to such period.



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     (h) Default Date Reports. Promptly but in any event within five (5) Business Days of a
Responsible Officer obtaining actual knowledge of any event resulting in a fifty percent (50%) or
greater reduction in the Gross Asset Value for any Permitted Asset having a Gross Asset Value of
$25,000,000 or more immediately prior to such event, the Managing Member shall cause to be prepared
a Class A Portfolio Compliance Certificate applicable to the period ending on the day after the
occurrence of such event.



     (i) Class A Notice Event Reports. In the event that during any Fiscal Year a Class A Notice
Event described in Section 14.1(b) occurs and the Members have not delivered a Liquidation Notice
to the Managing Member prior to the date on which a certification would otherwise be required to be
delivered to the Class A Limited Members pursuant to this Section 9.2; on or before the later to
occur of (i) the date on which reports are furnished to the Class A Limited Members pursuant to
Section 9 for the immediately preceding Fiscal Year or (ii) sixty (60) days after receipt by the
Managing Member of a request from the Class A Limited Members, the Managing Member shall cause to
be prepared and the Members furnished with a certification by a nationally recognized accounting
firm to be selected in accordance with Section 9.1(d) that the statements furnished to the Class A
Limited Members for such immediately preceding Fiscal Year pursuant to Section 9 were prepared in
accordance with this Agreement.



     (j) Liquidation Date Reports. On the date on which final distributions are made to the Members
pursuant to Section 13.2, the Liquidator shall cause to be prepared and each Member furnished with
each of the following statements:



          (i) A Balance Sheet as of the date of such distribution setting forth as individual line items
the aggregate Mark-to-Market Capital Values for each Permitted Asset held by the Company;




          (ii) A statement of the Members’ Capital Accounts as adjusted immediately prior to such
distribution pursuant to Section 13.2; and




          (iii) Not later than sixty (60) days after the distributions referred to in this
Section 9.2(j) have been made, a certificate of a nationally recognized accounting firm selected in
accordance with Section 9.1(d) shall have been prepared and delivered to the Members stating that
the statement in clause (i) above has been prepared in accordance with this Agreement.




     (k) Class B Exchange Date Reports. No later than the date on which Class B Limited Membership
Interests will be exchanged for securities of GMI or one of its Affiliates pursuant to the terms of
the Exchange Agreement, the Managing Member shall cause to be prepared and each Class B Limited
Member furnished with each of the following statements:



          (i) a statement of the Class B Limited Members’ Capital Accounts specially determined pursuant
to this Section 9.2(k); and




          (ii) a certificate of a nationally recognized accounting firm selected in accordance with
Section 9.1(d) stating that the statement in clause (i) above has been prepared in accordance with
this Agreement.




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For purposes of this Section 9.2(k), the Class B Limited Members’ Capital Accounts shall be
determined as of the Exchange Valuation Date by taking into account the adjustments that would
result from (x) determining the Mark-to-Market Value of the Company’s Permitted Assets pursuant to
Section 13.11 as of the last day of the Fiscal Quarter preceding the Fiscal Quarter in which the
Exchange Valuation Date occurs and adjusting the Gross Asset Values of all the Company’s Property
pursuant to subparagraph (ii) of the definition of “Gross Asset Value” in Section 1.10 as of the
Exchange Valuation Date (assuming, for purposes of this Section 9.2(k), that, except as otherwise
provided in this Section 9.2(k), such Mark-to-Market Value remains unchanged since the last day of
such prior Fiscal Quarter as of the Exchange Valuation Date and that the Mark-to-Market Value of
any Inventory or any asset acquired during the Fiscal Quarter in which the Exchange Valuation Date
occurs is equal to the Gross Asset Value of such asset on the Exchange Valuation Date), and (y)
allocating the Estimated Profits and Losses, and other items of Company income, gain, loss, or
deduction for the Exchange Valuation Year pursuant to Section 3. Notwithstanding the provisions of
the parenthetical in clause (x) of the immediately preceding sentence, the Mark-to-Market Value of
the Company’s Permitted Assets shall take into account any financial activity during the Fiscal
Quarter in which the any Exchange Valuation Date occurs to the extent necessary to account for
(i) any asset dispositions during such Fiscal Quarter and (ii) with respect to any Subsidiary of
the Company that is a “subchapter C” corporation under the Code, any earnings and profits of such
Subsidiary during such Fiscal Quarter. In addition, for purposes of this Section 9.2(k), the
Class B Limited Members’ Capital Accounts shall include the amount of any Class B Limited Member
Preferred Return that has accrued since the last Class B Distribution Date occurring prior to the
date on which the Class B Exchange occurs but that has not been distributed (whether or not the
distribution of such Class B Limited Member Preferred Return was prohibited pursuant to the proviso
set forth in Section 4.1(a)(ii)). If a Class B Limited Member owns more than one Series of Class B
Limited Membership Interests, the capital account determined for such Class B Limited Member
pursuant to this Section 9.2(k) shall be determined with respect to each Series of Class B Limited
Membership Interests being exchanged by such Class B Limited Member.




     (l) GMI Events. Promptly but in any event within five (5) Business Days of a Responsible
Officer obtaining actual knowledge of (A) any notice from Moody’s or S&P that such Rating Agency is
considering lowering the senior unsecured debt rating of GMI below “Baa3” with respect to Moody’s
or “BBB-” with respect to S&P, (B) the lowering of the senior unsecured debt rating of GMI below
“Baa3” by Moody’s or “BBB-” by S&P, (C) any event resulting in a reduction of the Mark-to-Market
Value of any Permitted Loan under which GMI or one of its Affiliates is a borrower or (D) any GMI
Event, the Managing Member shall deliver to each of the other Members a notice of the occurrence of
such event.



     (m) Rule 144A Information. At the request of any Member or any prospective Member, the
Managing Member shall provide, with respect to the Company, the information required by Rule
144A(d)(4)(i) under the Securities Act.



     9.3 Tax Matters.



     (a) The Managing Member is specifically authorized to act as the “Tax Matters Member” under
the Code and in any similar capacity under state or local law. The Tax Matters Member shall have
the authority without any further consent of the Members being required



98









 




(except as specifically required herein, and provided that reasonable notice is provided to
Members): (i) to make any and all elections for federal, state, local, and foreign tax purposes
including any election, if permitted by applicable law (A) provided for in Code
Section 6231(a)(1)(B)(ii), (B) to adjust the basis of the Company’s assets pursuant to Code
Sections 754, 734(b), and 743(b), or comparable provisions of state, local, or foreign law, in
connection with Transfers of Interests and Company distributions, and (C) to extend the statute of
limitations for assessment of tax deficiencies with respect to adjustments to the Company’s
federal, state, local, or foreign tax returns; (ii) to determine the appropriate forum in which any
potential tax controversy shall be litigated; (iii) to the extent provided in Code Sections 6221
through 6231 and similar provisions of federal, state, local, or foreign law, to appear before
taxing authorities or courts of competent jurisdiction in tax matters with respect to the Company’s
federal, state, local or foreign tax returns; and (iv) to file any tax returns and execute any
agreements or other documents relating to or affecting such tax matters. The Company has made a
valid election under Code Section 754 and such election has not been and will not be revoked.




     (b) No Member shall make any election under Treasury Regulations Section 301.7701-3 to cause
the Company to be treated as a corporation for federal income tax purposes. To the extent
permitted by applicable law and regulation at the relevant time, each Member will (i) treat the
Membership Interests as representing equity interests in the Company for all U.S. federal income
tax purposes and for all relevant state and local income, franchise, and other similar tax
purposes, (ii) treat the Company as a partnership for U.S. federal income tax purposes that is not
taxable as an association or a PTP, and (iii) take no position on any tax return or with any taxing
or other governmental authority that is inconsistent with such treatment.



     (c) Other than such information delivered pursuant to Section 9.2(b)(vii), all other necessary
tax information shall be delivered to each Member as soon as practicable after the end of each
Fiscal Year of the Company but not later than eight (8) months after the end of each Fiscal Year.



SECTION 10.




AMENDMENTS




     10.1 Amendments.



     (a) Amendments to this Agreement may be proposed by the Managing Member, a Class A Limited
Member, or upon a written request from the holders of at least 25% of the Series B-1 Limited
Membership Interests or Series B-2 Limited Membership Interests. Following such proposal, the
Managing Member shall submit to the Members a verbatim statement of any proposed amendment, and the
Managing Member shall include in any such submission a recommendation as to the proposed amendment.
The Managing Member shall seek the affirmative written consent of the Members on the proposed
amendment or shall call a meeting to vote thereon and to transact any other business that it may
deem appropriate. Except as expressly provided in Section 5.3(c), a proposed amendment shall be
adopted and be effective as an amendment hereto if it receives the affirmative written consent or
vote of (i) the Required Class A Limited Members, (ii) holders of Series B-1 Limited Membership
Interests representing



99









 








at least two-thirds of any outstanding Series B-1 Limited Membership Interests that are held
by holders other than GMI and its Affiliates, (iii) holders of Series B-2 Limited Membership
Interests representing at least two-thirds of any outstanding Series B-2 Limited Membership
Interests that are held by holders other than GMI and its Affiliates, and (iv) the Managing Member;
provided that, with respect to any amendment that solely concerns the right and obligations of a
Class A Limited Member under this Agreement, such amendment shall only require the consent the
Managing Member and the Required Class A Limited Members, and provided, further, that, so long as
the consent of the Required Class B Limited Members is not otherwise required pursuant to
Section 5.3(b), the approval of the holders of the Class B Limited Membership Interests shall not
be required for any amendment that is executed in connection with, and in order to give effect to,
(i) the sale of the Series B-2 Limited Membership Interests held by Cereals Holdings to any Person
that is not GMI or an Affiliate of GMI or another GMI Entity, (ii) the issuance of additional
Membership Interests, or (iii) the conversion of the Class A Limited Membership Interests; and
provided, further, that the form of the Series B-1 Preferred Certificate or Series B-2 Preferred
Certificate and any provision of this Agreement may be at any time and from time to time be
amended, without the consent of the holders of the Class B Limited Membership Interests, to the
extent that such amendment shall cure any ambiguity, defect, or inconsistency or shall be of a
ministerial or technical nature.



     (b) Any provision herein to the contrary notwithstanding, in connection with a sale of the
Series B-2 Limited Membership Interests currently outstanding to any Person that is not GMI or an
Affiliate of GMI or another GMI Entity, the provisions herein with respect to the Series B-2
Preferred Return Rate, the Initial Fixed Rate Period and Class B Distribution Period with respect
to the Series B-2 Limited Membership Interests may be amended without the consent of the holders of
the Series B-1 Limited Membership Interests; provided that such amendments are in accordance with
then current market terms for comparable securities.



     (c) Notwithstanding the foregoing, Section 4.1(b) shall not be amended without the consent of
any former Limited Member whose right to receive a distribution pursuant to Section 4.1(b), or the
amount or timing of such distribution, would be affected by such amendment.



SECTION 11.




TRANSFERS; PURCHASE




     11.1 Restriction on Transfers.



     (a) Except as otherwise permitted by this Agreement, no Member shall Transfer all or any
portion of its Membership Interests. In the event any Member pledges or otherwise encumbers its
Interest as security for the payment of a liability, any such pledge or hypothecation shall be made
pursuant to a pledge or hypothecation agreement that requires the pledgee or secured party to be
bound by all of the terms and conditions of this Section 11.



     (b) Notwithstanding any other provisions of this Agreement (including without limitation,
Sections 11.2, 11.3(a), 11.3(c), and 11.6), (i) the Class A Limited Members may Transfer their
respective Class A Limited Membership Interests to the Managing Member (or its designee) pursuant
to the Class A Purchase Option as set forth in Section 11.8, and upon such Transfers,




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the Managing Member (or its designee) shall be admitted as the Class A Limited Member and the
prior Class A Limited Members shall be deemed withdrawn as Class A Limited Members with respect to
such Transferred Class A Limited Membership Interests and (ii) the Class B Limited Members may
Transfer their respective Class B Limited Membership Interests to the Managing Member (or its
designee) pursuant to the Class B Purchase Option as set forth in Section 11.9, and upon any such
Transfers, the Managing Member (or its designee) shall be admitted as a Class B Limited Member of
the applicable Series and the prior Class B Limited Members shall be deemed withdrawn as Class B
Limited Members with respect to such Transferred Class B Limited Membership Interests.




     11.2 Permitted Transfers.



     (a) Managing Member. Subject to the conditions and restrictions set forth in Section 11.3 and
Section 5.6, the Managing Member may at any time Transfer all or any portion of its Managing
Membership Interest (i) while GMI or any of its Subsidiaries is the Managing Member, to GMI or any
of its Subsidiaries (so long as, in the case of a Transfer to a Subsidiary, its obligations as
Managing Member are fully guaranteed pursuant to a GMI Guaranty) or (ii) any other Person approved
by all the Members; provided that (A) the indemnification obligation of the Managing Member shall
be unaffected by such Transfer and (B) in the event that any such transferee (other than GMI)
ceases to be a Subsidiary of GMI, such transferee shall Transfer back to GMI or to another
Subsidiary of GMI any such Managing Membership Interest immediately prior to such transferee
ceasing to be a Subsidiary of GMI.



     (b) Class A Limited Members. Subject to the conditions and restrictions set forth in
Section 11.3: (i) without the consent of any other Member, a Class A Limited Member may (A) pledge
all (but not less than all) of its Class A Limited Membership Interests to a single lender as a
bona fide pledge in connection with financing obtained to purchase such Class A Limited Membership
Interests and transfer such Class A Limited Membership Interests to such lender in connection with
any foreclosure of such pledge, (B) Transfer all (but not less than all) of its Class A Limited
Membership Interests to (1) any other Member, (2) any wholly owned Subsidiary or any entity of
which it is a wholly owned Subsidiary, and (3) any Person(s) pursuant to a Class A Remarketing, and
(C) Transfer all or any portion of its Class A Limited Membership Interests to any Person upon the
occurrence of a continuing Liquidating Event; and (ii) with the unanimous written consent of the
other Members, which consent shall not be unreasonably withheld, a Class A Limited Member may
Transfer its Class A Limited Membership Interests to any other Person.



     (c) Class B Limited Members. Subject to the conditions and restrictions set forth in
Section 11.3: (i) without the consent of any other Member, a Class B Limited Member may (A) pledge
all (but not less than all) of its Class B Limited Membership Interests to a single lender as a
bona fide pledge in connection with financing obtained to purchase such Class B Limited Membership
Interests and Transfer such Class B Limited Membership Interests to such lender in connection with
the foreclosure of such, (B) Transfer all of its Class B Limited Membership Interests to (1) any
other Member, (2) any wholly owned Subsidiary or any entity of which it is a wholly owned
Subsidiary, and (3) GMI or any Affiliate of GMI in exchange for securities of GMI or an Affiliate
of GMI, (C) Transfer all or any portion of its Class B Limited Membership Interests to any Person
pursuant to a Class B Remarketing, and (D) in the case of



101









 







Series B-1 Limited Membership Interests, Transfer such Interests in accordance with
Section 11.3(k); and (ii) with the written consent of the Managing Member and Required Class A
Limited Members, which consent shall not be unreasonably withheld, a Class B Limited Member may
Transfer its Class B Limited Membership Interests to any other Person. In addition, subject to the
conditions and restrictions set forth in Section 11.3, Cereals Holdings may Transfer the Series B-2
Limited Membership Interests to one or more purchasers and, upon such Transfer, such purchasers
will be admitted as Class B Limited Members, immediately whereafter, Cereals Holdings shall be
deemed withdrawn in respect of the Series B-2 Limited Membership Interests so Transferred.



     (d) Any Transfer permitted by this Section 11.2 shall be referred to in this Agreement as a
“Permitted Transfer,” and the Person to which the Interest is Transferred shall be a “Permitted
Transferee.”



     11.3 Conditions to Permitted Transfers.



     A Transfer shall not be treated as a Permitted Transfer under Sections 11.2 unless and until
the following conditions are satisfied:



     (a) The transferee shall execute and deliver to the Company such documents and instruments of
conveyance as may be reasonably required to effect such Transfer and to confirm the agreement of
the transferee to be bound by the provisions of this Agreement applicable to the relevant Member.



     (b) In the case of any Transfer by a Class A Limited Member of any portion of its Class A
Limited Membership Interests, such Transfer shall not cause (i) the Class A Limited Membership
Interests to be owned by more than 10 persons as determined in accordance with Regulations
Section 1.7704-1(h) or (ii) as a result of such Transfer, the Company to otherwise be treated as a
“publicly traded partnership” within the meaning of Code Section 7704 and the Regulations
promulgated thereunder, assuming for purposes of this Section 11.3(b)(ii) that the Class B Limited
Membership Interests are held by 90 Persons. Any purported Transfer of any Class A Limited
Membership Interest that does not comply with the conditions set forth in this Section 11.3(b)
shall be null and void and of no force or effect whatsoever.



     (c) In the case of any Transfer of a Class A Limited Membership Interest, the transferee
represents and agrees in a written certification, unless such requirement is waived in writing by
Managing Member in its sole discretion, that either (A) it is not, for U.S. federal income tax
purposes, a partnership, grantor trust, or “S corporation” (each a “Flow-Through Entity") or (B) it
is a Flow-Through Entity but, after giving effect to such purchase of the Class A Limited
Membership Interest, less than 50% of the value of any beneficial owner’s interest in the
Flow-Through Entity is attributable to the Flow-Through Entity’s direct or indirect interest in the
Company or a principal purpose in using the Flow-Through Entity to purchase the Class A Limited
Membership Interests is not to permit the Company to have more than 10 owners of the Class A
Membership Interests or to have more than 100 “partners” within the meaning of Regulations
Section 1.7704-1(h)(1)(ii).



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     (d) In the case of any Transfer by a Series B-1 Limited Member of any portion of its
Series B-1 Limited Membership Interests (including any beneficial interest therein), such Transfer
shall not cause (i) the Series B-1 Limited Membership Interests to be owned by more than 83 persons
as determined in accordance with Regulations Section 1.7704-1(h) or (ii) as a result of such
Transfer, the Company to otherwise be treated as a “publicly traded partnership” within the meaning
of Code Section 7704 and the Regulations promulgated thereunder, assuming for purposes of this
Section 11.3(d)(ii) that the Class A Limited Membership Interests are held by 10 Persons and the
Series B-2 Limited Membership Interests are held by 6 Persons. Any purported Transfer of any
Series B-1 Limited Membership Interest that does not comply with the conditions set forth in this
Section 11.3(d) shall be null and void and of no force or effect whatsoever.



     (e) In the case of any Transfer of a Series B-1 Limited Membership Interest, the transferee
represents and agrees in a written certification that either (A) it is not, for U.S. federal income
tax purposes, a Flow-Through Entity or (B) it is a Flow-Through Entity but, after giving effect to
such purchase of the Series B-1 Limited Membership Interest, less than 50% of the value of any
beneficial owner’s interest in the Flow-Through Entity is attributable to the Flow-Through Entity’s
direct or indirect interest in the Company or a principal purpose in using the Flow-Through Entity
to purchase the Series B-1 Limited Membership Interests is not to permit the Company to have more
than 83 owners of the Series B-1 Membership Interests or to have more than 100 “partners” within
the meaning of Regulations Section 1.7704-1(h)(1)(ii).



     (f) In the case of any Transfer by a Series B-2 Limited Member of any portion of its
Series B-2 Limited Membership Interests (including any beneficial interest therein), such Transfer
shall not cause (i) the Series B-2 Limited Membership Interests to be owned by more than 6 persons
as determined in accordance with Regulations Section 1.7704-1(h) or (ii) as a result of such
Transfer, the Company to otherwise be treated as a “publicly traded partnership” within the meaning
of Code Section 7704 and the Regulations promulgated thereunder, assuming for purposes of this
Section 11.3(f)(ii) that the Class A Limited Membership Interests are held by 10 Persons and the
Series B-1 Limited Membership Interests are held by 83 Persons. Any purported Transfer of any
Series B-2 Limited Membership Interest that does not comply with the conditions set forth in this
Section 11.3(f) shall be null and void and of no force or effect whatsoever.



     (g) In the case of any Transfer of a Series B-2 Limited Membership Interest, the transferee
represents and agrees in a written certification that either (A) it is not, for U.S. federal income
tax purposes, a Flow-Through Entity or (B) it is a Flow-Through Entity but, after giving effect to
such purchase of the Series B-2 Limited Membership Interest, less than 50% of the value of any
beneficial owner’s interest in the Flow-Through Entity is attributable to the Flow-Through Entity’s
direct or indirect interest in the Company or a principal purpose in using the Flow-Through Entity
to purchase the Series B-2 Limited Membership Interests is not to permit the Company to have more
than 6 owners of the Series B-2 Limited Membership Interests or to have more than 100 “partners”
within the meaning of Regulations Section 1.7704-1(h)(1)(ii).



     (h) The transferor and transferee shall furnish the Company with the transferee’s taxpayer
identification number, sufficient information to determine the transferee’s initial tax basis in
the Interest Transferred, and any other information reasonably necessary to permit the Company to



103









 








file all required federal and state tax returns and other legally required information
statements or returns. Without limiting the generality of the foregoing, the Company shall not be
required to make any distribution otherwise provided for in this Agreement with respect to any
Transferred Interest until it has received such information.



     (i) The transferee shall represent and warrant to the Company that the transferee: (1) is an
institutional “accredited investor” (as such term is defined in Rule 501(a) promulgated under the
Securities Act); (2) has sufficient knowledge and experience in financial and investment matters to
be capable of evaluating the risks and merits involved in acquiring such Interest, understands the
risks and merits applicable to such Interest (including, without limitation, any legal, tax, and
accounting issues inherent therein) and is financially able to bear such risks; (3) has sufficient
knowledge of, and experience with, financial markets that it is able to determine that its
acquiring such Interest is suitable for its financial and investment objectives; and
(4) understands that the Interest is not registered or entitled to be registered under the
Securities Act or any state securities law or other applicable federal securities or other similar
law.



     (j) Each transferor and transferee of Class A Limited Membership Interests or Series B-2
Limited Membership Interests, as applicable, shall execute certificates substantially similar to
the certificates (the “Transferor Certificate”
and Transferee Certificate”) attached hereto as
Exhibit E and Exhibit F, respectively.



     (k) In the case of a transferee of any of the Series B-1 Limited Membership Interests or
Series B-2 Limited Membership Interests, unless waived by the Managing Member and the Required
Class A Limited Members, each prospective purchaser will be required to sign and deliver to the
Company a purchaser’s letter (a “Purchaser’s
Letter”) substantially similar to the form attached
hereto as Exhibit G, and will be deemed to have acknowledged, represented and agreed that:



          (i) It understands and acknowledges that the Series B-1 Limited Membership Interests or
Series B-2 Limited Membership Interests, as applicable, have not been registered under the
Securities Act or any other applicable securities law and, unless so registered, may not be
re-offered, resold, pledged or otherwise Transferred except in compliance with the registration
requirements of the Securities Act or any other applicable securities law, or pursuant to an
exemption therefrom or in a transaction not subject thereto, and in each case, in compliance with
the conditions for Transfer set forth in paragraph (vii) below.




          (ii) It is a Qualified Institutional Buyer (QIB) within the meaning of Rule 144A under the
Securities Act and is aware that any sale of the Series B-1 Limited Membership Interests or
Series B-2 Limited Membership Interests, as applicable, to it will be made in reliance on Rule
144A. Such acquisition will be for its own account or for the account of another QIB.




          (iii) It agrees that it will give to each Person to whom it Transfers the Series B-1 Limited
Membership Interests or Series B-2 Limited Membership Interests, as applicable, notice of any
restrictions on Transfer of the Series B-1 Limited Membership Interests or Series B-2 Limited
Membership Interests, as applicable.




104









 








          (iv) It acknowledges that as a purchaser of either Series B-1 Limited Membership Interests or
Series B-2 Limited Membership Interests, as applicable, it will be holding membership interests in
a limited liability company, it will be admitted to the Company as a member, and therefore, it will
be subject to rights and obligations as set forth in this Agreement.




          (v) It acknowledges that prior to any proposed Transfer of the Series B-1 Limited Membership
Interests or Series B-2 Limited Membership Interests, as applicable, (other than pursuant to an
effective registration statement) it may be required to provide certification or other
documentation relating to the Transfer as provided in this Agreement and may be required to provide
to the Company any information required by Regulations Section 1.743-1(k)(2).




          (vi) It acknowledges that none of the Company, any Class A Limited Member, any Class B Limited
Member, the Class B Remarketing Agent, or GMI or the Person representing any such Person, has made
any representation to it with respect to the Company, any Class B Limited Member, GMI, or the
offering of the Series B-1 Limited Membership Interests or Series B-2 Limited Membership Interests,
as applicable. It has had access to such financial and other information concerning the Company,
Cereals Holdings, GMI, and the Series B-1 Limited Membership Interests or Series B-2 Limited
Membership Interests, as applicable, as it deemed necessary in connection with its decision to
purchase any of the Series B-1 Limited Membership Interests or Series B-2 Limited Membership
Interests, as applicable, including an opportunity to ask questions and request information from
the Company, Cereals Holdings, and GMI.




          (vii) It is purchasing the Series B-1 Limited Membership Interests or Series B-2 Limited
Membership Interests, as applicable, for its own account, or for one or more investor accounts
(each beneficial owner of which shall have executed a Purchaser’s Letter) for which it is acting as
a fiduciary or agent, in each case for investment, and not with a view to, or for offer or sale in
connection with, any distribution thereof in violation of the Securities Act, subject to any
requirement of law that the disposition of its property or the property of such investor account or
accounts be at all times within its or their control and subject to its or their ability to resell
such Series B-1 Limited Membership Interests or Series B-2 Limited Membership Interests, as
applicable, pursuant to Rule 144A or any exemption from registration available under the Securities
Act. It agrees on its own behalf and on behalf of any investor account for which it is purchasing
the Series B-1 Limited Membership Interests or Series B-2 Limited Membership Interests, as
applicable, and each subsequent holder of the Series B-1 Limited Membership Interests or Series B-2
Limited Membership Interests, as applicable, by its acceptance thereof will agree, to offer, sell
or otherwise Transfer such Series B-1 Limited Membership Interests or Series B-2 Limited Membership
Interests, as applicable, only (a) to the Company, (b) pursuant to a registration statement which
has been declared effective under the Securities Act, (c) for so long as the Series B-1 Limited
Membership Interests or Series B-2 Limited Membership Interests, as applicable, are eligible for
resale pursuant to Rule 144A, to a Person it reasonably believes is a QIB that purchases for its
own account or for the account of a QIB to whom notice is given that the Transfer is being made in
reliance on Rule 144A, or (d) pursuant to another available exemption from the registration
requirements of the Securities Act and, in each case, in accordance with the applicable securities
laws of any state of the United States or any other applicable jurisdiction and, subject to any
requirement of law that the




105









 




disposition of its property or the property of such investor account or accounts be at all
times within its or their control. Each purchaser acknowledges that the Company reserves the right
prior to any offer, sale or other Transfer pursuant to clause (d) above to require the delivery of
an opinion of counsel, certifications or other information acceptable to the Company in form and
substance. Each purchaser agrees on its own behalf and on behalf of any investor account for which
it is purchasing the Series B-1 Limited Membership Interests or Series B-2 Limited Membership
Interests, as applicable, and each subsequent holder of the Series B-1 Limited Membership Interests
or Series B-2 Limited Membership Interests, as applicable, by its acceptance thereof will agree, to
offer, sell or otherwise transfer such Series B-1 Limited Membership Interests or Series B-2
Limited Membership Interests, as applicable, only to a purchaser who signs and delivers a
Purchaser’s Letter to a Broker-Dealer. Each purchaser acknowledges that each Series B-1 Preferred
Certificate or Series B-2 Preferred Certificate, as applicable, will contain a legend, to which
such purchaser hereby agrees, substantially to the following effect:




     “THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS AND NEITHER THIS SECURITY NOR ANY
INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY
NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE
HEREOF, REPRESENTS, ACKNOWLEDGES AND AGREES FOR THE BENEFIT OF GENERAL MILLS CEREALS, LLC AND
GENERAL MILLS, INC. THAT: (i) IT HAS ACQUIRED A “RESTRICTED” SECURITY WHICH HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT; (II) IT WILL NOT OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT
(A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE
UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO
RULE 144A, TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES OR ANY APPLICABLE JURISDICTION; AND (III) IT WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THIS SECURITY OF THE RESALE RESTRICTIONS SET FORTH IN
(II) ABOVE. ANY OFFER, SALE OR OTHER DISPOSITION PURSUANT TO THE FOREGOING CLAUSE (II)(D) IS
SUBJECT TO THE RIGHT OF THE COMPANY TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATIONS OR OTHER INFORMATION ACCEPTABLE TO IT IN FORM AND SUBSTANCE.



     THE SECURITIES WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS CONSISTING OF NOT LESS
THAN 10,000 SECURITIES. A TRANSFEROR OF



106









 







THE SECURITIES MAY NOT RETAIN SECURITIES UNLESS IT RETAINS AT LEAST 10,000 SECURITIES. ANY
ATTEMPTED TRANSFER OF SECURITIES IN A BLOCK CONSISTING OF LESS THAN 10,000 SECURITIES SHALL BE
DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED
NOT TO BE THE HOLDER OF SUCH SECURITIES FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT
OF DISTRIBUTIONS ON SUCH SECURITIES, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO
INTEREST WHATSOEVER IN SUCH SECURITIES.



     SO LONG AS THE SECURITIES ARE “RESTRICTED SECURITIES” (AS SUCH TERM IS DEFINED IN RULE
144(a)(3) UNDER THE SECURITIES ACT), THE COMPANY AGREES TO MAKE AVAILABLE TO EACH HOLDER AND EACH
PROSPECTIVE PURCHASER OF THE SECURITIES DESIGNATED BY A HOLDER, UPON REQUEST, THE INFORMATION
REQUIRED TO BE PROVIDED PURSUANT TO RULE 144A(d)(4) UNDER THE SECURITIES ACT.



     EACH HOLDER AND SUBSEQUENT TRANSFEREE OF THE SECURITIES WILL BE DEEMED TO HAVE REPRESENTED AND
WARRANTED THAT: (i) IT IS NOT USING THE ASSETS OF ANY PLAN, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER
ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
(“ERISA”), SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) OR OTHER
PROVISIONS OF FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT CONTAIN ONE OR MORE
PROVISIONS THAT ARE SIMILAR TO ANY OF THE PROHIBITED TRANSACTION PROVISIONS THAT ARE CONTAINED IN
TITLE I OF ERISA OR SECTION 4975 OF THE CODE (“SIMILAR LAWS”), OR ANY ENTITY WHOSE UNDERLYING
ASSETS ARE CONSIDERED TO INCLUDE “PLAN ASSETS” OF ANY SUCH PLAN, ACCOUNT OR ARRANGEMENT; OR
(II) ITS ACQUISITION AND HOLDING OF SUCH SECURITIES OR ANY INTEREST THEREIN WILL NOT CONSTITUTE A
NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE, OR A
VIOLATION OF ANY SIMILAR LAW.



     THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER FOR THE
PURPOSE OF PREVENTING THE COMPANY FROM BEING CLASSIFIED AS A PUBLICLY TRADED PARTNERSHIP UNDER THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) AND FOR THE PURPOSE OF PREVENTING TRANSFERS
TO NON-U.S. PERSONS. ANY ATTEMPTED TRANSFER OF SECURITIES THAT WOULD CAUSE THE COMPANY TO BE
CLASSIFIED AS A PUBLICLY TRADED PARTNERSHIP OR ANY ATTEMPTED TRANSFER OF SECURITIES TO NON-U.S.
PERSONS SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER.



     EACH HOLDER AND SUBSEQUENT TRANSFEREE OF THE SECURITIES, SHALL BE DEEMED TO HAVE REPRESENTED
AND WARRANTED THAT IT (I) IS NOT, AND WILL NOT BECOME, A PARTNERSHIP, A SUBCHAPTER S CORPORATION OR
A GRANTOR TRUST, IN EACH CASE, AS DESCRIBED IN THE CODE (EACH A “FLOW-THROUGH ENTITY”) OR (II) IS A
FLOW-THROUGH ENTITY, BUT LESS THAN 50% OF



107









 







THE VALUE OF ANY BENEFICIAL OWNER’S INTEREST IN THE FLOW-THROUGH ENTITY IS ATTRIBUTABLE TO THE
FLOW-THROUGH ENTITY’S DIRECT OR INDIRECT INTEREST IN THE COMPANY OR A PRINCIPAL PURPOSE IN USING
THE FLOW-THROUGH ENTITY TO PURCHASE THE SERIES B-1 LIMITED MEMBERSHIP INTERESTS IS NOT TO PERMIT
THE COMPANY TO HAVE MORE THAN 83 OWNERS OF THE SERIES B-1 LIMITED MEMBERSHIP INTERESTS, TO HAVE
MORE THAN 6 OWNERS OF THE SERIES B-2 LIMITED MEMBERSHIP INTERESTS OR TO HAVE MORE THAN 100
“PARTNERS” WITHIN THE MEANING OF REGULATIONS SECTION 1.7704-1(h)(1)(ii).



     ALL CAPITALIZED TERMS IN THIS LEGEND HAVE THE MEANINGS DEFINED IN GENERAL MILLS CEREALS, LLC’S
LIMITED LIABILITY COMPANY AGREEMENT AS THE SAME MAY BE AMENDED FROM TIME TO TIME, A COPY OF WHICH,
INCLUDING THE RESTRICTIONS ON TRANSFER, WILL BE SENT WITHOUT CHARGE TO EACH HOLDER OF SECURITIES
WHO SO REQUESTS.



          (viii) If it is acquiring any Series B-1 Limited Membership Interests or Series B-2 Limited
Membership Interests, as applicable, as a fiduciary or agent for one or more investor accounts, it
represents that it has sole investment discretion with respect to each such account and it has full
power to make the foregoing acknowledgments and agreements on behalf of each such account.




          (ix) (A) It is not using the assets of any plan, individual retirement account or other
arrangement subject to Title I of ERISA, Section 4975 of the Code or any Similar Law, or any entity
whose underlying assets are considered to include “plan assets” of any such plan, account or
arrangement; or (B) its acquisition and holding of such Series B-1 Limited Membership Interests or
Series B-2 Limited Membership Interests, as applicable, or any interest therein will not constitute
a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code, or a
violation of any Similar Law. The purchaser acknowledges, represents and agrees that any attempt
to Transfer any Series B-1 Limited Membership Interests or Series B-2 Limited Membership Interests,
as applicable, to such a plan or arrangement or to any Person acting on behalf of or using the
assets of such a plan or arrangement in violation of this restriction shall be null and void.




          (x) It understands and acknowledges that if the Managing Member is, at any time and in good
faith, of the opinion that ownership of the Series B-1 Limited Membership Interests or Series B-2
Limited Membership Interests, as applicable, has or may become widely disseminated to an extent
that may cause us to qualify as a PTP, then the Managing Member will have the power to prevent the
Transfer of the Series B-1 Limited Membership Interests or Series B-2 Limited Membership Interests,
as applicable. It also acknowledges that upon any Transfer of its Series B-1 Limited Membership
Interests or Series B-2 Limited Membership Interests, as applicable, the prospective transferee
will be required to execute a Purchaser’s Letter.




          (xi) It understands and acknowledges that it may not Transfer any Series B-1 Limited
Membership Interests or Series B-2 Limited Membership Interests, as applicable, or any portion
thereof (including any beneficial interest therein) if such Transfer would cause (i) the




108









 




Series B-1 Limited Membership Interests to be owned by more than 83 Persons or the Series B-2
Limited Membership Interests to be owned by more than 6 Persons (in each case, as determined in
accordance with Treasury Regulations promulgated under Section 7704 of the Code) or (ii) the
Company to otherwise be treated as a PTP assuming that, in the case of the Series B-1 Limited
Membership Interests, the Class A Limited Membership Interests are held by 10 Persons and the
Series B-2 Limited Membership Interests are held by 6 Persons and, in the case of the Series B-2
Limited Membership Interests, the Class A Limited Membership Interests are held by 10 Persons and
the Series B-1 Limited Membership Interests are held by 83 Persons. It also understands and
acknowledges that any purported Transfer of any Series B-1 Limited Membership Interests or Series
B-2 Limited Membership Interests, as applicable, or any portion thereof (including any beneficial
interest therein) that does not comply with this condition shall be null and void and of no force
or effect whatsoever.




          (xii) It understands and acknowledges that Series B-1 Limited Membership Interests or
Series B-2 Limited Membership Interests, as applicable, may not be purchased by or Transferred to
any non-U.S. Person. Allocations to non-U.S. Persons would require the Company to pay withholding
taxes, at the highest effective tax rate applicable to taxpayers of the relevant type. The
Company, therefore, will not allow any non-U.S. Person to acquire its membership interests.




          (xiii) It represents and covenants that (A) it is not, and will not become, a Flow-Through
Entity or (B) it is a Flow-Through Entity, but less than 50% of the value of any beneficial owner’s
interest in the Flow-Through Entity is attributable to the Flow-Through Entity’s direct or indirect
interest in the Company or a principal purposes in using the Flow-Through Entity to purchase the
Series B-1 Limited Membership Interests or Series B-2 Limited Membership Interests, as applicable,
is not to permit the Company to have more than 83 owners of the Series B-1 Interests or to have
more than 6 owners of the Series B-2 Interests or to have more than 100 “Partners” within the
meaning of Regulations Section 1.7704-1(h)(1)(ii).




          (xiv) It represents and covenants that it will not market, Transfer, assign, participate,
pledge or otherwise dispose of its Series B-1 Limited Membership Interests or Series B-2 Limited
Membership Interests, as applicable, (or any interest therein) on or through an “established
securities market” within the meaning of Section 7704(b)(1) of the Code (and the Treasury
Regulations promulgated thereunder), including, without limitation, an over-the-counter market or
an inter-dealer quotation system that regularly disseminates firm buy or sell quotations.




          (xv) It acknowledges that as a purchaser of either the Series B-1 Limited Membership Interests
or Series B-2 Limited Membership Interests, as applicable, it will be subject to the rights and
obligations set forth in, and bound by the terms and provisions of, the Exchange Agreement or other
documents to which the Series B-1 Limited Membership Interests or Series B-2 Limited Membership
Interests, as applicable, are bound.




          (xvi) It acknowledges that the Company, Cereals Holdings, GMI, and others will rely upon the
truth and accuracy of the foregoing acknowledgments, representations and agreements and agrees that
if any of the acknowledgments, representations and agreements deemed to have been made by purchase
of the Series B-1 Limited Membership Interests or




109









 




Series B-2 Limited Membership Interests, as applicable, are no longer accurate, it will
promptly notify the Company.




          (xvii) It acknowledges that as a purchaser of the Series B-1 Limited Membership Interests or
Series B-2 Limited Membership Interests, as applicable, it is required, pursuant to Regulations
Section 1.743-1(k)(2), to provide the Company with the following information within 30 days of its
purchase of the Series B-1 Limited Membership Interests or Series B-2 Limited Membership Interests,
as applicable: (i) the names and addresses of the transferee and (if ascertainable) of the
transferor; (ii) the taxpayer identification numbers of the transferee and (if ascertainable) of
the transferor; (iii) the relationship (if any) between the transferee and the transferor; (iv) the
date of the Transfer; and (v) the consideration for the Transferred Interest.




     (l) Paragraphs (a) through (j) of this Section 11.3 shall not be applicable to any pledge
described in Section 11.2(b)(i)(A) or Section 11.2(c)(i)(A). As set forth in Section 11.1(a), the
pledgee or secured party is subject to the terms and conditions of this Section 11.



     (m) A Transfer of Series B-1 Preferred Certificates shall not be a Permitted Transfer if fewer
than 10,000 Series B-1 Preferred Certificates are Transferred. A Transfer of any Membership
Interests other than a Series B-1 Limited Membership Interests shall not be a Permitted Transfer if
such Transfer would result in there being more than 17 beneficial owners of the Membership
Interests, excluding the owners of the Series B-1 Limited Membership Interests.



     11.4 Prohibited Transfers.



     Any purported Transfer of a Membership Interest that is not a Permitted Transfer shall be null
and void and of no effect whatsoever; provided that, if the Company is required to recognize a
Transfer that is not a Permitted Transfer, the Membership Interest Transferred shall be strictly
limited to the transferor’s rights to allocations and distributions as provided by this Agreement
with respect to the Transferred Membership Interest, which allocations and distributions may be
applied (without limiting any other legal or equitable rights of the Company) to satisfy any debts,
obligations, or liabilities for damages that the transferor or transferee of such Membership
Interest may have to the Company. In the case of a Transfer or attempted Transfer of a Membership
Interest that is not a Permitted Transfer, the parties engaging or attempting to engage in such
Transfer shall be liable to indemnify and hold harmless the Company and the other Members from all
cost, liability, and damage that any of such indemnified Persons may incur (including, without
limitation, incremental tax liability and lawyers’ fees and expenses) as a result of such Transfer
or attempted Transfer and efforts to enforce the indemnity granted hereby. Notwithstanding any
provision in this Agreement to the contrary, the Managing Member shall prohibit (i) any Transfer
that would result in the Company being treated as a PTP or (ii) any Transfer (other than a Transfer
by RBDB) that would result in a violation of the requirements of Section 11.3(b).



     11.5 Rights of Unadmitted Assignees.



     (a) In General. A Person who acquires one or more Interests but who is not admitted as a
substituted Member pursuant to Section 11.6 shall be entitled only to allocations and distributions
with respect to such Membership Interests in accordance with this Agreement, but shall have no



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right to any information or accounting of the affairs of the Company, shall not be entitled to
inspect the books or records of the Company, and shall not have any of the rights of a Managing
Member or a Limited Member under the Act or this Agreement.



     (b) Managing Member. A transferee who acquires a Membership Interest from the Managing Member
under this Agreement by means of a Transfer that is permitted under this Section 11, but who is not
admitted as the Managing Member, shall have no authority to act for or bind the Company, to inspect
the Company books, or otherwise to be treated as a Managing Member. Following such a Transfer, the
transferor shall not cease to be the Managing Member of the Company and shall continue to be the
Managing Member until such time as the transferee is admitted as the Managing Member.



     (c) Limited Members. Following a Transfer to a transferee who acquires a Membership Interest
from a Limited Member under this Agreement by means of a Transfer that is permitted under this
Section 11, but who is not admitted as a Limited Member, the transferor shall not cease to be a
Limited Member of the Company and shall continue to be a Limited Member until such time as the
transferee is admitted as a Limited Member under this Agreement.



     11.6 Admission as Substituted Members.



     (a) A Person shall be admitted to the Company as a Class B Limited Member without execution of
this Agreement upon the acquisition of a Series B-1 Preferred Certificate or Series B-2 Preferred
Certificate in a Permitted Transfer.



     (b) Subject to the other provisions of this Section 11, a transferee of Membership Interests
may be admitted to the Company as a substituted Member only upon satisfaction of the conditions set
forth below in this Section 11.6:



          (i) The Membership Interests with respect to which the transferee is being admitted were
acquired by means of a Permitted Transfer;




          (ii) The transferee of a Class A Limited Membership Interest or the Managing Membership
Interest becomes a party to this Agreement as a Member and executes such documents and instruments
as the Managing Member may reasonably request (including, without limitation, amendments to the
Certificate of Formation) as may be necessary or appropriate to confirm such transferee as a Member
in the Company and such transferee’s agreement to be bound by the terms and conditions of this
Agreement;




          (iii) Unless the requirements of this Section 11.6(b)(iii) have been waived by the Managing
Member, the transferee pays or reimburses the Company for all reasonable legal, filing, and
publication costs that the Company incurs in connection with the admission of the transferee as a
Member with respect to the Transferred Interests;




          (iv) Unless the requirements of this Section 11.6(b)(iv) have been waived by the Members, the
transferee of a Class A Limited Membership Interest or the Managing Membership Interest provides
the Company with evidence satisfactory to counsel for the Company that such transferee has made
representations equivalent to those contained in Section 8.2 as of the date of the Transfer; and




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          (v) In the event that the transferee of a Membership Interest from any Member is admitted
under this Agreement, such transferee shall be deemed admitted to the Company as a substituted
Member immediately prior to the Transfer, and with respect to the transferee of the Managing
Member, such transferee shall continue the business of the Company without dissolution.




     11.7 Distributions and Allocations in Respect of Transferred Membership Interests.



     If any Membership Interest is Transferred during any Allocation Year in compliance with the
provisions of this Section 11, Profits, Losses, each item thereof, and all other items attributable
to the Transferred Interest for such Allocation Year shall be divided and allocated between the
transferor and the transferee by taking into account their varying Membership Interests during the
Fiscal Year in accordance with Code Section 706(d), using the daily proration convention.
Notwithstanding the date of such Transfer, all distributions shall be made to the holder of record
as of the relevant date as set forth in Section 4.1. The Company shall recognize a Permitted
Transfer of Series B-1 Limited Membership Interests, as of the date of such Permitted Transfer,
when it receives the Purchaser’s Letter with respect to such Permitted Transfer. The Company shall
recognize a Permitted Transfer of any other Membership Interests not later than the end of the
calendar month during which it is given notice of a Permitted Transfer; provided that, if the
Company is given notice of such a Permitted Transfer at least fourteen (14) Business Days prior to
the Transfer, the Company shall recognize a Permitted Transfer as of the date of such Permitted
Transfer; and provided, further, that if the Company does not receive a notice stating the date
such Interest was Transferred and such other information as the Managing Member may reasonably
require within thirty (30) days after the end of the Allocation Year during which the Permitted
Transfer occurs, then all such items shall be allocated, and all distributions shall be made, to
the Person who, according to the books and records of the Company, was the owner of the Interest on
the last day of such Allocation Year. Neither the Company nor the Managing Member shall incur any
Liability for making allocations and distributions in accordance with the provisions of this
Section 11.7, whether or not the Managing Member or the Company has knowledge of any Transfer of
ownership of any Interest.



     11.8 Class A Limited Membership Interest Purchase Option.



     (a) Class A Purchase Option. The Managing Member or, in the sole discretion of the Managing
Member, its designee (for purposes of this Section 11.8, references to the Managing Member shall,
as the context requires, include such designee) may, by delivery of a written notice to the Class A
Limited Members (a “Class A Purchase Notice"), elect to purchase (the “Class A Purchase Option")
(x) with respect to subparagraph (i) below, all of the Class A Limited Membership Interests of any
Class A Limited Member and (y) with respect to subparagraphs (ii) below, all the Class A Limited
Membership Interests then outstanding at the following times:



          (i) At any time prior to the delivery of a Liquidation Notice to the Managing Member pursuant
to Section 14.2; provided that, other than a purchases on a Class A Reset Date, the Capital Account
of such Class A Limited Member calculated as of the Class A Purchase Valuation Date as determined
pursuant to Section 9.2(f) is not less than such Class A Limited Member’s Preferred Return Capital;
or




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          (ii) Within the ten (10) day period prior to the effectiveness of any Liquidation Notice
delivered to the Managing Member pursuant to Section 14.2; provided that the Required Class A
Limited Members have not rescinded such Liquidation Notice during such ten (10) day period; and
provided, further, that no GMI Event shall have occurred and be continuing.




     Upon consummation of the Class A Purchase Option, the Managing Member shall be admitted as a
Class A Limited Member with respect to the Class A Limited Membership Interests purchased pursuant
to the Class A Purchase Option, and the Class A Limited Members from whom such Class A Limited
Membership Interests were purchased shall be deemed withdrawn with respect to such Class A Limited
Membership Interests.



     (b) Class A Purchase Election Date. The “Class A Purchase Election Date” shall be the day on
which the Managing Member delivers the Class A Purchase Notice; provided that, if the Managing
Member elects to purchase all of the Class A Limited Membership Interests then outstanding during
the ten (10) day period following the delivery of a Liquidation Notice, the Class A Purchase
Election Date shall be the day on which such Liquidation Notice is delivered to the Managing
Member. Except as provided in Section 14.2 with respect to a rescinded Liquidation Notice, a
Class A Purchase Notice given pursuant to this Section 11.8 shall be irrevocable and binding on the
Managing Member.



     (c) Class A
Purchase Price. The purchase price (the “Class A Purchase Price”) for each
Class A Limited Member’s Limited Membership Interest being purchased on a Class A Reset Date shall
equal the Class A Mandatory Purchase Price that would be payable in connection with a Class A
Mandatory Remarketing held with respect to such Class A Reset Date (determined in accordance with
Section 7.1(d)(ii)); provided that, if (i) the amount of Estimated Profits and Losses, and other
items of Company income, gain, loss, or deduction included in the determination of such Class A
Mandatory Purchase Price differs from the actual amount of Profits and Losses, and other items of
Company income, gain, loss, or deduction for the relevant Reset Valuation Allocation Year and
(ii) such difference would have resulted in the Class A Mandatory Purchase Price differing from the
Class A Purchase Price, then (x) if the revised Class A Mandatory Purchase Price would have
exceeded the Class A Purchase Price paid to the Class A Members, the Managing Member (or its
designee) shall pay an amount equal to such excess to each Class A Limited Member within five (5)
Business Days after the final determination of such Mandatory Purchase Price, or (y) if the Class A
Purchase Price paid to the Class A Members exceeded such revised Class A Mandatory Purchase Price,
the Class A Members shall pay to the Managing Member (or its designee) an amount equal to such
excess within five (5) Business Days after receipt of the final determination of such Mandatory
Purchase Price.



     The Class A Purchase Price for each Class A Limited Member’s Limited Membership Interests
being purchased on any other date shall be equal to the excess, if any, of (i) the sum of (x) the
balance in such Class A Limited Member’s Capital Account determined pursuant to Section 9.2(f) as
of the last day of the Fiscal Quarter preceding the Fiscal Quarter in which the Class A Purchase
Election Date occurs (the “Class A Purchase Valuation
Date”), plus (y) an amount equal to such
Class A Limited Member’s accrued but undistributed Class A Limited Member Preferred Return for the
period from and including the Class A Purchase Valuation Date to but excluding the Class A Purchase
Date, plus (z) the Class A Purchase Premium, if any, over



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(ii) any amounts distributed to such Class A Limited Member from and including the Class A
Purchase Valuation Date to but excluding the Class A Purchase Date.




     (d) Purchase.



          (i) Single Payment. In the case of a Class A Purchase Option exercised in any case not
described in Section 11.8(a)(ii), the Class A Purchase Price shall be paid in Dollars and
immediately available funds on the last Business Day of the Fiscal Quarter during which the Class A
Purchase Election Date occurs or, if such last Business Day of such Fiscal Quarter is less than
five Business Days after the Election Date, the last Business Day of the following Fiscal Quarter
(the “11.8(a)(i) Purchase Date”) in accordance with Section 11.8(e).




          (ii) Installments. In the case of a Class A Purchase Option exercised in any case described
in Section 11.8(a)(ii), the Class A Purchase Price shall be payable in two (2) installments, each
in Dollars and immediately available funds:




               (A) The first installment shall be made on the date specified in the Purchase Notice, which
date shall be a Business Day that is on or before the fortieth (40th) day following the
Class A Purchase Election Date (such date of payment being the “11.8(a)(ii) Purchase Date,”
together with the 11.8(a)(i) Purchase Date, each a “Class A Purchase Date”) and shall be equal to
applicable Class A Limited Member’s Preferred Return Capital as of the Class A Purchase Valuation
Date. In the event that, on the Class A Purchase Date, the rating assigned to the senior unsecured
and unsupported long-term debt obligations of a Class A Limited Member is below A- by S&P or A3 by
Moody’s, then such Class A Limited Member will be required, unless its repayment obligation under
clause (b) below is guaranteed by a Person whose debt obligations are so rated, to hold in escrow
any amount of the first installment remaining after payment of its obligations to its creditors;
and



               (B) If the Class A Purchase Price is greater than the first installment, to the extent that
the first installment was required to be held in an escrow account pursuant to clause (A) above,
the balance in the escrow account shall be released to the applicable Class A Limited Member and
the second installment shall be made as soon as practicable after the Capital Account statements
described in Section 9.2(f) are received by the Class A Limited Members, but in no event later than
sixty (60) days following the Class A Purchase Election Date. The second installment shall be
equal to the excess, if any, of the Class A Purchase Price over the amount of the first
installment. If the first installment exceeds the Class A Purchase Price, an amount equal to the
lesser of (1) such excess or (2) the balance in the escrow account shall be returned to the
Managing Member.



     (e) Closing. The closing of the purchase contemplated by this Section 11.8 shall occur on the
Class A Purchase Date at such place as is mutually agreeable to the Members, or upon the failure to
agree, at the principal place of business of the Company. At the closing, the Class A Limited
Members shall deliver to the Managing Member good title, free and clear of any Liens, claims,
encumbrances, security interests, or options, to its Class A Limited Membership Interests thus
purchased other than such Liens, claims, encumbrances, security interest or options permitted
hereunder. The reasonable costs of such Transfer and closing, including, without limitation,
attorneys’ fees and filing expenses, shall be paid by the Managing Member. At the



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closing, the Class A Limited Members shall execute such documents and instruments of
conveyance as may be reasonably necessary to effectuate the transaction contemplated hereby,
including the Transfer of the Class A Limited Membership Interests.



     (f) Treatment as Purchase Under Section 741. The Class A Limited Members agree to treat the
Transfer of the Class A Limited Membership Interests to the Managing Member pursuant to this
Section 11.8 as a purchase and sale under Code Section 741 and not as a retirement under Code
Section 736.



     11.9 Purchase of Class B Limited Membership Interests.



     (a) Class B Purchase Option. The Managing Member or, in the sole discretion of the Managing
Member, its designee (for purposes of this Section 11.9, references to the Managing Member shall,
as the context requires, include its designee) may, by delivery of a written notice complying with
the requirements set forth in Section 11.9(e) (a “Class B Purchase Notice”), elect to purchase (the
“Class B Purchase Option”) all (but not less than all) of the Series B-1 Limited Membership
Interests and/or the Series B-2 Limited Membership Interests (i) during any Fixed Rate Period, on
any Scheduled Reset Date and (ii) during any Floating Rate Period, on a Class B Distribution Date.
Any such purchases shall be in Cash, unless otherwise consented to by the Class B Limited Members
whose interests are being purchased.



     Upon consummation of the Class B Purchase Option, the Managing Member shall be admitted as a
Class B Limited Member with respect to the Class B Limited Membership Interests purchased pursuant
to the Class B Purchase Option, and the Class B Limited Members from whom such Class B Limited
Membership Interests were purchased shall be deemed withdrawn with respect to such Class B Limited
Membership Interests.



     (b) Class B Purchase Election Date. The “Class B Purchase Election Date” shall be the day on
which the Managing Member delivers the Class B Purchase Notice. A Class B Purchase Notice given
pursuant to this Section 11.9 shall be irrevocable and binding on the Managing Member.



     (c) Class B Purchase Price. The purchase price (the “Class B Purchase Price”) for each
Class B Limited Member’s Limited Membership Interests being purchased on a Scheduled Reset Date
shall equal the Class B Mandatory Purchase Price that would be payable in connection with a Class B
Optional Remarketing held with respect to such Scheduled Reset Date (determined in accordance with
Section 7.2(b)(iii).



     The Class B Purchase Price for each Class B Limited Member’s Limited Membership Interests
being purchased on a Class B Distribution Date during a Floating Rate Period shall be equal to the
excess, if any, of (i) the sum of (x) the balance in such Class B Limited Member’s Capital Account
determined pursuant to Section 9.2(g) as of the last day of the Fiscal Quarter preceding the Fiscal
Quarter in which the Class B Purchase Election Date occurs (the “Class B Purchase Valuation Date”),
over (ii) any amounts distributed to such Class B Limited Member from and including the Class B
Purchase Valuation Date to but excluding the Class B Purchase Date. In the event a Class B Limited
Member holds a Series of Class B Limited Membership Interests other than the Series being purchased
pursuant to this Section 11.9, the calculations



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described in this Section 11.9(c) shall be performed by the Managing Member in a manner that
determines the Class B Purchase Price solely with respect to the Series being purchased.
Notwithstanding the two preceding sentences, if the Managing Member elects to purchase all (but not
less than all) the Series B-1 Limited Membership Interests on the first Scheduled Reset Date, then
the Class B Purchase Price for the purchase of a specific Series B-1 Limited Member’s Series B-1
Limited Membership Interests shall be equal to the greater of (i) the Mandatory Purchase Price that
would be payable to such Series B-1 Limited Member in connection with a Class B Optional
Remarketing held with respect to such Scheduled Reset Date (determined in accordance with
Section 7.2(b)(iii)), and (ii) the sum of ninety percent of such Series B-1 Limited Member’s
initial Capital Account, plus an amount equal to such Series B-1 Limited Member’s accrued but
undistributed Class B Limited Member Preferred Return as of the day before the Class B Purchase
Date.



     (d) Purchase. The Class B Purchase Price shall be paid in Dollars and immediately available
funds on the last Business Day of the Fiscal Quarter during which the Class B Purchase Election
Date occurs (the “Class B Purchase Date”) in accordance with Section 11.9(e). Provided that, if
the Managing Member elects to purchase all (but not less than all) of the Series B-1 Limited
Membership Interests on the first Scheduled Reset Date, then the Class B Purchase Price shall be
paid in immediately available funds on such Scheduled Reset Date.



     (e) Closing. In the event that the Managing Member has elected to purchase any Series of
Class B Limited Membership Interests from a Class B Limited Member pursuant to Section 11.9(a),
then such Member’s Class B Limited Membership Interests shall be purchased, at 11:00 a.m., New York
City time, on the Class B Purchase Date (which shall be specified in the Class B Purchase Notice),
which date shall not be less than thirty (30) Days or more than sixty (60) Days after the date on
which such Class B Purchase Notice was given pursuant to Section 11.9(a); provided, however, that
the failure to give such Class B Purchase Notice or any defect in such Class B Purchase Notice or
in the mailing of such Class B Purchase Notice will not effect the validity of the proceeding for
the purchase of any Class B Limited Membership Interests to be purchased except as to a Member to
whom the Company has failed to give such notice or except as to a Member to whom notice was
defective. A Class B Purchase Notice will be sent to each Member whose Class B Limited Membership
Interests are being called for purchase at such Member’s address as it appears in the Membership
Registry. Each Class B Purchase Notice will state: (i) the applicable Class B Purchase Date;
(ii) the applicable Class B Purchase Price as determined under Section 11.9(c); and (iii) the place
or places where certificates, if any, for the Membership Interests are to be surrendered for
payment of the Class B Purchase Price.



     (f) Treatment as Purchase Under Section 741. The Class B Limited Members agree to treat the
Transfer of the Class A Limited Membership Interests to the Managing Member pursuant to this
Section 11.9 as a purchase and sale under Code Section 741 and not as a retirement under Code
Section 736.



     11.10 Form and Transfers of Class B Limited Membership Interests



     (a) The Series B-1 Preferred Certificates and Series B-2 Preferred Certificates (except with
respect to any Class B Limited Membership Interests held by GMI or one of its affiliates,



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which shall not be certificated) shall be issued substantially in the form set forth in
Exhibits H and I, respectively. No such certificate shall be valid for any purpose
unless it shall have been executed on behalf of the Company by the manual or facsimile signature of
an officer of the Company.



     (b) All requests for removal of legends on definitive certificates indicating restrictions on
Transfer shall be accompanied by an opinion of counsel addressed to the Transfer Agent stating that
such legends may be removed and all such requests for removal of legends on definitive certificates
indicating restrictions on Transfer shall be accompanied by an opinion of counsel addressed to the
Transfer Agent stating that such legends may be removed and the Series B-1 Preferred Certificates
represented thereby freely Transferred in compliance with the federal securities laws. No legend
may be removed without the consent of the Managing Member and the Required Class A Limited Members.



     (c) The Transfer Agent shall issue and register replacement certificates for certificates
represented to have been lost, stolen or destroyed upon the fulfillment of such requirements as
shall be deemed appropriate by the Transfer Agent, subject at all times to provisions of law. The
Transfer Agent may issue new certificates in exchange for and upon the cancellation of mutilated
certificates. Any request by a holder to the Transfer Agent to issue a replacement or new
certificate pursuant to this Section shall be deemed to be a representation and warranty by the
holder to the Transfer Agent that such issuance will comply with such provisions of law.



     (d) Any Transfer shall be automatically void if such Transfer was effected through an
established securities market (within the meaning of Treasury Regulation § 1.7704-1(b)).



SECTION 12.




POWER OF ATTORNEY




     12.1 Managing Member as Attorney-In-Fact.



     Each Limited Member hereby makes, constitutes, and appoints the Managing Member, each
successor Managing Member, and the Liquidator, severally, with full power of substitution and
resubstitution, its true and lawful attorney-in-fact for it and in its name, place, and stead and
for its use and benefit, to sign, execute, certify, acknowledge, swear to, file, publish, and
record (i) all certificates of formation, amended name or similar certificates, and other
certificates and instruments (including counterparts of this Agreement) which the Managing Member
or Liquidator may deem necessary to be filed by the Company under the laws of the State of Delaware
or any other jurisdiction in which the Company is doing or intends to do business; (ii) any and all
amendments, restatements, or changes to this Agreement and the instruments described in clause (i),
as now or hereafter amended, which the Managing Member may deem necessary to effect a change or
modification of the Company in accordance with the terms of this Agreement, including amendments,
restatements, or changes to reflect (A) the admission of any additional or substituted Member and
(B) the disposition by any Member of its Membership Interests; (iii) all certificates of
cancellation and other instruments which the Liquidator reasonably deems necessary or appropriate
to effect the dissolution and termination of the Company pursuant to the terms of this Agreement;
and (iv) any other instrument which is now or



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may hereafter be required by law to be filed on behalf of the Company to carry out fully the
provisions of this Agreement in accordance with its terms; provided that nothing in this
Section 12.1 shall authorize such attorney-in-fact to take any action that could reasonably be
anticipated to have an adverse effect on a Limited Member or the Company.



     12.2 Nature of Special Power.



     The power of attorney granted to the Managing Member pursuant to this Section 12:



     (a) Is a special power of attorney coupled with an interest and is irrevocable; provided,
however, that, with respect to the power of attorney granted to the Managing Member, such power
shall terminate upon the appointment of the Liquidator;



     (b) May be exercised by such attorney-in-fact with the single signature of any such
attorney-in-fact acting as attorney-in-fact for such Members; and



     (c) Shall survive and not be affected by the subsequent Bankruptcy, insolvency, dissolution,
or cessation of existence of a Limited Member and shall survive the delivery of an assignment by a
Limited Member of the whole or a portion of its Membership Interests (except that where the
assignment is of such Limited Member’s entire Membership Interests and the assignee, with the
affirmative written consent of the other Members, is admitted as a substituted Limited Member, the
power of attorney shall survive the delivery of such assignment for the sole purpose of enabling
any such attorney-in-fact to effect such substitution) and shall extend to such Limited Member’s or
assignee’s successors and assigns.



SECTION 13.




DISSOLUTION AND WINDING UP




     13.1 Liquidating Events.



     (a) The Company shall dissolve and shall commence winding up and liquidation upon the first to
occur of any of the following (each, a “Liquidating Event”):



          (i) The date upon which a Liquidation Notice becomes effective to cause a Class A Notice Event
to become a Liquidating Event;




          (ii) The Bankruptcy of the Company or any of its Subsidiaries or any GMI Member then owning an
Interest hereunder;




          (iii) The unanimous vote or consent of the Members to dissolve, wind up, and liquidate the
Company;




          (iv) In the event the Managing Member has elected pursuant to the Class A Purchase Option to
purchase all of the Class A Limited Membership Interests, (x) the failure of the Managing Member,
or its designee, to pay the Class A Purchase Price in Cash in the amount and at such times as are
required pursuant to Section 11.8 or (y) the occurrence of any GMI Event;




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          (v) The happening of any other event which makes it unlawful, impossible, or impractical to
carry on the business of the Company;




          (vi) GMCO, another consolidated Subsidiary of GMI, or another Managing Member approved by the
Limited Members ceases to be the Managing Member; or




          (vii) The entry of a decree of judicial dissolution of the Company under Section 18-802 of the
Act.




     The Members hereby agree that, notwithstanding any provision of the Act, the Company shall not
dissolve prior to the occurrence of a Liquidating Event.



     (b) Reconstitution. If it is determined, by a court of competent jurisdiction, that the
Company has dissolved prior to the occurrence of a Liquidating Event, then within an additional
ninety (90) days after such determination (the “Reconstitution Period”), all of the Members may
elect to reconstitute the Company and continue its business on the same terms and conditions set
forth in this Agreement by forming a new limited liability company on terms identical to those set
forth in this Agreement. Unless such an election is made within the Reconstitution Period, the
Company shall dissolve and wind up its affairs in accordance with Section 13.2. If such an
election is made within the Reconstitution Period, then:



          (i) The reconstituted limited liability company shall continue until the occurrence of a
Liquidating Event as provided in Section 13.1(a); and




          (ii) Unless otherwise agreed to by all of the Members, the Certificate of Formation, and this
Agreement shall, subject to any requirement under the Act to file a new certificate of formation,
automatically constitute the certificate of formation and agreement of such new Company. All of
the assets and liabilities of the dissolved Company shall be deemed to have been automatically
assigned, assumed, conveyed, and transferred to the new Company. No bond, collateral, assumption,
or release of any Member’s or the Company’s liabilities shall be required; provided that the right
of the Members to select successor managers and to reconstitute and continue the business of the
Company shall not exist and may not be exercised unless the Company has received an opinion of
counsel that the exercise of the right would not result in the loss of limited liability of any
Member and neither the Company nor the reconstituted limited liability company would cease to be
treated as a partnership for federal income tax purposes upon the exercise of such right to
continue.




     (c) Notwithstanding any other provision of this Agreement, the Bankruptcy of a Member shall
not cause such Member to cease to be a Member.



     13.2 Winding Up.



     Upon the occurrence of a (i) Liquidating Event or (ii) the determination by a court of
competent jurisdiction that the Company has dissolved prior to the occurrence of a Liquidating
Event (unless the Company is reconstituted pursuant to Section 13.1(b)), the Company shall continue
solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets, and
satisfying the claims of its creditors and Members, and no Member shall take any action that is
inconsistent with, or not necessary to or appropriate for, the winding up of the



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Company’s business and affairs; provided that, to the extent not inconsistent with the
foregoing, all covenants contained in this Agreement and obligations provided for in this Agreement
shall continue to be fully binding upon the Members until such time as the Property has been
distributed pursuant to this Section 13.2 and the Certificate of Formation has been canceled
pursuant to the Act. The Liquidator shall be responsible for overseeing the winding up and
dissolution of the Company, which winding up and dissolution shall be completed within ninety (90)
days of the occurrence of the Liquidating Event and within ninety (90) days after the last day on
which the Company may be reconstituted pursuant to Section 13.1(b). The Liquidator shall take full
account of the Company’s liabilities and Property and shall cause the Property or the proceeds from
the sale thereof (as determined pursuant to Section 13.11), to the extent sufficient therefor, to
be applied and distributed, to the maximum extent permitted by law, in the following order:



     (a) First, to creditors in satisfaction of all of the Company’s debts and other
liabilities (whether by payment or the making of reasonable provision for payment thereof to the
extent required by Section 18-804 of the Act), other than the liabilities for distribution to
Members under Section 18-601 or 18-604 of the Act;



     (b) Second, to the Members and former Members of the Company in satisfaction of
liabilities for distribution under Sections 18-601 or 18-604 of the Act; and



     (c) Third, the balance, if any, to the Members in accordance with the positive balance
in their Capital Accounts, after giving effect to a Mark-to-Market Valuation pursuant to
Section 13.11 and a determination and allocation of all Profits, Losses, and other items of the
Company’s income, gain, loss or deduction pursuant to Section 3.



     No Member shall receive additional compensation for any services performed pursuant to this
Section 13.



     13.3 Compliance With Certain Requirements of Regulations; Deficit Capital Accounts.



     In the event the Company is “liquidated” within the meaning of Regulations
Section 1.704-1(b)(2)(ii)(g), distributions shall be made pursuant to this Section 13 to the
Members who have positive Capital Accounts in compliance with Regulations
Section 1.704-1(b)(2)(ii)(b)(2). If any Member has a deficit balance in such Member’s Capital
Account, determined after debiting and crediting such Member’s Capital Account for all income,
gain, and loss allocations and distributions occurring prior to dissolution, such Member shall have
no obligation to make any contribution to the capital of the Company with respect to such deficit,
and such deficit shall not be considered a debt owed to the Company or to any other Person for any
purpose whatsoever. In the discretion of the Liquidator, a pro rata portion of the distributions
that would otherwise be made to the Members pursuant to this Section 13 may be:



     (a) Distributed to a trust established for the benefit of the Members for the purposes of
liquidating Company assets, collecting amounts owed to the Company, and paying any contingent or
unforeseen liabilities or obligations of the Company. The assets of any such trust shall be
distributed to the Members from time to time, in the reasonable discretion of the



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Liquidator, in the same proportions as the amount distributed to such trust by the Company
would otherwise have been distributed to the Members pursuant to Section 13.2; or



     (b) Withheld to provide a reasonable reserve for Company liabilities (contingent or otherwise)
and to reflect the unrealized portion of any installment obligations owed to the Company; provided
that such withheld amounts shall be distributed to the Members as soon as practicable.



     13.4 Deemed Contribution and Distribution.



     Notwithstanding any other provision of this Section 13, in the event the Company is liquidated
within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g) but no Liquidating Event has
occurred, the Property shall not be liquidated, the Company’s liabilities shall not be paid or
discharged, and the Company’s affairs shall not be wound up. Instead, solely for federal income
tax purposes, the Company shall be deemed to have contributed all its Property and liabilities to a
new limited liability company in exchange for an interest in such new company and, immediately
thereafter, the Company will be deemed to liquidate by distributing interests in the new company to
the Members.



     13.5 Rights of Members.



     Except as otherwise provided in this Agreement, each Member shall look solely to the Property
of the Company for the return of its Capital Contributions and has no right or power to demand or
receive Property other than Cash from the Company. If the assets of the Company remaining after
payment or discharge of the Indebtedness or liabilities of the Company are insufficient to return
such Capital Contributions, the Members shall have no recourse against the Company, the Managing
Member, or any other Member, except as expressly set forth in Section 5.8 or in any other
Transaction Document.



     13.6 Notice of Dissolution.



     In the event a Liquidating Event occurs or an event occurs that would, but for provisions of
Section 13.1, result in a dissolution of the Company, the Managing Member shall, within thirty (30)
days thereafter, provide written notice thereof to each of the Members and to all other parties
with whom the Company regularly conducts business (as determined in the discretion of the Managing
Member) and shall publish notice thereof in a newspaper of general circulation in each place in
which the Company regularly conducts business (as determined in the discretion of the Managing
Member).



     13.7 Guaranteed Payments During Period of Liquidation.



     During the period commencing on the first day of the Fiscal Quarter during which a Liquidating
Event occurs and ending on the date on which all of the assets of the Company have been distributed
to the Members pursuant to Section 13.2 (the “Liquidation Period”), the Company shall pay to each
Limited Member no less frequently than on each Liquidation Period Guaranteed Payment Date, Cash in
an amount (the “Liquidation Period Guaranteed Payment”) equal to the Limited Member Preferred
Return on such Limited Member’s Preferred Return Capital determined as of (i) with respect to the
Class A Limited Members, the last Class A



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Distribution Date occurring prior to the Liquidation Period, and (ii) with respect to the
Class B Limited Members, the last Class B Distribution Date occurring prior to the Liquidation
Period, in each case after giving effect to any distributions made pursuant to Section 4.1 on such
Class A Distribution Date or Class B Distribution Date. For purposes of this Section 13.7, the
Limited Member Preferred Return shall be determined as if the last Class A Distribution Date and
Class B Distribution Date occurring prior to the Liquidation Period and each Liquidation Period
Guaranteed Payment Date constituted a Class A Distribution Date or Class B Distribution Date, as
the case may be.



     13.8 Allocations and Distributions During Period of Liquidation.



     During the period commencing on the first day of the Fiscal Quarter during which a Liquidating
Event occurs and ending on the date on which all of the assets of the Company have been distributed
to the Members pursuant to Section 13.2, the Members shall continue to share Profits, Losses, gain,
loss, and other items of Company income, gain, loss, or deduction in the manner provided in
Section 3 (other than pursuant to Sections 3.1(a) and 3.1(c)) but no distributions shall be made
pursuant to Section 4.



     13.9 Character of Liquidating Distributions.



     (a) All payments made in liquidation of the Membership Interests of a Member in the Company
shall be made in exchange for the Membership Interests of such Member in the Company Property
pursuant to Code Section 736(b)(1), including the interest of such Member in Company goodwill.



     (b) For purposes of making distributions required by Section 13.2, the Liquidator may
determine whether to distribute all or any portion of the Property in-kind or to sell all or any
portion of such assets and distribute the proceeds therefrom; provided that the Liquidator shall
not distribute Property other than Cash to a Limited Member without such Limited Member’s consent
and the Liquidator shall be required to reduce Property to Cash to the extent necessary to make
distributions in Cash to the Limited Member pursuant to Section 13.2.



     13.10 The Liquidator.



     (a) The “Liquidator” shall be the Managing Member or any other Person appointed by the
Managing Member, unless (i) such liquidation arises as a result of (1) the Bankruptcy of the
Company or the Managing Member, (2) a Liquidating Event described in clauses 13.1(a)(iv) or (vi) or
(3) a Class A Notice Event described in clause (c), (d), or (f) of Section 14.1 occurs, (ii) final
liquidating distributions have not been made by the ninetieth (90th) day following the
date of the Liquidating Event, or (iii) a GMI Event has occurred and is continuing, in which case,
the holder or holders of more than 50% of the Class A Limited Membership Interests may appoint the
Liquidator.



     (b) The Company is authorized to pay such reasonable compensation to the Liquidator for its
services performed pursuant to this Section 13 as shall be agreed upon by the Liquidator and the
Limited Members and to reimburse the Liquidator for its reasonable costs and Expenses incurred in
performing those services.



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     13.11 Mark-to-Market Methodology.



     (a) For purposes of determining the amount of any adjustment to the Gross Asset Values of the
Company’s Property pursuant to paragraphs (ii) or (iii) of the definition of “Gross Asset Value” in
Section 1.10, the values of each of the Company’s Permitted Assets must be determined (such value
being the “Mark-to-Market Value,” and any calculation of such Mark-to-Market Value, the
“Mark-to-Market Valuation”). The Gross Asset Value and Mark-to-Market Value of the Company’s
Permitted Assets shall be determined in accordance with the Valuation Methodology described on
Schedule D hereto.



     (b) In the event that it is necessary to determine the Mark-to-Market Value of the Company’s
Permitted Assets pursuant to this Section 13.11, such Mark-to-Market Valuation shall be performed
by any nationally recognized independent accounting firm or other appraiser of national standing
selected by the Managing Member and, if RBDB retains any of its Class A Limited Membership
Interests, approved by RBDB; provided that any appraiser appointed hereunder shall be disinterested
and qualified to appraise property similar to the Permitted Assets being appraised; and provided,
further, that, solely for purposes of determining compliance with the Portfolio Requirements, the
Mark-to-Market Valuation of all Permitted Loans that are obligations of any GMI Entity may be
performed by the Managing Member. In the event the parties cannot agree on one appraiser, then the
Managing Member shall select an appraiser (“Appraiser 1”) and the Required Class A Limited Members
shall jointly select an appraiser (“Appraiser 2”) and the two appraisers shall jointly select a
third appraiser (“Appraiser 3”). The value arrived at by appraisal shall be determined by
Appraiser 1 and Appraiser 2 submitting their separate appraisals to Appraiser 3. Appraiser 3 shall
independently review the appraisals and shall select one appraisal between the two appraisals
submitted as the appraisal that, in the opinion of Appraisal 3, best represents the value of the
Permitted Assets. Where the appraisal process provided by this Section 13.11 is invoked, the
parties and the appraisers shall all act promptly and diligently so as to determine the value of
the Permitted Assets in a commercially reasonable period. The cost of all appraisals shall be
borne by the Company.



     (c) The Gross Asset Value and Mark-to-Market Value of all Permitted Loans owned by the Company
or any of its Subsidiaries that are obligations of any GMI Entity shall be equal to their stated
principal amount; provided that, solely for the purposes of determining compliance with the
Portfolio Requirements, if there has occurred and is continuing any GMI Event, the Gross Asset
Value and Mark-to-Market Value of such Permitted Loans shall be equal to zero.



     (d) The Gross Asset Value and Mark-to-Market Value of any Cash Equivalents shall be determined
by reference to their face value, less unamortized discount, if any, and plus unamortized premium,
if any.



     (e) Except as provided above, the Gross Asset Value and Mark-to-Market Value of any A-Rated
Securities shall be determined by reference to their average of the bid-side, market prices quoted
by three investment or commercial banks of recognized standing.



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SECTION 14.




CLASS A NOTICE EVENTS; PURCHASE OPTIONS




     14.1 Class A Notice Events.



     In the event that any of the following events (“Class A Notice Events") shall occur, the
Class A Limited Members shall have the rights described in Section 14.2; provided that with respect
to a Class A Notice Event pursuant to Section 14.1(h), only the holders of the Class A Limited
Membership Interests other than GMI or any of its Affiliates shall have such rights described in
Section 14.2:



     (a) The failure of the Company to distribute to the Class A Limited Members in immediately
available funds on the last Business Day of each Fiscal Quarter an amount equal to the cumulative
Class A Limited Member Preferred Return and such failure continues for a period of three (3)
Business Days;



     (b) The failure of the Company to comply with the Class A Portfolio Requirements at any time
and solely with respect to a failure to comply with clause 5.9(a)(iii) or clause 5.9(a)(iv)) such
failure continues unabated for five (5) Business Days;



     (c) The failure of the Company to dispose of any asset that ceases to be a Permitted Asset
within five (5) Business Days after the date on which such asset ceases to be a Permitted Asset;



     (d) The Managing Member or any Affiliate of the Managing Member fails to (i) be in compliance
with its obligations to deal with the Company on an arm’s length basis and as a separate entity,
(ii) observe or perform any covenant, condition, or agreement contained in Sections 5.2(b), 5.2(c),
5.2(d), and 5.3 of this Agreement, or (iii) observe or perform any other covenant, condition, or
agreement contained in the Agreement or any other Transaction Document and such failure continues
for a period of ten (10) Business Days after notice from either Limited Member;



     (e) Any representation or warranty made or deemed made by the Managing Member, the Company, or
any of its Subsidiaries, GMI, or any Affiliate of GMI under or in connection with this Agreement or
any Transaction Document shall prove to have been incorrect in any material respect when made or
deemed made except for the covenant in Section 8.3;



     (f) The failure of the Managing Member, in the event that there is a default, event of default
or any similar condition or event (however described) with respect to any GMI Entity under any
Transaction Document to which any GMI Entity is a party to give prompt notice thereof to the
Limited Members, to declare due and payable and collect any amount owing under the relevant
Transaction Document (subject to the satisfaction of any applicable notice requirement and the
lapse of any grace period) or to preserve, protect and enforce the Company’s rights with respect to
such Transaction Document;



     (g) One or more judgments for the payment of money in an aggregate amount in excess of
$1,000,000 shall be rendered against the Company or any of its Subsidiaries or any combination
thereof and the same shall remain undischarged for a period of thirty (30)



124









 







consecutive days during which execution shall not be effectively stayed, or any action shall
be legally taken by a judgment creditor to attach to or levy upon any assets of the Company or any
of its Subsidiaries to enforce any such judgment;



     (h) The senior unsecured debt rating of GMI falls below either Baa3 by Moody’s or BBB- by S&P;



     (i) A Failed Class A Mandatory Remarketing shall have occurred as a result of any failure of
the Company to completely perform its obligations under the Class A Remarketing Agreement; or



     (j) A Class A Limited Member is not provided a reasonable opportunity to enter a Bid in
connection with a Class A Mandatory Remarketing.



     The Managing Member shall be obligated to notify the Limited Members of the occurrence of any
Class A Notice Event when an officer of the Managing Member has actual knowledge of such
occurrence.



     14.2 Liquidation Notice.



     At any time on or after the occurrence of a Class A Notice Event, the Required Class A Limited
Members may elect to cause such Class A Notice Event to result in a Liquidating Event by delivering
to the Managing Member a notice (a “Liquidation
Notice”) of such election; provided that: (i) such
Class A Notice Event shall not result in a Liquidating Event until the expiration of ten (10) days
following such delivery, (ii) the Required Class A Limited Members may rescind such Liquidation
Notice by delivering to the Managing Member a notice prior to such tenth (10th) day, and (iii) a
Liquidation Notice automatically will be deemed rescinded upon the irrevocable election within such
ten (10) day period by the Managing Member or its designee pursuant to the Class A Purchase Option
to purchase all of the Class A Limited Membership Interests.



SECTION 15.




MISCELLANEOUS




     15.1 Notices.



     Any notice, payment, demand, or communication required or permitted to be given by any
provision of this Agreement shall be in writing and shall be deemed to have been delivered, given,
and received for all purposes (i) as of the date so delivered, if delivered personally to the
Person or to an officer of the Person to whom the same is directed or (ii) when the same is
actually received, if sent either by overnight courier, registered or certified mail, postage and
charges prepaid, or by facsimile, if such facsimile is followed by a hard copy of the facsimile
communication sent promptly thereafter by overnight courier, charges prepaid and addressed as
follows, or to such other address as such Person may from time to time specify by notice to the
Members:



125









 





     (a) If to the Company, to the principal place of business address set forth in Section 1.4;
and



     (b) If to a Member, to the address set forth in Section 2.1 or, in the case of a Permitted
Transferee who becomes a Member, the address specified by such Member.



     15.2 Binding Effect.



     Except as otherwise provided in this Agreement, every covenant, term, and provision of this
Agreement shall be binding upon and inure to the benefit of the Members and their respective
successors, transferees, and assigns.



     15.3 Construction.



     It is the intent of the parties hereto that every covenant, term, and provision of this
Agreement shall be construed simply according to its fair meaning and not strictly for or against
any Member. The terms of this Agreement are intended to embody the economic relationship among the
Members and shall not be subject to modification by, or be conformed with, any actions by the
Internal Revenue Service except as this Agreement may be explicitly so amended and except as may
relate specifically to the filing of tax returns.



     15.4 Time.



     In computing any period of time pursuant to this Agreement, the day of the act, event, or
default from which the designated period of time begins to run shall be included.



     15.5 Headings.



     Section and other headings contained in this Agreement are for reference purposes only and are
not intended to describe, interpret, define, or limit the scope, extent, or intent of this
Agreement or any provision hereof.



     15.6 Severability.



     Except as otherwise provided in the succeeding sentence, every provision of this Agreement is
intended to be severable, and, if any term or provision of this Agreement is illegal or invalid for
any reason whatsoever, such illegality or invalidity shall not affect the validity or legality of
the remainder of this Agreement. The preceding sentence of this Section 15.6 shall be of no force
or effect if the consequence of enforcing the remainder of this Agreement without such illegal or
invalid term or provision would be to cause any Member to lose the material benefit of its economic
bargain.



     15.7 Incorporation by Reference.



     No exhibit, schedule, or other appendix attached to this Agreement and referred to herein is
incorporated in this Agreement by reference unless this Agreement expressly otherwise provides.



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     15.8 Governing Law.



     The laws of the State of Delaware, without application of the conflicts of laws principles
thereof, shall govern the validity of this Agreement, the construction of its terms, and the
interpretation of the rights and duties arising hereunder.



     15.9 Consent to Jurisdiction.



     Each Member (i) irrevocably submits to the non-exclusive jurisdiction of any New York State or
Delaware State court or Federal court sitting in New York County or Wilmington, Delaware, in any
action arising out of this Agreement, (ii) agrees that all claims in such action may be decided in
such court, (iii) waives, to the fullest extent it may effectively do so, the defense of an
inconvenient forum, and (iv) consents, to the fullest extent it may effectively do so, to the
service of process by mail in accordance with Section 15.1. A final judgment in any such action
shall be conclusive and may be enforced in other jurisdictions. Nothing herein shall affect the
right of any party to serve legal process in any manner permitted by law or affect its right to
bring any action in any other court.



     15.10 WAIVER OF JURY TRIAL.



     EACH OF THE MEMBERS IRREVOCABLY WAIVES, TO THE EXTENT PERMITTED BY LAW, ALL RIGHTS TO TRIAL BY
JURY AND ALL RIGHTS TO IMMUNITY BY SOVEREIGNTY OR OTHERWISE IN ANY ACTION, PROCEEDING, OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.



     15.11 Counterpart Execution.



     This Agreement may be executed in any number of counterparts with the same effect as if all of
the Members had signed the same document. All counterparts shall be construed together and shall
constitute one agreement.



     15.12 Specific Performance.



     Each Member agrees with the other Members that the other Members would be irreparably damaged
if any of the provisions of this Agreement are not performed in accordance with their specific
terms and that monetary damages would not provide an adequate remedy in such event. Accordingly, it
is agreed that, in addition to any other remedy to which the nonbreaching Members may be entitled,
at law or in equity, the nonbreaching Members shall be entitled to injunctive relief to prevent
breaches of the provisions of this Agreement and specifically to enforce the terms and provisions
hereof in any action instituted in any court of the United States or any state thereof having
subject matter jurisdiction thereof.



     15.13 No Material Impairment.



     No Member shall take any action that could impair materially such Member’s ability to perform
its duties and obligations under this Agreement.



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     15.14 Entire Agreement.



     This Agreement and the Transaction Documents and the Annexes, Exhibits and Schedules hereto
and thereto constitute the entire agreement among the parties hereto and their respective
Affiliates and contain all of the agreements among such parties with respect to the subject matter
hereof and thereof. This Agreement and the Transaction Documents and the Annexes, Exhibits and
Schedules hereto and thereto supersede any and all other agreements, either oral or written,
between such parties with respect to the subject matter hereof and thereof.



     15.15 No Third Party Beneficiaries.



     Except as otherwise provided herein (including, without limitation, Section 10.1(c)), no
Person other than a party hereto shall have any rights or remedies under this Agreement. Without
limiting the foregoing, any obligations of the Members to satisfy their respective obligations to
make Capital Contributions under this Agreement is an agreement only among the Members and no other
Person shall have any rights to enforce such obligations.



     15.16 Waiver.



     Any term or provision of this Agreement may be waived, or the time for its performance may be
extended, by the party or parties entitled to the benefit thereof. Any such waiver shall be
validly and sufficiently authorized for the purposes of this Agreement if, as to any party, it is
authorized in writing by an authorized representative of such party. The failure of any party
hereto to enforce at any time any provision of this Agreement shall not be construed to be a waiver
of such provision, nor in any way to affect the validity of this Agreement or any part hereof or
the right of any party thereafter to enforce each and every such provision. No waiver of any
breach of this Agreement shall be held to constitute a waiver of any other or subsequent breach.



[Signature Page Follows]




128









 






     IN WITNESS WHEREOF, the parties have executed and entered into this Agreement of the Company
as of the day first above set forth.



	 	 	 	 	 
	 	MANAGING MEMBER:
 

GM CEREALS OPERATIONS, INC., as 

Managing Member
 	 
	 
	 	By:  	/s/ Daralyn K. Peifer
 	 
	 	 	Name:  	Daralyn K. Peifer 	 
	 	 	Title:  	Treasurer 	 
	 
	 	CLASS A LIMITED MEMBER:




RBDB, INC., as a Class A Limited Member

 	 
	 	By:  	/s/ Andrew Sherman
 	 
	 	 	Name:  	Andrew Sherman 	 
	 	 	Title:  	Assistant Secretary 	 
	 
	 	By:  	                                              /s/ Kevin Moclair
 	 
	 	 	Name:  	Kevin Moclair 	 
	 	 	Title:  	Assistant Treasurer 	 
	 
	 	CLASS B LIMITED MEMBERS:




GENERAL MILLS SALES, INC., as a Class B 

Limited Member
 	 
	 
	 	By:  	/s/ Daralyn K. Peifer
 	 
	 	 	Name:  	Daralyn K. Peifer 	 
	 	 	Title:  	Treasurer 	 
	 
	 	GM CEREALS HOLDINGS, INC., as a Class B Limited Member
 	 
	 
	 	By:  	/s/ Daralyn K. Peifer
 	 
	 	 	Name:  	Daralyn K. Peifer 	 
	 	 	Title:  	Treasurer