Document:

ex104_071108.htm

     

     

     

    
      

      

    

    Exhibit
10.4

     

     

    
 

     

     

    AMENDED
AND RESTATED OPERATING AGREEMENT

    

    OF

    

    FRANKLIN
COVEY PRODUCTS, LLC

     

     

     

     

     

     

     

     

     

    

    

    
      
         

      

      
         

        
          

          

        

        
          

        

      

      
         

      

    

    AMENDED
AND RESTATED OPERATING AGREEMENT

    

    OF

     

    FRANKLIN
COVEY PRODUCTS, LLC

     

    THIS
AMENDED AND RESTATED OPERATING AGREEMENT (this “Agreement”), is dated as of July
7, 2008 but effective as of July 5, 2008 at 11:59 pm Mountain Daylight Time (the
“Effective Date”), by and among FRANKLIN COVEY PRODUCTS, LLC, a Utah limited
liability company (“Franklin Covey Products”), PETERSON PARTNERS V, L.P., a
Delaware limited partnership (“Peterson”), FRANKLIN COVEY CLIENT SALES, INC., a
Utah corporation (“FC”), SARAH MERZ, an individual, GORDON WILSON, an
individual, RICK WOODEN, an individual, JEFF ANDERSON, an individual, BOB
SUMBOT, an individual, KENT FROGLEY, an individual, MIKE CONNELLY, an
individual, BRYAN WILDE, an individual and ERIC BRIGHT, an individual, as
members of the Company (the “Members”) and JORDAN CLEMENTS, an individual, JAMES
B. NELSON, an individual, ROBERT A. WHITMAN, an individual, and SARAH MERZ, an
individual, as managers of the Company (the “Managers”).

     

    For the
consideration of their mutual covenants hereinafter set forth, the Company and
the Members and Managers hereby agree as follows:

     

    RECITALS

     

    WHEREAS, the Company was
formed upon the filing of Articles of Organization on May 22, 2008 and entered
into that certain Operating Agreement of the Company dated May 22, 2008 (the
“Original Operating Agreement”);

     

    WHEREAS, the Company entered
into the Asset Purchase Agreement and the Ancillary Agreements to purchase and
otherwise acquire the Business;

     

    WHEREAS, in connection with
the Closing, Peterson and certain other Members are contributing certain amounts
to the Company in exchange for Class A Units, as further described in this
Agreement;

     

    WHEREAS, in connection with
the Closing, FC is contributing a certain amount to the Company in exchange for
Class B Units, as further described in this Agreement;

     

    WHEREAS, in connection with
the Closing, FC is also contributing one million dollars ($1,000,000) for which
no additional Units will be issued to FC but with respect to which FC shall be
entitled to the FC Preferred Return and a priority distribution as set forth in
this Agreement;

     

    WHEREAS, the Company desires
to issue the Profits Interest Units as further described in this Agreement to
certain key executives of the Company, and the key executive desire to receive
such Profits Interest Units; and

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    WHEREAS, on the date hereof or
soon thereafter, the Company shall file amended and restated Articles of
Organization with the Division to reflect the current Managers.

     

    NOW, THEREFORE, in consideration of
mutual representations, warranties, and agreements contained in this Amended and
Restated Operating Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties amend and
restate the Original Agreement, and agree as follows:

     

    ARTICLE
I 

     

    DEFINITIONS

     

    1.1 Definitions.  Appendix
1 hereof sets forth the definitions of certain terms relating to the maintenance
of Capital Accounts and accounting rules.  In addition, the following
terms used in this Agreement shall have the following meanings:

     

    “Acquired Assets” is
defined in the Asset Purchase Agreement.

     

    “Act” means the Utah
Revised Limited Liability Company Act, Utah Code Ann. § 48-2c-101, et seq., as amended from time
to time.

     

    “Affiliate” means any
Person directly or indirectly controlling, controlled by, or under common
control with another Person. “Control,” “controlled” and “controlling” means the
power to direct or cause the direction of the management and policies of a
Person and shall be deemed to exist if any Person directly or indirectly owns,
controls, or holds the power to vote fifty percent (50%) or more of the voting
securities of such other Person.

     

    “Agreement” means the
Amended and Restated Operating Agreement as set forth in paragraph one of this
Agreement, as amended from time to time.

     

    “Ancillary Agreements”
means as defined in the Asset Purchase Agreement, provided that for the purpose
of this Agreement the term shall not include this Agreement.

     

    “Asset Purchase
Agreement” means the Asset Purchase Agreement, dated as of May 22, 2008,
among the Company and Franklin Covey Co., a Utah corporation, Franklin Covey
Canada, Ltd., a Canadian corporation, Franklin
Covey de Mexico S. de R.L. de C.V., a Mexican company, Franklin Covey Europe,
Ltd., a UK registered company, FC, Franklin Covey Catalog Sales, Inc., a Utah
corporation, Franklin Covey Product Sales, Inc., a Utah corporation, and
Franklin Covey Printing, Inc., a Utah corporation, as the same may be amended
from time to time in accordance with its terms.

     

    “Assumed Liabilities”
means as defined in the Asset Purchase Agreement.

     

    “Business” is defined
in the Asset Purchase Agreement.

     

    “Capital Contribution”
means any contribution to the capital of the Company whenever
made.  The initial Capital Contribution of each Member is listed in
Exhibit A.

     

    
      
         

      

      
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    “Cause” shall mean any
one or more of the following: (A) a Restricted Member or Manager’s continued
willful failure, neglect, or refusal to perform his duties with respect to the
Company which continues beyond thirty (30) days after a written demand for
substantial performance is delivered to such Restricted Member or Manager by the
Company; (B) conduct by a Restricted Member or Manager involving fraud, material
dishonesty or breach of trust in connection with such Restricted Member or
Manager’s performance of his duties to the Company as reasonably determined by
the Management Board; (C) the conviction of a Restricted Member or Manager of a
crime involving theft, dishonesty or moral turpitude (or upon such Restricted
Member or Manager’s entry of a guilty plea to or entry of a nolo contendere plea
to a criminal charge involving theft, dishonesty or moral turpitude); (D) a
Restricted Member or Manager’s willful and continued failure or refusal to
follow lawful and material directions of the Management Board or any other
substantial and continued acts of insubordination by such Restricted Member or
Manager as reasonably determined by the Management Board; or (E) any other act
or omission that (in the reasonable determination by the Management Board) has
caused or is likely to cause detrimental notoriety or other comparable material
harm to the Company, monetarily or otherwise.

     

    “Change of Control”
means (i) the acquisition of the Company by a successor entity by means of any
transaction or series of transactions (including, without limitation, any
acquisition, recapitalization, conversion, reorganization, merger or
consolidation) other than a transaction or series of related transactions in
which the holders of the voting securities of the Company outstanding
immediately prior to such transaction retain, immediately after such transaction
or series of transactions, at least a majority of the total voting power
represented by the outstanding voting securities of the Company or such other
surviving or resulting entity (or if the Company or such other surviving or
resulting entity is a wholly owned subsidiary immediately following such
acquisition, its parent); or (ii) a sale or other disposition of all or
substantially all of the assets of the Company and its subsidiaries taken as a
whole by means of any transaction or series of related transactions, except
where such sale or other disposition is to a wholly owned subsidiary of the
Company.

     

    “Class A Member” means
a Member holding Class A Units.

     

    “Class A Preferred
Return” means a sum equal to eight percent (8%) per annum, determined on
the basis of a year of 365 or 366 days, as the case may be, for the actual
number of days occurring in the period for which the Class A Preferred Return is
being determined, cumulative and compounded annually to the extent not
distributed in any Fiscal Year pursuant to Section 5.1(c) or Section 12.2(d), of
the average daily balance of a Class A Members’ Class A Unreturned Contribution
Balances, from to time, during the period to which the Class A Preferred Return
relates, commencing on the date each Class A Member first makes a Capital
Contribution.

     

    “Class A Unit” means a
Class A Unit of the Company having the rights described herein and otherwise
governed by the terms and conditions of this Agreement and any other Equity
Securities into which such Class A Units may be exchanged or converted in
accordance with this Agreement.

     

    
      
         

      

      
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    “Class A Unreturned
Contribution Balance” means the total amount of Capital Contributions
made to the Company by a Class A Member less the amount of distributions made to
such Class A Member in accordance with Section 5.1(d) and Section 12.2(e) of
this Agreement.

     

    “Class B Member” means
a Member holding Class B Units.

     

    “Class B Unit” means a
Class B of the Company having the rights described herein and otherwise governed
by the terms and conditions of this Agreement and any other Equity Securities
into which such Class B Units may be exchanged or converted in accordance with
this Agreement.

     

    “Class B Unreturned
Contribution Balance” means the total amount of Capital Contributions
made to the Company by the Class B Member other than the FC Priority
Contribution less the amount of distributions made to such Member in accordance
with Section 5.1(e) and Section 12.2(f) of this Agreement.

     

    “Class C Member” means
a Member holding Class C Units.

     

    “Class C Unit” means a
Class C Unit of the Company having the rights described herein and otherwise
governed by the terms and conditions of this Agreement and any other Equity
Securities into which such Class C Units may be exchanged or converted in
accordance with this Agreement.

     

    “Closing” means the
“Closing” under the Asset Purchase Agreement.

     

    “Code” means the
Internal Revenue Code of 1986, as amended from time to time.  All
references herein to sections of the Code shall include any corresponding
provision or provisions of succeeding law.

     

    “Company” means
Franklin Covey Products, LLC, a Utah limited liability company.

     

    “Covered Person” means
(i) a Member, a Manager or an Officer, (ii) an Affiliate of a Member, a Manager
or an Officer, and, (iii) directly or indirectly, the respective officers,
directors, shareholders, partners, managers, members, trustees, beneficiaries,
employees, representatives or agents of a Member, a Manager or an Officer, or an
Affiliate of a Member, a Manager or an Officer.

     

    “Disabling Conduct”
means an admission in writing or conviction of fraud, a willful violation of
this Agreement after notice and an opportunity to cure, commission of a felony
or other crime involving moral turpitude, or gross negligence or willful
misconduct in the performance of duties.

     

    “Division” means the
Utah Department of Commerce, Division of Corporations and Commercial
Code.

     

    
      
         

      

      
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    “Equity Securities”
means (i) any Units, (ii) any options, warrants or other rights to acquire any
Units and any other securities convertible into or exercisable or exchangeable
for (or entitling the holder thereof to subscribe for) Units, (iii) any equity
securities distributed in respect of the Units pursuant to dissolution of the
Company or otherwise, and (iv) any securities issued directly or indirectly with
respect to the foregoing securities by way of a split, dividend, or other
division of securities, or in connection with an exchange or combination of
securities, recapitalization, merger, consolidation or other
reorganization.

     

    “FC Preferred Return”
means a sum equal to ten percent (10%) per annum, determined on the basis of a
year of 365 or 366 days, as the case may be, for the actual number of days
occurring in the period for which the FC Preferred Return is being determined
cumulative and compounded to the extent not distributed in any Fiscal Year
pursuant to Section 5.1(a) or Section 12.2(c) of the average daily balance of
the FC Unreturned Priority Contribution, commencing on the date FC first makes
the FC Priority Contribution.

     

    “FC Priority
Contribution” means the amount of one million dollars ($1,000,000)
contributed by FC to the Company on the Effective Date with respect to which FC
shall not receive any additional Units from the Company, but with respect to
which FC shall be entitled to the FC Preferred Return and a priority
distribution as set forth in this Agreement.

     

    “FC Unreturned Priority
Contribution” means the FC Priority Contribution less any amounts
distributed to FC by the Company that is designated by the Management Board as a
return of the FC Priority Contribution in accordance with Section 3.12 and
Section 4.2(bb) hereof, including, but not limited to, any distributions made to
FC in accordance with Section 5.1(b).

     

    “Fiscal Year” means
the Company’s taxable year, which shall be a calendar year except as otherwise
required by law.

     

    “Governmental Body”
means any government, any governmental or quasi-governmental entity or
authority, including any department, commission, board, bureau, branch, agency
or instrumentality thereof, any administrative or regulatory body obtaining
authority from any of the foregoing, any contractor acting on behalf of any of
the foregoing, and any court, tribunal, judicial or arbitral body, mediation or
conciliation or self-regulatory authority, in each case whether federal, state,
regional, county, city or of any other political subdivision, whether domestic
or foreign.

     

    “Initial Capital
Contributions” means any Capital Contributions made pursuant to Section
3.1 upon the formation of the Company.

     

    “Initial Members”
means Peterson, FC, Sarah Merz, Gordon Wilson, Rick Wooden, Jeff Anderson, Bob
Sumbot, Kent Frogley, Mike Connelly, Bryan Wilde and Eric Bright.

     

    “Law” means any
treaty, code, statute, law (including common law), rule, regulation, convention,
ordinance, Order, legally binding regulatory policy statement or similar legally
binding guidance, binding directive or decree of any kind of any Governmental
Body, as well as any common law.

     

    
      
         

      

      
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    “Liquidity Event”
means (i) the acquisition of the Company by a successor entity by means of any
transaction or series of transactions (including, without limitation, any
acquisition, recapitalization, conversion, reorganization, merger or
consolidation but excluding any sale of equity securities for capital raising
purposes) other than a transaction or series of related transactions in which
the holders of the voting securities of the Company outstanding immediately
prior to such transaction retain, immediately after such transaction or series
of transactions, at least ten percent (10%) of the total voting power
represented by the outstanding voting securities of the Company or such other
surviving or resulting entity (or if the Company or such other surviving or
resulting entity is a wholly owned subsidiary immediately following such
acquisition, its parent); or (ii) a sale or other disposition of all or
substantially all of the assets of the Company and its subsidiaries taken as a
whole by means of any transaction or series of related transactions, except
where such sale or other disposition is to a wholly owned subsidiary of the
Company.

     

    “Majority Vote” means
the written consent or affirmative vote of (i) Members holding more than fifty
percent (50%) of the outstanding Units entitled to vote held by all Members, in
connection with action by the Members; or (ii) more than fifty percent (50%) of
the Managers then in office in connection with action by the Management Board,
each Manager being entitled to one vote.

     

    “Management Board”
means the five (5) individuals appointed in accordance with the provisions of
Section 4.1.  The initial Managers shall be JORDAN CLEMENTS, JAMES B.
NELSON, ROBERT A. WHITMAN, SARAH MERZ and a Manager to be appointed by
Peterson.

     

    “Manager” shall be any
individual serving on the Management Board.  The initial Managers
shall be JORDAN CLEMENTS, JAMES B. NELSON, ROBERT A. WHITMAN, SARAH MERZ and a
Manager to be appointed by Peterson.

     

    “Master License
Agreement” is defined in the Asset Purchase Agreement.

     

    “Material Competitor”
means any Person that, directly or indirectly through Affiliates, is engaged in
the marketing, distribution or sale of Training-Oriented Products or
Training-Oriented Services.  The following terms used in this
definition of “Material Competitor” shall have the following
meanings:  (i) “Training-Oriented Product” means any good, product or
thing in any tangible form (including software) that is designed to teach
individuals or organizations Individual Effectiveness, Management/Leadership
and/or Organizational Execution Skills; (ii) “Training-Oriented Service” means
any seminar, session, online course, webinar, consultation or similar
interaction, whether or not for a fee, where the subject matter of such service
relates to or includes Individual Effectiveness, Management/Leadership and/or
Organizational Execution Skills; and (iii)  “Individual Effectiveness,
Management/Leadership and/or Organizational Execution Skills” means any and all
organizational, management, leadership or personal effectiveness skills and the
techniques and strategies for attaining such skills including, without
limitation, executive coaching, management coaching, performance review,
trust-building (in or out of an organizational setting), execution-related
skills, personal time management, personal performance, personal goal-setting
(including personal time-management, performance and goal setting in any
academic or educational environment), family

     

    
      
         

      

      
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    effectiveness,
family organization, family goal-setting, family values, personal fitness,
wellness and life balance, and any other form of training.

     

    “Member” means (a)
each Initial Member until such time, if any, that any such Person becomes a
Withdrawn Member, (b) any Person acquiring Units directly from the Company in
accordance with this Agreement until such time, if any, that any such Person
becomes a Withdrawn Member, and (c) any Person who acquires Units in the Company
in a Permitted Transfer and who is deemed, or is admitted as, a Substitute
Member until such time, if any, that such Person becomes a Withdrawn
Member.

     

    “Net Available Cash
Flow” means, with respect to any period, the Company’s gross cash
receipts derived from any source whatsoever, excluding Capital Contributions,
reduced by the portion thereof used to pay or establish reasonable reserves for
all Company expenses, debt payments and accrued interest (including principal
and interest payments on loans made to the Company by non-Members and by the
Members), contingencies, and proposed acquisitions, as determined by the
Management Board.  “Net Available Cash Flow” shall not be reduced by
depreciation, amortization, cost recovery deductions, or similar
allowances.

     

    “Officer” means as set
forth in Section 4.10.  The initial Officers of the Company are as
follows:

     

    Chairman
of the Management
Board:                                 Robert
A. Whitman

     

    Chief
Executive Officer and
President:                               Sarah
Merz

     

    Chief
Financial
Officer:                                                          Robert
Sumbot

     

    “Order” means any
judgment, writ, decree, directive, decision, injunction, ruling, stipulation,
award, order (including any consent decree or cease and desist order) or
determination of kind issued, promulgated or entered by or with any Governmental
Body.

     

    “Original Operating
Agreement” is defined in the Recitals.

     

    “Percentage Interest”
means, at any particular time, the percentage interest of each Member or Unit
Holder of the Company and determined with respect to a particular Member or Unit
Holder at any particular time by dividing the number of Units owned by such
Member or Unit Holder by the aggregate number of outstanding Units.

     

    “Person” means any
individual, firm, corporation, partnership, limited liability company, trust,
estate, association or other legal entity.

     

    “Priority Members”
means the Class A Members and the Class B Members.

     

    “Profits” means the
profits of the Company as defined in Section A1 of Appendix 1.

     

    “Public Offering”
means any underwritten sale of any Equity Securities pursuant to an effective
registration statement under the Securities Act filed with the SEC on Form S-1
(or a successor form) after which such Equity Securities are (i) listed on a
national securities

     

    
      
         

      

      
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    exchange
and (ii) registered under the Securities Exchange Act; provided that the
following shall not be considered a Public Offering: (A) any issuance of Equity
Securities as consideration or financing for a merger or acquisition and (B) any
issuance of Equity Securities or rights to acquire Equity Securities to
employees as part of an incentive or compensation plan.

     

    “Quorum” shall mean
(i) at least fifty percent (50%) of the Managers then in office, in the case of
a meeting of the Management Board; or (ii) Members who own, in the aggregate, a
majority of the outstanding Units held by all Members entitled to vote at the
meeting, in the case of a meeting of the Members.

     

    “Regulations” mean the
Income Tax Treasury Regulations promulgated under the Code as such Regulations
may be amended and in effect from time to time (including corresponding
provisions of succeeding Regulations).

     

    “Reset Ratio” is
defined in the Master License Agreement.

     

    “SEC” means the U.S.
Securities and Exchange Commission and any Governmental Body or agency
succeeding to the functions thereof.

     

    “Securities Act” means
the Securities Act of 1933.

     

    “Securities Exchange
Act” means the Securities Exchange Act of 1934.

     

    “Selling Companies” is
defined in the Asset Purchase Agreement.

     

    “Substitute Member”
means a Person who acquires Units from a Member and who satisfies all of the
conditions of Section 11.5.

     

    “Taxing Jurisdiction”
means any state, local, or foreign government that collects tax, interest, and
penalties, however designated, on any Member’s share of income or gain
attributable to the Company.

     

    “Tax Matters Partner”
means the Person so designated in Section 9.4(b).

     

    “Transfer” means, when
used as a noun, any voluntary or involuntary sale, assignment, gift, transfer,
or other disposition and, when used as a verb, voluntarily or involuntarily to
sell, assign, gift, dispose, or otherwise transfer.

     

    “Unanimous Consent”
means the written consent of all of the Members.

     

    “Unit” means the
economic interest in the Company acquired by a Member or Unit Holder
representing the economic rights of a Member or Unit Holder and the Member’s or
Unit Holder’s permitted assignees and successors to share in distributions of
cash and other property from the Company pursuant to the Act and this Agreement,
together with the Member’s or Unit Holder’s distributive share of the Company’s
Profits and Losses and shall include the Class A Units, the Class B Units, and
the Class C Units.

     

    
      
         

      

      
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    “Unit Holder” means a
Person who owns Units of the Company but who is not a Member including, except
as otherwise provided herein, a Member who becomes a Withdrawn
Member.

     

    “Unsuitable
Transferee” means any Person that, directly or indirectly through
Affiliates, engages in any of the following
activities:  (i) publishing or promoting indecent or pornographic
materials, (ii) deriving a substantial portion of revenue from gaming activities
or the promotion or sale of alcoholic beverages, tobacco products or firearms,
(iii) having as a primary purpose the advocacy of a particular political or
moral position or (iv) illegal activities.

     

    “Withdrawal Notice”
means as set forth in Section 10.4(a).

     

    “Withdrawal Event”
means the occurrence of any of the following events:  (1) the Member
voluntarily withdraws from the Company; (2) the Member is expelled as a member,
as provided in the Act; (3) the Member does any of the following: (a) makes an
assignment for the benefit of creditors; (b) files a voluntary petition in
bankruptcy; (c) is adjudicated as bankrupt or insolvent; (d) files a petition or
answer seeking for itself or himself any reorganization, arrangement,
composition, readjustment, liquidation or similar relief under any statute, law
or rule; (e) files an answer or other pleading admitting or failing to contest
the material allegations of a petition filed against it or him in a bankruptcy,
insolvency, reorganization or similar proceeding; (f) seeks, consents to or
acquiesces in the appointment of a trustee, receiver or liquidator of the Member
or of all or any substantial part of its or his property; (4) if a Member is a
natural person: (a) his death; (b) the entry of an order or judgment by a court
of competent jurisdiction adjudicating him incompetent to manage his person or
his estate; (5) if a Member is acting as a Member by virtue of being a trustee
of a trust, the termination of the trust but not merely the substitution of a
new trustee; (6) if a Member is a general or limited partnership, the
dissolution and commencement of winding up of the partnership; (7) if a Member
is a corporation, the filing of a certificate of dissolution or its equivalent
for the corporation or revocation of its charter; (8) if a Member is an estate,
the distribution by the fiduciary of the estate’s entire interest in the
Company; (9) if a Member is another foreign or domestic limited liability
company, the filing of articles of dissolution or termination or their
equivalent for the foreign or domestic limited liability company and (10) the
Member ceases to be a member of the Company for any other reason pursuant to
Section 708 of the Act.

     

    “Withdrawn Member”
means a Member following the occurrence of a Withdrawal Event with respect to
such Member.

     

    The
following terms not defined above are defined in the sections indicated
below:

     

    
      	
              Definition

            	
              Defined

            
	
              Additional
      Capital Shortfall

            	
              3.2(b)

            
	
              Capital
      Account

            	
              Sec.
      A1, App. 1

            
	
              Claims

            	
              8.2(a)

            
	
              Contributing
      Member

            	
              3.2(b)

            
	
              CPR
      Institute

            	
              13.2

            

    

    
      
         

      

      
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              Damages

            	
              8.2(a)

            
	
              Depreciation

            	
              Sec.
      A1, App. 1

            
	
              Designated
      Office

            	
              2.4

            
	
              Disposing
      Member

            	
              11.4(b)

            
	
              Disposition
      Notice

            	
              11.4(b)

            
	
              Dispute
      Notice

            	
              3.10(a)

            
	
              Drag-Along
      Notice

            	
              11.8(a)

            
	
              Drag-Along
      Right

            	
              11.8

            
	
              Expenses

            	
              14.14

            
	
              FC
      Manager

            	
              4.1(b)

            
	
              Gross
      Asset Value

            	
              Sec.
      A1, App. 1

            
	
              Losses

            	
              Sec.
      A1, App. 1

            
	
              Management
      Services Agreements

            	
              4.15

            
	
              Noncontributing
      Member

            	
              3.2(b)

            
	
              Non-Disposing
      Members

            	
              11.4(b)

            
	
              Notice
      Period

            	
              11.4(b)

            
	
              Offered
      Units

            	
              11.9(a)

            
	
              Performance-Based
      Restricted Units

            	
              3.9(c)(ii)

            
	
              Permitted
      Transfer

            	
              11.2

            
	
              Peterson
      Managers

            	
              4.1(b)

            
	
              Peterson/FC
      Manager

            	
              4.1(b)

            
	
              Presumed
      Tax Liability

            	
              5.7

            
	
              Proceeding

            	
              8.2(a)

            
	
              Profits
      Interest Grant Letter

            	
              3.4(e)(i)

            
	
              Profits
      Interest Pool

            	
              3.4(e)(i)

            
	
              Profits
      Interest Units

            	
              3.9

            
	
              Proposed
      Transfer

            	
              11.9(a)

            
	
              Purchase
      Option

            	
              10.4(b)

            
	
              Purchase
      Option Notice

            	
              10.4(c)

            
	
              Redemption
      Date

            	
              3.9(b)

            
	
              Remaining
      Member

            	
              11.9

            
	
              Repurchase
      Notice

            	
              3.10(a)

            
	
              Repurchase
      Price

            	
              3.10(a)

            
	
              Restricted
      Member

            	
              3.4(e)(ii)

            
	
              Restricted
      Unit

            	
              3.4(e)(ii)

            
	
              Safe
      Harbor

            	
              3.4(v)(A.2)

            
	
              Safe
      Harbor Election

            	
              3.4(v)(A.2)

            
	
              Successor
      Corporation

            	
              2.9

            
	
              Tag-Along
      Demand

            	
              11.9(c)

            
	
              Tag-Along
      Rights

            	
              11.9(a)

            
	
              Tax
      Advances

            	
              5.8

            
	
              Tax
      Distribution

            	
              5.7

            
	
              Time
      Vested Restricted Units

            	
              3.9(c)(i)

            
	
              Transferring
      Member

            	
              11.8

            
	
              Withdrawal
      Notice

            	
              10.4(a)

            
	
              Withdrawn
      Member

            	
              10.4(e)

            

    

    

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    

    ARTICLE
II

     

    FORMATION
OF THE LIMITED LIABILITY COMPANY

     

    2.1 General.  The
Company has been formed pursuant to the Act and the terms of the Original
Operating Agreement, effective upon the filing of the Articles of Organization
on May 22, 2008.  The Members shall execute and acknowledge any and
all certificates and instruments and do all filing, recording, and other acts as
may be necessary or appropriate to comply with the requirements of the Act
relating to the formation, operation, and maintenance of the Company in
accordance with the terms of this Agreement.

     

    2.2 Name.  The
name of the Company is “Franklin Covey Products, LLC,” and the business of the
Company shall be carried on in this name with such variations and changes as the
Management Board deems necessary or appropriate to comply with requirements of
the jurisdiction(s) in which the Company’s operations shall be
conducted.

     

    2.3 Purposes and
Powers.  The business purpose of the Company shall be to
transact any lawful business as may be authorized under the
Act.  Without limiting the foregoing, the purposes for which the
Company is formed are (i) to operate the Business, directly or indirectly
through subsidiaries, and in connection therewith to enter into the Ancillary
Agreements, and (ii) such other purposes as may be approved by the Majority Vote
of the Managers consistent with the Company’s Articles of
Organization.

     

    2.4 Designated
Office.  The designated office of the Company (the “Designated
Office”) shall be located at 2250 West Parkway Blvd., Salt Lake City, Utah
84119.  The Management Board shall be authorized to change the
location of the designated office of the Company; provided, however, that such
change is authorized under the Act, the Management Board provides written notice
of such change to all of the Members, and the Managers deliver a statement of
change to the Division.

     

    2.5 Registered Agent; Registered
Office.  The registered agent for service of process on the
Company in the State of Utah is Robert Sumbot and the registered office of the
Company shall be located at the same address as the Designated
Office.  

     

    2.6 Term.  The
term of the Company commenced on the filing of the Articles of Organization for
the Company and shall not expire except in accordance with the provisions of
Article XII hereof or in accordance with the Act.

     

    2.7 Company
Classification.  The Members intend that, until such time, if
any, as the Company is converted to a corporation in accordance with this
Agreement, the Company always be operated in a manner consistent with its
treatment as a “partnership” for federal and state income tax
purposes.  The Members also intend that the Company not be operated or
treated as a “partnership” for purposes of Section 303 of the Federal Bankruptcy
Code.  None of the Management Board, the Managers, or the Members may
take any action inconsistent with the express intent of the parties
hereto.  The Company is not a “partnership” for purposes of the Utah
General and Limited Liability Partnerships (Utah Code Ann. § 48-1-1 et seq.) or
the Utah

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    Revised
Uniform Limited Partnership Act (Utah Code Ann. § 48-2a-101 et seq.) and the
Members are not partners for the purposes of such provisions.

     

    2.8 Qualification in Other
Jurisdictions.  The Management Board, or any employee of the
Company designated by the Management Board as an officer of the Company, shall
cause the Company to be qualified or registered under foreign entity or assumed
or fictitious name statutes or similar Laws in any jurisdiction in which the
Company owns property or transacts business to the extent such qualification or
registration is necessary or advisable in order to protect the limited liability
of the Members or to permit the Company lawfully to own property or transact
business.  In connection with the foregoing, any Manager or any such
officer, acting alone, may execute, deliver and file any certificates (and any
amendments and/or restatements thereof) necessary for the Company to qualify to
do business in a jurisdiction in which the Company may wish to conduct
business.

     

    2.9 Conversion to
Corporation.  The Management Board may elect to cause the
Company to be converted from a limited liability company to a corporation (the
“Successor Corporation”).  All of the rights, privileges, and powers
of the Company and all property and assets of the Company shall remain vested in
the Successor Corporation, and all debts, liabilities, and duties of the Company
shall remain attached to the Successor Corporation, all as more provided by
applicable Law.  Upon consummation of the conversion: (a) all Members
shall be issued such class or series and amount of preferred or common stock or
other securities in the Successor Corporation which reflects their relative
economic interests in the Company with respect to the class or series of Equity
Securities owned by them prior to the conversion and whose terms best preserve
the rights, privileges, preferences, restrictions and limitations of such
applicable class or series of Equity Securities as provided under this
Agreement, including but, not limited to, the rights to receive those dollar
amounts that would be allocated to each class or series of Equity Securities if
the Company were to be liquidated in accordance with this Agreement at the time
of such conversion, and (b) the Members shall enter into, and cause the
Successor Corporation to enter into, a shareholders agreement with respect to
the equity securities of the Successor Corporation setting forth rights and
obligations of the parties equivalent to those set forth in this
Agreement.  Any such shareholders agreement shall also include
substantially equivalent demand and piggy back registration rights for the
benefit of the Priority Members (and excluding the Members holding Class C
Units) on customary terms and conditions.

     

    2.10 Statutory
Compliance.  The Members shall make all filings and disclosures
required by, and shall otherwise comply with, all Laws in connection with this
Agreement or the Business.  The Members shall execute, file and record
in the appropriate records any assumed or fictitious name certificate required
by Law to be filed or recorded in connection with the formation of the Company
and shall execute, file and record such other documents and instruments as may
be necessary or appropriate with respect to the formation of, and conduct of
business by, the Company.  Each Member shall, and shall cause its
Affiliates to, cooperate reasonably with the other Member with respect to all
filings that the Company or a Member is required or otherwise elects to make
under Law in connection with this Agreement or the
Business.   

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    ARTICLE
III

     

    CAPITAL
CONTRIBUTIONS

     

    3.1 Initial Capital
Contributions.  As of the Effective Date, the Initial Members
of the Company shall contribute property as set forth in Exhibit A to the
Company in exchange for their Units.  In addition, FC shall contribute
the FC Priority Contribution with respect to which FC shall not be issued any
additional Units.

     

    3.2 Additional Capital
Contributions by the Members.

     

    (a) The
Management Board may, from time to time, determine that Capital Contributions in
addition to the Members’ prior Capital Contributions are needed to enable the
Company to conduct its business.  Upon making such a determination,
notice shall be given to all Members in writing at least thirty (30) days before
the date on which the Members may make such additional Capital
Contributions.  The notice shall set forth the amount of additional
Capital Contribution needed, the purpose for which it is needed, and the date by
which the Members may contribute such additional amounts.  No Member
shall be required to make an additional Capital
Contribution.  However, each Member shall be given the opportunity to
make such additional Capital Contribution in proportion to such Member’s
Percentage Interest in relation to Units then held by all
Members.  Upon payment of the additional Capital Contribution, the
Company shall issue a new Class of Units to each contributing Member, each new
Unit having a value as determined by the Management Board, provided, however, that the
Company shall not issue any Units with superior rights to the Class A Units or
the Class B Units without the written consent of a majority of the issued and
outstanding Class A Units and the Class B Units, voting together as a single
class and not as a separate class.  The value of the Units shall be
reasonably determined by the Management Board after consultation with
knowledgeable professionals based on the then current value of the Company;
provided, however, that unless required by the Management Board, the Company
shall not be required to obtain an appraisal of the Company.

     

    (b) If a
Member fails to make an additional Capital Contribution, which such Member has
an option to make under Section 3.2(a), at the time specified in the notice (a
“Noncontributing Member”), the Management Board shall, within five (5) days
after said failure, notify each other Member which has made its additional
Capital Contribution in full (a “Contributing Member”) in writing of the total
amount of Noncontributing Member Capital Contributions not made (the “Additional
Capital Shortfall”), and shall specify a number of days within which each
Contributing Member may make an additional Capital Contribution, which Capital
Contribution shall not be less than an amount bearing the same ratio to the
amount of Additional Capital Shortfall as the Contributing Member’s Units bear
to the total Units of all Contributing Members.  If the total amount
of Additional Capital Shortfall is not contributed, the Management Board may use
any reasonable method to provide Members the opportunity to make additional
Capital Contributions until the Additional Capital Shortfall is as fully
contributed as possible.

     

    (c) Immediately
before the issuance of additional Units, the Company shall adjust the Capital
Accounts of the Members who own Units in the Company before the issuance of the
additional Units in Section 1.704-1(b)(2)(iv)(f) of the
Regulations.  Further, following the

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    issuance
of the additional Units, if necessary, the Management Board shall re-compute the
Percentage Interests of the Members based on the total number of Units held by
each Member after the issuance of the additional Units.

     

    3.3 Additional Funding;
Borrowing.  Before or after the expenditure or commitment of
Company capital, the Management Board may, but shall not be obligated to, obtain
or provide additional financing for Company activities by any method which it
believes to be appropriate under the circumstances, including issuance of
additional Units or borrowing funds for or loaning funds to the Company,
provided, however, that the Company shall not issue any Units with superior
rights to the Class A Units or the Class B Units without the written consent,
respectively, of a majority of the Class A Members with respect to the Class A
Units and a majority in interest of the Class B Members with respect to the
Class B Units.  The Company may borrow, at the discretion of the
Management Board, from banks, lending institutions, or other unrelated third
parties, or from Affiliates of the Company or any Member, Manager or Officer,
and may pledge Company properties or any income therefrom to secure or provide
for the repayment of any such loans.  In the event the Company elects
to borrow funds from one or more Members, each Priority Member shall have the
right, but not the obligation, to loan to the Company his or its proportionate
share of the aggregate principal amount of funds borrowed from the Member or
Members, which amount shall be based upon such Member’s Percentage Interest
(taking into account only the Percentage Interests of the Priority
Members).

     

    3.4 Units.

     

    (a) General.  The total
number of outstanding Units of the Company as of the Effective Date is one
hundred thousand (100,000) Units.  The name and address of each
Initial Member and the initial number of Units and the class of Units held by
each Initial Member is set forth on Exhibit A.  Exhibit A shall
reflect any additional Units issued by the Company, any Units transferred in
accordance with this Agreement, and any Person admitted as a
Member.  Members or Unit Holders who change their addresses following
the issuance of Units shall advise the Company of any such change of
address.  Any reference to Exhibit A in this Agreement means Exhibit A
as amended to reflect any changes in the information specified
herein.  The Managers shall be authorized, but not obligated, to issue
certificates reflecting the number of Units held by each Member of the
Company.

     

    (b) Class A Units. There shall be
a class of Units that shall be designated as “Class A Units” that shall have the
respective voting and economic rights set forth in this Agreement, including the
right to receive distributions pursuant to Section 5.1(c), Section 12.2(d), and
Section 12.2(e).  As of the date hereof, the Company has issued and
outstanding 64,357.73 Class A Units, the number of which are held by certain
Members in exchange for a cash Capital Contribution as follows:

     

    
      	
              No. of Class A
      Units

            	
              Member

            	
              Capital
      Contributions

            
	
              60,804.49

            	
              Peterson

            	
              $6,845,000

            
	
              1,776.61

            	
              Sarah
      Merz

            	
              $200,000

            
	
              888.31

            	
              Rick
      Wooden

            	
              $100,000

            
	
              222.08

            	
              Gordon
      Wilson

            	
              $25,000

            
	
              222.08

            	
              Jeff
      Anderson

            	
              $25,000

            

    

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    

    
      	
              222.08

            	
              Bob
      Sumbot

            	
              $25,000

            
	
              222.08

            	
              Kent
      Frogley

            	
              $25,000

            

    

     

    (c) Class B Units. There shall be
a class of Units that shall be designated as “Class B Units” that shall have the
respective voting and economic rights set forth in this Agreement, including the
right to receive distributions pursuant to Section 12.2(f).  As of the
date hereof, the Company has issued and outstanding 15,600 Class B Units held by
FC in exchange for a Capital Contribution in the amount of $1,755,000 by
FC.

     

    (d) Additional Units. Subject to
the other terms and conditions of this Agreement, including Section 3.2 of this
Agreement, the Management Board may from time to time by its Majority Vote cause
the Company to issue Additional Units to existing Members or new Members, provided, however, that the
Company shall not issue any Additional Units with superior rights to the Class A
Units or the Class B Units without the written consent of a majority of the
issued and outstanding Class A Units and the Class B Units, voting together as a
single class and not as a separate class.

     

    (e) Class C Units/Profits Interest
Pool.

     

    i. The
Company is authorized to issue up to 20,000 profits interest units (“Profits
Interest Units”) in the form of Class C Units (the “Profits Interest Pool”), of
which 18,400 shall be issued as of the Effective Date to the individuals
identified in Exhibit A, and 1,600 of which shall be issued after the Effective
Date.  The Profits Interest Units in the Profits Interest Pool shall
be issued pursuant to a profits interest grant letter in substantially the form
attached hereto as Exhibit B (with such modifications as the Management Board
may determine, the “Profits Interest Grant Letter”).  The Company
intends that the Profits Interest Units be treated as “profits interests” under
Revenue Procedure 93-27, 1993-2 CB 343, and, if applicable, Revenue Procedure
2001-43, 2001-2 CB 191, or any similar provisions of any future IRS guidance or
applicable law, including Treasury Regulations under Code §83.

     

    ii. Each
Member who receives Profits Interest Units (each such Member, a “Restricted
Member” and such Profits Interest Units, the “Restricted Units”) is willing to
subject the Restricted Units to the terms and conditions of this Agreement,
including Section 3.9 and Section 3.10 and the Profits Interest Grant
Letter.

     

    iii. Unless
otherwise set forth in this Agreement or the Profits Interest Grant Letter, each
holder of Profits Interest Units shall be treated as a Member and shall be
subject to all of the rights and obligations of a Member under this
Agreement.  Without limiting the generality of the foregoing, the
holder of a Profits Interest Unit shall be entitled to receive all allocations
of Profits and Loss with respect to any holder of Profits Interest Units
pursuant to this Agreement, and shall be entitled to all distributions with
respect to any holder of Profits Interest Units in accordance with this
Agreement, until such time as such holder of Profits Interest Units ceases to be
a Member pursuant to this Agreement.

     

    iv. The
Company shall adjust the Capital Accounts of all Members effective immediately
before any issuance of Profits Interest Units contemplated in this Section
3.4(e) pursuant to Treas. Reg. §1.704-1(b)(iv)(f) to reflect the fair market
value of the Company’s

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    assets at
the time of such adjustment.  In addition, following the issuance of
Profits Interest Units, if necessary, the Management Board shall re-compute the
Percentage Interests of the Members based on the total number of Units held by
each Member after the issuance of such additional Units.

     

    v. The IRS
has issued proposed Treasury Regulations Section 1.83-3(l) providing that
subject to such additional conditions, rules, and procedures that the IRS may
prescribe, a partnership and all of its partners may elect a safe harbor under
which the fair market value of a partnership interest that is transferred in
connection with the performance of services will be treated as being equal to
the liquidation value of that interest (the “Safe Harbor”).  Such
proposed Treasury Regulations may become effective on the date the final
Treasury Regulations are published in the federal register.  Each
Member, by executing this Agreement, hereby agrees to the
following:

     

    A.1 The
Company and each Member shall report the fair market value of each Profits
Interest Unit that is transferred in connection with the performance of services
as being equal to the liquidation value of that interest.

     

    A.2 The
Company is authorized and directed to elect the Safe Harbor, in accordance with
proposed Treasury Regulations Section 1.83-3(l) and the proposed revenue
procedure thereunder (once such regulations and revenue procedure become
effective and, in such case, immediately before issuing any Profits Interest
Units) (the “Safe Harbor Election”), provided that if the final Treasury
Regulations issued pursuant to Section 1.83-3(l) and the proposed revenue
procedure thereunder are different in any material way than the current proposed
regulations, then the Management Board shall determine whether to make such
election.

     

    A.3 The
Company and each Member (including any Person to whom a Profits Interest Unit is
transferred in connection with the performance of services) agree to comply with
all requirements of the Safe Harbor Election with respect to all Profits
Interest Units transferred in connection with the performance of services while
the Safe Harbor Election remains in effect, including the requirement that all
relevant U.S. federal income tax items be reported consistently with the Safe
Harbor Election as in effect at the time of the election.

     

    A.4 The
effective date of the Safe Harbor Election shall be the earliest date that a
Profits Interest Unit is issued by the Company after such election is permitted
under the applicable regulations and revenue procedure, once effective, and the
Safe Harbor Election shall continue to apply until such time (if ever) as the
Board agree, and cause the Company, to terminate the Safe Harbor
Election.

     

    A.5 To the
extent required under then-applicable law, the Tax Matters Partner, at the
discretion of the Management Board, shall cause the Company to file all such
forms and documents that are required to have the Safe Harbor Election apply
irrevocably with respect to all Profits Interest Units transferred in connection
with the performance of services while the Safe Harbor Election is in
effect.

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

     

    A.6 The
Company shall comply with any applicable record keeping requirements for the
Safe Harbor Election, and the Company and the Members shall take all other
actions, if any, required to comply with the requirements of such Safe Harbor
Election as ultimately promulgated, to the extent practicable.

     

    A.7 The
Members authorize the Management Board to amend this Agreement, in a manner
reasonably determined by the Board to be necessary to meet the requirements of
the final Treasury Regulations, provided, however, that no
amendment pursuant to this Section 3.4(e)(v) shall be effective if such
amendment adversely affects the economic interest of Units held by any
Member.  For purposes of the preceding sentence, the reduction in or
minimization of a compensation deduction of the Company as a result of such
amendment will not be treated as adversely affecting the economic interest of
Units held by any Member.

     

    vi. Each
Member acknowledges that any applicable transfer restrictions under this
Agreement with respect to certain Restricted Members may result in adverse tax
consequences to such Members that may be avoided or mitigated by filing an
election under Code §83(b).  Such election must be filed within the
timing requirements of Code §83(b), which generally requires that such election
be made within 30 days from the issuance of the Profits Interest Units subject
to the transfer restrictions.  Each Member receiving any Profits
Interest Unit(s) acknowledges and agrees (i) that a Code Section 83(b) election
shall be timely made by such Person, and (ii) that the making of such election
is such Person’s sole responsibility, and not the Company’s, even if such Person
requests the Company or its representatives to make this filing on such Person’s
behalf.

     

    vii. This
Section 3.4(e) shall constitute a written compensation plan and agreement within
the meaning of Rule 701 under the Securities Act and under Utah law with respect
to the issuance of Profits Interest Units.

     

    3.5 Use of Capital
Contributions.  All Capital Contributions shall be expended
only in furtherance of the business purpose of the Company as set forth in
Section 2.3 hereof.

     

    3.6 No Unauthorized Withdrawals
of Capital Contributions.  No Member or Unit Holder shall have
the right to withdraw or to be repaid any of such Member or Unit Holder’s
Capital Contributions, except as specifically provided in this
Agreement.

     

    3.7 Return of
Capital.  Except as otherwise provided in this Agreement, no
Member or Unit Holder shall be entitled to the return of the Member or the Unit
Holder’s Capital Contributions to the Company.

     

    3.8 Third Party
Rights.  Nothing contained in this Agreement is intended or
will be deemed to benefit any creditor of the Company, nor will any creditor of
the Company be entitled to require the Management Board to solicit or demand
Capital Contributions from any Member.  

     

    3.9 Automatic
Redemption.

     

    (a) Each
Restricted Member is willing to subject his Restricted Units to the automatic
redemption provisions of this Section 3.9.

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

     

    (b) In the
event that a Restricted Member voluntarily terminates his services to the
Company or the Company terminates such Restricted Member’s services to the
Company for any or no reason, with or without Cause, the Restricted Units held
by such Restricted Member shall, upon the date of such termination (the
“Redemption Date”), be automatically redeemed by the Company for no
consideration (other than any Tax Distribution to which such Restricted Member
is entitled with respect to the Restricted Units in accordance with Section 5.7
following the allocation of Profits and Losses through the Redemption Date).
Upon the automatic redemption of any Restricted Units, the Company shall become
the legal and beneficial owner of the Restricted Units so redeemed and all
rights and interest therein or related thereto without further action by the
Restricted Member.

     

    (c) The
Restricted Units shall be released from automatic redemption pursuant to Section
3.9(b) in the following manner:

     

    i. One third
(1/3rd) of the
Restricted Units shall be considered “Time Vested Restricted
Units”.  One third (1/3rd) of the
Time Vested Restricted Units shall be automatically released from automatic
redemption pursuant to Section 3.9(b), and shall no longer be treated as
Restricted Units for purposes of this Section 3.9, on each of the first three
annual anniversaries of the date of the grant of such Profits Interest
Units.

     

    ii. Two
thirds (2/3rd) of the
Restricted Units shall be considered “Performance-Based Restricted
Units”.

     

    A.1 All of
the Performance-Based Restricted Units shall be released from automatic
redemption pursuant to Section 3.9(b), and shall no longer be treated as
Restricted Units for purposes of this Section 3.9, if (x) the Company’s average
12-month EBITDA for the 24 months preceding a Liquidity Event is above $19
million; and (y) the Company’s 12-month EBITDA for the second 12 months
preceding a Liquidity Event is at least 95% of the 12-month EBITDA for the first
12 months preceding the Liquidity Event.

     

    A.2 Only
three fourths (3/4th) of the
Performance-Based Restricted Units shall be released from automatic redemption
pursuant to Section 3.9(b), and shall no longer be treated as Restricted Units
for purposes of this Section 3.9, if (x) the Company’s average 12-month EBITDA
for the 24 months preceding a Liquidity Event is above $18 million and up to $19
million; and (y) the Company’s 12-month EBITDA for the second 12 months
preceding a Liquidity Event is at least 95% of the 12-month EBITDA for the first
12 months preceding the Liquidity Event.

     

    A.3 Only one
half (1/2) of the Performance-Based Restricted Units shall be released from
automatic redemption pursuant to Section 3.9(b), and shall no longer be treated
as Restricted Units for purposes of this Section 3.9, if (x) the Company’s
average 12-month EBITDA for the 24 months preceding a Liquidity Event is above
$14 million and up to $18 million; and (y) the Company’s 12-month EBITDA for the
second 12 months preceding a Liquidity Event is at least 95% of the 12-month
EBITDA for the first 12 months preceding the Liquidity Event.

     

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    

     

    A.4 Only one
fourth (1/4th) of the
Performance-Based Restricted Units shall be released from automatic redemption
pursuant to Section 3.9(b), and shall no longer be treated as Restricted Units
for purposes of this Section 3.9, if (x) the Company’s average 12-month EBITDA
for the 24 months preceding a Liquidity Event is above $13 million and up to $14
million; and (y) the Company’s 12-month EBITDA for the second 12 months
preceding a Liquidity Event is at least 95% of the 12-month EBITDA for the first
12 months preceding the Liquidity Event.

     

    A.5 None of
the Performance-Based Restricted Units shall be released from automatic
redemption pursuant to Section 3.9(b) if he Company’s average 12-month EBITDA
for the 24 months preceding a Liquidity Event is $13 million or
less.

     

    A.6 If the
Company sells or otherwise divests a portion of the Business, then “average
12-month EBITDA” and the “12-month EBITDA” used to determine the percentage of
the Performance-Based Restricted Units that shall be released under Section
3.9(b) shall be automatically adjusted downwards based on the same Reset Ratio
as used in Section 6.1(a) of the Master License Agreement.

     

    Any
Restricted Units released from the automatic redemption provisions of this
Section 3.9 shall continue to be subject to the other restrictions on transfer
and the other provisions set forth in this Agreement.

     

    (d) In the
event of a recapitalization or a similar transaction affecting the Company’s
outstanding securities without receipt of consideration, any new, substituted or
additional securities or other property that by reason of such transaction are
distributed with respect to any Restricted Units or into which such Restricted
Units thereby become convertible shall immediately be subject to the provisions
of this Section 3.9.  Appropriate adjustments to reflect the
distribution of such securities or property shall be made to the Restricted
Units.

     

    (e) Upon the
automatic redemption of any Restricted Units pursuant to the provisions of this
Section 3.9, the Restricted Member shall no longer have any rights as a holder
of the Restricted Units so redeemed and Exhibit A shall be
restated to reflect the Restricted Units, if any, held by such Restricted
Member.

     

    3.10 Company Repurchase
Right.

     

    (a) Termination without Cause or
Voluntary Termination by the Restricted Member.  In the event
that the Company terminates a Restricted Member’s services to the Company
without Cause or a Restricted Member voluntarily terminates his services to the
Company, the Company shall have the right to repurchase such Restricted Member’s
Restricted Units that are not subject to the automatic redemption set forth
above in Section 3.9 for a period of 270 days following such termination upon at
least ten (10) days prior written notice to such Restricted Member (the
“Repurchase Notice”).  Subject to Article 3.10(b), the repurchase
price for such Restricted Units shall be a cash amount equal to the fair market
value (as determined by the Company’s Management Board) of such Restricted
Units, taking into account discounts for lack of marketability and lack of
control, to the extent applicable (the “Repurchase Price”). The Repurchase
Notice shall include the proposed Repurchase Price.  If the Restricted
Member

     

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    disputes
the proposed Repurchase Price, such Restricted Member shall deliver written
notice of such dispute to the Company within twenty (20) days of receipt of the
Repurchase Notice (the “Dispute Notice”). If such Restricted Member fails to
deliver a Dispute Notice to the Company within such 20-day period, such
Restricted Member shall be deemed to have agreed with and shall be bound by the
Repurchase Price proposed in the Repurchase Notice. If such Restricted Member
delivers a Dispute Notice to the Company within such 20-day period, the Company
and such Restricted Member shall select a reputable valuation firm to determine
the fair market value of such Restricted Units.  In the event that the
Company and such Restricted Member do not agree upon a valuation firm within
sixty (60) days of the date the Company delivered the Repurchase Notice to such
Restricted Member, the Company and such Restricted Member shall each select a
reputable valuation firm and instruct the valuation firms to select a third
reputable valuation firm. The fair market value of such Restricted Units shall
then be determined by such third valuation firm. The fees and costs of the
valuation firms engaged pursuant to this Article 3.9 shall be borne equally
between the Company and such Restricted Member.

     

    (b) Termination for
Cause.  Notwithstanding anything herein to the contrary, in the
event that the Company terminates a Restricted Member’s services to the Company
for Cause, all of such Restricted Member’s Restricted Units, including those
Restricted Units previously released from automatic redemption pursuant to
Section 3.9(c), shall, upon the date of such termination, be automatically
redeemed by the Company for no consideration (other than any Tax Distribution to
which such Restricted Member is entitled with respect to the Restricted Units in
accordance with Section 5.7 following the allocation of Profits and Losses
through the Redemption Date). Upon the redemption of any Restricted Units, the
Company shall become the legal and beneficial owner of such Restricted Units so
redeemed and all rights and interest therein or related thereto without further
action by the Restricted Member.

     

    3.11 Purchase of Assets by the
Company.  Effective as of the Closing, in exchange for cash in
the amount of $32,000,000 (as adjusted pursuant to Section 2.10 of the Asset
Purchase Agreement) and the assumption of the Assumed Liabilities, the Company
shall purchase from the Selling Companies the Acquired Assets.  The
cash that is to be used to purchase the Acquired Assets may include funds
borrowed by the Company, as described in the Purchase Agreement, and the parties
agree that they shall not apply Treasury Regulation section 1.707-5(b)(1) or
1.707-4(d) to reduce the portion of the assets treated as sold to the Company
for the consideration identified in this 3.11.  

     

    3.12 The FC Preferred Return and
the FC Priority Contribution.  As of the Effective Date, FC
shall contribute the FC Priority Contribution with respect to which FC shall not
be issued any additional Units, but with respect to which FC shall be entitled
to the FC Preferred Return and the FC Priority Contribution in accordance with
Section 5.1(a), Section 5.1(b) and Section 12.2(c), provided, however, that the
Company may, with unanimous consent of the Management Board, determine to make a
distribution of part or all of the FC Preferred Return or the FC Priority
Contribution before the dissolution and liquidation of the Company.

     

    ARTICLE
IV

     

    MANAGEMENT

     

    
      
         

      

      
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    4.1 Management by Management
Board.

     

    (a) The
Managers shall collectively comprise the Management Board.  The
Management Board shall function substantially the same manner as a board of
directors of a Utah corporation.  In addition to those actions set
forth in Section 4.2 and otherwise in this Agreement, all actions by the Company
that would require board of directors or stockholder approval or for which it
would be customary, using good corporate practice, to obtain board of director
or stockholder approval if the Company were a Utah corporation shall require
Management Board approval.

     

    (b) The
number of Managers to serve on the Management Board shall be five (5) and may be
increased from time to time by the Management Board by Majority
Vote.  The initial members of the Management Board are:  (i)
three individuals appointed by Peterson (or Peterson’s transferee in the event
of a Transfer of Units by Peterson) (the “Peterson Managers”), who shall
initially be (A) JORDAN CLEMENTS, (B) JAMES B. NELSON, and (C) a Manager to be
appointed by Peterson; (ii) one individual appointed by FC (the “FC Manager”),
who shall initially be ROBERT A. WHITMAN; and (iii) one individual appointed by
the unanimous consent of the Peterson Managers and the FC Manager (the
“Peterson/FC Manager”), who shall initially be SARAH MERZ.

     

    (c) Robert A.
Whitman shall serve as the Chairman of the Management Board and serve in that
capacity for a minimum of three (3) years unless earlier (A) he resigns as the
FC Manager; (B) he is removed for Cause; (C) he is no longer the Chief Executive
Officer of Franklin Covey Co., a Utah corporation; or (D) the Percentage
Interest held by FC (or an Affiliate of FC) is 50% or less than the Percentage
Interest held by FC as of the Effective Date.  If Mr. Whitman’s
service as the FC Manager and the Chairman terminates for any reason prior to
the termination of such three-year period, then, as long as the Percentage
Interest held by FC (or an Affiliate of FC) is greater than 50% of the
Percentage Interest held by FC as of the Effective Date, the person who replaces
Mr. Whitman as the FC Manager shall serve as the Chairman of the Management
Board and serve in that capacity until the expiration of such three-year
period.  Any successor Chairman thereafter shall be appointed by the
Management Board and shall serve in that capacity until his successor shall have
been appointed by the Management Board or until his earlier
resignation.

     

    (d) Each
Manager shall sign a counterpart to this Agreement in his capacity as a
Manager.

     

    (e) Each
Manager shall hold office until his successor shall have been appointed or until
his earlier resignation.

     

    (f) The
Management Board may hold regular meetings at a time and place determined by the
Management Board.  Any Manager may call a special meeting of the
Management Board by giving at least forty-eight (48) hours notice of the special
meeting and the time, place, and purpose for such meeting.  Managers
may waive the forty eight (48)-hour notice requirement by attending the meeting
or by waiving the notice requirement in writing.  Any Manager may
participate in a regular or special meeting by, or conduct the meeting through
the use of, any means of communication by which all Managers participating may
simultaneously

     

    
      
         

      

      
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    hear each
other during the meeting, in which case, any required notice of the meeting may
generally describe the arrangements (rather than or in addition to the place)
for the holding thereof.  A Manager participating in a meeting by this
means is deemed to be present in person at this meeting.  At any
meeting of the Management Board, a Quorum of the Managers must exist in order to
transact business at such meeting.

     

    (g) Unless
otherwise required by the Act or otherwise specified in this Agreement, any and
all actions taken by the Management Board shall require the approval of at least
a Majority Vote of the Managers.  Any action which may be taken by the
Management Board at a special or regularly scheduled meeting may be taken
without a meeting if the Managers then in office unanimously consent to the
action in writing.  The Managers may not vote by proxy.

     

    4.2 Authority of
Officers.  The business and affairs of the Company shall be
managed by its Officers.  Subject to Section 4.1, the Management Board
hereby delegates to the Officers full, exclusive, and complete discretion,
power, and authority, to manage, control, administer, and operate the day-to-day
business and affairs of the Company for the purposes herein
stated.  The Officers have full and complete authority, power and
discretion to make any and all decisions affecting such day-to-day business and
affairs, and to do any and all things that the Officers shall deem to be
necessary or appropriate to accomplish the business objectives of the Company,
except as otherwise (i) provided in this Agreement, (ii) specifically required
by the non-waivable provisions of the Act, (iii) directed by the Management
Board; or (iv) provided in this Section 4.2.  Notwithstanding anything
to the contrary in this Agreement, the following actions shall require the
consent of the Management Board:

     

    (a) acquire
by purchase, lease, or otherwise, any real or personal property, tangible or
intangible in excess of $500,000;

     

    (b) construct,
operate, maintain, finance, and improve, and to own, sell, convey, assign,
mortgage, or lease any real estate and any personal property in excess of
$250,000;

     

    (c) sell,
dispose, trade, or exchange Company assets in the ordinary course of the
Company’s business in excess of $250,000;

     

    (d) sell,
dispose, trade, or exchange any of the Company subsidiaries;

     

    (e) enter
into agreements and contracts and to give receipts, releases, and discharges for
products and/or services in excess of $1,000,000;

     

    (f) purchase
liability and other insurance to protect the Company’s properties and
business;

     

    (g) borrow
money in excess of $250,000 for and on behalf of the Company, and, in connection
therewith, execute and deliver instruments authorizing the confession of
judgment against the Company;

     

    
      
         

      

      
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    (h) execute
or modify leases, with respect to any part of all of the assets of the Company,
in excess of $250,000;

     

    (i) increase,
modify, accelerate, refinance or extend any existing loan or existing
indebtedness of the Company;

     

    (j) pledge,
mortgage, grant a security interest in or encumber or otherwise encumber any
asset or property of the Company other than in the ordinary course of
business;

     

    (k) prepay,
in whole or in part, refinance, amend, modify, or extend any mortgages or deeds
of trust which may affect any asset of the Company and in connection therewith
to execute for and on behalf of the Company any extensions, renewals, or
modifications of such mortgages or deeds of trust;

     

    (l) invest
and reinvest Company reserves in anything other than short-term instruments or
money market funds;

     

    (m) take any
action which would make it impossible to carry on the ordinary business or
accomplish the purposes of the Company, except as otherwise provided in this
Agreement;

     

    (n) take any
action which would cause the termination of the Company for federal income tax
purposes or the dissolution of the Company under the Act or this Agreement or
cause the Company to be classified as an “association” taxable as a corporation
under the Code;

     

    (o) change or
reorganize the Company into any other legal form;

     

    (p) amend or
terminate any agreement or arrangement that was required to be approved by the
consent of the Management Board at the time such agreement or arrangement was
entered into;

     

    (q) authorize
or approve the sale, transfer, assignment, exchange or other disposition of all
or substantially all of the assets of the Company;

     

    (r) initiate
any lawsuit or other judicial proceeding or arbitration in the name of the
Company;

     

    (s) commence
bankruptcy, insolvency, liquidation or similar proceedings with respect to the
Company or any of its subsidiaries;

     

    (t) lend any
money to a Member, Manager or Officer or a Affiliate thereof;

     

    (u) confess a
judgment against the Company or settle any proceeding brought against the
Company in an amount in excess of $250,000;

     

    (v) change
the nature of the business of the Company or enter into any business other than
or in addition to that contemplated by this Agreement;

     

    
      
         

      

      
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    (w) make any
investment in an entity (other than in short-term temporary investments of
working capital);

     

    (x) cause the
formation of any entity to be owned or controlled by the Company;

     

    (y) authorize
or approve the merger, consolidation or other combination of the Company with or
into another entity;

     

    (z) convert
the Company into a corporation or otherwise change the form of the entity in
which the Company does business;

     

    (aa) issue any
additional Units or Equity Securities of the Company;

     

    (bb) make a
distribution of the FC Preferred Return or the FC Priority Contribution except
as set forth in Section 5.1(a) and Section 5.1(b) before the dissolution and
liquidation of the Company in accordance with Section 12.2, which action shall
require the unanimous consent of the Management Board;

     

    (cc) enter
into any agreement, arrangement or understanding, written or oral, to do any of
the foregoing; or

     

    (dd) take
actions which, pursuant to this Agreement, specifically require action by, or
the consent of, the Management Board.

     

    4.3 Independent
Activities.  Except to the extent otherwise provided in this
Article IV and the Act, (i) a Member, a Manager, or any Affiliate of a Member or
Manager may engage in whatever activities such Person chooses without having or
incurring any obligation to offer any interest in such activities to the Company
or to any other Member or Manager; and (ii) neither this Agreement nor any
obligation undertaken pursuant hereto shall prevent a Member, a Manager, or any
Affiliate of a Member or Manager from engaging in such activities, or require a
Member, Manager, or any Affiliate of a Member or Manager to permit the Company
or any other Member or Manager to participate in any such activities, and as a
material part of the consideration for the execution of this Agreement by the
Members and the Managers and the admission of each Member, each Member and each
Manager hereby waives, relinquishes, and renounces any such right or claim of
participation.

     

    4.4 Fiduciary
Responsibilities.  Notwithstanding Section 4.3, each Manager
and Member shall, in all events, account to the Company and to the Members for
any benefit, and hold, as trustee for the Company and the Members, any benefit
or profits derived by such Manager or Member without the prior consent of the
Members, by Majority Vote, from any transaction connected with the formation,
conduct or liquidation and winding up of the Company or from any use by such
Manager or Member of Company property, including, but not limited to,
confidential or proprietary information of the Company or other matters
entrusted to such Person in his or its capacity as a Manager or a Member, and
such duty extends to the personal representatives of any deceased Manager or
Member involved in the liquidation and winding up of the Company.  All
management, investments, accountings, and distributions shall be conducted by
the Managers or Members, as the case may be, subject to good faith
and

     

    
      
         

      

      
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    fiduciary
responsibility.  However, no Manager or Member shall be liable for any
loss or depreciation in the value of the Company or any of its assets or
business occurring by reason of error of judgment in making any sale, any
investment or reinvestment, or any management, investment or business decision
whatsoever, provided such loss or depreciation in value has not occurred through
the Disabling Conduct of such Manager or Member.  Good faith and
fiduciary responsibility shall be required of the Managers and
Members.

     

    4.5 Permitted
Transactions.  Except as otherwise provided in this Article IV
including, but not limited, to Section 4.4, the fact that any Manager or Member,
or any Affiliate of a Manager or a Member, or any employee, partner, officer, or
officer of either an Manager or Member or an Affiliate of a Manager or Member,
is employed by, or is directly or indirectly interested in or connected with,
any person employed by the Company or any Affiliate of the Company to render or
perform a service, or from or through whom the Company or any Affiliate of the
Company may make any sale or purchase, or from whom the Company or any Affiliate
of the Company may borrow, shall not prohibit the Company or any Affiliate of
the Company from engaging in any transaction with such person, or create any
duty of legal justification additional to that which would exist if such person
were not so related to the Company, and neither the Company nor any other
Manager or Member shall have any right in or to any benefits derived from such
transaction by such Manager or Member or Person.

     

    4.6 Time and Attention Required
of Managers or Members.  The parties understand that the
Managers and Members may have other business activities that take a substantial
portion of their time and attention.  Accordingly, the Managers and
Members are required to devote to the business of the Company only the time and
attention that they in their sole discretion shall deem necessary.

     

    4.7 No Guaranty of Return of
Capital or Distribution of Cash.  The Company does not in any
way guarantee the return of the Members’ capital contributions or the
realization of a profit from their investment in the Company.  There
is no guarantee of the distribution of any particular amount of cash to Members
at any particular time.

     

    4.8 Prohibited
Acts.  The Officers and Managers shall not knowingly perform
any act that contravenes the provisions of this Agreement.

     

    4.9 Reliance Upon Actions by the
Managers.  Any Person dealing with the Company may rely without
any duty of inquiry upon any action taken by the Managers on behalf of the
Company.  Any and all deeds, bills of sale, assignments, mortgages,
deeds of trust, security agreements, promissory notes, leases, and other
contracts, agreements or instruments executed by at least two (2) Managers on
behalf of the Company pursuant to the requirements of this Agreement, shall be
binding upon the Company, and all Members agree that a copy of this provision
may be shown to the appropriate parties in order to confirm the
same.  Without limiting the generality of the foregoing, any Person
dealing with the Company may rely upon a certificate or written statement signed
by at least two (2) Managers as to:

     

    (a) The
identity of any Manager, Officer or Member;

     

    
      
         

      

      
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    (b) The
existence or nonexistence of any fact or facts that constitute a condition
precedent to acts by the Managers or that are in any other manner germane to the
affairs of the Company;

     

    (c) The
Persons who are authorized to execute and deliver any instrument or documents on
behalf of the Company; or

     

    (d) Any act
or failure to act by the Company on any other matter whatsoever involving the
Company or any Member.

     

    4.10 Officers.  The
Company may have such officers as are appointed from time to time by the
Management Board (each, an “Officer”).  Without limiting the
generality of the foregoing, the Company may have a Chairman, a President, a
Chief Executive Officer, and a Chief Financial Officer, each of whom shall,
unless otherwise directed by the Management Board, have the powers normally
associated with such officers of a Utah corporation, provided the Chairman shall
preside at all meetings of the Management Board.  Any number of
offices may be held by the same person, as the Management Board may
determine.  Sarah Merz shall serve as the initial President and Chief
Executive Officer, and Robert Sumbot shall serve as the initial Chief Financial
Officer.  In addition, Robert A. Whitman or his successor as the FC
Manager shall serve as the Chairman of the Management Board for a minimum of
three (3) years as more specifically set forth in Section
4.1(c).  Unless otherwise provided in this Agreement regarding the
appointment of any Officer, each Officer shall be chosen for a term which shall
continue until such Officer’s successor shall have been chosen and qualified or
such Officer’s earlier resignation or removal by a Majority Vote of the
Management Board.

     

    4.11 Resignation.  A
Manager may resign at any time by delivering written notice to the Management
Board.  The resignation of a Manager shall take effect upon receipt of
notice thereof or at such later time as shall be specified in such notice; and,
unless otherwise specified therein, the acceptance of such resignation shall not
be necessary to make it effective.  Such resignation shall not affect
the Manager’s rights and liabilities as a Member, if applicable, except to the
extent otherwise specifically provided in this Agreement.

     

    4.12 Removal.  A
Manager may be removed for Cause by the Company upon a determination that Cause
exists.  Further, (i) the Peterson Managers may be removed with or
without Cause by Peterson, (ii) the FC Manager may be removed with or without
Cause by FC, and (iii) the Peterson/FC Manager may be removed with the unanimous
consent of the Peterson Managers and the FC Manager.

     

    4.13 Vacancies.  Any
vacancy occurring for any reason in the office of (i) the Peterson Managers may
be filled by Peterson, (ii) the FC Manager may be filled by FC, and (iii) the
Peterson/FC Manager may be filled with the unanimous consent of the Peterson
Managers and the FC Manager.

     

    4.14 Manager
Compensation.  Peterson and FC shall be compensated for making
their employees available to the Company to serve as
Managers.  Further, the Managers shall be reimbursed for expenses
reasonably incurred in carrying out such role.  The total management
fee payable to Peterson and FC shall be $125,000, which shall be paid (i)
$101,250 to Peterson, and

     

    
      
         

      

      
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    (ii)
$23,750 to FC.  In addition, the Peterson/FC Manager shall be entitled
to compensation as reasonably determined by the Management Board in the event
that such Peterson/FC Manager is not an employee of the Company.  Each
Manager who is an employee of the Company shall be compensated only in
accordance with an employment agreement with the Company containing terms and
conditions acceptable to such Manager and a Majority Vote of the
Managers.

     

    ARTICLE
V

     

    PAYMENTS
AND DISTRIBUTIONS

     

    5.1 Distributions of Net
Available Cash Flow.  Except as provided in Article XII in
connection with the dissolution of the Company, after any Tax Distributions to
be made pursuant to Section 5.7, Net Available Cash Flow shall be distributed on
a quarterly basis, or more frequently as determined by a Majority Vote of the
Management Board, to the Members in the following order and
priority:

     

    (a) First, to
FC an amount equal to the FC Preferred Return until FC has received cumulative
distributions pursuant to this Section 5.1(a) equal to the FC Preferred
Return;

     

    (b) Second,
to FC an amount equal to the FC Unreturned Priority Contribution until FC has
received cumulative distributions pursuant to this Section 5.1(b) equal to the
FC Priority Contribution;

     

    (c) Third, to
the Class A Members in proportion to each Class A Member’s unpaid Class A
Preferred Return, until each Class A Member has received cumulative
distributions pursuant to this Section 5.1(c) equal to such Class A Member’s
Class A Preferred Return;

     

    (d) Fourth,
to the Class A Members, pro rata based on the Class A Unreturned Contribution
Balance of each Class A Member, an amount equal to the Class A Unreturned
Contribution Balance;

     

    (e) Fifth, to
the Class B Member, an amount equal to the Class B Unreturned Contribution
Balance; and

     

    (f) Thereafter,
to the Members in proportion to their respective Percentage
Interests.

     

    5.2 Distributions in
Kind.  The Company, at the discretion of and by the Majority
Vote of the Management Board, may make distributions in kind.  All
Members must accept distributions in kind.  At the time of any
distribution in kind, the Gross Asset Value of the Company’s assets will be
adjusted pursuant to Appendix 1.

     

    5.3 Distributions in
Liquidation.  Following the dissolution of the Company and the
commencement of winding up and the liquidation of its assets, distributions to
the Members shall be governed by Section 12.2.

     

    
      
         

      

      
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    5.4 Amounts
Withheld.  All amounts withheld pursuant to the Code or any
provisions of state or local tax law with respect to any payment or distribution
to the Members from the Company shall be treated as amounts distributed to the
relevant Member(s) for all purposes of this Agreement.

     

    5.5 State Law Limitation on
Distributions.  Notwithstanding any provision to the contrary
contained in this Agreement, the Company shall not make a distribution to any
Member on account of such Member’s Units if such distribution would violate the
Act or other applicable law.

     

    5.6 Liability For Repayment of
Distributions.  The Members acknowledge and agree that pursuant
to Section 1006 of the Act, a member of a limited liability company who receives
a distribution from a limited liability company by mistake or in violation of
the articles of organization, the operating agreement or the Act, is liable for
a period of five (5) years following such distribution to return the wrongful
distribution to the limited liability company if an action to recover such
distribution is commenced prior to the expiration of such five (5)-year period,
and an adjudication of liability is made against such member in such
action.  The Management Board does not intend to make a distribution
of Net Available Cash Flow to the Members if any such distribution would be
required to be returned by the Members in accordance with the
foregoing.  However, there may be circumstances in which claims of
creditors might have been unanticipated or the extent of such claims may have
been difficult to calculate and, accordingly, the Members are aware that there
may be circumstances in which distributions from the Company may be required to
be repaid to the Company by the distributee Members.

     

    5.7 Tax
Distributions.  

     

    (a) For each
Fiscal Year, the Company will during such Fiscal Year use its reasonable efforts
to distribute to each Member, with respect to such Fiscal Year, a distribution
in an amount equal to such Member’s Presumed Tax Liability for such Fiscal Year
(a “Tax Distribution”), which Tax Distribution will be offset by the amount of
Tax Advances for such Member for such Fiscal Year, as provided in Section
5.8.  Such Tax Distributions shall be made to the Members on a
quarterly basis in the manner set forth in Section 5.7(c).

     

    (b) For
purposes of this Section 5.7, “Presumed Tax Liability” for any Member for a
Fiscal Year shall mean an amount equal to the product of (i) the amount of
taxable income (including any items required to be separately stated under
Section 703 of the Code and taking into account any allocations under Section
704(c)) allocated to such Member for that Fiscal Year, and (ii) the combined
effective federal and state income tax rate, adjusted for the federal deduction
for state income taxes, applicable during a Fiscal Year for computing regular
ordinary income tax liabilities (without reference to minimum taxes, alternative
minimum taxes, or income tax surcharges) of a natural person residing in Utah in
the highest bracket of taxable income.

     

    (c) The
Company shall reasonably estimate the Presumed Tax Liability of each Member with
respect to each quarter of the applicable Fiscal Year, and shall make a Tax
Distribution to each Member no less than ten (10) days prior to the quarterly
federal estimated income tax payment due dates for individual
taxpayers.

     

    
      
         

      

      
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    (d) The
amount to be distributed to a Member as a Tax Distribution pursuant to this
Section 5.7 shall be computed as if any distributions made pursuant to Section
5.1(f) during such quarter were a Tax Distribution in respect of such
quarter.  Further, any Tax Distribution made pursuant to this Section
5.7 shall be considered an advance against the next distribution(s) payable to
the applicable Member pursuant to Section 5.1(f) and Section 12.2, and shall
reduce such distribution(s) on a dollar-for-dollar basis.

     

    5.8 Withholding and Tax
Advances.  To the extent the Company is required by any Laws of
any Taxing Jurisdiction to withhold or to make tax payments on behalf of or with
respect to a Member (e.g., (i) backup withholding, (ii) withholding with respect
to Members who are neither citizens nor residents of the United States, or (iii)
withholding with respect to Members who are not residents of any state requiring
withholding) (“Tax Advances”), the Company may withhold such amounts and make
such tax payments to the appropriate taxing jurisdiction as may be
required.  Further, all amounts withheld or required to be 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
Members and treated by the Code (whether or not withheld pursuant to the Code)
or any such tax law as amounts payable by or in respect of any Member or any
Person owning an interest, directly or indirectly, in such Member shall be
treated as an advance to the Member and shall be credited against the Tax
Distribution such Member would otherwise receive for the applicable period
pursuant to Section 5.7.  The Company is authorized to withhold from
distributions, or with respect to allocations, to the Members and to pay over to
any federal, state, local or foreign government any amounts required to be so
withheld pursuant to the Code or any provisions of any other federal, state,
local, or foreign law and shall allocate any such amounts to the Members with
respect to which such amount was withheld.  If the amount of the Tax
Advances with respect to any Fiscal Year payable to the Member are not
sufficient to offset the Tax Advances with respect to such Fiscal Year, then the
Company shall reduce the amount of any other distributions payable to the Member
or, at the discretion of the Managers, require the Member to immediately repay
the Company any remaining balance until the Tax Advances amount is repaid by the
Member.

     

    5.9 Inclusion of Unit
Holder.  Except as otherwise provided herein, the term “Member”
for purposes of this Article V shall include a Unit Holder.

     

    ARTICLE
VI

     

    ALLOCATION
OF PROFITS AND LOSSES

     

    6.1 Profit
Allocations.  After making any special allocations required
under Appendix 1, Profits for each Fiscal Year (and each item of income and gain
entering into the computation thereof) shall be allocated among the Members (and
credited to their respective Capital Accounts) in the following order and
priority:

     

    (a) First, to
FC until the cumulative Profits allocated pursuant to this Section 6.1(a) are
equal to the cumulative Losses, if any, previously allocated to FC pursuant to
Section 6.2(f) for all prior periods;

     

    (b) Second,
to FC until the cumulative Profits allocated pursuant to this

     

    
      
         

      

      
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    Section
6.1(b) are equal to the cumulative Losses, if any, previously allocated to FC
pursuant to Section 6.2(e) for all prior periods;

     

    (c) Third, to
FC, an amount equal to the cumulative accrued FC Preferred Return for the
current taxable year and all prior taxable years until the cumulative Profits
allocated pursuant to this Section 6.1(c) are equal to the cumulative accrued FC
Preferred Return for the current taxable year and all prior taxable
years;

     

    (d) Fourth,
to the Class A Members, pro rata based on the amount of Losses being offset,
until the cumulative Profits allocated pursuant to this Section 6.1(d) are equal
to the cumulative Losses, if any, previously allocated to the Class A Members
pursuant to Section 6.2(d) for all prior periods;

     

    (e) Fifth, to
the Class A Members, pro rata based on the accrued Class A Preferred Return of
the Class A Members, an amount equal to the cumulative accrued Class A Preferred
Return for the current taxable year and all prior taxable years;

     

    (f) Sixth, to
each Class A Members, pro rata based on the amount of Losses being offset, until
the cumulative Profits allocated pursuant to this Section 6.1(f) are equal to
the cumulative Losses, if any, previously allocated to the Class A Members
pursuant to Section 6.2(c) for all prior periods;

     

    (g) Seventh,
to the Class B Members, until the cumulative Profits allocated pursuant to this
Section 6.1(g) are equal to the cumulative Losses, if any, previously allocated
to the Members pursuant to Section 6.2(b) for all prior periods;

     

    (h) Eighth,
to the Members, pro rata based on the amount of Losses being offset, until the
cumulative Profits allocated pursuant to this Section 6.1(h) are equal to the
cumulative Losses, if any, previously allocated to the Members pursuant to
Section 6.2(h) for all prior periods in proportion to the Members’ respective
shares of the Losses being offset;

     

    (i) Ninth, to
the Members, pro rata based on the amount of Losses being offset, until the
cumulative Profits allocated pursuant to this Section 6.1(i) are equal to the
cumulative Losses, if any, previously allocated to the Members pursuant to
Section 6.2(g) for all prior periods; and

     

    (j) Tenth, to
the Members in accordance with their Percentage Interests.

     

    6.2 Loss
Allocations.  After making any special allocations required
under Appendix 1,
Losses for each fiscal year (and each item of loss and deduction entering into
the computation thereof) shall be allocated among the Members (and charged to
their respective Capital Accounts) in the following order and
priority:

     

    (a) First, to
the Members, pro rata based on the amount of Profits being offset, until the
cumulative Losses allocated pursuant to this Section 6.2(a) are equal to the
cumulative Profits, if any, previously allocated to the Members pursuant to
Section 6.1(i) and Section 6.1(j) for all prior periods in proportion to the
Members’ respective shares of the Profits being offset;

     

    
      
         

      

      
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    (b) Second,
to the Class B Members, pro rata in accordance with its Class B Unreturned
Contribution Balance as of the end of the period to which the allocation of
Losses under this Section 6.2(b) relates reduced by any Losses previously
allocated to such Class B Member pursuant to this Section 6.2(b), until the
cumulative Losses allocated pursuant to this Section 6.2(b) to each Class B
Member equal the Unreturned Contribution Balance of each such Class B Member as
of the end of the period to which the allocation of Losses under this Section
6.2(b) relates plus the total Profits allocated to each Class B Member pursuant
to Section 6.1(g).

     

    (c) Third, to
the Class A Members, pro rata based upon the Profits being offset, until the
cumulative Losses allocated pursuant to this Section 6.2(c) are equal to the
cumulative Profits, if any, previously allocated to the Class A Member pursuant
to Section 6.1(e) and Section 6.1(f) for all prior periods;

     

    (d) Fourth,
to the Class A Members, pro rata based upon the Class A Unreturned Contribution
Balances of the Class A Members as of the end of the period to which the
allocation of Losses under this Section 6.2(d) relates reduced by any Losses
previously allocated to such Class A Members pursuant to this Section 6.2(d),
until the cumulative Losses allocated pursuant to this Section 6.2(d) to each
Class A Member equals the Class A Unreturned Contribution Balance of such Class
A Member as of the end of the period to which the allocation of Losses under
this Section 6.2(d) relates plus the total Profits allocated to each Class A
Member pursuant to Section 6.1(d);

     

    (e) Fifth, to
FC until the cumulative Losses allocated pursuant to this Section 6.2(e) are
equal to the cumulative Profits, if any, previously allocated to FC pursuant to
Section 6.1(b) and Section 6.1(c) for all prior periods;

     

    (f) Sixth, to
FC until the cumulative Losses allocated pursuant to this Section 6.2(f) to FC
equals the FC Unreturned Priority Contribution as of the end of the period to
which the allocation of Losses under this Section 6.2(f) relates plus the total
Profits allocated to FC pursuant to Section 6.1(a);

     

    (g) Seventh,
to the Members in accordance with their Percentage Interests.

     

    (h) Losses
allocated in accordance with subparagraphs (a) through (g) of this Section 6.2
to the Capital Account of any Member shall not exceed the maximum amount of
Losses that can be so allocated without creating an Adjusted Capital Account
Balance deficit with respect to such Capital Account.  This limitation
shall be applied individually with respect to each Member in order to permit the
allocation pursuant to this Section 6.2(h) of the maximum amount of Losses
permissible under Regulations Section 1.704-1(b)(2)(ii)(d).  All
Losses in excess of the limitations set forth in this Section 6.2(h) shall be
allocated solely to those Members that bear the economic risk for such
additional Losses within the meaning of Code Section 704(b) and the Regulations
thereunder.  If it is necessary to allocate Losses under the preceding
sentence, the Managers shall, in accordance with the Regulations promulgated
under Code Section 704(b), determine those Members that bear the economic risk
for such additional Losses.

     

    
      
         

      

      
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    6.3 Tax
Allocations.

     

    (a) Except as
otherwise provided in Section 6.2(b) hereof, for income tax purposes, all items
of income, gain, loss, deduction and credit of the Company for any tax period
shall be allocated among the Members in accordance with the allocation of
Profits and Losses prescribed in this Article VI and Appendix 1
hereto.

     

    (b) 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 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 in
the same manner as under Code Section 704(c) and the Regulations thereunder;
provided, however, that unless otherwise determined by Management Board, the
Company shall not adopt the Traditional Method with Curative Allocations as
defined under Regulations Section 1.704-3(c) or the Remedial Allocation Method
as defined in Regulations Section 1.704-3(d) that would require any Member to
report any item of income or gain for Code Section 704(c) purposes that differs
in amount or timing from the taxable income that the Company allocates to such
Member under Code Section 704(b).  In the event the Gross Asset Value
of any Company asset is adjusted pursuant to Section A1 of Appendix 1 hereto,
subsequent allocations of income, gain, loss and deduction with respect to such
asset shall take account of any variation between the adjusted basis of such
asset for federal income tax purposes and its Gross Asset Value in the same
manner as under Code Section 704(c) and the Regulations thereunder; provided,
however, that unless otherwise determined by Management Board, the Company shall
not adopt the Traditional Method with Curative Allocations as defined under
Regulations Section 1.704-3(c) or the Remedial Allocation Method as defined in
Regulations Section 1.704-3(d) that would require any Member to report any item
of income or gain for Code Section 704(c) purposes that differs in amount or
timing from the taxable income that the Company allocates to such Member under
Code Section 704(b).  Allocations pursuant to this Section 6.2 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 or other items or distributions pursuant to any
provision of this Agreement.

     

    (c) The
Members are aware of the income tax consequences of the allocations made by this
Article VI and Appendix 1 hereto and hereby agree to be bound by the provisions
of this Article VI and Appendix 1 hereto in reporting their distributive shares
of the Company’s taxable income and loss for income tax purposes.

     

    6.4 Transferor – Transferee
Allocations.  Income, gain, loss, deduction or credit
attributable to any Units which have been transferred shall be allocated between
the transferor and the transferee under any method allowed under Code Section
706 and the Regulations thereunder as agreed by the transferor and the
transferee.

     

    6.5 Rights of Unit
Holders.  If any Person who is not a Member acquires ownership
of one or more Units, the term “Member” shall be construed to include such Unit
Holder for purposes of this Article VI.

     

    
      
         

      

      
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    ARTICLE
VII

     

    LIABILITIES,
RIGHTS AND OBLIGATIONS OF MEMBERS

     

    7.1 Limitation of
Liability.  Each Member’s liability for Company debts and
obligations shall be limited as set forth in the Act and other applicable
law.  This Section 7.1 shall not be deemed to limit in any way the
Member’s liabilities to the Company and to the other Members arising from a
breach of this Agreement.

     

    7.2 Access to Company
Records.  Upon a Member’s written request, the Managers shall
permit such Member, at a reasonable time to both the Managers and the Member, to
inspect and copy the Company records required to be maintained pursuant to
Section 9.1, as more specifically provided in Section 9.1.

     

    7.3 Waiver of Action for
Partition.  Each Member irrevocably waives during the term of
the Company any right that such Member may have to maintain any action for
partition with respect to Company property or other Company assets.

     

    7.4 Cooperation With Tax Matters
Partner.  Each Member agrees to cooperate with the Tax Matters
Partner and to do or refrain from doing any or all things reasonably required by
the Tax Matters Partner in connection with the conduct of any proceedings
involving the Tax Matters Partner.

     

    7.5 Acknowledgment of Liability
for State and Local Taxes.  To the extent that the laws of any
Taxing Jurisdiction require, each Member requested to do so by any other Member
shall submit an agreement indicating that the Member shall make timely income
tax payments to the Taxing Jurisdiction and that the Member accepts personal
jurisdiction of the Taxing Jurisdiction regarding the collection of income
taxes, interest, and penalties attributable to the Member’s
income.  If a Member fails to provide such agreement upon request, the
Company may withhold or pay over to such Taxing Jurisdiction the amount of tax,
penalty, and interest determined under the laws of the Taxing Jurisdiction with
respect to such income.  Any such payments shall be treated as
distributions for purposes of Article V.

     

    7.6 Limitation On Bankruptcy
Proceedings.  No Member, without the Majority Vote of the
Members, shall file or cause to be filed any action in bankruptcy involving the
Company.

     

    7.7 Voting
Rights.  The Priority Members shall have the right to vote on
the matters specifically reserved for their approval or consent set forth in
this Agreement.  The Class C Units are non-voting and shall have no
right to vote under this Agreement.

     

    7.8 Annual Member
Meeting.  The Members shall not be required to hold an annual
meeting. Notwithstanding the foregoing sentence, an annual meeting of the
Members may be held each year on the date, at the time, and at the place, fixed
by the Management Board for the purpose of electing Managers for vacant Manager
positions, if any, and for the transaction of such other business as may come
before the meeting.

     

    7.9 Special Member
Meetings.  Special meetings of the Members may be called, for
any purposes described in the notice of the meeting, by the Management Board,
and shall be

     

    
      
         

      

      
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    called by
the Management Board promptly upon the request of Members holding not less than
fifteen percent (15%) of the outstanding Units entitled to vote at the
meeting.

     

    7.10 Notice of Member
Meeting.

     

    (a) Required
Notice.  Written notice stating the place, day, and hour of any
annual or special Member meeting shall be delivered not less than five (5) nor
more than sixty (60) days before the date of the meeting, either personally,
orally, by mail or by electronic mail, by or at the direction of the person or
group calling the meeting, to each Member of record entitled to vote at such
meeting.  Notice shall be deemed to be effective as provided in
Section 14.1, or when received if delivered orally.

     

    (b) Adjourned
Meeting.  If any Member meeting is adjourned to a different
date, time, or place, notice need not be given of the new date, time, or place,
if the new date, time, or place is announced at the meeting before
adjournment.

     

    (c) Contents of
Notice.  Notice of any special meeting of the Members shall
include a description of the purpose or purposes for which the meeting is
called.  Notice of an annual meeting of the Members need not include a
description of the purpose or purposes for which the meeting is
called.

     

    (d) Waiver of Notice of
Meeting.  Any Member may waive notice of a meeting by a writing
signed by the Member which is delivered to the Company (either before or after
the date and time stated in the notice as the date or time when any action will
occur or has occurred) for inclusion in the minutes or filing with the Company’s
records.

     

    (e) Effect of Attendance at
Meeting.  A Member’s attendance at a meeting:

     

    i. Waives
objection to lack of notice or defective notice of the meeting, unless the
Member at the beginning of the meeting objects to holding the meeting or
transacting business at the meeting; and

     

    ii. Waives
objection to consideration of a particular matter at the meeting that is not
within the purpose or purposes described in the meeting notice, unless the
Member objects to considering the matter when it is presented.

     

    7.11 Member Voting
Requirements.

     

    (a) Approval of
Actions.  If a Quorum of the Members exists at a meeting of the
Members, action on a matter is approved if the votes required by this Agreement,
unless a greater number of affirmative votes are required under the Act, are
voted in favor of such matter.  Except as otherwise provided in this
Agreement, or as otherwise required by the Act, the Priority Members shall vote
together as a single class on any matter requiring the approval or consent of
the Members.  If less than a Quorum of the Members exists, the meeting
may be adjourned by the Chairman to a later date, time and place, and the
meeting may be held as adjourned without further notice.

     

    
      
         

      

      
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    (b) Effect of
Representation.  Once a Unit is represented for any purpose at
a meeting, including the purpose of determining that a Quorum of the Members
exists, it is deemed present for quorum purposes for the remainder of the
meeting and for any adjournment of that meeting, unless a new record date is or
must be set for that adjourned meeting.

     

    7.12 Proxies.  At
all meetings of the Members, a Member may vote the Units the Member is entitled
to vote in person or by a proxy executed in any lawful manner under the
Act.  Such proxy shall be filed with the Company before or at the time
of the meeting.  No proxy shall be valid after eleven months from the
date of its execution unless otherwise provided in the proxy.

     

    7.13 Voting of
Units.  Unless otherwise provided in the Articles of
Organization or this Agreement, each outstanding Unit entitled to vote shall be
entitled to one vote, and each fractional share shall be entitled to a
corresponding fractional vote, upon each matter submitted to a vote at a meeting
of Members.

     

    7.14 Informal Action by
Members.

     

    (a) Written Consent. Any
action which may be taken at any annual or special meeting of Members may be
taken without a meeting and without prior notice if one or more consents in
writing, setting forth the action so taken, are signed by the holders of
outstanding Units having not less than the minimum number of votes necessary to
authorize or take the action under this Agreement (unless a greater number of
affirmative votes are required under the Act).  Unless the written
consents of all Members entitled to vote have been obtained, notice of any
Member approval without a meeting shall be given at least five (5) days before
the consummation of the transaction, action, or event authorized by the Member
action to those Members entitled to vote who have not consented in
writing.  The notice must contain or be accompanied by a description
of the transaction, action or event.  If the Company has received
written consents as contemplated by this Section 7.14(a) signed by all Members
entitled to vote with respect to the action, the effective date of the action
may be any date that is specified in all of the written consents.  Any
consent or writing may be received by the Company by any electronically
transmitted or other form of communication that provides the Company with a
complete copy thereof, including the signature thereto.  Any Member or
an authorized representative of that Member may revoke a consent by a signed
writing describing the action and stating that the Member’s prior consent is
revoked, if the writing is received by the Company prior to the effective date
and time of the action.  A member action taken pursuant to this
Section 7.14(a) is not effective unless all written consents on which the
Company relies for taking an action pursuant to this Section 7.14(a) are
received by the Company within a 60-day period and not revoked pursuant to this
Section 7.14(a).

     

    (b) Effect of Action Without a
Meeting.  Action taken under this Section 7.14 has the same
effect as action taken at a meeting of Members and may be so described in any
document.

     

     

    ARTICLE
VIII

     

    LIABILITY,
EXCULPATION AND INDEMNIFICATION

     

    
      
         

      

      
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    8.1 Liability.  Except
as otherwise provided by the Act or pursuant to any agreement, the debts,
obligations and liabilities of the Company, whether arising in contract, tort or
otherwise, shall be solely the debts, obligations and liabilities of the
Company, and no Covered Person shall be obligated personally for any such debt,
obligation or liability of the Company solely by reason of being a Covered
Person.

     

    8.2 Exculpation.  No
Covered Person shall be liable to the Company or any Member for any act or
omission taken or suffered by such Covered Person in good faith and in the
reasonable belief that such act or omission is in or is not contrary to the best
interest of the Company and is within the scope of authority granted to such
Covered Person by this Agreement; provided, however, that such act or omission
is not in violation of this Agreement and does not constitute Disabling Conduct
by the Covered Person.

     

    8.3 Indemnification.

     

    (a) The
Company shall, to the fullest extent permitted by applicable Law (but subject to
the limitations set forth in this Article VIII), indemnify, hold harmless and
release each Covered Person from and against all claims, demands, liabilities,
costs, expenses, damages, losses, suits, proceedings and actions, whether
judicial, administrative, investigative or otherwise, of whatever nature, known
or unknown, liquidated or unliquidated (“Claims”), that may accrue to or be
incurred by any Covered Person, or in which any Covered Person may become
involved, as a party or otherwise, or with which any Covered Person may be
threatened, relating to or arising out of the business and affairs of, or
activities undertaken in connection with, the Company, including, but not
limited to, amounts paid in satisfaction of judgments, in compromise, or as
fines or penalties and counsel fees and expenses incurred in connection with the
preparation for or defense or disposition of any investigation, action, suit,
arbitration or other proceeding (a “Proceeding”), whether civil or criminal (all
of such Claims and amounts covered by this Section 8.3 and all expenses referred
to in Section 8.3(e), are referred to as “Damages”), except to the extent that
it is ultimately determined that such Damages arose from Disabling Conduct of
such Covered Person.  The termination of any Proceeding by settlement
shall not, of itself, create a presumption that any Damages relating to such
settlement arose from a material violation of this Agreement by, or Disabling
Conduct of, any Covered Person.  Members shall not indemnify any
Covered Person.

     

    (b) Notwithstanding
anything to the contrary in this Section 8.3, and as provided in Section 1802(1)
of the Act, the Company shall not indemnify a Covered Person made a party to a
Proceeding against liability incurred in the Proceeding unless:

     

    i. the
Covered Person’s conduct was in good faith;

     

    ii. the
Covered Person reasonably believed that such Covered Person’s conduct was in, or
not opposed to, the Company’s best interests; and

     

    iii. in the
case of any criminal proceeding, the Covered Person had no reasonable cause to
believe such Covered Person’s conduct was unlawful.

     

    
      
         

      

      
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    The
termination of a Proceeding by judgment, order, settlement, conviction, or upon
a plea of nolo contendere or its equivalent is not, of itself, determinative
that the Covered Person did not meet the standard of conduct described in this
Section 8.3(b).

    

    (c) Notwithstanding
anything to the contrary in this Section 8.3, and as provided in Section 1802(4)
of the Act, the Company shall not indemnify a Covered Person under this Section
8.3:

     

    i. in
connection with a Proceeding by or in the right of the Company in which the
Covered Person was adjudged liable to the Company; or

     

    ii. in
connection with any other Proceeding charging that the Covered Person derived an
improper personal benefit, whether or not involving action in such Covered
Person’s official capacity, in which proceeding such Covered Person was adjudged
liable on the basis that such Covered Person derived an improper personal
benefit.

     

    (d) The
determination regarding whether the Covered Person has met the standards and
requirements set forth in this Section 8.3, and is therefore entitled to
indemnification and the advancement of expenses pursuant to Section 8.3(e),
shall be made in accordance with Section 1806 of the Act.

     

    (e) Expenses
incurred by a Covered Person in defense or settlement of any Claim that may be
subject to a right of indemnification hereunder shall be advanced by the Company
prior to the final disposition thereof if (i) the Covered Person furnishes the
Company a written affirmation of such Covered Person’s good faith belief that
such Covered Person has met the applicable standard of conduct described in this
Section 8.3, (ii) upon receipt of a written undertaking by or on behalf of the
Covered Person to repay such amount if it is ultimately determined that the
Covered Person is not entitled to be indemnified hereunder, and (iii) a
determination is made that the facts then known to those making the
determination would not preclude indemnification under this Section 8.3, as
provided in the Act.

     

    (f) The right
of any Covered Person to the indemnification provided herein shall be cumulative
with, and in addition to, any and all rights to which such Covered Person may
otherwise be entitled by contract or as a matter of law or equity and shall
extend to such Covered Person’s heirs, personal representatives, successors and
assigns.

     

    (g) Promptly
after receipt by a Covered Person of notice of the commencement of any
Proceeding, such Covered Person shall, if a claim for indemnification in respect
thereof is to be made against the Company, give written notice to the Company of
the commencement of such Proceeding, provided that the failure of any Covered
Person to give notice as provided herein shall not relieve the Company of its
obligations under this Section 8.3 except to the extent that the Company is
actually prejudiced by such failure to give notice.  In case any such
Proceeding is brought against a Covered Person (other than a derivative suit in
right of the Company), the Company will be entitled to participate in and to
assume the defense thereof to the extent that the Company may wish, with counsel
reasonably satisfactory to such Covered Person.  After notice from the
Company to such Covered Person of the Company’s election to assume the defense
thereof, the Company will not be liable for expenses subsequently

     

    
      
         

      

      
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    incurred
by such Covered Person in connection with the defense thereof.  The
Company will not consent to entry of any judgment or enter into any settlement
that (i) does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Covered Person a release from all liability in
respect to such Claim, or (ii) requires any action (or inaction) by the Covered
Person other than the payment of money, but only to the extent that the Company
is required to indemnify the Covered Person for such payment.

     

     

    ARTICLE
IX

     

    BOOKS AND
RECORDS, REPORTS, TAX ACCOUNTING, BANKING

     

    9.1 Books and
Records.  The Managers, at the Company’s expense, shall keep or
cause to be kept adequate books and records for the Company, which contain an
accurate account of all business transactions arising out of and in connection
with the conduct of the Company, as required by the Act.  After first
giving the Company written notice of the demand at least five (5) business days
before the inspection is to occur, any current or former Member or Manager, or
his or its designated representative, shall have the right, at any reasonable
time, to have access to and may inspect and copy the contents of such books or
records for any proper purpose, as defined by the Act.  The cost of
such inspection and copying shall be borne by the Member or Manager seeking such
inspection.  The following records are those that the Managers shall
cause to be maintained at the Company’s Designated Office:

     

    (a) An
alphabetical list of the full name and last known business, residence, or
mailing address of each Member, each Manager and each Officer, both past and
present;

     

    (b) A copy of
the stamped Articles of Organization for the Company, and all certificates of
amendment thereto, together with a copy of all signed powers of attorney
pursuant to which the Company’s Articles of Organization or any amendment has
been signed;

     

    (c) A copy of
the writing required of an organizer under Section 401(2) of the Act setting
forth the name and address of each Member of the Company and each
Manager;

     

    (d) A copy of
the Company’s currently effective Agreement and all amendments thereto, copies
of any prior operating agreements no longer in effect, and copies of any
writings permitted or required with respect to a Member’s obligation to
contribute cash, property, or services;

     

    (e) Copies of
the Company’s federal, state, and local income tax returns and reports, if any,
for the three (3) most recent years;

     

    (f) Copies of
Company financial statements, if any, for the three (3) most recent
years;

     

    (g) Copies of
the minutes, if any, of every meeting of the Members and any written consents
obtained from the Members;

     

    (h) Copies of
minutes, if any, of every meeting of the Management Board, and any written
consents obtained from the Managers;

     

    
      
         

      

      
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    (i) Copies of
any consents or approvals for actions by the Managers; and

     

    (j) Except to
the extent already set forth in this Agreement, a written statement setting
forth:  (i) the amount of cash and a description and statement of the
agreed value of the other property or services contributed and agreed to be
contributed by each Member; (ii) the times at which, or events on the happening
of which, any additional contributions agreed to be made by each Member are to
be made; (iii) any right of a Member to receive distributions; (iv) any date or
event upon the happening of which a Member is entitled to payment in redemption
of the Member’s interests in the Company; and (v) any date or event upon the
happening of which the Company is to be dissolved and its affairs wound
up.

     

    9.2 Reports to
Members.  Within twenty (20) days after the end of each Fiscal
Year, within fifteen (15) days after the end of each of the first three fiscal
quarters thereof, and within fifteen (15) days after the end of each calendar
month other than March, June, September and December, the Chief Executive
Officer shall cause the Management Board and the Members to be furnished with a
copy of the balance sheet of the Company as of the last day of the applicable
period and a statement of income or loss for the Company for such
period.  Quarterly and annual statements shall also include a
statement of the Members’ Capital Accounts and changes therein for such Fiscal
quarter or Fiscal Year, as applicable.  Annual statements shall be
audited by the Company’s accountants, and shall be in such form as shall enable
the Members to comply with all reporting requirements applicable to either of
them or their Affiliates under the Securities Exchange Act of 1934, as
amended.  The audited financial statements of the Company shall be
furnished to the Members within fifty (50) days after the end of each Fiscal
Year. 

     

    9.3 Tax
Matters.  The Members intend that the Company shall be operated
in a manner consistent with its treatment as a partnership for federal and state
income tax purposes.  The Members shall not take any action
inconsistent with this expressed intent.  The Tax Matters Partner
shall take no action to cause the Company to elect to be taxed as a corporation
pursuant to Regulations Section 301.7701-3(a) or any counterpart under state
law.  Each Member agrees not to make any election for the Company to
be excluded from the application of the provisions of Subchapter K of the
Code.

     

    9.4 Tax
Returns.  The Management Board shall cause the Company
accountants to prepare and timely file all tax returns required to be filed by
the Company pursuant to the Code and all other tax returns deemed necessary and
required in each jurisdiction in which the Company does business.  The
Management Board shall instruct Company accountants to use commercially
reasonable efforts to prepare and deliver all Forms K-1 (and similar forms under
state and local law) to each Member by March 1 of each Fiscal
Year.  

     

    (a) The
Management Board may, where permitted by the rules of any Taxing Jurisdiction,
file a composite, combined, or aggregate tax return reflecting Company income,
and pay the tax, interest, and penalties of some or all Members on such income
to the Taxing Jurisdiction.  In such case the Company shall inform the
Members of the amount of such tax, interest, and penalties so paid.

     

    (b) The
Management Board shall designate one Manager that is a Member to be the
Company’s “tax matters partner” pursuant to Code Section 6231(a)(a)(7) (the
“Tax

     

    
      
         

      

      
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    Matters
Partner”), provided, however, that if there is only one Manager that is a
Member, such Manager shall be the Tax Matters Partner, and provided further
that, if there is no Manager that is a Member, the Tax Matters Partner shall be
a Member that is designated as such by a Majority Vote of the
Members.  Any Person so designated as the Tax Matters Partner shall
receive no compensation (other than compensation, if any, otherwise specified in
this Agreement) from the Company or its Members for its services in that
capacity.  Sarah Merz is hereby designated as the initial Tax Matters
Partner of the Company and shall be authorized and required to represent the
Company in connection with all examinations of the Company’s affairs by tax
authorities (Federal, State and local), including resulting administrative and
judicial proceedings, and to expend Company funds for professional services and
costs associated therewith.  To the extent permitted by the Code, the
Tax Matters Partner may be removed by the Management Board.  The Tax
Matters Partner shall, on a timely basis, keep all Members fully informed of the
progress of any examinations, audits or other proceedings, and all Priority
Members shall have the right to participate in any such examinations, audits or
other proceedings.  Notwithstanding the foregoing, the Tax Matters
Partner shall not settle or otherwise compromise any issue in any such
examination, audit or other proceeding without first obtaining the approval of
the Management Board.

     

    (c) At the
request of a Majority Vote of the Members, the Managers may make the election
provided under Code Section 754 and any corresponding provision of applicable
state law.

     

    (d) If a
Member reports a Company item on the Member’s income tax return in a manner
inconsistent with the Company income tax return, the Member shall notify the
Management Board of such treatment before filing the Member’s income tax
return.  If a Member fails to report such inconsistent reporting, the
Member shall be liable to the Company and the other Members for any expenses,
including professionals’ fees, tax, interest, penalties, or litigation costs,
that may arise as a consequence of such inconsistent reporting, such as an audit
by a Taxing Jurisdiction.

     

    9.5 Bank
Accounts.  The Company shall maintain checking or other
accounts in such bank or banks as the Managers shall determine and all funds
received by the Company shall be deposited therein and withdrawn therefrom under
such general or specific authority as this Agreement, the Act, or the Management
Board shall grant to the Managers.  Company funds shall not be
commingled with the funds of any other Person.  Checks shall be drawn
upon the Company account or accounts only for Company purposes and shall be
signed by authorized Persons on the Company’s behalf.

     

     

    ARTICLE
X

     

    ADMISSIONS
AND WITHDRAWALS

     

    10.1 Admission of
Member.  Persons may be admitted as Members as a result of the
issuance of Units only with a Majority Vote of the Members, provided, however,
that a third party may become a Member through conversion rights granted to such
third party by an instrument approved by the Management Board.  Except
as specifically set forth herein, no

     

    
      
         

      

      
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    Person
shall be admitted as a Member of the Company after the date of formation of the
Company as a result of a Transfer of Units, except in accordance with Section
11.5.

     

    10.2 Right to
Withdraw.  A Member may withdraw from the Company at any time
by mailing or delivering a written notice of withdrawal to the
Managers.  If the withdrawing Member is a Manager, such Member may
withdraw by mailing or delivering a written notice of withdrawal to the Company
and to the other Members at their last known addresses set forth in Exhibit
A.

     

    10.3 Rights of Withdrawn
Member.  Except to the extent set forth in this Agreement with
respect to a Restricted Member, upon the occurrence of a Withdrawal Event with
respect to a Member, the Withdrawn Member (or the Withdrawn Member’s personal
representative or other successor if applicable) shall cease to have any rights
of a Member, except the right to receive distributions and allocations of
Profits and Losses occurring at the times and equal in amounts to those
distributions and allocations of Profits and Losses the Withdrawn Member would
otherwise have received if a Withdrawal Event had not occurred.  In
addition, the Units held by the Withdrawn Member shall be subject to the
Purchase Option.  If there are no remaining Members, distributions to
any Withdrawn Member shall be governed by Section 12.2.

     

    10.4 Option to Purchase the
Interest of a Member upon a Withdrawal Event.

     

    (a) Within
thirty (30) days from the occurrence of a Withdrawal Event with respect to a
Member, the Withdrawn Member (or the Withdrawn Member’s personal representative
or other successor if applicable) shall provide the Company with written notice
of the Withdrawal Event (“Withdrawal Notice”).

     

    (b) Following
a Withdrawal Event, the Company shall then have the option to purchase all of
the Withdrawn Member’s Units (“Purchase Option”) in the place of making
distributions to the Withdrawn Member (or the Withdrawn Member’s personal
representative or other successor if applicable) as set forth in Section
10.3.

     

    (c) The
Purchase Option shall be exercisable at any time during the thirty (30) day
period following the Company’s receipt of the Withdrawal Notice (or if no
Withdrawal Notice is delivered, within the thirty (30)-day period following the
date on which the Company becomes aware of the Withdrawal Event) by delivery of
written notice (the “Purchase Option Notice”) to the Withdrawn Member (or the
Withdrawn Member’s personal representative or other successor if
applicable).

     

    (d) The
Purchase Option Notice shall indicate the date the purchase is to be effected
(such date to be not less than five (5) business days, nor more than ten (10)
business days, after the date of the Purchase Option Notice).

     

    (e) The
purchase price for the Withdrawn Member’s Units shall be an amount equal to the
fair market value (as determined by the Company’s Management Board) of such
Units, taking into account discounts for lack of marketability and lack of
control, to the extent applicable. The Purchase Option Notice shall include the
proposed purchase price.  If the Withdrawn Member disputes the
proposed purchase price, such Withdrawn Member shall deliver written notice of
such dispute to the Company within twenty (20) days of receipt of
the

     

    
      
         

      

      
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    repurchase
notice (the “Withdrawn Member Notice”). If such Withdrawn Member fails to
deliver a Withdrawn Member Notice to the Company within such 20-day period, such
Withdrawn Member shall be deemed to have agreed with and shall be bound by the
purchase price proposed in the Purchase Option Notice. If such Withdrawn Member
delivers a Withdrawn Member Notice to the Company within such 20-day period, the
Company and such Withdrawn Member shall select a reputable valuation firm to
determine the fair market value of the Withdrawn Member’s Units.  In
the event that the Company and such Withdrawn Member do not agree upon a
valuation firm within sixty (60) days of the date the Company delivered the
Purchase Option Notice to such Withdrawn Member, the Company and such Withdrawn
Member shall each select a reputable valuation firm and instruct the valuation
firms to select a third reputable valuation firm. The fair market value of the
Withdrawn Member’s Units shall then be determined by such third valuation firm.
The fees and costs of the valuation firms engaged pursuant to this Section
10.4(e) shall be borne by the Withdrawn Member, provided, however, that the
Company shall bear the fees and costs of the valuation firm if the fair market
value of the Withdrawn Member’s Units determined by the valuation firm is more
than ten  percent (10%) below the fair market value determined by the
Management Board.

     

    (f) The
purchase price for the Withdrawn Member’s interests shall be payable in cash or
a promissory note with mutually agreeable terms.

     

    (g) In the
case of a Restricted Member, Section 3.9 and Section 3.10 shall apply in place
of this Section 10.4 with respect to Restricted Units only.

     

     

    ARTICLE
XI

     

    TRANSFERABILITY

     

    11.1 General.  No
Member shall be authorized to Transfer all or a portion of such Member’s Units
unless the Transfer constitutes a Permitted Transfer.

     

    11.2 Permitted
Transfers.  Subject to the conditions and restrictions set
forth in Section 11.3, a Transfer of a Member’s Units shall constitute a
Permitted Transfer provided that:

     

    (a) The
Transfer is made to another Member or an Affiliate of any Member (provided,
however, that if such transferee ceases to be an Affiliate of the Member, then
such event shall constitute a Withdrawal Event unless the Affiliate first
Transfers all of the Units held by such Person to the transferor);
or

     

    (b) To the
extent applicable, the Transfer is made following compliance with the terms of
the (A) right of first refusal set forth in Section 11.4; and (B) the Tag-Along
Rights set forth in Section 11.9.

     

    11.3 Conditions to Permitted
Transfer.  A Transfer shall not be treated as a Permitted
Transfer unless all of the following conditions are satisfied:

     

    (a) The
Members consent to the Transfer by a Majority Vote of the Members, (A) which
consent will not be unreasonably withheld, conditioned, or delayed with respect
to the Class B Units, (B) which consent may be granted or withheld, conditioned,
or delayed, for any

     

    
      
         

      

      
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    or no
reason with respect to any Class C Units, and (C) which consent requirement
under this Section 11.3(a) shall not apply to a Priority Member holding a
majority of the Class A Units;

     

    (b) Unless
otherwise determined by a Majority Vote of the Management Board, the Units are
not Profits Interest Units;

     

    (c) The
Transfer is not to a Material Competitor or Unsuitable Transferee;

     

    (d) The
Transfer does not cause the Company to become a “publicly traded partnership”
within the meaning of Code Section 7704(b);

     

    (e) The Units
which are the subject of the Transfer are registered under the Securities Act as
amended, and any applicable state securities laws; or, alternatively, Company
counsel furnishes an opinion that such Transfer is exempt from all applicable
registration requirements or that such Transfer will not violate any applicable
securities laws; and

     

    (f) The
transferor and the transferee agree to execute such documents and instruments
necessary or appropriate in the Managers’ discretion to confirm such
Transfer.

     

    11.4 Right of First
Refusal.  At any time it holds a majority of the Class A Units,
Peterson shall not be subject to the obligations of a Disposing Member (as
defined below) set forth in Sections 11(a) – 11(g).

     

    (a) General.  If
any Member (other than a Priority Member holding a majority of the Class A
Units) desires to Transfer all or a portion of the Member’s Units to any Person,
such Transfer shall not constitute a Permitted Transfer unless such Member shall
afford the Company and the Priority Members a right of first refusal pursuant to
this Section 11.4.

     

    (b) Notice.  A
Member desiring to Transfer Units shall first provide to the Company and the
Priority Members at least one hundred twenty (120) days’ prior written notice of
the Member’s intention to make a Transfer of Units (the “Disposition Notice”),
provided, however, that a Disposition Notice may be issued to the Company and
the Priority Members by a Member only after such Member has received a bona-fide
offer from an unrelated third-party relating to the Transfer of the Units that
the Member desires to Transfer.  The one hundred twenty (120) day time
frame following the Company and the Priority Members’ receipt of the Disposition
Notice shall be termed the “Notice Period”.  The Member desiring to
Transfer Units shall be known as the “Disposing Member” and the Priority Members
(other than the Disposing Member) shall be known as the “Non-Disposing Members”
for purposes of this Agreement.  In the Disposition Notice, the
Disposing Member shall specify the price at which the Units are proposed to be
purchased in the bona-fide offer, the portion of the Disposing Member’s Units to
be sold or transferred, the identity of the proposed purchaser or transferee,
and the terms and conditions of the proposed Transfer as set forth in the
bona-fide offer.

     

    (c) Option to
Company.  The Company may elect with Majority Vote of the
Managers within the first sixty (60) days of the Notice Period, to purchase some
or all of the Units proposed to be transferred by the Disposing Member at the
proposed price as contained in the Disposition Notice.  The terms and
conditions of the purchase by the Company shall be the terms and conditions of
the proposed Transfer as set forth in the Disposition
Notice.  Any

     

    
      
         

      

      
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    purchase
by the Company shall be made in cash any day between and including the
ninety-first (91st) and including the one hundredth (100th) day of
the Notice Period.

     

    (d) Options to
Members.  If the Company does not purchase all of the Disposing
Member’s Units covered by the Disposition Notice, the remaining Units may be
purchased by the Non-Disposing Members on the same terms and at the same price
available to the Company.  Each Non-Disposing Member shall have the
option to purchase that portion of the Disposing Member’s Units that is
necessary to maintain the Member’s Percentage Interest vis-à-vis the other
Non-Disposing Members (not taking into account the Percentage Interest of the
Class C Members).  If any Non-Disposing Member does not purchase the
portion of the Units available to such Member within the time frame stated in
Section 11.4(e), the remaining Units will then be available for purchase by the
other Non-Disposing Members in proportion to their respective Percentage
Interests.

     

    (e) Timing.  If
the Company decides to purchase less than all of the Units offered by the
Disposing Member (including a decision to purchase none of such Units), within
thirty (30) days after the Company reaches such decision, and, in any event, by
the end of the first sixty (60) days of the Notice Period, the Company shall so
notify each Non-Disposing Member.  The notice shall state that the
Company did not exercise its option to purchase all of the Disposing Member’s
Units offered pursuant to the Disposition Notice and shall contain appropriate
information concerning each Non-Disposing Member’s option to purchase all
remaining Units offered by the Disposing Member.  Each Non-Disposing
Member must give written notice to the Disposing Member and the other
Non-Disposing Members of the exercise of such Member’s option to acquire the
Member’s portion of such Units within the first eighty (80) days of the Notice
Period.  Such Member must then pay for such Units in cash by the end
of the first ninety (90) days of the Notice Period.  If any
Non-Disposing Member does not elect to purchase, and pay the purchase price for,
all of the Units available to such Member within the required time period, the
remaining Non-Disposing Members shall be entitled to purchase any remaining
Units vis-à-vis such Non-Disposing Members’ Percentage Interests (not taking
into account the Percentage Interest of the Class C Members) by giving written
notice to the Disposing Member and the other Non-Disposing Members within the
first ninety (90) days of the Notice Period.  Any purchase by the
remaining Non-Disposing Members shall be made in cash within the first one
hundred (100) days of the Notice Period.

     

    (f) Transfer to Third
Party.  If the Company and the Non-Disposing Members have not
collectively purchased all of the Disposing Members’ Units covered by the
Disposition Notice within the first one hundred (100) days of the Notice Period,
the Disposing Member may, provided the conditions of Section 11.3 are satisfied,
sell its or his remaining Units to Persons other than the Company and the
Non-Disposing Members, provided that any disposition must be made on the terms
and conditions and to the party specified in the Disposition Notice and must be
consummated within the one hundred twenty (120) day Notice Period, but after any
time provided above for the Company and/or Non-Disposing Members to elect to
purchase and consummate the purchase of such Units.

     

    (g) Transfer of Rights to
Assignee.  If the Transfer entails the Transfer of all of
Disposing Member’s Units and there shall be only one Non-Disposing Member, such
Member

     

    
      
         

      

      
        44

        
          

        

      

      
         

      

    

    shall
have the right to assign to any Person the rights otherwise available to the
Non-Disposing Member pursuant to this Section 11.4.

     

    (h) Transfer by Peterson of
Class A Units.  In the event that Peterson desires to Transfer
all or a portion of its Class A Units, such Transfer shall not constitute a
Permitted Transfer unless Peterson shall afford the Class B Member a right of
first refusal pursuant to this Section 11.4(h).  If Peterson desires
to Transfer Class A Units, it shall first provide to the Class B Member written
notice of Peterson’s intention to make a Transfer of its Class A Units (the
“Peterson Notice”), which notice shall specify (i) the estimated price at which
Peterson proposes to Transfer the Class A Units, and (ii) the terms and
conditions of the proposed Transfer.  The Class B Member may elect to
purchase all (but not less than all) of the Class A Units proposed to be
transferred by Peterson at the estimated purchase price contained in the
Peterson Notice.  Within fifteen (15) days following the Class B
Member’s receipt of the Peterson Notice, the Class B Member must provide written
notice to Peterson of its election to acquire Peterson’s Class A Units on the
terms and conditions of the proposed Transfer set forth in the Peterson
Notice.  Upon receipt of such notice from the Class B Member, Peterson
and the Class B Member will enter into exclusive negotiations for the purchase
of the Class A Units proposed to be transferred on terms and conditions
substantially similar to those terms and conditions set forth in the Peterson
Notice.  If within thirty (30) days of Peterson’s receipt of the Class
B Member’s election notice Peterson and the Class B Member have not entered into
a definitive agreement for the purchase of the Class A Units proposed to be
Transferred, then Peterson’s obligations to exclusively negotiate with the Class
B Member will automatically terminate and Peterson may negotiate the Transfer of
its Class A Units to one or more third-parties on the terms and conditions
substantially similar to those set forth in the Peterson Notice; provided, however,
that no Transfer of any of Peterson’s Class A Units shall be made to any
third-party at a purchase price of less than 90% of the estimated purchase price
contained in the Peterson Notice without a new notice of intention to Transfer
to the Class B Member and full compliance with the requirements of this Section
11.4(h).

     

    11.5 Admission as Substitute
Member.

     

    (a) A
transferee of Units who is not a Member shall be admitted to the Company as a
Substitute Member only upon satisfaction of the following
conditions:

     

    i. The Units
with respect to which the transferee is being admitted were acquired by means of
a Permitted Transfer;

     

    ii. The
transferee becomes a party to this Agreement and executes such documents and
instruments as the Management Board determines are necessary or appropriate to
confirm such transferee as a Member and such transferee’s agreement to be bound
by the terms of this Agreement; and

     

    iii. The
Members (defined for this purpose by excluding the Disposing Member) consent to
the admission of the transferee as a Substitute Member by a Majority Vote of
such Members, provided, however, that the
consent requirement under this Section 11.5(a)(iii) shall not apply to any
transferee of Units from a Priority Member.

     

    
      
         

      

      
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    (b) A
transferee of Units in a Permitted Transfer under Sections 11.2(a) shall
automatically become a Substitute Member with regard to the Transferred Units
unless the transferor directs in writing to the contrary.

     

    (c) If the
transferee of Units in a Permitted Transfer shall not become a Substitute
Member, the transferee shall have only the rights set forth in Section 11.6
hereof.

     

    11.6 Rights as
Assignee.  A non-Member who acquires Units (and any Member if
the transferor directs in writing to the contrary as provided in Section
11.5(b)) and who is not admitted to the Company as a Substitute Member shall
have only the right to receive the distributions and allocations of Profits and
Losses to which such Person would have been entitled under this Agreement with
respect to the transferred Units, but shall have no right to participate in
Company management, no right to inspect Company books and records, and no other
rights accorded Members under this Agreement.  Any distributions to
such purported transferee 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 may have to the
Company.

     

    11.7 Prohibited
Transfers.  Any purported Transfer of Units that is not a
Permitted Transfer shall be null and void and of no force and effect
whatsoever.  In the case of an attempted Transfer that is not a
Permitted Transfer, the Persons engaging in or attempting to engage in such
Transfer shall be liable to and shall indemnify and hold harmless the Company
from all loss, cost, liability and damages that the Company and/or any Member
incurs as a result of such attempted Transfer.

     

    11.8 Drag-Along
Right.  If a Class A Member (“Transferring Member”) intends to
sell Class A Units to a third party purchaser that would result in such third
party purchaser acquiring control over more than fifty percent (50%) of all
outstanding Class A Units and otherwise result in a Change of Control, after
taking into account the sale of Units by the Members pursuant to the provisions
of this Section 11.8, in which the Transferring Member (together with any
affiliates of the Transferring Member) would not retain a controlling interest
in the Company, then the Transferring Member shall have the right (the
“Drag-Along Right”) to require each remaining Members to sell some or all of its
or his or her Units to the third party in a proportionate amount and on the same
terms and conditions as the Transferring Member (taking into account Section
11.8(f)) in accordance with the terms and conditions of this Section 11.8 and
otherwise in accordance with the following provisions:

     

    (a) The
Drag-Along Right may only be exercised by written notice (the “Drag-Along
Notice”) from the Transferring Member and the third party purchaser to the
remaining Members.

     

    (b) The
Drag-Along Notice shall:

     

    i. state the
name of the third party purchaser, the purchase price for the Units of the
Transferring Member(s) and the purchase price proposed to be paid for the Units
of the remaining Members (in accordance with Section 11.8(f)) and the time, date
and place of completion of such sale and purchase; and

     

    
      
         

      

      
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    ii. be given
no later than fifteen (15) business days before the date fixed for completion of
the sale by the Transferring Member of its or his or her Units to the third
party.

     

    (c) The
delivery of the Drag-Along Notice to a Member shall constitute an irrevocable
and binding obligation of the Member to sell, and the third party to purchase,
some or all of the Member’s Units in a proportionate amount and on the same
terms and conditions, taking into account Section 11.8(f) and subject to Section
11.8(e), as are applicable to the sale by the Transferring Member of its Units
to the third party as set forth in the Drag-Along Notice (subject to such terms
being accurately reflected in the Drag-Along Notice).

     

    (d) At or
before the time of completion of the sale of the Units of each Member to the
third party purchaser, each such Member shall (i) use its best efforts to cause
to be discharged any and all encumbrances of, and security interests in, its or
his or her Units and provide written evidence of such discharges to the third
party purchaser, and (ii) execute and deliver to the third party purchaser,
against payment for such Units, all certificates or other documents representing
such Units, duly endorsed for transfer or with duly executed assignment forms
attached.

     

    (e) Notwithstanding
any provision of this Section 11.8, (i) no Member shall be under any obligation
to sell any Units unless (A) such sale occurs concurrently with or subsequent to
the sale of Units by the Transferring Member in a proportionate amount on the
same terms and conditions (taking into account Section 11.8(f)), (B) the sale of
Units by the Transferring Member shall qualify as a Permitted Transfer under
Section 11.2 and meets the conditions to a Permitted Transfer set forth in
Section 11.3 to the extent applicable, and (C) such sale results in a third
party purchaser acquiring control over more than fifty percent (50%) of all
outstanding Class A Units and otherwise result in a Change of Control, after
taking into account the sale of Units by the Members pursuant to the provisions
of this Section 11.8, in which the Transferring Member (together with any
affiliates of the Transferring Member) would not retain a controlling interest
in the Company and (ii) nothing in such sale of Units shall require a Member
subject to this Section 11.8 to do any of the following, unless all Members
similarly situated (e.g., of a similar class or Series of Units) and the
Transferring Member are required to do the same:  (w) enter into any
agreement or make any covenant, (x) make any representation, or warranty other
than related to authority, ownership and the ability to convey title to such
Units, (y) be liable for the inaccuracy of any representation or warranty made
by any person or entity in connection with the sale other than himself or itself
and the Company, or (z) be liable in any way other than severally in proportion
to the amount of consideration paid to such Member in connection with such sale
and such liability not exceed the aggregate consideration received by such
Member in such sale.

     

    (f) Notwithstanding
that a sale pursuant to this Section 11.8 may provide for, or result in,
different per Unit consideration for different classes or series of Units, such
sale shall be deemed to be for the same terms and conditions regarding
consideration if the proceeds of such sale are allocated in the manner that
would result if such consideration were distributed to the Members as if the
Company were hypothetically liquidated pursuant to the rights and preferences
set forth in Section 12.2 (taking into account Section 12.3) as in effect
immediately prior to such sale as long as the nature of that consideration
(e.g., cash, promissory notes, or other

     

    
      
         

      

      
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    property)
is received among the various classes or series of Units in the same
proportionate amounts received by the Transferring Member.

     

    11.9 Tag-Along
Right.  

     

    (a) If any
Disposing Member desires to Transfer all or a portion of the Member’s Units to
any Person (the “Offered Units”), such Transfer (a “Proposed Transfer”) shall
not constitute a Permitted Transfer unless such Member shall afford the Priority
Members the tag-along rights set forth in this Section 11.9 (the “Tag-Along
Rights”).

     

    (b) Any
Disposition Notice delivered to a Priority Member pursuant to Section 11.4(b)
shall also serve as notice of such Priority Member’s Tag-Along Rights under this
Section 11.9.

     

    (c) Each
Priority Member that is not the Disposing Member (a “Remaining Member”) shall
have forty-five (45) days after receipt of the Disposition Notice to deliver to
the Disposing Member a demand (a “Tag-Along Demand”) invoking the provisions of
this Section 11.9.  The Tag-Along Demand shall indicate the maximum
number of Units that each Remaining Member wishes to sell (including the number
of such Units he or she or it would sell if one or more Remaining Members do not
elect to participate in the sale).

     

    (d) The
Disposing Member and each Remaining Member shall have the right to sell a
portion of his or her or its Units pursuant to the Proposed Transfer which is
equal to or less than the product obtained by multiplying (i) the total number
of Offered Units by (ii) a fraction, the numerator of which is
(x) the total number of Units held by such Disposing Member or Remaining Member
on the date of the Tag-Along Demand and the denominator of which
is (y) the total number of Units then held by the Disposing Member and by the
Remaining Members on the date of the Tag-Along Demand.  To the extent
one or more Remaining Members elect not to exercise their Tag-Along Rights or
the transferee agrees to purchase a number of Units greater than the Offered
Units, then the rights of the Disposing Member and the rest of the Remaining
Members (who exercise their Tag-Along Rights) to sell Units shall be increased
proportionately based on their relative holdings by the full amount of (A) Units
which the non-electing Remaining Members were entitled to sell pursuant to this
Section 11.9(d); and/or (B) the additional number of Units that the transferee
is willing to purchase, if any.

     

    (e) Within
five (5) days of receiving a notice from the Company or, as applicable, the
Non-Disposing Members as set forth in Section 11.4(e), the Disposing Member
shall notify each Remaining Member in writing (i) whether the Company or, as
applicable, any Non-Disposing Member, has elected to purchase none, some or all
of the Offered Units in accordance with Section 11.4(c) or Section 11.4(d) and
(ii) if the Company or any Non-Disposing Member has elected to purchase some or
all of the Offered Units, the number of Units held by such Remaining Member that
may be included in the sale, subject to the revocation rights set forth below in
this Section 11.4(e).  If the Company and the Non-Disposing Members
have elected to purchase none or some but not all of the Offered Units, then,
only if a Remaining Member elects to exercise his or her or its rights to
purchase his or her or its allocated portion of the remaining Offered Units in
accordance with Sections 11.4(d) and (e), then such Remaining Member may,
concurrently with delivering the required notice of such election pursuant
to

     

    
      
         

      

      
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    Section
11.4(e), deliver written notice to the Disposing Member, the other Remaining
Members and the Company that such Remaining Member has revoked his or her or its
prior election to exercise his or her or its Tag-Along Rights pursuant to this
Section 11.9.  By the ninetieth (90th) day of
the Notice Period, the Disposing Member shall notify each Remaining Member in
writing if there has been any change in the number of Units that will be
included in the sale and the date on which the Proposed Sale with the purchasing
party(ies) (whether a third party, the Company, or the Remaining Members) is
anticipated to be consummated in accordance with the provisions of Section
11.4.

     

    (f) Notwithstanding
the provisions of Sections 11.9(d) and (e), if the Disposing Member is a Class A
Member and the Proposed Transfer would result in a third party purchaser
acquiring control over more than fifty percent (50%) of all outstanding Class A
Units and otherwise result in a Change of Control, after taking into account the
sale of Units by the Members pursuant to the provisions of this Section 11.9,
then the third party purchaser shall purchase a proportionate amount of the
Units (in the same percentage of the number of Class A Units that the Class A
Member is proposing to transfer as compared to the overall number of Class A
Units held by the Class A Member) requested to be purchased by any Remaining
Member pursuant to a Tag-Along Demand.

     

    (g) The
delivery of a Tag-Along Demand by a Remaining Member, subject to the revocation
rights set forth in Section 11.9(e), shall constitute an irrevocable and binding
obligation of such Remaining Member to sell the specified number of Units in
such Remaining Member’s Tag-Along Demand, as such number may be adjusted as set
froth in Section 11.9(e), to the third party on the same terms and conditions,
taking into account Section 11.9(j), as set forth in the Disposition Notice
(subject to such terms being accurately reflected in the Disposition Notice) and
on such other applicable terms and conditions as are set forth in this Section
11.9.

     

    (h) The
Disposing Member shall not complete the sale of his or her or its Units to the
third party unless he or she or it has fully complied with its obligations set
forth in Section 11.4 and this Section 11.9 and the third party purchaser (and
any other purchasing parties pursuant to Section 11.4 and this Section 11.9) has
completed the purchase of all Units in respect of which each applicable
Tag-Along Demand has been delivered within the prescribed time.

     

    (i) The
completion of the sale to the third party purchaser of the Units of each
Remaining Member that provides a Tag-Along Demand within the prescribed time
shall take place no later than concurrently with the sale of the Disposing
Member(s)’ Units to the third party.

     

    (j) At or
before the time of completion of the sale of his or her or its Units, each
Remaining Member that provided a Tag-Along Demand within the prescribed time
shall (i) cause to be discharged any and all encumbrances of, and security
interests in, its Units and provide written evidence of such discharges, and
(ii) execute and deliver to the purchasing party(ies), against payment for such
Units, all certificates or other documents representing such Units, duly
endorsed for transfer or with duly executed assignment forms
attached.

     

    
      
         

      

      
        49

        
          

        

      

      
         

      

    

     

    (k) Notwithstanding
that a sale pursuant to this Section 11.9 may provide for, or result in,
different per Unit consideration for different classes or series of Units, such
sale shall be deemed to be for the same terms and conditions regarding
consideration if the proceeds of such sale are allocated in the manner that
would result if such consideration were distributed to the Members as if the
Company were hypothetically liquidated pursuant to the rights and preferences
set forth in Section 12.2 (taking into account Section 12.3) as in effect
immediately prior to such sale as long as the nature of that consideration
(e.g., cash, promissory notes, or other property) is received among the various
classes or series of Units in the same proportionate amounts received by the
Disposing Member.

     

    11.10 Change of
Control.  Notwithstanding any other provision of this
Agreement, the Company is prohibited from completing a Change of Control (a)
without a prior Majority Vote of the Members and (b) in which any party to the
Change of Control is a Material Competitor or Unsuitable
Transferee.  

     

    11.11 Legends.  Each
Member agrees that the following legend shall be placed upon any counterpart of
this Agreement or any other instrument or document evidencing ownership of a
Unit:

     

    THE UNITS
REPRESENTED BY THIS DOCUMENT HAVE NOT BEEN REGISTERED UNDER ANY SECURITIES LAWS
AND THE TRANSFERABILITY OF SUCH UNITS IS RESTRICTED.  SUCH UNITS MAY
NOT BE SOLD, ASSIGNED, GIFTED, TRANSFERRED OR OTHERWISE DISPOSED, NOR WILL THE
VENDEE, ASSIGNEE, BENEFICIARY, OR TRANSFEREE BE RECOGNIZED AS HAVING ACQUIRED
SUCH UNITS FOR ANY PURPOSES, UNLESS (A) A REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AS AMENDED, WITH RESPECT TO SUCH UNITS SHALL THEN BE IN EFFECT
AND SUCH HAS BEEN QUALIFIED UNDER ALL APPLICABLE STATE SECURITIES LAWS, OR (B)
THE AVAILABILITY OF AN EXEMPTION FROM SUCH REGISTRATION AND QUALIFICATION SHALL
BE ESTABLISHED TO THE SATISFACTION OF COUNSEL FOR THE COMPANY.

     

    THE UNITS
REPRESENTED BY THIS DOCUMENT ARE SUBJECT TO FURTHER RESTRICTION AS TO THEIR
SALE, TRANSFER, HYPOTHECATION, OR ASSIGNMENT AS SET FORTH IN THE AMENDED AND
RESTATED OPERATING AGREEMENT OF THE COMPANY AND AGREED TO BY EACH MEMBER OF THE
COMPANY.  SAID RESTRICTION PROVIDES, AMONG OTHER THINGS, THAT
GENERALLY NO UNITS MAY BE TRANSFERRED TO ANY PERSON WHO IS NOT A MEMBER WITHOUT
FIRST OFFERING SUCH UNITS TO THE COMPANY AND THE PRIORITY MEMBERS, AND THAT
GENERALLY NO BENEFICIARY,

     

    
      
         

      

      
        50

        
          

        

      

      
         

      

    

    TRANSFEREE,
OR ASSIGNEE SHALL HAVE THE RIGHT TO BECOME A “SUBSTITUTE MEMBER” WITHOUT THE
CONSENT OF ALL OTHER MEMBERS.

     

    11.12 Distributions in Respect of
Transferred Units.  If any Units are transferred in compliance
with this Article XI, all distributions on or before the date of such Transfer
shall be made to the transferor, and all distributions thereafter shall be made
to the transferee.

     

    ARTICLE
XII

     

    DISSOLUTION
AND TERMINATION

     

     

    12.1 Dissolution.  The
Company shall be dissolved upon the first to occur of any of the following
events:

     

    (a) The
Majority Vote of the Members;

     

    (b) The entry
of a decree of judicial dissolution under Section 1213 of the Act;

     

    (c) The sale,
exchange, or other disposition of all or substantially all Company
assets;

     

    (d) Failure
by the Company to have at least one (1) Member;

     

    (e) When the
Company is not the successor company in the merger or consolidation of the
Company with or into any other entity or entities; or

     

    (f) Upon
administrative dissolution under Section 1207 of the Act, subject to the right
of reinstatement under Section 1208 of the Act.

     

    The
Company shall not be dissolved upon the occurrence of a Withdrawal Event with
respect to any Manager or Member unless there is no remaining Member, taking
into consideration for this purpose Sections 402(2)(c) and 1201(2) of the
Act.  Provided, however, that the Company shall be dissolved at the
expiration of the Company’s period of duration, as set forth in the Company’s
Articles of Organization or, if no period of duration is set forth in the
Company’s Articles of Organization, the date which is 99 years from the date the
Articles of Organization were filed with the Division.

     

    12.2 Liquidation, Winding Up and
Distribution of Assets.  The Managers shall, upon the Company’s
dissolution, proceed to liquidate Company assets and properties, discharge
Company obligations, and wind up the Company’s business and affairs as promptly
as is consistent with obtaining the fair value thereof.  The proceeds
from liquidating Company assets, to the extent available, shall be applied and
distributed as follows:

     

    (a) First, to
the payment and discharge of all Company debts and liabilities (other than debts
and liabilities owing to the Members) or to the establishment of any
reasonable

     

    
      
         

      

      
        51

        
          

        

      

      
         

      

    

    reserves
for contingent or unliquidated debts and liabilities, in the order of priority
as provided by law;

     

    (b) Second,
to the payment of any liabilities to Members in their capacities as creditors,
in the order of priority as provided by law;

     

    (c) Third, to
FC an amount equal to the FC Unreturned Priority Contribution and the FC
Preferred Return;

     

    (d) Fourth,
to the Class A Members, pro rata based on the unpaid Class A Preferred Return
payable to each Class A Member, an amount equal to the Class A Members’ unpaid
Class A Preferred Return;

     

    (e) Fifth, to
the Class A Members, pro rata based on the Class A Unreturned Contribution
Balance of each Class A Member, an amount equal to the Class A Unreturned
Contribution Balance;

     

    (f) Sixth, to
the Class B Member, an amount equal to the Class B Unreturned Contribution
Balance; and

     

    (g) Thereafter,
in accordance with the positive balance of each Member’s Capital Account as
determined after taking into account all Capital Account adjustments for the
Company’s taxable year during which the liquidation occurs, including any
distributions pursuant to Sections 12.2(c) through (f) and any Capital Account
adjustments associated with the allocation of Profits and Losses with respect to
any sale, transfer or other taxable disposition of any Company
property.  Any such distributions to the Members in respect of their
Capital Accounts shall be made within the time requirements of Regulations
Section 1.704-1(b)(2)(ii)(b)(2).  If for any reason the amount
distributable pursuant to this Section 12.2(g) shall be more than or less than
the sum of all the positive balances of the Members’ Capital Accounts, then the
proceeds distributable pursuant to this Section 12.2(g) shall be distributed
among the Members in accordance with the ratio by which the positive Capital
Account balance of each Member bears to the sum of all positive Capital Account
balances.  Distributions required by this Section 12.2(g) may be
distributed to a trust established for the benefit of the Members for the
purposes of liquidating Company property, collecting amounts owed to the
Company, and paying any contingent or unforeseen liabilities or obligations of
the Company or of the Managers arising out of or in connection with the
Company.  In such case, the assets of such trust shall be distributed
to the Members from time to time, in the discretion of the Managers, in the same
proportions as the amount distributed to such trust by the Company would
otherwise have been distributed to the Members pursuant to this
Agreement.

     

    12.3 Allocations Relating to Last
Fiscal Year.

     

    (a) Notwithstanding
Section 6.1 and Section 6.2, if upon the dissolution and termination of the
Company pursuant to Article XII and after all other allocations provided for in
Section 6.1 and Section 6.2 have been tentatively made as if this Section 12.3
were not in this Agreement, a distribution to the Company under Section 12.2
would be different from a distribution pursuant to the distribution priorities
set forth in Section 12.3(b), then Profits (and items thereof) and Losses (and
items thereof) for the Fiscal Year in which the Company dissolves

     

    
      
         

      

      
        52

        
          

        

      

      
         

      

    

    and
terminates pursuant to Article XII shall be allocated among the Members in a
manner such the Capital Account of each Member, immediately after giving effect
to such allocation, is, as near as possible, equal (proportionately) to the
amount of the distributions that would be made to such Member during such Fiscal
Year if the Company was making its distributions pursuant to Section
12.3(b).  The Management Board, may, in its discretion, (A) apply the
principles of this Section 12.3 to any Fiscal Year preceding the Fiscal Year in
which the Company dissolves and terminates if delaying the application of the
principles of this Section 12.3 would likely result in distributions under
Article XII that are materially different from distributions under Section
12.3(b) in the Fiscal Year in which the Company dissolves and terminates, or (B)
allocate items of gross income, gain, deduction, loss, or credit with respect to
any Fiscal Years that are open for tax purposes (i.e., Fiscal Years for which
either tax returns have not yet been filed or, if filed, an amended tax return
may still be timely filed), if the Management Board determines, in the Fiscal
Year in which the Company dissolves and terminates, that allocation of Profits
and Losses will result in distributions under Article XII that are materially
different from distributions under Section 12.3(b).

     

    (b) The
distribution priority under this Section 12.3(b) is as follows:

     

    i. First, to
FC an amount equal to the FC Unreturned Priority Contribution and the unpaid FC
Preferred Return;

     

    ii. Second,
to the Class A Members, pro rata based on the unpaid Class A Preferred Return
payable to each Class A Member, an amount equal to each Class A Member’s unpaid
Class A Preferred Return;

     

    iii. Third, to
the Class A Member, pro rata based on the Class A Unreturned Contribution
Balance of each Class A Member, an amount equal to each Class A Member’s Class A
Unreturned Contribution Balance;

     

    iv. Fourth,
to the Class B Member, an amount equal to the Class B Unreturned Contribution
Balance; and

     

    v. Thereafter,
to the Members in according with the Members’ Percentage Interest in the
Company, provided,
however, that, in order to comply with the Profit Interest Revenue
Procedures, liquidating distributions pursuant to Section 12.3(b)(iv) shall be
made in a manner that accounts for the differences in Capital Accounts of the
Profits Interest Unit holders versus the other Members resulting from the
adjustments made to the Capital Accounts of the Members pursuant to Section
1.704-1(b)(2)(iv)(f) of the Regulations at the time that any Profits Interest
Unit is granted.

     

    12.4 Deficit Capital
Accounts.  No Member shall have any obligation to contribute or
advance any funds or other property to the Company by reason of any negative or
deficit balance in such Member’s Capital Account during or upon completion of
winding up or at any other time except to the extent that a deficit balance is
directly attributable to a distribution of cash or other property in violation
of this Agreement.

     

    12.5 Certificate of
Cancellation.  When all the remaining property and assets have
been applied and distributed in accordance with Section 12.2 hereof, the
Managers (or such other

     

    
      
         

      

      
        53

        
          

        

      

      
         

      

    

    Person
designated by the Members) shall cause a Certificate of Cancellation to be filed
with the Division in accordance with Section 1202 of the Act.

     

    12.6 Return of Contribution
Non-Recourse to Other Members.  Except as provided by law, upon
dissolution, each Member shall look solely to the Company assets for the return
of the Member’s Capital Contributions.  If any Company property
remaining after payment or discharge of Company debts and liabilities is
insufficient to return the cash or other property contribution of one or more
Member(s), such Member(s) shall have no recourse against the Managers, the
Management Board or any other Member.

     

    12.7 In Kind
Distributions.  A Member shall have no right to demand and
receive any distribution from the Company in any form other than
cash.  However, a Member may be compelled to accept a distribution of
an asset in kind if the Company is unable to dispose of all of its assets for
cash.

     

    12.8 Inclusion of Unit
Holder.  Except as otherwise provided herein, the term “Member”
for purposes of this Article XII shall include a Unit Holder.

     

     

    ARTICLE
XIII

     

    DISPUTE
RESOLUTION; BUY-SELL 

     

    13.1 Good Faith
Negotiations.  Subject to Section 13.4, any dispute between the
Members arising out of or relating to this Agreement that the Members cannot
resolve through good faith negotiations between their respective representatives
within forty-five (45) days after written notice of such dispute is first given
by one Member to the other Member(s) shall be resolved in accordance with the
procedures described in this Article XIII, which shall be the sole and exclusive
procedures for resolution of any such dispute.

     

    13.2 Non-Binding
Mediation.  The Members shall use reasonable, good faith
efforts to settle any dispute through non-binding mediation before a mutually
acceptable, neutral, third-party mediator.  The mediation shall be
held in Salt Lake City, Utah and administered by the CPR Institute for Dispute
Resolution (the “CPR Institute”) under the CPR Mediation Procedure then in
effect.  Unless otherwise agreed, the parties shall jointly select a
single mediator from the CPR Panels of Distinguished Neutrals based on a list of
mediator candidates supplied by the CPR Institute.  If, within
fourteen (14) days after any Member makes a written request for mediation under
this Section 13.2, the Members have not reached agreement on the selection of a
mediator, the mediator shall be selected in accordance with the CPR Mediation
Procedure currently in effect.  A good faith attempt at mediation
shall be a condition precedent to the commencement of arbitration, but is not a
condition precedent to any court action for injunction or other interim relief
pending the outcome of mediation.

     

    13.3 Binding
Arbitration.  If the Members who are parties to a dispute are
unable to resolve the dispute by mediation in a timely manner (which, in any
case, shall not exceed sixty (60) days from the first notice of mediation), the
dispute shall be resolved through final, binding arbitration held in Salt Lake
City, Utah in accordance with the CPR Rules for Non-Administered Arbitration
then in effect by three arbitrators of whom the Member or Members, as
applicable, on

     

    
      
         

      

      
        54

        
          

        

      

      
         

      

    

    each side
of the dispute shall appoint one in accordance with the “screened” appointment
procedure provided by the CPR Rules for Non-Administered Arbitration currently
in effect, and of whom the third arbitrator shall be selected by mutual
agreement of the two arbitrators selected by the Members.  The
Arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C. §§ 1-16,
and judgment on the award rendered by the arbitrators may be entered in any
court having jurisdiction thereof.  The Members shall cause the
arbitrators to render their decision within one hundred twenty (120) days after
the designation of the arbitrators, and the Members shall cooperate with each
other and the arbitrators in the conduct of the arbitration to permit such
timing.  Any award of the arbitrators shall be final, conclusive and
binding on the Members; provided, however, that any Members to the dispute may
seek to vacate, modify or correct the arbitrators’ decision or award as provided
under Section 10 and Section 11 of the Federal Arbitration Act.  The
arbitrators shall be bound to follow the laws of the State of Utah, decisional
and statutory, in reaching any decision and making any award and shall deliver a
written award, including written findings of fact and conclusions of law, with
respect to the dispute to each of the Members who are parties to the dispute,
who shall promptly act in accordance therewith.  In no event shall the
arbitrators have the power to award damages in connection with any dispute in
excess of actual compensatory damages.  In particular, the arbitrators
may not multiply actual damages or award consequential, indirect, special or
punitive damages, including damages for lost profits or loss of business
opportunity.  Any Member who is a party to the dispute may enforce any
award rendered pursuant to the arbitration provisions of this Section 13.3 by
bringing suit in any court of competent jurisdiction.  All costs and
expenses attributable to the arbitrators shall be allocated between the Members
who are parties to the dispute in such manner as the arbitrators determine to be
appropriate under the circumstances.  Any Member who is a party to the
dispute may file a copy of this Section 13.3 with any arbitrator or court as
written evidence of the knowing, voluntary and bargained agreement among the
Members with respect to the subject matter of this Section 13.3. 

     

     

    ARTICLE
XIV

     

    MISCELLANEOUS
PROVISIONS

     

    14.1 Notices.  Except
as otherwise provided herein, any notice, demand, or communication required or
permitted to be given to a Member by any provision of this Agreement shall be
deemed to have been sufficiently given or served for all purposes if (i)
delivered personally to the Member, (ii) sent by facsimile or electronic mail
transmission or (iii) sent by registered or certified mail, postage prepaid,
addressed to the Member’s address set forth in Exhibit A.  Except as
otherwise provided herein, any such notice shall be deemed to be given on the
date on which the same was personally delivered, on the date on which it was
transmitted by facsimile or electronic transmission if confirmation thereof is
obtained or, if sent by registered or certified mail, on the third (3rd) day
after such notice was deposited in the United States mail addressed as
aforesaid.

     

    14.2 Governing
Law.  This Agreement and the rights of the parties hereunder
will be governed by, interpreted, and enforced in accordance with the laws of
the State of Utah.

     

    14.3 Entire Agreement;
Amendments.  This Agreement constitutes the entire agreement
between the Members concerning the matters set forth herein, and may not
be

     

    
      
         

      

      
        55

        
          

        

      

      
         

      

    

    amended
except by Majority Vote of the Members provided, however, any amendment that
adversely affects the rights (economic or otherwise) set forth in this Agreement
of any Priority Member shall not be effective without the prior written consent
of such Priority Member.  Notwithstanding the foregoing, the Managers
shall be authorized to make any amendments to this Agreement that are approved
by the Management Board and that counsel to the Company opines are necessary to
maintain the Company’s status as a partnership for federal and state income tax
purposes provided, however, that no such
amendment shall be effective if such amendment adversely affects the economic
interest of Units held by any Member.  If any conflict exists between
the provisions of this Agreement, any employment or repurchase agreement with
any Member, Manager or Officer, or the provisions of any oral or prior agreement
between the Members, Managers or Officers, the provisions of this Agreement
shall prevail.

     

    14.4 Additional Documents and
Acts.  Each Member agrees to execute and deliver such
additional documents and instruments and to perform such additional acts as may
be necessary or appropriate to effectuate, carry out and perform all of the
terms, provisions and conditions of this Agreement and the transactions
contemplated hereby.

     

    14.5 Headings.  The
headings in this Agreement are inserted for convenience only and are in no way
intended to describe, interpret, define, or limit the scope, extent, or intent
of this Agreement or any provision hereof.

     

    14.6 Severability.  If
any provision of this Agreement is held to be illegal, invalid or unenforceable
under the present or future laws effective during the term of this Agreement,
such provision will be fully severable and the remaining provisions of this
Agreement will remain in full force and effect.

     

    14.7 Heirs, Successors, and
Assigns.  Each and all of the covenants, terms, provisions, and
agreements herein contained shall be binding upon and inure to the benefit of
the parties hereto and, to the extent permitted by this Agreement and by
applicable law, the parties’ respective heirs, legal representatives,
successors, and assigns.

     

    14.8 Creditors and Other Third
Parties.  None of the provisions of this Agreement shall be for
the benefit of, or enforceable, by any Company creditors or any other third
parties.

     

    14.9 Section, Other
References.  Except to the extent provided to the contrary,
references to the terms “Section,” “Schedule,” “Exhibit,” or “Appendix” mean to
the corresponding Sections, Schedules, Exhibits, or Appendices attached to or
referred to in this Agreement. Any reference to an Exhibit to this Agreement
contained herein shall be deemed to include any Schedule(s) to such
Exhibit.  Each Appendix, Exhibit and Schedule referred to in this
Agreement is hereby incorporated by reference in this Agreement as if such
Appendix, Exhibit or Schedule were set out in full in the text of this
Agreement.  Any reference in this Agreement to a statute shall be to
such statute, as amended from time to time, and to the rules and regulations
promulgated thereunder.  Any reference to any agreement, document or
instrument means such agreement, document or instrument as amended or otherwise
modified from time to time in accordance with its terms.  Unless the
context otherwise requires, (i) all references made in this Agreement to an
Article,  Section, Clause, Schedule or an Exhibit are to an Article,
Section, Clause, Schedule or an Exhibit of or to this Agreement, (ii) “or” is
disjunctive

     

    
      
         

      

      
        56

        
          

        

      

      
         

      

    

    but not
necessarily exclusive, (iii) “will” shall be deemed to have the same meaning as
the word “shall”, (iv) words in the singular include the plural and vice versa
and (v) use of the masculine, feminine or neutral gender herein shall not limit
any provision of this Agreement.  Whenever the words “include”,
“includes” or “including” are used in this Agreement, they shall be deemed to be
followed by the words “without limitation”, whether or not so
followed.  All references to “$” or dollar amounts are to lawful
currency of the United States of America, unless otherwise expressly
stated.

     

    14.10 Authority to Adopt
Agreement.  By execution hereof, each Member represents and
covenants as follows:

     

    (a) The
Member has full legal right, power, and authority to deliver this Agreement and
to perform the Member’s obligations hereunder;

     

    (b) This
Agreement constitutes the legal, valid, and binding obligation of the Member
enforceable in accordance with its terms, except as the enforcement thereof may
be limited by bankruptcy and other laws of general application relating to
creditors’ rights or general principles of equity;

     

    (c) This
Agreement does not violate, conflict with, result in a breach of the terms,
conditions or provisions of, or constitute a default or an event of default
under any other agreement of which the Member is a party; and

     

    (d) The
Member’s investment in Units is made for the Member’s own account for investment
purposes only and not with a view to the resale or distribution of such
Units.

     

    14.11 No
Encumbrances.  No Member or Unit Holder may pledge, lien or
otherwise encumber such Member’s or Unit Holder’s interest or Units for any
purpose unless approved by a Majority Vote of the Members.

     

    14.12 Independent
Counsel.  Each Member, Officer and Manager acknowledges that
each of them has had the opportunity to review this Agreement with independent
legal counsel.

     

    14.13 Counterparts.  This
Agreement may be executed in one or more counterparts each of which shall for
all purposes be deemed an original, and all of such counterparts, taken
together, shall constitute one and the same Agreement.

     

    14.14 Expenses.  Except
as otherwise expressly provided for herein or in the Asset Purchase Agreement or
the Ancillary Agreements, each of the parties hereto shall be responsible for
all expenses directly incurred by them in connection with the transactions
contemplated by such agreements; provided that the
Company will reimburse Peterson for its reasonable documented
expenses.

     

    By
execution below, each of the undersigned agrees to the terms and provisions of
this Amended and Restated Operating Agreement for Franklin Covey Products,
LLC.

     

    
      
         

      

      
        57

        
          

        

      

      
         

      

    

    

     

    
      	
              MEMBERS

               

            
	
              PETERSON
      PARTNERS V, L.P., a Delaware

                   limited
      partnership

               

            
	
              By:

            	
              Peterson
      Partners V, LLC

            
	
              Its:

               

               

              By:

            	
              General
      Partner

               

               

                /s/
      James B. Nelson

            
	
               

            	
              James
      B. Nelson, Partner

               

               

            
	
              FRANKLIN
      COVEY CLIENT SALES, INC.,

              a
      Utah corporation

            
	
               
      

               

            	
               
      

               

                /s/ Steve Young

            
	
              By:

            	 
      Steve Young
	
              Its:

            	
               
      Chief Financial Officer

            
	 	
               

               

                /s/ Sarah Merz

            
	
               

               

            	
              SARAH
      MERZ

               

               
      /s/ Gordon Wilson

            
	
               

               

            	
              GORDON
      WILSON

               

                /s/
      Rick Wooden

            
	
               

               

            	
              RICK
      WOODEN

               

                /s/ Jeff
      Anderson  

            
	
               

               

            	
              JEFF
      ANDERSON

               

               
      /s/ Bob Sumbot  

            
	
               

               

            	
              BOB
      SUMBOT

               

                /s/
      Kent Frogley  

            
	
               

               

            	
              KENT
      FROGLEY

               

                /s/
      Mike Connelly

            
	
               

               

            	
              MIKE
      CONNELLY

                

            

    

    
      
         

      

      
        58

        
          

        

      

      
         

      

    

    

    
      	 	 
      /s/ Bryan Wilde 
	
               

               

            	
              BRYAN
      WILDE

                

                /s/ Eric Bright

            
	
               

            	ERIC
      BRIGHT

                

            
	
               

               

              COMPANY

               

            
	
              FRANKLIN
      COVEY PRODUCTS, LLC

               

                /s/
      James B. Nelson

            
	
              By:

            	
              James
      B. Nelson

            
	
              Its:

            	
              Manager

            
	
               

              MANAGERS

               

            
	 	 
      /s/ Sarah Merz
	
               

            	
              SARAH
      MERZ

               

                /s/
      Jordan Clements

            
	
               

               

            	
              JORDAN
      CLEMENTS

               

                /s/
      James B. Nelson

            
	
               

               

            	
              JAMES
      B. NELSON

               

                /s/
      Robert A. Whitman

            
	
               

               

            	
              ROBERT
      A. WHITMAN

               

            

    

    
      
         

      

      
        59ex101to8k03725_07092008.htm

    Exhibit 10.1

     

    
      FIFTH
AMENDMENT TO THE LOAN AGREEMENT

       

      THIS
Amendment to Loan Agreement made this 30th day of June, 2008, by and between
M-TRON INDUSTRIES, INC.,
a Delaware corporation (“M-TRON”), and PIEZO TECHNOLOGY, INC., a
Florida corporation (collectively, the “Borrowers”), and FIRST NATIONAL BANK OF OMAHA
(the “Bank”), a national banking association established at Omaha,
Nebraska.

       

      WHEREAS,
M-TRON has existing term loans with the Bank evidenced by term note number
855891-1 with a due date of January 24, 2013, pursuant to an existing additional
loan agreement with the Bank, which shall remain in full force in accordance
with its terms; and

       

      WHEREAS,
M-TRON has an existing revolving line of credit with the Bank evidenced by
revolving note number 855893-1 with a due date of June 30, 2009 pursuant to an
existing additional loan agreement with the Bank, which shall be paid in full
from the proceeds of the Revolving Note; and

       

      Whereas,
the Borrowers have requested the Bank to lend to the Borrowers the sum of
$5,500,000 revolving line of credit (the “Revolving Loan”) and $1,310,280 term
loan (“Term Loan”) (collectively referred to as the “Loans”); and

       

      WHEREAS,
the Bank is willing to provide such credit facilities to the Borrowers upon the
terms and conditions herein set forth.

       

      WHEREAS,
BANK and BORROWER executed a written Loan Agreement dated October 14, 2004 which
was subsequently amended May 31, 2005, June 30, 2006, October 3, 2006, and June
30, 2007 (the Loan Agreement together with all amendments is herein called the
“AGREEMENT”); and

       

      WHEREAS,
the parties hereto desire to amend the AGREEMENT.

       

      Now,
therefore, in consideration of the AGREEMENT, and their mutual promises made
herein, BANK and BORROWERS agree as follows:

       

      1.           Terms
which are typed herein as all capitalized words and are not defined herein shall
have the same meanings as when described in the AGREEMENT.

       

      2.           Article I.
Section 1.01.  Defined Terms “Revolving Loan Termination Date”
(a) and “Term Loan Termination Date” (b) of the AGREEMENT are hereby
amended to read, effective immediately:

       

      (a)           June
30, 2009

      
        	
                 
      

              	
                (b)

              	
                January
      24, 2013

              

      

       

      3.           Article II
Section 2.12, Repayment of Revolving Note is hereby amended to read,
effective immediately:

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      The
Revolving Note shall be due and payable on June 30, 2009.  Interest
only shall be payable monthly on the Revolving Note.  All outstanding
principal and interest shall be due and payable on June 30, 2009.

       

      4.           Article VIII,
Section 8.01 Minimum Working Capital is hereby deleted from the AGREEMENT,
effective immediately.

       

      5.           Article VIII,
Section 8.02 Minimum Tangible Net Worth is hereby amended, effective
immediately:

       

      The
Borrower will maintain at all times a tangible net worth of not less than
$7,000,000.00 measured quarterly.

       

      6.           Article VIII,
Section 8.03 Capital Expenditures is hereby deleted from the AGREEMENT,
effective immediately.

       

      7.           Article VIII,
Section 8.04 Current Ratio is hereby amended to read effective
immediately:

       

      At all
times after June 30, 2008, the Borrower will maintain a ratio of current assets
to current liabilities of not less than 1.5 to 1.0 measured
quarterly.

       

      8.           Article VIII,
Section 8.05 is hereby amended to read effective immediately:

       

      The
Borrower will maintain at all times a maximum Leverage Ratio of 2.75:1.00
measured quarterly.

       

      9.           BORROWER
certifies by its execution hereof that all of the representations and warranties
set forth in the AGREEMENT are true as of this date, and that no EVENT OF
DEFAULT under the AGREEMENT, and no event which, with the giving of notice or
passage of time or both, would become such an EVENT OF DEFAULT, has occurred as
of execution hereof, except as disclosed to BANK.  All other terms and
conditions of the AGREEMENT not affected or amended by this AGREEMENT, are
hereby ratified and confirmed.

       

      10.           GUARANTOR
acknowledges and consents to the foregoing amendment, and agrees and confirms
that his separate guarantee of BORROWER’s obligations to BANK are, and continue
to be, valid and binding obligations of GUARANTOR.

       

      11.           Except
as herein amended, the AGREEMENT continues to be the valid, binding obligation
of BORROWER.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed by their
respective officers thereunto duly authorized, as of the date first above
written.

       

      
        	
                M-TRON
      INDUSTRIES, INC.

              	 
      	
                FIRST
      NATIONAL BANK OF OMAHA

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                By:

              	
                
                  /s/
      Robert Zylstra

                

              	 
      	
                By:

              	
                
                  /s/
      Justin Mahoney

                

              
	 
      	 
      	 
      	 
      	 
      
	
                Its:

              	
                
                  President
      & CEO

                

              	 
      	
                Its:

              	
                
                  Officer

                

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                By:

              	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                Its:

              	 
      	 
      	 
      	 
      

      

      

      

      
        	
                PIEZO
      TECHNOLOGY, INC.

              	 
      
	 
      	 
      
	 
      	 
      
	
                By:

              	
                
                  /s/
      Robert Zylstra

                

              	 
      
	 
      	 
      	 
      
	
                Its:

              	
                
                  Chairman

                

              	 
      
	 
      	 
      
	 
      	 
      
	
                By:

              	 
      	 
      
	 
      	 
      	 
      
	
                Its:

              	 
      	 
      

      

      

      

      
        	
                ACKNOWLEDGED
      BY GUARANTOR:

              	 
      	 
      
	 
      	 
      	 
      
	
                THE
      LGL GROUP, INC., fka LYNCH CORPORATION

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                By:

              	
                
                  /s/
      Robert Zylstra

                

              	 
      	 
      
	 
      	 
      	 
      	 
      
	
                Its:

              	
                
                  President
      & CEO

                

              	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                By:

              	
                
                  /s/
      Harold Castle

                

              	 
      	 
      
	 
      	 
      	 
      	 
      
	
                Its:

              	
                CFO

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00144-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00144-of-00352.parquet"}]]