<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------
SCHEDULE 13D
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
(Amendment No. 1)
Seal Holdings Corporation
- -------------------------------------------------------------------------------
(Name of Issuer)
Class A Common Stock, par value $.20 per share
- -------------------------------------------------------------------------------
(Title of Class of Securities)
812070 10 0
- -------------------------------------------------------------------------------
(CUSIP Number)
Stuart L. Rosow, Esq.
Proskauer Rose, LLP
1585 Broadway
New York, New York 10036-8299
(212) 969-3000
- -------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
June 10, 1999
- --------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box |_|
<PAGE>
SCHEDULE 13D
_______________________________________________________________________________
CUSIP No. 812070 10 0 Page 1 of 6 Pages
_______________________________________________________________________________
1 NAME OF REPORTING PERSONS
S.S OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
M. Lee Pearce, M.D.
______________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
______________________________________________________________________________
3 SEC USE ONLY
______________________________________________________________________________
4 SOURCE OF FUNDS*
00
______________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(D) OR 2(E) [ ]
______________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
_______________________________________________________________________________
| |
NUMBER OF | 7 | SOLE VOTING POWER
SHARES | | 28,168,419
BENEFICIALLY |_____|________________________________________________________
OWNED BY | |
EACH | 8 | SHARED VOTING POWER
REPORTING | | 2,000,000
PERSON WITH |_____|________________________________________________________
| |
| 9 | SOLE DISPOSITIVE POWER
| | 28,968,419
|_____|________________________________________________________
| |
| 10 | SHARED DISPOSITIVE POWER
| | 1,200,000
_______________|_____|_________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
30,168,419 (95.5%)
______________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [X]
______________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
95.5%
______________________________________________________________________________
14 TYPE OF REPORTING PERSON*
IN
______________________________________________________________________________
*SEE INSTRUCTIONS BEFORE FILLING OUT
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SCHEDULE 13D
_______________________________________________________________________________
CUSIP No. 812070 10 0 Page 2 of 6 Pages
_______________________________________________________________________________
1 NAME OF REPORTING PERSONS
S.S OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
Robert G. Tancredi, M.D.
______________________________________________________________________________
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
______________________________________________________________________________
3 SEC USE ONLY
______________________________________________________________________________
4 SOURCE OF FUNDS*
00
______________________________________________________________________________
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(D) OR 2(E) [ ]
______________________________________________________________________________
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
_______________________________________________________________________________
| |
NUMBER OF | 7 | SOLE VOTING POWER
SHARES | | 0
BENEFICIALLY |_____|________________________________________________________
OWNED BY | |
EACH | 8 | SHARED VOTING POWER
REPORTING | | 2,000,000
PERSON WITH |_____|________________________________________________________
| |
| 9 | SOLE DISPOSITIVE POWER
| | 0
|_____|________________________________________________________
| |
| 10 | SHARED DISPOSITIVE POWER
| | 1,200,000
_______________|_____|_________________________________________________________
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,200,000
______________________________________________________________________________
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
______________________________________________________________________________
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
10.3%
______________________________________________________________________________
14 TYPE OF REPORTING PERSON*
IN
______________________________________________________________________________
*SEE INSTRUCTIONS BEFORE FILLING OUT
<PAGE>
Item 1. Security and Issuer
This statement on Schedule 13D, Amendment No. 1 (the "13D Amendment") relates to
the Class A Common Stock, par value $.20 per share (the "Class A Common Shares")
of Seal Holdings Corporation, a Delaware corporation (the "Issuer"). The
principal executive offices of the Issuer are located at 5601 North Dixie
Highway, Suite 411, Fort Lauderdale, Florida 33334.
The information set forth in the Exhibits hereto is hereby expressly
incorporated herein by reference and the responses to each Item of this 13D
Amendment are qualified in their entirety by the provisions of such Exhibits.
Item 2. Identity and Background
(a) -(c) This 13D Amendment is being filed jointly by M. Lee Pearce, M.D.
("Pearce") and Robert G. Tancredi, M.D. ("Tancredi") (collectively, the
"Reporting Persons").
Pearce is the Chairman of the Board and a Class B Director of the
Issuer, whose business address is 5601 North Dixie Highway, Suite 411, Fort
Lauderdale, Florida 33334. Tancredi is the Chief Executive Officer and a Class B
Director of the Issuer.
(d)-(e) During the last five years, the Reporting Persons have not been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors), or been a party to a civil proceeding of a judicial or
administrative body of competent decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
(f) Pearce and Tancredi are both United States citizens.
Item 3. Source and Amount of Funds or Other Consideration
All of the 2,000,000 shares of the Issuer which are the subject of this 13D
Amendment were acquired by the Reporting Persons in connection with the
formation of PearTan, LLC, a Delaware limited liability company ("PearTan").
Pearce contributed 2,000,000 shares (the "Shares") of the Issuer's Class A
Common Stock, pursuant to the terms of the PearTan Limited Liability Company
Agreement (the "LLC Agreement"), dated as of June 10, 1999, and Tancredi
contributed $225,000 to PearTan.
Item 4. Purpose of Transaction
The Shares were acquired by the Reporting Persons pursuant to the LLC Agreement
described in Item 3 above. The Reporting Persons presently intend to hold the
Issuer's shares for investment.
(a)-(j) The Reporting Persons do not have any plans with respect to their
securities of the nature set forth in Item 4 (a)-(j), however, the Reporting
Persons may, from time to time, acquire additional shares or dispose of the
shares which they own. In addition, the Reporting Persons are aware that the
Issuer explores, from time to time, potential business combination opportunities
which may result in the acquisition by others of additional securities of the
Issuer or the disposition of securities of the Issuer or which may result in a
sale or transfer of a material amount of the assets of the Issuer or its
subsidiaries.
Item 5. Interest in Securities of the Issuer
See response to Item 3.
(a) The number of Class A Common Shares beneficially owned by Pearce is equal to
30,168,419, which constitutes 95.5% of the outstanding Class A Common Shares as
of April 23, 1999 (plus shares issuable to Pearce upon conversion of 2,000,000
shares of Series A Convertible Preferred Stock ("Series A Preferred Shares")
that are automatically convertible into 20,000,000 shares of Class A Common
Shares at such time as an amendment to the Issuer's Certificate of Incorporation
to increase its authorized shares of Class A Common Shares is filed with the
Delaware Secretary of State. The authority to increase the authorized shares is
expected to be voted upon by the Issuer's stockholders at the Issuer's Annual
Meeting of Stockholders. Until such time as the Series A Preferred Stock is
converted, Pearce is entitled to ten votes for each one share of Series A
Preferred Stock held. Pearce also owns 25,000 shares of Class B Common Stock,
which represents all of the issued and outstanding shares of that class of
stock. The Class B Common Stock is entitled to one vote per share and is
entitled to elect a majority of the Board of Directors of the Issuer. Tancredi
does not own any Class A Common Shares (or other securities of the Issuer),
except through PearTan.
(b) Pearce has the sole power to vote 28,168,419 Class A Common Shares, which
includes the sole power to vote and to dispose or direct the disposition of
2,000,000 Series A Preferred Shares. Such shares entitle Pearce to ten votes for
each Series A Preferred Share so held. Subject to the discussion in Item 6
below, Pearce has shared power with Tancredi to vote or to direct the vote of
2,000,000 Class A Common Shares held of record by PearTan, as described in the
LLC Agreement. Pearce has the sole power to direct the disposition of 28,968,419
Class A Common Shares, including 800,000 of the Class A Common Shares held
Page 3 of 6
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of record by PearTan and the 20,000,000 shares of Class A Common Shares issuable
upon conversion of the Series A Preferred Shares. Pearce has shared power with
Tancredi to direct the disposition of the remaining 1,200,000 Class A Common
Shares held of record by PearTan.
Tancredi has the sole power to vote and to dispose or direct the
disposition of no Class A Common Shares. Subject to the discussion in Item 6
below, Tancredi has shared power with Pearce to vote or to direct the vote of
2,000,000 Class A Common Shares. Tancredi has shared power with Pearce to direct
the disposition of 1,200,000 Class A Common Shares.
(c) There have not been any transactions in the class of securities reported on
that were effected during the past 60 days or since the most recent filing on
Schedule 13D, whichever is less, by the Reporting Persons, other than as
described herein.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to
Securities of the Issuer.
PearTan is managed by Pearce and Tancredi, the sole members of PearTan.
Shares of the Issuer's stock held by PearTan may not be sold or otherwise
disposed of without the consent of both Pearce and Tancredi, except that Pearce
shall have the right to cause PearTan to sell up to 800,000 shares. The voting
of the 2,000,000 shares of the Issuer's Class A Shares held of record by PearTan
on any matter submitted to the vote of the Issuer's stockholders shall be as
Pearce and Tancredi may agree. If no agreement can be reached, Tancredi shall
have the right to determine how PearTan will vote a number of shares equal to
500,000 shares plus up to 600,000 additional shares that may accrue over a three
year period. Pearce shall have the right to determine how PearTan will vote on
the balance of such 2,000,000 shares. Notwithstanding the foregoing, and as more
fully set forth in the LLC Agreement, Tancredi's right to vote the additional
600,000 shares may be accelerated or forfeited in the event of a change in
control of the Issuer or a termination of Tancredi's employment with the Issuer.
With the exception of 800,000 of the Shares for which Pearce has sole
dispositive power, the Shares are subject to certain transfer restrictions.
Page 4 of 6
<PAGE>
Item 7. Material to Be Filed as Exhibits
(a) PearTan, LLC Limited Liability Company Agreement dated as of June 10, 1999
and effective as of May 26, 1999.
(b) Joint Filing agreement by and among M. Lee Pearce, M.D. and Robert G.
Tancredi, M.D. dated June 14, 1999.
Page 5 of 6
<PAGE>
Signature
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: June 14, 1999
/s/ M. Lee Pearce, M.D.
-----------------------------
M. Lee Pearce, M.D.
/s/ Robert G. Tancredi, M.D.
-----------------------------
Robert G. Tancredi, M.D.
Page 6 of 6
<PAGE>
EXHIBIT A
PEARTAN LIMITED LIABILITY COMPANY AGREEMENT
<PAGE>
PEARTAN, LLC
LIMITED LIABILITY COMPANY AGREEMENT
As of May 26, 1999
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS..............................................................................................1
Section 1.1 Definitions..........................................................................1
ARTICLE II
ORGANIZATION.............................................................................................7
Section 2.1 Name and Place of Business...........................................................7
Section 2.2 Purpose and Powers of the Company....................................................7
Section 2.3 Registered Agent and Office..........................................................7
Section 2.4 Commencement; Term...................................................................7
ARTICLE III
MEMBERS..................................................................................................8
Section 3.1 Admission of Members.................................................................8
Section 3.2 Management...........................................................................8
Section 3.3 Limitation on Members' Liabilities...................................................8
ARTICLE IV
CAPITAL CONTRIBUTIONS AND CAPITAL ACCOUNTS...............................................................8
Section 4.1 Original Capital Contributions and Percentage Interest...............................8
Section 4.2 Capital Accounts.....................................................................9
Section 4.3 Nature of Contributions.............................................................10
Section 4.4 Investment of Capital Contributions.................................................10
Section 4.5 Transfer of Interest................................................................10
Section 4.6 Sale of Seal Shares.................................................................10
ARTICLE V
ALLOCATIONS.............................................................................................11
Section 5.1 Profits.............................................................................11
Section 5.2 Losses..............................................................................11
Section 5.3 Other Allocation Rules..............................................................12
Section 5.4 Tax Allocations; Section 704(c) of the Code.........................................12
Section 5.5 Tax Matters Member..................................................................13
</TABLE>
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TABLE OF CONTENTS
(Continued)
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ARTICLE VI
DISTRIBUTIONS...........................................................................................13
Section 6.1 Distributions.......................................................................13
ARTICLE VII
BOOKS, RECORDS, ACCOUNTING AND REPORTS..................................................................14
Section 7.1 Books of Account....................................................................14
Section 7.2 Financial Reports...................................................................14
Section 7.3 Accounting Decisions................................................................15
Section 7.4 Taxable Year; Accounting Method, Elections..........................................15
Section 7.5 Deposit of Initial Shares and Vested Shares.........................................15
ARTICLE VIII
TRANSFER OF INTEREST; ADMISSION, WITHDRAWAL,
DISABILITY OR REMOVAL OF MEMBERS........................................................................15
Section 8.1 Limitation on Transfers of Interests................................................15
Section 8.2 Admission of Members................................................................15
Section 8.3 Withdrawal of Tancredi..............................................................16
Section 8.4 Death, Disability or Bankruptcy of a Member.........................................16
ARTICLE IX
AMENDMENTS..............................................................................................17
ARTICLE X
DISSOLUTION OF THE COMPANY..............................................................................17
Section 10.1 Events Causing Dissolution..........................................................17
Section 10.2 Liquidation.........................................................................17
ARTICLE XI
EXCULPATION; INDEMNIFICATION; EXPENSES..................................................................18
Section 11.1 Exculpation.........................................................................18
Section 11.2 Indemnification.....................................................................18
Section 11.3 Company Expenses....................................................................18
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TABLE OF CONTENTS
(Continued)
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ARTICLE XII
MISCELLANEOUS...........................................................................................18
Section 12.1 Severability........................................................................18
Section 12.2 Headings............................................................................19
Section 12.3 Binding Agreement...................................................................19
Section 12.4 Applicable Law......................................................................19
Section 12.5 Entire Agreement; No Oral Modification..............................................19
Section 12.6 Agreement in Counterparts...........................................................19
Section 12.7 No Right of Partition...............................................................19
Section 12.8 Qualification and Assumed Name Filings..............................................19
Section 12.9 Jurisdiction and Venue..............................................................19
Section 12.10 Notices.............................................................................20
Section 12.11 No Third Party Beneficiary..........................................................20
</TABLE>
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<PAGE>
PEARTAN, LLC
LIMITED LIABILITY COMPANY AGREEMENT
LIMITED LIABILITY COMPANY AGREEMENT, dated as of May 26, 1999 by and
between M. Lee Pearce, M.D. ("Pearce") and Robert Tancredi ("Tancredi")
(individually referred to as "Member," and collectively referred to as
"Members").
In order to form a limited liability company under the laws
of the State of Delaware under the name of PearTan, LLC(the "Company"), the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. As used herein, unless the context otherwise
requires, each of the following terms shall have the meaning given to it below,
which meaning shall be applicable to both the singular and plural forms of the
term defined; and unless otherwise indicated, all section references hereto are
to sections of this Agreement.
"Adjusted Capital Account Deficit" means, with respect to any Member,
the deficit balance, if any, in such Member's Capital Account as of the end of
the relevant fiscal year, after giving effect to the following adjustments:
(i) crediting to such Capital Account any amounts which such
Member is obligated to restore or is deemed obligated to restore pursuant to
Treasury Regulations Sections 1.704-1(b)(2)(ii)(c), 1.704-2(g)(1) and
1.704-2(i)(5); and
(ii) debiting from such Capital Account the items described
in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).
The foregoing definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Treasury Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
"Affiliate" of a Person (the "Principal") shall mean: (i) any Person
who controls, is controlled by or under common control with the Principal; (ii)
if the Principal is not an individual, any officer, director, trustee, general
partner, managing member or employee of the Principal; and (iii) if the
Principal is an individual, any spouse or immediate family member of the
Principal or of any other Person included in clause (i) or (ii) above.
"Agreement" shall mean this Limited Liability Company Agreement, as it
may be amended, supplemented or restated from time to time.
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"Bank" shall mean a bank organized under the laws of the United States
or any state thereof with equity capital in excess of $100,000,000.
"Bankruptcy" of a Person shall be deemed to occur when such Person:
makes an assignment for the benefit of creditors; files a voluntary petition in
bankruptcy; is adjudged a bankrupt or insolvent, or has entered against it an
order for relief in any bankruptcy or insolvency proceeding; files a petition or
answer seeking for itself any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any statute, law
or regulation; files an answer or other pleading admitting or failing to contest
the material allegations of a petition filed against it in any proceeding of
this nature; or seeks, consents to or acquiesces in the appointment of a
trustee, receiver or liquidator of that Person or of all or any substantial part
of its properties.
"Capital Account" means, with respect to any Member, the account
maintained for such Member in accordance with the provisions of Section 4.2
hereof.
"Capital Contribution" means, with respect to any Member, the aggregate
amount of money and the initial Gross Asset Value of any property (other than
money) contributed to the Company by such Member pursuant to Section 4.1 hereof
with respect to such Member's Interest (or deemed contributed under Treasury
Regulation Section 1.704-1(b)(2)(iv)(d)), net of any liabilities that are
secured by such property, or that the Company or any other Member is considered
to assume under Code Section 752.
"Capital Withdrawal" means the amount of cash or the Gross Asset Value
of any non-cash property which a Member has withdrawn from the Company, from
time to time, net of any liabilities that are secured by such property or that
the Member is considered to assume under Code Section 752.
"Cause" means (a) a willful breach by Tancredi of any material
provision of the Executive Employment Agreement that remains uncured by Tancredi
after thirty (30) days' written notice is received by Tancredi of such breach
from the board of directors of Seal, (b) Tancredi's habitual neglect of his
duties, (c) Tancredi's material dishonesty, misappropriation or fraud with
regard to Seal (other than good faith expense account disputes) or (d)
Tancredi's conviction of a felony.
"Certificate" means the Certificate of Formation of the Company and any
and all amendments thereto and restatements thereof filed on behalf of the
Company as required under Delaware LLCA.
"Code" means the Internal Revenue Code of 1986, as amended, or any
subsequent revenue law of the United States in effect from time to time.
"Company" shall mean PearTan, LLC.
"Control" (including the terms "controlling", "controlled by" and
"under common control with") with respect to a Person shall mean the possession,
direct or indirect, of the power to direct
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or cause the direction of the management and policies of that Person, whether
through the ownership of voting securities, by contract or otherwise.
"Deemed Withdrawal Notice" shall have the meaning given to it in
Section 8.5.
"Delaware LLCA" means the Delaware Limited Liability Company Act
(ss.18-101 et seq.) and as amended from time to time.
"Depreciation" means, for each fiscal year or other period, an amount
equal to the depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such fiscal year or other period;
provided, however, that if the Gross Asset Value of an asset differs from its
adjusted basis for federal income tax purposes at the beginning of such fiscal
year or other period, Depreciation shall be an amount that bears the same ratio
to such beginning Gross Asset Value as the federal income tax depreciation,
amortization or other cost recovery deduction with respect to such asset for
such fiscal year or other period bears to such beginning adjusted tax basis; and
provided further, that if the federal income tax depreciation, amortization or
other cost recovery deduction for such fiscal year or other period is zero,
Depreciation shall be determined with reference to such beginning Gross Asset
Value using any reasonable method selected by the Members.
"Designee" shall have the meaning given to it in the definition of
"Gross Asset Value" below.
"Disability" shall have the meaning given to it in Section 8.5.
"Disabled Member" shall have the meaning given to it in Section 8.5.
"Executive Employment Agreement" means the employment agreement dated
as of April 1, 1999 by and between Seal and Tancredi.
"Fair Market Value" means, as of the third business day before the date
of distribution to Tancredi, the average of the closing prices of one share of
Seal stock as recorded on the established securities market on which Seal stock
is traded for the immediately preceding twenty days on which Seal stock was
traded. If Seal stock is not traded on an established securities market or is
thinly traded, Fair Market Value shall be determined by an investment banker
mutually acceptable to the Members.
"Gross Asset Value" means, with respect to any asset, such asset's
adjusted basis for federal income tax purposes, except as follows:
(i) the initial Gross Asset Value of any asset contributed
by a Member to the Company shall be the gross fair market value of such asset,
as reasonably determined by the Members, provided that the initial Gross Asset
Value of the assets contributed to the Company pursuant to Section 4.1 shall be
as set forth in such Section;
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(ii) the Gross Asset Value of all Company assets shall be
adjusted to equal their respective gross fair market values, as of the following
times: (a) the acquisition of an additional interest by any new or existing
Member in exchange for more than a de minimis Capital Contribution; (b) if a
Withdrawal Notice is given pursuant to Section 8.3 or a Deemed Withdrawal Notice
is given pursuant to Section 8.4 or there is a distribution by the Company to a
Member of more than a de minimis amount of Company assets as consideration for
such Member's Interest; and (c) the liquidation of the Company within the
meaning of Treasury Regulation Section 1.704-1(b)(2)(ii)(g);
(iii) the Gross Asset Value of any Company asset distributed
to any Member shall be the gross fair market value of such asset on the date of
distribution, as reasonably determined by the Members subject, however, to the
provisions of Section 8.3;
(iv) the Gross Asset Values of Company assets shall be
increased (or decreased) to reflect any adjustments to the adjusted basis of
such assets pursuant to Sections 734(b) or 743(b) of the Code, but only to the
extent that such adjustments are taken into account in determining Capital
Accounts pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m) and
subparagraph (iv) of the definition of "Profits and Losses" set forth below;
provided, however, that Gross Asset Values shall not be adjusted pursuant to
this subparagraph (iv) to the extent the Members determine that an adjustment
pursuant to subparagraph (ii) is necessary or appropriate in connection with a
transaction that would otherwise result in an adjustment pursuant to this
subparagraph (iv); and
(v) The determination of fair market values pursuant to
subparagraph (ii) above shall be as reasonably determined by the Members, except
that any determination of the fair market values of Company assets pursuant to
clause (b) of subparagraph (ii) above shall be made jointly by the Members and
the Withdrawing Member (or his personal or legal representatives in the case of
a Disabled Member).
If the Gross Asset Value of an asset has been determined or
adjusted pursuant to subparagraphs (i), (ii), (iii), (iv) or (v), such Gross
Asset Value shall thereafter be adjusted by the Depreciation taken into account
with respect to such asset for purposes of computing Profits and Losses.
"Initial Shares" means the 300,000 shares of Class A common stock of
Seal.
"Interest" of a Member at any given time means the then percentage
ownership interest of a Member in the Company, including any and all rights and
benefits to which a Member may be entitled as provided in this Agreement,
together with the obligations to comply with all terms and provisions of this
Agreement.
"Member" or "Members" means Pearce and Tancredi, including any Person
admitted to the Company after the date hereof (but excluding any Person who
shall withdraw the entire value of his or her Interest).
4
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"Net Cash Flow" means, for each fiscal year or other period of the
Company, the gross cash receipts of the Company from all sources, including,
without limitation, the sale of the Stock, but excluding any amounts used to pay
or establish reserves for all Company expenses, debt payments, capital
improvements, replacements and contingencies. Net Cash Flow shall be determined
in accordance with the accrual or cash receipts and disbursements method of
accounting, and otherwise in accordance with generally accepted accounting
principles, consistently applied. Net Cash Flow shall not be reduced by
depreciation, amortization, cost recovery deductions, depletion, similar
allowances or other non-cash items, but shall be increased by any reduction of
reserves previously established.
"Opening Capital Account Balance" means, the Original Capital
Contribution of each Member made pursuant to Section 4.1, as set forth on
Schedule A annexed hereto.
"Original Capital Contribution" means, with respect to each Member, the
Capital Contribution made by such Member pursuant to Section 4.1, reduced by the
amount of any liabilities of such Member assumed by the Company in connection
with such Capital Contribution or which are secured by any property contributed
by such Member to the Company as a part of such Capital Contribution. In the
event all or a portion of an Interest is transferred in accordance with the
terms of this Agreement, the transferee shall succeed to the Original Capital
Contribution of the transferor to the extent it relates to the transferred
Interest.
"Pearce" means M. Lee Pearce, M.D.
"Percentage Interest" means, with respect to any Member as of any date,
such Member's Interest as a percentage of all Members' Interests in the Company
(as it may be amended from time to time pursuant to the terms hereof). The
Percentage Interest as of any date will be calculated as follows: Tancredi's
Percentage Interest will be: (a) the sum of the number of Initial Shares and
Vested Shares as of such date, over (b) the aggregate number of Seal shares then
held by the Company, multiplied by 100 percent. Pearce's Percentage Interest as
of such date shall be: 100 percent minus Tancredi's Percentage Interest.
"Permitted Temporary Investments" shall mean (a) United States treasury
and federal agency full faith and credit obligations with maturities of not more
than one year and one day, (b) banker's acceptances and interest-bearing
deposits (including without limitation certificates of deposit) in United States
Dollars in Banks, and (c) commercial paper of a domestic issuer rated at least
A-1 by Standard & Poor's Corporation or P-1 by Moody's Investor's Service, Inc.
with maturities of nine months or less from the date of acquisition.
"Person" shall mean an individual, corporation, partnership, limited
liability company, joint venture, trust, unincorporated organization or any
other juridical entity, or a government (domestic or foreign) or any agency or
political subdivision thereof.
"Profits" and "Losses" means, for each fiscal year, an amount equal to
the Company's taxable income or loss for such fiscal year, determined in
accordance with section 703(a) of the Code
5
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(but including in taxable income or loss, for this purpose, all items of income,
gain, loss or deduction required to be stated separately pursuant to section
703(a)(1) of the Code), with the following adjustments:
(i) any income of the Company exempt from federal income tax
and not otherwise taken into account in computing Profits or Losses pursuant to
this definition shall be added to such taxable income or loss;
(ii) any expenditures of the Company described in section
705(a)(2)(B) of the Code (or treated as expenditures described in section
705(a)(2)(B) of the Code pursuant to Treasury Regulations Section
1.704-1(b)(2)(iv)(i)) and not otherwise taken into account in computing Profits
or Losses pursuant to this definition shall be subtracted from such taxable
income or loss;
(iii) in the event the Gross Asset Value of any Company
asset is adjusted in accordance with Paragraph (ii) or Paragraph (iii) of the
definition of "Gross Asset Value" above, the amount of such adjustment shall be
taken into account as gain or loss from the disposition of such asset for
purposes of computing Profits or Losses;
(iv) gain or loss resulting from any disposition of any
asset of the Company with respect to which gain or loss is recognized for
federal income tax purposes shall be computed by reference to the Gross Asset
Value of the asset disposed of, notwithstanding that the adjusted tax basis of
such asset differs from its Gross Asset Value;
(v) in lieu of the depreciation, amortization and other cost
recovery deductions taken into account in computing such taxable income or loss,
there shall be taken into account Depreciation for such fiscal year or other
period, computed in accordance with the definition of "Depreciation" above; and
(vi) To the extent that a Code Section 734(b) or Code
Section 743(b) adjustment is required to be taken into account in determining
Capital Accounts, pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m),
the amount of such adjustment shall be treated as an item of gain (if the
adjustment increases the basis of the asset) or loss (if the adjustment
decreases the basis of the asset) from the disposition of the asset and shall be
taken into account for purposes of computing Profits or Losses.
(vii) Upon the distribution of assets in kind, Profits and
Losses shall also include the amount of gain or loss the Company would have
recognized had such assets been sold for their fair market value.
"Seal" means Seal Holdings, Corp..
"Stock" shall mean 2,000,000 shares of Seal Class A common stock
contributed by Pearce and having a Gross Asset Value of $1,500,000 on the date
of such contribution, as the same may be
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distributed or disposed of in accordance with the terms of this Agreement, and
as the same may be adjusted by reason of stock dividends, stock splits or
otherwise.
"Tancredi" means Robert Tancredi, M.D.
"Tax Matters Member" shall mean Pearce.
"Treasury Regulations" means the income tax regulations, including
temporary regulations, promulgated under the Code, as such regulations may be
amended from time to time (including corresponding provisions of succeeding
regulations).
"Vested Shares" shall mean the shares of Seal Holdings, Corp. that are
treated as vested to Tancredi. For purposes of this Agreement, 200,000 shares
shall be considered Vested Shares on the date of this Agreement and an
additional 200,000 shares shall be considered as Vested Shares on each of the
first, second and third anniversary of the date of this Agreement. In the
aggregate, upon the third anniversary hereof, there should be 800,000 Vested
Shares. Notwithstanding the foregoing (a) the portion of the 800,000 shares that
are not Vested Shares shall become Vested Shares upon (i) the termination of
Tancredi's employment with Seal without "cause" (as defined in Section 7(c)(1)
of the Executive Employment Agreement) or upon his death or disability
("Disability" as defined in Section 7(d) of the Executive Employment Agreement)
or (ii) a change of control of Seal ("Change of Control" as defined in Section
7(e) of the Executive Employment Agreement); and (b) no additional shares shall
become Vested Shares after the termination of Tancredi's employment, whether by
Seal for "cause" or voluntarily by Tancredi (pursuant to Section 7(c) or (d), as
applicable, of the Executive Employment Agreement).
"Withdrawal Notice" shall have the meaning given to it in Section 8.3.
"Withdrawing Member" shall mean a Member who withdraws from the Company
pursuant to Section 8.3 or a Disabled Member.
ARTICLE II
ORGANIZATION
Section 2.1 Name and Place of Business. The name of the Company shall
be "PearTan, LLC" or such other name as the Members may agree. All business,
operations and activities of the Company shall be conducted under such name. The
principal place of business for the Company shall be 5601 North Dixie Highway,
Suite 411, Fort Lauderdale, Florida 33334 or such other place or places as the
Members may agree.
Section 2.2 Purpose and Powers of the Company. The Company is organized
for the purpose of engaging in any lawful act or activity for which limited
liability companies may be organized under the Delaware LLCA. In furtherance of
the foregoing, the Company shall have all
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powers necessary, desirable or convenient for the accomplishment of its
objectives, except where specifically limited pursuant to this Agreement.
Section 2.3 Registered Agent and Office. The Company's registered agent
and office in the State of Delaware shall be as determined by the Members.
Section 2.4 Commencement; Term. The Company shall commence its term on
the date of the filing of the Certificate in the office of the Secretary of
State of the State of Delaware and shall have perpetual existence unless
dissolved in accordance with the provisions of this Agreement.
ARTICLE III
MEMBERS
Section 3.1 Admission of Members. Pearce and Tancredi shall be the
Members.
Section 3.2 Management. Subject to the terms and provisions hereof and
to the rights and obligations of Members under the Delaware LLCA, the
management, operation and policies of the Company and the authority to take all
action in the name and on behalf of the Company, including, without limitation,
the acquisition of any or all of the assets of the Company, shall be vested
fully and exclusively in the Members, who shall have all rights and powers
generally conferred on members under the Delaware LLCA and all rights and powers
necessary, advisable or consistent with the purposes and powers of the Company,
except as otherwise expressly provided herein. The Company shall be managed
jointly by the Members. Shares of Seal stock held by the Company may not be sold
or otherwise disposed of without the consent of both Members, except that Pearce
shall have the right to cause the Company to sell up to 800,000 shares (as
provided in Section 4.6(a)). The voting of Seal shares on any matter submitted
to the Seal shareholders for a vote shall be as the Members may agree, and if no
agreement can be reached, Tancredi shall have the right to determine how the
Company will vote a number of shares equal to 300,000 plus the number of then
Vested Shares and Pearce shall have the right to determine how the Company will
vote the balance.
Section 3.3 Limitation on Members' Liabilities. A Member shall have no
personal liability or responsibility under this Agreement to the Company in
excess of his Capital Contribution. No Member, in his capacity as such, shall be
liable to third parties for any debts, liabilities or obligations of the Company
except to the extent of distributions received by it, except as otherwise
required by the Delaware LLCA or other applicable law.
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ARTICLE IV
CAPITAL CONTRIBUTIONS AND CAPITAL ACCOUNTS
Section 4.1 Original Capital Contributions and Percentage Interest. (a)
Schedule A hereto sets forth the Original Capital Contributions to be made to
the Company by each Member, the nature of their respective contributions, and
for contributions other than cash, the Gross Asset Value. Pearce has contributed
the Stock to the Company, which shall be registered in the name of the Company.
The agreed Gross Asset Value of the Stock on the date of contribution is
$1,500,000. Tancredi has contributed cash in the amount of $45,000 and a five
year note (the "Note") with a principal value of $180,000 to be paid off in
equal annual principal installments together with interest at an annual rate of
5.75%.
(b) All stock contributed by Pearce to the Company shall bear the
following legend:
"TRANSFER RESTRICTIONS
The securities represented by this certificate have
not been registered under the Securities Act of
1933, as amended (the "Act") or under any state
securities law. The securities may not be offered,
sold or otherwise transferred unless they are
registered under the Act and all applicable state
securities laws, or unless the issuer is satisfied
that registration is not required under the Act or
any such state securities laws. The issuer may
require, among other things, an opinion of counsel
acceptable to it that such registration is not
required.
The securities represented by this certificate are
subject to a Limited Liability Company Agreement by
and between M. Lee Pearce, M.D. and Robert Tancredi
(the "Agreement"), dated as of May 26, 1999. The
securities may not be offered, sold or otherwise
transferred except in accordance with the
Agreement. The issuer will require an opinion of
counsel acceptable to it that such transfer has
been completed in accordance with the Agreement. A
copy of the Agreement will be furnished without
charge by the issuer to any prospective
transferee."
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Section 4.2 Capital Accounts. A single Capital Account shall be
established and maintained for each Member (regardless of the time or manner in
which such Interests were acquired) in accordance with the capital accounting
rules of section 704(b) of the Code and regulations thereunder. Each Member's
Opening Capital Account Balance shall be the amount of such Member's Original
Capital Contribution made pursuant to Section 4.1, as set forth on Schedule A
annexed hereto. Thereafter, the Member's Capital Account shall be maintained in
accordance with the following provisions:
(i) such Member's Capital Account shall be increased by: (a)
the amount of cash hereafter contributed by such Member to the Company; (b) the
Gross Asset Value of property, if any, hereafter contributed by such Member to
the Company (net of liabilities that are secured by such contributed property,
or that the Company or any other Member is considered to assume under Code
Section 752); (c) the amount of any Company liabilities that are assumed by such
Member pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(c); and (d)
allocations to such Member of Profits pursuant to Section 5.1 hereof; and
(ii) such Member's Capital Account shall be decreased by:
(a) the amount of cash distributed to such Member by the Company; (b) the Gross
Asset Value of property distributed to such Member by the Company (net of
liabilities that are secured by such distributed property or that such Member is
considered to assume or take under Code Section 752); (c) allocations to such
Member of Losses pursuant to Section 5.2 hereof; and (d) the amount of such
Member's individual liabilities that are assumed by the Company pursuant to
Treasury Regulations Section 1.704-1(b)(2)(iv)(c).
The Members' respective Capital Accounts shall be determined
and maintained at all times in accordance with all the provisions of Treasury
Regulations Section 1.704-1(b)(2)(iv).
Section 4.3 Nature of Contributions. No Member shall be required to
make any capital contributions to the Company other than as provided herein or
to lend any funds to the Company. No interest shall be paid on any Capital
Contributions and, except as otherwise provided herein, no Member may withdraw
any Capital Contributions or any part thereof made by that Member.
Section 4.4 Investment of Capital Contributions. Pending use by the
Company or return to the Members, Capital Contributions consisting of cash or
cash equivalents shall be invested in Permitted Temporary Investments.
Section 4.5 Transfer of Interest. If any Interest is transferred
pursuant to the terms of this Agreement, the transferee shall succeed to the
Capital Account of the transferor to the extent the Capital Account is
attributable to the transferred Interest.
Section 4.6 Sale of Seal Shares.
(a) Pearce may cause the Company to sell up to 800,000 shares
of Seal stock without the consent of Tancredi.
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(b) All other sales of Seal shares must be pursuant to an
agreement of the Members. The Members shall also agree on the economic interest
of each Member in the shares being sold.
ARTICLE V
ALLOCATIONS
Section 5.1 Profits.
Section 5.1.1 Ordinary Income. Profits derived from ordinary income for
any fiscal year shall be allocated pro rata to the Members in proportion to
their Percentage Interests.
Section 5.1.2 Sale of Seal Stock.
(a) Profits derived from the sale of Seal stock pursuant to
Section 4.6(a) shall be allocated to Pearce.
(b) Profits derived from the sale of Seal stock under a joint
agreement of the Members pursuant to Section 4.6(b) shall be allocated according
to such joint agreement. To the extent that the sale of Seal stock causes a
change in control of Seal and an acceleration of the Vesting Schedule, Profits
shall be allocated according to Section 5.1.3.
Section 5.1.3 Liquidation. Profits upon liquidation, sale of all the
assets or Tancredi's withdrawal for any fiscal year shall be allocated in the
following order and priority:
(a) First, 100% to the Members to the extent of, and in
proportion to, any deficit balance in their respective Adjusted Capital
Accounts, until such deficit balance is eliminated;
(b) Second, 100% to Pearce and Tancredi until the balances of
their Capital Accounts are equal to the amount of their unreturned Capital
Contributions;
(c) Third, to Tancredi to the extent required to make his
Capital Account balance equal to the excess of (1) the number of Initial Shares
and Vested Shares as of the date of distribution multiplied by the Fair Market
Value per share, over (2) the number of Vested Shares multiplied by $.75; and
(d) Thereafter, the balance to Pearce.
Section 5.2 Losses.
(a) Losses from the sale of Seal stock under a joint agreement
of the Members pursuant to Section 4.6(b) shall be allocated according to the
joint agreement.
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(b) All other Losses for any fiscal year shall be allocated to
the Members in proportion to their respective positive Capital Account balances,
until such balances have been eliminated and thereafter in accordance with their
Percentage Interests, subject to the limitation of Section 5.2(c).
(c) The Losses allocated pursuant to Section 5.2(a) and (b)
shall not exceed the maximum amount of Losses that can be allocated to that
Member without causing or increasing an Adjusted Capital Account Deficit for
such Member at the end of any fiscal year. All Losses in excess of the amount
that may be allocated to that Member shall be re-allocated to any other Members
which would not have an Adjusted Capital Account Deficit as a result of the
allocation, in proportion to their respective Percentage Interests, or, if no
such Members exist, then to the Members in accordance with their respective
Percentage Interests.
Section 5.3 Other Allocation Rules.
(a) For purposes of determining Profits, Losses or any other
items allocable to any period, Profits, Losses and any such other items shall be
determined on a daily, monthly or other basis, as determined by the Members
using any method that is permissible under Code Section 706. If an Interest in
the Company is transferred or the Percentage Interests in the Company change,
except as otherwise provided by Code Section 706, the Profits and Losses and any
such other items of the Company shall be allocated between the periods before
and after the transfer by the closing-of-the-books method. As of the date of
such transfer, the transferee shall succeed to the Capital Account of the
transferor Member with respect to the transferred Interest. This paragraph shall
apply for purposes of computing a Member's Capital Account and for federal
income tax purposes.
(b) If any fees or other payments deducted for federal income
tax purposes by the Company are recharacterized by a final determination of the
Internal Revenue Service as nondeductible distributions to any Member, then,
notwithstanding all other allocation provisions, gross income shall be allocated
to such Member (for each fiscal year in which such recharacterization occurs) in
an amount equal to the fees or payments recharacterized.
(c) Section 754 Adjustment. To the extent any adjustment to
the adjusted tax basis of any Company asset pursuant to Code Section 734(b) or
Code Section 743(b) is required, pursuant to Treasury Regulations Section
1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts,
the amount of such adjustment shall be treated as an item of gain (if the
adjustment increases the basis of the asset) or loss (if the adjustment
decreases such basis), and such gain or loss shall be specially allocated to the
Members in a manner consistent with the manner in which their Capital Accounts
are required to be adjusted pursuant to such section of the Treasury
Regulations. The Tax Matters Member, on behalf of the Company, shall have the
right, in his discretion, to make the election permitted under Code Section 754.
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Section 5.4 Tax Allocations; Section 704(c) of the Code.
(a) In accordance with section 704(c) of the Code and the
Treasury Regulations thereunder, income, gain, loss and deduction with respect
to any property contributed to the capital of the Company shall, solely for
income tax purposes, be allocated among the Members so as to take account of any
variation between the adjusted basis of such property to the Company for federal
income tax purposes and its initial Gross Asset Value (computed in accordance
with Section 1.1 hereof).
(b) In the event the Gross Asset Value of any Company asset is
adjusted pursuant to subparagraph (ii) of the definition of "Gross Asset Value"
contained in Section 1.1 hereof, subsequent allocations of income, gain, loss
and deduction with respect to such asset shall take account of any variation
between the adjusted basis of such asset for federal income tax purposes and its
Gross Asset Value in the same manner as under section 704(c) of the Code and the
Treasury Regulations thereunder.
(c) Any elections or other decisions relating to allocations
under this Section 5.4, including the selection of any allocation method
permitted under Treasury Regulation ss. 1.704-3, shall be made by the Members in
any manner that reasonably reflects the purpose and intention of this Agreement.
Allocations pursuant to this Section 5.4 are solely for the purposes of
computing the taxes of the Company and shall not affect, or in any way be taken
into account in computing, any Member's Capital Account or share of Profits,
Losses, other items or distributions pursuant to any provisions of this
Agreement.
Section 5.5 Tax Matters Member. Pearce shall be the "Tax Matters
Member," and as such, shall be solely responsible for representing the Company
in all dealings with the Internal Revenue Service, or any local or foreign tax
authorities, but Pearce shall keep all of the other Members reasonably informed
of any Company dealings with any tax agency.
ARTICLE VI
DISTRIBUTIONS
Section 6.1 Distributions.
Except as otherwise provided in Section 10.2, any Net Cash
Flow during any fiscal year, shall be distributed in cash to the Members in the
following order and priority:
Section 6.1.1 Ordinary Income. Net Cash Flow derived from ordinary
income for any fiscal year shall be distributed pro rata to the Members in
proportion to their Percentage Interests.
Section 6.1.2 Sale of Seal Stock.
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(a) Net Cash Flow derived from the sale of Seal stock pursuant
to Section 4.6(a) shall be distributed to Pearce.
(b) Net Cash Flow derived from the sale of Seal stock under a
joint agreement of the Members pursuant to Section 4.6(b) shall be distributed
according to such joint agreement. To the extent that the sale of Seal stock
causes a change in control of Seal and an acceleration of the Vesting Schedule,
then Net Cash Flow shall be distributed according to Section 6.1.3.
Section 6.1.3 Liquidation. Net Cash Flow upon liquidation, sale of all
the assets or Tancredi's withdrawal for any fiscal year shall be distributed in
the following order and priority:
(a) First, 100% to Pearce and Tancredi until they have
received aggregate distributions equal to their unreturned Capital
Contributions;
(b) Second, to Tancredi until Tancredi has been distributed an
aggregate amount equal to the excess of (1) the number of Initial Shares and
Vested Shares as of the date of distribution multiplied by the Fair Market Value
per share, over (2) the number of Vested Shares multiplied by $.75; and
(c) Thereafter, the balance to Pearce.
Section 6.1.4 Payments On Note. Net Cash Flow from the repayment of the
Note (as defined in Section 4.1) by Tancredi shall be distributed to Pearce.
Section 6.1.5 Distribution of Assets in Kind. At the option of either
Tancredi or Pearce, the Company may distribute any assets in kind. If cash and
property are to be distributed simultaneously, the Company, shall distribute
such cash and property in the same proportion to each Member (e.g., if one
Member's distributive share consists of 75% cash and 25% property, the other
Member's distributive share shall also consist of 75% cash and 25% property),
unless agreed to by all Members. For purposes of determining amounts
distributable to the respective Members under this Section 6.1.5, any property
to be distributed in kind shall be valued at its Fair Market Value and the
amount of Profits or Losses that would have been realized had such assets been
sold at their Fair Market Value, shall be allocated to the Capital Accounts of
the Members pursuant to Sections 5.1 and 5.2 immediately prior to such
distribution.
ARTICLE VII
BOOKS, RECORDS, ACCOUNTING AND REPORTS
Section 7.1 Books of Account. At all times during the existence of the
Company, the Members shall keep or cause to be kept full and true books of
account in accordance with the accounting method followed by the Company and in
accordance with generally accepted accounting principles applied in a consistent
manner, which shall reflect all Company transactions, the state of the Company's
business and financial condition as well as otherwise being appropriate and
adequate
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for the Company's business. Those books of account shall at all times be
maintained at the principal office of the Company.
Section 7.2 Financial Reports. As soon as practicable after the close
of each fiscal year, each Member shall receive from the Company the financial
statements of the Company for that fiscal year, prepared in accordance with
generally accepted accounting principles consistently applied, including a
balance sheet, a profit and loss statement, and a statement of cash flows, and a
report showing (i) contributions and distributions, whether actual or deemed, to
the Members and allocations to the Members of Company taxable income, gains,
losses, deductions, credits and items of tax preference for that fiscal year,
(ii) all necessary tax or other reporting information reasonably required by the
Members for preparation of their respective income tax and information returns
or reports, (iii) a copy of all of the Company's income tax returns for the
previous fiscal year and (iv) the Percentage Interests of the Members as of the
end of that year. As soon as practicable after the close of each of the first
three quarterly periods of each fiscal year of the Company but in no event later
than 75 days after the close of the quarterly period, each Member shall receive
from the Company for that period, prepared on a basis consistent with the
Company's method of accounting: (w) a balance sheet, (x) a profit and loss
statement, (y) a statement of cash flows and (z) a report showing contributions
by and distributions, whether actual or deemed, to the Members and the
Percentage Interests of the Members as of the end of that quarter.
Section 7.3 Accounting Decisions. Except as specifically provided to
the contrary herein, all decisions as to accounting matters involving Company
operations shall be made by the Members in good faith.
Section 7.4 Taxable Year; Accounting Method, Elections. The Company's
taxable and fiscal years shall be the calendar year. The Company shall use the
accrual method of accounting. All elections required or permitted to be made by
the Tax Matters Member under the Code shall be made by Pearce. The Company may
elect to deduct expenses incurred in organizing the Company ratably over a
60-month period as provided in section 709 of the Code. In case of a permitted
transfer of all or part of any Interest, the Company may elect in a timely
manner pursuant to section 754 of the Code and pursuant to corresponding
provisions of any other applicable tax laws to adjust the basis of the assets of
the Company pursuant to sections 734 and 743 of the Code.
Section 7.5 Deposit of Initial Shares and Vested Shares. All Initial
Shares and any Vested Shares shall be deposited into a safe-deposit box leased
by the Company which shall require the signature of Tancredi for access to such
safe-deposit box.
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ARTICLE VIII
TRANSFER OF INTEREST; ADMISSION, WITHDRAWAL,
DISABILITY OR REMOVAL OF MEMBERS
Section 8.1 Limitation on Transfers of Interests. No Member may sell,
transfer, assign, convey or grant (collectively, "Transfer") a security interest
all or any part of its Interest (either voluntarily or by operation of law)
unless jointly agreed upon by the Members, notwithstanding a withdrawal pursuant
to Section 8.3. Any act in violation of this Section 8.1 shall be null and void
ab initio.
Section 8.2 Admission of Members. At any time or from time to time, the
Members may cause one or more Persons to be admitted as new Members and shall,
upon such admission, reallocate the Percentage Interests of the Members,
provided that the prior written consent of all Members shall have been obtained
prior to such admission. Each such new Member shall be admitted upon that new
Member's execution of an appropriate joinder to this Agreement pursuant to which
that new Member agrees to be bound by the terms and provisions hereof. Each such
new Member shall, at the discretion of the existing Members, be subject to a
charge in an amount required to defray the expenses of the Company in connection
with that admission. This Agreement shall constitute the irrevocable consent of
all Members to the admission of new Members pursuant to this Section.
Section 8.3 Withdrawal of Tancredi. At any time after the earlier of
(i) four years from the date of the Agreement or (ii) the termination of
Tancredi's employment under the Executive Employment Agreement (as provided for
in the Executive Employment Agreement), Tancredi or his estate may, by written
notice to but without the prior consent of Pearce, elect to withdraw from the
Company. As soon as reasonably practicable after receipt of such notice (the
"Withdrawal Notice"), the Members shall cause the distribution to such Member of
such amounts in cash or in kind, at either Tancredi or Pearce's option, as would
be distributed to such Member pursuant to Section 6.1.3 after giving effect to
an adjustment in Gross Asset Value of all Company assets on the date the
Withdrawal Notice is given in accordance with clause (ii) contained in the
definition of Gross Asset Value and after allocating Profits and Losses under
Article V and making adjustments to Capital Accounts under Article IV as if
other Company assets had been sold on the date the Withdrawal Notice is given
for an amount equal to such adjusted Gross Asset Value; provided that, if
Tancredi voluntarily terminates his employment with Seal (pursuant to Section
7(d) of the Executive Employment Agreement) prior to April 1, 2000 and elects to
withdraw from the Company pursuant to this Section 8.3, no distribution shall be
made to Tancredi prior to April 1, 2000. If Tancredi withdraws from the Company,
he shall not be entitled to sell his Initial Shares and Vested Shares for two
years from the date of such withdrawal, except in a private transaction sale to
a person who agrees not to Transfer such shares of Seal in the public market for
the period ending two years from the date of Withdrawal; provided, however, that
this restriction shall lapse at the end of four years from the date of the
Agreement. Pearce and Tancredi shall execute any supplement or amendment to this
Agreement or into such new agreements as shall be necessary or appropriate to
accomplish the foregoing. Tancredi acknowledges and agrees that a restrictive
legend referencing
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the restriction on Transfer contained herein shall be affixed to any stock
certificate representing shares of stock distributed to him in connection with
his withdrawal. Except as provided in this Section, no Member shall have the
right to withdraw as a Member of the Company.
Section 8.4 Death, Disability or Bankruptcy of a Member. The Company
shall continue and shall not dissolve upon the Bankruptcy, death or Disability
(as defined in Section 7(d) of the Executive Employment Agreement ) of any
Member (the "Disabled Member"). Upon the occurrence of any such Bankruptcy,
death or Disability of a Member, the Disabled Member or the personal or legal
representatives of the Disabled Member, by written notice to the Members (a
"Deemed Withdrawal Notice"), shall have the right to cause the Company to
distribute to the Disabled Member's personal or legal representatives all
Company assets that such Member (including Pearce as though he had a right to
withdraw pursuant to such Section) would have been entitled to receive had he
withdrawn from the Company in accordance with Section 8.3 above, in the form and
manner provided in such Section including without limitation, the restrictions
on Transfer of any shares of Stock distributed in connection with such
withdrawal, and upon such distribution, the Disabled Member and his personal or
legal representatives shall have no further interest in the Company. Until such
time as notice shall have been given pursuant to this Section 8.4, but not
thereafter (with such Disabled Member no longer being considered a Member of the
Company), the Disabled Member's personal or legal representatives shall have all
of the rights of such Member as are necessary or incidental to the
administration of his Interest, including, without limitation, the right to
receive all allocations and distributions to which the Disabled Member would
have been entitled under this Agreement. If the Bankruptcy or Disability of the
Disabled Member ceases prior to any distribution pursuant to this Section 8.4,
the provisions of this Section 8.4 shall no longer apply with respect to such
Member's Interest, and such Member shall continue as a Member of the Company,
provided that the Members give notice to the personal or legal representatives
of the Disabled Member prior to any distribution pursuant to this Section 8.4.
The Members may delay distributions pursuant to this Section 8.4 in the event
the Members believe there are unresolved issues regarding the proper distributee
hereunder until the Members have determined to their satisfaction the
appropriate distributee(s). In making any such determination, the Members may
rely upon the advice of counsel and shall be fully protected for any actions
based on such advice.
ARTICLE IX
AMENDMENTS
No amendment hereof, whether or not such amendment adversely affects
the rights of the Members hereunder shall be effective without the consent of
each of the Members.
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ARTICLE X
DISSOLUTION OF THE COMPANY
Section 10.1 Events Causing Dissolution. The Company shall be dissolved
and its affairs wound up on the first to occur of the following:
(a) as required under the Delaware LLCA;
(b) the entry of a decree of judicial dissolution under the
Delaware LLCA;
(c) if the Members shall determine in writing that the Company
should be dissolved; or
(d) the entry of a final judgment, order or decree of a court
of competent jurisdiction adjudicating the Company to be
bankrupt and the expiration of the period, if any, allowed
by applicable law in which to appeal therefrom.
Section 10.2 Liquidation. Upon the liquidation of the Company within
the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(g) and subject to
any applicable provision of the Delaware LLCA, after payment of, or adequate
provision for, the debts and obligations of the Company, the remaining assets of
the Company shall be distributed (or deemed distributed in the event of a
termination under Code Section 708(b)(1)(B)) to the Members (after giving effect
to all contributions, distributions, allocations and other Capital Account
adjustments for all taxable years, including the year during which such
liquidation occurs) in proportion to the positive balances in their Capital
Accounts and the balance of such assets, if any, shall be distributed to the
Members in proportion to their respective Percentage Interests.
ARTICLE XI
EXCULPATION; INDEMNIFICATION; EXPENSES
Section 11.1 Exculpation. To the extent not inconsistent with
applicable law, neither the Members nor any of their respective officers,
directors, employees or Affiliates shall be liable, responsible or accountable
in damages or otherwise to the Company or to the other Members for any action
taken or for any failure to act on behalf of the Company after the date hereof
in connection with the business or operations of the Company, unless the act or
omission constituted gross negligence or willful misconduct.
Section 11.2 Indemnification. To the extent not inconsistent with
applicable law, the Company shall indemnify and hold harmless the Members and
all of their respective officers, directors, employees and Affiliates from and
against any loss, liability, damage, claim or expense (including, but not
limited to, any judgment, award or settlement and reasonable attorneys' fees and
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other costs or expenses incurred in connection with the defense of any actual or
threatened action, proceeding or claim) arising out of (a) any acts or omissions
or alleged acts or omissions in connection with their activities or the
activities of any of their respective employees or agents on behalf of the
Company after the date hereof or in connection with the business or operations
of the Company after the date hereof and (b) any liability imposed upon any of
them under any statute, rule or regulation applicable to the Company; provided
that the acts or omissions or the alleged acts or omissions upon which the
action or threatened action, proceeding or claim is based did not constitute
gross negligence or willful misconduct by the indemnified party. A Member
seeking such indemnification shall have the right to control the defense of any
such loss, damage, claim, liability or expense, and the Company shall pay the
costs and expenses thereof on a current basis.
Section 11.3 Company Expenses. Except as otherwise set forth herein,
Pearce shall pay all costs and expenses relating to the establishment,
maintenance and operations of the Company, including without limitation
accounting and legal expenses. Tancredi shall have no obligation to pay such
costs and expenses.
ARTICLE XII
MISCELLANEOUS
Section 12.1 Severability. Each provision hereof is intended to be
severable and the invalidity or illegality of any portion of this Agreement
shall not affect the validity or legality of the remainder hereof.
Section 12.2 Headings. Headings contained in this Agreement are
inserted only as a matter of convenience and for reference and in no way define,
limit, extend or describe the scope of this Agreement or the intent of any
provision hereof.
Section 12.3 Binding Agreement. The terms and provisions of this
Agreement shall be binding upon, and inure to the benefit of the successors,
permitted assigns, personal representatives, estates, heirs and legatees of the
respective Members.
Section 12.4 Applicable Law. Notwithstanding the place where this
Agreement may be executed by any of the parties hereto, the parties expressly
agree that all the terms and provisions hereof shall be construed under the laws
of the Cayman Islands.
Section 12.5 Entire Agreement; No Oral Modification. This Agreement
constitutes the entire agreement of the parties hereto with respect to the
matters set forth herein and supersedes any prior understanding or agreement,
oral or written, with respect thereto. This Agreement may not be modified or
amended except in a writing executed by the Persons entitled to adopt such
modification or amendment as provided herein.
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Section 12.6 Agreement in Counterparts. This Agreement may be executed
in several counterparts and all so executed shall constitute one Agreement,
binding on all the parties hereto, notwithstanding that all the parties are not
signatories to the original or the same counterpart.
Section 12.7 No Right of Partition. No Member shall have the right to
bring an action for partition against the Company. Each Member hereby
irrevocably waives any and all rights which it may have to maintain an action to
partition Company property or to compel any sale or transfer thereof.
Section 12.8 Qualification and Assumed Name Filings. The Members may
cause the Company to qualify to do business and file an assumed or fictitious
name certificate in each jurisdiction where the activities of the Company make
such qualification or filing necessary. A Company office or principal place of
business may be designated from time to time by the Members anywhere in the
United States.
Section 12.9 Jurisdiction and Venue. In any action, dispute or
litigation brought under or relating to this Agreement or the Company or its
operations, the Members agree to the non-exclusive jurisdiction and venue of any
United States District Court located in the State of New York and the appellate
courts to which orders and judgments thereof may be appealed and in any such
action, dispute or litigation the Members agree that in addition to any method
for service of process permitted or required by said courts, to the fullest
extent permitted by law, service of process may be made by prepaid certified
mail with a proof of mailing receipt validated by the U.S. Postal Service
constituting evidence of valid service. EACH OF THE MEMBERS HEREBY WAIVES TRIAL
BY JURY IN ANY PROCEEDING BROUGHT UNDER OR RELATING TO THIS AGREEMENT OR
RELATING TO THE COMPANY OR ITS OPERATIONS.
Section 12.10 Notices. Unless otherwise provided herein or waived by
the Member being charged therewith, all notices, demands, consents or other
communications required or permitted to be given or made under this Agreement
shall be in writing and shall be given to the Company at 5601 North Dixie
Highway, Suite 411, Fort Lauderdale, Florida 33334 to any Member at his or her
addresses as set forth in the Company's records or to such other address as the
Company or any party hereto shall hereafter specify by notice to the other
parties hereto.
Section 12.11 No Third Party Beneficiary. This Agreement is made solely
and specifically between and for the benefit of the parties hereto, and their
respective successors and permitted assigns, and no other Person shall have any
rights, interest or claims hereunder or be entitled to any benefits under or on
account of this Agreement as a third party beneficiary or otherwise.
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IN WITNESS WHEREOF, the parties hereto have entered into this Limited
Liability Company Agreement as of the date first above written.
Dated: June 10, 1999
Member
/s/ M. Lee Pearce, M.D.
--------------------------------------------
M. Lee Pearce, M.D.
Member
/s/ Robert Tancredi, M.D.
--------------------------------------------
Robert Tancredi, M.D.
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SCHEDULE A
Original Capital Opening Capital
Managing Member Contributions Account Balances
- --------------- ---------------- ----------------
M. Lee Pearce, M.D. 2,000,000 shares of $1,500,000 US
Seal Holdings, Corp.
Member
- ------
Robert Tancredi, M.D. $45,000 and a five year $ 225,000 US
Note with a principal
value of $180,000
<PAGE>
EXHIBIT B
JOINT FILING AGREEMENT
The undersigned hereby agree to the joint filing of Amendment No. 1 to
Schedule 13D (the "13D Amendment") and any subsequent Amendments relating to the
13D Amendment. Such Amendments shall be deemed filed on behalf of each of the
undersigned.
Dated as of the 14th day of June, 1999.
/s/ M. Lee Pearce, M.D.
----------------------------------
M. Lee Pearce, M.D.
/s/ Robert G. Tancredi, M.D.
----------------------------------
Robert G. Tancredi, M.D.
