EXHIBIT B
================================================================================
---------------------------------------------
U-C HOLDINGS, L.L.C.
A Delaware Limited Liability Company
---------------------------------------------
FIFTH AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
Dated as of April 5, 2001
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.
================================================================================
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS........................................................................................1
1.1 Certain Definitions.......................................................................1
1.2 Other Definitions.........................................................................7
1.3 Construction..............................................................................8
ARTICLE II
ORGANIZATION.......................................................................................8
2.1 Formation.................................................................................8
2.2 Name......................................................................................9
2.3 Registered Office; Registered Agent; Principal Office; Other Offices......................9
2.4 Purposes..................................................................................9
2.5 Term......................................................................................9
2.6 No State-Law Partnership..................................................................9
ARTICLE III
MEMBERSHIP; MEMBER UNITS..........................................................................10
3.1 Members..................................................................................10
3.2 Liability of Members.....................................................................10
3.3 No Authority to Bind Company.............................................................10
3.4 Member Units.............................................................................10
3.5 Issuance of Additional Units and Interests; Admission of New Members; Additional
Capital Contributions....................................................................11
3.6 Representations, Warranties and Agreements of the Members................................12
3.7 Capital Contributions....................................................................14
3.8 Defaulting Members.......................................................................14
3.9 Repurchased Units........................................................................14
ARTICLE IV
CAPITAL ACCOUNTS..................................................................................14
4.1 Establishment and Determination of Capital Accounts......................................14
4.2 Computation of Amounts...................................................................15
4.3 Interest; Withdrawal.....................................................................15
-i-
ARTICLE V
DISTRIBUTIONS; ALLOCATIONS OF PROFITS AND LOSSES .................................................15
5.1 Generally................................................................................15
5.2 Distributions: Round One Investment......................................................15
5.3 Distributions: Round Two Investment......................................................17
5.4 Distributions: Round Three Investment....................................................18
5.5 Class A Investor Unit, Class B Investor Unit and Management Unit Holdback................18
5.6 Allocation of Profits and Losses.........................................................20
5.7 Capital Contributions....................................................................21
5.8 Tax Allocations; Code Section 704(c).....................................................21
ARTICLE VI
MANAGEMENT OF THE COMPANY.........................................................................22
6.1 Managing Member..........................................................................22
6.2 Delegation by Managing Member............................................................22
6.3 Resignation; Vacancy; Removal............................................................23
6.4 Compensation.............................................................................23
6.5 Board Membership of Subsidiaries.........................................................23
ARTICLE VII
MEMBERS...........................................................................................24
7.1 Membership Status; Resignation...........................................................24
7.2 No Participation in Management...........................................................24
7.3 Voting Rights Generally; Voting of Units.................................................24
7.4 Conflicts of Interest. .................................................................24
7.5 Outside Activities.......................................................................24
7.6 Confidentiality..........................................................................24
ARTICLE VIII
EXCULPATION AND INDEMNIFICATION...................................................................25
8.1 Exculpation..............................................................................25
8.2 Right to Indemnification.................................................................25
8.3 Advance Payment..........................................................................26
8.4 Indemnification of Employees and Agents..................................................26
8.5 Appearance as a Witness..................................................................26
8.6 Nonexclusivity of Rights.................................................................26
8.7 Savings Clause...........................................................................26
ARTICLE IX
TAXES.............................................................................................27
9.1 Tax Returns..............................................................................27
-ii-
9.2 Tax Matters Partner......................................................................27
ARTICLE X
BOOKS, REPORTS....................................................................................27
10.1 Maintenance of Books.....................................................................27
10.2 Member Tax Information...................................................................27
ARTICLE XI
TRANSFERS.........................................................................................27
11.1 Assignment by Members....................................................................27
11.2 Void Transfers...........................................................................28
11.3 Substituted Member.......................................................................28
11.4 Effect of Assignment.....................................................................28
11.5 Permitted Transfers......................................................................29
11.6 Deliveries for Transfer..................................................................29
11.7 Prospective Transferees..................................................................29
11.8 Legend...................................................................................29
11.9 Effective Date...........................................................................30
ARTICLE XII
DISSOLUTION, LIQUIDATION AND TERMINATION..........................................................30
12.1 Dissolution..............................................................................30
12.2 Liquidation and Termination..............................................................30
12.3 Management Holder Give Back..............................................................31
12.4 Deficit Capital Accounts.................................................................32
12.5 Cancellation of Certificate..............................................................33
ARTICLE XIII
GENERAL PROVISIONS................................................................................33
13.1 Notices..................................................................................33
13.2 Entire Agreement.........................................................................33
13.3 Effect of Waiver or Consent..............................................................33
13.4 Amendment, Modification or Waiver........................................................33
13.5 Binding Effect...........................................................................34
13.6 Governing Law; Severability..............................................................34
13.7 Further Assurances.......................................................................34
13.8 Waiver of Certain Rights.................................................................34
13.9 Indemnification and Reimbursement for Payments on Behalf of a Member.....................34
13.10 Notice to Members of Provisions..........................................................35
13.11 Counterparts.............................................................................35
13.12 Consent to Jurisdiction..................................................................35
13.13 Headings.................................................................................35
-iii-
13.14 Remedies.................................................................................35
13.15 Parties in Interest......................................................................35
-iv-
FIFTH AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF U-C HOLDINGS, L.L.C.
A DELAWARE LIMITED LIABILITY COMPANY
THIS FIFTH AMENDED AND RESTATED LIMITED LIABILITY COMPANY
AGREEMENT OF U-C HOLDINGS, L.L.C. (this "AGREEMENT"), dated as of April 5, 2001,
for good and valuable consideration, is adopted by, executed and agreed to by
▇▇▇▇▇▇ ▇▇▇▇▇ & Partners, L.P., a Delaware limited partnership ("WSPI"), ▇▇▇▇▇▇
▇▇▇▇▇ & Partners II, L.P., a Delaware limited partnership ("WSPII"), ▇▇▇▇▇▇
▇▇▇▇▇ & Partners Dutch, L.P., a Delaware limited partnership ("WSP DUTCH") and
the other Persons listed on SCHEDULE A hereto. This Agreement was originally
executed on April 25, 1997 and was amended and restated on May 15, 1997 (which
such restated agreement was amended, but not restated, from time to time
thereafter) and was further amended and restated in its entirety on July 23,
1999 and on August 31, 1999, and is now further amended and restated in its
entirety as of the date hereof.
ARTICLE I
DEFINITIONS
1.1 CERTAIN DEFINITIONS. As used in this Agreement, the
following terms have the following meanings:
"ACT" means the Delaware Limited Liability Company Act, Title
6, Sections 18-101, ET SEQ., and any successor statute, as amended from time to
time.
"ADJUSTED CAPITAL ACCOUNT DEFICIT" shall mean, with respect to
any Member, the deficit balance, if any, in such Member's Capital Account as of
the end of the relevant Fiscal Year or other period, after giving effect to the
following adjustments:
(i) Crediting to such Capital Account any amounts which
such Member is obligated to restore to the Company pursuant to any provision of
this Agreement or is deemed to be obligated to restore pursuant to the
penultimate sentences of Treasury Regulations Sections 1.704-2(g)(1) and 1.704-
2(i)(5); and
(ii) Debiting to such Capital Account the items described
in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4),
1.704-1(b)(2)(ii)(d)(5), and 1.704-1(b)(2)(ii)(d)(6). This definition of
Adjusted Capital Account Deficit is intended to comply with the provisions of
Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted
consistently therewith.
"ADVANCED DISTRIBUTIONS" means the Advanced Class A
Distributions, the Advanced Class B Distributions and the Advanced Class C
Distributions, including each, or any combination, of the preceding.
"AFFILIATE" means, with respect to a Person, another Person
that directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such Person, where "CONTROL"
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.
"APPLICABLE CLASS A PERCENTAGE" means, on any date of
determination, 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 PERCENTAGE" means, on any date of
determination, the lesser of (i) 5% or (ii) 5% multiplied by 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
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 holiday on which national banking associations in the State of Illinois are
closed.
"CAPITAL CONTRIBUTION" means the aggregate contributions made
by a Member to the capital of the Company. The aggregate Capital Contributions
as of the date hereof of each Member is shown opposite such Member's name on
SCHEDULE A, as the same may be amended from time to time.
"CASH INFLOWS" means, with respect to the Investors, all
payments or 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 (including, without limitation, distributions made to the
Investors pursuant to SECTION 5.5).
"CASH OUTFLOWS" means, with respect to the Investors, all
Capital Contributions made by such Investors with respect to Investor Units
issued to the Investors pursuant to this Agreement (including, without
limitation, contributions made by the Investors pursuant to SECTION 5.5).
"CLASS A INVESTOR IRR" means the annual interest rate
(compounded annually) which, when used to calculate the net present value of (i)
all Cash Inflows received by any holder of Class A Investor Units with respect
to the Round One Investment and (ii) all Cash Outflows made by any holder of
Class A Investor Units with respect to the Round One Investment through the date
of determination, causes such net present value to equal zero. Any Class A
Investor IRR calculation required pursuant to this Agreement shall be determined
by the Company's regular outside accounting firm. For purposes of any such 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.
"CLASS A INVESTOR UNITS" means (i) any Class A Investor Units
originally issued to the Investors pursuant to this Agreement and designated as
Class A Investor Units on SCHEDULE A, (ii) any Class A Investor Units otherwise
acquired by a Person holding Class A Investor Units and (iii) any Class A
Investor Units issued with respect to the Class A Investor Units referred to in
clauses (i) or (ii) by way
-2-
of dividend or Unit split or in connection with a combination of Units,
recapitalization, reclassification, merger or other reorganization. A Class A
Investor Unit will continue to be a Class A Investor Unit in the hands of any
Person to which such Unit is transferred.
"CLASS A INVESTOR YIELD" means at any time an amount
calculated on a daily basis (without daily compounding) at the rate of 12.5% per
annum, compounded annually, on the Unreturned Class A Investor Capital and the
Unpaid Class A Investor Yield.
"CLASS A MANAGEMENT UNITS" means (i) the Class A Management
Units (A) originally issued and outstanding pursuant to this Agreement to the
applicable persons listed on SCHEDULE A or (B) allocated to the Pool 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 Class A Management
Units by way of dividend or Unit split or in connection with a combination of
Units, recapitalization, reclassification, 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 INVESTOR IRR" means the annual interest rate
(compounded annually) which, when used to calculate the net present value of (i)
all Cash Inflows received by any holder of Class B Investor Units with respect
to the Round Two Investment and (ii) all Cash Outflows made by any holder of
Class B Investor Units with respect to the Round Two Investment through the date
of determination, causes such net present value to equal zero. Any Class B
Investor IRR calculation required pursuant to this Agreement shall be determined
by the Company's regular outside accounting firm. For purposes of any such 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.
"CLASS B INVESTOR UNITS" means (i) any Class B Investor Units
originally issued to the Investors pursuant to this Agreement and designated as
Class B Investor Units on SCHEDULE A, (ii) any Class B Investor Units otherwise
acquired by a Person holding Class B Investor Units and (iii) any Class B
Investor Units issued with respect to the Class B 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, reclassification, merger or other
reorganization. A Class B Investor Unit will continue to be a Class B Investor
Unit in the hands of any Person to which such Unit is transferred.
"CLASS B INVESTOR YIELD" means at any time an amount
calculated on a daily basis (without daily compounding) at the rate of 12.5% per
annum, compounded annually, on the Unreturned Class B Investor Capital and the
Unpaid Class B Investor Yield.
"CLASS B MANAGEMENT UNITS" means (i) the Class B Management
Units (A) originally issued and outstanding pursuant to this Agreement to the
applicable persons listed on SCHEDULE A or (B) allocated to the Pool pursuant to
this Agreement and designated as Class B Management Units on SCHEDULE A and (ii)
any Class B Management Units issued with respect to such Class B Management
Units by way of dividend or Unit split or in connection with a combination of
Units, recapitalization, reclassification, 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.
-3-
"CLASS C INVESTOR UNITS" means (i) any Class C Investor Units
originally issued to WSPI, WSPII and WSP Dutch pursuant to this Agreement and
designated as Class C Investor Units on SCHEDULE A, (ii) any Class C Investor
Units otherwise acquired by a Person holding Class C Investor Units and (iii)
any Class C Investor Units issued with respect to the Class C 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, reclassification,
merger or other reorganization. A Class C Investor Unit will continue to be a
Class C Investor Unit in the hands of any Person to which such Unit is
transferred.
"CLASS R MANAGEMENT UNITS" means (i) the Class R Management
Units originally issued to ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and designated as
Class R Management Units on SCHEDULE A and (ii) any Class R Management Units
issued with respect to such Class R Management Units by way of dividend or Unit
split or in connection with a combination of Units, recapitalization,
reclassification, merger or other reorganization. A Class R Management Unit will
continue to be a Class R 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 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 company.
"CTN" means CTN Media Group, Inc. (formerly known as College
Television Network, Inc.), a Delaware corporation.
"ENTITY" means any general partnership, limited partnership,
corporation, association, cooperative, joint stock company, trust, limited
liability company, business trust, joint venture, unincorporated organization,
governmental entity (or any department, agency or political subdivision thereof)
or other entity.
"EQUITY PROTECTION AGREEMENTS" means those certain Equity
Protection Agreements dated as of April 25, 1997 by and between the Company and
CTN, as amended and modified from time to time.
"FAMILY GROUP" means a Unitholder's spouse and descendants
(whether 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 period ending on December 31.
"INVESTOR" means any holder of either Class A Investor Units,
Class B Investor Units or of Class C Investor Units, and "INVESTORS" shall mean
all such Investors collectively.
"INVESTOR UNITS" means, collectively, the Class A Investor
Units, the Class B Investor Units and the Class C Investor Units.
-4-
"LOSSES" for any period means all items of Company loss,
deduction and expense for such period determined in accordance with SECTION 4.2.
"MANAGEMENT HOLDER" means any holder of Management Units.
"MANAGEMENT UNITS" means, collectively, the Class A Management
Units, the Class B Management Units and the Class R Management Units.
"MEMBER" means any Person executing this Agreement as of the
date of 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 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, 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 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.
"POOL" means, collectively, (i) any Class B Management Units
that have not been allocated to any Member or have become unallocated due to
repurchase by the Company and (ii) those certain Class A Management Units listed
as of the date hereof on SCHEDULE A across from the caption "Unallocated Pool".
"PREFERRED UNITS" means (i) any Preferred Units originally
issued to any of WSPI, WSPII or WSP Dutch pursuant to this Agreement and
designated as Preferred Units on SCHEDULE A, and (ii) any Preferred Units issued
with respect to the Preferred Units referred to in clause (i) by way of dividend
or Unit split or in connection with a combination of Units, recapitalization,
reclassification, merger or other reorganization. A Preferred Unit will continue
to be a Preferred Unit in the hands of any Person to which such Unit is
transferred.
"PROFITS" for any period means all items of Company income and
gain for such period determined in accordance with SECTION 4.2.
"REQUIRED INTERESTS" means each of (i) the Members holding at
least a 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 (ii) any securities issued with respect to the securities
referred to in clause (i) above in connection with a conversion, combination of
shares, recapitalization, reclassification, merger, consolidation or other
reorganization.
"ROUND ONE INVESTMENT" means all Capital Contributions made on
or after April 25, 1997 and on and before July 23, 1999 plus any Capital
Contributions made with respect to the securities
-5-
purchased on or before July 23, 1999 and all Capital Contributions made after
July 23, 1999 to fund the exercise of any Warrants and the Equity Protection
Agreements pursuant to SECTION 3.5(c).
"ROUND TWO INVESTMENT" means all Capital Contributions made
after July 23, 1999 and before April 5, 2001, other than Capital Contributions
made with respect to a Round One Investment, plus any Capital Contributions made
with respect to the securities purchased after July 23, 1999 and before April 5,
2001.
"ROUND THREE INVESTMENT" means all Capital Contributions made
on or after April 5, 2001, other than Capital Contributions made with respect to
a Round One Investment or a Round Two Investment.
"ROUND ONE PROCEEDS" means any and all proceeds or other
distributions on or with respect to any securities purchased or otherwise
acquired or received (including any other securities issued with respect to such
securities by way of an interest payment, stock dividend or stock split or in
connection with a combination of shares, recapitalization, reclassification,
merger, consolidation or other reorganization) by the Company from CTN with the
proceeds of the Round One Investment.
"ROUND TWO PROCEEDS" means any and all proceeds or other
distributions on or with respect to any securities purchased or otherwise
acquired or received (including any other securities issued with respect to such
securities by way of an interest payment, stock dividend or stock split or in
connection with a combination of shares, recapitalization, reclassification,
merger, consolidation or other reorganization) by the Company from CTN with the
proceeds of the Round Two Investment.
"ROUND THREE PROCEEDS" means any and all proceeds or other
distributions on or with respect to any securities purchased or otherwise
acquired or received (including any other securities issued with respect to such
securities by way of an interest payment, stock dividend or stock split or in
connection with a combination of shares, recapitalization, reclassification,
merger, consolidation or other reorganization) by the Company from CTN with the
proceeds of the Round Three Investment.
"SECURITIES ACT" means the U.S. Securities Act of 1933, as
amended.
"SUBSIDIARY" shall mean, with respect to any Person, (a) any
corporation of which an aggregate of more than 50% of the outstanding Stock
having ordinary voting power to elect a majority of the board of directors of
such corporation (irrespective of whether, at the time, Stock of any other class
or classes of such corporation shall have or might have voting power by reason
of the happening of any contingency) is at the time, directly or indirectly,
owned legally or beneficially by such Person and/or one or more Subsidiaries of
such Person, and (b) any partnership, limited liability company or other entity
in which such Person and/or one or more Subsidiaries of such Person shall have
an interest (whether in the form of voting or participation in profits or
capital contribution) of more than 50%.
"TAXABLE YEAR" means the Company's taxable year ending
December 31 (or part thereof, in the case of the Company's 1996 taxable year),
or such other year as is (i) required by Section 706 of the Code or (ii)
determined by the Managing Manager.
-6-
"TRANSFER" means any sale, transfer, assignment, pledge,
mortgage, 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,"
"TRANSFERRED," and other forms of the word "Transfer" shall have correlative
meanings.
"TREASURY REGULATIONS" means the income tax regulations
promulgated 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.
"UNITHOLDER" means any holder of a Unit.
"UNPAID CLASS A INVESTOR YIELD" means at any time with
respect to any Class A Investor Unit an amount equal to the excess, if any,
of (a) the aggregate Class A Investor Yield accrued through such date with
respect to such Class A Investor Unit, over (b) all prior distributions made
by the Company with respect to such Class A Investor Unit pursuant to SECTION
5.2(b), SECTION 5.5(b) and SECTION 12.4.
"UNPAID CLASS B INVESTOR YIELD" means at any time with respect
to any Class B Investor Unit an amount equal to the excess, if any, of (a) the
aggregate Class B Investor Yield accrued through such date with respect to such
Class B Investor Unit, over (b) all prior distributions made by the Company with
respect to such Class B Investor Unit pursuant to SECTION 5.3(b), SECTION 5.5(b)
and SECTION 12.4.
"UNRETURNED CLASS A INVESTOR CAPITAL" means at any time the
aggregate Capital Contributions with respect to the Class A Investor Units
reduced by all prior distributions made to the holders of Class A Investor Units
by the Company pursuant to SECTION 5.2(a).
"UNRETURNED CLASS B INVESTOR CAPITAL" means at any time the
aggregate Capital Contributions with respect to the Class B Investor Units
reduced by all prior distributions made to the holders of Class B Investor Units
by the Company pursuant to SECTION 5.3(a).
"UNRETURNED CLASS C INVESTOR CAPITAL" means at any time the
aggregate Capital Contributions with respect to the Class C Investor Units
reduced by all prior distributions made to the holders of Class C Investor Units
by the Company pursuant to SECTION 5.4 and SECTION 5.5(a).
"WARRANTS" means those certain Class C Warrants issued to the
Company by CTN on April 25, 1997, to purchase common stock of CTN from time to
time.
"WITHHELD DISTRIBUTIONS" means the Withheld Class A
Distributions, the Withheld Class B Distributions and the Withheld Class C
Distributions, including each, or any combination, of the preceding.
1.2 OTHER DEFINITIONS. Each of the following defined
terms has the meaning given such term in the Section set forth opposite such
defined term:
-7-
Defined Term Section
------------ -------
"ADVANCED CLASS A DISTRIBUTIONS" 5.5(b)
"ADVANCED CLASS B DISTRIBUTIONS" 5.5(c)
"ADVANCED CLASS C DISTRIBUTIONS" 5.5(a)
"AGREEMENT" Preamble
"BOARD" 6.5(a)
"CAPITAL ACCOUNT" 4.1
"CERTIFICATE" 2.1
"CERTIFICATED UNITS" 11.8
"DEFAULTING MEMBER" 3.8
"INDEMNIFYING MEMBER" 13.9
"INVESTOR DIRECTORS" 6.5(a)(i)
"MANAGEMENT NOTES" 5.7(a)
"MANAGEMENT DIRECTOR" 6.5(a)(ii)
"MANAGING MEMBER" 6.1
"OTHER DIRECTORS" 6.5(a)(iii)
"PASSIVE INVESTMENT" 2.4
"POST-DISTRIBUTION CLASS A CAPITAL CONTRIBUTION" 5.2(h)
"POST-DISTRIBUTION CLASS B CAPITAL CONTRIBUTION" 5.3(g)
"PROCEEDING" 8.2
"REMAINING ASSETS" 12.2(d)
"TAX MATTERS MEMBER" 9.2
"UNIT" 3.4
"WITHHELD CLASS A DISTRIBUTIONS" 5.5(b)
"WITHHELD CLASS B DISTRIBUTIONS" 5.5(c)
"WITHHELD CLASS C DISTRIBUTIONS" 5.5(a)
1.3 CONSTRUCTION. Whenever the context requires, the
gender of all 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.
ARTICLE II
ORGANIZATION
2.1 FORMATION. The Company has been organized as a
Delaware limited liability company by the filing of a Certificate of Formation
(the "CERTIFICATE") under and pursuant to the Act. The rights and liabilities of
the 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.
-8-
2.2 NAME. The name of the Company is "U-C Holdings,
L.L.C." and all 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 OFFICES. The registered office of the Company required by the Act
to be 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 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, or (ii) enter
into or engage in any transaction which is reasonably likely to cause WSPI or
any of its limited partners which are exempt from income taxation under Code
Section 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 Sections 512 and 514. Without limiting the generality of the preceding
sentence, the Company shall not: (i) engage in any trade or business other
than the passive investment in securities of a corporation (a "PASSIVE
INVESTMENT") or (ii) create, incur, assume or suffer to exist any
indebtedness for borrowed money or issue evidences of indebtedness or
guarantee indebtedness in connection with a Passive Investment, or secure the
Passive Investment by a mortgage, pledge or other lien on the assets of the
Company, for any length of time. It is understood and agreed to by the
Members and the Company that the Negative Pledge Agreement, dated as of July
26, 1999, by and between the Company and LaSalle Bank National Association,
and the Amended and Restated Guaranty, dated as of November 8, 2000, from the
Company in favor of Canadian Imperial Bank of Commerce, as Agent, and the
lender institutions referenced therein, are both hereby approved by the
Members and neither such agreements shall in any way be deemed to be a
violation of this SECTION 2.4.
2.5 TERM. The term of the Company commenced on the date
the 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.
2.6 NO STATE-LAW PARTNERSHIP. The Members intend that the
Company 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 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.
-9-
ARTICLE III
MEMBERSHIP; MEMBER UNITS
3.1 MEMBERS. The name and address of each Member, the
number of Units of each class owned by such Member at any time, the percentage
of each class of Units owned by such Member, and the Capital Contribution and
Capital Account of such Member with respect to such Units (as determined in
accordance with SECTION 4.1) shall be set forth next to each Member's name on
SCHEDULE A hereto, as amended from time to time in accordance with this
Agreement. Each Person listed on SCHEDULE A, upon (i) his or its execution of
this Agreement or counterpart thereof and (ii) receipt (or deemed receipt) of
such Person's Capital Contribution as set forth on SCHEDULE A, is hereby
admitted to the Company as a Member of the Company. No Member shall be required
to make any additional Capital Contribution except as required by applicable law
or by SECTION 3.5. The Members acknowledge that ▇▇▇▇▇ ▇▇▇▇▇▇ is no longer an
employee of CTN, that the Company has exercised its option pursuant to ▇▇▇▇▇
▇▇▇▇▇▇'▇ employment agreement with CTN (to which the Company is a party) to
repurchase all 100 Class B Management Units held by ▇▇▇▇▇ ▇▇▇▇▇▇, but that as of
the date hereof such repurchase has not been completed, that the Company and
▇▇▇▇▇ ▇▇▇▇▇▇ have not agreed to the related repurchase price with respect to
41.67 of those Class B Management Units, and that at such time as such
repurchase has been completed and the repurchase price is no longer in dispute,
all 100 Class A Management Units will be allocated to the Pool.
3.2 LIABILITY OF MEMBERS. Except as otherwise required by
applicable 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
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 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 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
thereof, "UNITS"). As of the date hereof, the Units are comprised of "CLASS A
INVESTOR UNITS," "CLASS B INVESTOR UNITS," "CLASS C INVESTOR UNITS," "PREFERRED
UNITS," "CLASS A MANAGEMENT UNITS," "CLASS B MANAGEMENT UNITS" and "CLASS R
MANAGEMENT UNITS". The ownership by a Member of any Class A Investor Units,
Class B Investor Units,
-10-
Class C Investor Units, Preferred Units, Class A Management Units, Class B
Management Units and/or Class R Management Units shall entitle such Member to
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.
Ownership of a Unit by a Member shall entitle such Member to one (1) 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 MEMBERS; ADDITIONAL CAPITAL CONTRIBUTIONS.
(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 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; PROVIDED FURTHER that no consent of
the Required Interests shall be required in connection with the issuance of the
Management Notes on July 23, 1999 or on August 31, 1999. 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. Subject to SECTION 3.5(b) below, 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 on the same terms with respect to such repurchased units. 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.
-11-
(b) Notwithstanding anything herein to the contrary,
▇▇▇▇▇ ▇▇▇▇▇ shall have the right in his sole discretion, without obtaining the
consent of the Required Interests or any Member, to (i) cause the Company to
issue those certain Class A Management Units contained in the Pool as of the
date hereof or hereafter added to the Pool pursuant to SECTION 3.9, or (ii)
cause the Company to issue any Class B Management Units, or allocate any
unallocated Class B Management Units from the Pool, in an amount not to exceed
an aggregate issued and outstanding number equal to 500 Class B Management
Units, in each case to employees of any Subsidiary of the Company (including,
without limitation, employees of CTN but excluding ▇▇▇▇▇ ▇▇▇▇▇); provided,
however, that prior to any such issuance, ▇▇▇▇▇ ▇▇▇▇▇ shall require such
employees to enter into agreements providing for the repurchase of such
Management Units upon termination of employment and shall obtain the consent of
the Managing Member solely with respect to adequacy of any repurchase rights in
favor of the Company regarding such Class A Management Units or Class B
Management Units; and provided further that the Company shall not issue Class A
Management Units or Class B Management Units, or allocate any unallocated Class
A Management Units or Class B Management Units from the Pool, 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, which such form has already been approved by the
Managing Member. In the event ▇▇▇▇▇ ▇▇▇▇▇ ceases to be an employee of any
Subsidiary of the Company (including, without limitation, CTN) or ceases to be a
Member, the Managing Member shall have the right to issue any additional Class A
Management Units or Class B Management Units, or allocate any unallocated Class
A Management Units or Class B Management Units from the Pool.
(c) Notwithstanding anything to the contrary in SECTION
3.5(a) above, 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, unless otherwise
decided by the Managing Member.
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 or by issuance of Management
Notes and not with the funds of any other Person other than pursuant to the
issuance of Management Notes, 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
-12-
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.
(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.
-13-
3.7 CAPITAL CONTRIBUTIONS. Each Member has made the
Capital Contributions to the Company in cash or assets in the amount set forth
opposite such Member's name on SCHEDULE A hereto. Upon receipt of such Capital
Contribution set forth opposite such Member's name on SCHEDULE A, such Member
shall be deemed to own the number of 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%.
(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, 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(a) and SECTION 5.3(a).
3.9 REPURCHASED 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, including any Class A Management
Units and Class B Management Units allocated to the Pool. Any Management Units
repurchased by the Company shall be reallocated to the Pool; PROVIDED that any
Management Units repurchased by the Company may only be subsequently reissued
for a purchase price equal to or greater than the consideration received in
connection with such repurchase.
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 Capital Contribution as listed on SCHEDULE A as
of the date hereof, 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
-14-
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 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: ROUND ONE INVESTMENT. Except as
provided in SECTIONS 5.5 and 5.7, distributions to be made with respect to any
Round One Proceeds at any time shall be made in the following order and
priority:
-15-
(a) FIRST, to the holders of Class A Investor Units pro
rata according to their ownership of outstanding Class A Investor Units until
the aggregate distributions with respect to the Class A Investor Units made
pursuant to this SECTION 5.2(a) reduces the aggregate Unreturned Class A
Investor Capital to zero;
(b) SECOND, to the holders of Class A Investor Units pro
rata according to their Unpaid Class A Investor Yield until the aggregate
distributions with respect to the Class A Investor Units made pursuant to this
SECTION 5.2(b) and SECTION 5.5(b) reduces the aggregate Unpaid Class A Investor
Yield to zero;
(c) THIRD, to the holders of the Class R Management Units
pro rata according to their ownership of the outstanding Class R Management
Units until the aggregate distributions with respect to the Class R Management
Units made pursuant to this SECTION 5.2(c) equals $750,000;
(d) FOURTH, to the holders of the Class A 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(d) equals the Applicable
Class A Percentage of all distributions made pursuant to SECTION 5.2(b) and this
SECTION 5.2(d);
(e) FIFTH, until such time as the Class A Investor IRR
for each holder of Class A Investor Units equals 30%, 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 and the remainder to the
holders of Class A Investor Units pro rata according to their ownership of
outstanding Class A Investor Units;
(f) SIXTH, after such time as the Class A Investor IRR
equals 30% for each holder of Class A Investor Units (i) to the holders of Class
A Management Units the Applicable Class A Percentage, pro rata according to
their ownership of outstanding Class A Management Units and (ii) the remainder
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 Class B Management Units made pursuant to this
SECTION 5.2(f) is equal to the Applicable Class B Percentage of the aggregate
distributions made pursuant to SECTION 5.2(b), (d), (e) and this SECTION 5.2(f)
with respect to the Class A Investor Units and Management Units; and
(g) SEVENTH, 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 Class A
Investor Units pro rata according to their ownership of outstanding Class A
Investor Units.
(h) Notwithstanding SECTIONS 5.2(d) through (g), if
subsequent to the making of any distribution pursuant to SECTIONS 5.2(d) through
(g), a Capital Contribution with respect to any Class A Investor Units occurs (a
"POST-DISTRIBUTION CLASS A CAPITAL CONTRIBUTION"), then in such case (i) the
amount that would otherwise be distributed to holders of Class B Management
Units pursuant to SECTIONS 5.2(f) and (g) shall be reduced (and such amount
shall be distributed in accordance with SECTIONS 5.2(a) through (e) hereof) by
an amount equal to the excess, if any, of (x) the aggregate amount of all
distributions
-16-
previously made to the holders of Class B Management Units pursuant to SECTIONS
5.2(f) and (g) over (y) the aggregate amount of the distributions that would
have been made to the holders of Class B Management Units pursuant to SECTIONS
5.2(f) and (g) if all Post-Distribution Class A Capital Contributions had been
taken into account for purposes of determining whether the Class A Investor IRR
equaled or exceeded 30% for each holder of Class A Investor Units on the date of
such distributions and (ii) the amount that would otherwise be distributed to
holders of Class A Management Units pursuant to SECTIONS 5.2(d) through (g) and
clause (i) of this SECTION 5.2(h) shall be reduced (and such amount shall be
distributed in accordance with SECTION 5.2(a) and (b) hereof) by an amount equal
to the excess of (x) the aggregate amount of all distributions previously made
to the holders of Class A Management Units pursuant to SECTIONS 5.2(d) through
(g) over (y) the aggregate amount of the distributions that would have been made
to the holders of Class A Management Units pursuant to SECTIONS 5.2(d) through
(g) if all Post-Distribution Class A Capital Contributions had been taken into
account for purposes of determining whether the Unpaid Class A Investor Yield
had been reduced to zero for all holders of Class A Investor Units on the date
of such distributions.
(i) Attached hereto as SCHEDULE B is an illustrative
example of the operation of this SECTION 5.2.
5.3 DISTRIBUTIONS: ROUND TWO INVESTMENT. Except as
provided in SECTIONS 5.5 and 5.7 hereof, distributions to be made with respect
to any Round Two Proceeds at any time shall be made in the following order and
priority:
(a) FIRST, to the holders of Class B Investor Units pro
rata according to their ownership of outstanding Class B Investor Units until
the aggregate distributions with respect to the Class B Investor Units made
pursuant to this SECTION 5.3(a) reduces the aggregate Unreturned Class B
Investor Capital to zero;
(b) SECOND, to the holders of Class B Investor Units pro
rata according to their Unpaid Class B Investor Yield until the aggregate
distributions with respect to the Class B Investor Units made pursuant to this
SECTION 5.3(b) reduces the aggregate Unpaid Class B Investor Yield to zero;
(c) THIRD, to the holders of the Class A 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 5.3(c) equals the Applicable Class A
Percentage of all distributions made pursuant to SECTION 5.3(b) and this SECTION
5.3(c);
(d) FOURTH, until such time as the Class B Investor IRR
for each holder of Class B Investor Units equals 30%, 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 and the remainder to the
holders of Class B Investor Units pro rata according to their ownership of
outstanding Class B Investor Units;
(e) FIFTH, after such time as the Class B Investor IRR
equals 30% for each holder of Class B Investor Units (i) to the holders of Class
A Management Units the Applicable Class A Percentage, pro rata according to
their ownership of outstanding Class A Management Units and (ii) the remainder
to the holders of Class B Management Units, pro rata according to their
ownership of outstanding Class B
-17-
Management Units, until the aggregate distributions with respect to the Class B
Management Units made pursuant to this SECTION 5.3(e) is equal to the Applicable
Class B Percentage of the aggregate distributions made pursuant to SECTION
5.3(b), (c), (d) and this SECTION 5.3(e) with respect to the Class B 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 Class B
Investor Units pro rata according to their ownership of outstanding Class B
Investor Units.
(g) Notwithstanding SECTIONS 5.3(b) through (f), if
subsequent to the making of any distribution pursuant to SECTIONS 5.3(b) through
(f), a Capital Contribution with respect to any Class B Investor Units occurs (a
"POST-DISTRIBUTION CLASS B CAPITAL CONTRIBUTION"), then in such case (i) the
amount that would otherwise be distributed to holders of Class B Management
Units pursuant to SECTIONS 5.3(e) and (f) shall be reduced (and such amount
shall be distributed in accordance with SECTIONS 5.3(a) through (d) hereof) by
an amount equal to the excess, if any, of (x) the aggregate amount of all
distributions previously made to the holders of Class B Management Units
pursuant to SECTIONS 5.3(e) and (f) over (y) the aggregate amount of the
distributions that would have been made to the holders of Class B Management
Units pursuant to SECTIONS 5.3(e) and (f) if all Post-Distribution Class B
Capital Contributions had been taken into account for purposes of determining
whether the Class B Investor IRR equaled or exceeded 30% for each holder of
Class B Investor Units on the date of such distributions and (ii) the amount
that would otherwise be distributed to holders of Class A Management Units
pursuant to SECTIONS 5.3(c) through (f) and clause (i) of this SECTION 5.3(g)
shall be reduced (and such amount shall be distributed in accordance with
SECTION 5.3(a) and (b) hereof) by an amount equal to the excess of (x) the
aggregate amount of all distributions previously made to the holders of Class A
Management Units pursuant to SECTIONS 5.3(c) through (f) over (y) the aggregate
amount of the distributions that would have been made to the holders of Class A
Management Units pursuant to SECTIONS 5.3(b) through (f) if all post-
Distribution Class B Capital Contributions had been taken into account for
purposes of determining whether the Unpaid Class B Investor Yield had been
reduced to zero for all holders of Class B Investor Units on the date of such
distributions.
(h) Attached hereto as SCHEDULE C is an illustrative
example of the operation of this SECTION 5.3.
5.4 DISTRIBUTIONS: ROUND THREE INVESTMENT. Except as
provided in SECTIONS 5.5 and 5.7 hereof, distributions to be made with respect
to any Round Three Proceeds at any time shall be made to the holders of Class C
Investor Units pro rata according to their ownership of outstanding Class C
Investor Units.
5.5 CLASS A INVESTOR UNIT, CLASS B INVESTOR UNIT AND
MANAGEMENT UNIT HOLDBACK. Notwithstanding SECTIONS 5.2 and 5.3 hereof:
(a) Notwithstanding SECTIONS 5.5(b) and (c) below, no
distribution shall be made with respect to any Class A Investor Unit, Class B
Investor Unit or Management Unit until the Unreturned Class C Investor Capital
has been reduced to zero. Any distribution to which holders of Class A Investor
Units,
-18-
Class B Investor Units or Management Units would be entitled pursuant to the
terms of SECTION 5.2 or 5.3 (as applicable) without regard to this SECTION
5.5(a) that is not distributed by reason of application of the first sentence of
this SECTION 5.5(a) shall be held by the Company ("WITHHELD CLASS C
DISTRIBUTIONS") or, if requested by WSPI, shall be distributed to the holders of
Class C Investor Units ("ADVANCED CLASS C DISTRIBUTIONS"). If, as a result of
any distribution pursuant to SECTION 5.4 hereof, the Unreturned Class C Investor
Capital has been reduced to zero, (i) any Withheld Class C Distributions shall
be distributed to the holders of Class A Investor Units, Class B Investor Units
and Management Units pursuant to the terms of SECTION 5.2 or 5.3 (as
applicable), and (ii) any Advanced Class C Distributions shall, only to the
extent that the holders of Class C Investor Units have received total
distributions (including Advanced Class C Distributions) in excess of their
Capital Contributions with respect to Class C Investor Units (including amounts
treated as Capital Contributions pursuant to this sentence), be contributed to
the Company by the holders of Class C Investor Units (which contributions shall
be deemed to be Capital Contributions hereunder) and distributed to the holders
of Class A Investor Units, Class B Investors Units or Management Units pursuant
to the terms of SECTION 5.2 or 5.3 (as applicable).
(b) No distribution shall be made with respect to any
Class A Management Unit until the Unpaid Class A Investor Yield and the Unpaid
Class B Investor Yield have each been reduced to zero. Any distribution to which
holders of Class A Management Units would be entitled pursuant to the terms of
SECTION 5.2 or 5.3 (as applicable) without regard to this SECTION 5.5(b) that is
not distributed by reason of application of the first sentence of this SECTION
5.5(b) shall be held by the Company ("WITHHELD CLASS A DISTRIBUTIONS") or, if
requested by WSPI, shall be distributed to WSPI, WSPII or WSP Dutch ("ADVANCED
CLASS A DISTRIBUTIONS"). If, as a result of any distribution pursuant to SECTION
5.2 or 5.3 hereof, the Unpaid Class A Investor Yield and the Unpaid Class B
Investor Yield have each been reduced to zero, (i) any Withheld Class A
Distributions shall (prior to any other distributions under SECTION 5.2 or 5.3
hereof) be distributed to the holders of Class A Management Units, pro rata
according to their ownership of the outstanding Class A Management Units, and
(ii) any Advanced Class A Distributions shall, only to the extent that the
holders of Class A Investor Units and Class B Investor Units have received total
distributions (including Advanced Class A Distributions) in excess of the sum of
(x) their Capital Contributions with respect to Class A Investor Units and Class
B Investor Units (including amounts treated as Capital Contributions pursuant to
this sentence) and (y) the accumulated Class A Investor Yield and Class B
Investor Yield, be contributed to the Company by WSPI, WSPII or WSP Dutch (which
contributions shall be deemed to be Capital Contributions hereunder) and
distributed to the holders of Class A Management Units pursuant to the terms of
SECTION 5.2 or 5.3 (as applicable).
(c) No distribution shall be made with respect to any
Class B Management Unit until the Class A Investor IRR equals or exceeds 30% for
all holders of Class A Investor Units and the Class B Investor IRR equals or
exceeds 30% for all holders of Class B Investor Units. Any distribution to which
holders of Class B Management Units would be entitled pursuant to the terms of
SECTION 5.2 or 5.3 (as applicable) without regard to this SECTION 5.5(c) that is
not distributed by reason of application of the first sentence of this SECTION
5.5(c) shall be held by the Company ("WITHHELD CLASS B DISTRIBUTIONS") or, if
requested by WSPI, WSPII or WSP Dutch, shall be distributed to (i) the Investors
until the Unpaid Class A Yield and the Unpaid Class B Yield have each been
reduced to zero for all holders of Class A Investor Units and Class B Investor
Units and (ii) thereafter in accordance with SECTIONS 5.2(d) and (e) and
SECTIONS 5.3(c) and (d) hereof ("ADVANCED CLASS B DISTRIBUTIONS"). If, as a
result of any distribution pursuant to SECTION 5.2 or 5.3 hereof, the Class A
Investor IRR equals or exceeds 30% for all holders of Class A Investor Units and
the Class B Investor IRR equals or exceeds 30% for all holders of Class B
Investor
-19-
Units, (i) any Withheld Class B Distributions shall (prior to any other
distributions under SECTION 5.2 or 5.3 hereof) be distributed to the holders of
Class B Management Units, pro rata according to their ownership of the
outstanding Class B Management Units, and (ii) any Advanced Class B
Distributions shall, only to the extent that the Class A Investor IRR exceeds
30% and/or the Class B Investor IRR exceeds 30%, be contributed to the Company
by the holders of Class A Investor Units and/or Class B Investor Units, as
applicable, and the holders of Class A Management Units (which contributions
shall be deemed to be Capital Contributions hereunder), and distributed to the
holders of Class B Management Units pursuant to the terms of SECTION 5.2 or 5.3
(as applicable).
(d) Other than the Class C Investor Units, no Investor
Units and no Management Units shall be entitled to any Round Three Proceeds or
any other interest in the Round Three Investment.
(e) For purposes of this SECTION 5.5, any Withheld
Distributions and/or any Advanced Distributions shall consist of a pro rata
portion of the Round One Proceeds (if any) and the Round Two Proceeds (if any)
that would have been distributed pursuant to SECTIONS 5.2 and 5.3 but for this
SECTION 5.5. The Withheld Distributions and Advanced Distributions distributed
pursuant to the last sentence of any of paragraphs (a), (b) or (c) of this
SECTION 5.5 shall be divided between Round One Proceeds and Round Two Proceeds
in the same proportion as such proceeds, in the aggregate, have been withheld or
advanced previously pursuant to SECTION 5.5. The portion of each of the Withheld
Distributions and Advanced Distributions attributable to Round One Proceeds
shall, when distributed pursuant to the last sentence of any of paragraphs (a),
(b) or (c) of this SECTION 5.5, be distributed pursuant to SECTION 5.2, and the
portion of each of the Withheld Distributions and Advanced Distributions
attributable to Round Two Proceeds shall, when distributed pursuant to the last
sentence of any of paragraphs (a), (b) or (c) of this SECTION 5.5, be
distributed pursuant to SECTION 5.3. Similarly, any contribution by a holder of
Class C Investor Units pursuant to SECTION 5.5(a), by WSPI, WSPII or WSP Dutch
pursuant to SECTION 5.5(b), or by a holder of Class A Investor Units and/or
Class B Investor Units pursuant to SECTION 5.5(c), shall constitute Round One
Proceeds and Round Two Proceeds in the same proportion as Round One Proceeds and
Round Two Proceeds became Advanced Distributions to the applicable contributing
Person.
5.6 ALLOCATION OF PROFITS AND LOSSES.
(a) Except as set forth in SECTION 5.6(b) hereof, 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.
(b) If any Unitholder that unexpectedly receives an
adjustment, allocation or distribution described in Treasury Regulation Section
1.704-1(b)(2)(ii)(d)(4), (5) and (6) has an Adjusted Capital Account Deficit as
of the end of any Taxable Year, then Profits for such Taxable Year shall be
allocated to such Unitholder in proportion to, and to the extent of, such
Adjusted Capital Account Deficit. This
-20-
SECTION 5.6(b) is intended to be a qualified income offset provision as
described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and shall be
interpreted in a manner consistent therewith.
5.7 CAPITAL CONTRIBUTIONS.
(a) Notwithstanding anything to the contrary contained in
SECTIONS 5.2 and 5.3, the Members acknowledge that the Management Holders paid a
portion of their Capital Contributions by the delivery of promissory notes to
the Company, which notes outstanding as of the date hereof are listed on
SCHEDULE A (as amended and restated from time to time, the "MANAGEMENT NOTES")
and that all principal and accrued interest with respect to the Management Notes
which is paid to the Company by such Management Holders shall be distributed
solely to the holders of the Preferred Units. 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 Notes
and all accrued and unpaid interest thereon is paid in full.
(b) Of the aggregate Capital Contributions made by WSPI,
an amount equal to the aggregate principal amount of all Management Notes issued
with respect to the Round One Investment shall be treated as contributed with
respect to Preferred Units, and the remainder shall be treated as contributed
with respect to Class A Investor Units. Of the aggregate Capital Contributions
made by WSPII or WSP Dutch, an amount equal to the aggregate principal amount of
all Management Notes issued with respect to the Round Two Investment shall be
treated as contributed with respect to Preferred Units, and the remainder shall
be treated as contributed with respect to Class B Investor Units. The Company
and the Members acknowledge and agree that the principal amount of any
Management Note shall be treated as a Capital Contribution and included in the
Capital Account of the Member issuing such Management Note as of the original
date of issuance of such Management Note, or as of the date of assumption of
such Management Note, and that any assumption of the obligation to repay any
such Management Note shall be treated as an assumption of the rights and
obligations associated with such related Capital Contribution.
5.8 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
-21-
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
5.8 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.
(e) The Company and the Members agree to use the
"traditional method" with respect to Section 704(c) of the Code.
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 WSPI.
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 it 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 CTN) or
exercise or convert any right to acquire securities held by the Company
(including the Warrants, convertible preferred stock of CTN 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,
-22-
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 and to
the other Members. 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 WSPI. Any subsequent Managing Member may be removed only by WSPI.
The initial Managing Member may not be removed for any reason.
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 CTN 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 of CTN (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) ▇▇▇▇▇ ▇▇▇▇▇ (a "MANAGEMENT DIRECTOR"), so
long as such Management Director is employed by CTN; 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 CTN 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.
-23-
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 as a
consequence of such transfer and the transferee shall be entitled to succeed to
the rights, benefits and interests in all such Units. 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 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 the Members who constitute a Required
Interest and who are 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
-24-
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.
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 extent of the Company's assets and without requiring any additional
Capital Contributions not otherwise required by this Agreement) 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.
-25-
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, agent of the Managing Member or of any other Member or the Company to
the same extent and subject to the same conditions that it may indemnify and
advance expenses to the Members including 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 any Member including the Managing Member or
such Managing Member's officers, directors, employees, partners and agents in
connection with such 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 this ARTICLE VIII may have or hereafter acquire under
any law (common or statutory), any agreement, any provision of the Certificate
or this Agreement, any 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.
-26-
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 forty-five (45) 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 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. Subject to SECTION 3.5(b)
regarding the rights of ▇▇▇▇▇ to allocate Units contained in the Pool, no
Management Holder shall transfer any Management Units of the Company, or offer
to Transfer all or any part of such Management Holder's Management Units of 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, except for a transfer of Management Units to the Company to be
allocated to the Pool. 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
-27-
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), or (b) 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 pursuant to a void transfer 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.
(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, including, but not by
way of limitation, the right to vote.
(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.
With respect to a permitted assignment, the Company shall use the "closing of
the books method" for all allocation purposes.
-28-
(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 counsel satisfactory
to the Company 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.
(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.
-29-
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 CTN; and
(e) the entry of a decree of judicial dissolution of the
Company under Section 18-802 of the Act.
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;
-30-
(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
THROUGH 5.5 AND 5.7 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 reduce the amount to be distributed to the
distributees in accordance with SECTIONS 5.2 THROUGH 5.5 and 5.7 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
SECTION 5.6.
12.3 MANAGEMENT HOLDER GIVE BACK.
(a) If, subsequent to the making of any distribution
pursuant to SECTION 5.2(d) through (g), one or more Post-Distribution Class A
Capital Contributions occurred, then, after the final distribution of assets of
the Company among the Members as provided in SECTION 12.2 and ARTICLE V, the
following Capital Contributions and distributions shall be made:
(i) To the extent that the amount that would
otherwise have been distributed to holders of Class B Management Units pursuant
to SECTION 5.2(f) and (g) and SECTION 12.2(d) was not reduced in distributions
subsequent to such Post-Distribution Class A Capital Contributions by an amount
equal to the excess described in SECTION 5.2(h)(i), then (A) the holders of
Class B Management Units shall make a Capital Contribution to the Company (pro
rata according to their respective ownership of Class B Management Units) in an
amount equal to the lesser of (I) the extent to which such reduction was less
than such excess described in SECTION 5.2(h)(i) or (II) the aggregate amount
distributed to holders of Class B Management Units pursuant to SECTIONS 5.2,
5.5(a)-(c) and 12.2(d) (but, with respect to distributions pursuant to SECTIONS
5.5(a)-(c)), only to the extent such distributions were made with respect to
distributions that would have been made pursuant to SECTION 5.2, but for the
first sentence of each of SECTIONS 5.5(a), (b) AND (c)), and (B) the amount
contributed to the Company pursuant to clause (A) of this SECTION 12.3(a)(i)
shall be distributed in accordance with SECTION 5.2(a) through (e), and
(ii) To the extent that the amount that would
otherwise have been distributed to holders of Class A Management Units pursuant
to SECTION 5.2(d) through (g) and SECTION 12.2(d) was not reduced in
distributions subsequent to such Post-Distribution Class A Capital Contributions
by an
-31-
amount equal to the excess described in SECTION 5.2(h)(ii), then (A) the holders
of Class A Management Units shall make a Capital Contribution to the Company
(pro rata according to their respective ownership of Class A Management Units)
in an amount equal to the lesser of (I) the extent to which such reduction was
less than such excess described in SECTION 5.2(h)(ii) or (II) the aggregate
amount distributed to holders of Class A Management Units pursuant to SECTIONS
5.2, 5.5(a)-(c) and 12.2(d) (but, with respect to distributions pursuant to
SECTIONS 5.5(a)-(c), only to the extent such distributions were made with
respect to distributions that would have been made pursuant to SECTION 5.2 but
for the first sentence of each of SECTIONS 5.5(a), (b) AND (c)), and (B) the
amount contributed to the Company pursuant to clause (A) of this SECTION
12.3(a)(ii) shall be distributed in accordance with SECTION 5.2(a) AND (b).
(b) If, subsequent to the making of any distribution
pursuant to SECTION 5.3(c) through (f), one or more Post-Distribution Class B
Capital Contributions occurred, then, after the final distribution of assets of
the Company among the Members as provided in SECTION 12.2 and ARTICLE V, the
following Capital Contributions and distributions shall be made:
(i) To the extent that the amount that would
otherwise have been distributed to holders of Class B Management Units pursuant
to SECTION 5.3(d) through (f) and SECTION 12.2(d) was not reduced in
distributions subsequent to such Post-Distribution Class B Capital Contributions
by an amount equal to the excess described in SECTION 5.3(g)(i), then (A) the
holders of Class B Management Units shall make a Capital Contribution to the
Company (pro rata according to their respective ownership of Class B Management
Units) in an amount equal to the lesser of (I) the extent to which such
reduction was less than such excess described in SECTION 5.3(g)(i) or (II) the
aggregate amount distributed to holders of Class B Management Units pursuant to
SECTIONS 5.3, 5.5(a)-(c) and 12.2(d) (but, with respect to distributions
pursuant to SECTIONS 5.5(a)-(c)), only to the extent such distributions were
made with respect to distributions that would have been made pursuant to SECTION
5.3 but for the first sentence of each of SECTIONS 5.5(a), (b) AND (c)), and (B)
the amount contributed to the Company pursuant to clause (A) of this SECTION
12.3(b)(i) shall be distributed in accordance with SECTION 5.3(a) THROUGH (d);
and
(ii) To the extent that the amount that would
otherwise have been distributed to holders of Class A Management Units pursuant
to SECTION 5.3(c) through (f) and SECTION 12.2(d) was not reduced in
distributions subsequent to such Post-Distribution Class B Capital Contributions
by an amount equal to the excess described in SECTION 5.3(g)(ii) then (A) the
holders of Class A Management Units shall make a Capital Contribution to the
Company (pro rata according to their respective ownership of Class A Management
Units) in an amount equal to the lesser of (I) the extent to which such
reduction was less than such excess described in SECTION 5.3(g)(ii) or (II) the
aggregate amount distributed to holders of Class A Management Units pursuant to
SECTIONS 5.3, 5.5(a)-(c) and 12.2(d) (but, with respect to distributions
pursuant to SECTIONS 5.5(a)-(c), only to the extent such distributions were made
with respect to distributions that would have been made pursuant to SECTION 5.3
but for the first sentence of each of SECTIONS 5.5(a), (b) AND (c)), and (B) the
amount contributed to the Company pursuant to clause (A) of this SECTION
12.3(b)(ii) shall be distributed in accordance with SECTION 5.3(a) AND (b).
12.4 DEFICIT CAPITAL ACCOUNTS. Except as otherwise
provided in 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.
-32-
12.5 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.
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.
13.4 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
-33-
(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 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
-34-
(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 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.
* * * * * *
-35-
IN WITNESS WHEREOF, the Members have executed this Fifth Amended and
Restated Limited Liability Company Agreement as of the date first set forth
above.
MEMBERS:
▇▇▇▇▇▇ ▇▇▇▇▇ & PARTNERS, L.P.
By: ▇▇▇▇▇▇ ▇▇▇▇▇ & Partners, L.L.C.
Its: General Partner
By:
-------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇
Its: Managing Director
▇▇▇▇▇▇ ▇▇▇▇▇ & PARTNERS II, L.P.
By: ▇▇▇▇▇▇ ▇▇▇▇▇ & Partners Management II, L.P.
Its: General Partner
By: ▇▇▇▇▇▇ ▇▇▇▇▇ & Partners Management II, L.L.C.
Its: General Partner
By:
-------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇
Its: Managing Director
▇▇▇▇▇▇ ▇▇▇▇▇ & PARTNERS DUTCH, L.P.
By: ▇▇▇▇▇▇ ▇▇▇▇▇ & Partners Management II, L.P.
Its: General Partner
By: ▇▇▇▇▇▇ ▇▇▇▇▇ & Partners Management II, L.L.C.
Its: General Partner
By:
--------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇
Its: Managing Director
MEMBERS (continued)
-------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------
▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
▇▇▇ ▇▇▇▇▇▇▇
-------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇
MEMBERS (continued)
-------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
▇▇▇ ▇▇▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇