\n| <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n ii<\/p>\n \n
\nAMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT dated as of [ 143],
\n2012 (this “Agreement<\/u>“), of [NEWCO], LLC, a Delaware limited liability
\ncompany (the “Company<\/u>“), among [ 143], a [ 143] (“Beckett Member<\/u>“),
\nsolely for purposes of Sections 6.09 and 7.05(a)(ii), BARNES & NOBLE, INC.,
\na Delaware corporation (“Barnes&Noble<\/u>“), MORRISON INVESTMENT
\nHOLDINGS, INC., a Nevada corporation (“Morrison<\/u>“) and, solely for
\npurposes of Section 9.05(c), MICROSOFT CORPORATION, a Washington corporation
\n(“Microsoft Corporation<\/u>“). Capitalized terms used herein have their
\nrespective meanings as set forth in Section 1.01.<\/p>\n<\/p>\n WHEREAS the Company has heretofore been formed as a limited liability company
\nunder the Delaware Limited Liability Company Act (6 Del. C. Section 18-101,
\net<\/u> seq.<\/u>, as amended from time to time (the “Delaware
\nAct<\/u>“)) pursuant to the filing of the Certificate of Formation;<\/p>\n<\/p>\n WHEREAS Beckett Member, as sole member of the Company (in such capacity, the
\n“Initial Member<\/u>“), executed a limited liability company agreement
\neffective as of [ 143], 2012 (the “Original LLC Agreement<\/u>“); and<\/p>\n<\/p>\n WHEREAS the Initial Member of the Company wishes to amend and restate such
\nExisting LLC Agreement to reflect the addition of an Additional Member (as
\ndefined below) and to reflect other terms and conditions set forth herein.<\/p>\n<\/p>\n<\/p>\n NOW, THEREFORE, in consideration of the agreements and obligations set forth
\nherein and for other good and valuable consideration, the receipt and
\nsufficiency of which are hereby acknowledged, the Members hereby continue the
\nCompany pursuant to and in accordance with the Delaware Act, as provided herein,
\nand hereby agree to amend and restate the Original LLC Agreement as follows:<\/p>\n<\/p>\n<\/p>\n ARTICLE I<\/p>\n \n<\/p>\n Defined Terms<\/u><\/p>\n \n SECTION 1.01. Definitions.<\/u> Unless the context otherwise requires, the
\nterms defined in this Article I shall, for the purposes of this Agreement, have
\nthe meanings herein specified.<\/p>\n<\/p>\n “Additional Issuance Price<\/u>” shall mean, in connection with any
\nissuance of Additional Membership Interests, (i) the total consideration paid
\nfor such Additional Membership Interests (or, in the case of a deemed issuance
\nof Additional Membership Interests as described in Section 3.04(c), the exercise
\nor conversion price of the Options or Convertible Securities giving rise to such
\ndeemed issuance), divided by (ii) the number of Common Membership Interests
\nissued, or deemed issued pursuant to Section 3.04(c), as Additional Membership
\nInterests in connection with such issuance.<\/p>\n<\/p>\n 1<\/p>\n \n
\n“Additional Membership Interests<\/u>” shall mean any Membership Interests
\nissued by the Company after the date hereof other than: (i) except for purposes
\nof Section 3.05(b), in connection with any Initial Public Offering or Qualified
\nDistribution, (ii) pursuant to any present or future employee, officer or
\ndirector benefit plan or program of or assumed by the Company or any of its
\nSubsidiaries, (iii) in connection with any merger, consolidation, acquisition
\nfor stock, business combination or any similar extraordinary transaction, (iv)
\nthe issuance of Common Membership Interests as a dividend or distribution to all
\nor substantially all holders of Common Membership Interests, or a subdivision or
\ncombination of Common Membership Interests or a reclassification of (or similar
\naction with respect to) Common Membership Interests into a greater or lesser
\nnumber of Common Membership Interests or (v) Equity Incentive Reimbursement
\nIssuances.<\/p>\n<\/p>\n “Adjusted Capital Account Balance<\/u>” shall mean, with respect to any
\nMember, the balance in such Member153s Capital Account after giving effect to the
\nfollowing adjustments:<\/p>\n<\/p>\n<\/p>\n (i) debits to such Capital Account of the items described in Sections
\n1.704-1(b)(2)(ii)(d)(4) through (6) of the Treasury Regulations; and<\/p>\n<\/p>\n<\/p>\n (ii) credits to such Capital Account of such Member153s share of minimum gain
\nor Member Nonrecourse Liability minimum gain or any amount which such Member
\nwould be required to restore under this Agreement or otherwise.<\/p>\n<\/p>\n<\/p>\n The foregoing definition of Adjusted Capital Account Balance is intended to
\ncomply with the provisions of Section 1.704-1(b)(2)(ii)(d) of the Treasury
\nRegulations.<\/p>\n<\/p>\n “Adjusted Capital Account Deficit<\/u>” shall mean, with respect to any
\nMember, the deficit balance, if any, in such Member153s Adjusted Capital Account
\nBalance as of the end of the relevant taxable period or portion thereof.<\/p>\n<\/p>\n “Affiliate<\/u>” shall mean, with respect to any Person, any other Person
\nthat directly or through one or more intermediaries, controls, is controlled by
\nor is under common control with, the specified Person. As used in this
\ndefinition, the term “control” (including with correlative meanings, “controls”,
\n“controlled by” and “under common control with”) shall mean, with respect to any
\nPerson, the possession, directly or indirectly, of the power to direct or cause
\nthe direction of the management or policies of such Person, whether through
\nownership of securities or partnership, membership, limited liability company or
\nother ownership interests, by contract or otherwise. For purposes of this
\nAgreement, neither the Company nor any entity controlled, directly or
\nindirectly, by the Company shall be an Affiliate of any Member.<\/p>\n<\/p>\n “Agreement<\/u>” shall have the meaning set forth in the preamble hereof.\n<\/p>\n<\/p>\n 2<\/p>\n \n
\n“Appraiser<\/u>” shall have the meaning set forth in Section 7.06(b).<\/p>\n<\/p>\n “Barnes&Noble<\/u>” shall have the meaning set forth in the preamble
\nhereof.<\/p>\n<\/p>\n “Beckett Entity<\/u>” shall mean (a) Barnes&Noble, (b) Beckett Member,
\n(c) any Affiliate of Barnes&Noble to whom any Beckett Entity Transfers all
\nor any part of its Membership Interests in accordance with Section 8.05(a) and
\n(d) any Intermediate Subsidiary, in each case for so long as any such Beckett
\nEntity holds, directly or indirectly, any Membership Interests.<\/p>\n<\/p>\n “Board of Managers<\/u>” shall have the meaning set forth in Section
\n4.01(a).<\/p>\n<\/p>\n “Business Day<\/u>” shall mean any day other than (a) a Saturday or Sunday
\nand (b) any day on which banks located in New York City are authorized or
\nrequired by applicable law to be closed for the conduct of regular banking
\nbusiness.<\/p>\n<\/p>\n “Capital Account<\/u>” shall have the meaning set forth in Section 6.01(a).\n<\/p>\n<\/p>\n “Capital Contribution<\/u>” shall mean any capital contribution made by a
\nMember of the Company.<\/p>\n<\/p>\n “Certificate of Formation<\/u>” shall mean the Certificate of Formation of
\nthe Company filed on [ 143], 2012, and any and all amendments thereto and
\nrestatements thereof filed on behalf of the Company with the office of the
\nSecretary of State of the State of Delaware pursuant to the Delaware Act.<\/p>\n<\/p>\n “Change of Control<\/u>” shall mean the occurrence of any of the following
\nevents: (a) any transaction in which Barnes&Noble ceases to own, directly or
\nindirectly, at least 50% of the voting power of the Company (other than an
\nInitial Public Offering or Qualified Distribution), (b) any disposition of all
\nor substantially all of the assets of the Company and (c) at any time that
\nBarnes&Noble owns, directly or indirectly, at least 50% of the voting power
\nof the Company, any transaction in which a person or entity that is not a
\nPermitted Holder acquires stock of Barnes&Noble entitled to exercise a
\nmajority of the voting power of Barnes&Noble.<\/p>\n<\/p>\n “Change of Control Effective Date<\/u>” shall have the meaning set forth in
\nSection 7.04(a).<\/p>\n<\/p>\n “Change of Control Payment<\/u>” shall have the meaning set forth in
\nSection 7.04(a).<\/p>\n<\/p>\n “Change of Control Sale<\/u>” shall have the meaning set forth in Section
\n7.04(a).<\/p>\n<\/p>\n “Closing Date<\/u>” shall mean the date hereof.<\/p>\n<\/p>\n “Closing Price<\/u>” of a security on any date of determination shall mean
\nthe closing sale price or, if no closing sale price is reported, the last
\nreported sale price, of the shares of such security on the Eligible Exchange on
\nwhich such security is listed or quoted on such date, or if no closing sale
\nprice is reported, the last reported sale price on the Eligible Exchange, or if
\nsuch security is not so listed or quoted on an Eligible Exchange, the last
\nquoted bid price for such security in the over-the-counter market as reported by
\nPink Sheets LLC or a similar organization, or, if that bid price is not
\navailable, the market price of such security on that date as determined by a
\nnationally recognized investment banking firm (unaffiliated with the Company)
\nretained by the Company for such purpose.<\/p>\n<\/p>\n 3<\/p>\n \n
\n“Code<\/u>” shall mean the Internal Revenue Code of 1986, as amended.<\/p>\n<\/p>\n “Commercial Agreement<\/u>” shall mean the Commercial Agreement dated as of
\nApril 27, 2012 among the Company, Barnes&Noble and Microsoft Corporation.\n<\/p>\n<\/p>\n “Common Membership Interests<\/u>” shall mean the common limited liability
\ncompany interests of the Company having the terms and conditions specified in
\nthis Agreement and which shall be evidenced by certificates in the form of
\nExhibit B hereto.<\/p>\n<\/p>\n “Company<\/u>” shall have the meaning set forth in the preamble hereof.<\/p>\n<\/p>\n “Company Common Stock<\/u>” shall mean the common stock or other common
\nequity interests of the Issuer sold in an Initial Public Offering or distributed
\nin a Qualified Distribution.<\/p>\n<\/p>\n “Company Formation Transactions<\/u>” shall have the meaning assigned to
\n“NewCo Formation Transactions” in the Investment Agreement<\/p>\n<\/p>\n “Company Notice of Redemption<\/u>” shall have the meaning set forth in
\nSection 7.05(c).<\/p>\n<\/p>\n “Company Optional Redemption Date<\/u>” shall have the meaning set forth in
\nSection 7.05(b)(ii).<\/p>\n<\/p>\n “Conversion Date<\/u>” shall have the meaning set forth in Section 3.04(b).\n<\/p>\n<\/p>\n “Conversion Price<\/u>” shall have the meaning set forth in Section
\n3.04(a).<\/p>\n<\/p>\n “Conversion Rate<\/u>” shall have the meaning set forth in Section 3.04(a).\n<\/p>\n<\/p>\n “Convertible Securities<\/u>” shall mean, with respect to a security, any
\nevidences of indebtedness, or other securities convertible into or exchangeable
\nfor such security (including, with respect to Common Membership Interests,
\nSeries A Preferred Membership Interests); provided<\/u> that if such security
\nis a Common Membership Interest, such security would, if issued following the
\ndate hereof, constitute Additional Membership Interests.<\/p>\n<\/p>\n “Covered Person<\/u>” shall have the meaning set forth in Section 3.07(b).\n<\/p>\n<\/p>\n 4<\/p>\n \n
\n“Current Market Price<\/u>” per share or other applicable unit of any
\nsecurity as of a Record Date for any issuance, distribution, dividend or other
\naction, shall mean the arithmetic average of the VWAP per share or other
\napplicable unit of such security, for each of the ten consecutive full Trading
\nDays ending on the Trading Day before the Record Date with respect to such
\nissuance, distribution, dividend or other action, appropriately adjusted to take
\ninto account the occurrence during such period of any event described in Section
\n3.05(c).<\/p>\n<\/p>\n “Delaware Act<\/u>” shall have the meaning set forth in the recitals
\nhereto.<\/p>\n<\/p>\n “Distributed Entity<\/u>” shall mean any Subsidiary of the Company
\ndistributed in a Distribution Transaction.<\/p>\n<\/p>\n “Distributed Property<\/u>” shall have the meaning set forth in Section
\n3.05(c)(iv).<\/p>\n<\/p>\n “Distribution Ratio<\/u>” shall mean the number of shares (or fraction of a
\nshare) of a Distributed Entity received in respect of or in exchange for, as
\napplicable, a share of Company Common Stock in the Distribution Transaction.<\/p>\n<\/p>\n “Distribution Transaction<\/u>” shall mean any transaction by which a
\nSubsidiary of the Company ceases to be a Subsidiary of the Company by reason of
\nthe distribution of such Subsidiary153s equity securities to holders of Company
\nCommon Stock, whether by means of a spin-off, split-off, redemption,
\nreclassification, exchange, stock dividend, share distribution, rights offering
\nor similar transaction.<\/p>\n<\/p>\n “Distributions<\/u>” shall mean distributions of cash, Equity Interests,
\nequity interests of Subsidiaries of the Company or other property made by the
\nCompany with respect to the Membership Interests.<\/p>\n<\/p>\n “Drag Along Notice<\/u>” shall have the meaning set forth in Section
\n8.06(b).<\/p>\n<\/p>\n “Drag Along Portion<\/u>” shall mean, with respect to any holder of Series
\nA Preferred Membership Interests, the number of Membership Interests (on an
\nas-converted basis) held by such holder multiplied by a fraction, the numerator
\nof which is the number of Membership Interests proposed to be sold (or converted
\ninto the right to receive merger consideration in a merger or consolidation of
\nthe Company) by the Beckett Entities in a Drag Along Sale pursuant to Section
\n8.06(b) and the denominator of which is the total number of Membership Interests
\nthen held by all Beckett Entities.<\/p>\n<\/p>\n “Drag Along Sale<\/u>” shall mean a transaction in which one or more
\nBeckett Entities propose to transfer any Membership Interests representing more
\nthan 50% of all of the Membership Interests to any Person(s) that are not
\nAffiliates of Barnes&Noble (other than in connection with a Qualified
\nDistribution) and which transaction is a Change of Control, but excluding a
\ntransaction that is subject to the provisions of Section 9.01. A Drag Along Sale
\nshall include a merger or consolidation of the Company.<\/p>\n<\/p>\n 5<\/p>\n \n
\n“Drag Along Sale Period<\/u>” shall have the meaning set forth in Section
\n8.06(d).<\/p>\n<\/p>\n “Electing Holders<\/u>” shall have the meaning set forth in Section
\n7.05(a).<\/p>\n<\/p>\n “Eligible Exchange<\/u>” shall mean the New York Stock Exchange, the Nasdaq
\nNational Market or any respective successor exchange.<\/p>\n<\/p>\n “Equity Incentive Reimbursement Issuances<\/u>” shall mean any issuance of
\nCommon Membership Interests to the Beckett Member as reimbursement for the
\nactual cost of any compensation paid to NewCo employees in the form of
\nBarnes&Noble equity awards, which Common Membership Interests shall be
\nissued to the Beckett Member at the fair market value of such Common Membership
\nInterests as reasonably determined in good faith by the Board of Managers.<\/p>\n<\/p>\n “Equity Interest<\/u>” shall mean any Membership Interest or Options or
\nConvertible Securities with respect to Membership Interests.<\/p>\n<\/p>\n “Exchange Act<\/u>” shall mean the United States Securities Exchange Act of
\n1934.<\/p>\n<\/p>\n “Exchange Ratio<\/u>” shall mean the quotient of (i) the number of
\noutstanding shares of Company Common Stock immediately following the effective
\ndate of a Distribution Transaction and (ii) the number of outstanding shares of
\nCompany Common Stock immediately prior to the effective date of such
\nDistribution Transaction.<\/p>\n<\/p>\n “Expiration Date<\/u>” shall have the meaning set forth in Section
\n3.05(c)(iii).<\/p>\n<\/p>\n “Expiration Time<\/u>” shall have the meaning set forth in Section
\n3.05(c)(iii).<\/p>\n<\/p>\n “Fair Market Value<\/u>” shall mean, with respect to any security or other
\nproperty, the fair market value of such security or other property as determined
\nby the Board of Managers, or an authorized committee thereof, acting in good
\nfaith.<\/p>\n<\/p>\n “GAAP<\/u>” shall mean generally accepted accounting principles in the
\nUnited States.<\/p>\n<\/p>\n “holder<\/u>” with respect to a security, shall mean a Person in whose name
\nsuch security is registered, which Person may be treated by the issuer of such
\nsecurity, and any agent of such issuer, as the absolute owner of such security
\nfor the purpose of making payment and settling conversions and for all other
\npurposes; provided that, with respect to Series A Membership Interests, Common
\nMembership Interests, Preferred Stock and Company Common Stock, to the fullest
\nextent permitted by law, no Person that has received Series A Preferred
\nMembership Interests, Common Membership Interests, Preferred Stock or Company
\nCommon Stock in violation of Article VIII shall be a holder, and the Company,
\nand any agent of the Company, shall not recognize any such Person as a holder.\n<\/p>\n<\/p>\n 6<\/p>\n \n
\n“Holder Notice of Elective Redemption<\/u>” shall have the meaning set
\nforth in Section 7.05(a).<\/p>\n<\/p>\n “Initial Member<\/u>” shall have the meaning set forth in the recitals
\nhereto.<\/p>\n<\/p>\n “Initial Public Offering<\/u>” shall mean the closing of a bona fide, firm
\ncommitment, underwritten public offering of the Issuer153s common equity
\nsecurities, pursuant to an effective registration statement under the Securities
\nAct; provided<\/u>, however<\/u>, that such common equity securities of the
\nIssuer in such offering are (following consummation of such offering) registered
\non or listed for trading on, as applicable, an Eligible Exchange.<\/p>\n<\/p>\n “Intermediate Subsidiary<\/u>” shall mean any direct or indirect Subsidiary
\nof Barnes&Noble that directly or indirectly holds any Membership Interests.\n<\/p>\n<\/p>\n “Investment Agreement<\/u>” shall mean the Investment Agreement dated as of
\nApril 27 2012, among Barnes&Noble, Morrison, Microsoft Corporation (solely
\nfor purposes of Section 3.06 thereof) and, following its formation and its
\nexecution of a joinder thereto, the Company.<\/p>\n<\/p>\n “IPO Valuation<\/u>” shall mean an amount equal to (i) the price per share
\nof common equity interests of the Issuer paid by the public in an Initial Public
\nOffering, multiplied by (ii) the total number of shares of such common equity
\ninterests outstanding immediately following such Initial Public Offering
\n(excluding the number of shares of common equity interests issued for sale for
\nthe Issuer153s account in such Initial Public Offering) on a fully diluted basis,
\nas if (1) all Series A Preferred Membership Interests had been converted or
\nexchanged for such common equity interests of the Issuer and (2) all other
\nConvertible Securities and Options with respect to such common equity interests
\n(which shall include such Convertible Securities and Options with respect to
\nCommon Membership Interests that become convertible or exercisable with respect
\nto such common equity interests) with a conversion or exercise price per share
\nthat is less than the price specified in sub-clause (i) had been fully
\nexercised, converted or exchanged immediately prior to such Initial Public
\nOffering (and the resulting securities fully converted into such common equity
\ninterests, if so convertible, but without any adjustment to the Conversion Price
\nor Conversion Rate), as of such date, and the consideration paid for such
\nexercise or conversion used by the Issuer to repurchase and retire common equity
\ninterests of the Issuer immediately prior to such issuance.<\/p>\n<\/p>\n “Issuer<\/u>” shall have the meaning set forth in Section 9.01(a).<\/p>\n<\/p>\n “Joinder Agreement<\/u>” shall mean an agreement, substantially in the form
\nof Exhibit A, confirming the agreement of a Person to be bound by the terms and
\nprovisions of this Agreement.<\/p>\n<\/p>\n “Junior Equity Interests<\/u>” shall mean any Equity Interests of the
\nCompany (including Common Membership Interests) the holders of which have rights
\nto any distribution or payment out of the assets of the Company upon a
\nLiquidation Event ranking junior to the rights of the Series A Preferred
\nMembership Interests.<\/p>\n<\/p>\n 7<\/p>\n \n
\n“Launch Date<\/u>” shall have the meaning set forth in the Commercial
\nAgreement.<\/p>\n<\/p>\n “Liquidation Event<\/u>” shall mean any liquidation, dissolution or
\nwinding-up of the Company or Barnes&Noble, whether voluntary or involuntary.\n<\/p>\n<\/p>\n “Liquidation Preference<\/u>” shall have the meaning set forth in Section
\n7.03(a).<\/p>\n<\/p>\n “Major Division<\/u>” shall mean either of (i) the Company153s digital device
\nand content business and (ii) the business currently conducted by Barnes &
\nNoble College Booksellers, LLC.<\/p>\n<\/p>\n “Manager<\/u>” shall have the meaning set forth in Section 4.01(b).<\/p>\n<\/p>\n “Market Disruption Event<\/u>” shall mean any of the following events:<\/p>\n<\/p>\n (i) with respect to a security, any suspension of, or limitation imposed on,
\ntrading of such security by any exchange or quotation system on which the
\nClosing Price is determined pursuant to the definition of the term “Closing
\nPrice” (the “Relevant Exchange<\/u>“) during the one-hour period prior to the
\nclose of trading for the regular trading session on the Relevant Exchange (or
\nfor purposes of determining the VWAP per share of such security, any period or
\nperiods aggregating one half-hour or longer during the regular trading session
\non the relevant day) and whether by reason of movements in price exceeding
\nlimits permitted by the Relevant Exchange as to securities generally, or
\notherwise relating to such security or options contracts relating to such
\nsecurity on the Relevant Exchange; or<\/p>\n<\/p>\n<\/p>\n (ii) with respect to a security, any event that disrupts or impairs (as
\ndetermined by the Company in its reasonable discretion) the ability of market
\nparticipants during the one-hour period prior to the close of trading for the
\nregular trading session on the Relevant Exchange (or for purposes of determining
\nthe VWAP per share of such security, any period or periods aggregating one
\nhalf-hour or longer during the regular trading session on the relevant day) in
\ngeneral to effect transactions in, or obtain market values for, such security on
\nthe Relevant Exchange or to effect transactions in, or obtain market values for,
\noptions contracts relating to such security on the Relevant Exchange.<\/p>\n<\/p>\n “Member<\/u>” shall mean the Initial Member, Morrison and any Additional
\nMember until the Initial Member, Morrison or such Additional Member, as
\napplicable, ceases to be a Member of the Company in accordance with the terms of
\nthis Agreement.<\/p>\n<\/p>\n “Member Nonrecourse Liability<\/u>” shall mean a “partner nonrecourse
\nliability” as defined in Section 1.704-2(b)(4) of the Treasury Regulations.<\/p>\n<\/p>\n 8<\/p>\n \n
\n“Membership Interests<\/u>” shall mean the Common Membership Interests and
\nthe Series A Preferred Membership Interests or any other membership interests of
\nthe Company the Company is authorized to issue pursuant to Section 3.03(b).<\/p>\n<\/p>\n “Morrison<\/u>” shall have the meaning set forth in the preamble hereto.\n<\/p>\n<\/p>\n “Morrison Consent<\/u>” shall mean the written consent of the Morrison
\nParty or Morrison Parties then holding a majority of Membership Interests held
\nby all such Morrison Parties (which consent, except as provided in Section
\n4.03(g), may be given, withheld or made subject to such conditions as are
\ndetermined by such Morrison Party or Morrison Parties in its or their sole
\ndiscretion).<\/p>\n<\/p>\n “Microsoft Corporation<\/u>” shall have the meaning set forth in the
\npreamble hereto.<\/p>\n<\/p>\n “Morrison Notice of Redemption<\/u>” shall have the meaning set forth in
\nSection 7.05(a).<\/p>\n<\/p>\n “Morrison Party<\/u>” shall mean each of (i) Microsoft Corporation and (ii)
\nany Subsidiary of Microsoft Corporation, in each case, so long as such entity
\nholds Series A Preferred Membership Interests, or Common Membership Interests
\nresulting from the conversion of Series A Preferred Membership Interests.<\/p>\n<\/p>\n “Morrison Optional Redemption Date<\/u>” shall have the meaning set forth
\nin Section 7.05(a)(iii).<\/p>\n<\/p>\n “Net Income<\/u>” or “Net Loss<\/u>” shall have the meaning set forth in
\nSection 6.02(a).<\/p>\n<\/p>\n “New Issuance Valuation<\/u>” shall mean, in connection with an issuance of
\nAdditional Membership Interests, (i) the Additional Issuance Price in respect of
\nsuch issuance, multiplied by (ii) the total number of Common Membership
\nInterests outstanding immediately prior to such issuance. For the purposes of
\nthe above calculation, the total number of Common Membership Interests
\noutstanding immediately prior to such issuance shall be calculated on a fully
\ndiluted basis (without giving effect to any adjustment under Section 3.05), as
\nif (1) all Series A Preferred Membership Interests had been converted to Common
\nMembership Interests and (2) all other Convertible Securities and Options with
\nrespect to Common Membership Interests with a conversion or exercise price per
\nCommon Membership Interest that is less than the Additional Issuance Price had
\nbeen fully converted, exercised or exchanged immediately prior to such issuance
\n(and the resulting securities fully converted into Common Membership Interests,
\nif so convertible, but without any adjustment to the Conversion Price or
\nConversion Ratio), as of such date, and the consideration paid for such
\nconversion or exercise used by the Company to repurchase and retire Common
\nMembership Interests immediately prior to such issuance.<\/p>\n<\/p>\n “Options<\/u>” shall mean, with respect to any security, rights, options or
\nwarrants to subscribe for, purchase or otherwise acquire either such security or
\nConvertible Securities which are convertible into such security; provided<\/u>
\nthat if such security is a Common Membership Interest, such security would, if
\nissued following the date hereof, constitute Additional Membership Interests.\n<\/p>\n<\/p>\n 9<\/p>\n \n
\n“Original LLC Agreement<\/u>” shall have the meaning set forth in the
\nrecitals hereto.<\/p>\n<\/p>\n “Parity Equity Interests<\/u>” shall mean Equity Interests of the Company,
\nthe holders of which have rights to any distribution or payment out of the
\nassets of the Company upon a Liquidation Event ranking equally to the rights of
\nthe Series A Preferred Membership Interests.<\/p>\n<\/p>\n “Partial Sale<\/u>” shall mean a Change of Control Sale effected with
\nrespect to Series A Preferred Membership Interests representing less than all
\nthe Series A Preferred Membership Interests held by the selling Member.<\/p>\n<\/p>\n “Participation Notice<\/u>” shall have the meaning set forth in Section
\n9.03(b).<\/p>\n<\/p>\n “Patent Settlement and License Agreement<\/u>” shall mean the Settlement
\nand License Agreement dated as of April 27, 2012, among Barnes&Noble,
\nbarnesandnoble.com llc, Microsoft Corporation and Microsoft Licensing GP, which
\nhas been assigned to the Company effective as of the date hereof.<\/p>\n<\/p>\n “Percentage Interest<\/u>” with respect to any Member as of any date, shall
\nmean the percentage determined by dividing (i) (A) the number of Common
\nMembership Interests held by such Member on such date, plus (B) the number of
\nCommon Membership Interests into which any other Membership Interests held by
\nsuch Member could then be converted, by (ii) (x) the total number of Common
\nMembership Interests issued and outstanding, plus (y) the number of Common
\nMembership Interests into which any other Membership Interests issued and
\noutstanding could then be converted.<\/p>\n<\/p>\n “Permitted Holder<\/u>” shall mean (i) any Person that had filed a report
\non Schedule 13D with the SEC in respect of such Person153s beneficial ownership of
\nBarnes&Noble153s then outstanding voting securities prior to April 29, 2012
\nand (ii) any Person a majority of the equity securities of which are
\nbeneficially owned by a Person described in clause (i).<\/p>\n<\/p>\n “Person<\/u>” shall mean any individual, corporation, association,
\npartnership (general or limited), joint venture, trust, estate, limited
\nliability company or other legal entity or organization.<\/p>\n<\/p>\n “Preferred Stock<\/u>” shall have the meaning set forth in Section 9.01.\n<\/p>\n<\/p>\n “Prime Rate<\/u>” shall mean the “Prime Rate” as published in the Wall
\nStreet Journal on the first Business Day of each calendar month, which rate
\nshall apply to the calculation of interest under Section 6.08 for that calendar
\nmonth.<\/p>\n<\/p>\n “Purchased Shares<\/u>” shall have the meaning set forth in Section
\n3.05(c)(iii).<\/p>\n<\/p>\n 10<\/p>\n \n
\n“Qualified Distribution<\/u>” shall mean either of (i) the closing of a
\ndirect or indirect distribution to the holders of the stock of Barnes&Noble
\n(by pro rata distribution or dividend, by exchange offer\/”split-off” or by any
\ncomparable means) of all or a portion of the Membership Interests (or equity
\nsecurities of an entity owned by a Beckett Entity holding Membership Interests)
\nheld immediately prior to such distribution by Beckett Entities;
\nprovided<\/u>, however<\/u>, that the Membership Interests (or other equity
\nsecurities) so distributed are (upon consummation of such distribution), or
\ncontinue to be, registered on or listed for trading on, as applicable, an
\nEligible Exchange; and (ii) any sale by Barnes&Noble of, or distribution to
\nthe holders of the stock of Barnes&Noble (by pro rata distribution or
\ndividend, by exchange offer\/”split-off” or by any comparable means) of, all or
\nsubstantially all of its operations other than the Company.<\/p>\n<\/p>\n “Record Date<\/u>” shall mean, with respect to any dividend, distribution
\nor other transaction or event in which the holders of a security have the right
\nto receive any cash, securities or other property or in which such security is
\nexchanged for or converted into any combination of cash, securities or other
\nproperty, the date fixed for determination of holders of such security entitled
\nto receive such cash, securities or other property (whether such date is fixed
\nby a board of managers or by statute, contract or otherwise).<\/p>\n<\/p>\n “Redemption Amount<\/u>” shall have the meaning set forth in Section
\n7.05(a).<\/p>\n<\/p>\n “Register<\/u>,” “registered<\/u>” and “registration<\/u>” shall mean a
\nregistration effected by preparing and filing a registration statement with the
\nSEC in compliance with the Securities Act and applicable rules and regulations
\nthereunder, and the declaration or ordering of effectiveness of such
\nregistration statement by the SEC.<\/p>\n<\/p>\n “Registration Rights Agreement<\/u>” shall mean the Registration Rights
\nAgreement dated as of the date hereof among the Issuer and the Shareholders (as
\nsuch term is defined in the Registration Rights Agreement) party thereto in the
\nform of Annex B to the Investment Agreement.<\/p>\n<\/p>\n “Relevant Exchange<\/u>” shall have the meaning set forth in the definition
\nof “Market Disruption Event”.<\/p>\n<\/p>\n “Retail Sale Valuation<\/u>” shall mean an amount equal to (i)(A) the
\narithmetic average of the VWAPs of a share of the common stock of
\nBarnes&Noble on the principal securities exchange on which such common stock
\ntrades, for each of the ten consecutive full Trading Days commencing with, and
\nincluding, the closing date of a transaction described in clause (ii) of the
\ndefinition of “Qualified Distribution”, multiplied by (B) the total number of
\nshares of common stock of Barnes&Noble outstanding immediately following
\nsuch transaction on a fully diluted basis, as if (1) all Series A Preferred
\nMembership Interests had been converted or exchanged for common stock of
\nBarnes&Noble and (2) all other Convertible Securities and Options with
\nrespect to such common stock (which shall include such Convertible Securities
\nand Options with respect to Common Membership Interests that become convertible
\nor exercisable with respect to such common stock) with a conversion or exercise
\nprice per share that is less than the average described in sub-clause (A) had
\nbeen fully exercised, converted or exchanged immediately prior to closing of
\nsuch transaction (and the resulting securities fully converted into common stock
\nof Barnes&Noble, if so convertible), as of such date, and the consideration
\npaid for such exercise or conversion used by Barnes&Noble to repurchase and
\nretire common stock of Barnes&Noble immediately prior to such transaction,
\nminus (ii) the amount of net cash (reflected as a positive amount) or net debt
\n(reflected as a negative amount) on the balance sheet of Barnes&Noble
\nimmediately following the closing of such transaction.<\/p>\n<\/p>\n 11<\/p>\n \n
\n“SEC<\/u>” shall mean the United States Securities and Exchange Commission.\n<\/p>\n<\/p>\n “Securities Act<\/u>” shall mean the United States Securities Act of 1933.\n<\/p>\n<\/p>\n “Selling Significant Member<\/u>” shall have the meaning set forth in
\nSection 8.06(a).<\/p>\n<\/p>\n “Senior Equity Interests<\/u>” shall mean any Equity Interests of the
\nCompany the holders of which have rights to any distribution or payment out of
\nthe assets of the Company upon a Liquidation Event, or rights of redemption or
\nrights upon distributions otherwise ranking senior to, or with preference or
\npriority over, the rights of the Series A Preferred Membership Interests.<\/p>\n<\/p>\n “Series A Preferred Membership Interests<\/u>” shall mean the convertible
\nSeries A preferred limited liability company interests of the Company having the
\nterms and conditions set forth in this Agreement and which shall be evidenced by
\ncertificates in the form of Exhibit B hereto.<\/p>\n<\/p>\n “Service<\/u>” shall mean the U.S. Internal Revenue Service.<\/p>\n<\/p>\n “Significant Member<\/u>” shall mean, as of any date, any Member holding 5%
\nor more of the Common Membership Interests (on an as-converted basis) on such
\ndate.<\/p>\n<\/p>\n “Spin-Off\/Split-Off Valuation<\/u>” shall mean an amount equal to (i) the
\narithmetic average of the VWAPs of a share of the common equity interests of the
\nIssuer distributed to Members on the principal securities exchange on which such
\ncommon equity interests trade, for each of the ten consecutive full Trading Days
\ncommencing with, and including the first day on which the common equity
\ninterests of the Issuer trade on an Eligible Exchange, multiplied by (ii) the
\ntotal number of shares of common equity interests outstanding immediately
\nfollowing such Qualified Distribution on a fully diluted basis, as if (1) all
\nSeries A Preferred Membership Interests had been converted or exchanged for the
\ncommon equity interests of the Issuer and (2) all other Convertible Securities
\nand Options with respect to such common equity interests (which shall include
\nsuch Convertible Securities and Options with respect to Common Membership
\nInterests that become convertible or exercisable with respect to such common
\nequity interests) with a conversion or exercise price per interest that is less
\nthan the average described in clause (i) had been fully exercised, converted or
\nexchanged immediately prior to such Qualified Distribution (and the resulting
\nsecurities fully converted into common equity interests, if so convertible), as
\nof such date, and the consideration paid for such exercise or conversion used by
\nthe Issuer to repurchase and retire Common Membership Interests immediately
\nfollowing such Qualified Distribution.<\/p>\n<\/p>\n 12<\/p>\n \n
\n“Subscription Notice<\/u>” shall have the meaning set forth in Section
\n5.03(b).<\/p>\n<\/p>\n “Subsidiary<\/u>” with respect to any Person, shall mean another Person, an
\namount of the voting securities, other voting rights or voting partnership
\ninterests of which is sufficient to elect at least a majority of its board of
\ndirectors or other governing body (or, if there are no such voting interests,
\nmore than 50% of the equity interests of which) is owned directly or indirectly
\nby such first Person.<\/p>\n<\/p>\n “Successor Covenants<\/u>” shall have the meaning set forth in Section
\n4.04.<\/p>\n<\/p>\n “Tag Along Member<\/u>” shall have the meaning set forth in Section
\n8.06(a)(ii).<\/p>\n<\/p>\n “Tag Along Notice<\/u>” shall have the meaning set forth in Section
\n8.06(a).<\/p>\n<\/p>\n “Tag Along Portion<\/u>” of a Member in a Tag Along Sale shall mean the
\nproduct of:<\/p>\n<\/p>\n\n\n\n| <\/td>\n | \n (a) the aggregate number of Common Membership Interests (on an as-converted
\nbasis) proposed to be sold in a Tag Along Sale pursuant to Section 8.06(a),
\nmultiplied by<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | \n (b) a fraction, the numerator of which is the number of Membership Interests
\nheld by such Tag Along Member (on an as-converted basis), as the case may be,
\nand the denominator of which is the aggregate number of Membership Interests (on
\nan as-converted basis) then held by all Tag Along Members and Selling
\nSignificant Members participating in such Tag Along Sale.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n “Tag Along Sale<\/u>” shall mean a Selling Significant Member proposes to
\ntransfer any Common Membership Interests to any Person that is not a Member at
\nsuch time (other than in connection with a Qualified Distribution).<\/p>\n<\/p>\n “Tax Matters Member<\/u>” shall have the meaning set forth in Section 6.09.\n<\/p>\n<\/p>\n “Third Appraiser<\/u>” shall have the meaning set forth in Section 7.06(b).\n<\/p>\n<\/p>\n “Trading Day<\/u>” shall mean a Business Day on which a Relevant Exchange
\nis scheduled to be open for business and on which there has not occurred a
\nMarket Disruption Event.<\/p>\n<\/p>\n “Transfer<\/u>” shall mean any sale, assignment, transfer or other
\ndisposition, direct or indirect, by operation of law or otherwise.<\/p>\n<\/p>\n “Treasury Regulations<\/u>” shall mean the regulations, including proposed
\nor temporary treasury regulations, promulgated under the Code. References herein
\nto specific provisions of proposed or temporary regulations shall include
\nanalogous provisions of final treasury regulations or other successor treasury
\nregulations.<\/p>\n<\/p>\n 13<\/p>\n \n
\n“Trigger Event<\/u>” shall have the meaning set forth in Section
\n3.05(c)(v).<\/p>\n<\/p>\n “Unfunded Taxes<\/u>” shall have the meaning set forth in Section 7.02(a).\n<\/p>\n<\/p>\n “VWAP<\/u>” per share of a security on any Trading Day shall mean the per
\nshare volume-weighted average price as displayed under the heading Bloomberg
\nVWAP on the Bloomberg page applicable to such security (or, if Bloomberg ceases
\nto publish such price, any successor service reasonably chosen by the Company or
\nthe Issuer, as the case may be) in respect of the period from the open of
\ntrading on the relevant Trading Day until the close of trading on such Trading
\nDay (or, if such volume-weighted average price is unavailable, the market price
\nof one share of such security on such Trading Day determined, using a
\nvolume-weighted average method, by a nationally recognized investment banking
\nfirm (unaffiliated with the Company or the Issuer, as the case may be) retained
\nfor such purpose by the Company or the Issuer, as the case may be).<\/p>\n<\/p>\n SECTION 1.02. Terms and Usage Generally.<\/em><\/u> All references
\nherein to an “Article”, “Section” or “Schedule” shall refer to an Article or a
\nSection of, or a Schedule to, this Agreement. Whenever the words “include”,
\n“includes” or “including” are used in this Agreement, they shall be deemed to be
\nfollowed by the words “without limitation”. The words “hereto”, “hereof”,
\n“herein” and “hereunder” and words of similar import when used in this Agreement
\nshall refer to this Agreement as a whole and not to any particular provision of
\nthis Agreement. All terms defined in this Agreement shall have the defined
\nmeanings when used in any certificate or other document made or delivered
\npursuant hereto unless otherwise defined therein. The definitions contained in
\nthis Agreement are applicable to the singular as well as the plural forms of
\nsuch terms and to the masculine as well as to the feminine and neuter genders of
\nsuch terms. Any agreement, instrument or statute defined or referred to herein
\nor in any agreement or instrument that is referred to herein shall mean such
\nagreement, instrument or statute as from time to time amended, modified or
\nsupplemented, including (in the case of agreements or instruments) by waiver or
\nconsent in writing and (in the case of statutes) by succession of comparable
\nsuccessor statutes and references to all attachments thereto and instruments
\nincorporated therein. References to a Person are also to its permitted
\nsuccessors and assigns.<\/p>\n<\/p>\n<\/p>\nARTICLE II<\/p>\n \n<\/p>\n Formation and Business of the Company<\/u><\/p>\n \n SECTION 2.01. Admission of New Members; Formation.<\/u> The Company shall
\ncontinue as a Delaware limited liability company. This Agreement amends and
\nrestates the Original LLC Agreement in its entirety. Upon the effectiveness of
\nthis Agreement, the Members shall be those listed on Schedule A hereto. The
\nMembers hereby: (a) approve and ratify the filing of the Certificate of
\nFormation; (b) confirm and agree to their status as Members; and (c) execute
\nthis Agreement for the purpose of establishing the rights, duties and
\nrelationship of the Members.<\/p>\n<\/p>\n 14<\/p>\n \n
\nSECTION 2.02. Company Name.<\/u> The name of the Company is “[NEWCO], LLC”.\n<\/p>\n<\/p>\n SECTION 2.03. Purpose and Powers.<\/u> The Company has been formed for the
\nobject and purpose of, and the nature of the business to be conducted by the
\nCompany is, engaging in any act or activity for which limited liability
\ncompanies may be formed under the Delaware Act. The Company shall have the power
\nand authority to take any and all actions necessary, appropriate, proper,
\nadvisable, incidental or convenient to or for the furtherance of the purposes
\nset forth in this Section 2.03.<\/p>\n<\/p>\n SECTION 2.04. Registered Agent and Office.<\/u> The registered agent for
\nservice of process is, and the mailing address for the registered office of the
\nCompany in the State of Delaware is in care of, [ 143]. Such agent and such office
\nmay be changed from time to time by the Board of Managers.<\/p>\n<\/p>\n SECTION 2.05. Principal Place of Business.<\/u> The principal place of
\nbusiness of the Company shall be located at [ 143], or such other address as the
\nBoard of Managers shall specify from time to time.<\/p>\n<\/p>\n<\/p>\n SECTION 2.06. Authorized Persons.<\/u> Each officer of the Company (and any
\nagent as may from time to time be designated by any officer of the Company for
\nsuch purpose) is hereby designated as an authorized person, within the meaning
\nof the Act, to act individually or collectively, solely in connection with
\nexecuting, delivering and causing to be filed, if and when approved by the Board
\nof Managers, any amendments to, and\/or restatements of, the Certificate of
\nFormation adopted in accordance with the terms of this Agreement and, if and
\nwhen approved by the Board of Managers, any other certificates (and any
\namendments and\/or restatements thereof) permitted or required to be filed with
\nthe Secretary of State or that are necessary for the Company to qualify to do
\nbusiness in any jurisdiction in which the Company may wish to conduct business.\n<\/p>\n<\/p>\n SECTION 2.07. Term.<\/u> The term of the Company commenced on [ 143], 2012,
\nwith the filing of the Certificate of Formation in the office of the Secretary
\nof State of the State of Delaware, and shall continue perpetually unless the
\nCompany is dissolved pursuant to Section 9.02.<\/p>\n<\/p>\n SECTION 2.08. Books and Records.<\/u> At all times during the continuance
\nof the Company, the Company shall maintain or cause to be maintained proper and
\ncomplete books and records in which shall be entered fully and accurately all
\ntransactions and other matters relating to the Company153s business in the detail
\nand completeness customary and usual for businesses of the type engaged in by
\nthe Company.<\/p>\n<\/p>\n<\/p>\n ARTICLE III<\/p>\n \n<\/p>\n Members<\/u><\/p>\n \n SECTION 3.01. Members.<\/u> (a) Upon the execution of this Agreement, the
\nsole Members of the Company shall be the Initial Member and Morrison.<\/p>\n<\/p>\n 15<\/p>\n \n
\n(b) After the date of this Agreement, a Person shall only be admitted as a
\nMember (such Person, an “Additional Member<\/u>“) if such Person is (i) a
\npermitted transferee of a Membership Interest in accordance with Article VIII or
\n(ii) issued Membership Interests in accordance with Section 5.02.<\/p>\n<\/p>\n (c) The name and mailing address of each Member and the number of Membership
\nInterests in such class of Membership Interests held by such Member shall be
\nlisted on Schedule A. An officer designated by the Board of Managers pursuant to
\nSection 4.02 shall update Schedule A from time to time as necessary to
\naccurately reflect changes in the Membership Interest of any Member to reflect
\nthe consummation of any action taken in accordance with this Agreement. Any
\namendment or revision to Schedule A made to reflect an action taken in
\naccordance with this Agreement shall not be deemed an amendment to this
\nAgreement. Any reference in this Agreement to Schedule A shall be deemed to be a
\nreference to Schedule A as amended and in effect from time to time. The Company
\nshall provide the Members with any amendment or revision of Schedule A
\n(including any subsequent amendments or revisions thereto) within three days of
\nsuch amendment or revision.<\/p>\n<\/p>\n SECTION 3.02. Powers of Members.<\/u> Members shall not have the authority
\nto transact any business in the Company153s name or bind the Company by virtue of
\ntheir status as Members. Members shall have those rights and powers granted to
\nMembers pursuant to this Agreement.<\/p>\n<\/p>\n SECTION 3.03. Membership Interests.<\/u> (a) The Membership Interests shall
\nfor all purposes be personal property in accordance with Section 18-701 of the
\nDelaware Act. No holder of a Membership Interest or Member shall have any
\ninterest in specific Company assets, including any assets contributed to the
\nCompany by such Member as part of any capital contribution. Each Member waives
\nany and all rights that it may have to maintain an action for partition of the
\nCompany153s property.<\/p>\n<\/p>\n (b) The total number of Membership Interests that the Company shall have the
\nauthority to issue is unlimited. Subject to the limitations set forth in this
\nAgreement (including Sections 4.03 and 5.03), the Company may issue Common
\nMembership Interests, Series A Preferred Membership Interests and any other
\nMembership Interests (of existing classes or new classes) or Options or
\nConvertible Securities with respect to Membership Interests of the Company
\n(including creating additional classes or series thereof having such powers,
\ndesignations, preferences and rights as may be determined by the Board of
\nManagers) as the Board of Managers may reasonably determine, subject to
\ncompliance with the provisions of this Agreement. Membership Interests may be
\ndivided into partial Membership Interests.<\/p>\n<\/p>\n (c) All Membership Interests shall be evidenced by certificates in accordance
\nwith Section 18-702 of the Delaware Act, substantially in the form of Exhibit B
\nor such other form approved by the Board of Managers.<\/p>\n<\/p>\n SECTION 3.04. Conversion.<\/u> (a) Each holder of Series A Preferred
\nMembership Interests shall have the right, at the option of such holder, to
\nconvert its Series A Preferred Membership Interests at any time and from time to
\ntime, in whole or in part, into a number of Common Membership Interests
\ndetermined by dividing the Liquidation Preference by the Conversion Price,
\ndetermined as hereinafter provided, in effect on the date such Series A
\nPreferred Membership Interests are so converted (such rate of conversion, the
\n“Conversion Rate<\/u>“). The price at which one Common Membership Interest
\nshall be deliverable upon conversion of one Series A Preferred Membership
\nInterest (the “Conversion Price<\/u>“) shall initially be $1,000.00 per Common
\nMembership Interest and the Conversion Rate shall initially be 1.000. Such
\ninitial Conversion Price and Conversion Rate shall be subject to adjustment as
\nprovided in Section 3.05.<\/p>\n<\/p>\n 16<\/p>\n \n
\n(b) Conversion Procedures and Effect of Conversion.<\/u> To convert its
\nSeries A Preferred Membership Interests to Common Membership Interests, a holder
\nof Series A Preferred Membership Interests shall (i) deliver written notice to
\nthe Company, stating that such holder wishes to convert its Series A Preferred
\nMembership Interests into Common Membership Interests and specifying the number
\nof Series A Preferred Membership Interests to be so converted, (ii) surrender to
\nthe Company certificates representing Series A Preferred Membership Interests to
\nbe converted at any time during usual business hours at the Company153s principal
\nplace of businesses or the offices of the Company153s duly appointed agent and
\n(iii) pay any stock transfer, documentary, stamp or similar taxes required to be
\npaid to effect the conversion. The Company shall promptly notify each Member of
\nits receipt of such notice. Promptly after the receipt of such notice, an
\nofficer of the Company will amend Schedule A hereto to reflect the conversion
\nand will deliver a certificate to each Member stating that such conversion has
\nbeen effected, together with an amended copy of Schedule A hereto. Such
\nconversion, to the extent permitted by applicable law, shall be deemed to have
\nbeen effected as of the close of business on the date (the “Conversion
\nDate<\/u>“) on which the requirements of the first sentence of this Section
\n3.04(b) shall have been met by the holder electing to convert its Series A
\nPreferred Membership Interests. Effective immediately prior to the close of
\nbusiness on the Conversion Date applicable to any Series A Preferred Membership
\nInterests as to which such notice has been given, such Series A Preferred
\nMembership Interests shall cease to be outstanding and such holder shall be
\ndeemed to hold the number of Common Membership Interests equal to (x) the number
\nof Series A Preferred Membership Interests immediately prior to the close of
\nbusiness on the Conversion Date that such holder has elected to convert,
\nmultiplied by (y) the Conversion Rate in effect on such Conversion Date. Upon
\nthe conversion of any Series A Preferred Membership Interests into Common
\nMembership Interests, such Common Membership Interests shall be duly authorized,
\nvalidly issued and fully paid and nonassessable. Series A Preferred Membership
\nInterests converted in accordance with this Section 3.04 shall be retired
\npromptly after the acquisition by the Company thereof, and the certificates
\nrepresenting any such Series A Preferred Membership Interests surrendered to the
\nCompany shall be canceled and such Member shall be furnished with certificates
\nin the form attached hereto as Exhibit B reflecting the Common Membership
\nInterests.<\/p>\n<\/p>\n (c) Deemed Issuance of Additional Membership Interests.<\/u> In the event
\nthe Company at any time or from time to time after the date hereof shall issue
\nany Options or Convertible Securities or shall fix a record date for the
\ndetermination of holders of any class or series of securities then entitled to
\nreceive any such Options or Convertible Securities, then the maximum number (as
\nset forth in the instrument relating thereto without regard to any provisions
\ncontained therein designed to protect against dilution) of Common Membership
\nInterests issuable upon the exercise of such Option or, in the case of
\nConvertible Securities and Options therefor, the conversion or exchange of such
\nConvertible Securities, shall be deemed to be Additional Membership Interests
\nissued as of the time of such issue or, if such a record date shall have been
\nfixed, as of the close of business on such record date; provided<\/u> that in
\nany such case in which Additional Membership Interests are deemed to be issued:\n<\/p>\n<\/p>\n 17<\/p>\n \n
\n(i) no further adjustments in the Conversion Price shall be made upon the
\nsubsequent issue of Convertible Securities or Common Membership Interests upon
\nthe exercise of such Options or conversion or exchange of such Convertible
\nSecurities;<\/p>\n<\/p>\n<\/p>\n (ii) if such Options or Convertible Securities by their terms provide, with
\nthe passage of time or otherwise, for any increase or decrease in the
\nconsideration payable to the Company, or decrease or increase in the number of
\nshares of Common Membership Interests issuable, upon the exercise, conversion or
\nexchange thereof, the Conversion Price as adjusted upon the original issue of
\nsuch Options or Convertible Securities (or upon the occurrence of a record date
\nwith respect thereto), and any subsequent adjustments based thereon, shall, upon
\nany such increase or decrease insofar as it affects such Options or the rights
\nof conversion or exchange under such Convertible Securities be further adjusted;
\nprovided<\/u>, <\/em>however<\/u>, that no such adjustment of the
\nConversion Price for the Series A Preferred Membership Interests shall affect
\nCommon Membership Interests previously issued upon conversion of Series A
\nPreferred Membership Interests;<\/p>\n<\/p>\n<\/p>\n(iii) to the extent that such Options or Convertible Securities are not
\nexercised prior to their expiration or shares of Company Common Stock are
\notherwise not delivered pursuant to such Options or Convertible Securities upon
\nthe exercise of such Options or Convertible Securities, the Conversion Rate
\nshall be readjusted to the Conversion Rate that would then be in effect had the
\nadjustments made upon the dividend, distribution or issuance of such Options or
\nConvertible Securities been made on the basis of the delivery of only the number
\nof shares of Company Common Stock actually delivered;<\/p>\n<\/p>\n<\/p>\n (iv) no readjustment pursuant to clause (ii) or (iii) above shall have the
\neffect of increasing the Conversion Price to an amount which exceeds the
\nConversion Price on the date of adjustment upon the original issue of such
\nOptions or Convertible Securities before giving effect to the adjustment for
\nsuch issuance; and<\/p>\n<\/p>\n<\/p>\n (v) in the case of any Options which expire by their terms not more than 30
\ndays after the date of issue thereof, no adjustment of the Conversion Price
\nshall be made until the expiration or exercise of all such Options, whereupon
\nsuch adjustment shall be made under Section 3.05 based on the deemed issuance as
\nprovided in clause (iii) above.<\/p>\n<\/p>\n 18<\/p>\n \n
\nSECTION 3.05. Anti-Dilution Adjustments.<\/u><\/p>\n<\/p>\n (a) Adjustments for Dividends, Distributions, Subdivisions and
\nCombinations of Common Membership Interests<\/u>. The issuance of Common
\nMembership Interests as a dividend or distribution to all or substantially all
\nholders of Common Membership Interests, or a subdivision or combination of
\nCommon Membership Interests or a reclassification of Common Membership Interests
\ninto a greater or lesser number of Common Membership Interests or a similar
\naction, in which event the Conversion Rate will be adjusted (with a
\ncorresponding adjustment to the Conversion Price) based on the following
\nformula:<\/p>\n<\/p>\n<\/p>\n\n\n\n| \n CR1<\/p>\n<\/td>\n | \n =<\/p>\n<\/td>\n | \n CR0 x (OS1 \/ OS0)<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| \n CR0<\/p>\n<\/td>\n | \n =<\/p>\n<\/td>\n | \n the Conversion Rate in effect immediately prior to the close of business on
\n(i) the Record Date for such dividend or distribution, or (ii) the effective
\ndate of such subdivision, combination or reclassification or a similar action\n<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| \n CR1<\/p>\n<\/td>\n | \n =<\/p>\n<\/td>\n | \n the new Conversion Rate in effect immediately after the close of business on
\n(i) the Record Date for such dividend or distribution, or (ii) the effective
\ndate of such subdivision, combination or reclassification or a similar action\n<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| \n OS0<\/p>\n<\/td>\n | \n =<\/p>\n<\/td>\n | \n the number of Common Membership Interests outstanding immediately prior to
\nthe close of business on (i) the Record Date for such dividend or distribution
\nor (ii) the effective date of such subdivision, combination or reclassification
\nor similar action<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| \n OS1<\/p>\n<\/td>\n | \n =<\/p>\n<\/td>\n | \n the number of Common Membership Interests that would be outstanding
\nimmediately after, and as a result of, the completion of such event (including,
\nfor the avoidance of doubt, a number of Common Membership Interests equal to OS0
\nin the event of a dividend or distribution that does not involve the surrender
\nor exchange of Common Membership Interests).<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n Any adjustment made pursuant to this clause (i) shall be effective
\nimmediately prior to the open of business on the Business Day immediately
\nfollowing the Record Date, in the case of a dividend or distribution, or the
\neffective date in the case of a subdivision, combination or reclassification or
\nsimilar action. If any such event is declared but does not occur, the Conversion
\nRate shall be readjusted, effective as of the date the Board of Managers
\nannounces that such event shall not occur, to the Conversion Rate that would
\nthen be in effect if such event had not been declared.<\/p>\n<\/p>\n 19<\/p>\n \n
\n(b) Adjustment for Issuance of Additional Membership Interests<\/u>. (i) In
\nthe event the Company issues, or is deemed to issue pursuant to Section 3.04(c),
\nAdditional Membership Interests at a New Issuance Valuation less than
\n$1,700,000,000, each holder of Series A Preferred Membership Interests may elect
\nby written notice to the Company for the Conversion Price in respect of its
\nSeries A Preferred Membership Interests to be reduced effective as of the date
\nof such issuance to a Conversion Price (calculated to the nearest cent) equal to
\nthe lowest Additional Issuance Price for which such Additional Membership
\nInterests were issued; provided<\/u>, however<\/u>, that if the lowest
\nAdditional Issuance Price for such Additional Membership Interests is less than
\n$705.88 (adjusted for any subdivision, combination or reclassification of, or
\nsimilar action with respect to, Common Membership Interests pursuant to Section
\n3.05(a)) per Additional Membership Interest, then the Conversion Price shall be
\nadjusted to equal $705.88 (adjusted for any subdivision, combination or
\nreclassification of, or similar action with respect to, Common Membership
\nInterests pursuant to Section 3.05(a)).<\/p>\n<\/p>\n<\/p>\n (ii) In the event of an Initial Public Offering that results in an IPO
\nValuation that is less than $1,700,000,000, each holder of Series A Preferred
\nMembership Interests may elect for the Conversion Price to be reduced on the
\ndate of such Initial Public Offering, concurrently with the consummation of the
\nInitial Public Offering, to a Conversion Price (calculated to the nearest cent)
\nequal to the quotient of (A) the IPO valuation of the Issuer, divided by (B) the
\ntotal number of Common Membership Interests outstanding immediately following
\nsuch Initial Public Offering on a fully diluted basis, as if (1) all Series A
\nPreferred Membership Interests had been converted to Common Membership Interests
\nand (2) all other Convertible Securities and Options with respect to Common
\nMembership Interests had been fully exercised or converted immediately prior to
\nsuch Initial Public Offering (and the resulting securities fully converted into
\nCommon Membership Interests, if so convertible), as of such date, and the
\nconsideration paid for such exercise or conversion used by the Company to
\nrepurchase and retire Common Membership Interests immediately prior to such
\nInitial Public Offering; provided<\/u>, however<\/u>, that if the IPO
\nValuation is less than $1,200,000,000, then the Conversion Price shall be
\nadjusted to equal (x) $1,200,000,000 divided by (y) the total number of Common
\nMembership Interests outstanding immediately following such Initial Public
\nOffering on a fully diluted basis, as if (1) all Series A Preferred Membership
\nInterests had been converted to Common Membership Interests and (2) all other
\nConvertible Securities and Options with respect to Common Membership Interests
\nhad been fully exercised or converted immediately prior to such Initial Public
\nOffering (and the resulting securities fully converted into Common Membership
\nInterests, if so convertible), as of such date, and the consideration paid for
\nsuch exercise or conversion used by the Company to repurchase and retire Common
\nMembership Interests immediately prior to such Initial Public Offering.<\/p>\n<\/p>\n<\/p>\n (iii) In the event of a Qualified Distribution of the type described in
\nclause (i) of the definition thereof that results in a Spin-Off\/Split-Off
\nValuation that is less than $1,700,000,000, each holder of Series A Preferred
\nMembership Interests may elect for the Conversion Price to be reduced on the
\ndate of such Qualified Distribution, concurrently with the consummation of such
\nQualified Distribution, to a Conversion Price (calculated to the nearest cent)
\nequal to the quotient of (A) the Spin-Off\/Split-Off Valuation and (B) the total
\nnumber of Common Membership Interests outstanding immediately following such
\nQualified Distribution on a fully diluted basis, as if (1) all Series A
\nPreferred Membership Interests had been converted to Common Membership Interests
\nand (2) all other Convertible Securities and Options with respect to Common
\nMembership Interests had been fully exercised or converted immediately prior to
\nsuch Qualified Distribution (and the resulting securities fully converted into
\nCommon Membership Interests, if so convertible), as of such date, and the
\nconsideration paid for such exercise or conversion used by the Company to
\nrepurchase and retire Common Membership Interests immediately prior to such
\nQualified Distribution; provided<\/u>, however<\/u>, that if the
\nSpin-Off\/Split-Off Valuation is less than $1,200,000,000, the Conversion Price
\nshall equal (x) $1,200,000,000 divided by (y) the total number of Common
\nMembership Interests outstanding immediately following such Qualified
\nDistribution on a fully diluted basis, as if (1) all Series A Preferred
\nMembership Interests had been converted to Common Membership Interests and (2)
\nall other Convertible Securities and Options with respect to Common Membership
\nInterests had been fully exercised or converted immediately prior to such
\nQualified Distribution (and the resulting securities fully converted into Common
\nMembership Interests, if so convertible), as of such date, and the consideration
\npaid for such exercise or conversion used by the Company to repurchase and
\nretire Common Membership Interests immediately prior to such Qualified
\nDistribution.<\/p>\n<\/p>\n 20<\/p>\n \n
\n(iv) In the event of a Qualified Distribution of the type described in clause
\n(ii) of the definition thereof that results in a Retail Sale Valuation that is
\nless than $1,700,000,000, each holder of Series A Preferred Membership Interests
\nmay elect for the Conversion Price to be reduced on the date of such Qualified
\nDistribution, concurrently with the consummation of such Qualified Distribution,
\nto a Conversion Price (calculated to the nearest cent) equal to the quotient of
\n(A) the Retail Sale Valuation and (B) the total number of Common Membership
\nInterests outstanding immediately following such Qualified Distribution on a
\nfully diluted basis, as if (1) all Series A Preferred Membership Interests had
\nbeen converted to Common Membership Interests and (2) all other Convertible
\nSecurities and Options with respect to Common Membership Interests had been
\nfully exercised or converted immediately prior to such Qualified Distribution
\n(and the resulting securities fully converted into Common Membership Interests,
\nif so convertible), as of such date, and the consideration paid for such
\nexercise or conversion used by the Company to repurchase and retire Common
\nMembership Interests immediately prior to such Qualified Distribution;
\nprovided<\/u>, however<\/u>, that if the Retail Sale Valuation is less than
\n$1,200,000,000, the Conversion Price shall equal (x) $1,200,000,000 divided by
\n(y) the total number of Common Membership Interests outstanding immediately
\nfollowing such Qualified Distribution on a fully diluted basis, as if (1) all
\nSeries A Preferred Membership Interests had been converted to Common Membership
\nInterests and (2) all other Convertible Securities and Options with respect to
\nCommon Membership Interests had been fully exercised or converted immediately
\nprior to such Qualified Distribution (and the resulting securities fully
\nconverted into Common Membership Interests, if so convertible), as of such date,
\nand the consideration paid for such exercise or conversion used by the Company
\nto repurchase and retire Common Membership Interests immediately prior to such
\nQualified Distribution.<\/p>\n<\/p>\n<\/p>\n 21<\/p>\n \n
\n(c) Adjustments Following an Initial Public Offering or Qualified
\nDistribution.<\/u> Following the earlier to occur of an Initial Public Offering
\nand a transaction described in clause (i) of the definition of Qualified
\nDistribution, the conversion rate and the conversion price with respect to any
\nPreferred Stock will be subject to adjustment, without duplication, under the
\nfollowing circumstances:<\/p>\n<\/p>\n<\/p>\n (i) the dividend, distribution or other issuance to all or substantially all
\nholders of Company Common Stock of rights (other than a distribution of rights
\nissued pursuant to a stockholders rights plan, to the extent such rights are
\nattached to shares of Company Common Stock (in which event the provisions of
\nSection 3.05(c)(iv) shall apply)), options or warrants entitling them to
\nsubscribe for or purchase shares of Company Common Stock for a period expiring
\n60 days or less from the date of issuance thereof, at less than the Current
\nMarket Price as of the Record Date for such issuance, in which event the
\nconversion rate will be increased (with a corresponding adjustment to the
\nconversion price) based on the following formula:<\/p>\n<\/p>\n<\/p>\n \n\n\n| \n CR1<\/p>\n<\/td>\n | \n =<\/p>\n<\/td>\n | \n CR0 x [(OS0 + X) \/ (OS0 + Y)]<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| \n CR0<\/p>\n<\/td>\n | \n =<\/p>\n<\/td>\n | \n the conversion rate in effect immediately prior to the close of business on
\nthe Record Date for such dividend, distribution or issuance<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| \n CR1<\/p>\n<\/td>\n | \n =<\/p>\n<\/td>\n | \n the new conversion rate in effect immediately following the close of business
\non the Record Date for such dividend, distribution or issuance<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| \n OS0<\/p>\n<\/td>\n | \n =<\/p>\n<\/td>\n | \n the number of shares of Company Common Stock outstanding immediately prior to
\nthe close of business on the Record Date for such dividend, distribution or
\nissuance<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| \n X=<\/p>\n<\/td>\n | <\/td>\n | \n the total number of shares of Company Common Stock issuable pursuant to such
\nrights, options or warrants<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| \n Y=<\/p>\n<\/td>\n | <\/td>\n | \n the number of shares of Company Common Stock equal to the aggregate price
\npayable to exercise rights, options or warrants divided by the Current Market
\nPrice as of the Record Date for such dividend, distribution or issuance<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n For purposes of this clause (i), in determining whether any rights, options
\nor warrants entitle the holders to purchase the Company Common Stock at less
\nthan the Current Market Price as of the Record Date for such dividend,
\ndistribution or issuance, there shall be taken into account any consideration
\nthe Issuer receives for such rights, options or warrants, and any amount payable
\non exercise thereof, with the value of such consideration, if other than cash,
\nto be the Fair Market Value thereof.<\/p>\n<\/p>\n 22<\/p>\n \n
\nAny adjustment made pursuant to this clause (i) shall become effective
\nimmediately prior to the open of business on the Trading Day immediately
\nfollowing the Record Date for such dividend, distribution or issuance. In the
\nevent that such rights, options or warrants are not so issued, the conversion
\nrate shall be readjusted, effective as of the date the board of directors (or
\nequivalent) of the Issuer publicly announces its decision not to issue such
\nrights, options or warrants, to the conversion rate that would then be in effect
\nif such dividend, distribution or issuance had not been declared. To the extent
\nthat such rights, options or warrants are not exercised prior to their
\nexpiration or shares of Company Common Stock are otherwise not delivered
\npursuant to such rights, options or warrants upon the exercise of such rights,
\noptions or warrants, the conversion rate shall be readjusted to the conversion
\nrate that would then be in effect had the adjustments made upon the dividend,
\ndistribution or issuance of such rights, options or warrants been made on the
\nbasis of the delivery of only the number of shares of Company Common Stock
\nactually delivered.<\/p>\n<\/p>\n<\/p>\n (ii) the Issuer or one or more of its Subsidiaries make purchases of Company
\nCommon Stock pursuant to a tender offer or exchange offer (other than an
\nexchange offer that constitutes a Distribution Transaction subject to Section
\n3.05(c)(iii)) by the Issuer or a Subsidiary of the Issuer for all or any portion
\nof the Company Common Stock to the extent that the cash and value of any other
\nconsideration included in the payment per share of Company Common Stock validly
\ntendered or exchanged exceeds the Closing Price of the Company Common Stock on
\nthe Trading Day prior to the last day (the “Expiration Date<\/u>“) on which
\ntenders or exchanges may be made pursuant to such tender or exchange offer (as
\nit may be amended), in which event the conversion rate will be increased based
\n(with a corresponding adjustment to the conversion price) on the following
\nformula:<\/p>\n<\/p>\n<\/p>\n\n\n\n| \n CR1<\/p>\n<\/td>\n | \n =<\/p>\n<\/td>\n | \n CR0 x [(FMV + (SP1 x OS1)] \/ (SP1 x OS0)<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| \n CR0<\/p>\n<\/td>\n | \n =<\/p>\n<\/td>\n | \n the conversion rate in effect immediately prior to the close of business on
\nthe Expiration Date<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| \n CR1<\/p>\n<\/td>\n | \n =<\/p>\n<\/td>\n | \n the new conversion rate in effect immediately after the close of business on
\nthe Expiration Date<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| \n FMV<\/p>\n<\/td>\n | \n =<\/p>\n<\/td>\n | \n the Fair Market Value as of the Expiration Time of the aggregate value of all
\ncash and any other consideration paid or payable for shares validly tendered or
\nexchanged and not withdrawn as of the Expiration Time (“Purchased
\nShares<\/u>“)<\/p>\n<\/td>\n<\/tr>\n\n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| \n OS1<\/p>\n<\/td>\n | \n =<\/p>\n<\/td>\n | \n the number of shares of Company Common Stock outstanding as of the last time
\ntenders or exchanges may be made pursuant to such tender or exchange offer (the
\n“Expiration Time<\/u>“), excluding any Purchased Shares<\/p>\n<\/td>\n<\/tr>\n\n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| \n OS0<\/p>\n<\/td>\n | \n =<\/p>\n<\/td>\n | \n the number of shares of Company Common Stock outstanding immediately before
\nthe Expiration Time, including any Purchased Shares<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| \n SP1<\/p>\n<\/td>\n | \n =<\/p>\n<\/td>\n | \n the arithmetic average of the VWAP of a share of Company Common Stock for
\neach of the 10 consecutive full Trading Days ending on the Trading Day
\nimmediately succeeding the Expiration Date<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n 23<\/p>\n \n
\nAny adjustment made pursuant to this clause (iii) shall become effective
\nimmediately prior to the open of business on the Trading Day immediately
\nfollowing the Expiration Date. In the event that the Issuer or any of its
\nSubsidiaries is obligated to purchase Company Common Stock pursuant to any such
\ntender offer or exchange offer but is permanently prevented by applicable law
\nfrom effecting any such purchases, or all such purchases are rescinded, then the
\nconversion rate shall be readjusted to be the conversion rate that would then be
\nin effect if such tender offer or exchange offer had not been made.<\/p>\n<\/p>\n<\/p>\n (iii) the Issuer shall, by dividend or otherwise, distribute to all or
\nsubstantially all holders of its Company Common Stock (subject to an exception
\nfor cash in lieu of fractional shares) shares of any class of capital stock
\n(other than Company Common Stock to which Section 3.05(a) applies), evidences of
\nits indebtedness, assets, other property or securities or rights, options or
\nwarrants to acquire capital stock or other securities, but excluding (A)
\ndividends or distributions referred to in Section 3.05(a) hereof, (B) rights,
\noptions or warrants referred to in Section 3.05(c)(i) hereof or distributed in
\nconnection with a stockholder rights plan (in which event the provisions of
\nSection 3.05(c)(iv) to the extent applicable shall apply), (C) dividends or
\ndistributions paid exclusively in cash, or (D) Distribution Transactions as to
\nwhich the provision set forth below in this Section 3.05(c)(iii) shall apply
\n(any of such shares of capital stock, indebtedness, assets, property or rights,
\noptions or warrants to acquire Company Common Stock or other securities,
\nhereinafter in this Section 3.05(c)(iii) called the “Distributed
\nProperty<\/u>“), then, in each such case the conversion rate shall be adjusted
\n(with a corresponding adjustment to the conversion price) based on the following
\nformula:<\/p>\n<\/p>\n<\/p>\n\n\n\n| \n CR1<\/p>\n<\/td>\n | \n =<\/p>\n<\/td>\n | \n CR0 x [SP0 \/ (SP0 – FMV)]<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| \n CR0<\/p>\n<\/td>\n | \n =<\/p>\n<\/td>\n | \n the conversion rate in effect immediately prior to the close of business on
\nthe Record Date for such dividend or distribution<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| \n CR1<\/p>\n<\/td>\n | \n =<\/p>\n<\/td>\n | \n the new conversion rate in effect immediately after the close of business on
\nthe Record Date for such dividend or distribution<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| \n SP0<\/p>\n<\/td>\n | \n =<\/p>\n<\/td>\n | \n the Current Market Price of a share of Company Common Stock as of the Record
\nDate for such dividend or distribution<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| \n FMV<\/p>\n<\/td>\n | \n =<\/p>\n<\/td>\n | \n the Fair Market Value of the portion of Distributed Property distributed with
\nrespect to each outstanding share of Company Common Stock on the Record Date for
\nsuch dividend or distribution<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n 24<\/p>\n \n
\nWith respect to an adjustment pursuant to this Section 3.05(c)(iii) in
\nconnection with a Distribution Transaction (which for the avoidance of doubt
\ndoes not include a Qualified Distribution), the conversion rate in effect
\nimmediately prior to the effective date of the Distribution Transaction shall be
\nadjusted (with a corresponding adjustment to the conversion price) based on the
\nfollowing formula:<\/p>\n<\/p>\n<\/p>\n \n\n\n| \n CR1<\/p>\n<\/td>\n | \n =<\/p>\n<\/td>\n | \n CR0 x [(FMV + MP0) \/ MP0]<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| \n CR0<\/p>\n<\/td>\n | \n =<\/p>\n<\/td>\n | \n (x) the Exchange Ratio, multiplied by (y) the conversion rate in effect
\nimmediately prior to the close of business on the effective date of the
\nDistribution Transaction<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| \n CR1<\/p>\n<\/td>\n | \n =<\/p>\n<\/td>\n | \n the new conversion rate in effect immediately after the close of business on
\nthe effective date of the Distribution Transaction<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| \n FMV<\/p>\n<\/td>\n | \n =<\/p>\n<\/td>\n | \n (x) the Distribution Ratio, multiplied by (y) the arithmetic average of the
\nVWAPs of a share of the capital stock or similar equity interest distributed to
\nholders of Company Common Stock on the principal United States securities
\nexchange on which such capital stock or equity interest trades, for each of the
\nten consecutive full Trading Days commencing with, and including, the effective
\ndate of the Distribution Transaction (such arithmetic average, the
\n“Distributed Company VWAP<\/u>“)<\/p>\n<\/td>\n<\/tr>\n\n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| \n MP0<\/p>\n<\/td>\n | \n =<\/p>\n<\/td>\n | \n (x) the Exchange Ratio, multiplied by (y) the arithmetic average of the VWAPs
\nof a share of Company Common Stock for each of the ten consecutive full Trading
\nDays commencing with, and including, the effective date of the Distribution
\nTransaction (such arithmetic average, the “Distributing Company VWAP<\/u>“)\n<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n (iv) If the Issuer has a stockholder rights plan in effect with respect to
\nthe Company Common Stock on the date of conversion of such Preferred Stock to
\nCompany Common Stock, upon conversion of any shares of Preferred Stock to
\nCompany Common Stock, holders of such shares will receive, in addition to the
\nshares of Company Common Stock, the rights under such rights plan relating to
\nsuch Company Common Stock, unless, prior to such date, the rights have (A)
\nbecome exercisable or (B) separated from the shares of Company Common Stock (the
\nfirst of such events to occur being the “Trigger Event<\/u>“), in either of
\nwhich cases the Conversion Rate will be adjusted (with a corresponding
\nadjustment to the Conversion Price), effective automatically at the time of such
\nTrigger Event, as if the Issuer had made a distribution of such rights to all
\nholders of the Company Common Stock as described in Section 3.05(c)(i) (without
\ngiving effect to the 60-day limit on the exercisability of rights, options or
\nwarrants ordinarily subject to such Section 3.05(c)(i)), subject to appropriate
\nreadjustment in the event of the expiration, termination or redemption of such
\nrights prior to the exercise, deemed exercise or exchange thereof.
\nNotwithstanding the foregoing, to the extent any such stockholder rights are
\nexchanged by the Issuer for shares of Company Common Stock, the conversion rate
\nshall be appropriately readjusted (with a corresponding adjustment to the
\nconversion price) as if such stockholder rights had not been issued, but the
\nIssuer had instead issued the shares of Company Common Stock issued upon such
\nexchange as a dividend or distribution of shares of Company Common Stock subject
\nto Section 3.05(a). Notwithstanding the preceding provisions of this paragraph,
\nno adjustment shall be required to be made to the Conversion Rate with respect
\nto any holder of such Preferred Stock which is, or is an “affiliate” or
\n“associate” of, an “acquiring person” under such stockholder rights plan or with
\nrespect to any direct or indirect transferee of such holder who receives such
\nPreferred Stock in such transfer after the time such holder becomes, or its
\naffiliate or associate becomes, an “acquiring person.”<\/p>\n<\/p>\n 25<\/p>\n \n
\nIn the event of a transaction described in clause (ii) of the definition of
\nQualified Distribution is consummated prior to an Initial Public Offering or a
\ntransaction described in clause (i) of the definition of Qualified Distribution,
\ncorresponding adjustments will apply thereafter.<\/p>\n<\/p>\n (d) Effectiveness of Adjustments<\/u>. Any adjustment made pursuant to this
\nSection 3.05 shall be effective immediately prior to the open of business on the
\ndate the event giving rise to the adjustment is to occur (or, in the case of
\nSection 3.05(c), the Record Date for the event giving rise to the adjustment).
\nIf any such event is declared but does not occur, the Conversion Rate and
\nConversion Price (or the conversion rate and the conversion price, as the case
\nmay be) shall be readjusted, effective as of the date the Board of Managers
\nnotifies the Members (or holders of Preferred Stock, as the case may be) that
\nsuch event shall not occur, to the Conversion Rate and Conversion Price (or the
\nconversion rate and the conversion price, as the case may be) that would then be
\nin effect if such event had not been declared.<\/p>\n<\/p>\n (e) Calculation of Adjustments.<\/u> All adjustments to the Conversion Rate
\nand Conversion Price (or the conversion rate and the conversion price, as the
\ncase may be) shall be calculated by the Company or the Issuer, as the case may
\nbe, to the nearest cent. No adjustment to the Conversion Price will be required
\nunless such adjustment would require an increase or decrease of at least
\n1\/10,000th of a Series A Preferred Membership Interest of the Conversion Rate or
\nto Conversion Price (or the conversion rate and the conversion price, as the
\ncase may be); provided<\/u>, however<\/u>, that any such adjustment that is
\nnot required to be made will be carried forward and taken into account in any
\nsubsequent adjustment; provided<\/u>, further<\/u> that any adjustment not
\nmade because of this sentence will be made upon any conversion.<\/p>\n<\/p>\n (f) Successive Adjustments.<\/u> After an adjustment to the Conversion Rate
\nand Conversion Price (or the conversion rate and the conversion price, as the
\ncase may be) under this Section 3.05, any subsequent event requiring an
\nadjustment under this Section 3.05 shall cause an adjustment to each such
\nConversion Rate and Conversion Price (or the conversion rate and the conversion
\nprice, as the case may be) as so adjusted.<\/p>\n<\/p>\n 26<\/p>\n \n
\n(g) Notice of Adjustments.<\/u> Whenever the Conversion Rate and Conversion
\nPrice (or the conversion rate and the conversion price, as the case may be) is
\nto be adjusted as provided under this Section 3.05, the Company or the Issuer,
\nas the case may be, shall as soon as reasonably practicable following the
\noccurrence of an event that requires such adjustment (or if the Company or the
\nIssuer, as the case may be, is not aware of such occurrence, as soon as
\nreasonably practicable after becoming so aware) (i) compute the adjusted
\napplicable Conversion Rate and Conversion Price (or the conversion rate and the
\nconversion price, as the case may be) in accordance with this Section 3.05 and
\n(ii) prepare and provide a written notice to the Members (or holders of
\nPreferred Stock, as the case may be) of the occurrence of such event and a
\nstatement in reasonable detail setting forth the method by which the adjustment
\nto the applicable Conversion Rate and Conversion Price (or the conversion rate
\nand the conversion price, as the case may be) was determined and setting forth
\nthe adjusted applicable Conversion Rate and Conversion Price (or the conversion
\nrate and the conversion price, as the case may be).<\/p>\n<\/p>\n (h) No Fractional Shares.<\/u> No fractional shares of Company Common Stock
\nwill be delivered to a holder upon conversion of such holder153s Preferred Stock.
\nIn lieu of fractional shares of Company Common Stock otherwise issuable, holders
\nof Preferred Stock will be entitled to receive an amount in cash equal to the
\nfraction of a share of Company Common Stock, multiplied by the Closing Price of
\nthe Company Common Stock on the Trading Day immediately preceding the record
\ndate applicable to the conversion of such Preferred Stock. In order to determine
\nwhether the number of shares of Company Common Stock to be delivered to a holder
\nof Preferred Stock upon the conversion of such holder153s shares of Preferred
\nStock will include a fractional share (in lieu of which cash would be paid
\nhereunder), such determination shall be based on the aggregate number of shares
\nof Preferred Stock of such holder that are being converted on any Conversion
\nDate.<\/p>\n<\/p>\n (i) Adjustment for Reorganization Events.<\/u> (i) In the event of:<\/p>\n<\/p>\n<\/p>\n (A) any reclassification, statutory exchange, merger, consolidation or other
\nsimilar business combination of the Company with or into another Person, in each
\ncase, pursuant to which Common Membership Interests (but not Series A Preferred
\nMembership Interests) are changed or converted into, or exchanged for, cash,
\nsecurities or other property of the Company or another Person;<\/p>\n<\/p>\n<\/p>\n (B) any sale, transfer, lease or conveyance to another Person of all or
\nsubstantially all the property and assets of the Company, in each case pursuant
\nto which Common Membership Interests (but not Series A Preferred Membership
\nInterests) are converted into cash, securities or other property; or<\/p>\n<\/p>\n<\/p>\n (C) any statutory exchange of securities of the Company with another Person
\n(other than in connection with a merger, consolidation or other similar business
\ncombination);<\/p>\n<\/p>\n 27<\/p>\n \n
\n(each of which is referred to as a “Reorganization Event<\/u>“) each Series
\nA Preferred Membership Interest outstanding immediately prior to such
\nReorganization Event will, without the consent of the holders thereof (unless
\notherwise required by Section 4.03 or 4.04) and subject to Section 3.05(i)(v),
\nremain outstanding but shall become convertible into, out of funds legally
\navailable therefor, the number, kind and amount of securities, cash and other
\nproperty (the “Exchange Property<\/u>“) (without any interest on such Exchange
\nProperty) that the holder of such Series A Preferred Membership Interests would
\nhave received in such Reorganization Event had such holder converted its Series
\nA Preferred Membership Interests into the applicable number of Common Membership
\nInterests immediately prior to the effective date of the Reorganization Event.\n<\/p>\n<\/p>\n<\/p>\n (ii) Exchange Property Election.<\/u> In the event that the holders of
\nCommon Membership Interests have the opportunity to elect the form of
\nconsideration to be received in such transaction, the Exchange Property that the
\nholders of Series A Preferred Membership Interests shall be entitled to receive
\nshall be determined by the holders of a majority of the outstanding Series A
\nPreferred Membership Interests on or before the earlier of (A) the deadline for
\nelections by holders of Common Membership Interests and (B) two Business Days
\nbefore the anticipated effective date of such Reorganization Event. The number
\nof units of Exchange Property for each Series A Preferred Membership Interest
\nconverted following the effective date of such Reorganization Event shall be
\ndetermined from among the choices made available to the holders of the Common
\nMembership Interests and based on the number of Common Membership Interests into
\nwhich such holder would be entitled to convert its Series A Preferred Membership
\nInterests as of the effective date of the Reorganization Event, determined as if
\nthe references to “number of Common Membership Interests” in this Agreement were
\nto “units of Exchange Property.”<\/p>\n<\/p>\n<\/p>\n (iii) Successive Reorganization Events.<\/u> The above provisions of this
\nSection 3.05(i) shall similarly apply to successive Reorganization Events and
\nthe applicable provisions of this Section 3.05, as the case may be, shall apply
\nto any Common Membership Interests or Company Common Stock, as the case may be,
\nreceived by the holders of the Common Membership Interests in any such
\nReorganization Event.<\/p>\n<\/p>\n<\/p>\n (iv) Reorganization Event Notice.<\/u> The Company (or any successor)
\nshall, no less than 20 Business Days prior to the occurrence of any
\nReorganization Event, provide written notice to the Members of such occurrence
\nof such event and of the kind and amount of the cash, securities or other
\nproperty that constitutes the Exchange Property. Failure to deliver such notice
\nshall not affect the operation of this Section 3.05(i).<\/p>\n<\/p>\n<\/p>\n (v) The Company shall not enter into any agreement for a transaction
\nconstituting a Reorganization Event unless (A) such agreement provides for or
\ndoes not interfere with or prevent (as applicable) conversion of the Series A
\nPreferred Membership Interests into the Exchange Property in a manner that is
\nconsistent with and gives effect to this Section 3.05(i), and (B) to the extent
\nthat the Company is not the surviving corporation in such Reorganization Event
\nor will be dissolved in connection with such Reorganization Event, proper
\nprovision shall be made in the agreements governing such Reorganization Event
\nfor the conversion of the Series A Preferred Membership Interests into stock of
\nthe Person surviving such Reorganization Event or such other continuing entity
\nin such Reorganization Event, or in the case of a Reorganization Event described
\nin Section 3.05(i)(i)(B), an exchange of Series A Preferred Membership Interests
\nfor the stock of the Person to whom the Company153s assets are sold, transferred,
\nleased, conveyed or transferred, with the same rights, power and preferences,
\nincluding as to liquidation and redemption, as the Series A Preferred Membership
\nInterests and subject to the Successor Covenants in accordance with Section
\n4.04.<\/p>\n<\/p>\n 28<\/p>\n \n
\n(vi) Notwithstanding anything in this Agreement to the contrary, this Section
\n3.05(i) shall not apply to any transaction under Section 9.01.<\/p>\n<\/p>\n (j) Section 3.05(b) shall terminate immediately following the earlier to
\noccur of an Initial Public Offering and a Qualified Distribution.<\/p>\n<\/p>\n SECTION 3.06. Voting Rights.<\/u> (a) Subject to Section 4.03, Members
\nshall have voting rights in connection with (i) the designation and removal of
\nManagers in accordance with Section 4.01(b), (ii) the dissolution of the Company
\nin accordance with Section 9.02 and (iii) any amendment of this Agreement in
\naccordance with Section 10.11 and any other matters submitted to a vote of the
\nMembers by the Board of Managers. Holders of a Series A Preferred Membership
\nInterests shall be entitled to vote with the holders of the Common Membership
\nInterests on all matters submitted to a vote of holders of Common Membership
\nInterests (together with any other class of series of Membership Interests then
\nentitled to vote with the Common Membership Interests), as provided below. The
\nMembers shall vote together as a single class on all matters on which they are
\nentitled to vote. Each Member holding Common Membership Interests shall be
\nentitled to one vote for each Common Membership Interest held by such Member
\n(and a partial vote for any partial Common Membership Interest). Each Member
\nholding Series A Preferred Membership Interests shall be entitled to the number
\nof votes equal to the number of Common Membership Interests (and a partial vote
\nfor any partial Common Membership Interests) into which all Series A Preferred
\nMembership Interests held of record by such Member could then be converted
\npursuant to Section 3.04 on the date any vote is taken. The Company shall
\nprovide written notice to all Members of any meeting at which a vote will be
\nheld at least five Business Days prior thereto, which notice shall describe the
\nbusiness to be considered, the actions to be taken and the matters to be voted
\non at the meeting in reasonable detail. At any meeting of the Members, the
\npresence, in person or by proxy, of Members holding a majority of the
\noutstanding Common Membership Interests (on an as-converted basis) shall
\nconstitute a quorum. When a quorum is present, the affirmative vote of a
\nmajority of votes cast shall be the act of the Members. If any business
\nconsidered, action taken or matter voted on was not described in the written
\nnotice provided to all Members of such meeting, within three Business Days of
\nsuch meeting the Company shall provide written notice to the Members describing
\nin reasonable detail such business consideration taken or matter voted on. Any
\naction permitted or required to be taken by the Members may be taken without a
\nmeeting, without prior notice and without a vote if a consent or consents in
\nwriting, setting forth the action so taken, shall be signed by Members holding a
\nmajority of the outstanding Common Membership Interests (on an as-converted
\nbasis). Within three Business Days of taking of action by Members without a
\nmeeting by less than unanimous written consent, the Company shall provide
\nwritten notice of the taking of such action to those Members who have not
\nconsented in writing to the taking of such action, which notice shall describe
\nthe actions taken in reasonable detail.<\/p>\n<\/p>\n 29<\/p>\n \n
\nSECTION 3.07. Liability of Members, Managers, Etc.<\/u> (a) Except to the
\nextent provided in the Delaware Act, none of the Members or any Manager shall
\nhave any personal liability for the debts, obligations or liabilities of the
\nCompany.<\/p>\n<\/p>\n (b) To the fullest extent permitted by applicable law (including Section
\n18-1101 of the Delaware Act), notwithstanding any other provision of this
\nAgreement or otherwise of applicable law, including any in equity or at law, no
\nMember, Manager, officer or employee of the Company (collectively, the
\n“Covered Persons<\/u>“), shall have any fiduciary duty to the Company, the
\nMembers or the Managers (or any other person or entity bound by this Agreement)
\nby reason of this Agreement or in its capacity as a Covered Person, except that
\nthe Members and Managers shall be subject to the implied contractual covenant of
\ngood faith and fair dealing. To the fullest extent permitted by applicable law
\n(including Section 18-1101 of the Delaware Act), no Member or Manager shall be
\nliable, including under any legal or equitable theory of fiduciary duty or other
\ntheory of liability, to the Company, any Member, Manager or any other person or
\nentity bound by this Agreement for any losses, claims, damages or liabilities
\nincurred by reason of any act or omission performed or omitted by such Member in
\nits capacity as a Member or Manager except that (i) a Member or Manager shall be
\nliable for any act or omission that constitutes fraud or a bad faith violation
\nof the implied contractual covenant of good faith and fair dealing and (ii) a
\nMember shall be liable for any breach by such Member of the covenants and
\nexpress obligations set forth in this Agreement. The provisions of this
\nAgreement, to the extent that they restrict or eliminate the duties and
\nliabilities of a Member or Manager otherwise existing at law or in equity, are
\nagreed by the parties hereto to replace such other duties and liabilities of
\nsuch Member or Manager. A Member or Manager shall be fully protected in relying
\nin good faith upon the records of the Company and upon such information,
\nopinions, reports or statements presented to the Company by any Person as to
\nmatters which such Member or Manager reasonably believes are within such
\nPerson153s professional or expert competence.<\/p>\n<\/p>\n (c) (i) Each Person who was or is made a party or is threatened to be made a
\nparty to or is otherwise involved in any action, suit or proceeding, whether
\ncivil, criminal, administrative or investigative, by reason of the fact that he
\nis or was a Member of the Company (hereinafter an “Indemnitee<\/u>“), whether
\nthe basis of such proceeding is alleged action in an official capacity as a
\nMember or in any other capacity while serving as a Member, shall be indemnified
\nand held harmless by the Company if the Indemnitee acted in good faith and in a
\nmanner the Indemnitee reasonably believed to be in or not opposed to the best
\ninterests of the Company, and, with respect to any criminal action or
\nproceeding, had no reasonable cause to believe the Indemnitee153s conduct was
\nunlawful, against all expense, liability and loss (including attorneys153 fees,
\njudgments, fines, ERISA excise taxes or penalties and amounts paid in
\nsettlement) reasonably incurred or suffered by such Indemnitee in connection
\ntherewith; provided<\/u>, however<\/u>, that except as provided in Section
\n3.07(e) with respect to proceedings to enforce rights to indemnification, the
\nCompany shall indemnify any such Indemnitee in connection with a proceeding (or
\npart thereof) initiated by such Indemnitee only if such proceeding (or part
\nthereof) was authorized by the Board of Managers. This Section 3.07(c)(i) shall
\nnot apply to any action by or in the right of the Company. In addition, no
\nMember shall be entitled to be indemnified if any such expense, liability or
\nloss was caused by a breach by such Member of the covenants and express
\nobligations set forth in this Agreement.<\/p>\n<\/p>\n 30<\/p>\n \n
\n(ii) The Company shall indemnify any Indemnitee who was or is a party or is
\nthreatened to be made a party to any threatened, pending or completed action or
\nsuit by or in the right of the Company to procure a judgment in its favor by
\nreason of the fact that the Indemnitee is or was an Indemnitee, against expenses
\n(including attorneys153 fees) actually and reasonably incurred by the Indemnitee
\nin connection with the defense or settlement of such action or suit if the
\nIndemnitee acted in good faith and in a manner the Indemnitee reasonably
\nbelieved to be in or not opposed to the best interests of the Company.<\/p>\n<\/p>\n (d) The right to indemnification conferred in Section 3.07(c) shall include
\nthe right to be paid by the Company the expenses (including attorney153s fees)
\nincurred in defending any such proceeding in advance of its final disposition;
\nprovided<\/u>, however<\/u>, that an advancement of expenses incurred by an
\nIndemnitee shall be made only upon delivery to the Company of an undertaking, by
\nor on behalf of such Indemnitee, to repay all amounts so advanced if it shall
\nultimately be determined by final judicial decision from which there is no
\nfurther right to appeal that such Indemnitee is not entitled to be indemnified
\nfor such expenses under this Section 3.07(d) or otherwise. Such undertaking
\nshall be an unlimited, unsecured general obligation of an Indemnitee, and shall
\nbe accepted without reference to such Indemnitee153s ability to make repayment.
\nThe rights to indemnification and to the advancement of expenses conferred in
\nSection 3.07(c) and this Section 3.07(d) shall be contract rights and such
\nrights shall continue as to an Indemnitee who has ceased to fall within the
\ndefinition of “Indemnitee” and shall inure to the benefit of the Indemnitee153s
\nheirs, executors and administrators. Any repeal or modification of any of the
\nprovisions of this Section 3.07 shall not adversely affect any right or
\nprotection of an Indemnitee existing at the time of such repeal or modification.\n<\/p>\n<\/p>\n (e) If a claim under Section 3.07(c) or 3.07(d) is not paid in full by the
\nCompany within 60 calendar days after a written claim has been received by the
\nCompany, except in the case of a claim for an advancement of expenses, in which
\ncase the applicable period shall be 20 calendar days, the Indemnitee may at any
\ntime thereafter bring suit against the Company to recover the unpaid amount of
\nthe claim. If successful in whole or in part in any such suit, or in a suit
\nbrought by the Company to recover an advancement of expenses pursuant to the
\nterms of an undertaking, the Indemnitee shall also be entitled to be paid the
\nexpenses of prosecuting or defending such suit. In (i) any suit brought by the
\nIndemnitee to enforce a right to indemnification hereunder (but not in a suit
\nbrought by the Indemnitee to enforce a right to an advancement of expenses) it
\nshall be a defense that, and (ii) any suit brought by the Company to recover an
\nadvancement of expenses pursuant to the terms of an undertaking, the Company
\nshall be entitled to recover such expenses upon a final adjudication that, the
\nIndemnitee has not met the applicable standard for indemnification set forth in
\nSections 3.07(c) and 3.07(d). Neither the failure of the Company (including its
\nBoard of Managers, independent legal counsel, or its Members) to have made a
\ndetermination prior to the commencement of such suit that indemnification of the
\nIndemnitee is proper in the circumstances because the Indemnitee has met the
\nstandard of conduct for entitlement to indemnification, nor an actual
\ndetermination by the Company (including its Board of Managers, independent legal
\ncounsel, or its Members) that the Indemnitee has not met the standard of conduct
\nfor entitlement to indemnification, shall create a presumption that the
\nIndemnitee has not met such standard of conduct or, in the case of such a suit
\nbrought by the Indemnitee, be a defense to such suit. In any suit brought by the
\nIndemnitee to enforce a right to indemnification or to an advancement of
\nexpenses hereunder, or brought by the Company to recover an advancement of
\nexpenses pursuant to the terms of an undertaking, the burden of proving that the
\nIndemnitee is not entitled to be indemnified, or to such advancement of
\nexpenses, under this Section 3.07 or otherwise shall be on the Company. The
\ntermination of a proceeding by judgment, order, settlement, conviction, or upon
\na plea of nolo<\/u> contendere<\/u> or its equivalent, shall not of itself
\ncreate a presumption that a Member, Manager or officer acted in such a manner as
\nto make him or her ineligible for indemnification.<\/p>\n<\/p>\n 31<\/p>\n \n
\n(f) The rights to indemnification and to the advancement of expenses
\nconferred in this Section 3.07 shall not be exclusive of any other right which
\nany Person may have or hereafter acquire under any statute, this Agreement, any
\nother agreement, any vote of Managers or otherwise. However, no person shall be
\nentitled to indemnification by the Company by virtue of the fact that such
\nperson is actually indemnified by another entity, including an insurer.<\/p>\n<\/p>\n (g) The Company may maintain insurance, at its expense, to protect itself and
\nany Member, Manager, director, officer, employee or agent of the Company or
\nanother limited liability company, corporation, partnership, joint venture,
\ntrust or other enterprise against any expense, liability or loss, whether or not
\nthe Company would have the power to indemnify such Person against such expense,
\nliability or loss under the Delaware Act.<\/p>\n<\/p>\n (h) The Company shall from time to time enter into indemnification agreements
\nwith Managers and officers in substantially the form attached hereto as Exhibit
\nC.<\/p>\n<\/p>\n (i) The Company may, to the extent authorized from time to time by the Board
\nof Managers, grant rights to indemnification and to the advancement of expenses
\nto any person or entity not mandatorily entitled to indemnification under this
\nSection 3.07 and grant rights to indemnification and to the advancement of
\nexpenses in addition to those granted in this Section 3.07 to any person or
\nentity mandatorily entitled to indemnification under this Section 3.07, in each
\ncase as long as such person or entity has met the standard of conduct set forth
\nin the first sentence of Section 3.07(b).<\/p>\n<\/p>\n 32<\/p>\n \n
\nARTICLE IV<\/p>\n \n<\/p>\n Governance<\/u><\/p>\n \n SECTION 4.01. Board of Managers.<\/u> (a) The Company shall have a board of
\nmanagers (the “Board of Managers<\/u>“). The Members hereby designate the
\nBoard of Managers as the managers (within the meaning of the Delaware Act) of
\nthe Company, with exclusive rights and responsibilities to direct the business
\nof the Company. The Board of Managers shall have the power to do any and all
\nacts necessary or convenient to or for the furtherance of the purposes described
\nherein, including all powers, statutory or otherwise, possessed by managers
\nunder the laws of the State of Delaware.<\/p>\n<\/p>\n (b) The Board of Managers shall be comprised of [ 143] members (each, a
\n“Manager<\/u>“). As of the date of this Agreement, the Managers are [ 143].
\nThereafter, each of the Managers shall be designated and removed at any time by
\nthe holders of Membership Interests (voting or consenting in accordance with
\nSection 3.06(a)). A Manager shall hold office until his or her successor is
\ndesignated or until his or her earlier death, resignation or removal.<\/p>\n<\/p>\n (c) Any Manager may attend a meeting of the Board of Managers in person, by
\ntelephone or any other electronic communication device. At any meeting of the
\nBoard of Managers, the presence, in person or by proxy, of a majority of the
\nManagers shall constitute a quorum. A Manager entitled to vote at any meeting of
\nthe Board of Managers may authorize another Person, including another Manager,
\nto act in place of that Manager by proxy. The Board of Managers may act by
\nwritten consent in lieu of a meeting in accordance with Section 18-404 of the
\nDelaware Act.<\/p>\n<\/p>\n (d) At any meeting of the Board of Managers, any action taken by the Board of
\nManagers shall require the approval of a majority of the Managers present, in
\nperson or by proxy, at such meeting. Each Manager shall be entitled to one vote.\n<\/p>\n<\/p>\n SECTION 4.02. Officers.<\/u> The officers of the Company as of the date of
\nthis Agreement shall continue to act in such capacity. Thereafter, the Board of
\nManagers may from time to time appoint (and subsequently remove) individuals to
\nact on behalf of the Company as “officers” or “agents” of the Company within the
\nmeaning of Section 18-407 of the Delaware Act to conduct the day-to-day
\nmanagement of the Company with such general or specific authority as the Board
\nof Managers may specify.<\/p>\n<\/p>\n SECTION 4.03. Matters Requiring Morrison Consent.<\/u> For so long as
\nMorrison Parties hold in aggregate at least 150,000 Series A Preferred
\nMembership Interests (excluding, for the avoidance of doubt, any Series A
\nPreferred Membership Interests previously converted to Common Membership
\nInterests), none of the following actions shall be taken by the Board of
\nManagers, the Company or any Subsidiary of the Company (whether by merger,
\nconsolidation, reorganization or otherwise) without prior Morrison Consent:<\/p>\n<\/p>\n 33<\/p>\n \n
\n(a) declaring, paying or making any Distributions by the Company to Members,
\nother than Distributions to Members expressly contemplated by Section 7.02 of
\nthis Agreement (including any Distribution upon liquidation pursuant to Section
\n9.03);<\/p>\n<\/p>\n (b) the Company, on the one hand, and any Member or Affiliate of a Member or
\na Permitted Holder, on the other hand, entering into any material agreement or
\nother material transaction except (i) as contemplated in connection with the
\nCompany Formation Transactions (including ongoing commercial relationships (so
\nlong as in compliance with the Separation Principles (as defined in the
\nInvestment Agreement)), (ii) for Distributions by the Company to Members in
\naccordance with this Agreement, (iii) for issuances of Equity Securities by the
\nCompany in accordance with this Agreement, (iv) subject to the rights of holders
\nof Series A Preferred Membership Interests under Section 5.03, for any
\ninvestment in Common Membership Interests of the Company by Barnes&Noble (or
\nany of its Affiliates, officers, directors or any Permitted Holder) at a New
\nIssuance Valuation not less than the greater of (A) $1,500,000,000 and (B) the
\nhighest New Issuance Valuation in respect of an issuance of Additional
\nMembership Interests issued to any third-party purchaser (other than a Morrison
\nParty), (v) any Equity Incentive Reimbursement Issuances, (vi) for trade
\nreceivables and payables arising out of the transactions described in clause (i)
\nhereof and (vii) compensation arrangements (including equity incentive
\ncompensation) with officers and employees of the Company and its Subsidiaries;
\nprovided<\/u> that Morrison Consent with respect to matters described in this
\nSection 4.03(b) which are entered into in the ordinary course of the business of
\nthe Company (other than equity issuances described in clause (iv) hereof) shall
\nnot be unreasonably withheld, conditioned or delayed and that such Morrison
\nConsent shall be deemed given if Morrison Parties entitled to give such Morrison
\nConsent have not responded to a request for such consent by the close of
\nbusiness on the 10th Business Day following the date of such request.<\/p>\n<\/p>\n (c) any amendment to, or waiver of, any provision of this Agreement or the
\norganizational documents of the Company153s Subsidiaries, or, subject to Section
\n9.01, any change of legal form of the Company, if such amendment, waiver or
\nchange would adversely affect the rights or preferences of, or the restrictions
\nprovided for the benefit of, Members holding the Series A Preferred Membership
\nInterests (excluding any amendment to the extent necessary to effect the
\ncreation or issuance of Equity Interests permitted to be issued under this
\nAgreement);<\/p>\n<\/p>\n (d) any voluntary bankruptcy filing, dissolution, liquidation or winding up
\nof the Company or any of its respective direct or indirect Subsidiaries;<\/p>\n<\/p>\n (e) subject to Section 9.01, any authorization, designation or issuance of
\n(i) Senior Equity Interests; or (ii) Parity Equity Interests having a
\nliquidation preference in an amount in excess of $250,000,000 in aggregate;<\/p>\n<\/p>\n (f) the redemption, purchase or acquisition of any (x) equity securities of
\nthe Company or any Subsidiary of the Company which are held by a person other
\nthan a Subsidiary of the Company or (y) any options, warrants or other rights to
\nacquire such securities, other than: (A) redemptions, purchases or other
\nacquisitions of shares of such securities in connection with any employment
\ncontract, benefit plan or other similar arrangement with or for the benefit of
\nemployees, officers, directors or consultants; (B) as a result of an exchange or
\nconversion of any class or series of such securities, for any other class or
\nseries of such securities; (C) the purchase of fractional interests in shares of
\nsuch securities pursuant to the conversion or exchange provisions of such
\nsecurity or the security being converted or exchanged; or (D) distributions of
\nsuch securities or rights to purchase such securities (subject to the other
\nrestrictions set forth in this Agreement);<\/p>\n<\/p>\n 34<\/p>\n \n
\n(g) the incurrence by the Company or any of its Subsidiaries of indebtedness
\nfor borrowed money, other than (i) trade debt incurred in the ordinary course of
\nbusiness, (ii) indebtedness incurred under a revolving credit facility in the
\nordinary course of business to fund working capital and (iii) other indebtedness
\nfor borrowed money in an outstanding principal amount not in excess of
\n$1,000,000,000; provided<\/u> that the Company may incur indebtedness for
\nborrowed money without the prior consent of Morrison Parties entitled to give
\nsuch Morrison Consent if the Company in writing first offered Microsoft
\nCorporation by written notice the opportunity to provide such indebtedness to
\nthe Company and Microsoft Corporation has elected not to provide such
\nindebtedness to the Company or has not responded to such offer by the close of
\nbusiness on the 10th Business Day following the date of such offer; or<\/p>\n<\/p>\n (h) (i) the distribution (by way of dividend, share distribution, exchange,
\nredemption, recapitalization or similar transaction) of securities of any entity
\nholding a significant portion of the assets and business of a Major Division,
\nincluding by way of spin-off, split-off or other distribution transaction; or
\n(ii) the sale, transfer, lease or other disposition of all or substantially all
\nof the assets constituting a Major Division, in each case other than a
\ndistribution, sale, transfer, lease or other disposition that constitutes a
\nChange of Control or is a transaction pursuant to Section 9.01.<\/p>\n<\/p>\n SECTION 4.04. Successor Covenants.<\/u> Upon the occurrence of an event
\ndescribed in Section 9.01 (and, in the case of covenants set forth in Section
\n4.03, so long as Morrison Parties hold in aggregate at least 150,000 shares of
\nPreferred Stock (excluding, for the avoidance of doubt, any Preferred Stock
\nconverted to Company Common Stock)), the covenants set forth in Section 4.03 and
\nthe restrictions on transfer set forth in Section 8.01, 8.02 and 8.04 shall be
\nincluded in any certificate of incorporation (or equivalent governing documents)
\nof an Issuer as terms of Preferred Stock with respect to Morrison Parties and
\neach other as a holder thereof and shall in any event continue to be in effect
\nwith the same terms set forth in Section 4.03 except with such modifications as
\nare necessary for such covenants to apply to the Issuer with the same effect
\nthat such covenants apply to the Company and such restrictions apply to holders
\nof the Series A Preferred Membership Interests (the “Successor
\nCovenants<\/u>“).<\/p>\n<\/p>\n SECTION 4.05. Termination.<\/u> Sections 4.03(a), (b), (d), (f), (g) and
\n(h), or the corresponding provisions of the Successor Covenants, shall terminate
\nimmediately prior to the earlier to occur of an Initial Public Offering and a
\nQualified Distribution.<\/p>\n<\/p>\n SECTION 4.06. Equity Incentive Reimbursement Issuances.<\/u> Any
\nreimbursement by NewCo of the cost of equity compensation of NewCo employees in
\nthe form of Barnes&Noble equity awards shall be required to take the form of
\nEquity Incentive Reimbursement Issuances.<\/p>\n<\/p>\n 35<\/p>\n \n
\nARTICLE V<\/p>\n \n<\/p>\n Capital Contributions; New Issuances; Preemptive Rights<\/u>\n<\/p>\n \n SECTION 5.01. Capital Contributions.<\/u> Pursuant to the Company Formation
\nTransactions, on or prior to the date hereof, the Initial Member will have made
\nan initial Capital Contribution to the Company in exchange for the issuance by
\nthe Company of Membership Interests to the Beckett Member as set forth on
\nSchedule A. Pursuant to the Investment Agreement, on or prior to the date
\nhereof, Morrison will have made a Capital Contribution to the Company in
\nexchange for the issuance by the Company of Membership Interests as set forth on
\nSchedule A.<\/p>\n<\/p>\n SECTION 5.02. New Issuances of Equity Capital.<\/u> Subject to the terms of
\nthis Agreement (including Section 4.03 and 5.03), the Board of Managers may
\ndetermine the form, timing and terms of any new issuance of Membership Interests
\nof the Company to any Person, or any sale or granting of options to purchase
\nMembership Interests of the Company, and will notify the Members of such
\ndecision. Any such Person subscribing to any issuance of Membership Interests or
\nexercising any option to purchase Membership Interests shall be required to
\nbecome a party to this Agreement as a Member, and shall have all the rights and
\nobligations of a Member hereunder, by executing a Joinder Agreement in the form
\nof Exhibit A or in such other form that is satisfactory to the Board of
\nManagers.<\/p>\n<\/p>\n SECTION 5.03. Preemptive Rights.<\/u> (a) At any time after the date hereof
\nthat the Company proposes to issue or sell any Equity Interests to any Person
\n(including any Member) (other than: (i) in connection with any Initial Public
\nOffering or Qualified Distribution, (ii) pursuant to any present or future
\nemployee, officer or director benefit plan or program of or assumed by the
\nCompany or any of its Subsidiaries, (iii) in connection with any merger,
\nconsolidation, acquisition for stock, business combination or any similar
\nextraordinary transaction, (iv) the issuance of Common Membership Interests as a
\ndividend or distribution to all or substantially all holders of Common
\nMembership Interests, or a subdivision or combination of Common Membership
\nInterests or a reclassification of (or similar action with respect to) Common
\nMembership Interests into a greater or lesser number of Common Membership
\nInterests) or (v) Equity Incentive Reimbursement Issuances, each holder of
\nSeries A Preferred Membership Interests at such time shall be afforded the
\nopportunity to acquire from the Company for the same price (net of any
\nunderwriting discounts or sales commissions) and on the same terms as such
\nEquity Interests are proposed to be offered (or, to the extent such Equity
\nInterests are offered for consideration (or the exercise price of which is to be
\npaid in consideration) other than cash, the cash equivalent thereof) an amount
\nof Equity Interests up to the aggregate amount of Equity Interests to be offered
\nor sold (including those to be sold to the holders of Series A Preferred
\nMembership Interests pursuant to this Section 5.03) multiplied by such holder153s
\nPercentage Interest; provided<\/u> that if a holder of Series A Preferred
\nMembership Interests is entitled to and elects to adjust the Conversion Price
\nupon any issuance of Equity Interests pursuant to Section 3.05(b)(i), such
\nholder shall not be entitled to preemptive rights under this Section 5.03 in
\nrespect of such issuance.<\/p>\n<\/p>\n 36<\/p>\n \n
\n(b) In the event the Company proposes to offer or sell Equity Interests that
\nare subject to this Section 5.03, it shall give each holder of Series A
\nPreferred Membership Interests at such time written notice (a “Subscription
\nNotice<\/u>“) of its intention, describing the type of such Equity Interest,
\nprice (or range of prices), anticipated amount of such Equity Interests, timing,
\nand other terms upon which the Company proposes to issue or sell the same, no
\nlater than two Business Days after the Company proposes to pursue such issuance
\nor sale. Each such holder shall have 15 Business Days from the date of receipt
\nof a Subscription Notice to notify the Company in writing (a “Participation
\nNotice<\/u>“) that it intends to exercise its rights provided in this Section
\n5.03 and, the amount of such Equity Interests such holder desires to purchase,
\nup to the maximum amount calculated pursuant to Section 5.03(a). Such
\nSubscription Notice shall constitute a nonbinding indication of interest of the
\nholder of Series A Preferred Membership Interests to purchase the amount of such
\nEquity Interests so specified at the price and other terms set forth in the
\nCompany153s notice to it. The failure of a holder of Series A Preferred Membership
\nInterests to respond within such 15-Business Day period shall be deemed to be a
\nwaiver of such holder153s rights under this Section 5.03 only with respect to the
\noffering described in the applicable Subscription Notice.<\/p>\n<\/p>\n (c) If a holder of Series A Preferred Membership Interests exercises its
\nrights provided in this Section 5.03, the closing of the purchase of the Equity
\nInterests with respect to which such right has been exercised shall take place
\nwithin 90 days after the giving of notice of such exercise, which period of time
\nshall be extended for a maximum of 180 days in order to comply with applicable
\nlaws and regulations (including receipt of any applicable regulatory approvals).
\nThe Company and each holder of Series A Preferred Membership Interests
\nexercising its rights under Section 5.03 will use commercially reasonable
\nefforts to secure any regulatory approvals or other consents, and to comply with
\nany law or regulation necessary in connection with the issuance, sale and
\npurchase of, such Equity Interests.<\/p>\n<\/p>\n (d) In the event that a holder of Series A Preferred Membership Interests
\nfails to exercise its rights provided in this Section 5.03 within such
\n10-Business Day period or, if so exercised, a holder of Series A Preferred
\nMembership Interests is unable to consummate such purchase within the time
\nperiod specified in Section 5.03(c) because of such holder153s failure to obtain
\nany required regulatory consent or approval, the Company shall thereafter be
\nentitled (during the period of 90 days following the conclusion of the
\napplicable period) to sell or enter into an agreement (pursuant to which the
\nsale of the Equity Interests covered thereby shall be consummated, if at all,
\nwithin 90 days from the date of said agreement) to sell the Equity Interests not
\nelected to be purchased pursuant to this Section 5.03 by such holder or which
\nsuch holder is unable to purchase because of such failure to obtain any such
\nconsent or approval, at a price no less than that offered to the holders of
\nSeries A Preferred Membership Interests, and otherwise upon terms no more
\nfavorable to the purchasers of such securities than were specified in the
\nCompany153s Subscription Notice to the holders of Series A Preferred Membership
\nInterests. Notwithstanding the foregoing, if such sale is subject to the receipt
\nof any regulatory approval or consent or the expiration of any waiting period,
\nthe time period during which such sale may be consummated shall be extended
\nuntil the expiration of 10 Business Days after all such approvals or consents
\nhave been obtained or waiting periods expired, but in no event shall such time
\nperiod exceed 270 days from the date of the applicable agreement with respect to
\nsuch sale. In the event the Company has not sold the Equity Interests or entered
\ninto an agreement to sell the Equity Interests within such 90-day period (or
\nsold and issued Equity Interests in accordance with the foregoing within 90 days
\nfrom the date of such agreement (as such period may be extended in the manner
\ndescribed above for a period not to exceed 270 days from the date of such
\nagreement), the Company shall not thereafter offer, issue or sell such Equity
\nInterests without first offering such securities to holders of Series A
\nPreferred Membership Interests in the manner provided in this Section 5.03.<\/p>\n<\/p>\n 37<\/p>\n \n
\n(e) In the case of the issuance or sale of Equity Interests that are subject
\nto this Section 5.03 for a consideration in whole or in part other than cash,
\nincluding securities acquired in exchange therefor (other than securities by
\ntheir terms so exchangeable), the consideration other than cash shall be deemed
\nto be the fair value thereof as determined in good faith by the Board of
\nManagers; provided<\/u>, however<\/u>, that such fair value as determined by
\nthe Board of Managers shall not exceed the aggregate market price of the
\nsecurities being offered as of the date the Board authorizes the offering of
\nsuch securities.<\/p>\n<\/p>\n (f) This Section 5.03 shall terminate immediately prior to, and shall not
\napply to, the earlier to occur of an Initial Public Offering and a Qualified
\nDistribution.<\/p>\n<\/p>\n<\/p>\n ARTICLE VI<\/p>\n \n<\/p>\n Capital Accounts; Allocations of Profit and Loss; Tax
\nMatters<\/u><\/p>\n \n SECTION 6.01. Initial Capital Accounts.<\/u> (a) The Company shall
\nestablish a capital account (a “Capital Account<\/u>“) for each Member, which
\nshall be maintained and adjusted as provided in this Article VI. Each Member153s
\ninitial Capital Account is set forth on Schedule B.<\/p>\n<\/p>\n (b) Adjustments to Capital Accounts.<\/u> The initial Capital Account of a
\nMember shall be (i) increased by the amount of (A) cash and the fair market
\nvalue of any property contributed to the Company by such Member (net of
\nliabilities secured by such contributed property that the Company is considered
\nto assume or take subject to) and (B) any Net Income allocated to such Member
\nunder Section 6.02 and any other items of income and gain allocated to such
\nMember under Section 6.02; and (ii) decreased by the amount of (A) cash and the
\nfair market value of any property distributed by the Company to such Member (net
\nof liabilities secured by such distributed property that such Member is
\nconsidered to assume or take subject to) and (B) any Net Loss allocated to such
\nMember under Section 6.02 and any other items of deduction or loss allocated to
\nsuch Member under Section 6.02.<\/p>\n<\/p>\n (c) Revaluations.<\/u> Upon the occurrence of any event specified in
\nSection 1.704-1(b)(2)(iv)(f<\/em>) of the Treasury Regulations, the Tax
\nMatters Member shall cause the Capital Accounts to be adjusted in accordance
\nwith that Section of the Treasury Regulations to reflect the fair market value
\nof the Company153s assets at the time of such occurrence.<\/p>\n<\/p>\n38<\/p>\n \n
\n(d) Transfers of Interests.<\/u> If any Membership Interest is Transferred,
\nthe transferee shall succeed to the portion of the transferor153s Capital Account
\nattributable to that Membership Interest.<\/p>\n<\/p>\n (e) General 704(b) Authority.<\/u> The foregoing provisions and the other
\nprovisions of this Agreement relating to the maintenance of Capital Accounts are
\nintended to comply with the Treasury Regulations under Section 704(b) of the
\nCode and shall be interpreted and applied in a manner consistent with those
\nTreasury Regulations. The Company, after consultation with the Tax Matters
\nMember, is authorized to make reasonable adjustments in the allocation of the
\nincome, gain, loss, deduction and credit of the Company to the minimum extent
\nnecessary to comply with Section 704(b) of the Code (including any adjustments
\nto any item thereof required as a result of (i) any amendment to the Code or the
\nTreasury Regulations or (ii) the adjustment of any tax item by the Service);
\nprovided<\/u>, however<\/u>, that no such adjustment shall be made if it
\nwould materially change the economic rights and obligations of the Members
\notherwise set forth in this Agreement.<\/p>\n<\/p>\n SECTION 6.02. Allocations of Book Income and Loss.<\/u> (a) Calculation
\nof Net Income and Net Loss.<\/u> (i) General.<\/em> “Net Income<\/u>” or
\n“Net Loss<\/u>“, as appropriate, shall equal, for any taxable period, the
\ntaxable income or tax loss of the Company for such period for U.S. Federal
\nincome tax purposes, as determined by taking into account any separately stated
\nitems, increased by the amount of any tax-exempt income of the Company during
\nsuch period and decreased by the amount of any expenditures described in Section
\n705(a)(2)(B) of the Code (taking into account Section
\n1.704-1(b)(2)(iv)(i<\/em>) of the Treasury Regulations) of the Company during
\nsuch period; provided<\/u>, however<\/u>, that Net Income or Net Loss shall
\nbe computed excluding any item of income, gain, loss or deduction allocated
\npursuant to Section 6.02(c) or (d).<\/p>\n<\/p>\n(ii) Contributed Property.<\/em> With respect to any property contributed
\nby a Member to the Company at a time when the property153s adjusted tax basis
\ndiffers from its fair market value, and with respect to all property of the
\nCompany after any adjustment to the Capital Accounts pursuant to Section
\n6.01(c), Net Income or Net Loss (and the constituent items of income, gain, loss
\nand deduction) shall be computed in accordance with the principles of Section
\n1.704-1(b)(2)(iv)(g<\/em>) of the Treasury Regulations and the “traditional
\nmethod” of Section 1.704-3(b) of the Treasury Regulations.<\/p>\n<\/p>\n(iii) Distributed Property.<\/em> With respect to any property distributed
\nby the Company to a Member at a time when the property153s adjusted book basis
\ndiffers from its fair market value, Net Income or Net Loss (and the constituent
\nitems of income, gain, loss and deduction) shall be computed in accordance with
\nthe principles of Section 1.704-1(b)(2)(iv)(e<\/em>) of the Treasury
\nRegulations.<\/p>\n<\/p>\n39<\/p>\n \n
\n(b) General Allocations.<\/u> (i) Allocations of Net Income. <\/em>Net
\nIncome for any taxable period shall be allocated in the following order and
\namounts:<\/p>\n<\/p>\n<\/p>\n(A) First<\/u>, if any Net Loss shall have been previously allocated to
\nMembers pursuant to Section 6.02(b)(ii)(E), to such Members in an amount equal
\nto, and in proportion to, such Net Losses not previously taken into account
\nunder this paragraph (A);<\/p>\n<\/p>\n<\/p>\n (B) Second<\/u>, if any Net Loss shall have been previously allocated to
\nMembers pursuant to Section 6.02(b)(ii)(D), to such Members in an amount equal
\nto, and in proportion to, such Net Losses not previously taken into account
\nunder this paragraph (B);<\/p>\n<\/p>\n<\/p>\n (C) Third<\/u>, if any Net Loss shall have been previously allocated to
\nMembers holding Series A Preferred Membership Interests pursuant to Section
\n6.02(b)(ii)(C), to such Members in an amount equal to, and in proportion to,
\nsuch Net Losses not previously taken into account under this paragraph (C);<\/p>\n<\/p>\n<\/p>\n (D) Fourth<\/u>, if any Net Loss shall have been previously allocated to
\nMembers holding Common Membership Interests pursuant to Section 6.02(b)(ii)(B),
\nto such Members in an amount equal to, and in proportion to, such Net Losses not
\npreviously taken into account under this paragraph (D);<\/p>\n<\/p>\n<\/p>\n (E) Fifth<\/u>, to the Members in proportion to their Percentage Interests.\n<\/p>\n<\/p>\n<\/p>\n (ii) Allocations of Net Loss. <\/em>Net Loss for any taxable period shall
\nbe allocated in the following order and amounts:<\/p>\n<\/p>\n<\/p>\n(A) First<\/u>, if any Net Income shall have been previously allocated to
\nMembers under Section 6.02(b)(i)(E), to such Members in an amount equal to, and
\nin proportion to, such Net Income not previously taken into account under this
\nparagraph (A);<\/p>\n<\/p>\n<\/p>\n (B) Second<\/u>, to the Members holding the Common Membership Interests, in
\nproportion to their respective Percentage Interests; provided<\/u>,
\nhowever<\/u>, that Net Loss shall not be allocated to any Member under this
\nparagraph (B) to the extent such allocation would cause (or increase) an
\nAdjusted Capital Account Deficit for such Member, and any Net Loss not allocated
\nto any such Member by operation of this proviso shall be allocated to the other
\nMembers holding Common Membership Interests, in proportion to their respective
\nPercentage Interests and consistent with the principles of this paragraph (B)
\nuntil the Adjusted Capital Account Balance of each Member holding Common
\nMembership Interests equals zero;<\/p>\n<\/p>\n<\/p>\n (C) Third<\/u>, to the Members holding Series A Preferred Membership
\nInterests, in proportion to their respective Percentage Interests;
\nprovided<\/u>, however<\/u>, that Net Loss shall not be allocated to any
\nMember under this paragraph (C) to the extent such allocation would cause (or
\nincrease) an Adjusted Capital Account Deficit for such member, and any Net Loss
\nnot allocated to any such Member by operation of this proviso shall be allocated
\nto the other Members holding Series A Preferred Membership Interests, in
\nproportion to their respective Percentage Interests and consistent with the
\nprinciples of this paragraph (C) until the Adjusted Capital Account Balance of
\neach Member holding Series A Preferred Membership Interests equals zero;<\/p>\n<\/p>\n 40<\/p>\n \n
\n(D) Fourth<\/u>, to the Members to the extent, and in the proportion that,
\nsuch Members bear the economic risk of loss for any liabilities of the Company
\nwithin the meaning of the Treasury Regulations promulgated under Section 752 of
\nthe Code, excluding liabilities described in Section 1.752-2(c) of the Treasury
\nRegulations; and<\/p>\n<\/p>\n<\/p>\n (E) Fifth<\/u>, to the Members in proportion to their Percentage Interests.\n<\/p>\n<\/p>\n (c) Regulatory Allocations.<\/u> Notwithstanding anything to the contrary
\nin Section 6.02(b), the Company shall make allocations of items of income, gain,
\nloss or deduction of the Company as set forth in paragraphs (i), (ii) and (iii)
\nof this Section 6.02(c) (the “Regulatory Allocations<\/u>“).<\/p>\n<\/p>\n (i) Minimum Gain Chargeback<\/em>. Items of income and gain shall be
\nallocated among the Members at such times and in such amounts as necessary to
\nsatisfy the minimum gain chargeback requirements of Sections 1.704-2(f) and
\n1.704-2(i)(4) of the Treasury Regulations.<\/p>\n<\/p>\n(ii) Allocation of Deductions Attributable to Member Nonrecourse
\nLiabilities<\/em>. Any nonrecourse deductions attributable to a Member
\nNonrecourse Liability shall be allocated among the Members that bear the
\neconomic risk of loss for that liability in accordance with the ratios in which
\nsuch Members share such economic risk of loss and in a manner consistent with
\nthe requirements of Sections 1.704-2(c), 1.704-2(i)(2) and 1.704-2(j)(1) of the
\nTreasury Regulations.<\/p>\n<\/p>\n(iii) Qualified Income Offset.<\/em> The Company shall specially allocate
\nitems of income and gain when and to the extent required to satisfy the
\n“qualified income offset” requirement Section 1.704-1(b)(2)(ii)(d<\/em>) of
\nthe Treasury Regulations.<\/p>\n<\/p>\n(iv) Offsetting Allocations.<\/em> If a Regulatory Allocation is made to a
\nMember, to the extent possible, such Member shall be allocated items of income,
\ngain, loss and deduction of the Company so that the Regulatory Allocations,
\ntaken together with such other allocations, shall have the same effect on such
\nMember as if the Regulatory Allocations had not been made. In exercising its
\ndiscretion to allocate items under this Section 6.02(c)(iv), the Company shall
\ntake into account future Regulatory Allocations under Section 6.02(c)(i) that,
\nalthough not yet made, are likely to offset other Regulatory Allocations
\npreviously made under Section 6.02(c)(ii).<\/p>\n<\/p>\n(d) Additional Allocations<\/u>.<\/em> (i) Notwithstanding anything to
\nthe contrary in this Agreement, Net Loss (or, if necessary, individual items of
\ndeduction or loss) shall be allocated to Morrison, or in the case when Morrison
\nhas Transferred its interests to a Morrison Party pursuant to Section 8.04, to
\nsuch Morrison Party, in an amount equal to the aggregate operational cost
\nexpenses paid by Morrison (or any of its Affiliates) to the Company pursuant to
\nSection 7.4 of the Commercial Agreement. In addition, the operational cost
\nexpenses paid by Morrison (or any of its Affiliates) to the Company pursuant to
\nSection 7.4 of the Commercial Agreement shall be treated as contributions to the
\nCompany by Morrison, or in the case when Morrison has Transferred its interests
\nto a Morrison Party pursuant to Section 8.04, by such Morrison Party, for
\npurposes of Section 6.01(b)(i)(A).<\/p>\n<\/p>\n41<\/p>\n \n
\n(ii) Except as provided in Section 6.02(c), and notwithstanding Section
\n6.02(b), for the taxable period in which a liquidation of the Company occurs,
\nall items of income, gain, deduction or loss of the Company for such taxable
\nperiod shall be allocated such that the balance in each Member153s Capital Account
\nas of the date of liquidation equals, as nearly as possible, the amount to be
\ndistributed to that Member pursuant to Section 7.03.<\/p>\n<\/p>\n (iii) Except as provided in Section 6.02(c), and notwithstanding Section
\n6.02(b), in the case of a Change of Control Sale, all items of income, gain,
\ndeduction or loss of the Company shall be allocated such that the balance of the
\nselling Member153s Capital Account as of the date of the Change of Control Sale
\nequals, as nearly as possible, the Change of Control Payment. In the case of a
\nPartial Sale, the selling Member153s Capital Account shall be bifurcated based on
\nthe percentage of the selling Member153s Interests sold in the Partial Sale, and
\nall items of income, gain, deduction or loss of the Company shall be allocated
\nsuch that such percentage of the selling Member153s Capital Account equals, as
\nnearly as possible, the Change of Control Payment. In addition, the Change of
\nControl Payment received by a selling Member in a Partial Sale shall be treated
\nas a distribution for purposes of Section 6.01(b)(ii)(A).<\/p>\n<\/p>\n SECTION 6.03. Allocations of Taxable Income and Loss.<\/u> The Company153s
\nordinary income and losses, capital gains and losses, and other tax items as
\ndetermined for U.S. Federal income tax purposes (and each item of income, gain,
\ndeduction and loss entering into the computation thereof) shall be allocated
\namong the Members in the same proportions as the corresponding “book” items are
\nallocated under Section 6.02. Notwithstanding the foregoing sentence, U.S.
\nFederal income tax items relating to any property contributed or deemed
\ncontributed (including in connection with a revaluation under Section 6.01(c))
\nby a Member to the Company shall be allocated among the Members in accordance
\nwith Section 704(c) of the Code and the “traditional method” of Section
\n1.704-3(b) of the Treasury Regulations, as applicable, to take into account any
\ndifference between the fair market value and the tax basis of such property as
\nof the date of such contribution (or deemed contribution). Items described in
\nthis Section 6.03 shall neither be credited nor charged to Capital Accounts.<\/p>\n<\/p>\n SECTION 6.04. Excess Nonrecourse Liabilities.<\/em><\/u> The “excess
\nnonrecourse liabilities” (as defined in Section 1.752-3(a)(3) of the Treasury
\nRegulations) of the Company shall be allocated among the Members in proportion
\nto their Percentage Interests.<\/p>\n<\/p>\n42<\/p>\n \n
\nSECTION 6.05. Allocations in Respect of Transferred Membership
\nInterests.<\/u> If any Membership Interests are Transferred during a taxable
\nperiod, the tax items attributable to those Membership Interests for that year
\nshall be allocated between the transferor and transferee based upon the number
\nof days each such Person holds those Membership Interests during the period or
\nin any other manner that is permitted under Section 706 of the Code, agreed by
\nthe transferor and transferee, and approved by the Tax Matters Member.<\/p>\n<\/p>\n SECTION 6.06. Elections.<\/u> Except as otherwise expressly provided herein
\n(including Section 6.10), all elections required or permitted to be made by the
\nCompany under applicable tax law, and all decisions with respect to the
\ncalculation of its income or loss under applicable tax law, shall be made in
\nsuch manner as may be determined by the Tax Matters Member; provided<\/u>
\nthat (i) the Company shall make the election described in Section 754 of the
\nCode at the request of any Member and (ii) subject to the final sentence of
\nSection 6.10, the Company shall not make any other tax election that would be
\nmaterially adverse to Morrison without prior Morrison Consent, which consent
\nshall not be unreasonably withheld, conditioned or delayed.<\/p>\n<\/p>\n SECTION 6.07. Fiscal Year.<\/u> The fiscal year of the Company for
\naccounting purposes shall be each year ending on the Saturday closest to the
\nlast day of April. The taxable year of the Company shall be the taxable year of
\nthe Beckett Member.<\/p>\n<\/p>\n SECTION 6.08. Withholding.<\/u> Notwithstanding anything contrary herein,
\nthe Company and the Tax Matters Member are authorized to take any and all
\nactions that they determine to be necessary or appropriate to ensure that the
\nCompany satisfies any and all withholding and tax payment obligations under
\napplicable law. Without limiting the generality of the foregoing, the Tax
\nMatters Member may cause the Company to withhold any amount that it determines
\nis required to be withheld or paid from any amounts otherwise distributable to
\nany Member hereunder and any such withheld amount shall be deemed to have been
\ndistributed to such Member for purposes of this Agreement. In the event that the
\nTax Matters Member causes the Company to withhold or pay tax in respect of any
\nMember for any period in excess of the amount otherwise distributable to such
\nMember for such period, such excess shall be treated as a recourse loan to such
\nMember that shall bear interest at a variable rate equal to the Prime Rate and
\nshall be payable by such Member to the Company on demand.<\/p>\n<\/p>\n SECTION 6.09. Tax Matters Member.<\/u> With respect to any taxable period,
\nBarnes&Noble shall act as the “tax matters partner” (the “Tax Matters
\nMember<\/u>“) of the Company within the meaning of Section 6231(a)(7) of the Code
\nand in any similar capacity under applicable state, local or foreign tax law.
\nAll reasonable out-of-pocket expenses incurred by the Tax Matters Member while
\nacting in such capacity shall be paid or reimbursed by the Company.
\nBarnes&Noble may resign as the Tax Matters Member, in which case it shall be
\nreplaced by a Person chosen by the Members, voting as a single class, to serve
\nas the Tax Matters Member. The Tax Matters Member shall keep the other Members
\nreasonably informed as to any material tax inquiries, examinations or
\nproceedings relating to the Company and shall submit to the other Members, for
\ntheir review and comment, any settlement or compromise offer with respect to any
\nmaterial disputed item of income, gain, loss, deduction or credit of the
\nCompany. The Tax Matters Member shall not settle or contest a dispute with
\nrespect to any material item of income, gain, loss, deduction or credit of the
\nCompany in a forum which will require a Member to pay any material amount of tax
\nliabilities associated with such dispute before the final resolution of such
\ndispute without the written consent of such Member, which shall not be
\nunreasonably withheld, conditioned or delayed.<\/p>\n<\/p>\n 43<\/p>\n \n
\nSECTION 6.10. Partnership Status.<\/u> It is the intent of the Company and
\nthe Members that the Company be classified as a partnership for U.S. Federal,
\nstate and local tax purposes, and neither the Company nor any Member shall file
\nany tax return, make any election or take any other action or position
\ninconsistent with that intention. With respect to any Subsidiary of the Company
\nthat is organized under the laws of the United States or any state thereof,
\nneither the Company nor such Subsidiary shall take any action that would result
\nin such Subsidiary becoming an association taxable as a corporation for U.S.
\nFederal income tax purposes. Notwithstanding the preceding two sentences, no
\naction that would be prohibited by either of such two sentences shall be
\nprohibited if the action is in connection with an Initial Public Offering or a
\nQualified Distribution.<\/p>\n<\/p>\n SECTION 6.11. Restoration of Negative Capital Account; Return of Capital.
\n<\/u>(a) A Member with a negative balance in its Capital Account shall have no
\nobligation to the Company to restore such negative balance.<\/p>\n<\/p>\n (b) No Member shall be entitled to withdraw any part of its Capital
\nContributions or demand distributions of any amount in its Capital Account, to
\nreceive interest on its Capital Contributions or Capital Account or to receive
\nany distributions from the Company, except as expressly provided herein or as
\nrequired under the Delaware Act as then in effect and which requirement the
\nMembers may not waive. No Member shall be entitled to the return of any part of
\nits Capital Contribution. No Member shall be liable for the return of the
\nCapital Contributions (or any portion thereof) of any other Member.<\/p>\n<\/p>\n SECTION 6.12. Tax Information.<\/u> The Company shall timely cause to be
\nprepared all U.S. Federal, state, local and foreign tax returns (including
\ninformation returns) required to be filed by the Company and its Subsidiaries
\nand, after review and approval of such tax returns by the Tax Matters Member,
\nshall cause such tax returns to be timely filed. Upon the reasonable request of
\nany Member, the Company shall provide such Member with access to such tax
\nreturns that have been so filed. With respect to each taxable period of the
\nCompany, no later than 30 days before the due date for the Company153s U.S.
\nFederal income tax return for that year (taking into account any applicable
\nextensions), the Company shall send to each Member a copy of such Member153s U.S.
\nInternal Revenue Service Schedule K-1 with respect to such tax return. The
\nCompany shall provide to each Member such information with respect to the
\noperations of the Company and its Subsidiaries as is reasonably requested by
\nsuch Member to file any required U.S. Federal, state, local and foreign tax
\nreturns of such Member or its Affiliates.<\/p>\n<\/p>\n 44<\/p>\n \n
\nARTICLE VII<\/p>\n \n<\/p>\n Distributions; Liquidation Events; Redemption<\/u><\/p>\n \n SECTION 7.01. Distributions.<\/u> Subject to Sections 4.03(a) and 7.03 and
\nSections 18-607 and 18-804 of the Delaware Act and other applicable law, the
\nBoard of Managers may declare Distributions to the Members in proportion to
\ntheir Percentage Interests, at such times as it deems appropriate, in its sole
\ndiscretion.<\/p>\n<\/p>\n SECTION 7.02. Tax Distributions.<\/u> (a) Notwithstanding Section 7.01, if
\nthe Company has net taxable income for U.S. Federal income tax purposes for any
\ntaxable period, the Company shall determine the Unfunded Taxes, if any, of each
\nMember. “Unfunded Taxes<\/u>” of any Member shall equal the excess of (i) the
\nproduct of (A) the highest marginal U.S. Federal statutory income tax rate
\napplicable to corporations plus three percent and (B) the excess, if any, of (1)
\nthe aggregate net taxable income allocated to such Member in the current and all
\npreceding taxable periods over (2) the aggregate net taxable loss allocated to
\nsuch Member in all preceding taxable periods over (ii) all cash Distributions to
\nsuch Member in the current and all preceding taxable periods.<\/p>\n<\/p>\n (b) The Company shall identify the Member with the highest amount of Unfunded
\nTaxes. The Company shall distribute to such Member an amount equal to its
\nUnfunded Taxes and shall distribute to each other Member an amount such that all
\ndistributions made under this Section 7.02(b) are to the Members in proportion
\nto their Percentage Interests.<\/p>\n<\/p>\n (c) Distributions under Section 7.02(b), if any, shall be made to the Members
\nwithin 45 days after the end of the applicable taxable period of the Company.\n<\/p>\n<\/p>\n (d) Any amounts distributed to a Member pursuant to Section 7.02(b) shall
\nreduce, on a dollar-for-dollar basis until fully recovered, the amount of any
\nDistribution to which such Member is otherwise entitled under this Agreement.\n<\/p>\n<\/p>\n SECTION 7.03. Liquidation Events.<\/u> (a) In the event of a Liquidation
\nEvent, the holders of Series A Preferred Membership Interests shall be entitled,
\nout of assets legally available therefor (subject to creditors153 reserves for
\npayments to creditors in accordance with Section 9.03(b)), before any
\ndistribution or payment out of the assets of the Company may be made to or set
\naside for the holders of any Junior Equity Interests, and subject to the rights
\nof the holders of any Senior Equity Interests and Parity Equity Interests upon
\nliquidation and the rights of the Company153s creditors, to receive in full a
\nliquidating distribution in an amount equal to $1,000 (together with any
\nDistribution to which a Series A Preferred Membership Interest is entitled under
\nSection 7.01 which has not yet been paid) for each Series A Preferred Membership
\nInterest of such holder then outstanding (such amount, the “Liquidation
\nPreference<\/u>“). The holders of Series A Preferred Membership Interests shall
\nnot be entitled to any further payments with respect to any Membership Interests
\nin the event of any such Liquidation Event, other than what is expressly
\nprovided for in this Section 7.03; provided<\/u>, however<\/u>, that in the
\nevent of a Liquidation Event involving Barnes&Noble, each holder of Series A
\nPreferred Membership Interests may elect with respect to each Series A Preferred
\nMembership Interest to receive the Liquidation Preference or continue to hold
\nsuch Series A Preferred Membership Interest.<\/p>\n<\/p>\n 45<\/p>\n \n
\n(b) If the assets of the Company are not sufficient to pay in full the
\naggregate liquidating distributions required to be paid pursuant to Section
\n7.03(a) to the holders of Series A Preferred Membership Interests and all
\nholders of Parity Equity Interests having pari<\/u> passu<\/u> rights as to
\nliquidation, the amounts distributed to the holders of Series A Preferred
\nMembership Interests and all such Parity Equity Interests shall be paid pro rata
\nin accordance with the respective aggregate liquidating distributions to which
\nthey would otherwise be entitled.<\/p>\n<\/p>\n (c) Following the distribution to holders of Series A Preferred Membership
\nInterests described in Section 7.03(a), the Board of Managers pursuant to
\nSection 9.03 will distribute any remaining proceeds of the liquidation of the
\nCompany to holders of Junior Equity Interests in proportion to their Percentage
\nInterests (including Members holding Common Membership Interests).<\/p>\n<\/p>\n SECTION 7.04. Change of Control Sale.<\/u> (a) In the event of a Change of
\nControl, the Company shall provide notice of the Change of Control to each
\nholder of Series A Preferred Membership Interests on the effective date of the
\nChange of Control (the “Change of Control Effective Date<\/u>“), and each
\nholder of outstanding Series A Preferred Membership Interests shall have the
\noption, during the period beginning on the Change of Control Effective Date and
\nending on the date that is 30 Business Days after the Change of Control
\nEffective Date, to require the Company to purchase (a “Change of Control
\nSale<\/u>“), out of funds legally available therefor (subject to creditors153
\nreserves for payments to creditors in accordance with 9.03(b)), before any
\ndistribution or payments may be made to or set aside for the holders of any
\nJunior Equity Interests, any or all of its Series A Preferred Membership
\nInterests at a purchase price per Series A Preferred Membership Interest,
\npayable in cash, equal to the greater of (i) 101% multiplied by the Liquidation
\nPreference and (ii) the amount which would have been received by such holder per
\nSeries A Preferred Membership Interest if the Series A Preferred Membership
\nInterests of such holder then outstanding had been converted into Common
\nMembership Interests pursuant to Section 3.04 immediately prior to such Change
\nof Control (a “Change of Control Payment<\/u>“).<\/p>\n<\/p>\n (b) Change of Control Sale Procedure.<\/u> To exercise a Change of Control
\nSale option, a holder of Series A Preferred Membership Interests must, no later
\nthan 5:00 p.m. New York City time, on the date by which such option must be
\nexercised surrender to the Company (or the Company153s duly appointed agent), the
\ncertificates representing the Series A Preferred Membership Interests to be sold
\nand indicate that it is exercising its Change of Control Sale option.<\/p>\n<\/p>\n (c) Delivery upon Change of Control Sale.<\/u> Upon a Change of Control
\nSale, the Company shall deliver or cause to be delivered by mail or wire
\ntransfer to each holder exercising a Change of Control Sale option the Change of
\nControl Payment with respect to each Series A Preferred Membership Interests
\nsurrendered.<\/p>\n<\/p>\n 46<\/p>\n \n
\n(d) Unsold Series A Preferred Membership Interests.<\/u> If a holder of
\nSeries A Preferred Membership Interests does not elect to exercise the Change of
\nControl Sale option pursuant to this Section 7.04 with respect to all of its
\nSeries A Preferred Membership Interests, the Series A Preferred Membership
\nInterests held by it and not surrendered for settlement will remain outstanding
\nuntil otherwise subsequently converted, redeemed, reclassified or canceled.<\/p>\n<\/p>\n (e) Partial Exercise of Change of Control Sale.<\/u> In the event of a
\nPartial Sale, upon such Partial Sale, the Company shall countersign and deliver
\nto such selling Member, at the expense of the Company, a certificate evidencing
\nthe Series A Preferred Membership Interests held by such selling Member as to
\nwhich a Partial Sale was not effected.<\/p>\n<\/p>\n SECTION 7.05. Redemption.<\/u> (a) Redemption at the Option of Series A
\nPreferred Membership Interests<\/u>. (i) If there is (A) a termination of the
\nCommercial Agreement based on a NewCo Material Default (as defined therein) or
\n(B) a termination of the Patent Settlement and License Agreement under Section
\n5.2(a) thereof based on a refusal to pay royalty payments due thereunder which
\nalso constitutes a NewCo Material Default (as such term is defined in the
\nCommercial Agreement) by the Company under the Commercial Agreement that would
\nentitle Microsoft Corporation to terminate the Commercial Agreement, the
\nMorrison Party or Morrison Parties then holding a majority of Membership
\nInterests held by Morrison Parties may elect to require the Company to redeem
\nthe outstanding Series A Preferred Membership Interests held by Morrison Parties
\nfor cash at a price equal to the greater of (x) 101% multiplied by the
\nLiquidation Preference and (y) the amount which would have been received by such
\nholder per Series A Preferred Membership Interest if the Series A Preferred
\nMembership Interests of such holder then outstanding had been converted into
\nCommon Membership Interests pursuant to Section 3.04 immediately prior to the
\noccurrence of the event triggering the right to elect redemption (the
\n“Redemption Amount<\/u>“); provided<\/u> that if such cash redemption is not
\npermitted by the terms of the agreements governing the Company153s or
\nBarnes&Noble153s third-party indebtedness for borrowed money then in effect,
\nany such election may instead, at the option of such Morrison Party or Morrison
\nParties entitled to such election, require the Company to redeem all the Series
\nA Preferred Membership Interests for an amount of Common Membership Interests
\nwith a Fair Market Value equal to the Redemption Amount.<\/p>\n<\/p>\n<\/p>\n (ii) Barnes&Noble hereby agrees that during the period ending on the
\nearlier of (A) the 12-month anniversary of the Launch Date or (B) the date of
\nthe earlier to occur of an Initial Public Offering and a Qualified Distribution,
\nupon such election during such period to require the Company to redeem the
\nSeries A Preferred Membership Interests pursuant to Section 7.05(a)(i),
\nBarnes&Noble shall take all action necessary (which may include providing
\nadditional funds to the Company) to cause the Company to effect any redemption
\nrequired pursuant to Section 7.05(a).<\/p>\n<\/p>\n<\/p>\n (iii) To elect pursuant to this Section 7.05(a) to require the Company to
\nredeem the outstanding Series A Preferred Membership Interests held by the
\nMorrison Party or Morrison Parties entitled to such election shall deliver
\nwritten notice (a “Morrison Notice of Redemption<\/u>“) to the Company on a
\ndate no later than 20 Business Days following the date of the event giving rise
\nto such right of redemption, stating that it wishes to redeem its Series A
\nPreferred Membership Interests pursuant to this Section 7.05(a) and describing
\nthe basis for such right of redemption under this Section 7.05(a). The Company
\nshall thereafter promptly notify the Morrison Parties of the date on which such
\nredemption is to occur (the “Morrison Optional Redemption Date<\/u>“), such
\nMorrison Optional Redemption Date falling no more than five months after the
\nreceipt by the Company of the Morrison Notice of Redemption. No later than 5:00
\np.m. New York City time on the Morrison Optional Redemption Date applicable to
\nsuch redemption, the relevant Morrison Parties shall surrender to the Company
\ncertificates representing all Series A Preferred Membership Interests owned by
\nthe Morrison Parties in exchange for payment by the Company to the Morrison
\nParties of the Redemption Amount. Promptly after such redemption, an officer of
\nthe Company will amend Schedule A hereto to reflect the redemption and will
\ndeliver a certificate to each Member stating that such redemption has been
\neffected, together with an amended copy of Schedule A hereto. Effective
\nimmediately prior to the close of business on the Morrison Optional Redemption
\nDate applicable to such redemption, such Series A Preferred Membership Interests
\nshall cease to be outstanding. Such Series A Preferred Membership Interests
\nredeemed in accordance with this Section 7.05 shall be retired promptly after
\nthe acquisition by the Company thereof, and the certificates representing any
\nsuch Series A Preferred Membership Interests surrendered to the Company shall be
\ncanceled.<\/p>\n<\/p>\n 47<\/p>\n \n
\n(b) Redemption at the Option of the Company.<\/u> (i) The Company shall
\nhave the right at any time after the fifth anniversary of the Launch Date to
\nredeem all but not less than all of the Series A Preferred Membership Interests
\n(but not any Common Membership Interests issued upon the conversion of the
\nSeries A Preferred Membership Interests, including upon a conversion following
\nnotice of redemption but prior to the redemption being effected) at a price
\nequal to the Redemption Amount.<\/p>\n<\/p>\n<\/p>\n (ii) Redemption Procedure.<\/u> In order to effect a redemption at the
\noption of the Company pursuant to this Section 7.05(b), the Company shall
\nprovide notice of such redemption to each holder of Series A Preferred
\nMembership Interests (a “Company Notice of Redemption<\/u>“). The redemption
\ndate applicable to such redemption, and selected by the Company (the
\n“Company Optional Redemption Date<\/u>“), shall be no less than 30 days and no
\ngreater than 60 days after the date on which the Company delivers the Company
\nNotice of Redemption to holders of the Series A Preferred Membership Interests.
\nIn addition to any information required by applicable law or regulation, the
\nCompany Notice of Redemption shall state, as appropriate:<\/p>\n<\/p>\n\n\n\n| <\/td>\n | \n (A) the Company Optional Redemption Date;<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | \n (B) the redemption price; and<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | \n (C) the instructions each holder of Series A Preferred Membership Interests
\nmust follow with respect to the redemption, including the method for
\nsurrendering the certificates for the Series A Preferred Membership Interests to
\nbe redeemed for payment of the redemption price.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n 48<\/p>\n \n
\n(c) Effectiveness of Redemption.<\/u> In the case of a redemption pursuant
\nto Section 7.05(b), if the Company Notice of Redemption has been duly given, and
\nif on or after the date that is no more than 30 calendar days prior to the
\nCompany Optional Redemption Date applicable to such redemption all funds
\nnecessary for such redemption have been deposited by the Company in trust for
\nthe benefit of the applicable holders of Series A Preferred Membership Interests
\nwith a bank or trust company doing business in the Borough of Manhattan, The
\nCity of New York, and having a capital and surplus of at least $500,000,000 and
\nselected by the Company, so as to be and continue to be available solely
\ntherefor, then, notwithstanding that any certificate for any Series A Preferred
\nMembership Interest so called for redemption has not been surrendered, on and
\nafter the Company Optional Redemption Date, all Series A Preferred Membership
\nInterests so called for redemption shall no longer be deemed outstanding and all
\nrights with respect to such Series A Preferred Membership Interests shall
\nforthwith on such Company Optional Redemption Date applicable to such redemption
\ncease and be terminated, except for the right of the holders thereof to receive
\nthe amount payable on such redemption from such bank or trust company, without
\ninterest. Any funds unclaimed at the end of three years from the Company
\nOptional Redemption Date applicable to such redemption shall, to the extent
\npermitted by law, be released to the Company, after which time holders of the
\nSeries A Preferred Membership Interests so called for redemption shall look only
\nto the Company for payment of the redemption price of such Series A Preferred
\nMembership Interests.<\/p>\n<\/p>\n SECTION 7.06. Morrison Put.<\/u> (a) If on the date following the fifth
\nanniversary of the Launch Date, the Company has not completed an Initial Public
\nOffering or Qualified Distribution, the Morrison Party or Morrison Parties then
\nholding a majority of Membership Interests held by Morrison Parties shall have
\nthe right by written notice to the Company to elect to require the Company to
\npurchase their Series A Preferred Membership Interests within five months of
\ndelivery of written notice to the Company of such election at a price equal to
\nthe fair market value of such Series A Preferred Membership Interests as
\ndetermined under the appraisal procedures described in Section 7.06(b).<\/p>\n<\/p>\n (b) Appraisal Procedures<\/u>. Appraisal of the Series A Preferred
\nMembership Interests for purposes of Section 7.06(a) shall be conducted pursuant
\nto the following procedures: (i) each of Microsoft Corporation and the Company
\nshall appoint an independent nationally recognized investment bank or appraiser
\n(each, an “Appraiser<\/u>“), (ii) each Appraiser shall independently make a
\ndetermination of the fair market value of the Series A Preferred Membership
\nInterests for purposes of the definition of Qualified Distribution or Section
\n7.06, as the case may be, (iii) (A) if the higher value determined by such
\nAppraisers is no greater than 110% of the lower value determined by such
\nAppraisers, then the fair market value for purposes of this Section 7.06, as the
\ncase may be, shall be the average of the two values determined by such
\nAppraisers and (B) otherwise, such Appraisers shall jointly agree on a third
\nindependent nationally recognized investment bank or appraiser (the “Third
\nAppraiser<\/u>“), which shall perform its own determination of the fair market
\nvalue of the Series A Preferred Membership Interests, and the determination of
\nthe Appraiser that is the closest to the determination of the Third Appraiser
\nshall be the fair market value of the Series A Preferred Membership Interests.\n<\/p>\n<\/p>\n 49<\/p>\n \n
\nARTICLE VIII<\/p>\n \n<\/p>\n Transfer of Membership Interests; Tag-Along Rights;
\nDrag-Along Rights<\/u><\/p>\n \n SECTION 8.01. Transfer of Membership Interests Generally.<\/u> Except for a
\nTransfer specifically permitted by this Agreement, a Member may not, directly or
\nindirectly, Transfer any Membership Interests held by such Member without the
\nwritten consent of the other Members; provided<\/u> that a Morrison Party may,
\ndirectly or indirectly, Transfer any Membership Interests with the written
\nconsent of Barnes&Noble and without the need to obtain the written consent
\nof any other Member; provided<\/u>, further<\/u>, that a transfer of equity
\ninterests that results in Morrison ceasing to be a Subsidiary of Microsoft
\nCorporation shall be deemed to be a Transfer of the Membership Interests owned
\nby Morrison. To the fullest extent permitted by applicable law, any purported
\nTransfer of Membership Interests in breach of this Agreement shall be null and
\nvoid, and neither the Company nor the Members shall recognize the same. Any
\nMember who Transfers or attempts to Transfer any Membership Interests except in
\ncompliance herewith shall be liable to, and shall indemnify and hold harmless,
\nthe Company and the other Members for all costs, expenses, damages and other
\nliabilities resulting therefrom.<\/p>\n<\/p>\n SECTION 8.02. Effect of Permitted Transfer.<\/u> Any Transfer of a
\nMembership Interest that complies with this Agreement shall be effective to
\nassign the right to become a Member, and, without the need for any action or
\nconsent of any other Person, a transferee of such Membership Interest shall
\nautomatically be admitted as a Member upon its execution of a Joinder Agreement.
\nAs a condition to the Company153s obligation to effect a Transfer permitted
\nhereunder, any transferee of Membership Interests shall be required to become a
\nparty to this Agreement as a Member, and shall have all the rights and
\nobligations of a Member hereunder, by executing a Joinder Agreement in the form
\nof Exhibit A or in such other form that is satisfactory to the Board of
\nManagers.<\/p>\n<\/p>\n SECTION 8.03. Securities Law Matters.<\/u> Each Member understands that the
\nCompany has not registered the Membership Interests under any United States
\nFederal or state securities or blue sky laws. No Member shall Transfer any
\nMembership Interest at any time if such action would constitute a violation of
\nany United States Federal or state securities or blue sky laws or a breach of
\nthe conditions to any exemption from registration of the Membership Interests
\nunder any such laws or a breach of any undertaking or agreement of a Member
\nentered into pursuant to such laws or in connection with obtaining an exemption
\nthereunder, and, prior to any Initial Public Offering or Qualified Distribution,
\nthe Company shall not Transfer upon its books any Membership Interests unless
\nprior thereto the Company has received (or the Board of Managers has waived in
\nwriting the requirement that the Company receive) evidence reasonably
\nsatisfactory to the Company that such transaction is in compliance with this
\nSection 8.03. Any certificate representing a Membership Interest shall bear
\nappropriate legends restricting the sale or other Transfer of such Membership
\nInterest in accordance with applicable United States Federal or state securities
\nor blue sky laws and in accordance with the provisions of this Agreement.<\/p>\n<\/p>\n 50<\/p>\n \n
\nSECTION 8.04. Transfers by Morrison.<\/u> (a) Permitted Transfers to
\nSubsidiaries of Microsoft Corporation.<\/u> A Morrison Party may at any time
\nTransfer all or any part of its Membership Interests to any Person that is
\nMicrosoft Corporation or a Subsidiary of Microsoft Corporation;
\nprovided<\/u>, however<\/u>, that if at any time subsequent to such Transfer
\nany such Subsidiary of Microsoft Corporation ceases to be a Subsidiary of
\nMicrosoft Corporation, then such Person shall automatically cease to be a Member
\nand all Membership Interests held by such Person shall be deemed to be
\nautomatically Transferred to Microsoft Corporation or such other Person that is
\na Subsidiary of Microsoft Corporation as may be designated by Microsoft
\nCorporation.<\/p>\n<\/p>\n (b) Permitted Transfers after Initial Public Offering or Qualified
\nDistribution and Five Years.<\/u> Morrison Parties may (i) following the earlier
\nto occur of an Initial Public Offering and a Qualified Distribution, Transfer
\n(A) on or prior to the third anniversary of the Launch Date, not more than
\n180,000 in aggregate of their Series A Preferred Membership Interests (or Common
\nMembership Interests resulting from the conversion of such number of Series A
\nPreferred Membership Interests) and (B) following the third anniversary of the
\nLaunch Date, not more than 240,000 in aggregate of their Series A Preferred
\nMembership Interests (or Common Membership Interests resulting from the
\nconversion of such number of Series A Preferred Membership Interests) and (ii)
\nfollowing the fifth anniversary of the Launch Date, Transfer all or any part of
\ntheir Membership Interests to any Person.<\/p>\n<\/p>\n SECTION 8.05. Transfers by Beckett Entity.<\/u> Any Beckett Entity may at
\nany time Transfer all or any part of its Membership Interests to any Person.<\/p>\n<\/p>\n SECTION 8.06. Tag Along; Drag Along.<\/u> (a) Tag Along Rights.<\/u> If a
\nSignificant Member (a “Selling Significant Member<\/u>“) proposes to transfer
\nany Membership Interests in a Tag Along Sale, any other Significant Member may,
\nat its option, elect to exercise its rights under this Section 8.06(a).<\/p>\n<\/p>\n<\/p>\n (i) In the event of a proposed Tag Along Sale, the Selling Significant Member
\nshall deliver to each other Significant Member: (A) a written notice of the
\nterms and conditions of such Tag Along Sale (a “Tag Along Notice<\/u>“) and
\noffer the other Significant Members the opportunity to participate in such Tag
\nAlong Sale on the same terms and conditions, subject to the same agreements and
\nfor the same consideration, as the Selling Significant Member, (B) the purchase
\nagreement (or similar instrument of transfer), including all attachments and
\nschedules, that is the subject of such Tag Along Sale and (C) a summary of the
\nmaterial terms of any other proposed contemporaneous or related commercial or
\nsimilar arrangements between the Selling Significant Member (or any Affiliate of
\nthe Selling Significant Member, other than the Company and any direct or
\nindirect Subsidiary of the Company) and the proposed transferee in such Tag
\nAlong Sale, subject to customary confidentiality agreements.<\/p>\n<\/p>\n 51<\/p>\n \n
\n(ii) From the date of the delivery of all of the information described in
\nSection 8.06(a)(i)(B) and (C), until the date that is 15 Business Days
\nthereafter (the “Tag Along Election Period<\/u>“), each other Significant
\nMember shall have the right, exercisable by written notice delivered by any
\nSignificant Member exercising its right to participate in the Tag Along Sale (a
\n“Tag Along Member<\/u>“) to the Selling Significant Member within such Tag
\nAlong Election Period, to have included in the Tag Along Sale the number of
\nCommon Membership Interests as is specified in such notice, and each Tag Along
\nMember shall be required to convert Series A Preferred Membership Interests into
\nthe number of Common Membership Interests necessary (along with any Common
\nMembership Interests already held by such Tag Along Member) to meet its Tag
\nAlong Portion which conversion may be conditioned on the consummation of the Tag
\nAlong Sale; provided<\/u>, however<\/u>, that if the aggregate number of
\nMembership Interests proposed to be sold by the Selling Significant Member and
\nany Tag Along Members in the Tag Along Sale exceeds the number of Membership
\nInterests (on an as-converted basis) that can be sold on the terms and
\nconditions set forth in the Tag Along Notice, then only the Tag Along Portion of
\nMembership Interests (on an as-converted basis) held by the Selling Significant
\nMember and each Tag Along Member shall be sold pursuant to the Tag Along Sale.
\nAll out-of-pocket costs and expenses incurred by each Tag Along Member in
\nconnection with a Tag Along Sale shall be paid by each respective Tag Along
\nMember. In connection with any Tag Along Sale, the closing of the sale of
\nMembership Interests held by any Selling Significant Member and the closing of
\nthe sale of Membership Interests held by each Tag Along Member shall each occur
\non the same date.<\/p>\n<\/p>\n<\/p>\n (iii Notwithstanding the foregoing, any Selling Significant Member that
\ndelivers a Tag Along Notice pursuant to this Section 8.06(a) may at any time
\nprior to consummation of a Tag Along Sale terminate the proposed sale and the
\nrelated tag along rights of each Tag Along Member with respect to such proposed
\nsale.<\/p>\n<\/p>\n (b) Drag Along.<\/u> If one or more Beckett Entities proposes to effect a
\nDrag Along Sale, such Beckett Entities may, at their option, require all other
\nholders of Membership Interests to transfer in such Drag Along Sale their
\nrespective Drag Along Portion of the Membership Interests then held by such
\nother holders on the same terms and conditions, subject to the same agreements
\nand for the same consideration, as such Beckett Entities pursuant to the terms
\nof this Section 8.06(b), in each case, subject to Section 7.04.<\/p>\n<\/p>\n<\/p>\n (i) In the event of a proposed Drag Along Sale, the Beckett Entities that are
\nparties to such sale (or Barnes&Noble on their behalf) shall provide to each
\nother holder of Membership Interests not later than the 30th day prior to the
\nproposed Drag Along Sale: (A) a written notice of the terms and conditions of
\nsuch Drag Along Sale (a “Drag Along Notice<\/u>“) together with a statement
\nasserting each such holder153s obligation to participate in such Drag Along Sale
\non the same terms and conditions, subject to the same agreements and for the
\nsame consideration, as such Beckett Entity, (B) the purchase agreement (or
\nsimilar instrument of transfer), including all attachments and schedules, that
\nis the subject of such Drag Along Sale and (C) a summary of the material terms
\nof any other proposed contemporaneous or related commercial or similar
\narrangements between any Beckett Entity (or any Affiliate of Barnes&Noble,
\nother than the Company and any direct or indirect Subsidiary of the Company) and
\nthe proposed transferee in such Drag Along Sale, subject to customary
\nconfidentiality agreements.<\/p>\n<\/p>\n 52<\/p>\n \n
\n(ii) Each holder of Membership Interests that receives a Drag Along Notice
\nshall be required to participate in the Drag Along Sale on the terms and
\nconditions set forth in the Drag Along Notice (subject to this Section
\n8.06(b)(ii)) and, if any such Drag Along Sale involves a merger or
\nconsolidation, each holder of Membership Interests that receives a Drag Along
\nNotice with respect to such Drag Along Sale shall be required to vote in favor
\nof or consent in writing to such merger or consolidation; provided<\/u>,
\nhowever<\/u>, that notwithstanding anything to the contrary contained herein,
\nno such holder shall be subject to the provisions of this Section 8.06(b) if in
\nthe Drag Along Sale such holder: (A) is required to make any representations or
\nwarranties in such Drag Along Sale other than as to such holder153s ownership and
\nauthority to sell, free of liens, claims and encumbrances, the Membership
\nInterests proposed to be sold by such holder, and as to the due authorization,
\nexecution, delivery and enforceability of the definitive documents entered into
\nby such holder in connection with such Drag Along Sale; (B) is required to be
\nsubject to an obligation for indemnification or other liability that (X) relates
\nto the representations, warranties or covenants made by any other holder of
\nMembership Interests and relating to such holder153s ownership of Membership
\nInterests or (Y) is in excess of either (I) the aggregate purchase price that
\nsuch holder actually receives in such transaction or (II) the obligation for
\nindemnification or other liability applicable to the Beckett Entities in the
\nDrag Along Sale (as appropriately adjusted for the relative portion of the Drag
\nAlong Sale that is represented by the Drag Along Portion); or (C) is subject to
\nany obligations that are different and adverse (taking into account the relative
\npositions of any such holder to any Beckett Entities in such transaction) as
\ncompared to any Beckett Entities in such transaction or is subject to any
\nnon-compete or non-solicit or similar covenant. All out of pocket costs and
\nexpenses incurred by any holder in connection with a Drag Along Sale shall be
\npaid by such holder. In connection with any Drag Along Sale, the closing of the
\nsale of Membership Interests held by any Beckett Entity and the closing of the
\nsale of Membership Interests held by any holder of Membership Interests that
\nreceives a Drag Along Notice shall each occur on the same date.<\/p>\n<\/p>\n<\/p>\n (iii) Notwithstanding the foregoing, any Beckett Entity that delivers a Drag
\nAlong Notice pursuant to this Section 8.06(b) may at any time prior to
\nconsummation of a Drag Along Sale terminate the proposed sale and any
\nconcomitant drag along obligations of other holders of Membership Interests.<\/p>\n<\/p>\n (c) This Section 8.06 shall terminate immediately prior to the earlier to
\noccur of an Initial Public Offering and a Qualified Distribution.<\/p>\n<\/p>\n (d) Any Drag Along Sale shall in any event be consummated within 180 days
\nfrom the date of the Drag Along Notice (the “Drag Along Sale Period<\/u>“);
\nprovided<\/u> that if the consummation of any Drag Along Sale has not been
\nconsummated by the end of such 180-day period due to required regulatory
\napprovals or consents necessary to consummate such Drag Along Sale, such Drag
\nAlong Sale Period shall be extended for up to an additional 180 days.<\/p>\n<\/p>\n 53<\/p>\n \n
\nSECTION 8.07. Lock-Up Agreements.<\/u> In connection with the Initial
\nPublic Offering, the holder(s) of Series A Preferred Membership Interests will
\nagree to enter into customary lock-up agreements (which shall be equivalent to
\nthe lock-up agreements entered into by the Beckett Member).<\/p>\n<\/p>\n<\/p>\n ARTICLE IX<\/p>\n \n<\/p>\n Certain Other Matters<\/u><\/p>\n \n SECTION 9.01. Initial Public Offering and Qualified Distribution.<\/u> (a)
\nWithout the need for any action or consent of any Member, the Board of Managers
\nshall have the right to authorize an Initial Public Offering. In connection with
\nany such Initial Public Offering or a Qualified Distribution, and upon the
\nrequest of the Board of Managers, each of the Members hereby agrees that it will
\ntake such action and execute such documents to the extent reasonably necessary
\nto effect such Initial Public Offering or Qualified Distribution, including
\ntaking such actions and executing such documents to the extent reasonably
\nnecessary to (i) amend this Agreement, (ii) contribute, exchange or Transfer its
\nrespective Membership Interests to an existing or newly-formed corporation
\n(which may include the Issuer (as defined below)) or the assets of the Company
\nto the Issuer, (iii) convert the Company to a corporation in accordance with
\nSection 18-216 of the Delaware Act and terminate this Agreement, (iv) in the
\ncase of a Qualified Distribution described in clause (i) of the definition
\nthereof, permit Barnes&Noble to comply with its obligations under its
\nCertificate of Designations filed on August 18, 2011, in connection therewith,
\nor (v) in the case of a transaction described in clause (ii) of the definition
\nof “Qualified Distribution”, effect a restructuring of the Company, which may
\ninclude a transaction between the Company and Barnes&Noble after the closing
\nof such transaction, for the purpose of enabling holders of Membership Interests
\nto convert those interests into pro rata shares of Barnes&Noble or a
\nsuccessor thereto representing the economic interests of such holders in the
\nCompany (such entity, in any such case (including in the case of the Company),
\nthe “Issuer<\/u>“); provided<\/u> that in connection with the occurrence of
\nan event described in either clause (ii) or (iii) of this Section 9.01(a), the
\nMembers will be entitled to receive Company Common Stock in exchange for their
\nCommon Membership Interests in the same proportions as their Common Membership
\nInterests immediately prior to such Initial Public Offering or Qualified
\nDistribution and each holder of Series A Preferred Membership Interests will be
\nentitled to receive in exchange for its Series A Preferred Membership Interests
\nconvertible preferred stock of the Issuer (“Preferred Stock<\/u>“) with the
\nsame rights as to liquidation, conversion and redemption reflected in a
\ncertificate of designations for the Preferred Stock as the Series A Preferred
\nMembership Interests, which is subject to the Successor Covenants in accordance
\nwith Section 4.04, and subject to the rights of any holder of Barnes&Noble153s
\nSenior Convertible Redeemable Series J Preferred Stock, which is (subject to and
\nafter application of any applicable adjustments under Sections 3.05(b)(ii),
\n(iii) or (iv)) convertible into Company Common Stock in the same proportion as
\nthe Series A Preferred Membership Interests held by such holder of Series A
\nPreferred Membership Interests to Common Membership Interests immediately prior
\nto the conversion of the Series A Preferred Membership Interests of such holder
\nto Preferred Stock; provided<\/u>, further<\/u>, that no Member shall be
\nrequired to take any action under this Section 9.01(a) without its consent to
\nthe extent such action would have a disproportionate and adverse effect on such
\nMember relative to any other Member. In the case that the Company is not the
\nIssuer, upon the occurrence of the events described in this Section 9.01, the
\nCompany shall cause the Issuer to execute and deliver an agreement to assume the
\nobligations of the Company under the Registration Rights Agreement.<\/p>\n<\/p>\n 54<\/p>\n \n
\n(b) In connection with any Initial Public Offering or Qualified Distribution,
\nand upon the request of the Board of Managers, each of the Members hereby agrees
\nthat it will reasonably cooperate to achieve the tax objectives of the Company
\n(as determined by the Board of Managers in good faith), including providing
\nreasonable and customary representations to counsel or to a taxing authority to
\nsupport an opinion of counsel or a private letter ruling.<\/p>\n<\/p>\n SECTION 9.02. Dissolution.<\/u> The Company shall dissolve upon the first
\nto occur of the following: (a) subject to any applicable Morrison Consent
\nrequirements of Section 4.03(d), the approval of the Members then holding a
\nmajority of the outstanding Membership Interests to dissolve the Company; (b) at
\nany time there are no Members unless the Company is continued without
\ndissolution in accordance with the Delaware Act; and (c) the entry of a decree
\nof dissolution under Section 18-802 of the Delaware Act. The Company shall
\nterminate when all its assets, after payment of or due provision for all debts,
\nliabilities and obligations of the Company, shall have been distributed to the
\nMembers in the manner provided for in Article VII and the Certificate of
\nFormation shall have been canceled in the manner required by the Delaware Act.\n<\/p>\n<\/p>\n SECTION 9.03. Liquidation.<\/u> (a) Subject to the applicable Morrison
\nConsent requirements of Section 4.03(d), following dissolution pursuant to
\nSection 9.02, all the business and affairs of the Company shall be liquidated
\nand wound up. The Board of Managers shall act as liquidating trustee and wind up
\nthe affairs of the Company pursuant to this Agreement.<\/p>\n<\/p>\n (b) The proceeds of the liquidation of the Company will be distributed (i)
\nfirst, to creditors of the Company (including Members who are creditors), to the
\nextent otherwise permitted by law in satisfaction of all the Company153s debts and
\nliabilities (whether by payment or by making reasonable provision for payment
\nthereof) and (ii) second, to each Member in accordance with Section 7.03.<\/p>\n<\/p>\n SECTION 9.04. Resignation.<\/u> Other than by Transferring in accordance
\nwith this Agreement all its Membership Interests, a Member may not withdraw or
\nresign from the Company.<\/p>\n<\/p>\n SECTION 9.05. Morrison Information Rights.<\/u> (a) Quarterly Financial
\nStatements<\/u>. The Company shall deliver to Microsoft Corporation, within 60
\ncalendar days after the end of each quarterly fiscal period in each fiscal year
\nof the Company (other than the last quarterly fiscal period of each such fiscal
\nyear):<\/p>\n<\/p>\n 55<\/p>\n \n
\n(i) an unaudited balance sheet as at the end of such quarter; and<\/p>\n<\/p>\n<\/p>\n (ii) an unaudited income statement and statement of cash flows for such
\nquarter and fiscal year to date;<\/p>\n<\/p>\n<\/p>\n for the Company and its Subsidiaries (on a consolidated basis), excluding
\nfootnotes thereto, setting forth in each case, in comparative form, the
\nfinancial statement for the corresponding period in the previous fiscal year
\n(provided<\/u> that such comparative financial statements need only be
\nincluded for the quarterly periods beginning after the first quarter ending
\nafter one full fiscal year has occurred following the Closing Date), all
\nprepared in accordance with GAAP (applicable to non-public companies)
\nconsistently applied and Barnes&Noble153s published accounting policies,
\nsubject to changes resulting from normal year-end adjustments (that are not
\nexpected to be material in amount or significance).<\/p>\n<\/p>\n (b) Annual Financial Statements.<\/u> The Company shall deliver to
\nMicrosoft Corporation, within 90 days after the end of each fiscal year of the
\nCompany:<\/p>\n<\/p>\n<\/p>\n (i) an unaudited balance sheet as at the end of such year; and<\/p>\n<\/p>\n<\/p>\n (ii) an unaudited income statement and statement of cash flows for such year;\n<\/p>\n<\/p>\n<\/p>\n for the Company and its Subsidiaries (on a consolidated basis), including any
\nfootnotes thereto, prepared in accordance with GAAP (applicable to non-public
\ncompanies) consistently applied and Barnes&Noble153s published accounting
\npolicies (except as otherwise disclosed in the footnotes).<\/p>\n<\/p>\n (c) Other Information.<\/u> The Company shall deliver to Morrison (i)
\nsummaries of topics covered at meetings of the Board of Managers, (ii) approved
\nminutes of all meetings of the Board of Managers and (iii) information directly
\nrelated to Morrison153s investment as reasonably requested by Morrison;
\nprovided<\/u>, however<\/u>, that (x) the Company shall have the right to
\nredact information from the information provided under this Section 9.05(c) that
\n(a) the Board of Managers determines in good faith constitutes competitively
\nsensitive information; (b) relates to the Company153s or Barnes&Noble153s
\nnegotiation of the terms of Morrison153s investment in the Company or relates to
\nthe Commercial Agreement or Patent Settlement and License Agreement or other
\ncommercial relationships between the Company and Microsoft Corporation; or (c)
\nthe Board of Managers determines in good faith would (1) violate law or any
\ncontract with a third party to disclose or (2) be inconsistent with its
\nfiduciary duties under applicable law or this Agreement to disclose and (y) with
\nrespect to any materials and minutes described in Section 9.05(c)(i) and (ii),
\n(A) Microsoft Corporation shall ensure that only employees of Microsoft
\nCorporation whose principal function for Microsoft Corporation is its
\ninvestment, legal, accounting and tax activities and who are not engaged in its
\neCommerce or software businesses as the exclusive persons who on behalf of
\nMicrosoft Corporation are entitled to receive such materials (the
\n“Recipients<\/u>“); and (B) Microsoft Corporation shall cause the Recipients
\nto comply with the following requirements: (1) the Recipients may not disclose
\nor distribute such materials and minutes to any other person or entity (whether
\nor not within Microsoft Corporation); and (2) the Recipients may only use such
\nmaterials and minutes solely in connection with monitoring Morrison153s investment
\nin the Company.<\/p>\n<\/p>\n 56<\/p>\n \n
\n(d) Termination.<\/u> The provisions of this Section 9.05 shall terminate
\nupon the later to occur of (i) an Initial Public Offering or a Qualified
\nDistribution and (ii) Morrison Parties holding in the aggregate less than 5% of
\nthe Company153s (or the Issuer153s) outstanding equity interests.<\/p>\n<\/p>\n (e) Limitation on Other Rights.<\/u> The rights of Morrison under this
\nSection 9.05 are to the exclusion of any other rights to information that may be
\navailable under the Delaware Act (including pursuant to Section 18-305 of the
\nDelaware Act) or common law in their capacities as Members of the Company.<\/p>\n<\/p>\n SECTION 9.06. Change of Control Notice.<\/u> So long as Morrison Parties
\nhold in the aggregate at least 150,000 Series A Preferred Membership Interests
\nor Common Membership Interests resulting from the conversion of such number of
\nSeries A Preferred Membership Interests, the Company shall provide written
\nnotice to Morrison as promptly as reasonably practicable if the Company or
\nBarnes&Noble receives a proposal that would reasonably be expected to result
\nin, or enters into discussions with respect to, a Change of Control of the
\nCompany.<\/p>\n<\/p>\n SECTION 9.07. Obligations with respect to Certain Qualified
\nDistributions.<\/u> Prior to undertaking a transaction of the type described in
\nclause (ii) of the definition of Qualified Distribution, Barnes&Noble and
\nNewCo shall take such actions as are necessary to permit the Series A Preferred
\nMembership Interests to become exchangeable following completion of such
\ntransaction for a pro rata share of Barnes&Noble’s common stock. In
\nconnection with a transaction of the type described in clause (ii) of the
\ndefinition of Qualified Distribution, Barnes&Noble shall make proper
\nprovision for its pre-Qualified Distribution shareholders to be entitled to the
\nbenefits of Barnes&Noble153s assets other than the Company and its
\nSubsidiaries, after making proper provision for liabilities of Barnes&Noble
\nnot related to the Company or its Subsidiaries, including, if applicable,
\nsegregating such assets and liabilities or otherwise allocating them solely for
\nthe benefit of such shareholders.<\/p>\n<\/p>\n<\/p>\n ARTICLE X<\/p>\n \n<\/p>\n Miscellaneous<\/u><\/p>\n \n SECTION 10.01. Notices.<\/u> All notices and other communications required
\nor permitted hereunder shall be in writing and shall be mailed by registered or
\ncertified mail, postage prepaid, sent by facsimile or otherwise delivered by
\nhand or by messenger addressed:<\/p>\n<\/p>\n 57<\/p>\n \n
\n(A) if given to the Company, to the following address (and fax number):<\/p>\n<\/p>\n<\/p>\n [NewCo] LLC<\/p>\n<\/p>\n c\/o Barnes & Noble, Inc.<\/p>\n<\/p>\n 122 Fifth Avenue<\/p>\n<\/p>\n New York, NY 10011<\/p>\n<\/p>\n Attention: Eugene V. DeFelice<\/p>\n<\/p>\n Vice President, General Counsel & Secretary<\/p>\n<\/p>\n Fax: (212) 463-5683<\/p>\n<\/p>\n<\/p>\n (B) if given to any Member, to the person and at the address (and, if
\napplicable, fax number) set forth opposite its name on Schedule A, or at such
\nother address (and, if applicable, fax number) as such Member may hereafter
\ndesignate by written notice to the Company.<\/p>\n<\/p>\n All such notices shall be deemed to have been delivered and given for all
\npurposes (i) on the delivery date if delivered by confirmed facsimile, (ii) on
\nthe delivery date if delivered personally to the party to whom the same is
\ndirected, (iii) one Business Day after deposit with a commercial overnight
\ncarrier, with written verification of receipt, or (iv) five Business Days after
\nthe mailing date, whether or not actually received, if sent by U.S. mail, return
\nreceipt requested, postage and charges prepaid, or any other means of rapid mail
\ndelivery for which a receipt is available addressed to the receiving party as
\nspecified on the signature page of this Agreement. Changes of the person to
\nreceive notices or the place of notification shall be effectuated pursuant to a
\nnotice given under this Section 10.01.<\/p>\n<\/p>\n SECTION 10.02. Waiver.<\/u> Failure or delay by any party hereto to enforce
\nany covenant, duty, agreement, term or condition of this Agreement, or to
\nexercise any right hereunder, shall not be construed as thereafter waiving such
\ncovenant, duty, term, condition or right. The waiver by any party or parties
\nhereto of a breach of any provision of this Agreement shall not operate or be
\nconstrued as a waiver of any other or subsequent breach hereunder. No waiver
\nshall be effective unless it is in writing and is signed by the party asserted
\nto have granted such waiver.<\/p>\n<\/p>\n SECTION 10.03. Cumulative Remedies.<\/u> The rights and remedies provided
\nby this Agreement are cumulative and the use of any one right or remedy by any
\nparty shall not preclude or waive its right to use any or all other remedies.
\nSaid rights and remedies are given in addition to any other rights the parties
\nmay have by law, statute, ordinance or otherwise.<\/p>\n<\/p>\n SECTION 10.04. Parties in Interest.<\/u> This Agreement shall be binding
\nupon and inure to the benefit of all the parties hereto and their successors and
\nassigns, and their legal representatives. No Member may assign this Agreement or
\nany of its rights, interests or obligations in connection with a Transfer of
\nMembership Interests hereunder except to the extent such rights, interests and
\nobligations relate to Membership Interests and the Transfer of such Membership
\nInterests is provided for or contemplated herein. Nothing in this Agreement,
\nexpress or implied, is intended to confer upon any Person other than the Members
\nor their respective permitted successors or assigns or, to the extent provided
\nby this Agreement, the Members153 respective Affiliates, any rights or remedies
\nunder or by reason of this Agreement. None of the provisions of this Agreement
\nshall be for the benefit of, or enforceable by, any creditors of the Members,
\nthe Company or any of the Company153s Affiliates, and no creditor who makes a loan
\nto any Member, the Company or any of the Company153s Affiliates may have or
\nacquire (except pursuant to the terms of a separate agreement executed by the
\nCompany in favor of such creditor) at any time as a result of making the loan
\nany direct or indirect interest in the Company153s profits, losses, Distributions,
\ncapital or property other than as a secured creditor.<\/p>\n<\/p>\n 58<\/p>\n \n
\nSECTION 10.05. Headings.<\/u> The headings and subheadings in this
\nAgreement are included for convenience and identification only and are in no way
\nintended to describe, interpret, define or limit the scope, extent or intent of
\nthis Agreement or any provision hereof.<\/p>\n<\/p>\n SECTION 10.06. Severability.<\/u> The invalidity or unenforceability of any
\nparticular provision of this Agreement shall not affect the other provisions
\nhereof, and this Agreement shall be construed in all respects as if such invalid
\nor unenforceable provision were omitted.<\/p>\n<\/p>\n SECTION 10.07. Counterparts.<\/u> This Agreement may be executed in any
\nnumber of counterparts with the same effect as if all parties hereto had signed
\nthe same document. All counterparts shall be construed together and shall
\nconstitute one instrument.<\/p>\n<\/p>\n SECTION 10.08. Entire Agreement.<\/u> This Agreement constitutes the entire
\nagreement among the parties hereto pertaining to the subject matter hereof and
\nsupersedes all prior agreements and understandings pertaining thereto.<\/p>\n<\/p>\n SECTION 10.09. Governing Law.<\/u> This Agreement and the rights of the
\nparties hereto shall be interpreted in accordance with the laws of the State of
\nDelaware, and all rights and remedies shall be governed by such laws without
\nregard to principles of conflict of laws. In the event of a conflict between any
\nprovision of this Agreement and any non-mandatory provision of the Delaware Act,
\nthe provisions of this Agreement shall control and take precedence. To the
\nfullest extent permitted by applicable law, each of the parties hereto
\nirrevocably agrees that any legal action or proceeding arising out of this
\nAgreement shall be brought only in the state or United States Federal courts
\nlocated in the State of New York, in the borough of Manhattan. Each party hereto
\nirrevocably consents to the service of process outside the territorial
\njurisdiction of such courts in any such action or proceeding by the mailing of
\nsuch documents by registered United States mail, postage prepaid, if to the
\nCompany, to the address of its principal place of business, and if to any
\nMember, to the respective address for such Member set forth on Schedule A.<\/p>\n<\/p>\n SECTION 10.10. Confidentiality.<\/u> Each Member expressly acknowledges
\nthat such Member may receive confidential and proprietary information relating
\nto the Company (including pursuant to Section 9.06), including information
\nrelating to the Company153s financial condition and business plans, and that the
\ndisclosure of such confidential information to a third party would cause
\nirreparable injury to the Company. Except with the prior written consent of the
\nCompany, no Member shall disclose any such information to a third party (other
\nthan on a “need to know” basis to any Affiliate or any employee, agent,
\nrepresentative or contractor of such Member or its Affiliates (each of whom
\nshall be directed to maintain the confidentiality of such information)), and
\neach Member shall use reasonable efforts to preserve the confidentiality of such
\ninformation. The obligations of a Member under this Section 10.10 shall survive
\nthe termination of this Agreement or cessation of a Member153s status as a Member
\nfor a period of five years. Information exchanged between Members shall be
\nnon-confidential unless exchanged pursuant to a separate confidentiality
\nagreement executed between such Members. Notwithstanding the foregoing, a Member
\nshall not be bound by the confidentiality obligations in this Section 10.10 with
\nrespect to any information that is currently or becomes: (a) required to be
\ndisclosed by such Member pursuant to applicable law, including Federal or state
\nsecurities laws, regulation or a domestic national securities exchange rule (but
\nin each case only to the extent of such requirement); (b) required to be
\ndisclosed in order to protect such Member153s interest in the Company or enforce
\nsuch Member153s rights under this Agreement (but in each case only to the extent
\nof such requirement and only after consultation with the Company to the extent
\nreasonably practicable); (c) publicly known or available in the absence of any
\nimproper or unlawful action on the part of such Member; (d) known or available
\nto such Member via legitimate means other than through or on behalf of the
\nCompany or the other Members.<\/p>\n<\/p>\n 59<\/p>\n \n
\nSECTION 10.11. Amendments.<\/u> Subject to the applicable Morrison Consent
\nrequirements of Section 4.03(c), this Agreement may be amended or waived from
\ntime to time by an instrument in writing signed by the Members holding a
\nmajority of the outstanding Membership Interests; provided<\/u> that Morrison
\nConsent will also be required to effect any amendment or waiver of the
\nprovisions set forth in Section 4.03 or this Section 10.11 or any amendment or
\nwaiver that would have a disproportionate and adverse effect on any Morrison
\nParty relative to any other Member.<\/p>\n<\/p>\n SECTION 10.12. Absence of Presumption.<\/u> The parties hereto have
\nparticipated jointly in the negotiation and drafting of this Agreement and, in
\nthe event an ambiguity or question of intent or interpretation arises, this
\nAgreement shall be construed as if drafted jointly by such parties and no
\npresumption or burden of proof shall arise favoring or disfavoring any party by
\nvirtue of the authorship of any of the provisions of this Agreement.<\/p>\n<\/p>\n<\/p>\n 60<\/p>\n \n
\nIN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
\ndate first stated above.<\/p>\n<\/p>\n<\/p>\n<\/p>\n \n\n\n| <\/td>\n | \n BECKETT MEMBER<\/p>\n<\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | \n by<\/p>\n<\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | \n Name:<\/p>\n<\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | \n Title:<\/p>\n<\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n| <\/td>\n | \n MORRISON INVESTMENT HOLDINGS, INC.<\/p>\n<\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | \n by:<\/p>\n<\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | \n Name:<\/p>\n<\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | \n Title:<\/p>\n<\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n| <\/td>\n | \n Solely for purposes of Sections 6.09 and 7.05(a)(ii),<\/p>\n<\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | \n BARNES & NOBLE, INC.<\/p>\n<\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | \n By<\/p>\n<\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | \n Name:<\/p>\n<\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | \n Title:<\/p>\n<\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n| <\/td>\n | \n Solely for purposes of Section 9.05(c),<\/p>\n<\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | \n MICROSOFT CORPORATION<\/p>\n<\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | \n By<\/p>\n<\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | \n Name:<\/p>\n<\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | \n Title:<\/p>\n<\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n<\/p>\n
\nSCHEDULE A<\/strong><\/p>\n\n<\/p>\n Members, Percentage Interests and Membership Interests<\/u>\n<\/p>\n \n<\/p>\n<\/p>\n<\/p>\n \n\n\n| \n Member<\/u><\/p>\n<\/td>\n | <\/td>\n | <\/td>\n | \n Number of Common<\/p>\n Membership Interests<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| \n [Beckett Member]<\/p>\n<\/td>\n | <\/td>\n | <\/td>\n | \n 1,400,000<\/p>\n<\/td>\n<\/tr>\n | \n| \n 122 Fifth Avenue<\/p>\n New York, NY 10011<\/p>\n Attention: Eugene V. DeFelice<\/p>\n Vice President, General<\/p>\n Counsel & Secretary<\/p>\n Fax: (212) 463-5683<\/p>\n<\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | \n Total<\/strong><\/p>\n<\/td>\n| <\/td>\n | \n 1,400,000<\/strong><\/p>\n<\/td>\n<\/tr>\n\n| <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n | \n Number of Series
\nA Preferred
\nMembership Units<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| \n Morrison Investment Holdings, Inc.<\/p>\n<\/td>\n | <\/td>\n | <\/td>\n | \n 300,000<\/p>\n<\/td>\n<\/tr>\n | \n| \n [ 143]<\/p>\n Attention: [ 143]<\/p>\n [ 143]<\/p>\n Fax: [ 143]<\/p>\n<\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | \n Total<\/strong><\/p>\n<\/td>\n| <\/td>\n | \n 300,000<\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
\n<\/p>\nSCHEDULE B<\/strong><\/p>\n\n<\/p>\n<\/p>\n Capital Accounts as of the Closing Date<\/u><\/p>\n \n<\/p>\n \n\n\n| <\/td>\n | \n Member<\/p>\n<\/td>\n | <\/td>\n | <\/td>\n | \n Capital Account<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n \n \n\n\n| \n [Beckett Member]<\/p>\n<\/td>\n | <\/td>\n | <\/td>\n | \n $<\/p>\n<\/td>\n | \n 1,400,000,000<\/p>\n<\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| \n Morrison Investment Holdings, Inc.<\/p>\n<\/td>\n | <\/td>\n | <\/td>\n | \n $<\/p>\n<\/td>\n | \n 300,000,000<\/p>\n<\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| \n Total<\/strong><\/p>\n<\/td>\n| <\/td>\n | <\/td>\n | \n $<\/strong><\/p>\n<\/td>\n| \n 1,700,000,000<\/strong><\/p>\n<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
\nEXHIBIT A<\/strong><\/p>\n\n<\/p>\n Form of Joinder Agreement<\/u><\/p>\n \n<\/p>\n \n<\/p>\n This JOINDER AGREEMENT (this “Joinder Agreement<\/u>“) is executed pursuant
\nto the terms of the Limited Liability Company Agreement of [NEWCO] (the
\n“Company<\/u>“) dated as of [ -], 2012, a copy of which is attached hereto and
\nis incorporated herein by reference (the “LLC Agreement<\/u>“), by the
\nundersigned (the “Additional Member<\/u>“). By execution and delivery of this
\nJoinder Agreement, the Additional Member agrees as follows:<\/p>\n<\/p>\n SECTION 1. Acknowledgment<\/u>. The Additional Member acknowledges that
\nsuch Additional Member is acquiring [Common] [Series A Preferred] Membership
\nInterests (as defined in the LLC Agreement) in the Company subject to the terms
\nand conditions of the LLC Agreement.<\/p>\n<\/p>\n SECTION 2. Agreement<\/u>. The Additional Member (a) agrees that all
\nMembership Interests in the Company acquired by such Additional Member shall be
\nbound by and subject to the terms of the LLC Agreement and (b) hereby adopts the
\nLLC Agreement with the same force and effect as if it were originally a party
\nthereto.<\/p>\n<\/p>\n SECTION 3. Notice<\/u>. Any notice required to be provided by the LLC
\nAgreement shall be given to the Additional Member at the address listed beside
\nsuch Additional Member153s signature below.<\/p>\n<\/p>\n SECTION 4. Governing Law<\/u>. This Joinder Agreement and the rights of the
\nparties hereto shall be interpreted in accordance with the laws of the State of
\nDelaware, and all rights and remedies shall be governed by such laws without
\nregard to principles of conflict of laws.<\/p>\n<\/p>\n Executed and dated ___this day of _____ ______.<\/p>\n<\/p>\n \n\n\n| <\/td>\n | \n Additional Member:<\/p>\n<\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n\n\n\n| \n Address for Notices:<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n<\/tr>\n | \n| <\/td>\n<\/tr>\n | \n| <\/td>\n<\/tr>\n | \n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n
\nEXHIBIT B<\/strong><\/p>\n\n<\/p>\n CERTIFICATE FOR LIMITED LIABILITY COMPANY INTERESTS IN<\/p>\n \n [NEWCO] LLC<\/p>\n \n<\/p>\n [COMMON MEMBERSHIP INTERESTS][SERIES A PREFERRED MEMBERSHIP
\nINTERESTS]<\/p>\n \n<\/p>\n THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
\nTHE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES OR BLUE SKY LAWS
\nOF ANY STATE. THE HOLDER OF THIS CERTIFICATE, BY ITS ACCEPTANCE HEREOF,
\nREPRESENTS THAT IT IS ACQUIRING THIS SECURITY FOR INVESTMENT AND NOT WITH A VIEW
\nTO ANY SALE OR DISTRIBUTION HEREOF. ANY TRANSFER OF THIS CERTIFICATE OR ANY
\nLIMITED LIABILITY COMPANY INTEREST REPRESENTED HEREBY IS SUBJECT TO THE TERMS
\nAND CONDITIONS OF THE LIMITED LIABILITY COMPANY AGREEMENT (AS DEFINED BELOW).\n<\/p>\n \n<\/p>\n Class___________________<\/p>\n<\/p>\n Certificate Number______________ _________ Units<\/p>\n<\/p>\n [NewCo] LLC, a Delaware limited liability company (the “Company”), hereby
\ncertifies that ____________ (together with any assignee of this Certificate, the
\n“Holder”) is the registered owner of ____units of limited liability company
\ninterests in the Company of the class listed above. The rights, powers,
\npreferences, restrictions and limitations of the limited liability company
\ninterests in the Company are set forth in, and this Certificate and the limited
\nliability company interests in the Company represented hereby are issued and
\nshall in all respects be subject to the terms and provisions of, the Limited
\nLiability Company Agreement of the Company dated as of _____________________, as
\nthe same may be amended or restated from time to time (the “Limited Liability
\nCompany Agreement”). By acceptance of this Certificate, and as a condition to
\nbeing entitled to any rights and\/or benefits with respect to the limited
\nliability company interests evidenced hereby, the Holder is deemed to have
\nagreed to comply with and be bound by all the terms and conditions of the
\nLimited Liability Company Agreement. The Company will furnish a copy of the
\nLimited Liability Company Agreement to the Holder without charge upon written
\nrequest to the Company at its principal place of business. Transfer of any or
\nall of the limited liability company interests in the Company evidenced by this
\nCertificate is subject to certain restrictions in the Limited Liability Company
\nAgreement and can be effected only after compliance with all of those
\nrestrictions and the presentation to the Company of the endorsed Certificate,
\naccompanied by the completed Application for Transfer of Interests, which is on
\nthe reverse side of this Certificate.<\/p>\n<\/p>\n This Certificate and the limited liability company interests evidenced hereby
\nshall be governed by and construed in accordance with the laws of the State of
\nDelaware without regard to principles of conflicts of laws.<\/p>\n<\/p>\n
\nIN WITNESS WHEREOF, the Company has caused this Certificate to be executed as
\nof the date set forth below.<\/p>\n<\/p>\n \n\n\n| <\/td>\n | \n [NEWCO] LLC<\/p>\n<\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| \n Dated:<\/p>\n<\/td>\n | \n By:<\/p>\n<\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | \n Name:<\/p>\n<\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | \n Title:<\/p>\n<\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
\n(REVERSE SIDE OF CERTIFICATE)<\/strong><\/p>\n\n FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
\n_________________________________________ (print or type name of transferee),
\n__________________ (insert Social Security or other taxpayer identification
\nnumber of transferee), the following specified limited liability company
\ninterests in the Company: ______________ (identify the interest being
\ntransferred) effective as of the date specified in the Application for Transfer
\nof Interests below, and irrevocably constitutes and appoints
\n__________________________ and its authorized officers, as attorney-in-fact, to
\ntransfer the same on the books and records of the Company, with full power of
\nsubstitution in the premises.<\/p>\n<\/p>\n<\/p>\n Dated: __________________________ Signature:_____________________________<\/p>\n<\/p>\n (Transferor)<\/p>\n<\/p>\n Address: ________________________<\/p>\n<\/p>\n<\/p>\n APPLICATION FOR TRANSFER OF INTERESTS<\/strong><\/p>\n\n The undersigned applicant (the “Applicant”) hereby (a) applies for a transfer
\nof the limited liability company interests in the Company described above (the
\n“Transfer”) and applies to be admitted to the Company as a substitute member of
\nthe Company, (b) agrees to comply with and be bound by all of the terms and
\nprovisions of the Limited Liability Company Agreement, (c) represents that the
\nTransfer complies with the terms and conditions of the Limited Liability Company
\nAgreement, (d) represents that the Transfer does not violate any applicable laws
\nand regulations, and (e) agrees to execute and acknowledge such instruments
\n(including, without limitation, a counterpart of the Limited Liability Company
\nAgreement), in form and substance reasonably satisfactory to the Company, as the
\nCompany reasonably deems necessary or desirable to effect the Applicant153s
\nadmission to the Company as a substitute member of the Company and to confirm
\nthe agreement of the Applicant to be bound by all the terms and provisions of
\nthe Limited Liability Company Agreement with respect to the limited liability
\ncompany interests in the Company described above. Initially capitalized terms
\nused herein and not otherwise defined herein are used as defined in the Limited
\nLiability Company Agreement.<\/p>\n<\/p>\n The Applicant directs that the foregoing Transfer and the Applicant153s
\nadmission to the Company as a substitute member shall be effective as of the
\nregistration of the Transfer in the books and records of the Company on
\n___________________.<\/p>\n<\/p>\n<\/p>\n Name of Transferee (Print) _______________________________________________\n<\/p>\n<\/p>\n Dated: __________________________ Signature:_____________________________<\/p>\n<\/p>\n (Transferee)<\/p>\n<\/p>\n Address: _________________________<\/p>\n<\/p>\n<\/p>\n The Company has determined (a) that the Transfer described above is permitted
\nby the Limited Liability Company Agreement, (b) hereby agrees to effect such
\nTransfer and the admission of the Applicant as a substitute member of the
\nCompany effective as of the date and time directed above, and (c) agrees to
\nrecord in the books and records of the Company the admission of the Applicant as
\na substitute member.<\/p>\n<\/p>\n \n\n\n| <\/td>\n | \n [NEWCO] LLC<\/p>\n<\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | \n By:<\/p>\n<\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | \n Name:<\/p>\n<\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | \n Title:<\/p>\n<\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n | <\/td>\n | <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n
\nEXHIBIT C<\/strong><\/p>\n\n FORM OF INDEMNIFICATION AGREEMENT<\/p>\n \n INDEMNIFICATION AGREEMENT dated as of [ 143] (this “Agreement”), between [NewCo]
\nLLC, a Delaware limited liability company (the “Company”), and [ 143]
\n(“Indemnitee”).<\/p>\n<\/p>\n RECITALS<\/p>\n \n A. It is important to the Company that it attract and retain as managers and
\nofficers the most capable persons available.<\/p>\n<\/p>\n B. Indemnitee is a manager and\/or officer of the Company.<\/p>\n<\/p>\n C. The Delaware Limited Liability Company Act expressly provides that,
\nsubject to such standards and restrictions, if any, as are set forth in its
\nlimited liability company agreement, the Company may indemnify its managers and
\nofficers.<\/p>\n<\/p>\n C. The Company153s Amended and Restated Limited Liability Company Agreement
\n(the “LLC Agreement”) provides that the Company shall from time to time enter
\ninto indemnification agreements with managers and officers of the Company.<\/p>\n<\/p>\n E. In recognition of Indemnitee153s need for substantial protection against
\npersonal liability in order to enhance Indemnitee153s continued service to the
\nCompany in an effective manner, and to provide Indemnitee with express
\ncontractual indemnification (regardless of, among other things, any amendment to
\nor revocation of the LLC Agreement, any change in the composition of the
\nCompany153s Board of Managers (the “Board”), any acquisition or business
\ncombination transaction relating to the Company or any change in the Company153s
\nstockholders), the Company wishes to provide on the terms and subject to the
\nconditions set forth in this Agreement for the indemnification of and the
\nadvancing of Expenses (as defined in Section 1(c)) to Indemnitee and, to the
\nextent insurance is maintained, for the continued coverage of Indemnitee under
\nthe Company153s directors153 and officers153 liability insurance policies.<\/p>\n<\/p>\n NOW, THEREFORE, the parties hereby agree as follows:<\/p>\n<\/p>\n 1. Certain Definitions<\/u>. In addition to terms defined elsewhere herein,
\nthe following terms shall have the meanings ascribed to them below when used in
\nthis Agreement:<\/p>\n<\/p>\n
\n (a) A “Change in Control<\/u>” shall have occurred with respect to the
\nCompany if (i) prior to any Initial Public Offering or Qualified Distribution
\n(as such terms are defined in the LLC Agreement), a Change of Control (as such
\nterm is defined in the LLC Agreement) shall have occurred and (ii) following any
\nInitial Public Offering or Qualified Distribution, (A) any “person” or “group”
\n(as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange
\nAct of 1934 and the rules and regulations thereunder, but excluding any employee
\nbenefit plan of such person or its subsidiaries, and any person or entity acting
\nin its capacity as trustee, agent or other fiduciary or administrator of any
\nsuch plan), other than one or more “Permitted Holders” (as such term is defined
\nin the LLC Agreement), becomes the “beneficial owner” (as defined in Rules 13d-3
\nand 13d-5 under the Securities Exchange Act of 1934, except that a person or
\ngroup shall be deemed to have “beneficial ownership” of all securities that such
\nperson or group has the right to acquire, whether such right is exercisable
\nimmediately or only after the passage of time (such right, an “option right”)),
\ndirectly or indirectly, of 40% or more of the equity interests of the Company
\nentitled to vote for members of the board of directors or equivalent governing
\nbody of the Company on a fully-diluted basis (including taking into account all
\nsuch equity interests that such “person” or “group” has the right to acquire
\npursuant to any option right); or (B) during any period of 24 consecutive
\nmonths, a majority of the members of the board of directors or other equivalent
\ngoverning body of the Company cease to be composed of individuals (1) who were
\nmembers of that board or equivalent governing body on the first day of such
\nperiod, (2) whose election or nomination to that board or equivalent governing
\nbody was approved (which need not include having been recommended) by
\nindividuals referred to in clause (1) above constituting at the time of such
\nelection or nomination at least a majority of that board or equivalent governing
\nbody or (3) whose election or nomination to that board or other equivalent
\ngoverning body was approved (which need not include having been recommended) by
\nindividuals referred to in clauses (1) and (2) above constituting at the time of
\nsuch election or nomination at least a majority of that board or equivalent
\ngoverning body.<\/p>\n<\/p>\n (b) “Claim<\/u>” means any Proceeding, whether instituted, made or
\nconducted by the Company or any other Person, to which Indemnitee is a party or
\nis otherwise involved (including as a witness) by reason of the fact that (i)
\nIndemnitee is or was a manager and\/or officer of the Company or (ii) Indemnitee
\nis or was serving at the request of the Company as a manager, director, officer,
\nemployee and\/or agent of another corporation, partnership, limited liability
\ncompany, joint venture, trust, employee benefit plan or other enterprise.<\/p>\n<\/p>\n (c) “Expenses<\/u>” means any and all attorneys153 and experts153 fees and all
\nother costs, expenses and obligations (including travel expenses, court costs,
\nretainers, transcript costs, duplicating, printing and binding costs, as well as
\ntelecommunications, postage and courier charges) actually and reasonably
\nincurred or suffered by or on behalf of Indemnitee in connection with
\ninvestigating, defending, being a witness in or participating in (including on
\nappeal), or preparing to investigate, defend, be a witness in or participate in,
\nany Claim.<\/p>\n<\/p>\n (d) “Indemnifiable Losses<\/u>” means any and all Expenses, damages,
\nlosses, liabilities, judgments, fines, penalties, ERISA excise taxes and amounts
\npaid or payable in settlement (including all interest, assessments and other
\ncharges paid or payable in connection with or in respect of any of the
\nforegoing) relating to, resulting from or arising out of any Claim.<\/p>\n<\/p>\n 2<\/p>\n \n
\n(e) “Independent Legal Counsel<\/u>” means an attorney or law firm that is
\nexperienced in matters of corporate law and that shall not have otherwise
\nperformed services for the Company or Indemnitee within the last five years
\nother than serving as independent legal counsel for purposes of determining the
\nrights, including the indemnification rights, of Indemnitee hereunder or under
\nthe LLC Agreement, or for purposes of determining similar rights of other
\nindemnitees under similar indemnification agreements or the LLC Agreement.<\/p>\n<\/p>\n (f) “Person<\/u>” means any individual, firm, corporation, partnership,
\ncompany, limited liability company, trust, joint venture, association,
\ngovernmental entity or other entity.<\/p>\n<\/p>\n (g) “Proceeding<\/u>” means any threatened, asserted, pending or completed
\naction, suit or proceeding (whether civil, criminal, administrative,
\ninvestigative or other, including any arbitration or other alternative dispute
\nresolution mechanism), or any inquiry or investigation that Indemnitee in good
\nfaith believes might lead to the institution of any such action, suit or
\nproceeding.<\/p>\n<\/p>\n (h) “Reviewing Party<\/u>” means (i) if Indemnitee is a current manager or
\nofficer of the Company, (A) such member or members of the Board who are not and
\nwere not party to or otherwise involved in (including as witnesses) the Claim in
\nrespect of which indemnification is being sought, (B) a committee of such
\nmembers of the Board, designated by a majority vote of such members of the Board
\nor (C) Independent Legal Counsel; or (ii) if Indemnitee is not a current manager
\nor officer of the Company, any person specified in clause (i) or such other
\nperson or body as may be selected by the member or members of the Board who are
\nnot and were not party to or otherwise involved in (including as witnesses) the
\nClaim in respect of which indemnification is being sought.<\/p>\n<\/p>\n 2. Service by Indemnitee<\/u>. Indemnitee shall serve and continue to serve
\nas a manager and\/or officer of the Company and in such other capacity with
\nrespect to the Company as the Company may request, as the case may be,
\nfaithfully and to the best of Indemnitee153s ability so long as Indemnitee is duly
\nelected or appointed to the Board or duly appointed as an officer of the
\nCompany, and until such time as Indemnitee is removed from the Board or removed
\nfrom his or her office, as the case may be, as permitted by law or the Company153s
\ncertificate of formation or LLC Agreement now or hereafter in effect, or until
\nsuch time as Indemnitee tenders a resignation in writing.<\/p>\n<\/p>\n 3. Basic Indemnification Arrangement; Advancement of Expenses<\/u>.<\/p>\n<\/p>\n (a) The Company shall indemnify and hold harmless Indemnitee, to the fullest
\nextent permitted by the laws of the State of Delaware in effect on the date
\nhereof or as such laws may from time to time hereafter be amended to increase
\nthe scope of such permitted indemnification, against all Indemnifiable Losses
\nactually and reasonably incurred in connection with a Claim. The Company shall
\nprovide such indemnification in full as soon as practicable after request is
\nmade by Indemnitee in accordance with Section 4 hereof, but in any event no
\nlater than 60 days after receiving a written request from Indemnitee.<\/p>\n<\/p>\n 3<\/p>\n \n
\n(b) If so requested by Indemnitee, the Company shall advance to Indemnitee
\nwithin 20 days of such request any and all Expenses which Indemnitee determines
\nare reasonably likely to be payable in connection with a Claim (an “Advancement
\nof Expenses”). In accordance with such request, the Company shall either (i) pay
\nsuch Expenses on Indemnitee153s behalf, or (ii) reimburse Indemnitee for such
\nExpenses. Subject to Sections 3(c) and 3(d)(ii), Indemnitee153s right to an
\nAdvancement of Expenses is absolute, payable in advance of any disposition of a
\nClaim, and shall not be subject to any prior determination by the Reviewing
\nParty that Indemnitee has satisfied any applicable standard of conduct for
\nindemnification.<\/p>\n<\/p>\n (c) Notwithstanding any other provision of this Agreement, Indemnitee shall
\nnot be entitled to indemnification or Advancement of Expenses hereunder with
\nrespect to any Claim (or portion thereof) brought or made by Indemnitee against:
\n(i) the Company, except for (A) any Claim (or portion thereof) in respect of
\nthis Agreement and\/or Indemnitee153s rights hereunder, (B) any Claim (or portion
\nthereof) to establish or enforce a right to indemnification under (1) any
\nstatute or law, (2) any other agreement with the Company or (3) the Company153s
\ncertificate of formation or LLC Agreement now or hereafter in effect and (C) any
\ncounter-claim or cross-claim brought or made by Indemnitee against the Company
\nin any Claim (or portion thereof) brought by or in the right of the Company
\nagainst him; or (ii) any other Person, unless approved by the Board.<\/p>\n<\/p>\n (d) Notwithstanding the foregoing, (i) the indemnification obligations of the
\nCompany under this Section 3 shall be subject to the condition that the
\nReviewing Party shall have determined, in accordance with Section 4 hereof, that
\nIndemnitee is entitled to indemnification under applicable law and this
\nAgreement, and (ii) to the extent required by the laws of the State of Delaware,
\nthe obligation of the Company to make an Advancement of Expenses under this
\nSection 3 shall be subject to the condition that if, when, and to the extent
\nthat it is determined in a final decision from which there is no further right
\nto appeal (a “Final Adjudication”) that Indemnitee is not entitled to be
\nindemnified hereunder in accordance with applicable law, the Company shall be
\nreimbursed by Indemnitee (who hereby agrees to reimburse the Company in
\naccordance with this Section 3(d)) within 20 days of such Final Adjudication for
\nall such Expenses theretofore advanced (it being understood that Indemnitee153s
\nforegoing agreement to reimburse shall be deemed to satisfy any requirement that
\nIndemnitee provide the Company with an undertaking to repay any Advancement of
\nExpenses if it is determined by a Final Adjudication that Indemnitee is not
\nentitled to indemnification hereunder in accordance with applicable law);
\nprovided<\/u>, however<\/u>, that if Indemnitee has commenced or thereafter
\ncommences legal proceedings in a court of competent jurisdiction to secure a
\ndetermination that indemnification of Indemnitee would not be prohibited under
\napplicable law, any determination made by the Reviewing Party that Indemnitee
\nwould be prohibited from being indemnified under applicable law shall not be
\nbinding and Indemnitee shall not be required to reimburse the Company for any
\nAdvancement of Expenses unless and until a Final Adjudication is made with
\nrespect thereto. Any required repayment of Advancement of Expenses on the part
\nof Indemnitee shall be unsecured and interest-free. If there has been no
\ndetermination by the Reviewing Party within 60 days after written request is
\npresented to the Company or if the Reviewing Party determines that the Company
\nwould be prohibited from indemnifying Indemnitee under applicable law,
\nIndemnitee shall have the right to commence litigation seeking an initial
\ndetermination by the court or challenging any such determination by the
\nReviewing Party or any aspect thereof, including the legal or factual bases
\ntherefor.<\/p>\n<\/p>\n 4<\/p>\n \n
\n4. Procedure for Determination of Entitlement to Indemnification<\/u>.<\/p>\n<\/p>\n (a) To obtain indemnification hereunder, following a Final Adjudication of
\nthe applicable Claim, Indemnitee shall submit to the Company a written request
\ntherefor, along with such documentation and information as is reasonably
\navailable to Indemnitee and reasonably necessary to determine whether and to
\nwhat extent Indemnitee is entitled to indemnification hereunder;
\nprovided<\/u>, however<\/u>, that no deficiency in any such request,
\ndocumentation or information shall adversely affect Indemnitee153s rights to
\nindemnification or Advancement of Expenses hereunder. The Secretary of the
\nCompany shall, promptly upon receipt of such a request for indemnification,
\nadvise the Board and the Reviewing Party in writing that Indemnitee has
\nrequested indemnification (or, if the Company does not at that time have a
\nSecretary, the Board shall, promptly upon receipt of such a request for
\nindemnification, advise the Reviewing Party in writing of such request for
\nindemnification).<\/p>\n<\/p>\n (b) Upon a written request by Indemnitee pursuant to the first sentence of
\nSection 4(a) hereof, a determination, if required by the laws of the State of
\nDelaware, with respect to Indemnitee153s entitlement thereto shall be made by the
\nReviewing Party. If the Reviewing Party is Independent Legal Counsel, such
\ndetermination shall be made in a written opinion to the Board, a copy of which
\nshall be delivered to Indemnitee. If it is determined that Indemnitee is
\nentitled to indemnification hereunder, the Company shall make payment to
\nIndemnitee as soon as practicable but in any event no later than 60 days after
\nreceiving Indemnitee153s written request for indemnification. Indemnitee shall
\ncooperate with the Reviewing Party with respect to Indemnitee153s entitlement to
\nindemnification, including providing to the Reviewing Party upon reasonable
\nadvance request any documentation or information which is not privileged or
\notherwise protected from disclosure by court order or other similar legal
\nrequirement and which is reasonably available to Indemnitee and reasonably
\nnecessary to such determination. Any costs and expenses (including attorneys153
\nfees and disbursements) reasonably incurred by Indemnitee in so cooperating with
\nthe Reviewing Party making such determination shall be borne by the Company, and
\nthe Company hereby agrees to indemnify and hold Indemnitee harmless therefrom.\n<\/p>\n<\/p>\n 5. Change in Control<\/u>. The Company agrees that if a Change in Control
\nshall have occurred with respect to the Company, then, upon written request of
\nIndemnitee, the Reviewing Party with respect to all matters thereafter arising
\nconcerning rights of Indemnitee to indemnification hereunder or under any
\nprovision of the Company153s certificate of formation or LLC Agreement now or
\nhereafter in effect shall be Independent Legal Counsel selected by Indemnitee
\nand approved by the Company (which approval shall not be unreasonably delayed,
\nconditioned or withheld). Such counsel, among other things, shall render its
\nwritten opinion to the Company and Indemnitee as to whether and to what extent
\nIndemnitee would be permitted to be indemnified under applicable law. The
\nCompany agrees to pay the reasonable fees of the Independent Legal Counsel and
\nto indemnify fully such counsel against any and all expenses (including
\nattorneys153 fees), claims, liabilities and damages arising out of or relating to
\nthis Agreement or its engagement pursuant hereto.<\/p>\n<\/p>\n 5<\/p>\n \n
\n6. Indemnification for Additional Expenses.<\/u> Without limiting the
\ngenerality or effect of the foregoing, the Company shall indemnify Indemnitee
\nagainst and, if requested by Indemnitee, shall within 20 days of such request
\nadvance to Indemnitee in accordance with Section 3(b), any and all additional
\nExpenses paid or incurred by Indemnitee in connection with any Claim asserted or
\nbrought by Indemnitee for (a) indemnification or Advancement of Expenses by the
\nCompany hereunder or under any other agreement or any provision of the Company153s
\ncertificate of formation or LLC Agreement now or hereafter in effect and\/or (b)
\nrecovery under any directors153 and officers153 liability insurance policies
\nmaintained by the Company, provided that it is determined by a Final
\nAdjudication that Indemnitee is entitled to indemnification, Advancement of
\nExpenses or insurance recovery, as the case may be, under applicable law.<\/p>\n<\/p>\n 7. Partial Indemnity, Success on the Merits, Etc.<\/u> If Indemnitee is
\nentitled under any provision of this Agreement to indemnification by the Company
\nfor some or a portion of any Indemnifiable Loss but not, however, for all of the
\ntotal amount thereof, the Company shall nevertheless indemnify Indemnitee for
\nthe portion thereof to which Indemnitee is entitled. Moreover, notwithstanding
\nany other provision of this Agreement, to the extent that Indemnitee has been
\nsuccessful on the merits or otherwise in defense of any or all Claims relating
\nin whole or in part to an Indemnifiable Loss or in defense of any issue or
\nmatter therein, including dismissal without prejudice, Indemnitee shall be
\nindemnified against all Expenses incurred in connection therewith.<\/p>\n<\/p>\n 8. Burden of Proof.<\/u> In connection with any determination by the
\nReviewing Party or otherwise as to whether Indemnitee is entitled to be
\nindemnified hereunder, the Reviewing Party or court shall presume that
\nIndemnitee has satisfied the applicable standard of conduct and is entitled to
\nindemnification, and the burden of proof shall be on the Company to establish
\nthat Indemnitee is not so entitled.<\/p>\n<\/p>\n 6<\/p>\n \n
\n9. Other Presumptions.<\/u> For purposes of this Agreement, the termination
\nof any Claim by judgment, order, settlement (whether with or without court
\napproval) or conviction, or upon a plea of nolo contendere or its equivalent,
\nshall not create a presumption that Indemnitee did not meet any particular
\nstandard of conduct or have any particular belief or that a court has determined
\nthat indemnification is not permitted by applicable law. In addition, neither
\nthe failure of the Reviewing Party to have made a determination as to whether
\nIndemnitee has met any particular standard of conduct or had any particular
\nbelief, nor an actual determination by the Reviewing Party that Indemnitee has
\nnot met such standard of conduct or did not have such belief, prior to the
\ncommencement of legal proceedings by Indemnitee to secure a judicial
\ndetermination that Indemnitee should be indemnified under applicable law shall
\nbe a defense to Indemnitee153s claim or create a presumption that Indemnitee has
\nnot met any particular standard of conduct or did not have any particular
\nbelief. For purposes of any determination of Indemnitee153s entitlement to
\nindemnification or Advancement of Expenses hereunder, Indemnitee shall be
\npresumed to have acted in good faith and in a manner he or she reasonably
\nbelieved to be in or not opposed to the best interests of the Company, and, with
\nrespect to a criminal Claim, to have also had no reasonable cause to believe his
\nor her conduct was unlawful, if it is determined by the Reviewing Party that
\nIndemnitee153s actions were based on reliance in good faith (A) on the records or
\nbooks of account of the Company or another enterprise, including financial
\nstatements, (B) on information supplied to Indemnitee by the officers of the
\nCompany or another enterprise in the course of their duties, (C) on the advice
\nof legal counsel for the Company or the Board (or any committee thereof) or for
\nanother enterprise or its board of directors (or any committee thereof), (D) on
\ninformation or records given or reports made by an independent certified public
\naccountant selected with reasonable care by the Company or the Board (or any
\ncommittee thereof) or by another enterprise or its board of directors (or any
\ncommittee thereof), or (E) on information, opinions or statements given or
\nreports made by any other person selected with reasonable care by the Company or
\nthe Board (or any committee thereof) or by another enterprise or its board of
\ndirectors (or any committee thereof) as to matters Indemnitee reasonably
\nbelieves are within such person153s professional or expert competence. For
\npurposes of this Section 9, the term “another enterprise” means any other
\ncorporation, partnership, limited liability company, joint venture, trust,
\nemployee benefit plan or other enterprise of which Indemnitee is or was serving
\nat the request of the Company as a manager, director, officer, employee or
\nagent. The provisions of this Section 9 shall not be deemed to be exclusive or
\nto limit in any way the other circumstances in which Indemnitee may be deemed or
\nfound to have met the applicable standard of conduct set forth in this
\nAgreement. In addition, the knowledge and\/or actions, or failure to act, of any
\nother manager, trustee, partner, managing member, fiduciary, officer, agent or
\nemployee of the Company shall not be imputed to Indemnitee for purposes of
\ndetermining the right to indemnification hereunder.<\/p>\n<\/p>\n 10. Non-Exclusivity, Etc.<\/u> The rights of Indemnitee hereunder shall be
\nin addition to any other rights Indemnitee may have under the Company153s
\ncertificate of formation and LLC Agreement now or hereafter in effect, the
\nsubstantive laws of the State of Delaware, any other contract or otherwise
\n(collectively, “Other Indemnity Provisions”); provided, however, that (a) to the
\nextent that Indemnitee otherwise would have any greater right to indemnification
\nunder any Other Indemnity Provision, Indemnitee shall be deemed to have such
\ngreater right hereunder and (b) to the extent that any change is made to any
\nOther Indemnity Provision which permits any greater right to indemnification
\nthan that provided hereunder as of the date hereof, Indemnitee shall be deemed
\nto have such greater right hereunder. No amendment to the Company153s certificate
\nof formation or LLC Agreement now or hereafter in effect shall be effective
\nvis- -vis Indemnitee to the extent the effect of such amendment would be to
\ndeny, diminish or encumber Indemnitee153s right to indemnification hereunder or
\nunder any Other Indemnity Provision.<\/p>\n<\/p>\n 7<\/p>\n \n
\n11. Liability Insurance.<\/u> To the extent the Company maintains an
\ninsurance policy or policies providing directors153 and officers153 liability
\ninsurance, Indemnitee shall be covered by such policy or policies, in accordance
\nwith its or their terms, to the maximum extent of the coverage available for any
\nmanager or officer of the Company. If, at the time of receipt of notice of a
\nClaim pursuant to the terms hereof, the Company has directors153 and officers153
\nliability insurance in effect, the Company shall give prompt notice of the Claim
\nto the insurers in accordance with the procedures set forth in the respective
\npolicies.<\/p>\n<\/p>\n 12. Subrogation.<\/u> In the event of payment hereunder, the Company shall
\nbe subrogated to the extent of such payment to all of the related rights of
\nrecovery of Indemnitee against other Persons (other than Indemnitee153s
\nsuccessors). Indemnitee shall execute all papers reasonably required and shall
\ndo everything that may be reasonably necessary to secure such rights, including
\nexecution of such documents necessary to enable the Company to effectively bring
\nsuit to enforce such rights.<\/p>\n<\/p>\n 13. No Duplication of Payments.<\/u> The Company shall not be liable
\nhereunder to make any payment in connection with any Claim made against
\nIndemnitee to the extent Indemnitee has otherwise actually received payment
\n(under any insurance policy, Other Indemnity Provisions or otherwise) of the
\namounts otherwise indemnifiable hereunder.<\/p>\n<\/p>\n 14. Defense of Claims.<\/u> The Company shall be entitled to participate in
\nthe defense of any Claim or to assume the defense thereof, with counsel
\nreasonably satisfactory to Indemnitee; provided<\/u>, however<\/u>, that if
\nIndemnitee believes, after consultation with counsel selected by Indemnitee,
\nthat (a) the use of counsel chosen by the Company to represent Indemnitee would
\npresent such counsel with an actual or potential conflict of interest, (b) the
\nnamed parties in any such Claim (including any impleaded parties) include both
\nthe Company and Indemnitee and Indemnitee concludes that there may be one or
\nmore legal defenses available to him or her that are different from or in
\naddition to those available to the Company, or (c) any such representation by
\nsuch counsel would be precluded under the applicable standards of professional
\nconduct then prevailing, then Indemnitee shall be entitled to retain separate
\ncounsel (but not more than one law firm plus, if applicable, local counsel in
\nrespect of any particular Claim) at the Company153s expense. The Company shall not
\nbe liable to Indemnitee hereunder for any amounts paid in settlement of any
\nClaim effected by Indemnitee without the Company153s prior written consent. The
\nCompany shall not, without the prior written consent of Indemnitee, effect any
\nsettlement of any threatened or pending Claim to which Indemnitee is or could
\nhave been a party unless such settlement solely involves the payment of money
\nand includes a complete and unconditional release of Indemnitee from all
\nliability on all claims that are the subject matter of such Claim. Neither the
\nCompany nor Indemnitee shall unreasonably delay, condition or withhold its or
\nhis or her consent to any proposed settlement; provided<\/u>, however<\/u>,
\nthat Indemnitee may withhold consent to any settlement that does not provide a
\ncomplete and unconditional release.<\/p>\n<\/p>\n 8<\/p>\n \n
\n15. Successors and Binding Agreement.<\/u><\/p>\n<\/p>\n (a) The Company shall require any successor (whether direct or indirect, by
\npurchase, merger, consolidation, reorganization (including the conversion or
\nreorganization of the Company into a corporation) or otherwise) to all or
\nsubstantially all of the business and\/or assets of the Company, by agreement in
\nform and substance reasonably satisfactory to Indemnitee and his or her counsel,
\nto expressly assume and agree to perform this Agreement in the same manner and
\nto the same extent the Company would be required to perform if no such
\nsuccession had taken place. This Agreement shall be binding upon and inure to
\nthe benefit of the Company and any successor to the Company, including any
\nPerson acquiring directly or indirectly all or substantially all of the business
\nor assets of the Company whether by purchase, merger, consolidation,
\nreorganization (including the conversion or reorganization of the Company into a
\ncorporation) or otherwise (and such successor shall thereafter be deemed the
\n“Company” for purposes of this Agreement), but shall not otherwise be assignable
\nor delegable by the Company.<\/p>\n<\/p>\n (b) This Agreement shall inure to the benefit of and be enforceable by
\nIndemnitee153s personal or legal representatives, executors, administrators,
\nsuccessors, heirs, distributees, legatees and other successors.<\/p>\n<\/p>\n (c) This Agreement is personal in nature and neither of the parties hereto
\nshall, without the consent of the other, assign or delegate this Agreement or
\nany rights or obligations hereunder except as expressly provided in Sections
\n15(a) and 15(b). Without limiting the generality or effect of the foregoing,
\nIndemnitee153s right to receive payments hereunder shall not be assignable,
\nwhether by pledge, creation of a security interest or otherwise, other than by a
\ntransfer by Indemnitee153s will or by the laws of descent and distribution, and,
\nin the event of any attempted assignment or transfer contrary to this Section
\n15(c), the Company shall have no liability to pay any amount so attempted to be
\nassigned or transferred.<\/p>\n<\/p>\n 16. Continuation of Indemnity.<\/u> This Agreement shall be unaffected by
\nIndemnitee ceasing serve as a manager or officer of the Company or ceasing to
\nserve at the request of the Company as a manager, director, officer, employee or
\nagent of another corporation, partnership, limited liability company, joint
\nventure, trust, employee benefit plan or other enterprise and shall continue for
\nso long as Indemnitee may have any liability or potential liability by virtue of
\nhis or her service in such capacity, including the final termination of all
\npending Claims in respect of which Indemnitee is granted rights of
\nindemnification or Advancement of Expenses hereunder and of any Claims commenced
\nby Indemnitee pursuant to this Agreement relating thereto, whether or not he or
\nshe is acting or serving in such capacity at the time any liability or Expense
\nis incurred for which indemnification or Advancement of Expenses can be provided
\nhereunder.<\/p>\n<\/p>\n 17. Notices.<\/u> For all purposes of this Agreement, all communications,
\nincluding notices, consents, requests or approvals, required or permitted to be
\ngiven hereunder shall be in writing and shall be deemed to have been duly given
\nwhen hand delivered or dispatched by electronic facsimile transmission (with
\nreceipt thereof orally confirmed), or five business days after having been
\nmailed by United States registered or certified mail, return receipt requested,
\npostage prepaid, or one business day after having been sent for next-day
\ndelivery by a nationally recognized overnight courier service, addressed to the
\nCompany (to the attention of the Secretary of the Company or, if the Company
\ndoes not at that time have a Secretary, the Board) and to Indemnitee at the
\naddresses shown on the signature page hereto, or to such other address as any
\nparty may have furnished to the other in writing and in accordance herewith,
\nexcept that notices of changes of address shall be effective only upon receipt.\n<\/p>\n<\/p>\n 9<\/p>\n \n
\n18. Governing Law; Submission to Jurisdiction.<\/u> THE VALIDITY,
\nINTERPRETATION, CONSTRUCTION AND PERFORMANCE OF THIS AGREEMENT SHALL BE GOVERNED
\nBY AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF
\nDELAWARE, WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICT OF LAWS OF SUCH
\nSTATE. ANY “ACTION OR PROCEEDING” (AS SUCH TERM IS DEFINED BELOW) ARISING OUT OF
\nOR RELATING TO THIS AGREEMENT OR BROUGHT TO ENFORCE RIGHTS HEREUNDER SHALL BE
\nFILED IN AND LITIGATED SOLELY BEFORE THE COURT OF CHANCERY OF THE STATE OF
\nDELAWARE (OR, SOLELY TO THE EXTENT THE COURT OF CHANCERY DOES NOT HAVE SUBJECT
\nMATTER JURISDICTION, THE EXCLUSIVE JURISDICTION OF ANY OTHER STATE OR FEDERAL
\nCOURT LOCATED IN THE STATE OF DELAWARE), AND EACH PARTY TO THIS AGREEMENT: (A)
\nGENERALLY AND UNCONDITIONALLY ACCEPTS THE EXCLUSIVE JURISDICTION OF THE
\nAFORESAID COURT AND VENUE THEREIN, AND WAIVES TO THE FULLEST EXTENT PERMITTED BY
\nLAW ANY DEFENSE OR OBJECTION TO SUCH JURISDICTION AND VENUE BASED UPON THE
\nDOCTRINE OF “FORUM NON CONVENIENS;” AND (B) GENERALLY AND UNCONDITIONALLY
\nCONSENTS TO SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING BY DELIVERY OF
\nCERTIFIED OR REGISTERED MAILING OF THE SUMMONS AND COMPLAINT IN ACCORDANCE WITH
\nTHE NOTICE PROVISIONS OF THIS AGREEMENT. FOR PURPOSES OF THIS SECTION, THE TERM
\n“ACTION OR PROCEEDING” IS DEFINED AS ANY AND ALL CLAIMS, SUITS, ACTIONS,
\nHEARINGS OR OTHER SIMILAR PROCEEDINGS, INCLUDING APPEALS AND PETITIONS
\nTHEREFROM, WHETHER FORMAL OR INFORMAL, GOVERNMENTAL OR NON-GOVERNMENTAL, OR
\nCIVIL OR CRIMINAL. THE FOREGOING CONSENT TO JURISDICTION SHALL NOT CONSTITUTE
\nGENERAL CONSENT TO SERVICE OF PROCESS IN THE STATE OF DELAWARE FOR ANY PURPOSE
\nEXCEPT AS PROVIDED ABOVE, AND SHALL NOT BE DEEMED TO CONFER RIGHTS ON ANY PERSON
\nOTHER THAN THE PARTIES TO THIS AGREEMENT.<\/p>\n<\/p>\n 19. Validity.<\/u> If any provision or provisions of this Agreement shall
\nbe held to be invalid, illegal or unenforceable for any reason whatsoever: (a)
\nthe validity, legality and enforceability of the remaining provisions of this
\nAgreement (including each portion of any Section of this Agreement containing
\nany such provision held to be invalid, illegal or unenforceable) shall not in
\nany way be affected or impaired thereby; (b) such provision or provisions will
\nbe deemed reformed to the extent necessary to conform to applicable law and to
\ngive maximum effect to the intent of the parties hereto; and (c) to the fullest
\nextent possible, the provisions of this Agreement (including each portion of any
\nSection of this Agreement containing any such provision held to be invalid,
\nillegal or unenforceable, that is not itself invalid, illegal or unenforceable)
\nshall be construed so as to give effect to the intent manifested by the
\nprovision or provisions held invalid, illegal or unenforceable.<\/p>\n<\/p>\n 10<\/p>\n \n
\n20. Amendments, Etc.<\/u> No provision of this Agreement may be waived,
\namended or discharged unless such waiver, amendment or discharge is executed in
\nwriting by both of the parties hereto. No waiver of any of the provisions of
\nthis Agreement shall be deemed or shall constitute a waiver of any other similar
\nor dissimilar provisions hereof, nor shall such waiver constitute a continuing
\nwaiver.<\/p>\n<\/p>\n 21. Counterparts.<\/u> This Agreement may be executed in any number of
\ncounterparts, each of which shall be deemed to be an original, but all such
\nrespective counterparts shall together constitute one and the same instrument.
\nOnly one such counterpart signed by the party against whom enforceability is
\nsought needs to be produced to evidence the existence of this Agreement.<\/p>\n<\/p>\n 22. Interpretation.<\/u> When a reference is made in this Agreement to
\nSections, such reference shall be to a Section of this Agreement unless
\notherwise indicated. Headings of sections and paragraphs in this Agreement are
\nfor convenience only and shall not be deemed to constitute part of this
\nAgreement or to affect the construction or interpretation thereof. Wherever the
\nwords “include”, “includes”, or “including” are used in this Agreement, they
\nshall be deemed to be followed by the words “without limitation”. Wherever the
\nword “hereunder” is used in this Agreement, it shall mean “under this
\nAgreement.” Words denoting gender shall include all genders.<\/p>\n<\/p>\n 23. Miscellaneous.<\/u> No agreements or representations, oral or
\notherwise, expressed or implied with respect to the subject matter hereof have
\nbeen made by either party that are not set forth expressly in this Agreement.\n<\/p>\n<\/p>\n 11<\/p>\n \n
\nIN WITNESS WHEREOF, Indemnitee has executed and the Company has caused its
\nduly authorized representative to execute this Agreement as of the date first
\nabove written.<\/p>\n<\/p>\n \n\n\n| \n [NEWCO] LLC<\/p>\n<\/td>\n<\/tr>\n | \n| \n by<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | \n Name:<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n | \n Title:<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n<\/p>\n<\/p>\n \n\n\n| \n [INDEMNITEE]<\/p>\n<\/td>\n<\/tr>\n | \n| \n by<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n | <\/td>\n<\/tr>\n | \n| <\/td>\n | \n Name:<\/p>\n<\/td>\n<\/tr>\n | \n| <\/td>\n | \n Title:<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n<\/p>\n<\/p><\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[6857],"corporate_contracts_industries":[9492],"corporate_contracts_types":[9573,9576],"class_list":["post-41641","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-barnes---noble-inc","corporate_contracts_industries-retail__books","corporate_contracts_types-formation","corporate_contracts_types-formation__llc"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/41641","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=41641"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=41641"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=41641"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=41641"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}} | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |