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EXHIBIT 10.6
Amended and Restated Limited Liability Company
Operating Agreement
of
▇▇▇▇ ▇▇▇▇▇▇▇ Productions, LLC
This Amended and Restated Limited Liability Company Operating
Agreement of ▇▇▇▇ ▇▇▇▇▇▇▇ Productions, LLC, a New York limited liability company
(the "Company"), made and entered into as of October 6, 1995 (the "Agreement"),
by and between The Interpublic Group of Companies, Inc., a Delaware corporation
("Interpublic"), Infoplan International, Inc., a Delaware corporation
("Infoplan"), All American Communications, Inc., a Delaware corporation ("All
American"), and All American ▇▇▇▇▇▇▇, a Delaware corporation ("All American
▇▇▇▇▇▇▇"), as members (each, a "Member" and collectively, with any other persons
that hereinafter become a party to this Agreement pursuant to the terms of this
Agreement, the "Members").
WITNESSETH:
WHEREAS, the Company was formed as a limited liability company
under the laws of the State of New York pursuant to the Articles of Organization
of the Company filed with the Department of State of the State of New York on
September 13, 1995;
WHEREAS, All American and All American ▇▇▇▇▇▇▇ executed an
Operating Agreement, dated as of September 18, 1995, with respect to the Company
(the "Original Agreement");
WHEREAS, pursuant to an Asset Purchase Agreement, dated as of
October 6, 1995, Interpublic has purchased an undivided interest in the Assets
(as hereinafter defined) and the Company has purchased an undivided interest in
the Assets;
WHEREAS, Interpublic has assigned a portion of its undivided
interest in the Assets to Infoplan;
WHEREAS, Interpublic and Infoplan desire to contribute their
respective undivided interests in the Assets to the Company;
WHEREAS, in exchange for Interpublic's and Infoplan respective
contribution of their undivided interests in the Assets and for other good and
valuable consideration the receipt and sufficiency of which is hereby
acknowledged, All American and All American ▇▇▇▇▇▇▇ desire to admit Interpublic
and Infoplan as additional Members in the Company, and Interpublic and Infoplan
desire to be so admitted; and
WHEREAS, All American, All American ▇▇▇▇▇▇▇, Interpublic and
Infoplan desire to amend and restate the Original Agreement in the manner set
forth herein, and to continue the business of the Company pursuant to this
Agreement.
NOW THEREFORE, the undersigned hereby agree as follows:
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ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions. The following terms used in this
Agreement shall have the following meanings (all terms defined in the singular
have the correlative meanings when used in the plural and vice versa).
"Acceleration Event" shall mean any of the following acts or
events provided that such acts or events occur prior to the Third Ordinary
Distribution Period: (i) the dissolution or liquidation of the Company, (ii) the
Transfer by the All American Members of their respective Interests to Persons
other than to any direct or indirect wholly-owned subsidiary of All American
unless consented to in writing by Interpublic, (iii) the liquidation of any All
American Member, (iv) the occurrence and continuance of any Tranche E Event of
Default or the breach by Chemical of any material term of the Intercreditor
Agreement, including, without limitation, the seizure, taking or realization
upon the IPG Collateral by Chemical or any bank party to the Chemical Credit
Facility other than in accordance with the Intercreditor Agreement or (v) the
Distributable Cash of the Company is less than one million ($1,000,000) for any
consecutive twelve month period, commencing on September 30, 1996 and measured
at the end of each calendar quarter.
"Acceleration Request" shall have the meaning set forth in
Section 4.2.
"Acceptance" shall have the meaning set forth in Section 6.2.
"Act" shall mean the New York Limited Liability Company Act,
as amended from time to time.
"Advisory Committee" shall have the meaning set forth in
Section 3.1.
"Advisory Committee Members" shall have the meaning set forth
in Section 3.2.1.
"Affiliate" means, with respect to any Person, (i) any Person
directly or indirectly controlling, controlled by, or under common control with
such Person, (ii) any Person owning or controlling twenty-five percent (25%) or
more of the outstanding voting securities of such Person, (iii) any officer,
director, or general partner of such Person, or (iv) any Person who is an
officer, director, general partner, trustee, or holder of twenty-five percent
(25%) or more of the voting securities of any Person described in clauses (i)
through (iii) of this sentence. For purposes of this definition, (a) the term
"control," "is controlled by," or "is under common control with" shall mean the
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of a Person or Entity, whether through the ownership
of voting securities, by contract or otherwise, (b) Fremantle shall be deemed to
be an Affiliate of All American and not an Affiliate of Interpublic, (c)
Interpublic (or its designee on All American's Board of Directors) shall be
deemed not to be an Affiliate of All American and (d) the Company
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shall be deemed not to be an Affiliate of any Member and any Member shall be
deemed not to be an Affiliate of the Company.
"Agent" shall mean Chemical Bank or any successor agent under
the Chemical Credit Facility.
"Agreement" shall mean this Amended and Restated Operating
Agreement, as originally executed and as modified, amended or supplemented from
time to time.
"All American" shall mean All American Communications, Inc., a
Delaware corporation.
"All American Class A Common Stock" shall mean All American's
class of voting Common Stock, $.0001 par value per share, or any shares of any
class of voting stock resulting from any reclassification thereof which have no
preference in respect of dividends or of amounts payable in the event of
liquidation, dissolution or winding-up of All American.
"All American Class B Common Stock" shall mean All American's
class of non-voting Common Stock, $.0001 par value per share, or any shares of
any class of non-voting stock resulting from any reclassification thereof which
have no preference in respect of dividends or of amounts payable in the event of
liquidation, dissolution or winding-up of All American.
"All American Fremantle II" shall mean All American Fremantle
II, Inc., a Delaware corporation.
"All American ▇▇▇▇▇▇▇" shall mean All American ▇▇▇▇▇▇▇, Inc.,
a Delaware corporation.
"All American Members" shall mean All American and All
American ▇▇▇▇▇▇▇.
"All American TV" shall mean All American Television, Inc., a
Delaware corporation.
"All American Television II" shall mean All American
Television II, Inc., a Delaware corporation.
"Arbitration Committee" shall have the meaning set forth in
Section 3.8.
"Articles of Organization" shall mean the Articles of
Organization of ▇▇▇▇ ▇▇▇▇▇▇▇ Productions, LLC as filed with the Secretary of
State of the State of New York, as the same may be modified, amended or
supplemented from time to time.
"Assets" shall have the meaning specified in the Asset
Purchase Agreement.
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"Asset Purchase" shall mean the transaction pursuant to which
the Company and Interpublic each purchased an undivided interest in the Assets
from the Sellers.
"Asset Purchase Agreement" shall mean the Asset Purchase
Agreement, dated as of October 6, 1995, by and among ▇▇▇▇▇▇▇, Childs Play, the
Company, All American, Interpublic and the Estate of ▇▇▇▇ ▇▇▇▇▇▇▇ as modified,
amended or supplemented from time to time.
"Assumption and Assignment Agreement" shall mean the
Assumption and Assignment Agreement, to be dated as of the Final Closing Date
among Interpublic, Infoplan and the Company.
"Bona Fide Offer" shall mean, with respect to an offer from a
Person pursuant to Section 6.2, an offer from a Person who (i) in the reasonable
view of the recipient of such offer makes such offer in good faith and (ii) is
not an Affiliate of the Person receiving the offer.
"Business Day" shall mean any day on which commercial banks
are open for business in New York, New York.
"Call Notice" shall have the meaning set forth in Section 6.4.
"Call Notice Date" shall have the meaning set forth Section
6.4.
"Call Purchase Price" shall have the meaning set forth in
Section 6.4.
"Capital Account" shall mean, as of any given date, the
account established for each Member pursuant to and adjusted in accordance with
Section 4.3.
"Capital Contribution" shall mean any contribution to the
capital of the Company in cash or property by a Member whenever made.
"Cause" shall mean the occurrence and continuation of any of
the following with respect to the Operator (or any of the Operator's executive
officers performing, directly or indirectly, functions under this Agreement or
any of the Transaction Documents on behalf of the Company): (i) a material
breach of the Operator's obligations under this Agreement if such breach is not
cured within thirty (30) days after receiving notice of such breach; (ii) any
act of fraud, misappropriation, embezzlement or similar conduct involving or
affecting the Company; (iii) a Sale of All American; (iv) a Change in Ownership;
(v) the Transfer by any All American Member of its Interests other than to a
direct or indirect wholly-owned subsidiary of All American; (vi) the failure of
the Company to make Ordinary Distributions in accordance herewith for two (2)
consecutive quarters when there are sufficient funds to be distributed and there
are no legal or contractual restrictions on making such distributions; or (vii)
the declaration of a Tranche E Event of Default unless such Tranche E Event of
Default shall have been waived or rescinded.
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"Change in Ownership" shall mean the occurrence of any of the
following events: (i) the beneficial ownership of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and Related
Parties prior to any conversion of any of the Debentures or exchange or
conversion of Class B Common Stock for or into Class A Common Stock is less than
twenty percent (20%) of All American's outstanding Class A Common Stock; (ii)
the beneficial ownership of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and Related Parties following the
conversion of any of the Debentures or exchange or conversion of any shares of
Class B Common Stock for or into Class A Common Stock is less than ten percent
(10%) of All American's outstanding Class A Common Stock; or (iii) a Sale of All
American.
"Chemical Credit Facility" shall mean the loan agreement among
All American, Chemical Bank, as Agent, and the Banks named therein, dated as of
April 13, 1995 as modified, amended or supplemented from time to time.
"Childs Play" shall mean The Child's Play Company, a joint
venture among MG Productions Inc., ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Estate of ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Grantor Trust, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and
Toasty Productions, Inc.
"Claims" shall have the meaning set forth in Section 10.2.
"Code" shall mean the Internal Revenue Code of 1986 as
amended, and the rules and regulations thereunder.
"Company" shall have the meaning set forth in the Introduction
to this Agreement.
"Contractual Obligation" shall mean, with respect to any
Person, any contract, agreement, deed, mortgage, lease, license, commitment or
understanding, whether or not in writing, pursuant to which such Person is bound
or otherwise legally obligated.
"Debentures" shall mean All American's 6.5% Convertible
Subordinated Debentures due 2003.
"Default Rate" shall mean interest at the rate which is three
(3) basis points above Chemical Bank's Alternate Base Rate as from time to time
in effect.
"Distributable Cash" shall mean all cash and cash equivalents
(including interest earned on any Permitted Investments) received by the Company
(including, for such purposes, funds deemed to be paid pursuant to the
Intercreditor Agreement from the LLC Funds Account referred to therein) other
than any moneys received by the Company pursuant to the Asset Purchase
Agreement, including without limitation, moneys received pursuant to
indemnification claims and as result of a decrease in the purchase price for the
Assets, less all amounts paid or set aside (excluding distributions to the
Members) by the Company (including, without limitation, amounts paid or set
aside for Earn-Out Payments) to operate its business or satisfy its obligations
under the Transaction Documents (other than pursuant to indemnification claims
arising thereunder).
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"Earn-Out Payments" shall mean, for the Earn-Out Period, the
obligation of the Company to make payments to the Sellers as required by Section
3.8 of the Asset Purchase Agreement.
"Earn-Out Period" shall mean the five or ten year period
following the closing of the Asset Purchase in which Earn-Out Payments may be
due as required by Section 3.8 of the Asset Purchase Agreement.
"Entity" shall mean any general partnership, limited
partnership, limited liability company, corporation, joint venture, trust,
business trust, cooperative or association or any foreign trust or foreign
business organization.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended and the rules and regulations thereunder.
"Final Closing" shall have the meaning set forth in the Asset
Purchase Agreement.
"Final Closing Date" shall mean the date of the Final Closing
of the Asset Purchase Agreement.
"First Ordinary Distribution Period" shall have the meaning
set forth in Section 5.3.
"Fiscal Year" shall mean the Company's fiscal year, which
shall be the calendar year.
"Fremantle" shall mean Fremantle International, Inc., a New
York corporation.
"GAAP" shall mean United States generally accepted accounting
principles.
"▇▇▇▇▇▇▇" shall mean ▇▇▇▇ ▇▇▇▇▇▇▇ Productions, LLP, a
California limited partnership, including its successors and assigns.
"Governmental Authority" shall mean any court, government
(federal, state, local or foreign), department, commission, board, agency,
official or other regulatory, administrative, judicial or governmental
authority.
"Guarantee Agreements" shall mean the Guarantee provided by
All American ▇▇▇▇▇▇▇ in favor of Interpublic to be dated as of the Final Closing
Date, the Guarantee provided by All American Television II in favor of
Interpublic to be dated as of the Final Closing Date; and the Guarantee provided
by All American Fremantle II in favor of Interpublic to be dated as of the Final
Closing Date.
"HSR Act" shall mean the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976, as amended, and the rules and regulations thereunder.
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"Indemnified Person" and "Indemnified Persons" shall have the
meanings set forth in Section 10.2.
"Infoplan" shall mean Infoplan International, Inc., a Delaware
corporation.
"Intercreditor Agreement" shall mean the agreement among the
Company, Interpublic, the Agent, All American, AAG, All American Fremantle II
and All American Television II, to be dated as of October 6, 1995.
"Interest" shall mean each Member's interest as a Member in
the Company, including any and all rights and benefits to which the Member may
be entitled under this Agreement and the obligations of the Member under this
Agreement.
"Interpublic" shall mean The Interpublic Group of Companies,
Inc., a Delaware corporation.
"Interpublic Members" shall mean Interpublic and Infoplan.
"Interpublic Shares" shall mean the number of shares of
Interpublic Common Stock, $.10 par value, delivered to Sellers at the closing of
the Asset Purchase (as adjusted as a result of any stock split, stock dividend,
reclassification, combination or similar event).
"Interpublic Game Shows" shall mean Interpublic Game Shows,
Inc., a Delaware corporation.
"Interpublic's Costs of Funds" shall mean, as of any date,
Interpublic's average annual borrowing rate under its long term debt obligations
for the immediately preceding fiscal year as determined by Interpublic in good
faith.
"IPG Collateral" shall have the meaning set forth in the
Intercreditor Agreement.
"IPG Sub License Agreement" shall mean "The Price is Right"
Network License Agreement between All American ▇▇▇▇▇▇▇ and Interpublic Game
Shows dated as of October 6, 1995.
"Legal Requirement" shall mean any federal, state, local or
foreign law, statute, standard, ordinance, code, order, rule, regulation,
resolution or promulgation, or any order, judgment, requirement or decree of or
binding agreement with any Governmental Authority, or any applicable license,
franchise permit or similar right granted under any of the foregoing, or any
similar provision having the force and effect of law.
"License Agreement" shall mean the License Agreement dated
October 6, 1995, between the Company and All American ▇▇▇▇▇▇▇, a copy of which
is attached hereto as Exhibit A.
"Liquidating Agent" shall have the meaning set forth in
Section 8.3.
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"LLC Funds" shall have the meaning set forth in the
Intercreditor Agreement.
"LLC Funds Account" shall have the meaning set forth in the
Intercreditor Agreement.
"Loss" shall have the meaning set forth in Section 10.2.
"Make Whole Amount" shall mean, as of any date, the sum of (i)
all Ordinary Distributions and Special Distributions distributed to the All
American Members as of such date minus the amount of Ordinary Distributions and
Special Distributions distributed to the Interpublic Members as of such date
plus (ii) interest on fifty percent (50%) of the average outstanding amount
calculated pursuant to clause (i) (from the date of the first of such
distributions until the Make Whole Amount is distributed to the Interpublic
Members in full) at a rate equal to Interpublic's Cost of Funds applicable to
such periods.
"Make Whole Default" shall have the meaning set forth in
Section 4.2.
"Member" and "Members" shall have the meanings set forth in
the Introduction to this Agreement.
"Membership Percentage" shall mean each Member's percentage
interest in the Company for purposes of voting as a Member and receiving
allocations or profit and loss and distributions.
"Nasdaq" shall mean the National Association of Securities
Dealers Automated Quotation System.
"Network Production Agreement" shall mean "The Price is Right"
Network Production Agreement between Interpublic Game Shows and TPIR LLC dated
as of October 6, 1995.
"Notice Date" shall have the meaning set forth in Section 6.2.
"Notice of Offer" shall have the meaning set forth in Section
6.2.
"Operator" shall mean All American or its legal successor.
"Ordinary Default Distributions" shall have the meaning set
forth in Section 5.3.
"Ordinary Distributions" shall have the meaning set forth in
Section 5.3.
"Original Agreement" shall have the meaning set forth in the
recitals.
"Payment" shall have the meaning set forth in Section 8.2.
"Permitted Investments" shall mean (i) those investments
unanimously
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consented to by the Members; (ii) negotiable certificates of deposit, demand
deposits (whether interest bearing or not) and time deposits having maturities
of not more than six (6) months from the date of acquisition; (iii) securities
issued or directly and fully guaranteed or insured by the United States of
America or any agency or instrumentality thereof (provided that the full faith
and credit of the United States of America is pledged in support thereof) having
maturities of not more than six (6) months from the date of acquisition; (iv)
corporate obligations rated P-1 by ▇▇▇▇▇'▇ Investors Service, Inc. or A-1 by
Standard & Poor's Corporation having maturities not more than six (6) months
from the date of acquisition; and (v) investments in money market funds
substantially all of the assets of which are comprised of securities of the type
described in clauses (ii) through (iv) above.
"Person" shall mean any individual or Entity, and the heirs,
executors, administrators, legal representatives, successors, and assigns of
such Person where the context so permits.
"Pledge Agreement" shall mean the pledge agreement between the
All American Members and Interpublic, to be dated as of the Final Closing Date.
"Prospective Purchaser" shall have the meaning set forth in
Section 6.2.
"Public Float Requirements" shall mean, as of the date the
Interpublic Members are to receive shares of All American Class B Common Stock
pursuant to Section 4.2, that the following is true: (i) the number of shares of
All American Class B Common Stock issued and outstanding (not including treasury
shares or shares held by All American or its Affiliates) is at least equal to
twice the number of such shares that are to be issued to the Interpublic Members
pursuant to Section 4.2(a); and (ii) that the shares of All American Class B
Common Stock are registered under the Exchange Act and listed on or admitted to
trading on an authorized stock exchange or quoted on Nasdaq at the time of such
issuance.
"Put Notice" shall have the meaning set forth in Section 6.4.
"Put Notice Date" shall have the meaning set forth
Section 6.4.
"Put Purchase Price" shall have the meaning set forth in
Section 6.4.
"Related Agreements" shall have the meaning set forth in the
Asset Purchase Agreement.
"Related Parties" shall mean members of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇'▇
immediate family (including ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇), Persons for whom ▇▇▇▇▇▇▇
▇▇▇▇▇▇, from time to time, holds an irrevocable proxy (while he holds such
proxy), the estate of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, trusts established for the benefit of
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ or his immediate family and Interpublic.
"Remaining Members" shall have the meaning set forth in
Section 6.2.
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"Restricted Period" shall mean the period commencing on the
date hereof and ending on the date the Make Whole Amount has been distributed to
Interpublic and Ordinary Distributions are being made to the Members pursuant to
Section 5.3(a)(iii).
"Sale of All American" shall mean the occurrence of any of the
following events: (i) any Person or group (as defined under the Section 13(d)(3)
of the Exchange Act) other than ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ or any Related Party beneficially
owns more than fifty percent (50%) of All American's Class A Common Stock; or
(ii) All American merges or consolidates with another Entity and All American is
not the surviving Entity. For purposes of this Agreement, the term "beneficial
ownership" shall have the meaning set forth in Rule 13d-3 of the Exchange Act
"Sale of All American Call Notice" shall have the meaning set
forth in Section 7.2.
"Sale of All American Call Notice Date" shall have the meaning
set forth Section 7.2.
"Sale of All American Call Purchase Price" shall have the
meaning set forth in Section 7.2.
"Sale of All American Put Notice" shall have the meaning set
forth in Section 7.1.
"Sale of All American Put Notice Date" shall have the meaning
set forth Section 7.1.
"Sale of All American Put Purchase Price" shall have the
meaning set forth in Section 7.1.
"Second Ordinary Distribution Period" shall have the meaning
set forth in Section 5.3.
"Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"Sellers" shall mean, collectively, ▇▇▇▇▇▇▇ and Childs Play.
"Selling Member" shall have the meaning set forth in Section
6.2.
"Special Distributions" shall have the meaning set forth in
Section 5.3.
"Tag-Along Rights" shall mean the rights of the Members
pursuant to Section 6.2.
"Tax Matters Partner" shall have the meaning set forth in
Section 9.5.
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"Taxes" shall mean all taxes, assessments, imposts and other
charges of every kind and nature arising under or imposed by any applicable law,
rule, regulation, ruling or order of any Governmental Authority including,
without limitation, all interest, penalties and additions assessed with respect
to any of the foregoing.
"Third Ordinary Distribution Period" shall have the meaning
set forth in Section 5.3.
"Tranche E Event of Default" shall have the meaning specified
in the Intercreditor Agreement.
"Transaction Documents" shall mean the Asset Purchase
Agreement; the License Agreement; the IPG Sub License Agreement; the Network
Production Agreement; the Intercreditor Agreement; the Put Agreement by and
among Interpublic, ▇▇▇▇▇▇▇ and Childs Play dated as of October 6, 1995; the
Pledge Agreement; the Guarantee Agreements; the letter agreement among
Interpublic, Infoplan, Interpublic Game Shows, All American, All American
▇▇▇▇▇▇▇, All American Fremantle II, All American Television II and the Company
dated as of October 6, 1995; and any of the Related Agreements.
"Transfer" shall have the meaning set forth in Section 6.1.
"Treasury Regulations" shall mean proposed, temporary and
final regulations promulgated under the Code in effect as of the date of filing
the Articles of Organization and the corresponding sections of any regulations
subsequently issued that amend or supersede such regulations.
SECTION 1.2 Interpretation. For all purposes of this
Agreement, except as otherwise expressly provided herein or unless the context
otherwise requires:
(a) words importing gender include all genders;
(b) any reference to an "Article" or a "Section" refers to an
Article or a Section, as the case may be, of this Agreement; and
(c) all references to this Agreement and the words "herein",
hereof", "hereto" and "hereunder" and other words of similar import refer to
this Agreement as a whole and not to any particular Article, Section or other
subdivision.
SECTION 1.3 Effectiveness. This Agreement shall not be
effective until the Final Closing Date. If the Final Closing Date does not occur
by December 5, 1995, this Agreement shall terminate and be null and void unless
the parties hereto agree in writing to extend such date.
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ARTICLE II
ORGANIZATION
SECTION 2.1 Office of the Company. The Company shall have its
principal office at the Operator's New York office and may establish such other
offices or places of business for the Company as the Members may deem
appropriate.
SECTION 2.2 Purposes of the Company. The purposes of the
Company shall be (i) to own and license the rights in its library of television
programs, including, without limitation, its rights in the Library Rights and
Library Tangible Assets (both terms as defined in the Asset Purchase Agreement),
to licensees, (ii) to exploit opportunities presented to the Company pursuant to
Section 3.10 and (iii) to engage in any other lawful business the Company is
permitted to under the Act with the consent of the Members.
SECTION 2.3 Term of the Company. The existence of the Company
commenced on the date the Articles of Organization were filed with the
Department of State of the State of New York and shall continue until October 6,
2085, unless sooner terminated in accordance with this Agreement or the Act.
ARTICLE III
MANAGEMENT OF COMPANY
SECTION 3.1 Management Generally.
(a) The business and affairs of the Company will be managed by
the Members. The Members, acting in their capacity as Members under the Act,
shall have full, complete and exclusive authority, power and discretion to
manage and control the business of the Company. Unless authorized to do so by
this Agreement or by the Members acting in accordance with this Agreement, no
attorney-in-fact, employee or other agent of the Company shall have the
authority to (i) manage the business and affairs of the Company or (ii) contract
for or incur on behalf of the Company any debts, liabilities or other
obligations.
(b) The Members shall direct, manage and control the business
of the Company to the best of their ability, and each Member shall perform its
duties as Member in good faith, in a manner it reasonably believes to be in the
best interests of the Company and with such care as an ordinary prudent Person
in a like position would use under similar circumstances. As of the effective
date of this Agreement, the All American Members and the Interpublic Members
each have equal Membership Percentages.
(c) The Members shall appoint an advisory committee to assist
in the management of the Company (the "Advisory Committee") through which the
Members will exercise their authority, power and discretion to manage and
control the business of the Company.
(d) All decisions and actions taken by the Members under the
authority of
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this Article III will be binding upon all the Members and the Company.
SECTION 3.2 The Advisory Committee; General Powers. There
shall be an Advisory Committee which shall have all powers of the Members except
for those set forth in Section 402 (c) and Section 402(d) of the Act including,
without limitation, the following powers and duties:
(a) Review of the performance of the Operator;
(b) Review and submission to the Members of a report prepared
by the Operator which sets forth the business activities of the Company each
fiscal quarter, submitted to the Members within forty-five (45) days after the
end of the fiscal quarter to which it corresponds;
(c) Review of any audits performed by the Members pursuant to
Section 9.2;
(d) Establishment of investment guidelines from time to time
in connection with investment of license payments received from any licensee;
(e) The taking of any action on behalf of the Members that
they may deem appropriate resulting from the actions set forth in paragraphs
(a) - (d) above; and
(f) Such other powers and duties as the Members may, from time
to time, delegate to it.
3.2.1 Number and Term of Office. The members of the Advisory
Committee ("Advisory Committee Members") shall be appointed by the Members. The
number of Advisory Committee Members which shall constitute the entire Advisory
Committee shall be two; one nominee of the Interpublic Members and one nominee
of the All American Members. Each Advisory Committee Member shall have an
alternate member to act in his stead when he is absent. The Interpublic Members
shall appoint ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ as their initial nominee for the Advisory Committee
and ▇▇▇▇▇▇ ▇▇▇▇▇ as his alternate and the All American Members shall appoint
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ as their initial nominee for the Advisory Committee and
▇▇▇ ▇▇▇▇▇ as his alternate (and such alternates shall be considered to be the
Advisory Committee Members when acting in such alternate capacity). Appointments
made pursuant to this Section 3.2.1 and Section 3.2.9 (other than the initial
appointments designated in this Section 3.2.1) shall be evidenced by an
instrument in writing signed by the appointing Members and delivered to the
other Members and to the Operator. Each Advisory Committee Member (and
alternate) shall hold office until his successor is appointed and qualified or
until his earlier resignation, removal or death.
3.2.2 Quorum and Manner of Acting. The presence of both
Advisory Committee Members shall constitute a quorum for the transaction of
business. In the absence of a quorum, the Advisory Committee Member present may
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum
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shall be present. The unanimous affirmative vote of each Advisory Committee
Member present at a meeting at which a quorum is present shall be an act of the
Advisory Committee.
3.2.3 Place of Meetings. The Advisory Committee may hold its
meetings at such place or places as the Advisory Committee may from time to time
determine.
3.2.4 Regular Meetings. Regular meetings of the Advisory
Committee shall be held not less than one (1) time each fiscal quarter. Any
business which properly may be transacted by the Advisory Committee may be
transacted at any regular meeting thereof.
3.2.4 Special Meetings. Special meetings of the Advisory
Committee shall be held whenever called by a Member. Unless otherwise agreed to
by all of the Advisory Committee Members present at a special meeting, the
business to be transacted at any special meeting shall be limited to that stated
in the notice of meeting.
3.2.5 Notice. Notice of all meetings of the Advisory Committee
shall be mailed by first class mail postage prepaid to each member of the
Advisory Committee addressed to him at his usual place of business, at least ten
(10) Business Days before the date on which the meeting is to be held, or shall
be sent to him at such place by telefax or express mail not later than the fifth
(5th) Business Day before the day on which such meeting is to be held. Such
notice shall state the place, date, and hour of the meeting and the purpose or
purposes for which it is called. In lieu of the notice to be given as set forth
above, a waiver thereof in writing, signed by the member or members of the
Advisory Committee entitled to receive such notice, whether before or after the
meeting, shall be deemed equivalent thereto for purposes of this Agreement.
Attendance of a Person at a meeting shall constitute a waiver of notice of such
meeting, except when the Person attends a meeting for the express purpose of
objecting, at the beginning of the meeting, to the transaction of any business
because the meeting is not properly called or convened.
3.2.6 Action Without a Meeting. Any action required or
permitted to be taken at any meeting of the Advisory Committee may be taken
without a meeting if all members of the Advisory Committee consent thereto in
writing, and the writing or writings are filed with the minutes of proceedings
of the committee.
3.2.7 Telephonic Meetings. Members of the Advisory Committee
may participate in a meeting of the Advisory Committee by means of a conference
telephone or similar communication equipment by means of which all Persons
participating in the meeting can hear each other. Participation in a meeting
pursuant to this paragraph shall constitute presence in Person at such meeting.
3.2.8 Resignation. Any Advisory Committee Member may resign at
any time by giving written notice to the Advisory Committee or to the Members,
which initially appointed such Advisory Committee Member. The resignation of any
Advisory Committee Member shall take effect upon receipt of notice thereof or at
such later time as shall be specified in such notice; and unless otherwise
specified therein, the acceptance of such
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resignation shall not be necessary to make it effective.
3.2.9 Vacancies. Unless otherwise provided in this Agreement,
any vacancies resulting from the death, resignation or removal of any Advisory
Committee Member shall be promptly filled, in a manner consistent with this
Agreement, by the Members which initially appointed such Advisory Committee
Member. Each Advisory Committee Member so chosen shall hold office until his
successor is elected and qualified, or until his earlier resignation, removal or
death. When any Advisory Committee Member shall resign effective at a future
date, the Member which appointed such Advisory Committee Member shall have the
power to fill such vacancy, in a manner consistent with this Agreement, and the
appointment of a successor Advisory Committee Member shall take effect when such
resignation shall have become effective.
3.2.10. Removal. Any one or more Advisory Committee Members
may be removed, with or without cause, at any time upon the written direction of
the Member or Members which appointed such Advisory Committee Member, effective
upon the delivery of such written direction by the removing Members to the other
Members and to the Operator.
3.2.11. Compensation of Advisory Committee Members. No
Advisory Committee Member shall be entitled to any compensation from the Company
in respect of his service on such committee; provided, however, that the
out-of-pocket expenses of each Advisory Committee Member shall be reimbursed by
the Company if the Advisory Committee unanimously agrees that the Company shall
so reimburse such member.
SECTION 3.3 Appointment and Authority of Operator.
(a) All American is hereby appointed as the Operator. Subject
to Section 3.3(b), the Operator and its employees are hereby delegated the
right, power and authority to take all actions which it deems necessary, useful
or appropriate for the day-to-day management and conduct of the Company's
business. The Operator shall not be entitled to any fee, commission or other
compensation for its services as Operator other than as provided herein.
(b) Notwithstanding anything herein to the contrary and
subject to Sections 10.4 and 11.1 and paragraphs (c) and (d) below, the
following actions shall not be taken by the Company (or the Operator or any
Member acting on its behalf) either directly or indirectly, without receiving
the prior unanimous written consent of the Members:
(i) approve (which approval shall not be unreasonably
withheld or delayed) any production costs associated
with programming assets owned by the Company whether
such expenditures are by third parties or the
Company;
(ii) acquire any asset (tangible or intangible);
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(iii) enter into or assume any contract or amend, modify,
terminate, suspend performance or waive any rights in
respect thereof; provided that the Transaction
Documents as entered into as of the date hereof or to
be entered into by the Company pursuant to the Asset
Purchase Agreement or the Related Agreements are
deemed to be approved;
(iv) merge the Company into another Person, consolidate
the Company with another Person or enter into any
other similar kind of business combination with
another Person;
(v) incur or guarantee any indebtedness;
(vi) commence any suit or action in the name of the
Company, seek injunctive relief or specific
performance with respect to material matters or agree
to any settlement of any suit or claim involving the
Company, provided that the Company may join the
Operator in defending the Company's title to its
assets free from the claim of third parties;
(vii) distribute any cash or assets of the Company to the
Members or any of their respective Affiliates, other
than as provided for in this Agreement;
(viii) make, execute or deliver any assignment for the
benefit of creditors, or commence a voluntary case
seeking liquidation, dissolution, reorganization or
adjustment of debts pursuant to the provisions of any
state or federal bankruptcy or insolvency act, or
consent to the institution of an involuntary case
with respect to the same, or ask for or consent to
the appointment of a receiver, liquidator, custodian,
trustee, or similar official for all or any part of
the Company's property, except in accordance with
this Agreement;
(ix) use the name, credit or property of the Company for
any purpose other than a proper corporate purpose or
engage in any business other than those specified in
this Agreement;
(x) pledge, create a security interest or lien on or
otherwise encumber any assets of the Company;
(xi) assign, transfer, pledge, compromise or release any
claim of the Company except for full payment;
(xii) sell, assign, transfer, exchange, grant or otherwise
dispose of any assets of the Company except (a) for
distributions of cash to Members as provided in
Article V or (b) pursuant to agreements previously
approved by the Member in accordance with the terms
hereof,
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including without limitation, the Transaction
Documents as entered into as of the date hereof or to
be entered into by the Company pursuant to the Asset
Purchase Agreement or the Related Agreements;
(xiii) engage in any transaction not in the ordinary course
of business;
(xiv) cause the Company to indemnify any Person (other than
by operation of law);
(xv) approve or file the annual tax returns of the
Company, make or change any and all elections for
federal, state and local tax purposes including,
without limitation, any election, if permitted by
applicable law (i) to adjust the basis of the
Company's properties or (ii) to extend the statute of
limitations for assessment or tax deficiencies
against Members with respect to adjustments to the
Company's federal, state or local tax returns,
represent the Company before the taxing authorities
or courts of competent jurisdiction in tax matters
affecting the Company and the Members in their
capacity as Members, and execute any agreements or
other documents that bind the Members with respect to
such tax matters or otherwise affect the rights of
the Company or the Members;
(xvi) change any accounting principle or practice,
including the method of accounting for, and reporting
of, the Company's assets (tangible or intangible),
except as required by GAAP applied on a consistent
basis;
(xvii) use or approve the use of the name of, or any
information regarding, either Member or any Affiliate
of either Member, in any advertising materials or
public relations campaigns for the Company without
the consent of the affected Member;
(xviii) cause securities of the Company to be registered
under the Securities Act or state, local or foreign
securities laws, or register the Company or any
affiliate as a broker-dealer under applicable
securities laws;
(xix) employ or retain any employees or consultants or
approve, adopt or implement any pension, health,
savings or welfare plan or provide any similar types
of benefits;
(xx) engage in any restricted transaction referred to in
Section 3.8;
(xxi) approve or make any loan or investment except for
Permitted Investments;
(xxii) enter into any agreement or understanding pursuant to
which it shall become obligated to any Person
pursuant to any collective bargaining
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agreement, including, without limitation, to any
union, guild or residual agreement arising in
connection with the Assets, whether or not
contemplated by the Transaction Documents; and
(xxiii) agree or commit to agree to any of the foregoing.
(c) Notwithstanding anything herein to the contrary, so long
as All American and Interpublic are Members the Operator shall act at the
direction of Interpublic with respect to any action taken under or required by
the Transaction Documents or any future agreement (including any consent,
approval, amendment, waiver, release or other action contemplated by such
agreements) that All American or any Affiliate of All American is a party on the
one hand and the Company is a party on the other hand. Actions taken under this
Section 3.3(c) do not require approval under Section 3.3(b).
(d) Notwithstanding anything herein to the contrary, so long
as All American and Interpublic are Members the Operator shall act at the
direction of All American with respect to any action taken under or required by
the Transaction Documents or any future agreement (including any consent,
approval, amendment, waiver, release or other action contemplated by such
agreements) that Interpublic or any Affiliate of Interpublic is a party on the
one hand and the Company is a party on the other hand. Actions taken under this
Section 3.3(d) do not require approval under Section 3.3(b).
SECTION 3.4 Duties of Operator. The Operator shall perform all
duties necessary to operate the Company's day-to-day activities including, but
not limited, to the following: (a) taking all reasonable steps necessary or
desirable in the Operator's business judgment after consulting with the Advisory
Committee, within or outside the United States, to ensure that (i) the Company's
copyrights do not enter the public domain before their statutory expiration, its
patents and material trademarks are not deemed abandoned, and its confidential
business information does not lose trade secret status, (ii) the Company has, at
all times, all authorizations and approvals necessary to exploit fully all of
its rights in the Library Rights and Library Tangible Assets (both terms as
defined in the Asset Purchase Agreement) and in any new program (whether
produced or yet to be produced), (iii) the Company makes all filings with any
Governmental Authority necessary or desirable to preserve or protect its
material rights in any intellectual property, whether owned or licensed, such
filings may include, without limitation, an application for the registration of
an owned copyright or trademark, the recordation of the Company's interest in
the intellectual property rights of a third party, and the registration of the
Company as a registered user of a third party's intellectual property rights,
and (iv) no copyright, trademark, patent, trade secret or similar intellectual
property right of the Company is infringed by any third party; (b) monitoring
performance by third party licensees under all licensing agreements; (c)
overseeing new programs; (d) investing the proceeds received from any license
agreement as such proceeds become available, subject to the terms of this
Agreement and the guidelines established by the Advisory Committee from time to
time; and (e) preparing all Tax returns and filings.
SECTION 3.5 Expenses.
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(a) The Operator shall be responsible for the payment of (i)
salaries and fringe benefits of any of its personnel, (ii) the cost of
maintaining any office space used by the Operator in connection with the
performance of its obligations under this Agreement, including rent, utilities
and the cost of office equipment and supplies, (iii) travel and entertainment
expenses of personnel of the Operator and (iv) any other overhead charges or
expenses of the Operator, except as may otherwise be approved by Interpublic in
writing. Any such expenses paid by the Operator shall not be accounted for as
expenses of, contributions to or income of the Company and shall in no way
affect the capital accounts or capital contributions of the Members.
(b) The Company shall pay (or reimburse the Operator for) all
costs, expenses and obligations of the Company other than those specified in
Section 3.5(a).
SECTION 3.6 Removal and Withdrawal of the Operator:
(a) Upon not less than thirty (30) days prior notice, the
Operator may be removed by Interpublic for Cause. Such removal for Cause shall
not be effective until and unless Interpublic agrees to perform the duties of
the Operator.
(b) All American shall not have the right to withdraw from its
duties as Operator unless removed pursuant to Section 3.6(a) or unless the All
American Members Transfer all of their respective Interests other than a
Transfer to a direct or indirect wholly-owned subsidiary of All American.
SECTION 3.7 Meetings of Members. Any action taken by the
Members, in their capacity as Members, shall be authorized by a vote of the
Members. With respect to any such vote, each Member shall vote in accordance
with such Member's Membership Percentage. In the event the Operator wishes to
take an action that requires the consent or approval of the Members, it shall
promptly call a meeting of the Members or obtain the written consent or approval
of the Members pursuant to Section 3.7.7. Minutes of any meeting shall be
prepared and kept by a Person designated by the Members (which designee may be a
Member) and shall be delivered to the Members within thirty (30) days of any
such meeting.
3.7.1. Quorum and Manner of Acting. The presence of all of
Members shall constitute a quorum for the transaction of business. In the
absence of a quorum, the Members present may adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a quorum
shall be present. The unanimous affirmative vote of all of Members present at a
meeting at which a quorum is present shall be an act of the Members.
3.7.2. Place of Meetings. The Members may hold their meetings
at such place or places as the Members may from time to time determine.
3.7.3. Annual Meeting. An annual meeting of the Members shall
be held each year, commencing in July 1996. Such meeting shall be held on such
date and time as
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shall be designated jointly by the Members, and specified in a notice given as
hereinafter provided for meetings of the Members or in a waiver of notice
thereof signed by each of the Members.
3.7.4. Regular Meetings. Regular meetings of the Members may
be held at such time and place as shall from time to time be determined by the
Members. Any business which properly may be transacted by the Members may be
transacted at any regular meeting thereof.
3.7.5. Special Meetings. Special meetings of the Members shall
be held whenever called by either Member, any member of the Advisory Committee
or the Operator. Unless otherwise agreed to by all of the Members present at a
special meeting, the business to be transacted at any special meeting shall be
limited to that stated in the notice of meeting.
3.7.6. Notice. Notice of all meetings of the Members shall be
mailed by first class mail postage prepaid to each Member addressed to it at its
usual place of business or shall be delivered personally or sent to it at such
place by telefax or express mail not less than ten (10) nor more than sixty (60)
days before the date on which the meeting is to be held. Such notice shall state
the place, date, and hour of the meeting and the purpose or purposes for which
it is called. In lieu of the notice to be given as set forth above, a waiver
thereof in writing, signed by the Members entitled to receive such notice,
whether before or after the meeting, shall be deemed equivalent thereto for
purposes of this Agreement. Attendance of a Member at a meeting shall constitute
a waiver of notice of such meeting, except when the Member attends a meeting for
the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not properly called or
convened.
3.7.7. Action Without a Meeting. Any action required or
permitted to be taken at any meeting of the Members may be taken without a
meeting if all of the Members consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the Members.
3.7.8. Telephonic Meetings. Members may participate in a
meeting of the Members by means of a conference telephone or similar
communication equipment by means of which all persons participating in the
meeting can hear each other. Participation in a meeting pursuant to this
paragraph shall constitute presence in person at such meeting.
SECTION 3.8 Transactions with Affiliates. The Company may not
engage in any transaction, directly or indirectly, with a Member or any
Affiliate of a Member unless it receives prior written approval from the other
Member; provided that the Company, All American, Interpublic and their
respective Affiliates may engage in the activities contemplated by the
Transaction Documents in accordance with the terms thereof. All transactions
(except transactions expressly contemplated by the Transaction Documents or the
agreements approved in accordance with this Section 3.8) between the Company and
any Member or any Affiliate of any Member shall be conducted on terms no less
favorable
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to the Company than might be obtained in an arm's length transaction from a
Person who is not a Member or an Affiliate of a Member. If the Company is (i)
negotiating a transaction among the Company and a Member or an Affiliate of a
Member or (ii) settling any pending or threatened claim or proceeding relating
to or arising out of transactions among the Company and a Member or an Affiliate
of a Member, the non-affiliated disinterested Members, if any, shall act on
behalf of the Company. Nothing herein shall prohibit transactions between a
Member and its own Affiliates.
SECTION 3.9 Business Activities of Members. Pursuant to the
License Agreement, the Company will grant to All American and certain of its
Affiliates, certain rights to produce, license, sublicense and distribute the
Company's programming assets.
SECTION 3.10 Non-Competition with Company Activities.
(a) Each Member agrees that, prior to exploiting any new
opportunity (other than opportunities contemplated by existing contracts,
including the Fremantle license from ▇▇▇▇▇▇▇) that involves the ownership,
production, distribution, marketing, licensing or exploitation of television
game shows with the financial and other assistance or participation of an
unaffiliated third party (other than a commercial bank or similar financial
institution or the public issuance by a Member of its securities or a private
placement for general corporate purposes) it shall consult with the other
non-affiliated Members and offer such other Members the opportunity to provide
such assistance or participation or transact such business through the Company
or through some alternative arrangements with such Members. If the other
non-affiliated Members do not agree to participate in such business on the terms
presented within thirty (30) days from notice thereof, the Member or Members
seeking to exploit such opportunity or engage in such activities may exploit
such opportunity or enter into such engagement on those terms with such third
party; provided that in no event shall such opportunity or engagement adversely
affect in any material respect the Company's business, operations, condition
(financial or other) or prospects and provided further that it may not exploit
such opportunity on any other terms without first offering the other Members the
opportunity to participate in such transaction on such other terms as provided
in this Section 3.10(a).
(b) Notwithstanding Section 3.10(a), any Member is free to
exploit any new game show opportunity covered by Section 3.10(a) that such
Member develops without the financial and other assistance or participation of
an unaffiliated third party (other than a commercial bank or similar financial
institution or the public issuance by a Member of its securities or a private
placement for general corporate purposes) without offering the other Members the
opportunity to participate in such opportunity through the Company or through
some alternative arrangements with such Members, provided that such new game
show opportunity does not infringe upon the Company's intellectual property
rights. Prior to the exploitation of any such opportunity that might infringe
upon the Company's intellectual property rights, the Member seeking to exploit
such opportunity shall consult with the other non-affiliated Members regarding
such opportunity. If the non-affiliated Member or Members believes that the
exploitation of such opportunity would infringe upon
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the Company's intellectual property rights, the Members shall consult with the
three member committee of the Board of Directors of All American (the
"Arbitration Committee") set forth on Schedule C regarding such disagreement. If
the Arbitration Committee does not agree that such opportunity does not infringe
upon the Company's intellectual property rights within thirty (30) days of it
being advised of such opportunity in writing, the Members shall promptly bring
the dispute to arbitration for resolution and the Member or Members seeking to
exploit such opportunity shall refrain from exploiting such opportunity pending
the issuance of the arbitral panel's determination regarding the issue. If the
arbitral panel determines in accordance with Article XIV that such opportunity
infringes upon the Company's intellectual property rights, the Member seeking to
exploit such opportunity shall not exploit such opportunity. If the Arbitration
Committee or the arbitral panel determines that such opportunity does not
infringe upon the Company's intellectual property rights, the Member seeking to
exploit such opportunity may exploit such opportunity.
(c) Each Member acknowledges that money damages would be both
incalculable and an insufficient remedy for any breach of this provision by it
and that any such breach would cause the Members and the Company irreparable
harm. Accordingly, each Member agrees that in the event of any breach or
threatened breach of this provision, both the non-breaching Members and the
Company, in addition to any other remedies at law or in equity they may have,
shall be entitled, without the requirement of posting a bond or other security,
to equitable relief, including injunctive relief and specific performance.
ARTICLE IV
CAPITAL CONTRIBUTIONS, CAPITAL
ACCOUNTS AND RELATED PROVISIONS
SECTION 4.1 Capital Contributions. The Interpublic Members'
and the All American Members' initial capital contribution shall be the amount
shown for such Members on Schedule A of this Agreement. In consideration for the
foregoing contribution, the Interpublic Members and the All American Members
each will hold a Membership Percentage equal to fifty percent (50%). The Members
shall not be required to make any additional capital contributions, except as
otherwise provided with respect to All American's obligation regarding a Make
Whole Amount.
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SECTION 4.2. The Make Whole Amount.
(a) Following the occurrence and during the continuation of an
Acceleration Event, All American shall, at the request of the Interpublic
Members (an "Acceleration Request"), make a payment in either (or in a
combination of) (i) cash, (ii) All American Class A Stock or (iii) All American
Class B Stock, all at All American's sole option, to the Interpublic Members in
an amount equal to a Make Whole Amount as of the Business Day immediately prior
to the date of such payment; provided that All American may only elect to
distribute All American Class B Common Stock to the Interpublic Members to the
extent that the Public Float Requirements are met as of such date. The payment
to the Interpublic Members of a Make Whole Amount shall be made on the sixtieth
(60th) day following the date of the Acceleration Request. After a Make Whole
Amount is received by the Interpublic Members, then, notwithstanding anything
herein to the contrary, all Ordinary Distributions shall be made to Members
pursuant to Section 5.3(a)(iii); provided, however that if the $25 million
principal amount comprising Tranche E of the Chemical Credit Facility and all
accrued interest thereon remains outstanding, distributions shall continue to be
made in accordance with Section 5.3(a)(i) until such principal and interest is
repaid and, upon the occurrence of an Acceleration Event, the Make Whole Amount
may, at the Interpublic Members' option, be accelerated again by the Interpublic
Members. The principal component of the Make Whole Amount paid by All American
to the Interpublic Members pursuant to this Section 4.2 shall reduce the
Interpublic Members' Capital Accounts in accordance with their respective
Membership Percentages. All American's payment of the interest component of any
Make Whole Amount shall be considered income to the Interpublic Members and
either a loss or a deduction to All American.
(b) If All American fails to make a Make Whole Amount payment
required by Section 4.2(a), and such failure continues unremedied for sixty (60)
days after the Interpublic Members shall have provided an Acceleration Request,
such failure unless and until cured shall be deemed to constitute a "Make Whole
Default" and the following shall apply:
(i) subject to the Chemical Credit Facility, any amounts
payable to All American or any of its Affiliates
pursuant to the License Agreements shall be paid to
the Interpublic Members and applied against such Make
Whole Default as if All American had made a Make
Whole Amount contribution pursuant to Section 4.2(a);
(ii) interest on the Make Whole Default shall accrue from
the date on which the amount of the Make Whole
Default becomes due until the date on which such Make
Whole Default is paid in full, at an annual rate
equal to the Default Rate (as in effect from time to
time) (which interest shall be reflected in the
Interpublic Members' Capital Accounts in accordance
with their Membership Percentages as a deemed special
allocation of net profit pursuant to Section
5.2(a)(ii)); and
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(iii) the provisions of Section 6.4 shall apply mutatis
mutandis.
4.2.1 Required Collateral.
(a) Until such time that a Make Whole Amount is distributed to
Interpublic in full and Ordinary Distributions have been made by the Company
pursuant to Section 5.3(a)(iii), each of All American and All American ▇▇▇▇▇▇▇
hereby (i) grants to Interpublic a second priority security interest in its
Interest, (ii) subject and subordinated to the rights of Chemical Bank (or any
other agent under the Chemical Credit Facility or any other facility refinancing
such facility but only if such refinancing does not increase the principal
amount of Tranche E of the Chemical Credit Facility outstanding at the time of
such refinancing) as the holder of a first priority security interest in such
Interest, appoints Interpublic as its attorney-in-fact, with power to sign its
name on any financing statement, mortgage, notice of assignment or other
document or certificate as may be necessary or appropriate to evidence and
maintain its security interest in its Interest in accordance with applicable law
and (iii) agrees that Interpublic shall have such rights and privileges that are
available to a secured party under applicable law with respect to its Interest.
The appointment of Interpublic as attorney-in-fact as provided hereunder shall
(A) be deemed to be coupled with an interest and is irrevocable until the Make
Whole Amount has been fully paid, including interest pursuant to Section
4.2(b)(ii), in accordance with the terms hereof, (B) not be affected by the
subsequent dissolution, termination or bankruptcy of All American or its
subsidiaries or the Transfer of all or any portion of any Members' Interest in
the Company and (C) extend to All American's and its subsidiaries' successors
and assigns. Interpublic's security interest in All American's and its
subsidiaries' Interests shall be recorded on the books of the Company.
(b) Until such time that the Make Whole Amount is distributed
to Interpublic in full and Ordinary Distributions have been made by the Company
pursuant to Section 5.3(a)(iii), Interpublic shall have the right to receive All
American Class A Common Stock upon the occurrence and during the continuation of
a Make Whole Default. All American hereby agrees to deliver to Interpublic newly
issued shares of All American Class A Common Stock, together with endorsed stock
powers, equal in value to and in satisfaction of the total amount of the then
unpaid Make Whole Amount as of the date immediately prior to the date of
delivery. The purchase price for such shares shall be the satisfaction of a Make
Whole Amount plus the par value of such shares.
SECTION 4.3 Capital Accounts.
(a) The Company shall establish and maintain a separate
account (the "Capital Account") for each Member. The initial balance of the
Capital Account for each Member shall be such Member's initial Capital
Contribution to the Company. The Capital Account of each Member shall be
increased by:
(i) the dollar amount of any additional cash
contributions made by such Member;
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(ii) the fair market value of any property (other than
cash) contributed to the Company by such Member; and
(iii) allocations to such Member with respect to net profit
hereunder (determined as provided under Article V
hereof).
The Capital Account of each Member shall be decreased by:
(iv) the dollar amount of any cash distributions made to
such Member;
(v) the fair market value of any property (other than
cash) distributed to such Member, and
(vi) allocations to such Member of net loss pursuant to
Article V hereof.
(b) The provisions of this Section 4.3 and the other
provisions of this Agreement are intended to comply with Code Section 704(b) and
the Treasury Regulations thereunder in respect of the maintenance of capital
accounts.
SECTION 4.4 No Interest. No interest will be paid by the
Company on any capital contribution (excluding interest to be paid pursuant to a
Make Whole Amount) or on the balance of any Capital Account.
SECTION 4.5 Partnership Classification for Tax Purposes. Each
Member recognizes and intends that for federal income tax purposes, the Company
will be classified as a partnership and that the Members shall take all
necessary action to make any election by the Company necessary for such
treatment.
ARTICLE V
ALLOCATIONS AND DISTRIBUTIONS
SECTION 5.1 Calculation of Net Profits and Net Losses. The net
profits and net losses of the Company shall be determined for each Fiscal Year
in accordance with U.S. GAAP applied on a consistent basis.
SECTION 5.2 Allocation of Net Profits and Net Losses.
(a) Except as provided in Section 8.3(b)(i), all items of
income and loss shall be allocated among the Members in proportion to their
Membership Percentages, except that in any year in which the interest component
of the Make Whole Amount is paid to the Interpublic Members then an amount of
income equal to such amount so paid to the Interpublic Members shall be
allocated to the Interpublic Members instead of to the All American Members
(b) Notwithstanding any other provision of this Agreement, in
the event that at the end of any Fiscal Year any Member's Capital Account is
adjusted for, or such Member is allocated, or there is a distribution to such
Member of, any item described in Section
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1.704-1(b)(2)(ii)(d)(4), (5) or (6) of the Treasury Regulations in an amount
not reasonably expected at the end of the prior Fiscal Year, and such treatment
creates a deficit balance in that Member's Capital Account, then such Member
shall be allocated all items of income and gain of the Company for such Fiscal
Year and for all subsequent Fiscal Years of the Company until such deficit
balance has been eliminated. Any special allocations of items of income or gain
pursuant to this Section 5.2(b) shall be taken into account in computing
subsequent allocations pursuant to this Section 5.2 so that the net amount of
any item so allocated and all other items allocated pursuant to this Section 5.2
shall, to the extent possible, be equal to the net amount that would have been
allocated to each such Member pursuant to the provisions of this Section 5.2 if
such unexpected adjustments, allocations or distributions had not occurred.
(c) Any income or gain in an amount equal to a decrease in
"partnership minimum gain" of the Company shall be allocated to the Members that
were allocated nonrecourse deductions or received distributions or proceeds
attributable to "nonrecourse liabilities" of the Company in accordance with the
"minimum gain chargeback" provisions of Section 1.704-2 of the Treasury
Regulations. The terms used in the preceding sentence shall have the meanings
set forth in Section 1.704-2 of the Treasury Regulations. Any special
allocations of items of income or gain pursuant to this Section 5.2(c) shall be
taken into account in computing subsequent allocations of items of income or
gain pursuant to this Section 5.2 so that the net amount of any item so
allocated and all other items allocated to each Member pursuant to this Section
5.2 shall, to the extent possible, be equal to the net amount that would have
been allocated to each such Member pursuant to the provisions to this Section
5.2 if the allocations under this Section 5.2(c) had not been made.
(d) The Capital Accounts of the Members shall be adjusted in
accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(f) to reflect the
gross fair market value of the Company's property as determined by the Members,
as of the following times: (i) the admission of a new Member to the Company or
acquisition by an existing Member of an additional Interest in the Company from
the Company; (ii) the distribution by the Company of money or property to a
retiring or continuing Member in consideration for the retirement of all or a
portion of such Member's Interest in the Company; (iii) the termination of the
Company for federal income tax purposes pursuant to Section 708(b)(1)(B) of the
Code; and (d) such other times as determined by the Members.
(e) Notwithstanding any other provision in this Agreement,
income, gain, loss and deductions with respect to property contributed to the
Company by a Member shall be allocated under the principles of Treasury
Regulations Section 1.704-3(b) and with respect to cash contributions allocated
under the principles of Treasury Regulation Section 1.704-1(b).
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SECTION 5.3 Distributions.
(a) Except as provided in Section 8.3 and subject to Sections
5.3(b) and 5.3(c), Distributable Cash shall, from time to time (but in no event
less frequently than once each quarter), be distributed to the Members by the
Operator (or deemed to be distributed to the Members from the LLC Funds Account
pursuant to the Intercreditor Agreement) as follows ("Ordinary Distributions"):
(i) first, to the All American Members until they have
received the amount of cash required to satisfy all
principal and interest payments required under
Tranche E of the Chemical Credit Facility (as such
payments are required as of the date of the signing
of this Agreement) (the period when such
distributions are being made hereinafter referred to
as the "First Ordinary Distribution Period");
(ii) second, to the Interpublic Members up to the then
unpaid Make Whole Amount (but excluding the interest
component of such Amount set forth in clause (ii) of
the definition of Make Whole Amount) (the period when
such distributions are being made hereinafter
referred to as the "Second Ordinary Distribution
Period"); and
(iii) thereafter, to the Members in proportion to their
Membership Percentages (the period when such
distributions are being made being hereinafter
referred to as the "Third Ordinary Distribution
Period").
(b) Prior to the Company making any Ordinary Distributions,
but subject to the terms of the Intercreditor Agreement, Distributable Cash
shall be distributed to the Members as follows ("Special Distributions"):
(i) during the First Ordinary Distribution Period, (A) at
the end of each calendar quarter, (x) the Interpublic
Members shall receive a Special Distribution equal to
the sum of (1) 22.5% of the Company's estimated net
United States source taxable income for such calendar
quarter; plus (2) 5% of the Company's estimated net
foreign source taxable income for such calendar
quarter; and (y) the All American Members shall
receive a Special Distribution equal to 22.5% of the
Company's estimated net taxable income for such
calendar quarter, and (B) on or prior to December 31
of each year, Interpublic shall receive a Special
Distribution equal to the annual cash dividends paid
by Interpublic out of Interpublic's regular earnings
on the Interpublic Shares during the preceding year;
(ii) during the Second Ordinary Distribution Period, (A)
at the end of each calendar quarter, (x) the
Interpublic Members shall receive a Special
Distribution equal to 22.5% of the Company's
estimated net taxable income for such calendar
quarter; and (y) the All American Members
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shall receive a Special Distribution equal to 22.5%
of the Company's estimated net taxable income for
such calendar quarter, and (B) on or prior to
December 31 of each year, Interpublic shall receive a
Special Distribution equal to the annual cash
dividends paid by Interpublic out of Interpublic's
regular earnings on the Interpublic Shares during the
preceding year; and
(iii) during the Third Ordinary Distribution Period, (A)
the Members shall receive Special Distributions
pursuant to clause (ii) above mutatis mutandis and
(B) the Interpublic Members shall receive the unpaid
interest component of any Make Whole Amount
previously paid as set forth in clause (ii) of the
definition of Make Whole Amount plus interest on such
sum from the date of the commencement of the Third
Ordinary Distribution Period until the date such sum
is paid in full, at a rate equal to Interpublic's
Cost of Funds, payable from, and in priority to, All
American's share of Ordinary Distributions during
such period. If the Interpublic Members shall not
have received the full amount of such sum by the
first anniversary of the date of the commencement of
the Third Ordinary Distribution Period, All American
shall thereafter immediately pay such unpaid amount
in cash.
In the event that the Distributable Cash available for Special Distributions is
insufficient to satisfy the Company's Special Distribution obligations to the
Members and a Tranche E Event of Default has not occurred and is not continuing,
the Company shall make Special Distributions to the Interpublic Members and the
All American Members from the Distributable Cash on a pro rata basis.
(c) Any LLC Funds withdrawn from the LLC Funds Account by the
Agent and not distributed to the LLC (other than funds withdrawn by the Agent to
pay Sellers Earn-Out Payments) shall be deemed to have been distributed to the
All American Members pursuant to this Section 5.3 (i) as Ordinary Distributions
if a Tranche E Event of Default has not occurred and is not continuing and (ii)
as Ordinary and Special Distributions if a Tranche E Event of Default has
occurred and is continuing.
(d) Notwithstanding anything in this Section 5.3 to the
contrary, the Company shall not make any Ordinary Distributions or Special
Distributions until payments required to be made to Sellers pursuant to Section
3.8 of the Asset Purchase Agreement, if any, are made and the Earn-Out Payments,
if any, in respect of the prior month have been paid to Sellers by the Agent as
required by the Intercreditor Agreement or otherwise reserved or provided for in
a manner satisfactory to the Members; provided, however, that (i) if Interpublic
Game Shows fails to make Earn-Out Payments when due as required by the IPG Sub
License Agreement, the Company may make Ordinary Distributions and Special
Distributions to the All American Members but not to the Interpublic Members and
(ii) if the Agent fails to make Earn-Out Payments when due as required by the
Intercreditor
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Agreement, the Company may make Ordinary Distributions and Special Distributions
to the Interpublic Members but not to the All American Members.
(e) Distributions as between the Interpublic Members shall be
made in proportion to their respective Membership Percentages and distributions
as between the All American Members shall be made in proportion to their
respective Membership Percentages.
ARTICLE VI
TRANSFERABILITY
SECTION 6.1 Transfer of Interests of Members.
(a) Except as provided in Section 4.2, Section 6.1(c), Section
6.2, Article VII or pursuant to the Pledge Agreements, no Member may, directly
or indirectly, transfer, assign, sell, pledge, hypothecate, encumber or
otherwise dispose (voluntarily or involuntarily) of its Interest (or any part
thereof), or any right or interest therein (a "Transfer"), without the other
Members' consent, which consent may be withheld in such non-transferring
Members' sole and absolute discretion. For purposes of this Section 6.1(a), a
sale of Interpublic or All American shall not be deemed to be a Transfer. Any
attempted disposition or substitution without such consent shall be void. No
such transfer or substitution (other than pursuant to the Pledge Agreements)
shall be valid unless the transferee agrees to be bound by this Agreement and to
assume all of the obligations of the transferring Member under this Agreement
with respect to such transferred Interest and executes such documents as may be
necessary, in the reasonable opinion of the non-transferring Members, to assume
such obligations including, without limitation, an amendment to the Articles of
Organization. If, notwithstanding the immediately preceding sentence, any such
transfer is held by a court of competent jurisdiction to be effective, then the
provisions of this Agreement shall apply to the transferee and to any subsequent
transferee as fully as if such transferee were a party hereto.
(b) Each Member hereby agrees that any Transfer of Interests
permitted under this Agreement shall result in the Transfer of all of the
rights, benefits and privileges of the transferor Member under this Agreement
with respect to such Interest.
(c) Each Member may Transfer all, but not less than all, of
its Interest to any direct or indirect wholly-owned subsidiary of All American
or Interpublic; provided, however, that prior to such Transfer (i) any such
Affiliate shall (A) execute and deliver to the Company a written agreement,
satisfactory in substance and form to the non-transferring Members, assuming all
of the obligations of the transferor Member and (B) agree that it will not cease
to be an Affiliate of such transferor Member unless, prior to the time the
transferee ceases to be such an Affiliate, such transferee transfers to such
Member its Interest and (ii) the transferring Member executes and delivers one
or more written agreements, reasonably satisfactory to the non-transferring
Members, pursuant to which it agrees to remain liable for the obligations of the
transferee hereunder and, if the transferring Member is an All American Member,
to grant to the Interpublic Members a second priority
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security interest in such All American subsidiary's Interest until such time as
the Make Whole Amount has been paid to the Interpublic Members.
(d) No Transfer of any Interest, or any right or interest in
such Interest, shall release the transferring Member from those liabilities to
the Company which such Member has as of the date of such Transfer.
(e) The Company agrees that it will record the Transfer of an
Interest and the admission of a new Member on its books only in accordance with
the terms and conditions of this Agreement. Any purported Transfer of an
Interest by a Member that is not in compliance with the terms and conditions of
this Agreement will be null and void, and the transferee under any such
purported Transfer will acquire no title or ownership thereby.
SECTION 6.2 Right of First Refusal and Tag-Along Rights. If at
any time after the Restricted Period has ended, a Member has a Bona Fide Offer
to purchase all, but not less than all, of its Interest (a "Selling Member")
from a third party purchaser (a "Prospective Purchaser") and such Selling Member
desires to accept such Offer, such Selling Member shall give prompt written
notice (a "Notice of Offer") to the remaining Members which are not Affiliates
of the Selling Member (the "Remaining Members"), which Notice shall contain, (i)
a true and complete copy of the Offer, (ii) the proposed purchase price and all
other material terms and conditions of the Offer, (iii) the identity of the
Prospective Purchaser and (iv) the intended closing date of any such sale. The
date on which the Notice is actually received by the Remaining Member is
referred to hereinafter as the "Notice Date". Each of the All American Members
and the Interpublic Members agrees that in the event it wishes to sell its
Interest to a Prospective Purchaser, the other All American Member or
Interpublic Member, as the case may be, shall sell its Interest to such Person
on the same terms and conditions and on the same date. The Notice of Offer shall
be deemed an irrevocable offer to sell, on the terms set forth in such Notice of
Offer and herein, and the Remaining Members shall have an exclusive right, as
hereinafter provided, either to buy the Interest that the Selling Member (and
its Affiliated Member) wishes to sell on the terms set forth in such Notice of
Offer (in proportion to their Membership Percentages unless otherwise agreed by
such Members) or to elect to exercise their Tag-Along Rights.
(i) Within thirty (30) days following the Notice Date,
the Remaining Members shall notify in writing the
Selling Members that they elect either to purchase
such Selling Members' Interests (in proportion to
their Membership Percentages unless otherwise agreed
by such Members) or exercise their Tag-Along Rights
(an "Acceptance"). If the Selling Members do not
receive an Acceptance within such thirty-day (30-day)
period, the Remaining Members shall be deemed to have
declined to purchase the Selling Members' Interests
and to have elected not to exercise their Tag-Along
Rights. The Acceptance shall be deemed to be an
irrevocable commitment either to purchase from
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the Selling Members such Selling Members' Interests
on the terms contained in such acceptance or to have
the Prospective Purchaser purchase the Remaining
Members' Interests at the same price and on the same
terms and conditions as are set forth in the Notice
of Offer, as the case may be.
(ii) If the Remaining Members do not elect to purchase the
Selling Members' Interests as set forth in the Notice
of Offer or to exercise their Tag-Along Rights, the
Selling Members may Transfer all, but not less than
all, of their Interests set forth in the Notice of
Offer to the Prospective Purchaser specified in the
Notice of Offer upon the terms and conditions set
forth in such Notice, provided such Transfer is
consummated within 180 days of the Notice Date. In no
event shall the Selling Members Transfer their
Interests to a Prospective Purchaser if such
Prospective Purchaser shall not have delivered to the
Company an executed agreement, reasonably
satisfactory in substance and form to the Remaining
Members, assuming all of the obligations of the
Selling Members contained in this Agreement and in
the Articles of Organization. If the Selling Members
do not complete the contemplated sale within the
180-day period, the provisions of this Section 6.2
shall again apply, and no Transfer of an Interest
shall be made otherwise than in accordance with the
terms of this Agreement.
(iii) If any Remaining Member elects to exercise its
Tag-Along Rights, the closing of the sale of the
Selling Members' Interests to the Prospective
Purchaser hereunder shall be conditioned on the
simultaneous purchase by the Prospective Purchaser of
the Interests from such Remaining Member.
Notwithstanding the foregoing, in the event any
Member breaches its obligations under this Section
6.2 or under any purchase agreement with the
Prospective Purchaser with respect to its Interest,
the non-breaching Members shall be free to sell their
Interests to the Prospective Purchaser without
liability to such breaching Member.
(iv) If the Remaining Members elect to purchase the
Selling Members' Interests as set forth in the Notice
of Offer, the closing of the purchase of the Selling
Members' Interests by the Remaining Members pursuant
to this Section 6.2 shall take place (subject to the
expiration of any waiting period under the HSR Act)
within thirty (30) days after the termination of the
thirty-day (30-day) period following the Notice Date,
at 11:00 a.m. at the principal offices of the
Company, or at such other time or place as the
parties may agree. At such closing, the Selling
Members shall sell to the Remaining Members full
right, title and interest in and to the Interests so
purchased in proportion to the Remaining Members
Membership Percentages (unless otherwise agreed by
such Members), free and clear of all liens, security
interests
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or adverse claims of any kind and nature. At the
closing, the Remaining Members shall deliver to the
Selling Members, in full payment of the purchase
price of the Interests purchased, cash payable by
wire transfer of immediately available funds to the
account or accounts of the Selling Members designated
by the Selling Members in writing not less than three
(3) Business Days prior to the closing of such
purchases.
SECTION 6.3 Admission of Members. Upon the consent of each
Member, which consent may be withheld in its sole discretion, the Members may
admit to the Company any Person as a Member. Any Person proposed to be admitted
as a Member shall, in connection with such admission, execute a counterpart of
this Agreement and an amendment to the Articles of Organization showing the
admission of such Member and agree to make a Capital Contribution to the Company
in such amount as shall be required by the Members.
SECTION 6.4 Put Right.
(a) Subject to the last sentence of this Section 6.4(a),
following the termination of the Second Ordinary Distribution Period or upon a
Change in Ownership, the Interpublic Members shall have the right (but not the
obligation) to require All American to purchase their respective Interests for
an amount equal to fifty percent (50%) of the product of (i) six (6) multiplied
by (ii) the sum of the average operating income (as reflected in the Company's
financial statements) of the Company during the fiscal year immediately
preceding the date the put right is exercised by the Interpublic Members and
during the fiscal year immediately following the date the put right is exercised
by the Interpublic Members (the "Put Purchase Price"). This put right will
become immediately exercisable for a sixty (60) day period on the occurrence of
a Make Whole Default as provided in Section 4.2. Notwithstanding the foregoing,
the Interpublic Members shall irrevocably waive their rights to put their
Interest to All American pursuant to this Section 6.4(a) (but not pursuant to
Section 7.1(a)) if, pursuant to Section 6.5(d), they have rejected the All
American Members' request to purchase their Interests.
(b) If the Interpublic Members choose to exercise their put
right they shall give prompt written notice (a "Put Notice") to All American,
which Notice shall state that the Interpublic Members wish to have All American
purchase all of their Interests for an amount equal to the Put Purchase Price.
The date on which the Notice is actually received by All American is referred to
hereinafter as the "Put Notice Date". The Put Notice shall be deemed to be an
irrevocable offer to sell, on the terms set forth in such Put Notice and herein,
and All American shall have the obligation to purchase, on the terms set forth
in such Put Notice and herein, the Interpublic Members' Interests.
Notwithstanding the foregoing, the Interpublic Members may not send a Put Notice
if they have previously received the All American Members' Call Notice or a
Notice of Offer from an All American Member pursuant to Section 6.2.
(c) The closing of the purchase of the Interpublic Members'
Interests by All
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American pursuant to this Section 6.4 shall take place (subject to the
expiration of any waiting period under the HSR Act) within thirty (30) days
after the Put Notice Date, at 11:00 a.m. at the principal offices of the
Company, or at such other time or place as the parties may agree. At such
closing, the Interpublic Members shall sell to All American full right, title
and interest in and to their Interests so purchased, free and clear of all
liens, security interests or adverse claims of any kind and nature. All American
shall deliver to the Interpublic Members, in payment of the Interpublic Members'
Interests, (i) at the closing of such transaction, 50% of (A) the Put Purchase
Price (based on the prior fiscal year's operating income) and (B) the then
unpaid Make Whole Amount by wire transfer of immediately available funds to an
account or accounts designated by the Interpublic Members in writing not less
than three (3) business days prior to the closing of such purchase and (ii)
after such closing, the balance of (A) the Put Purchase Price (including any
increase or decrease in the Put Purchase Price resulting from averaging the two
fiscal year's operating income) and (B) the remaining 50% of the then unpaid
Make Whole Amount plus (C) interest on such sum from the date immediately
following the closing of the purchase until the date such sum is paid in full,
at a rate equal to Interpublic's Cost of Funds plus 3%, shall be delivered to
the Interpublic Members, such sum to be payable in three equal annual
installments commencing on the first anniversary of the closing.
SECTION 6.5 Call Right.
(a) Subject to Section 6.5(d), following the second
anniversary of the date hereof, the All American Members shall have the right
(but not the obligation) to require the Interpublic Members to sell their
Interests to such Members for an amount equal to the sum of (i) $25 Million plus
(ii) an amount equal to the then unpaid Make Whole Amount as of the date of the
exercise of the call right (the "Call Purchase Price").
(b) If the All American Members choose to exercise their call
right they shall give prompt written notice (a "Call Notice") to the Interpublic
Members, which Notice shall state that the All American Members wish to have the
Interpublic Members sell all of their Interests to them for an amount equal to
the Call Purchase Price. The date on which the Notice is actually received by
All American is referred to hereinafter as the "Call Notice Date". The Call
Notice shall be deemed an irrevocable offer to purchase, on the terms set forth
in such Call Notice and herein, and, subject to Section 6.5(d), the Interpublic
Members shall have the obligation to sell, on the terms set forth in such Call
Notice and herein, the Interpublic Members' Interests. Notwithstanding the
foregoing, the All American Members may not send a Call Notice if they have
previously received the Interpublic Members' Put Notice or a Notice of Offer
from an Interpublic Member pursuant to Section 6.2.
(c) The closing of the purchase of the Interpublic Members
Interests by the All American Members pursuant to this Section 6.5 shall take
place (subject to the expiration of any waiting period under the HSR Act) within
thirty (30) days after the Call Notice Date, at 11:00 a.m. at the principal
offices of the Company, or at such other time or place as the parties may agree.
At such closing, the Interpublic Members shall sell to the
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All American Members full right, title and interest in and to their Interests so
purchased, free and clear of all liens, security interests or adverse claims of
any kind and nature. The All American Members shall deliver to the Interpublic
Members, in full payment of the Interpublic Members' Interests, the Call
Purchase Price payable by wire transfer at the closing of immediately available
funds to an account or accounts designated by the Interpublic Members in writing
not less than three (3) business days prior to the closing of such purchase.
(d) Notwithstanding paragraphs (b) and (c) above, the
Interpublic Members may reject the Call Notice whereupon the Interpublic Members
shall not be obligated to sell their respective Interests to the All American
Members and such rejection shall constitute an irrevocable waiver of the
Interpublic Members put rights set forth in Section 6.4.
ARTICLE VII
TRANSFERS UPON A SALE OF ALL AMERICAN
SECTION 7.1 Sale of All American Put Right
(a) Upon the occurrence of a Sale of All American if such Sale
of All American is publicly announced prior to the second anniversary of the
Final Closing Date, the Interpublic Members shall have the right (but not the
obligation) to require All American to purchase their respective Interests for a
cash amount (the "Sale of All American Put Purchase Price") equal to the sum of
(i) all Capital Contributions made by the Interpublic Members (with the initial
Capital Contribution being considered to be $25 million) to the Company through
the date of such Sale of All American plus (ii) an amount equal to interest on
the average outstanding Capital Contribution made by the Interpublic Members to
the Company computed at an annual rate of 12% less (iii) the sum of all amounts
distributed to the Interpublic Members by the Company prior to the payment of
the Sale of All American Put Purchase Price. For these purposes, the average
outstanding Capital Contribution of the Interpublic Members shall be an amount
equal to the Capital Contributions made by the Interpublic Members (computed as
provided above) reduced by the aggregate distributions to the Interpublic
Members theretofore made.
(b) If the Interpublic Members choose to exercise their put
right upon a Sale of All American they shall provide written notice (a " Sale of
All American Put Notice") within sixty (60) days from the closing of such event
to All American, which Notice shall state that the Interpublic Members wish to
have All American purchase all of their Interests for an amount equal to the
Sale of All American Put Purchase Price. The date on which the Notice is
actually received by All American is referred to hereinafter as the "Sale of All
American Put Notice Date". The Sale of All American Put Notice shall be deemed
to be an irrevocable offer to sell, on the terms set forth in such Sale of All
American Put Notice and herein, and All American shall have the obligation to
purchase, on the terms set forth in such Sale of All American Put Notice and
herein, the Interpublic Members' Interests.
(c) The closing of the purchase of the Interpublic Members
Interests by the All American Members pursuant to this Section 7.1 shall take
place (subject to the
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expiration of any waiting period under the HSR Act) within thirty (30) days
after the Sale of All American Put Notice Date, at 11:00 a.m. at the principal
offices of the Company, or at such other time or place as the parties may agree.
At such closing, the Interpublic Members shall sell to the All American Members
full right, title and interest in and to their Interests so purchased, free and
clear of all liens, security interests or adverse claims of any kind and nature.
The All American Members shall deliver to the Interpublic Members, in full
payment of the Interpublic Members' Interests, the Sale of All American Put
Purchase Price payable by wire transfer at the closing of immediately available
funds to an account or accounts designated by the Interpublic Members in writing
not less than three (3) business days prior to the closing of such purchase.
SECTION 7.2 Sale of All American Call Right.
(a) Upon the occurrence of a Sale of All American if such Sale
of All American is publicly announced prior to the second anniversary of the
Final Closing Date, the All American Members shall have the right (but not the
obligation) to require the Interpublic Members to sell their respective
Interests for a cash amount (the "Sale of All American Call Purchase Price")
equal to the sum of (i) all Capital Contributions made by the Interpublic
Members (with the initial Capital Contribution being considered to be $25
million) to the Company through the date of such Sale of All American plus (ii)
an amount equal to interest on the average outstanding Capital Contribution made
by the Interpublic Members to the Company computed at an annual rate of 12% less
(iii) the sum of all amounts distributed to the Interpublic Members by the
Company prior to the payment of the Sale of All American Call Purchase Price.
For these purposes, the average outstanding Capital Contribution of the
Interpublic Members shall be an amount equal to the Capital Contributions made
by the Interpublic Members (computed as provided above) reduced by the aggregate
distributions to the Interpublic Members theretofore made.
(b) If the All American Members choose to exercise their Sale
of All American right they shall provide written notice (a "Sale of All American
Call Notice") within sixty (60) days from the closing of such event to the
Interpublic Members, which Notice shall state that the All American Members wish
to have the Interpublic Members sell all of their Interests to them for an
amount equal to the Sale of All American Call Purchase Price. The date on which
the Notice is actually received by All American is referred to hereinafter as
the "Sale of All American Call Notice Date". The Sale of All American Call
Notice shall be deemed an irrevocable offer to purchase, on the terms set forth
in such Sale of All American Call Notice and herein, and the Interpublic Members
shall have the obligation to sell, on the terms set forth in such Sale of All
American Call Notice and herein, the Interpublic Members' Interests.
(c) The closing of the purchase of the Interpublic Members
Interests by the All American Members pursuant to this Section 7.2 shall take
place (subject to the expiration of any waiting period under the HSR Act) within
thirty (30) days after the Sale of All American Call Notice Date, at 11:00 a.m.
at the principal offices of the Company, or at such other time or place as the
parties may agree. At such closing, the Interpublic
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Members shall sell to the All American Members full right, title and interest in
and to their Interests so purchased, free and clear of all liens, security
interests or adverse claims of any kind and nature. The All American Members
shall deliver to the Interpublic Members, in full payment of the Interpublic
Members' Interests, the Sale of All American Call Purchase Price payable by wire
transfer at the closing of immediately available funds to an account or accounts
designated by the Interpublic Members in writing not less than three (3)
business days prior to the closing of such purchase.
ARTICLE VIII
DISSOLUTION AND TERMINATION OF THE COMPANY
SECTION 8.1 Dissolution. The Company shall be dissolved upon
the occurrence of the first to occur of any of the following:
(i) the expiration of the term of the Company pursuant to
Section 2.3;
(ii) the bankruptcy or liquidation of any Member, unless
the other Members elect to continue the Company
within sixty (60) days of such event;
(iii) the sale, transfer or other disposition of all or
substantially all the assets of the Company; provided
that a change of control of the Company shall not
constitute a sale, transfer or other disposition of
the assets of the Company for such purposes;
(iv) the unanimous written consent of the Members to
dissolve the Company; or
(v) as otherwise required under the Act including,
without limitation, in the case of judicial
dissolution under Section 702 of the Act.
SECTION 8.2 Articles of Dissolution. In accordance with the
Act, within ninety (90) days following the dissolution and the commencement of
winding up of the Company, the Members will cause to be executed and filed
Articles of Dissolution of the Company in such form as is prescribed by the
Secretary of State of the State of New York.
SECTION 8.3. Winding Up, Liquidation and Distribution of
Assets.
(a) Upon dissolution, an accounting shall be made by the
Members or, at any Member's request, an independent accounting firm mutually
acceptable to the Members, of the accounts of the Company and of the Company's
assets, liabilities and operations, from the date of the last previous
accounting until the date of the dissolution. The Members, a Person designated
by the Members by unanimous consent or the Person required by law to wind up the
Company's affairs (the Members or such other Person being referred to herein as
the "Liquidating Agent") shall immediately proceed to wind up the affairs of the
Company. Except as provided in Section 8.3(b)(i), the Members will continue
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to share profits and losses during the period of liquidation in accordance with
Article V. In performing its duties, the Liquidating Agent is authorized to
sell, distribute, exchange or otherwise dispose of the assets of the Company in
any reasonable manner that the Liquidating Agent shall determine to be in the
best interests of the Members, subject to applicable law.
(b) Following the payment of, or provision for, all debts and
liabilities (including liabilities to Members who are also creditors, to the
extent otherwise permitted by law, other than liabilities to Members for
distributions and the return of capital) of the Company and all expenses of
liquidation, and subject to the right of the Liquidating Agent to set up such
cash reserves as the Liquidating Agent may deem reasonably necessary for any
contingent or unforeseen liabilities or obligations of the Company, the proceeds
of the liquidation and any other funds (or other remaining assets) of the
Company will be distributed in the following order:
(i) If dissolution occurs during the Restricted Period,
the Interpublic Members shall receive a priority
distribution of any available funds or assets up to
the Make Whole Amount, if any. If any assets of the
Company are to be distributed in kind, the net fair
market value of such assets as of the date of
dissolution shall be determined by independent
appraisal or by agreement of the Members. Such assets
shall be deemed to have been sold as of the date of
dissolution for their fair market value. If
dissolution occurs during the Restricted Period, net
profits and net losses arising as a result of the
liquidation of the Company (including any net profits
and net losses attributable to the deemed sale of
assets pursuant to the immediately preceding
sentence) shall be allocated among the Members in
accordance with Article V; provided however, that
such allocations shall be modified to take account
of the priority distribution to the Interpublic
Members of a Make Whole Amount so that to the extent
possible the Capital Account balances of the Members
will reflect the amounts they are entitled to
receive on dissolution of the Company (including the
payment of a Make Whole Amount to the Interpublic
Members). If there are any assets available
following the priority distribution to the
Interpublic Members, such assets shall be
distributed to the Interpublic Members and the All
American Members in accordance with their
respective positive Capital Account balances.
(ii) If dissolution occurs after the termination of the
Restricted Period:
(A) If any assets of the Company are to be
distributed in kind, the net fair market
value of such assets as of the date of
dissolution shall be determined by
independent appraisal or by agreement of the
Members. Such assets shall be deemed to have
been sold as of the date of dissolution for
their fair market value,
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and the Capital Accounts of the Members
shall be adjusted pursuant to the provisions
of Article V.
(B) The positive balance (if any) of each
Member's Capital Account (as determined
after taking into account all Capital
Account adjustments for the Company's
taxable year during which the liquidation
occurs) shall be distributed to the Members
in cash or, if both Members agree, in kind
with the net fair market value of any assets
distributed in kind being determined by
agreement of the Members.
SECTION 8.4 Return of Contribution Nonrecourse to Other
Members. Except as provided by law or Section 4.2, each Member will look solely
to the assets of the Company for all distributions with respect to the Company
and such Member's Capital Contributions thereto and share of profits or losses
thereof, and will have no recourse therefore (upon dissolution of the Company or
otherwise) against any other Member.
ARTICLE IX
COMPANY EXPENSES, BOOKS AND RECORDS
SECTION 9.1 Fiscal Year and Method of Accounting. The fiscal
year of the Company shall begin on January 1 of each year (except for the first
fiscal year of the Company which shall begin on the date of this Agreement) and
end on the following December 31 of each year, unless otherwise agreed to by the
unanimous consent of all Members. The Company's books of account and records
shall be maintained in a manner consistent with GAAP applied on a consistent
basis and the Company shall elect to use the accrual method of accounting.
SECTION 9.2 Audits.
(a) The Members shall have the right to audit, at any time and
at their sole cost and expense, the books of account and records of the Company.
Such audit may be conducted by such Member or its external auditor. If a Member
elects to have its external auditor audit the Company's books and records, it
shall provide to the other Members a copy of any report or comments prepared by
such auditor relating to the Company, its books of account or records. If the
Members disagree about matters covered in such reports any Member may require
the Company to retain a nationally recognized independent accounting firm
mutually agreed upon by the Members to audit the books of account and records of
the Company until such time as the Members unanimously determine that it is no
longer necessary to retain such outside accounting firm.
(b) Interpublic shall have the right, on behalf of the
Company, to audit (up to four times in any Fiscal year) the books, records and
production budgets of All American ▇▇▇▇▇▇▇, All American TV, All American
Television II, Fremantle and All American Fremantle II. Any such audit shall be
at the Company's sole cost and expense.
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(c) Interpublic shall have the right, on behalf of the
Company, to audit the books, records and production budgets, with respect to
production costs, of any sublicensee of All American ▇▇▇▇▇▇▇ and any other
Persons producing, licensing or distributing the Company's programming assets.
The All American Members will use their best efforts to cause their sublicensees
to agree to allow Interpublic to perform such audits.
SECTION 9.3 Right of Inspection. The books and records of the
Company shall be available for inspection by the Members at the principal office
and place of business of the Company. Additionally, Interpublic shall be given
access to the Operator's financial statements and, with respect to production
costs, will have the right to examine such financial statements at any
reasonable time or times for any purpose.
SECTION 9.4 Financial Statements and Reports. Each Member
shall receive unaudited reports, quarterly, setting forth with specificity the
Company's financial data. Such reports shall be delivered within thirty (30)
days of the end of such quarter. The Members shall also receive such other
information as may be reasonably requested by a Member or as is otherwise
required by law.
SECTION 9.5 Tax Matters Partner. The Operator will be the "Tax
Matters Partner" (as defined in Section 6231 of the Code) until such time as a
new Tax Matters Partner may be designated by the Members. The Tax Matters
Partner is authorized and required to represent the Company (at the Company's
expense) in connection with all examinations of the Company's affairs by tax
authorities, including administrative and judicial proceedings, and to expend
Company funds for professional services and costs associated therewith.
ARTICLE X
LIABILITY AND INDEMNIFICATION
SECTION 10.1 Liability to Company and Other Members.
(a) Neither the Operator nor any Member, in its capacity as
Operator or as a Member, shall be liable to the Company or to any other Member
for any losses arising from any act or omission performed or omitted by it in
connection with this Agreement, except for any losses determined to be
attributable to the Operator's or such Member's gross negligence, bad faith,
willful misconduct or breach of this Agreement. Notwithstanding anything herein
to the contrary, the provisions of this Section 10.1 shall not be construed so
as to relieve (or attempt to relieve) the Operator or any Member of any
liability, to the extent (but only to the extent) that such liability may not be
waived, modified or limited under applicable law, but shall be construed so as
to effectuate the provisions of this Section 10.1 to the fullest extent
permitted by law.
(b) The Members, as such, shall not be liable under a
judgment, decree, or order of a court, or in any other manner, for a debt,
obligation, or liability of the Company.
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SECTION 10.2 Indemnification.
(a) The Company shall, to the fullest extent permitted by law,
indemnify and hold harmless the Operator and each Member (each, an "Indemnified
Person" and collectively, the "Indemnified Persons") from and against any loss,
liability, damage, cost or expense (including reasonable legal fees and expenses
and any amount paid in settlement) ("Loss") resulting from a claim, demand,
lawsuit, action or proceeding, including any appellate or bankruptcy proceeding
(collectively, "Claims") relating to such Indemnified Person's actions or
omissions or such Indemnified Person's status or capacity as a Member or
otherwise concerning business or activities undertaken by or on behalf of the
Company pursuant to this Agreement unless and to the extent that the acts or
omissions are determined to be attributable to the Indemnified Person's gross
negligence, bad faith, willful misconduct or breach of this Agreement. With
respect to any Claim brought by another Member against the Indemnified Person
and containing allegations of gross negligence, bad faith, willful misconduct or
breach of this Agreement, including without limitation, a breach of any
representation or warranty made pursuant to Article XIV (which shall continue to
survive after the execution of the Agreement), by the Indemnified Person, the
prevailing party shall be entitled to be reimbursed by the unsuccessful party
for any Loss incurred by the prevailing party in connection with such Claim.
(b) All rights to indemnification provided herein shall
survive the termination of this Agreement and the withdrawal, removal or
insolvency of the Operator or any Member; provided that a claim for
indemnification hereunder is made by or on behalf of the Person seeking such
indemnification prior to the time distribution in liquidation of the assets of
the Company is made pursuant to Article VIII.
(c) The reimbursement and indemnity obligations of each
Member, as such, under this Article X shall be limited to the sum of such
Member's Interest and any Capital Contributions required to be made but not then
made by such Member hereunder, including contributions made pursuant to Section
4.2, and interest accrued (but not paid) thereon; provided that a Member shall
be reimbursed for 100% of any Losses incurred in connection with a breach by a
Member of any representation or warranty made pursuant to Article XIII
irrespective of the amount of such Loss or Losses.
SECTION 10.3 Indemnification of Company. If the Company is
made a party to any Claim, or otherwise incurs any Loss as a result of or in
connection with the Operator's, any Member's or any Ex-Member's obligations or
liabilities unrelated to the business of the Company, the Operator, such Member
or such Ex-Member shall reimburse the Company for all Losses incurred.
SECTION 10.4 Members Right to Bring Cause of Action.
Notwithstanding anything herein to the contrary, any right, claim or cause of
action by the Company against the Operator, any Member or any Affiliate of such
Member may be brought by the other Member on behalf of the Company.
SECTION 10.5 Authorizations. The execution, delivery and
filing of the
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Articles of Organization is hereby authorized, approved and ratified and each
Member is hereby authorized to execute, deliver and file any amendment to and
restatements of the Articles of Organization that are required or permitted by
the Act and any and all certificates or documents required by the Act.
ARTICLE XI
MATTERS RELATING TO THE ASSET PURCHASE AGREEMENT
SECTION 11.1 Unanimous Consent of Members Required. Any
actions to be taken by the Company pursuant to the terms of the Asset Purchase
Agreement, including without limitation, any actions (i) to extend the Earn-Out
Payments pursuant to Section 3.8 of the Asset Purchase Agreement, (ii) to
approve refunding agreements pursuant to the Estate Guaranty referred to in
Section 13.5(a) of the Asset Purchase Agreement, or (iii) to assert claims or
defenses to or to commence or defend lawsuits arising under the Asset Purchase
Agreement on behalf of the Company, shall require the unanimous written consent
of the Members.
SECTION 11.2 Assumption of Liabilities.
(a) Pursuant to the Assumption and Assignment Agreement, the
Company assumes and discharges the Interpublic Members for any and all
liabilities and obligations in connection with the Interpublic Members'
undivided interest in the Assets other than the obligations of Interpublic (i)
to deliver its equity securities to Sellers pursuant to Section 3.3 of the Asset
Purchase Agreement, (ii) to deliver cash in lieu of fractional shares of its
securities to Sellers pursuant to Section 3.4 of the Asset Purchase Agreement,
(iii) relating to the giving of representations and warranties pursuant to
Article 6 of the Asset Purchase Agreement and (iv) relating to the covenant to
maintain Interpublic Game Shows as a special purpose entity pursuant to Section
7.15 of the Asset Purchase Agreement.
(b) If the Interpublic Members incur any Loss as a result of
or in connection with it being a purchaser of the Assets (as opposed to being an
equity owner of the Company) pursuant to the Asset Purchase Agreement, other
than a Loss resulting from Interpublic's breach of the Asset Purchase Agreement
or a breach by either Seller under the Asset Purchase Agreement, the Company
shall reimburse such Members for 100% of all Losses incurred with respect
thereto. Notwithstanding anything in Article V to the contrary, such
reimbursement payments shall be distributed to the Interpublic Members prior to
distributions of Ordinary Distributions, Special Distributions and Earn-Out
Payments.
SECTION 11.3 Indemnification.
(a) If the Company or any Member incurs any Loss as a result
of Interpublic's or All American's breach of the Asset Purchase Agreement, such
breaching party shall reimburse the Company or the other non-Affiliated Members,
as the case may be, for 100% of all Losses incurred.
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(b) If the Company receives any indemnification payments
pursuant to Section 13.1 of the Asset Purchase Agreement or any funds as a
result of a decrease in the purchase price for the Assets, the Company shall
distribute such payments to the Members in accordance with their Membership
Percentages prior to making Ordinary Distributions, Special Distributions or
Earn-Out Payments notwithstanding anything in this Agreement to the contrary.
ARTICLE XII
LETTER AGREEMENT
The Members and certain other parties are entering into a
letter agreement simultaneously with entering into this Agreement.
ARTICLE XIII
REPRESENTATIONS AND WARRANTIES
SECTION 13.1. Representations and Warranties of All American.
Each of the All American Members hereby represents and warrants to the
Interpublic Members as of the date hereof as follows:
13.1.1 Organization. Each of the All American Members is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, has all requisite corporate power and authority to (i)
conduct its business as it is now being conducted and to own or lease its
properties and assets, (ii) execute and deliver this Agreement and the
Transaction Documents, (iii) perform its obligations under this Agreement and
the Transaction Documents and (iv) consummate all of the transactions
contemplated by this Agreement and the Transaction Documents.
13.1.2 Authorization; Binding Effect. The execution, delivery
and performance by such All American Member of this Agreement and the
Transaction Documents, and the consummation of the transactions contemplated
hereby and thereby to be performed by it, have been duly authorized by all
necessary corporate action on the part of such All American Member. This
Agreement and the Transaction Documents have been duly executed and delivered by
it and, assuming the due execution and delivery by the other parties hereto and
thereto, this Agreement and the Transaction Documents constitute valid and
binding obligations of such All American Member, enforceable against it in
accordance with their terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and other laws affecting creditors' rights generally
and to general principles of equity (whether considered in a proceeding in
equity or at law).
13.1.3 No Conflicts. The execution and delivery of this
Agreement and the Transaction Documents by such All American Member and the
performance by it of the transactions contemplated hereby and thereby, will not
(i) violate any Legal Requirement applicable to such All American Member, (ii)
conflict with or result in a breach of any of the provisions of the charter or
by-laws of such All American Member, (iii) violate or result in a breach or
default under or cause the termination, modification or acceleration of any
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term or condition of any Contractual Obligation binding upon such All American
Member or any of its assets, or (iv) result in the creation or imposition of any
encumbrance or claim of any kind upon any asset of such All American Member.
13.1.4 Consents. No consent, approval, authorization, order of
or filing with any Governmental Authority or other Person is required to be made
by such All American Member to consummate the transactions contemplated by this
Agreement or the Transaction Documents (other than such as have been received or
made).
13.1.5 No Finder. No All American Member nor any party acting
on behalf of any All American Member has paid or become obligated to pay any fee
or commission to any broker, finder or intermediary for or on account of the
transactions contemplated by this Agreement.
13.1.6 Investment Intent. Each All American Member is
acquiring its Interest for its own account for investment and not with a view
to, or for resale in connection with, the distribution or other disposition
thereof.
13.1.7 Investment Company Act. No All American Member is
required to be registered as an "investment company" under the Investment
Company Act of 1940, as amended.
13.1.8 The Company.
(a) The Company is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of New York
and has all requisite corporate power and authority to conduct its business as
it is now being conducted and to own or lease its properties and assets.
(b) The Company has no liabilities other than liabilities
assumed by the Company pursuant to the Asset Purchase Agreement or immaterial
liabilities incurred in connection with the organization of the Company.
SECTION 13.2 Representations and Warranties of Interpublic.
Each of the Interpublic Members hereby represents and warrants to the All
American Members as of the date hereof as follows:
13.2.1 Organization. Each of the Interpublic Members is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, has all requisite corporate power and authority to (i)
conduct its business as it is now being conducted and to own or lease its
properties and assets, (ii) execute and deliver this Agreement and the
Transaction Documents, (iii) perform its obligations under this Agreement and
the Transaction Documents and (iv) consummate all of the transactions
contemplated by this Agreement and the Transaction Documents.
13.2.2 Authorization; Binding Effect. The execution, delivery
and
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performance by such Interpublic Member of this Agreement and the Transaction
Documents, and the consummation of the transactions contemplated hereby and
thereby to be performed by such Interpublic Member, have been duly authorized by
all necessary action on the part of such Interpublic Member. This Agreement and
the Transaction Documents have been duly executed and delivered by such
Interpublic Member and, assuming the due execution and delivery by the other
parties hereto and thereto, this Agreement and the Transaction Documents
constitute valid and binding obligations of such Interpublic Member enforceable
against such Interpublic Member in accordance with their terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and other laws
affecting creditors' rights generally and to general principles of equity
(whether considered in a proceeding in equity or at law).
13.2.3 No Conflicts. The execution and delivery of this
Agreement and the Transaction Documents and the performance by such Interpublic
Member of the transactions contemplated hereby and thereby will not (i) violate
any Legal Requirement applicable to such Interpublic Member or (ii) conflict
with or result in a breach of any of the provisions of the charter or by-laws of
such Interpublic Member, (iii) violate or result in a breach or default under or
cause the termination, modification or acceleration of any term or condition of
any Contractual Obligation binding upon such Interpublic Member or any of its
assets or (iv) result in the creation or imposition of any encumbrance or claim
of any kind upon any asset of such Interpublic Member.
13.2.4 Consents. No consent, approval, authorization, order of
or filing with any Governmental Authority or other Person is required to be made
by such Interpublic Member to consummate the transactions contemplated by this
Agreement or the Transaction Documents (other than such as have been received or
made).
13.2.5 Contracts. There are no Contractual Obligations to
which Interpublic or any of its Affiliates is a party or is otherwise bound
relating to the Assets.
13.2.6. No Finder. No Interpublic Member nor any party acting
on behalf of any Interpublic Member has paid or become obligated to pay any fee
or commission to any broker, finder or intermediary for or on account of the
transactions contemplated by this Agreement.
13.2.7 Investment Intent. Each Interpublic Member is acquiring
its Interest for its own account for investment and not with a view to, or for
resale in connection with, the distribution or other disposition thereof.
13.2.8 Investment Company Act. No Interpublic Member is
required to be registered as an "investment company" under the Investment
Company Act of 1940, as amended.
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ARTICLE XIV
ARBITRATION
SECTION 14.1 Nature of the Dispute. Any dispute arising out of
or relating to whether the Operator may be removed for Cause pursuant to Section
3.6 or to whether the Company's Assets have been infringed upon pursuant to
Section 3.10(b) (a "Dispute") shall be settled exclusively and finally by
arbitration. It is specifically understood and agreed that any Dispute may be
submitted to arbitration irrespective of the magnitude thereof, the amount in
controversy or whether such Dispute would otherwise be considered justiciable or
ripe for resolution by a court.
SECTION 14.2 Rules of Arbitration. The arbitration shall be
conducted in accordance with the Rules of Arbitration of the American
Arbitration Association as in effect on the date of this Agreement, except to
the extent those rules conflict with the provisions of this Article XIV, in
which event the provisions of this Article XIV shall control.
SECTION 14.3 Arbitration Procedure. The arbitral tribunal
shall consist of three (3) arbitrators. The arbitration shall be conducted in
New York, New York or such other place as is unanimously agreed by the parties
to the arbitration. Each party to the arbitration shall appoint one (1)
arbitrator, and the two (2) arbitrators thus appointed shall choose the third
(3rd) arbitrator, who will act as the chairman of the arbitral tribunal and if
the two (2) arbitrators appointed pursuant to the foregoing sentence are not
able to agree on the third (3rd) arbitrator within thirty (30) days from the
date the last such arbitrator was appointed, the third (3rd) arbitrator shall be
appointed by the American Arbitration Association.
SECTION 14.4 Binding Decision and Award. The arbitral tribunal
shall deliver a written decision or award and any such decision or award shall
be final and binding upon the parties to the arbitration proceeding. The Members
hereby waive to the extent permitted by law any rights to appeal or to review of
such award by any court or tribunal. The Members agree that the arbitral award
may be enforced against the parties to the arbitration proceeding or their
assets wherever they may be found and that a judgment upon the arbitral award
may be entered in any court having jurisdiction thereof.
SECTION 14.5 Miscellaneous. At any oral hearing of evidence in
connection with the arbitration, each party thereto or its legal counsel shall
have the right to examine its witnesses and to cross-examine the witnesses of an
opposing party. No evidence of any witness shall be presented in written form
unless the opposing party or parties shall have the opportunity to cross-examine
such witness, except as the parties to the dispute otherwise agree in writing or
except under extraordinary circumstances where the arbitrators determine that
the interests of justice require a different procedure. Without in any way
limiting the foregoing and notwithstanding anything herein to the contrary, the
Members may, upon the prior written consent of all parties to a Dispute, submit
any Dispute to an expert acceptable to all such parties for consideration and
advice. Each
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Member agrees, in the event such submission is made, to reasonably consider the
advice of such expert in connection with such Dispute.
ARTICLE XV
MISCELLANEOUS
SECTION 15.1 Amendments to Operating Agreement. The terms and
provisions of this Agreement may be modified or amended only by the unanimous
written consent of the Members.
SECTION 15.2 Notices. The Company shall send the Members
copies of all notices which it receives within 5 Business Days of the receipt of
such notice. All notices to the Company shall be addressed to its principal
office and place of business as set forth in Section 2.1. All notices addressed
to a Member shall be addressed to such Member at the address set forth in
Schedule B hereto or at such other address as the Member may designate by notice
to the Company from time to time. Unless otherwise specifically provided in this
Agreement, a notice shall be deemed to have been effectively given when properly
mailed by registered or certified mail postage prepaid to the proper address or
when properly transmitted by telex or other means of telecommunications or when
delivered by hand.
SECTION 15.3 Articles of Organization. From time to time the
Members shall sign and acknowledge all such writings as are required to amend
the Articles of Organization or for the carrying out of the terms of this
Agreement or, upon dissolution of the Company, to cancel such Articles of
Organization.
SECTION 15.4 Entire Agreement. This Agreement supersedes all
prior agreements and understandings among the Members with respect to the
subject matter hereof.
SECTION 15.5 Modification. No change or modification of this
Agreement shall be of any force unless such change or modification is in writing
and has been signed by the Members.
SECTION 15.6 Waivers. No waiver of any breach of any of the
terms of this Agreement shall be effective unless such waiver is in writing and
signed by the Member against whom such waiver is claimed. No waiver of any
breach shall be deemed to be a waiver of any other or subsequent breach.
SECTION 15.7 Severability. If any provision of this Agreement
shall be held to be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 15.8 Further Assurances. Each Member shall execute
such deeds, assignments, endorsements, evidences of Transfer and other
instruments and documents and shall give such further assurances as shall be
necessary to perform its obligations hereunder.
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SECTION 15.9 Confidentiality. By executing this Agreement,
each Member expressly agrees, at all times during the term of the Company and
thereafter and whether or not at the time a Member, to maintain the
confidentiality of, and not to disclose to any Person other than the Company,
another Member, Chemical Bank (provided that Chemical Bank enters into a
confidentiality agreement acceptable to Interpublic and All American) or a
Person designated by the Company, any information relating to the business,
financial structure, financial position or financial results, clients or affairs
of the Company that shall not be generally known to the public or the securities
industry, except as otherwise required by law or by any regulatory or
self-regulatory organization having jurisdiction; provided that any Member may
disclose any such information it is required by law, rule, regulation, Nasdaq or
the New York Stock Exchange, as determined by its outside counsel, to disclose.
SECTION 15.10 Publicity. The All American Members and the
Interpublic Members will consult with each other and obtain the consent of the
other parties (such consent not to be unreasonably withheld) before issuing any
press release or otherwise making any public statement with respect to the
Company (other than ordinary course press releases to the trade press in which
Interpublic is not named) and shall not make any such public statement prior to
such consultation, except as required by law or rules and regulations of the New
York Stock Exchange or Nasdaq.
SECTION 15.11 Governing Law. This Agreement shall be governed
by and be construed in accordance with the laws of the State of New York.
SECTION 15.12 Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed an original, but all
of which shall constitute one and the same instrument.
SECTION 15.13 Limitation on Rights of Others. No Person other
than a Member shall have any legal or equitable right, remedy or claim under or
in respect of this Agreement.
SECTION 15.14 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the Members and their respective
successors and permitted assigns.
SECTION 15.15 Securities Laws. All offerings and Transfers of
Interests shall be made in compliance with applicable federal and state
securities laws. Each Member indemnifies the other Members and the Company for
any loss, cost, liability or damage arising from its breach of the foregoing
sentence.
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IN WITNESS WHEREOF, the undersigned have executed this Amended
and Restated Limited Liability Company Operating Agreement as of the day and
year first above written.
ALL AMERICAN COMMUNICATIONS, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
____________________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
ALL AMERICAN ▇▇▇▇▇▇▇, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
____________________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
THE INTERPUBLIC GROUP OF COMPANIES
INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
____________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
INFOPLAN INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
____________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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SCHEDULE A
INITIAL CAPITAL CONTRIBUTIONS OF MEMBERS
Initial Initial
Capital Membership
Name Contribution Percentage
---- ------------ ----------
The All American Members __________ 50%
The Interpublic Members __________ 50%
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SCHEDULE B
NAMES AND ADDRESSES OF MEMBERS
Name Address
---- -------
All American Communications, Inc. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
All American ▇▇▇▇▇▇▇, Inc. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
The Interpublic Group of Companies, Inc. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Infoplan International, Inc. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
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SCHEDULE C
INITIAL MEMBERS OF THE ARBITRATION COMMITTEE
The members of the Arbitration Committee shall be appointed by the
Board of Directors of All American, provided that one member of the Arbitration
Committee shall consist of the nominee of the director appointed by Interpublic
to the All American Board of Directors. The members of the Arbitration Committee
shall consist initially of ▇▇▇▇▇▇ ▇▇▇▇▇ (as the nominee designated by the
director appointed by Interpublic to All American's Board of Directors), ▇▇▇▇▇▇▇
▇▇▇▇▇▇ (as the nominee of the All American board designees) and ▇▇▇▇▇ ▇▇▇▇▇. Any
member of the Arbitration Committee may be removed, with or without cause, by
the director who nominated such Arbitration Committee member, provided that any
successor to Mr. Mount will be nominated by the Interpublic board designee and
the All American board designee. Any vacancies on the Arbitration Committee
shall be filled by the director who initially nominated such member of the
Arbitration Committee after consultation with the other directors regarding such
Arbitration Committee member's replacement.
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