EXHIBIT 4.3
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U-C HOLDINGS, L.L.C.
A Delaware Limited Liability Company
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LIMITED LIABILITY COMPANY AGREEMENT
Dated as of April 25, 1997
THE MEMBERSHIP INTERESTS REPRESENTED BY THIS LIMITED LIABILITY COMPANY AGREEMENT
HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED, OR UNDER ANY OTHER APPLICABLE SECURITIES LAWS. SUCH INTERESTS MAY NOT
BE SOLD, ASSIGNED, PLEDGED OR OTHERWISE DISPOSED OF AT ANY TIME WITHOUT
EFFECTIVE REGISTRATION UNDER SUCH ACT AND LAWS OR EXEMPTION THEREFROM, AND
COMPLIANCE WITH THE OTHER RESTRICTIONS ON TRANSFERABILITY SET FORTH HEREIN.
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TABLE OF CONTENTS
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Page
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ARTICLE I
DEFINITIONS..................................................................................... 1
1.1 Certain Definitions........................................................................ 1
1.2 Other Definitions.......................................................................... 5
1.3 Construction............................................................................... 5
ARTICLE II
ORGANIZATION.................................................................................... 6
2.1 Formation.................................................................................. 6
2.2 Name....................................................................................... 6
2.3 Registered Office; Registered Agent; Principal Office; Other Offices....................... 6
2.4 Purposes................................................................................... 6
2.5 Term....................................................................................... 6
2.6 No State-Law Partnership................................................................... 6
ARTICLE III
MEMBERSHIP; MEMBER UNITS........................................................................ 7
3.1 Members.................................................................................... 7
3.2 Liability of Members....................................................................... 7
3.3 No Authority to Bind Company............................................................... 7
3.4 Member Units............................................................................... 7
3.5 Issuance of Additional Units and Interests; Admission of New Members; Additional
Capital Contributions...................................................................... 8
3.6 Representations, Warranties and Agreements of the Members.................................. 9
3.7 Initial Capital Contributions.............................................................. 10
3.8 Defaulting Members......................................................................... 10
3.9 Outstanding Units.......................................................................... 11
ARTICLE IV
CAPITAL ACCOUNTS................................................................................ 11
4.1 Establishment and Determination of Capital Accounts........................................ 11
4.2 Computation of Amounts..................................................................... 11
4.3 Interest; Withdrawal....................................................................... 12
ARTICLE V
DISTRIBUTIONS; ALLOCATIONS OF PROFITS AND LOSSES................................................ 12
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5.1 Generally.................................................................................. 12
5.2 Distributions.............................................................................. 12
5.3 Allocation of Profits and Losses........................................................... 13
5.4 Initial Capital Contributions.............................................................. 13
5.5 Tax Allocations; Code Section 704(c)....................................................... 14
ARTICLE VI
MANAGEMENT OF THE COMPANY....................................................................... 14
6.1 Managing Member............................................................................ 14
6.2 Delegation by Managing Member.............................................................. 15
6.3 Resignation; Vacancy; Removal.............................................................. 15
6.4 Compensation............................................................................... 15
6.5 Board Membership of Subsidiaries........................................................... 15
ARTICLE VII
MEMBERS......................................................................................... 16
7.1 Membership Status; Resignation............................................................. 16
7.2 No Participation in Management............................................................. 16
7.3 Voting Rights Generally; Voting of Units................................................... 16
7.4 Conflicts of Interest...................................................................... 17
7.5 Outside Activities......................................................................... 17
7.6 Confidentiality............................................................................ 17
ARTICLE VIII
EXCULPATION AND INDEMNIFICATION................................................................. 17
8.1 Exculpation................................................................................ 17
8.2 Right to Indemnification................................................................... 18
8.3 Advance Payment............................................................................ 18
8.4 Indemnification of Employees and Agents.................................................... 18
8.5 Appearance as a Witness.................................................................... 18
8.6 Nonexclusivity of Rights................................................................... 19
8.7 Savings Clause............................................................................. 19
ARTICLE IX
TAXES........................................................................................... 19
9.1 Tax Returns................................................................................ 19
9.2 Tax Matters Partner........................................................................ 19
ARTICLE X
BOOKS, REPORTS.................................................................................. 19
10.1 Maintenance of Books...................................................................... 19
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10.2 Member Tax Information................................................................... 19
ARTICLE XI
TRANSFERS....................................................................................... 20
11.1 Assignment by Members.................................................................... 20
11.2 Void Transfers........................................................................... 20
11.3 Substituted Member....................................................................... 20
11.4 Effect of Assignment..................................................................... 21
11.5 Permitted Transfers...................................................................... 21
11.6 Deliveries for Transfer.................................................................. 21
11.7 Prospective Transferees.................................................................. 22
11.8 Legend................................................................................... 22
11.9 Effective Date........................................................................... 22
ARTICLE XII
DISSOLUTION, LIQUIDATION AND TERMINATION........................................................ 22
12.1 Dissolution.............................................................................. 22
12.2 Liquidation and Termination.............................................................. 23
12.3 Management Holder Give Back.............................................................. 23
12.4 Cancellation of Certificate.............................................................. 24
ARTICLE XIII
GENERAL PROVISIONS.............................................................................. 24
13.1 Notices.................................................................................. 24
13.2 Entire Agreement......................................................................... 25
13.3 Effect of Waiver or Consent.............................................................. 25
13.4 Amendment, Modification or Waiver........................................................ 25
13.5 Binding Effect........................................................................... 25
13.6 Governing Law; Severability.............................................................. 25
13.7 Further Assurances....................................................................... 25
13.8 Waiver of Certain Rights................................................................. 26
13.9 Indemnification and Reimbursement for Payments on Behalf of a Member..................... 26
13.10 Notice to Members of Provisions.......................................................... 26
13.11 Counterparts............................................................................. 26
13.12 Consent to Jurisdiction.................................................................. 26
13.13 Headings................................................................................. 27
13.14 Remedies................................................................................. 27
13.15 Parties in Interest...................................................................... 27
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LIMITED LIABILITY COMPANY AGREEMENT
OF U-C HOLDINGS, L.L.C.
A DELAWARE LIMITED LIABILITY COMPANY
THIS OPERATING AGREEMENT OF U-C HOLDINGS, L.L.C. (this "Agreement"),
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dated as of April 25, 1997, is adopted by, and executed and agreed to, for good
and valuable consideration, by ▇▇▇▇▇▇ ▇▇▇▇▇ & Partners, L.P., a Delaware limited
partnership ("▇▇▇▇▇▇ ▇▇▇▇▇"), and the other Persons listed on Schedule A hereto
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and each other Person who becomes a Member in accordance with the terms of this
Agreement.
ARTICLE I
DEFINITIONS
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1.1 Certain Definitions. As used in this Agreement, the following
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terms have the following meanings:
"Act" means the Delaware Limited Liability Company Act, Title 6,
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Sections 18-106 to 18-1107 and any successor statute, as amended from time to
time.
"Affiliate" means, with respect to a Person, another Person that
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directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such Person, where "control"
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means the possession, directly or indirectly, of the power to direct the
management and policies of a Person whether through the ownership of voting
securities, contract or otherwise.
"Aggregate Management Percentage" means, on any date of determination,
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the lesser of (i) 25% or (ii) the sum of (A) the Applicable Class A Percentage
and (B) the Applicable Class B Percentage.
"Applicable Class A Catch-up Percentage" means, on any date of
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determination, the quotient obtained by dividing (i) the Applicable Class A
Percentage by (ii) the Aggregate Management Percentage.
"Applicable Class A Percentage" means, on any date of determination,
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the lesser of (i) 20% or (ii) 20% of the quotient obtained by dividing (A) the
number of outstanding Class A Management Units on such date by (B) 2,000.
"Applicable Class B Catch-up Percentage" means, on any date of
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determination, the quotient obtained by dividing (i) the Applicable Class B
Percentage by (ii) the Aggregate Management Percentage.
"Applicable Class B Percentage" means, on any date of determination,
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the lesser of (i) 5% or (ii) 5% of the quotient obtained by dividing (A) the
number of outstanding Class B Management Units on such date by (B) 500.
"Book Value" means, with respect to any Company property, the
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Company's adjusted basis for federal income tax purposes, adjusted from time to
time to reflect the adjustments required or permitted by Treasury Regulation
Sections 1.704-l(b)(2)(iv)(d)-(g).
"Business Day" means any day other than a Saturday, a Sunday or a
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holiday on which national banking associations in the State of Illinois are
closed.
"Capital Contribution" means the aggregate contributions made by a
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Member to the capital of the Company. The initial Capital Contribution of each
Member is shown opposite such Member's name on Schedule A, as the same may be
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amended from time to time.
"Cash Inflows" means, with respect to the Investors, all payments or
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distributions of cash received by such Investors directly from the Company with
respect to the Investor Units issued to the Investors pursuant to this
Agreement.
"Cash Outflows" means, with respect to the Investors, all Capital
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Contributions made by such Investors with respect to Investor Units issued to
the Investors pursuant to this Agreement.
"Class A Management Units"means (i) the Class A Management Units
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originally issued to ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇ III
pursuant to this Agreement and designated as Class A Management Units on
Schedule A and (ii) any Class A Management Units issued with respect to such
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Class A Management Units by way of dividend or Unit split or in connection with
a combination of Units, recapitalization, merger or other reorganization. A
Class A Management Unit will continue to be a Class A Management Unit in the
hands of any Person to which such Unit is transferred.
"Class B Management Units"means (i) the Class B Management Units
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originally issued pursuant to this Agreement and designated as Class B
Management Units on Schedule A and (ii) any Class B Management Units issued with
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respect to such Class B Management Units by way of dividend or Unit split or in
connection with a combination of Units, recapitalization, merger or other
reorganization. A Class B Management Unit will continue to be a Class B
Management Unit in the hands of any Person to which such Unit is transferred.
"Code" means the Internal Revenue Code of 1986, as amended, and any
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successor statute. Such term shall be deemed to include any future amendments
to the Code or any successor statute to the extent the Managing Member
determines that any such amendments do not adversely affect the relative
economic interests of the Members hereunder.
"Company" means U-C Holdings, L.L.C., a Delaware limited liability
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company.
"Entity" means any general partnership, limited partnership,
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corporation, association, cooperative, joint stock company, trust, limited
liability company, business trust, joint venture, unincorpo-
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rated organization, governmental entity (or any department, agency or political
subdivision thereof) or other entity.
"Equity Protection Agreements" means those certain Equity Protection
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Agreements of even date herewith by and between the Company and UCTV.
"Escrow Agreement" means that certain Escrow Agreement of even date
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herewith by and among UCTV, U-C Holdings, L.L.C. and LaSalle National Bank.
"Family Group" means a Unitholder's spouse and descendants (whether
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natural or adopted) and any trust solely for the benefit of such Unitholder
and/or such Unitholder's spouse and/or descendants.
"Fiscal Year" of the Company means the Company's annual accounting
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period ending on December 31.
"Investor" means any holder of Investor Units.
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"Investor Units" means (i) any Investor Units originally issued to the
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Investors pursuant to this Agreement and designated as Investor Units on
Schedule A, (ii) any Investor Units otherwise acquired by a Person holding
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Investor Units and (iii) any Investor Units issued with respect to the Investor
Units referred to in clauses (i) or (ii) by way of dividend or Unit split or in
connection with a combination of Units, recapitalization, merger or other
reorganization. An Investor Unit will continue to be an Investor Unit in the
hands of any Person to which such Unit is transferred.
"IRR" means the annual interest rate (compounded annually) which, when
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used to calculate the net present value as of April 25, 1997, of all (i) Cash
Inflows received by the Investors through the date of determination and (ii)
Cash Outflows made by the Investors through the date of determination, causes
such entire amount to equal zero. The IRR shall be determined by the Company's
regular outside accounting firm. For purposes of the net present value
calculation, each Cash Inflow and each Cash Outflow specified above shall be
deemed to have been received or made on the first day of the month nearest to
the actual date of such payment.
"IRR Target" means that the Investors have achieved an IRR of 30%.
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"Losses" for any period means all items of Company loss, deduction and
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expense for such period determined in accordance with Section 4.2.
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"Management Holder" means any holder of Management Units.
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"Management Units" means, collectively, the Class A Management Units
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and the Class B Management Units.
"Member" means any Person executing this Agreement as of the date of
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this Agreement as a Member or hereafter admitted to the Company as a Member in
accordance with this Agreement and the Act, but does not include any Person who
has ceased to be a member of the Company or no longer
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owns Units. The Members shall constitute the "members" (as that term is defined
in the Act) of the Company.
"Person" means any individual or Entity, and the heirs, executors,
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administrators, legal representatives, successors and assigns of such Person
where the context so permits.
"Permitted Transferee" means (i) with respect to any Unitholder who is
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a natural person, a member of such Unitholder's Family Group and any Transferee
pursuant to applicable laws of descent and distribution and (ii) with respect to
any Unitholder which is an Entity, any of such Unitholder's Affiliates.
"Preferred Units" means (i) any Preferred Units originally issued to
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▇▇▇▇▇▇ ▇▇▇▇▇ pursuant to this Agreement and designated as Preferred Units on
Schedule A, and (ii) any Preferred Units issued with respect to the Preferred
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Units referred to in clause (i) by way of dividend or Unit split or in
connection with a combination of Units, recapitalization, merger or other
reorganization. A Preferred Unit will continue to be an Preferred Unit in the
hands of any Person to which such Unit is transferred.
"Preferred Yield" means at any time an amount calculated on a daily
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basis (without daily compounding) at the rate of 12.5% per annum, compounded
annually, on the Unreturned Preferred Capital.
"Profits" for any period means all items of Company income and gain
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for such period determined in accordance with Section 4.2.
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"Required Interests" means each of (i) the Members holding at least a
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majority of the Investor Units and (ii) the Members holding at least a majority
of the Management Units.
"Restricted Securities" means (i) the securities issued hereunder, and
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(ii) any securities issued with respect to the securities referred to in clause
(i) above in connection with a conversion, combination of shares,
recapitalization, merger, consolidation or other reorganization.
"Securities Act" means the U.S. Securities Act of 1933, as amended.
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"Taxable Year" means the Company's taxable year ending December 31 (or
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part thereof, in the case of the Company's last taxable year), or such other
year as is (i) required by Section 706 of the Code or (ii) determined by the
Managing Manager.
"Transfer" means any sale, transfer, assignment, pledge, mortgage,
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exchange, hypothecation, grant of a security interest or other direct or
indirect disposition or encumbrance of an interest (including, without
limitation, by operation of law) or the acts thereof. The terms "Transferee,"
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"Transferred," and other forms of the word "Transfer" shall have correlative
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meanings.
"Treasury Regulations" means the income tax regulations promulgated
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under the Code and effective as of the date hereof. Such term shall be deemed
to include any future amendments to such regulations and any corresponding
provisions of succeeding regulations to the extent the Managing Member
determines that any such amendments and succeeding regulations do not adversely
affect the relative economic interests of the Members hereunder.
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"UCTV" means UC Television Network Corp., a Delaware corporation.
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"Unitholder" means any holder of a Unit.
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"Unpaid Preferred Yield" means at any time an amount equal to the
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excess, if any, of (a) the aggregate Preferred Yield accrued through such date,
over (b) all prior distributions made by the Company to the holders of Investor
Units pursuant to Section 5.2(a).
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"Unreturned Preferred Capital" means at any time the aggregate Capital
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Contributions with respect to the Investor Units reduced by all prior
distributions made to the holders of Investor Units by the Company pursuant to
Section 5.2(b).
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"Warrants" means those certain Class C Warrants to purchase common
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stock of UCTV of even date herewith issued to the Company by UCTV.
1.2 Other Definitions. Each of the following defined terms has the
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meaning given such term in the Section set forth opposite such defined term:
Defined Term Section
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"Agreement" Preamble
"Capital Account" 4.1
"Certificate" 2.1
"Certificated Units" 11.8
"Indemnifying Member" 13.11
"Initial Capital Account" 3.1
"Management Notes" 5.4
"Managing Member" 6.1
"Note" 2.4
"Proceeding" 8.2
"Remaining Assets" 12.2(d)
"Tax Matters Member" 9.2
"Unit" 3.4
1.3 Construction. Whenever the context requires, the gender of all
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words used in this Agreement includes the masculine, feminine and neuter. All
references to Articles and Sections refer to articles and sections of this
Agreement, and all references to Schedules are to schedules attached hereto,
each of which is made a part hereof for all purposes.
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ARTICLE II
ORGANIZATION
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2.1 Formation. The Company has been organized as a Delaware limited
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liability company by the filing of a Certificate of Formation (the
"Certificate") under and pursuant to the Act. The rights and liabilities of the
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Members shall be determined pursuant to the Act and this Agreement. To the
extent that the rights or obligations of any Member are different by reason of
any provision of this Agreement than they would be in the absence of such
provision, this Agreement, to the extent permitted by the Act, shall control.
2.2 Name. The name of the Company is "U-C Holdings, L.L.C." and all
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Company business shall be conducted in that name or such other names that comply
with applicable law as the Managing Member may select from time to time.
2.3 Registered Office; Registered Agent; Principal Office; Other
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Offices. The registered office of the Company required by the Act to be
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maintained in the State of Delaware shall be the office of the initial
registered agent named in the Certificate or such other office (which need not
be a place of business of the Company) as the Managing Member may designate from
time to time in the manner provided by law. The principal office of the Company
shall be at such place as the Managing Member may designate, from time to time,
which need not be in the State of Delaware, and the Company shall maintain
records there.
2.4 Purposes. The nature of the business or purposes to be conducted
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or promoted by the Company is to engage in any lawful act or activity for which
limited liability companies may be organized under the Act. The Company may
engage in any and all activities necessary, desirable or incidental to the
accomplishment of the foregoing. Notwithstanding anything herein to the
contrary, nothing set forth herein shall be construed as authorizing the Company
to possess any purpose or power, or to do any act or thing, forbidden by law to
a limited liability company organized under the laws of the State of Delaware.
The Company shall not (i) create, incur, assume or suffer to exist any
indebtedness for borrowed money or issue evidences of indebtedness or guaranty
indebtedness, or secure the same by a mortgage, pledge or other lien on the
assets of the Company, except for the issuance of the promissory note of the
Company pursuant to that certain Purchase Agreement, dated as of the date
hereof, by and between the Company and UCTV (the "Note"), or (ii) enter into or
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engage in any transaction which is reasonably likely to cause ▇▇▇▇▇▇ ▇▇▇▇▇ or
any of its limited partners which are exempt from income taxation under Code (S)
501(a) and, if applicable, any pension plan that any such trust may be a part
of, to recognize unrelated business taxable income as defined in Code (S)(S) 512
and 514.
2.5 Term. The term of the Company commenced on the date the
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Certificate was filed with the office of the Secretary of State of Delaware and
shall continue in existence until December 31, 2007 or termination and
dissolution of the Company as determined under Section 12.1 of this Agreement.
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2.6 No State-Law Partnership. The Members intend that the Company
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shall not be a partnership (including, without limitation, a limited
partnership) or joint venture, and that no Member or the Company shall be a
partner or joint venturer of any other Member or the Company, for any purposes
other than federal and, if applicable, state tax purposes, and this Agreement
shall not be construed to the
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contrary. The Members intend that the Company shall be treated as a partnership
for federal and, if applicable, state income tax purposes, and each Member and
the Company shall file all tax returns and shall otherwise take all tax and
financial reporting positions in a manner consistent with such treatment.
ARTICLE III
MEMBERSHIP; MEMBER UNITS
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3.1 Members. The name and address of each Member, the number of
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Units of each class owned by such Member at any time, the percentage of each
class of Units owned by such Member, and the initial Capital Contribution and
initial Capital Account (the "Initial Capital Account") of such Member with
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respect to such Units (as determined in accordance with Section 4.1) shall be
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set forth next to each Member's name on Schedule A hereto, as amended from time
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to time in accordance with this Agreement. Each Person listed on Schedule A,
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upon (i) his or its execution of this Agreement or counterpart thereof and (ii)
receipt (or deemed receipt) of such Person's initial Capital Contribution as set
forth on Schedule A, is hereby admitted to the Company as a Member of the
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Company. No Member shall be required to make any additional Capital Contribution
except as required by applicable law or by Section 3.5.
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3.2 Liability of Members. Except as otherwise required by applicable
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law and as expressly set forth in this Agreement, no Member shall have any
personal liability whatsoever in his capacity as a Member, whether to the
Company, to any of the other Members, to the creditors of the Company or to any
other third party, for the debts, liabilities, commitments or any other
obligations of the Company or for any losses of the Company, and therefore, a
Member shall be liable only to make the payments provided herein. In accordance
with the Act and the laws of the State of Delaware, a member of a limited
liability company may, under certain circumstances, be required to return
amounts previously distributed to such member. It is the intent of the Members
that no distribution to any Member pursuant to Article V hereof shall be deemed
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a return of money or other property paid or distributed in violation of the Act.
3.3 No Authority to Bind Company. No Member (in such Member's
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capacity as a Member) shall have the authority or power to represent or act for
or on behalf of the Company, to do any act that would be binding on the Company
or to make any expenditures or incur any obligations on behalf of the Company
other than the Managing Member. Each Member hereby consents to the exercise by
the Managing Member of the powers conferred on such Managing Member by law and
this Agreement.
3.4 Member Units. Each Member's interest in the Company, including
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such Member's interest, if any, in the capital, income, gains, losses,
deductions and expenses of the Company and the right to vote, if any, on certain
Company matters as provided in this Agreement, shall be represented by "Units"
(each, individually, a "Unit," and any number of Units, including fractions
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thereof, "Units"). Initially, the Units shall be comprised of "Investor Units,"
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"Preferred Units," "Class A Management Units" and "Class B Management Units."
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The ownership by a Member of "Investor Units," "Preferred Units," "Class A
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Management Units" and "Class B Management Units" shall entitle such Member to
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allocations of Profits and Losses and other items and distributions of cash and
other property with respect to such Units as set forth in Article V hereof.
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Ownership of a Unit by a Member shall entitle such Member to one
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vote on any matter voted on by all Members as provided in this Agreement and/or
as required by applicable law. The Managing Member may cause the Company to
issue to a Member certificates representing the Units held by such Member.
3.5 Issuance of Additional Units and Interests; Admission of New
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Members; Additional Capital Contributions.
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(a) Subject to obtaining the consent of the Required Interests and as
otherwise provided in this Agreement, the Managing Member shall have the right
to cause the Company to issue (i) additional Units or other interests in the
Company (including other classes or series thereof having different rights),
(ii) obligations, evidences of indebtedness or other securities or interests
convertible or exchangeable into Units or other interests in the Company and
(iii) warrants, options or other rights to purchase or otherwise acquire Units
or other interests in the Company; provided, however, that at any time following
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the date hereof, the Company shall not issue Units to any Person unless such
Person shall have executed a joinder agreement in form satisfactory to the
Managing Member pursuant to which such Person agrees to be bound by the
provisions of this Agreement; and provided further that no consent of the
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Required Interests shall be required in connection with the issuance of the
Note. The Managing Member shall determine the terms and conditions governing
the issuance of such additional interests, including the number and designation
of such additional interests, the preference (with respect to distributions, in
liquidation or otherwise) over any other Units and any required contributions in
connection therewith. A Person to which the Company issues Units or other
interests in the Company shall be admitted as a Member of the Company only with
the prior written consent of the Managing Member and if such Person has executed
and delivered a counterpart of this Agreement. Notwithstanding the foregoing,
the Managing Member shall have the right, without obtaining the consent of the
Required Interests or any Member, to cause the Company to issue additional
Investor Units in connection with the repurchase by the Company of any Units
held by any Member pursuant to an agreement with such Member. At least 10 days
prior to the issuance and sale of any additional Investor Units in connection
with any such repurchase, the Company shall give written notice of such issuance
to the Investors (other than any Investor whose Units are being repurchased)
and, to the extent permitted under applicable securities laws without material
expenditure by the Company, each such Investor shall be entitled to purchase in
connection with such issuance a number of additional Investor Units equal to
such Investor's pro rata share (based upon the number of Investor Units held by
such Investor and the number of Investor Units held by all Investors other than
any Investor whose Units are being repurchased) of such additional Investor
Units. Any Investor Units which remain unpurchased after such offer to such
Investors, shall be reoffered to such Investors on a pro rata basis until all of
such Investor Units shall have been purchased. Each such Investor may elect to
purchase additional Investor Units by delivering written notice of such election
to the Company together with the purchase price therefor (in the form specified
in the Company's notice) within 10 days after receipt of the Company notice.
Each purchasing Investor shall be entitled to purchase such additional Investor
Units at the same price and on the same terms as such Investor Units are offered
by the Company to the other Investors.
(b) Notwithstanding anything herein to the contrary, ▇▇▇▇ ▇. ▇▇▇▇▇▇
III ("▇▇▇▇▇▇") shall have the right, without obtaining the consent of the
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Required Interests or any Member, to cause the Company to issue Class B
Management Units to employees of any Subsidiary of the Company (including,
without limitation, employees of UCTV) in an amount not to exceed 500 Class B
Management Units; provided, however, that prior to any such issuance, ▇▇▇▇▇▇
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shall require such employees to enter into agreements providing for the
repurchase of such Units upon termination of employment and shall obtain
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the consent of the Managing Member solely with respect to adequacy of any
repurchase rights in favor of the Company regarding such Class B Management
Units; and provided further that the Company shall not issue Class B Management
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Units to any Person unless such Person shall have executed a joinder agreement
in form satisfactory to the Managing Member pursuant to which such Person agrees
to be bound by the provisions of this Agreement. In the event ▇▇▇▇▇▇ ceases to
be an employee of any Subsidiary of the Company (including, without limitation,
UCTV) or ceases to be a Member, the Managing Member shall have the right to
issue any additional Class B Management Units.
(c) Notwithstanding anything to the contrary in Section 3.5(a) above,
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each Investor shall be required to make additional Capital Contributions to the
Company from time to time with respect to the Investor Units held by such
Investor when and as called by the Managing Member upon ten days prior written
notice solely to fund the exercise by the Company of the Warrants or the
exercise by the Company of the purchase rights granted pursuant to the Equity
Protection Agreements. The amount of any such additional Capital Contribution by
such Investor shall be limited to such Investor's pro rata share (based upon the
number of outstanding Investor Units held by such Investor and the number of
outstanding Investor Units held by all Investors) of the aggregate Capital
Contribution being made by all Investors pursuant to such capital call by the
Managing Member. No additional Investor Units will be issued in connection with
any such additional Capital Contribution.
3.6 Representations, Warranties and Agreements of the Members. Each
---------------------------------------------------------
Member hereby represents and warrants (severally as to itself only) that:
(a) The Units have been purchased by such Member and not by any other
Person, with the Member's own funds and not with the funds of any other Person,
and for the account of such Member, not as a nominee or agent and not for the
account of any other Person. Such Member has purchased the Units for investment
for an indefinite period, not with a view to the sale or distribution of any
part of all thereof by public or private sale or other disposition.
(b) Such Member has been advised that the Units have not been
registered under the Securities Act or registered or qualified under any other
securities law, on the ground, among others, that no distribution or public
offering of the Units is to be effected and the Units will be issued by the
Company in connection with a transaction that does not involve any public
offering within the meaning of Section 4(2) of the Securities Act, or the rules
and regulations of the Securities and Exchange Commission and under comparable
exemptive provisions of the securities laws, rules and regulations of other
jurisdictions. Such Member understands that the Company is relying in part on
the Member's representations as set forth herein for purposes of claiming such
exemptions and that the basis for such exemptions may not be present if,
notwithstanding such Member's representations, such Member has in mind merely
acquiring Units for resale on the occurrence or non-occurrence of some
predetermined event. Such Member has no such intention.
(c) Such Member has such knowledge and experience in financial and
business matters that such Member is capable of evaluating the merits and risks
of an investment in Units and has the capacity to protect such Member's own
interests in connection with such Member's proposed investment in Units.
-9-
(d) Such Member acknowledges that such Member has been furnished with
such financial and other information concerning the Company as such Member
considers necessary in connection with such Member's investment in Units. Such
Member has carefully reviewed such information and is thoroughly familiar with
the proposed business, operations, properties and financial condition of the
Company and has discussed with representatives of the Company any questions the
Purchase may have had with respect thereto. Such Member understands: (i) the
risks involved in this offering, including the speculative nature of the
investment; (ii) the financial hazards involved in this offering, including the
risk of losing such Member's entire investment; (iii) the lack of liquidity and
restrictions on transfers of Units; and (iv) the tax consequences of this
investment. Such Member has consulted with such Member's own legal, accounting,
tax, investment and other advisers with respect to the tax treatment of an
investment by such Member in Units and the merits and risks of an investment in
Units. Such Member is an "accredited investor" as defined under the Securities
Act or has provided written notice to the Company that such Member is not an
"accredited investor" prior to purchasing any Units or other interest in the
Company.
(e) The execution, delivery and performance by such Member of this
Agreement have been duly authorized by such Member. This Agreement constitutes a
valid and binding obligation of such Member, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a proceeding in equity or
at law).
(f) Such Member understands that the Units will be "restricted
securities" as that term is defined in Rule 144 under the Securities Act and,
accordingly, that the Units must be held indefinitely unless they are
subsequently registered under the Securities Act and qualified under any other
applicable securities law or exemptions from such registration and qualification
are available. Such Member understands that the Company is under no obligation
to register or qualify Units under the Securities Act, or any other securities
law.
(g) Such Member is a resident of the jurisdiction set forth in such
Member's address on Schedule A.
----------
3.7 Initial Capital Contributions. Each Member shall make an initial
-----------------------------
Capital Contribution to the Company in cash or assets in the amount set forth
opposite such Member's name on Schedule A hereto. Upon receipt of the initial
----------
Capital Contribution set forth opposite such Member's name on Schedule A, each
----------
Member shall be deemed to own the number of Investor Units and Management Units
set forth opposite such Member's name on Schedule A.
----------
3.8 Defaulting Members. If any Member (a "Defaulting Member") fails
------------------ -----------------
to make full payment of any portion of any additional Capital Contribution
called by the Managing Member pursuant to Section 3.5(c), the Managing Member
--------------
may undertake any one or more of the following steps:
(a) The Managing Member may pursue and enforce all rights and
remedies the Company may have against such Defaulting Member, including a
lawsuit to collect the overdue amount, with interest calculated thereon
at a rate equal to 12%.
-10-
(b) Notwithstanding anything herein to the contrary, from and after
any date on which a Defaulting Member's fails to make any additional
Capital Contribution pursuant to Section 3.5(c), if such Defaulting
--------------
Member continues to hold Units, (i) such Defaulting Member shall have no
right to receive any distributions from the Company until such time as the
amount of distributions that would have been made to the Defaulting Member
shall have been reduced by an amount equal to the sum of (A) an amount
equal to 18% per annum, compounded annually, of the unpaid additional
Capital Contribution and (B) an amount equal to the unpaid Capital
Contribution, and such reduced amount shall have been distributed to the
Investors other than the Defaulting Member pursuant to Section 5.2(b), (ii)
--------------
such Defaulting Member's Capital Account shall not be credited with such
Defaulting Member's share of items of income and gain allocated to such
Defaulting Member pursuant to Article V, and (iii) such Defaulting Member's
---------
Capital Account shall continue to be debited for such Defaulting Member's
share of items of loss, deduction and expense allocated to such Defaulting
Member pursuant to Article V.
---------
3.9 Outstanding Units. Any Units issued pursuant to this Agreement
-----------------
which are subsequently held by the Company as a result of any repurchase of such
Units by the Company or otherwise, shall not be considered outstanding Units for
any purpose hereunder.
ARTICLE IV
CAPITAL ACCOUNTS
----------------
4.1 Establishment and Determination of Capital Accounts. A capital
---------------------------------------------------
account ("Capital Account") shall be established for each Member in accordance
---------------
with the Treasury Regulations under Section 704(b) of the Code. In accordance
with such Treasury Regulations, the Capital Account of each Member shall consist
of such Member's initial Capital Contribution and shall be (i) increased by any
additional Capital Contributions made by such Member pursuant to the terms of
this Agreement and such Member's share of items of income and gain allocated to
such Member pursuant to Article V and (ii) decreased by such Member's share of
---------
items of loss, deduction and expense allocated to such Member pursuant to
Article V and any distributions to such Member of cash or the fair market value
---------
of any other property (net of liabilities assumed by such Member and liabilities
to which such property is subject) distributed to such Member. Any references
in this Agreement to the Capital Account of a Member shall be deemed to refer to
such Capital Account as the same may be increased or decreased from time to time
as set forth above. The Capital Account maintenance rules set forth in this
Section 4.1 are intended to be consistent with the capital account maintenance
-----------
rules of Treasury Regulation Section 1.704-1(b)(2)(iv).
4.2 Computation of Amounts. For purposes of computing the amount of
----------------------
any item of income, gain, loss, deduction or expense to be reflected in Capital
Accounts, the determination, recognition and classification of each such item
shall be the same as its determination, recognition and classification for
federal income tax purposes; provided that (a) any income that is exempt from
-------------
federal income tax shall be added to such taxable income or losses; (b) any
expenditures of the Company described in Section 705(a)(2)(B) of the Code or
treated as Code Section 705(a)(2)(B) expenditures pursuant to Treasury
Regulation Section 1.704-1(b)(2)(iv)(i), shall be subtracted from such taxable
income or losses; (c) if the Book Value of any Company property is adjusted
pursuant to Treasury Regulation
-11-
Section 1.704-1(b)(2)(iv)(e) (in connection with a distribution of such
property) or (f) (in connection with a revaluation of Capital Accounts), the
amount of such adjustment shall be taken into account as gain or loss from the
disposition of such property; (d) if property that is reflected on the books of
the Company has a Book Value that differs from the adjusted tax basis of such
property, depreciation, amortization and gain or loss with respect to such
property shall be determined by reference to such Book Value; and (e) the
computation of all items of income, gain, loss, deduction and expense shall be
made without regard to any election pursuant to Section 754 of the Code that may
be made by the Company, unless the adjustment to basis of Company property
pursuant to such election is reflected in Capital Accounts pursuant to Treasury
Regulation Section 1.704-1(b)(2)(iv)(m).
4.3 Interest; Withdrawal. No Member shall be paid interest on any
--------------------
Capital Contributions to the Company or on the balance of such Member's Capital
Account. No Member shall have any right (a) to demand the return of such
Member's Capital Contributions or any other distribution from the Company
(whether upon resignation, withdrawal or otherwise), except upon dissolution of
the Company pursuant to Article XII hereof, or (b) to cause a partition of the
-----------
Company's assets.
ARTICLE V
DISTRIBUTIONS; ALLOCATIONS OF PROFITS AND LOSSES
------------------------------------------------
5.1 Generally. Subject to the provisions of Section 18-607 of the
---------
Act, the Managing Member shall have sole discretion regarding the amounts and
timing of distributions to Members, in each case subject to the retention and
establishment of reasonable reserves of, or payment to third parties of, such
funds as the Managing Member deems necessary with respect to the reasonable
business needs of the Company which shall include the payment or the making of
provision for the payment when due of the Company's obligations, including the
payment of any management or administrative fees and expenses or any other
obligations.
5.2 Distributions. Except as provided in Section 5.4, distributions
------------- -----------
to be made at any time shall be made in the following order and priority:
(a) First, to the holders of Investor Units pro rata according to
-----
their ownership of outstanding Investor Units until the aggregate distributions
with respect to the Investor Units made pursuant to this Section 5.2(a) reduces
--------------
the aggregate Unpaid Preferred Yield to zero; and
(b) Second, to the holders of Investor Units pro rata according to
------
their ownership of outstanding Investor Units until the aggregate distributions
with respect to the Investor Units made pursuant to this Section 5.2(b) reduces
--------------
the aggregate Unreturned Preferred Capital to zero; and
(c) Third, to the holders of the Management Units pro rata according
-----
to their ownership of the outstanding Class A Management Units until the
aggregate distributions with respect to the Class A Management Units made
pursuant to this Section 5.2(c) equals the Applicable Class A Percentage of all
-------------
distributions made pursuant to Section 5.2(a) and this Section 5.2(c); and
-------------- --------------
(d) Fourth, until such time as the IRR Target has been achieved, the
------
Applicable Class A Percentage to the holders of Class A Management Units pro
rata according to their ownership of
-12-
outstanding Class A Management Units and the remainder to the holders of
Investor Units pro rata according to their ownership of outstanding Investor
Units; and
(e) Fifth, after such time as the IRR Target has been achieved, the
-----
Applicable Class A Catch-up Percentage to the holders of Class A Management
Units pro rata according to their ownership of outstanding Class A Management
Units and the Applicable Class B Catch-up Percentage to the holders of Class B
Management Units pro rata according to their ownership of outstanding Class B
Management Units until the aggregate distributions with respect to the
Management Units made pursuant to Sections 5.2(c), (d) and this Section 5.2(e)
--------------- --- --------------
is equal to the Aggregate Management Percentage of the aggregate distributions
made pursuant to Sections 5.2(a), (c), (d) and this Section 5.2(e) with respect
--------------- --- --- --------------
to the Investor Units and Management Units; and
(f) Sixth, the Applicable Class A Percentage to the holders of Class
-----
A Management Units pro rata according to their ownership of outstanding Class A
Management Units, the Applicable Class B Percentage to the holders of the Class
B Management Units pro rata according to their ownership of outstanding Class B
Management Units and the remainder to the holders of Investor Units pro rata
according to their ownership of outstanding Investor Units.
(g) Notwithstanding Sections 5.2(d), (e) and (f), if subsequent to
----------------------------
the making of any distribution pursuant to Section 5.2(e) or (f), a Cash Outflow
---------------------
occurs (a "Post-Distribution Cash Outflow"), then in such case the amount that
------------------------------
would otherwise be distributed to Management Holders pursuant to Sections
--------
5.2(d), (e) and (f) shall be reduced (and such amount shall be distributed to
-------------------
holders of Investor Units, pro rata according to their ownership of Investor
Units) by an amount equal to the excess of (i) the aggregate amount of all
distributions previously made to the Management Holders pursuant to Section
-------
5.2(e) and (f) over (ii) the aggregate amount of the distributions that would
--------------
have been made to the Management Holders pursuant to Section 5.2(e) and (f) if
----------------------
all Post-Distribution Cash Outflows had been taken into account for purposes of
determining whether the IRR Target was met on the date of such distributions.
5.3 Allocation of Profits and Losses. For each Fiscal Year of the
--------------------------------
Company, all Profits and Losses shall be allocated to the Members' Capital
Accounts in a manner such that, as of the end of such Fiscal Year, the Capital
Account of each Member (which may be either a positive or negative balance)
shall be equal to (a) the amount which would be distributed to such Member,
determined as if the Company were to liquidate all of its assets for the Book
Value thereof and distribute the proceeds thereof pursuant to Section 12.2
------------
hereof, minus (b) the sum of (i) such Member's share of partnership minimum gain
-----
(as determined according to Treasury Regulation Sections 1.704-2(d) and (g)(3))
and partner minimum gain (as determined according to Treasury Regulation Section
1.704-2(i)) and (ii) the amount, if any, which such Member is obligated to
contribute to the capital of the Company as of the last day of such Fiscal Year.
5.4 Initial Capital Contributions. Notwithstanding anything to the
-----------------------------
contrary contained in Section 5.2, the Members acknowledge that (i) ▇▇▇▇▇▇ ▇▇▇▇▇
made an initial Capital Contribution to the Company in the amount of $29,090.91,
and that in the event this amount is returned to the Company pursuant to the
Escrow Agreement, such amount or other amounts payable to the Company by UCTV
shall be distributed solely to ▇▇▇▇▇▇ ▇▇▇▇▇ as a return of capital and (ii) the
Management Holders paid their initial Capital Contributions by the delivery of
promissory notes to the Company (the "Management Notes") and
----------------
-13-
that all principal and accrued interest with respect to the Management Notes
which is paid by such Management Holders shall be distributed solely to the
holders of Preferred Units as a return of capital. Each of the Management
Holders acknowledges and agrees that until such time as all principal and
accrued interest with respect to the Management Note of such Management Holder
is paid in full, such Management Holder shall have no right to receive any
distributions from the Company and all distributions which would have been paid
by the Company to such Management Holder shall be retained by the Company as
payment with respect to the Management Note of such Management Holder and
distributed in accordance with the immediately preceding sentence until such
Management Note is paid in full. Any distributions to the holders of Preferred
Units upon any payment with respect to a Management Note shall be deemed a
return of capital to the holders of Preferred Units.
5.5 Tax Allocations; Code Section 704(c).
------------------------------------
(a) The income, gains, losses, deductions and expenses of the Company
shall be allocated, for federal, state and local income tax purposes, among the
Members in accordance with the allocation of such income, gains, losses,
deductions and expenses among the Members for computing their Capital Accounts,
except that if any such allocation is not permitted by the Code or other
-----------
applicable law, the Company's subsequent income, gains, losses, deductions and
expenses shall be allocated among the Members so as to reflect as nearly as
possible the allocation set forth herein in computing their Capital Accounts.
(b) In accordance with Code Section 704(c) and the Treasury
Regulations thereunder, income, gain, loss, deduction and expense with respect
to any property contributed to the capital of the Company shall, solely for tax
purposes, be allocated among the Members so as to take account of any variation
between the adjusted basis of such property to the Company for federal income
tax purposes and its fair market value at the time of contribution.
(c) If the Book Value of any Company asset is adjusted pursuant to
Section 4.2, subsequent allocations of items of taxable income, gain, loss,
-----------
deduction and expense 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 Book Value in the same manner as under Code Section 704(c).
(d) Any elections or other decisions relating to such allocations
shall be made by the Members in any manner that reasonably reflects the purpose
and intent of this Agreement. Allocations pursuant to this Section 5.5 are
-----------
solely for purposes of federal, state and local taxes and shall not affect, or
in any way be taken into account in computing, any Member's Capital Account or
share of profits, losses, other items or distributions pursuant to any
provisions of this Agreement.
ARTICLE VI
MANAGEMENT OF THE COMPANY
-------------------------
6.1 Managing Member. Except as otherwise required by the Act, the
---------------
business and affairs of the Company shall be managed by or under the direction
of a "manager"(as that term is defined in the Act) who shall be a Member (the
"Managing Member"). The initial Managing Member shall be
---------------
-14-
▇▇▇▇▇▇ ▇▇▇▇▇. Except as otherwise expressly provided for in this Agreement, the
Members hereby consent to the exercise by the Managing Member of all such powers
and rights conferred on them by the Act with respect to the management and
control of the Company. The Managing Member shall have the power on behalf and
in the name of the Company to carry out any and all of the objectives and
purposes of the Company and to perform all acts and enter into and perform all
contracts and other undertakings which the Managing Member, in its sole
discretion, deems necessary or advisable or incidental thereto, including the
power to dispose of or vote any security held by the Company (including any
securities of UCTV) or exercise any right to acquire securities held by the
Company (including the Warrants and the Equity Protection Agreements).
Notwithstanding the foregoing and except as explicitly set forth in this
Agreement, if a vote, consent or approval of the Members is required by the Act
or other applicable law with respect to any act to be taken by the Company or
matter considered by the Managing Member, the Members agree that they shall be
deemed to have consented to or approved such act or voted on such matter in
accordance with the determination of the Managing Member on such act or matter.
No Member, in his or its capacity as a Member, shall have any power to act for,
sign for or do any act that would bind the Company. The Managing Member shall
devote such time and effort to the affairs of the Company as he or it may deem
appropriate for the oversight of the management and affairs of the Company.
6.2 Delegation by Managing Member. The Managing Member shall have the
-----------------------------
power and authority to delegate to one or more other Persons the Managing
Member's rights and powers to manage and control the business and affairs of the
Company, including to delegate to agents and employees of a Member or the
Company, and to delegate by a written agreement with, or otherwise to, other
Persons. The Managing Member may authorize any Person (including, without
limitation, any Member) to enter into and perform under any document on behalf
of the Company.
6.3 Resignation; Vacancy; Removal. The Managing Member may resign by
-----------------------------
delivering his or its written resignation to the Company. Such resignation
shall be effective fourteen (14) business days following receipt of such
resignation by the Company unless some later time is specified in such
resignation. If a vacancy in the position of Managing Member should for any
reason occur, a replacement Managing Member shall be appointed by ▇▇▇▇▇▇ ▇▇▇▇▇.
Any subsequent Managing Member may be removed only by ▇▇▇▇▇▇ ▇▇▇▇▇. The initial
Managing Member may not be removed for any reason. Any subsequent Managing
Member may be removed only by ▇▇▇▇▇▇ ▇▇▇▇▇.
6.4 Compensation. The Managing Member shall not be entitled to
------------
compensation from the Company in connection with its activities as Managing
Member; provided that the foregoing shall not prevent the Managing Member from
--------
receiving reimbursement for out-of-pocket expenses incurred by the Managing
Member on behalf of the Company, receiving distributions as a Member pursuant to
this Agreement or otherwise receiving compensation from the Company for actions
unrelated to its activities as Managing Member.
6.5 Board Membership of Subsidiaries.
--------------------------------
(a) The Managing Member and each other Member shall cause the Company
to vote all voting securities of UCTV over which the Company has voting
control and shall take all other necessary or desirable actions within its
control (including in its capacity as a member of the Board, as defined
below) so that the following individuals shall be elected to the board of
directors
-15-
of UCTV (the "Board") and shall remain directors of the Board until removed
in accordance with Sections 6.5(b) and 6.5(c):
--------------------------
(i) two representatives designated by the holders of a
majority of the Investor Units (the "Investor Directors"), which
------------------
Investor Directors shall initially be Avy ▇. ▇▇▇▇▇ and ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇;
(ii) ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇ III (the
"Management Directors"), so long as each such Management Director is
--------------------
employed by UCTV; and
(iii) up to six additional representatives designated by the
holders of a majority of the Investor Units, who shall initially include
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (the "Other Directors").
---------------
(b) The removal from the Board (with or without cause) of any
Investor Director or any Other Director shall only be upon written request
of the Managing Member and under no other circumstances.
(c) Each Management Director shall be removed from the Board
automatically if such Management Director ceases to be employed by UCTV
for any reason.
(d) In the event that any representative designated hereunder ceases
to serve as a member of the Board during his term of office for any reason,
the resulting vacancy on the Board shall be filled by a representative
designated by the same group or Person that designated such prior
representative.
ARTICLE VII
MEMBERS
-------
7.1 Membership Status; Resignation. A Transfer by a Member of all of
such Member's Units shall be deemed to be a resignation by such Member effective
upon consummation of such Transfer and such Member shall not be entitled to any
distributions or payments of any kind from the Company. Transfers may only be
made pursuant to Article XI hereof. To the fullest extent permitted by law, a
----------
Member may not resign or withdraw as a Member of the Company without the consent
of the Managing Member, which consent may be withheld in its sole discretion.
7.2 No Participation in Management. The management of the business
------------------------------
and affairs of the Company shall be vested in whole in the Managing Member in
accordance with Article VI of this Agreement. Except with respect to the
----------
execution and filing of the Certificate, as otherwise specifically provided by
this Agreement or required by the Act, no Member, acting solely in the capacity
of Member, shall participate in the management of or be an agent of the Company
or have any authority to act for or bind the Company.
7.3 Voting Rights Generally; Voting of Units. Except as expressly
----------------------------------------
provided in this Agreement or as may be required by the Act, Members shall have
no voting, approval or consent rights. Each Member shall be entitled to one (1)
vote for each Unit held by such Member upon
-16-
any matter upon which Members are entitled to vote submitted to a vote at a
meeting of the Members called by the Managing Member. Any action required to, or
which may be, taken by Members may be taken without a meeting if consented
thereto in a writing setting forth the action so taken and signed by all the
Members entitled to vote with respect to the subject matter thereof.
7.4 Conflicts of Interest. The Company may transact business with
---------------------
any Member, its Affiliates and each of their respective stockholders, directors,
officers, controlling persons, members, partners and employees; provided, the
terms of those transactions are no less favorable than those the Company could
obtain from unrelated third parties or are approved by a majority of the Members
who have no direct or indirect interest in that transaction.
7.5 Outside Activities. Each Member of the Company, in its capacity
------------------
as such, its Affiliates and each of their respective stockholders, directors,
officers, controlling persons, members, partners and employees may at any time
and from time to time may engage in and own interests in other business ventures
of any and every type and description, independently or with others (including
ones in competition with the Company) with no obligation to offer to the Company
or any other Member or officer the right to participate therein. Neither the
Company nor any Member of the Company shall have any rights by virtue of this
Agreement or the limited liability company relationship created hereby in any
such business interests or activities of any such Person.
7.6 Confidentiality. Each Member agrees to maintain the
---------------
confidentiality of all proprietary, nonpublic information, documents and
materials relating to the business of the Company or any of its Subsidiaries
which the Member now or in the future may possess, except to the extent
disclosure of any such information is required by law or authorized by the
Company or reasonably occurs in connection with disputes over the terms of this
Agreement.
ARTICLE VIII
EXCULPATION AND INDEMNIFICATION
-------------------------------
8.1 Exculpation. No Member (including the Managing Member) shall
-----------
have any duty to the Company or to any Member of the Company except as expressly
set forth herein. No Member (including the Managing Member) shall be liable to
any other Member or the Company for any loss or damage suffered by the Company
or any Member unless such loss or damage is caused by such Member's gross
negligence, willful misconduct, intentional violation of law or material breach
of this Agreement. No Member (including the Managing Member) shall be liable for
errors in judgment or for any acts or omissions that do not constitute gross
negligence, willful misconduct, intentional violation of law or material breach
of this Agreement. Any Member (including the Managing Member) may consult with
counsel and accountants in respect of Company affairs, and provided such Member
acts in good faith reliance upon the advice or opinion of such counsel or
accountants, such Member shall not be liable for any loss or damage suffered by
the Company or any Member in reliance thereon. The preceding sentence shall in
no way limit any Person's right to rely on information to the extent provided in
Section 18-406 of the Act.
-17-
8.2 Right to Indemnification. Subject to the limitations and
------------------------
conditions as provided in this Article VIII, each Person who was or is made a
------------
party or is threatened to be made a party to or is involved in any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative, arbitrative (hereinafter a "Proceeding"), or any appeal in such
----------
a Proceeding or any inquiry or investigation that could lead to such a
Proceeding, by reason of the fact that such Person, or a Person of whom such
Person is the legal representative, is or was a Member of the Company or while a
Member of the Company is or was serving at the request of the Company as a
manager, director, officer, partner, venturer, proprietor, trustee, employee,
agent or similar functionary of another foreign or domestic limited liability
company, corporation, partnership, joint venture, sole proprietorship, trust,
employee benefit plan or other enterprise shall be indemnified by the Company to
the fullest extent permitted under applicable law, as the same exist or may
hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the Company to provide broader indemnification
rights than said law permitted the Company to provide prior to such amendment)
against judgments, penalties (including excise and similar taxes and punitive
damages), fines, settlements and reasonable expenses (including, without
limitation, attorneys' fees) actually incurred by such Person in connection with
such Proceeding; provided that (a) such Person's course of conduct was pursued
-------------
in good faith and believed by such Person to be in the best interests of the
Company and (b) such course of conduct did not constitute gross negligence or
willful misconduct on the part of such Person and otherwise was in accordance
with the terms of this Agreement. Indemnification under this Article VIII shall
------------
continue as to a Person who has ceased to serve in the capacity which initially
entitled such Person to indemnity hereunder. The rights granted pursuant to
this Article VIII shall be deemed contractual rights, and no amendment,
------------
modification or repeal of this Article VIII shall have the effect of limiting or
------------
denying any such rights with respect to actions taken or Proceedings arising
prior to any amendment, modification or repeal. It is expressly acknowledged
that the indemnification provided in this Article VIII could involve
------------
indemnification for negligence or under theories of strict liability.
8.3 Advance Payment. The right to indemnification conferred in this
---------------
Article VIII shall include the right to be paid or reimbursed by the Company the
------------
reasonable expenses incurred by a Person of the type entitled to be indemnified
under Section 8.2 who was, is or is threatened to be made a named defendant or
-----------
respondent in a Proceeding in advance of the final disposition of the Proceeding
and without any determination as to the Person's ultimate entitlement to
indemnification; provided, however, that the payment of such expenses incurred
by any such Person in advance of the final disposition of a Proceeding shall be
made only upon delivery to the Company of a written affirmation by such Person
of his or her good faith belief that he has met the standard of conduct
necessary for indemnification under Article VIII and a written undertaking, by
------------
or on behalf of such Person, to repay all amounts so advanced if it shall
ultimately be determined that such indemnified Person is not entitled to be
indemnified under this Article VIII or otherwise.
------------
8.4 Indemnification of Employees and Agents. The Company shall
---------------------------------------
indemnify and advance expenses to any officer, director, partner, employee or
agent of the Managing Member or the Company to the same extent and subject to
the same conditions that it may indemnify and advance expenses to the Managing
Member under this Article VIII.
------------
8.5 Appearance as a Witness. Notwithstanding any other provision of
-----------------------
this Article VIII, the Company may pay or reimburse reasonable out-of-pocket
------------
expenses incurred by a Managing Member or such Managing Member's officers,
directors, employees, partners and agents in connection with such
-18-
Person's appearance as a witness or other participation in a Proceeding related
to or arising out of the business of the Company at a time when such Person is
not a named defendant or respondent in the Proceeding.
8.6 Nonexclusivity of Rights. The right to indemnification and the
------------------------
advancement and payment of expenses conferred in this Article VIII shall not be
------------
exclusive of any other right which a Person indemnified pursuant to Section 8.4
-----------
may have or hereafter acquire under any law (common or statutory), provision of
the Certificate or this Agreement, agreement, vote of Members or otherwise.
8.7 Savings Clause. If this Article VIII or any portion hereof shall
-------------- ------------
be invalidated on any ground by any court of competent jurisdiction, then the
Company shall nevertheless indemnify and hold harmless each Person indemnified
pursuant to this Article VIII as to costs, charges and expenses (including
------------
attorneys' fees), judgments, fines and amounts paid in settlement with respect
to any action, suit or proceeding, whether civil, criminal, administrative or
investigative to the full extent permitted by any applicable portion of this
Article VIII that shall not have been invalidated and to the fullest extent
------------
permitted by applicable law.
ARTICLE IX
TAXES
-----
9.1 Tax Returns. The Company shall cause to be prepared and filed
-----------
all necessary federal and state income tax returns for the Company, including
making any elections the Managing Member may deem appropriate and in the best
interests of the Members. Each Member shall furnish to the Managing Member all
pertinent information in its possession relating to Company operations that is
necessary to enable the Company's income tax returns to be prepared and filed.
9.2 Tax Matters Partner. The Managing Member shall be the "tax
-------------------
matters partner" of the Company pursuant to Section 6231(a)(7) of the Code (the
"Tax Matters Member"). The Tax Matters Member is authorized to represent the
------------------
Company before the Internal Revenue Service and any other governmental agency
with jurisdiction, and to sign such consents and to enter into settlements and
other agreements with such agencies as the Managing Member deems necessary or
advisable.
ARTICLE X
BOOKS, REPORTS
--------------
10.1 Maintenance of Books. The Company shall keep appropriate books
--------------------
and records of accounts and shall keep appropriate minutes of the proceedings of
its Members and any committees. The Fiscal Year of the Company shall be the
calendar year.
10.2 Member Tax Information. Within ninety (90) days after the end of
----------------------
each Taxable Year, the Company will cause to be delivered to each Person who was
a Member at any time during such
-19-
Taxable Year a Form K-1 and such other information, if any, with respect to the
Company as may be necessary for the preparation of such Member's federal, state
and local income tax returns.
ARTICLE XI
TRANSFERS
---------
11.1 Assignment by Members. No holder of Units shall Transfer any
---------------------
Units or other interests in the Company prior to the first anniversary of the
Escrow Release Date (as defined in the Escrow Agreement). No Management Holder
shall transfer any Units or other interests of the Company, or offer to Transfer
all or any part of such Management Holder's Units or other interest in the
Company (whether voluntarily or involuntarily) without the consent of the
Managing Member, which consent may be withheld in the Managing Member's sole
discretion. Each transferee of Units or other interest in the Company shall as a
condition prior to such Transfer execute a joinder agreement in a form
satisfactory to the Managing Member pursuant to which such transferee shall
agree to be bound by the provisions of this Agreement (it being understood that
any such Transfer shall have the effect of Transferring an economic interest in
such Units and shall not have the effect of Transferring any other rights of a
Member unless such Transferee is admitted as a substitute Member pursuant to
Section 11.3). Any Transfer by a Member of any part of Units to a Person who is
------------
not a Member shall not relieve such Member of any of its obligations with
respect to such Units.
11.2 Void Transfers. Any Transfer by any Member of any Units or other
--------------
interest in the Company (a) in contravention of this Agreement (including,
without limitation, the failure of the transferee to execute a counterpart in
accordance with Section 11.1), (b) prior to the first anniversary of the Escrow
------------
Release Date or (c) which would cause the Company to not be treated as a
partnership for U.S. federal income tax purposes, shall be void and ineffectual
and shall not bind or be recognized by the Company or any other party. No
purported assignee shall have any right to any profits, losses or distributions
of the Company.
11.3 Substituted Member.
------------------
(a) An assignee of any Units or other interest in the Company held by
a Member, or any portion thereof, shall become a substituted Member entitled to
all the rights of a Member if and only if the assignor gives the assignee such
right, and prior written consent to such assignment and substitution has been
obtained from the Managing Member, which consent may be withheld in such
Managing Member's sole discretion.
(b) The Company and the Members shall be entitled to treat the record
owner of any Units or other interest in the Company as the absolute owner
thereof and shall incur no liability for distributions of cash or other property
made in good faith to such owner until such time as a written assignment of such
Units or other interest in the Company, which assignment is permitted pursuant
to the terms and conditions of Section 11.1 and Section 11.3 hereof, has been
------------ ------------
received and accepted by the Managing Member and recorded on the books of the
Company.
-20-
(c) Upon the admission of a substituted Member, Schedule A attached
----------
hereto shall be amended to reflect the name, address and Units of such
substituted Member and to eliminate the name and address of and other
information relating to the assigning Member with regard to the assigned Units.
11.4 Effect of Assignment.
--------------------
(a) Any Member who shall make a permitted assignment under this
Agreement of any Units or other interest in the Company shall cease to be a
Member of the Company with respect to such Units or other interest and shall no
longer have any rights or privileges of a Member with respect to such Units or
other interest, except that unless and until the assignee of such Member is
admitted as a substituted Member in accordance with the provisions of this
Article XI, such assigning Member shall retain the statutory rights and
----------
obligations of an assignor member under applicable law.
(b) Any Person who acquires in any manner whatsoever any Units or
other interest in the Company, irrespective of whether such Person has accepted
and adopted in writing the terms and provisions of this Agreement, shall be
deemed by the acceptance of the benefits of the acquisition thereof to have
agreed to be subject to and bound by of all the terms and conditions of this
Agreement that any predecessor in such Units or other interest in the Company of
such Person was subject to or by which such predecessor was bound.
(c) Following an assignment of any Units or other interest that is
permitted under this Agreement, the transferee of such Units or interest shall
be treated as having made all of the Capital Contributions in respect of, and
received all of the distributions received in respect of, such Units or
interest, shall succeed to the Capital Account associated with such Units or
interest and shall receive allocations and distributions under Articles V and
--------------
XII in respect of such Units or interest as if such transferee were a Member.
---
11.5 Permitted Transfers. Subject in all events to the general
-------------------
restrictions on Transfers contained in Sections 11.1, 11.2 and 11.3, the
----------------------------
restrictions contained in the first sentence of Section 11.1 shall not apply to
------------
any Transfer of Units by any Unitholder among such Unitholder's Permitted
Transferees so long as such Permitted Transferee shall agree in writing to be
bound by the provisions of this Agreement prior to any such Transfer.
11.6 Deliveries for Transfer.
-----------------------
(a) In connection with the Transfer of any Restricted Securities, the
holder thereof will deliver written notice to the Company describing in
reasonable detail the Transfer or proposed Transfer. In addition, in the case
of any Certificated Units (as defined below), if the holder of such Restricted
Securities delivers to the Company an opinion of such counsel that no subsequent
Transfer of such Restricted Securities will require registration under the
Securities Act, the Company will promptly upon such contemplated Transfer
deliver new certificates or instruments, as the case may be, for such Restricted
Securities which do not bear the restrictive legend relating to the Securities
Act as set forth below. If the Company is not required to deliver new
certificates or instruments, as the case may be, for such Restricted Securities
not bearing such legend, the holder thereof will not Transfer the same until the
prospective transferee has confirmed to the Company in writing its agreement to
be bound by the conditions contained in this Section 11.6.
------------
-21-
(b) Notwithstanding any other provisions of this Article XI, no
----------
Transfer of Units or any other interest in the Company may be made unless in the
opinion of counsel (who may be counsel for the Company), satisfactory in form
and substance to the Managing Member and counsel for the Company (which opinion
may be waived, in whole or in part, at the discretion of the Managing Member),
such Transfer would not violate any federal securities laws or any state or
provincial securities or "blue sky" laws (including any investor suitability
standards) applicable to the Company or the interest to be transferred, or cause
the Company to be required to register as an Investment Company under the
Investment Company Act of 1940, as amended. Such opinion of counsel shall be
delivered in writing to the Company prior to the date of the Transfer.
11.7 Prospective Transferees. Subject to the terms of this Agreement,
-----------------------
the Company agrees to cooperate, as may reasonably be requested, in order to
provide any information and access to any information to any prospective
transferee in connection with a proposed Transfer.
11.8 Legend. In the event that certificates representing the Units are
------
issued ("Certificated Units"), such certificates will bear a legend stating that
------------------
the Transfer of the Units is subject to the conditions specified in this
Agreement.
11.9 Effective Date. Any Transfer and any related admission of a
--------------
Person as a Member in compliance with this Article XI shall be deemed effective
----------
on such date that the transferee or successor in interest complies with
the requirements of this Agreement.
ARTICLE XII
DISSOLUTION, LIQUIDATION AND TERMINATION
----------------------------------------
12.1 Dissolution. The Company shall be dissolved and its affairs
-----------
shall be wound up on the first to occur of the following:
(a) the expiration of its term pursuant to Section 2.5;
-----------
(b) prior to April 25, 2002, the written consent of the Required
Interests to dissolve the Company;
(c) after April 25, 2002, the written determination of the Managing
Member (in its self-discretion) to dissolve the Company;
(d) upon the determination of the Managing Member in the event of a
sale of all or substantially all the Company's assets or in the event the
Company no longer owns any securities of UCTN; and
(e) the entry of a decree of judicial dissolution of the Company
under Section 18-802 of the Act.
-22-
The death, retirement, resignation, expulsion, incapacity, bankruptcy or
dissolution of a Member, or the occurrence of any other event that terminates
the continued membership of a Member in the Company, shall not cause a
dissolution of the Company, and the Company shall continue in existence subject
to the terms and conditions of this Agreement.
12.2 Liquidation and Termination. On dissolution of the Company, the
---------------------------
Managing Member shall act as liquidator or may appoint one or more Members as
liquidator. The liquidator(s) shall proceed diligently to wind up the affairs
of the Company and make final distributions as provided herein and in the Act.
The costs of liquidation shall be borne as a Company expense. Until final
distribution, the liquidator(s) shall continue to operate the Company properties
with all of the power and authority of the Managing Member and the Members. The
steps to be accomplished by the liquidators are as follows:
(a) as promptly as possible after dissolution and again after final
liquidation, the liquidator(s) shall cause a proper accounting to be made by a
recognized firm of certified public accountants of the Company's assets,
liabilities and operations through the last day of the calendar month in which
the dissolution occurs or the final liquidation is completed, as applicable;
(b) the liquidator(s) shall cause the notice described in the Act to
be mailed to each known creditor of and claimant against the Company in the
manner described thereunder;
(c) the liquidator(s) shall pay, satisfy or discharge from Company
funds all of the debts, liabilities and obligations of the Company (including,
without limitation, all expenses incurred in liquidation) or otherwise make
adequate provision for payment and discharge thereof (including, without
limitation, the establishment of a cash fund for contingent liabilities in such
amount and for such term as the liquidator(s) may reasonably determine); and
(d) the remaining assets of the Company (the "Remaining Assets")
----------------
shall be distributed to the Members in accordance with Sections 5.2 and 5.4
--------------------
hereof. The Remaining Assets shall be distributed by the end of the taxable year
of the Company during which the liquidation of the Company occurs (or, if later,
90 days after the date of the liquidation).
All distributions in kind to the Members shall be made subject to the liability
of each distributee for costs, expenses and liabilities theretofore incurred or
for which the Company has committed prior to the date of termination, and those
costs, expenses and liabilities shall be allocated to the distributees pursuant
to this Section 12.2. The distribution of cash and/or property to a Member in
------------
accordance with the provisions of this Section 12.2 constitutes a complete
------------
return to the Member of its Capital Contributions and a complete distribution to
the Member of its interest in the Company and all the Company's property and
constitutes a compromise to which all Members have consented within the meaning
of the Act. To the extent that a Member returns funds to the Company, it has no
claim against any other Member for those funds. Any Company assets distributed
in kind will first be written up or down to their fair market value, thus
creating Profits or Losses (if any), which shall be allocated in accordance with
Sections 5.3 and 5.4.
------------ ---
12.3 Management Holder Give Back. After the final distribution of the
---------------------------
assets of the Company among the Members as provided in Section 12.2 and Article
------------ -------
V, the Management Holders shall contribute to the Company (pro rata according to
-
their ownership of Management Units) an amount equal to the sum of the
---
following:
-23-
(a) first, in the event that the Investors did not receive
-----
distributions in the aggregate pursuant to Sections 5.2(a) and (b) equal to
-----------------------
their aggregate Capital Contributions plus the aggregate Yield accrued through
such date, the Management Holders shall make a Capital Contribution (pro rata
according to their ownership of Management Units) to the Company equal to such
deficit and such amount will be distributed to the holders of Investor Units,
pro rata according to their ownership of Investor Units; and
(b) second, in the event that distributions to Management Holders
------
were not reduced by the entire excess amount described in Section 5.2(g), the
---------------
Management Holders shall make a Capital Contribution (pro rata according to
their ownership of Management Units) to the Company equal to the amount by which
distributions to Management Holders were not reduced by the entire excess amount
described in Section 5.2(g) and such amount will be distributed to the holders
--------------
of Investor Units, pro rata according to their ownership of Investor Units;
provided that such Management Holders Capital Contribution shall not exceed
--------
100% of the net amount distributed to the Management Holders during the life of
the Company pursuant to Section 5.2. Except as otherwise provided in this
-----------
Section 12.3, and notwithstanding any custom or rule of law to the contrary, to
------------
the extent that any Member has a deficit Capital Account balance, upon
dissolution of the Company such deficit shall not be an asset of the Company and
such Members shall not be obligated to contribute such amount to the Company to
bring the balance of such Member's capital account to zero.
12.4 Cancellation of Certificate. On completion of the distribution of
---------------------------
Company assets as provided herein, the Company is terminated, and the Managing
Member (or such other Person or Persons as the Act may require or permit) shall
file a certificate of cancellation with the Secretary of State of Delaware,
cancel any other filings made pursuant to Section 2.5 and take such other
-----------
actions as may be necessary to terminate the Company.
ARTICLE XIII
GENERAL PROVISIONS
------------------
13.1 Notices. Except as expressly set forth to the contrary in this
-------
Agreement, all notices, requests or consents provided for or permitted to be
given under this Agreement must be in writing and shall be deemed delivered:
(a) upon delivery if delivered in person; (b) three (3) business days after
deposit in the United States mail, addressed to the recipient, postage paid, and
registered or certified with return receipt requested; (c) upon transmission if
sent via telecopier, with a confirmation copy sent via overnight mail, provided
--------
that confirmation of such overnight delivery is received; or (d) one (1)
----
business day after deposit with a national overnight courier provided that
-------------
confirmation of such overnight delivery is received. All notices, requests and
consents to be sent to a Member must be sent to or made at the address given for
that Member on Schedule A, or such other address as that Member may specify by
----------
notice to the other Members. Any notice, request, or consent to the Company or
the Managing Member must be given to the Managing Member at the address for the
Managing Member set forth on Schedule A. Whenever any notice is required to be
----------
given by law, the Certificate or this Agreement, a written waiver thereof,
signed by the Person entitled to notice, whether before or after the time stated
therein, shall be deemed equivalent to the giving of such notice.
-24-
13.2 Entire Agreement. This Agreement constitutes the entire agreement
----------------
of the Members and their Affiliates relating to the Company and supersedes all
prior contracts or agreements with respect to the Company, whether oral or
written.
13.3 Effect of Waiver or Consent. A waiver or consent, express or
---------------------------
implied, to or of any breach or default by any Person in the performance by that
Person of its obligations with respect to the Company is not a consent or waiver
to or of any other breach or default in the performance by that Person of the
same or any other obligations of that Person with respect to the Company.
Failure on the part of a Person to complain of any act of any Person or to
declare any Person in default with respect to the Company, irrespective of how
long that failure continues, does not constitute a waiver by that Person of its
rights with respect to that default until the applicable statute-of-limitations
period has run.
13.3 Amendment, Modification or Waiver. Except as otherwise expressly
---------------------------------
provided herein, this Agreement may be amended, modified or waived from time to
time only by a written instrument adopted by the Managing Member; provided,
however, that (a) except as otherwise expressly provided herein, an amendment or
modification reducing disproportionately a Member's Units or other interest in
profits or losses or in distributions or increasing a Member's Capital
Contribution shall be effective only with that Member's consent, (b) an
amendment, modification or waiver to this Agreement which affects the
liabilities, obligations or rights of a particular class of Units in a manner
which is more adverse than such amendment, modification or waiver affects the
rights of all classes of Units shall be effective only with the consent of the
holders of a majority of the outstanding Units of such class, and (c) an
amendment, modification or waiver reducing the Required Interests for any
consent or vote in this Agreement shall be effective only with the consent or
vote of Members having the interest theretofore required, and provided further
that the Managing Member may amend and modify the provisions of this Agreement
and Schedule A hereto to the extent necessary to reflect the issuance of new
----------
Units or other interests in the Company as contemplated by Section 3.5 as
-----------
determined in good faith by the Managing Member.
13.5 Binding Effect. Subject to the restrictions on Transfers set
--------------
forth in this Agreement, this Agreement is binding on and shall inure to the
benefit of the Members and their respective heirs, legal representatives,
successors and assigns.
13.6 Governing Law; Severability. THIS AGREEMENT IS GOVERNED BY AND
---------------------------
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF DELAWARE,
EXCLUDING ANY CONFLICT-OF-LAWS RULE OR PRINCIPLE THAT MIGHT REFER THE GOVERNANCE
OR THE CONSTRUCTION OF THIS AGREEMENT TO THE LAW OF ANOTHER JURISDICTION. In the
event of a direct conflict between the provisions of this Agreement and any
provision of the Certificate or any mandatory provision of the Act, the
applicable provision of the Certificate or the Act shall control. If any
provision of this Agreement or the application thereof to any Person or
circumstance is held invalid or unenforceable to any extent, the remainder of
this Agreement and the application of that provision to other Persons or
circumstances is not affected thereby and that provision shall be enforced to
the greatest extent permitted by law.
13.7 Further Assurances. In connection with this Agreement and the
------------------
transactions contemplated hereby, each Member shall execute and deliver any
additional documents and instruments
-25-
and perform any additional acts that may be necessary or appropriate to
effectuate and perform the provisions of this Agreement and those transactions.
13.8 Waiver of Certain Rights. Each Member irrevocably waives any
------------------------
right it may have to demand any distributions or withdrawal of property from the
Company or to maintain any action for dissolution of the Company or for
partition of the property of the Company.
13.9 Indemnification and Reimbursement for Payments on Behalf of a
-------------------------------------------------------------
Member. If the Company is obligated to pay any amount to a governmental agency
------
(or otherwise makes a payment) because of a Member's status or otherwise
specifically attributable to a Member (including, without limitation, federal,
state or local withholding taxes, state personal property taxes, state
unincorporated business taxes, state personal property replacement taxes, etc.),
then such Member (the "Indemnifying Member") shall indemnify the Company in full
-------------------
for the entire amount paid (including, without limitation, any interest,
penalties and expenses associated with such payments). The amount to be
indemnified shall be charged against the Capital Account of the Indemnifying
Member, and, at the option of the Members, either:
------
(a) promptly upon notification of an obligation to indemnify the
Company, the Indemnifying Member shall make a cash payment to the Company equal
to the full amount to be indemnified (and the amount paid shall be added to the
Indemnifying Member's Capital Account but shall not be treated as a Capital
Contribution), or
--
(b) the Company shall reduce distributions which would otherwise be
made to the Indemnifying Member, until the Company has recovered the amount to
be indemnified (and, notwithstanding Section 4.1, the amount withheld shall not
be treated as a Capital Contribution).
The provisions of this Section 13.9 shall survive a liquidation, dissolution or
------------
termination of the Company.
13.10 Notice to Members of Provisions. By executing this Agreement,
-------------------------------
each Member acknowledges that it has actual notice of (i) all of the provisions
hereof (including, without limitation, the restrictions on the transfer set
forth in Article XI) and (ii) all of the provisions of the Certificate.
----------
13.11 Counterparts. This Agreement may be executed in multiple
------------
counterparts with the same effect as if all signing parties had signed the same
document. All counterparts shall be construed together and constitute the same
instrument.
13.12 Consent to Jurisdiction. Each Member irrevocably submits to the
-----------------------
non-exclusive jurisdiction of the United States District Court for the Northern
District of Illinois and the state courts of the State of Illinois, sitting in
Chicago, for the purposes of any suit, action or other proceeding arising out of
this Agreement or any transaction contemplated hereby. Each Member further
agrees that service of any process, summons, notice or document by U.S.
certified or registered mail to such Member's respective address set forth above
shall be effective service of process in any action, suit or proceeding in
Illinois with respect to any matters to which it has submitted to jurisdiction
as set forth above in the immediately preceding sentence. Each Member
irrevocably and unconditionally waives any objection to the laying of venue of
any action, suit or proceeding arising out of this Agreement or the transactions
contemplated hereby in the United States District Court for the Northern
District of Illinois or the state
-26-
courts of the State of Illinois, sitting in Chicago, and hereby irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such action, suit or proceeding brought in such court has been brought in an
inconvenient forum.
13.13 Headings. The headings used in this Agreement are for the
--------
purpose of reference only and will not otherwise affect the meaning or
interpretation of any provision of this Agreement.
13.14 Remedies. The Company and the Members shall be entitled to
--------
enforce their rights under this Agreement specifically, to recover damages by
reason of any breach of any provision of this Agreement (including costs of
enforcement) and to exercise any and all other rights existing in their favor.
The parties hereto agree and acknowledge that money damages may not be an
adequate remedy for any breach of the provisions of this Agreement and that the
Company or any Member may in its or his sole discretion apply to any court of
law or equity of competent jurisdiction for specific performance or injunctive
relief (without posting a bond or other security) in order to enforce or prevent
any violation or threatened violation of the provisions of this Agreement.
13.15 Parties in Interest. Except as expressly provided in the Act,
-------------------
nothing in this Agreement shall confer any rights or remedies under or by reason
of this Agreement on any Persons other than the Members and their respective
successors and assigns nor shall anything in this Agreement relieve or discharge
the obligation or liability of any other Person to any party to this Agreement,
nor shall any provision give any other Person any right of subrogation or action
over or against any party to this Agreement.
* * * * * *
-27-
IN WITNESS WHEREOF, the Members have executed this Agreement as of the
date first set forth above.
MEMBERS:
▇▇▇▇▇▇ ▇▇▇▇▇ & PARTNERS, L.P.
By: ▇▇▇▇▇▇ ▇▇▇▇▇ & Partners, L.L.C.
Its General Partner
By: /s/ Avy ▇. ▇▇▇▇▇
----------------------------
Avy ▇. ▇▇▇▇▇
Its Manager
/s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇, III
---------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇ III
-28-
Initial
Capital
Initial Account
Capital with
Account with Number of respect Percentage Number of
Number of respect to Percentage Class A to Class A of Class A Class B
Name and Address of Investor Investor of Investor Management Management Management Management
Members Units Units Units Units Units Units Units(1)
------- ----- ----- ----- ----- ----- ----- --------
▇▇▇▇▇▇ ▇▇▇▇▇ & Partners, 15,200,000 $15,200,000.00 93.8272% 0 $0.00 0.0000% 0
L.P. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
Attention: Avy ▇. ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ 333,334 $333,333.40 2.0576% 800 $800.00 40.0000% 0
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 333,333 $333,333.30 2.0576% 800 $800.00 40.0000% 0
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇ III 333,333 $333,333.30 2.0576% 400 $400.00 20.0000% 0
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇.
▇▇. ▇▇-▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
TOTALS 16,200,000 $16,200,000.00 100.0000% 2,000 $2,000.00 100.0000% 0
====== ========== ============== ======== ===== ========= ======== =
Initial Initial
Capital Capital
Account Account
with with
respect Percentage Number respect Percentage
to Class B of Class B of to of
Name and Address of Management Management Preferred Preferred Preferred
Members Units Units Units Clients Units
------- ----- ----- ----- ------- -----
▇▇▇▇▇▇ ▇▇▇▇▇ & Partners, $0.00 0.0000% 1,000,000 $1,000,000 100%
L.P. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
Attention: Avy ▇. ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ 0.00 0.0000%
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 0.00 0.0000%
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇ III 0.00 0.0000%
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇.
▇▇. ▇▇-▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
TOTALS 0.00 0.0000% 100%
====== ===== ====== ===
(1) Class B Management Units not to exceed 500 Class B Management Units to be
distributed at a later date at the discretion of ▇▇▇▇ ▇. ▇▇▇▇▇▇ III.