Exhibit 3.152
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LIMITED LIABILITY COMPANY OPERATING AGREEMENT
OF
COMMCORP, LLC
A CALIFORNIA LIMITED LIABILITY COMPANY
Dated October 14, 1997
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TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS
1.1 ADJUSTED CAPITAL ACCOUNT DEFICIT 1
1.2 AFFILIATE 1
1.3 AGREEMENT 1
1.4 ARTICLES OF ORGANIZATION 2
1.5 AVAILABLE CASH FLOW 2
1.6 BUSINESS OF THE LLC 2
1.7 CAPITAL ACCOUNT 2
1.8 CAPITAL CONTRIBUTION 2
1.9 CODE 2
1.10 DEPRECIATION 2
1.11 DISSOLUTION 2
1.12 ECONOMIC INTEREST 2
1.13 FISCAL YEAR 2
1.14 LLC 2
1.15 LLC INTEREST 3
1.16 LLC LOANS 3
1.17 LLC MINIMUM GAIN 3
1.18 MAJORITY IN INTEREST OF THE MEMBERS 3
1.19 MANAGER 3
1.20 MEMBER NONRECOURSE DEBT 3
1.21 MEMBER NONRECOURSE DEBT MINIMUM GAIN 3
1.22 MEMBER NONRECOURSE DEDUCTIONS 3
1.23 MEMBER 4
1.24 NET CAPITAL CONTRIBUTIONS 4
1.25 NET PROFITS AND NET LOSS 4
1.26 PERCENTAGE INTEREST 5
1.27 PERIOD OF DURATION 5
1.28 PERSON 5
1.29 PRINCIPAL 5
1.30 PROPERTY 5
1.31 REGULATIONS 5
1.32 RESERVES 5
1.33 SECRETARY OF STATE 5
1.34 STATUTE 5
1.35 VOTE 5
ARTICLE 2
INTRODUCTORY MATTERS
2.1 FORMATION OF LLC 6
2.2 NAME 6
2.3 PRINCIPAL OFFICE 6
2.4 AGENT FOR SERVICE OF PROCESS 6
2.5 PERIOD OF DURATION 6
2.6 BUSINESS AND PURPOSE OF THE LLC 6
ARTICLE 3
MEMBERS AND CAPITAL CONTRIBUTIONS
3.1 NAMES AND ADDRESSES OF INITIAL MEMBERS 7
3.2 CONTRIBUTIONS 7
3.3 ADDITIONAL CONTRIBUTIONS 7
3.4 RIGHTS WITH RESPECT TO CAPITAL 7
3.5 GENERAL RULES FOR ADJUSTMENT OF CAPITAL
ACCOUNTS 7
3.6 SPECIAL RULES WITH RESPECT TO CAPITAL ACCOUNTS 8
3.7 TRANSFEREE'S CAPITAL ACCOUNT 8
ARTICLE 4
ALLOCATION OF PROFITS AND LOSSES
4.1 ALLOCATION OF NET PROFITS AND LOSSES 9
4.2 RESIDUAL ALLOCATIONS 9
4.3 QUALIFIED INCOME OFFSET 9
4.4 MINIMUM GAIN CHARGEBACK 10
4.5 MEMBER NONRECOURSE DEBT MINIMUM GAIN
CHARGEBACK 10
4.6 MEMBER NONRECOURSE DEDUCTIONS 10
4.7 SPECIAL ALLOCATIONS 10
4.8 FEES TO MEMBERS OR AFFILIATES 11
4.9 SECTION 704(c) ALLOCATION 11
ARTICLE 5
DISTRIBUTIONS
5.1 AVAILABLE CASH FLOW 11
ARTICLE 6
RIGHTS, DUTIES, OBLIGATIONS AND COMPENSATION
OF MANAGERS AND OFFICERS
6.1 CO-MANAGERS 12
6.2 MEETINGS OF MANAGERS 13
6.3 LIMITATIONS ON RIGHTS AND POWERS 14
6.4 COMPENSATION OF MANAGERS 14
6.5 COMPENSATION OF MEMBERS 15
6.6 EXPENSE REIMBURSEMENT 15
6.7 RELATED PARTY TRANSACTIONS 15
ARTICLE 7
MEMBERS' MEETINGS
7.1 PLACE OF MEETINGS 15
7.2 ANNUAL MEETINGS OF MEMBERS 15
7.3 SPECIAL MEETINGS 15
7.4 NOTICE OF MEETINGS 15
7.5 VALIDATION OF MEMBERS' MEETINGS 16
7.6 ACTIONS WITHOUT A MEETING 16
7.7 QUORUM AND EFFECT OF VOTE 16
ARTICLE 8
RESTRICTIONS ON TRANSFER OR CONVERSION
OF LLC INTERESTS, ADDITIONAL CAPITAL CONTRIBUTIONS;
ADMISSION OF NEW MEMBERS
8.1 TRANSFER OR ASSIGNMENT OF MEMBER'S INTEREST 17
8.2 VOID TRANSFERS 17
8.3 ADMISSION OF NEW MEMBERS 17
ARTICLE 9
BOOKS, RECORDS, REPORTS AND BANK ACCOUNTS
9.1 MAINTENANCE OF BOOKS AND RECORDS 18
9.2 ANNUAL ACCOUNTING 18
9.3 INSPECTION AND AUDIT RIGHTS 19
9.4 RIGHTS OF MEMBERS AND NON-MEMBERS 19
9.5 BANK ACCOUNTS 19
9.6 TAX MATTERS HANDLED BY MANAGERS 19
9.7 FEDERAL INCOME TAX ELECTIONS MADE BY MANAGERS 19
9.8 OBLIGATIONS OF MEMBERS TO REPORT ALLOCATIONS 20
ARTICLE 10
TERMINATION AND DISSOLUTION
10.1 DISSOLUTION 20
10.2 STATEMENT OF INTENT TO DISSOLVE 20
10.3 CONDUCT OF BUSINESS 20
10.4 DISTRIBUTION OF NET PROCEEDS 21
ARTICLE 11
INDEMNIFICATION OF THE MEMBERS, MANAGERS, AND THEIR
AFFILIATES
11.1 INDEMNIFICATION OF THE MEMBERS AND THEIR
PRINCIPALS 21
11.2 EXPENSES 22
11.3 INDEMNIFICATION RIGHTS NON-EXCLUSIVE 22
11.4 ERRORS AND OMISSIONS INSURANCE 22
11.5 ASSETS OF THE LLC 22
ARTICLE 12
ISSUANCE OF LLC CERTIFICATES
12.1 ISSUANCE OF LLC CERTIFICATES 22
12.2 TRANSFER OF LLC CERTIFICATES 23
12.3 LOST, STOLEN OR DESTROYED CERTIFICATES 23
ARTICLE 13
AMENDMENTS
13.1 AMENDMENT, ETC. OF OPERATION AGREEMENT 24
13.2 AMENDMENT, ETC. OF ARTICLES OF ORGANIZATION 24
ARTICLE 14
MISCELLANEOUS PROVISIONS
14.1 COUNTERPARTS 24
14.2 SURVIVAL OF RIGHTS 24
14.3 SEVERABILITY 24
14.4 NOTIFICATION OR NOTICES 24
14.5 CONSTRUCTION 25
14.6 SECTION HEADINGS 25
14.7 GOVERNING LAW 25
14.8 ADDITIONAL DOCUMENTS 25
14.9 PRONOUNS AND PLURALS 25
14.10 TIME OF THE ESSENCE 25
14.11 FURTHER ACTIONS 25
14.12 MANDATORY ARBITRATION 25
14.13 EQUITABLE RELIEF 26
14.14 WAIVER OF JURY 27
14.15 THIRD PARTY BENEFICIARIES 27
14.16 TAX ELECTIONS 27
14.17 PARTITION 27
14.18 ENTIRE AGREEMENT 27
14.19 WAIVER 27
14.20 ATTORNEYS' FEES 27
14.21 CONFIDENTIALITY 28
COMMCORP, LLC
LIMITED LIABILITY COMPANY OPERATING AGREEMENT
This Limited Liability Company Operating Agreement (the "Agreement") is
made and entered into and effective as of October 14, 1997, by and among Tim
Novoselski, an individual, and Denise Novoselski, an individual, husband and
wife. The Members have formed a limited liability company (hereinafter called
the "LLC") pursuant to the provisions of the (California) Beverly-Killea Limited
Liability Company Act as set forth in Title 2.5 (commencing with Section 17000)
of the Corporations Code of the State of California.
In consideration of the covenants and the promises made herein, the
parties hereto, as signatories to the Agreement, hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 ADJUSTED CAPITAL ACCOUNT DEFICIT. "Adjusted Capital Account Deficit"
means, with respect to any Member, the deficit balance, if any, in such Member's
Capital Account as of the end of the relevant Fiscal Year, after giving effect
to the following adjustments:
1.1.1 increase such Capital Account by any amounts which such Member
is obligated to contribute to the LLC (pursuant to the terms of this
Agreement or otherwise) or is deemed to be obligated to contribute to the
LLC pursuant to Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5); and
1.1.2 reduce such Capital Account by the amount of the items
described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).
1.2 AFFILIATE. "Affiliate" means, when used with reference to a specified
Person, (i) the Principal of the Person, (ii) any Person directly or indirectly
controlling, controlled by or under common control with such Person, (iii) any
Person owning or controlling 10% or more of the outstanding voting interests of
such Person, and (iv) any relative or spouse of such Person.
1.3 AGREEMENT. "Agreement" means this Limited Liability Company Operating
Agreement, as originally executed and as amended from time to time, as the
context requires. Words such as "herein", "hereinafter", "hereto", "hereby" and
"hereunder", when used with reference to this Agreement, refer to this Agreement
as a whole, unless the context otherwise requires.
1.4 ARTICLES OF ORGANIZATION. "Articles of Organization" means the
articles of organization filed with the California Secretary of State for the
purpose of forming the LLC.
1.5 AVAILABLE CASH FLOW. "Available Cash Flow" means, with respect to any
Fiscal Year or other period, the sum of all cash receipts of the LLC from any
and all sources, less all cash disbursements (including loan repayments, capital
improvements and replacements) and a reasonable allowance for Reserves,
contingencies and anticipated obligations as determined by the Manager.
1.6 BUSINESS OF THE LLC. "Business of the LLC" shall have the meaning set
forth in Section 2.6 hereof.
1.7 CAPITAL ACCOUNT. "Capital Account" of a Member shall have the meaning
set forth in Section 3.5 hereof.
1.8 CAPITAL CONTRIBUTION. "Capital Contribution" shall have the meaning
set forth in Article 3 hereof.
1.9 CODE. "Code" means the Internal Revenue Code of 1986, as amended (or
any corresponding provision or provisions of any succeeding law).
1.10 DEPRECIATION. "Depreciation" means, for each Fiscal Year or other
period, an amount equal to the depreciation, amortization or other cost recovery
reduction allowable with respect to an asset for such Fiscal Year or other
period.
1.11 DISSOLUTION. "Dissolution" means (i) when used with reference to the
LLC, the earlier of (a) the date upon which the LLC is terminated under the
Statute, or any similar provision enacted in lieu thereof, or (b) the date upon
which the LLC ceases to be a going concern, and (ii) when used with reference to
any Member, the earlier of (a) the date upon which there is a Dissolution of the
LLC or (b) the date upon which such Member's entire interest in the LLC is
terminated by means of a distribution or series of distributions by the LLC to
such Member.
1.12 ECONOMIC INTEREST. "Economic Interest" means a Person's right to
share in the Net Profits, Net Loss or similar items of, and to receive
distributions from, the LLC, but does not include any other rights of a Member
including, without limitation, the right to vote or to participate in the
management of the LLC, or, except as provided in Section 9.4, any right to
information concerning the business and affairs of the LLC.
1.13 FISCAL YEAR. "Fiscal Year" means the period of January 1 to and
including December 31.
1.14 LLC. "LLC" means CommCorp, LLC.
1.15 LLC INTEREST. "LLC Interest" or "Interest" means an ownership
interest in the LLC, which includes the Economic Interest, the right to vote or
participate in the management of the LLC, and the right to information
concerning the business and affairs of the LLC, as provided in this Agreement
and under the Statute.
1.16 LLC LOANS. "LLC Loans" shall refer to any loans or advances made by
any Member to the LLC at the Member's option, without obligation to so do, to
the extent the LLC does not have sufficient resources (assets, borrowings or
otherwise) to meet its LLC obligations. Such LLC Loans shall bear interest at
the rate agreed to between the Member and the Manager.
1.17 LLC MINIMUM GAIN. "LLC Minimum Gain" means the amount determined by
computing with respect to each nonrecourse liability of the LLC, the amount of
gain (of whatever character), if any, that would be realized by the LLC if it
disposed (in a taxable transaction) of the Property subject to such liability in
full satisfaction thereof, and by then aggregating the amounts so computed as
set forth in Regulations Section 1.704-2(d).
1.18 MAJORITY IN INTEREST OF THE MEMBERS. "Majority in Interest of the
Members." unless otherwise provided in the Agreement, means more than fifty
percent (50%) of the interests of the Members in the current profits of the LLC.
1.19 MANAGER. "Manager" means the Person elected to manage the LLC
pursuant to Section 6.1 of this Agreement. At any time that the Members shall
have elected to have more than one Manager, all such Persons so elected shall be
referred to as the "Managers."
1.20 MEMBER NONRECOURSE DEBT. "Member Nonrecourse Debt" has the meaning
set forth in Regulations Section 1.704-2(b)(4).
1.21 MEMBER NONRECOURSE DEBT MINIMUM GAIN. "Member Nonrecourse Debt
Minimum Gain" means an amount, with respect to each Member Nonrecourse Debt,
equal to the LLC Minimum Gain that would result if such Member Nonrecourse Debt
were treated as a nonrecourse liability of the LLC, determined in accordance
with Regulations Sections 1.704-2(i)(2) and (3).
1.22 MEMBER NONRECOURSE DEDUCTIONS. "Member Nonrecourse Deductions" has
the meaning set forth in Regulations Section 1.704-2(i)(2). The amount of Member
Nonrecourse Deductions with respect to a Member Nonrecourse Debt for a Fiscal
Year of the LLC equals the excess (if any) of the net increase (if any) in the
amount of Member Nonrecourse Debt Minimum Gain attributable to such Member
Nonrecourse Debt during that Fiscal Year over the aggregate amount of any
distributions during that Fiscal Year to the Member that bears (or is deemed to
bear) the economic loss for such Member Nonrecourse Debt to the extent such
distributions are from the proceeds of such Member Nonrecourse Debt and are
allocable to an increase in Member Nonrecourse Debt Minimum
Gain attributable to such Member Nonrecourse Debt, determined in accordance with
Regulations Section 1.704-2(i)(2).
1.23 MEMBER. "Member" means a Person who:
1.23.1 Has been admitted to the LLC as a member in accordance with
the Articles of Organization or this Agreement, or an assignee of an
Interest, other than an Economic Interest, who has become a Member
pursuant to Section 8.1.
1.23.2 Has not resigned, withdrawn or been expelled as a Member or,
if other than an individual, been dissolved.
Reference to a "Member" shall be to any one of the Members. Reference to an
"Initial Member" shall be to any one of the Members listed in Section 3.1.
1.24 NET CAPITAL CONTRIBUTIONS. "Net Capital Contributions" means the
aggregate of a Member's Capital Contributions over the aggregate distributions
theretofore made to such Member pursuant to Section 5.1.
1.25 NET PROFITS AND NET LOSS. "Net Profits" and "Net Loss" mean, for each
Fiscal Year or other period, an amount equal to the LLC's taxable income or loss
for such year or period, determined in accordance with Code Section 703(a) (for
this purpose, all items of income, gain, loss or deduction required to be stated
separately pursuant to Code Section 703(a)(1) shall be included in taxable
income or loss), with the following adjustments:
1.25.1 Any income of the LLC that is exempt from Federal income tax
and not otherwise taken into account in computing Net Profits or Net Loss
shall be added to such taxable income or loss;
1.25.2 Any expenditures of the LLC described in Code Section
705(b)(2)(B) or treated as Code Section 705(b)(2)(B) expenditures pursuant
to Regulations Section 1.704-1(b)(2)(iv)(i) and not otherwise taken into
account in computing Net Profits or Net Loss shall be subtracted from such
taxable income or loss;
1.25.3 Gain or loss resulting from any disposition of Property with
respect to which gain or loss is recognized for Federal income tax
purposes shall be computed by reference to the fair market value of the
Property disposed of, notwithstanding that the adjusted tax basis of such
Property differs from its fair market value;
1.25.4 In lieu of depreciation, amortization, and other cost
recovery deductions taken into account in computing such taxable income or
loss, there shall be taken into account Depreciation for such Fiscal Year
or other period, computed in accordance with the subsection hereof
entitled "Depreciation"; and
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1.25.5 Notwithstanding any other provision of this subsection, any
items of income, gain, loss or deduction which are specifically allocated
shall not be taken into account in computing Net Profits or Net Loss.
1.26 PERCENTAGE INTEREST. The Initial Member's "Percentage Interest" shall
be in the following percentages:
Tim Novoselski, an individual 50%
Denise Novoselski, an individual 50%
1.27 PERIOD OF DURATION. "Period of Duration" shall have the meaning set
forth in Section 2.5 hereof.
1.28 PERSON. "Person" means an individual, partnership, limited
partnership, corporation, trust, estate, association, limited liability company,
or other entity, whether domestic or foreign.
1.29 PRINCIPAL. Principal" means the natural Person which is in ultimate
control of a Member.
1.30 PROPERTY. "Property" means all assets of the LLC, both tangible and
intangible, or any portion thereof.
1.31 REGULATIONS. "Regulations" means the federal income tax regulations
promulgated by the Treasury Department under the Code, as such regulations may
be amended from time to time. All references herein to a specific section of the
Regulations shall be deemed also to refer to any corresponding provisions of
succeeding Regulations.
1.32 RESERVES. "Reserves" means funds set aside from Capital Contributions
or gross cash revenues as reserves. Such Reserves shall be maintained in amounts
reasonably deemed sufficient by the Manager for working capital and the payment
of taxes, insurance, debt service, repairs, replacements renewals, or other
costs or expenses incident to the Business of the LLC, or in the alternative,
the Dissolution of the LLC.
1.33 SECRETARY OF STATE. "Secretary of State" shall mean the Secretary of
State of the State of California.
1.34 STATUTE. "Statute" shall mean the (California) Beverly-Killea Limited
Liability Company Act as set forth in Title 2.5 (commencing with Section 17000)
of the Corporations Code of the State of California (or any corresponding
provision or provisions of any succeeding law).
1.35 VOTE. Except where superseded by another Section of this Agreement,
or required by the terms of the Statute, Code or applicable Regulations
thereunder, all decisions
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made by the LLC shall be approved by fifty-one percent (51%) of the votes
("Vote") of the Members, wherein each Member casts a number of votes equal to
the Member's Percentage Interest in the LLC.
ARTICLE 2
INTRODUCTORY MATTERS
2.1 FORMATION OF LLC. The parties have formed the LLC pursuant to the
provisions of the Statute by filing the Articles of Organization with the
Secretary of State.
2.2 NAME. The name of the LLC is "COMMCORP, LLC" The Members shall operate
the Business of the LLC under such name or use such other or additional names as
the Members may deem necessary or desirable provided that: (i) no such name
shall contain the words "bank," "insurance," "trust," "trustee," "incorporated,"
"inc.," "corporation," "corp.," or any similar name or variation thereof; (ii)
the Members shall have reasonably determined, before use of any such name, that
the LLC is entitled to use such name and will not by reason of such use infringe
upon any rights of any other Person, or violate any applicable laws or
governmental regulations; and (iii) the Members shall register such name under
assumed or fictitious name statutes or similar laws of the states in which the
LLC operates.
2.3 PRINCIPAL OFFICE. The LLC shall maintain its principal place of
business at 22313 Carbon Mesa Road, Malibu, California 90265, or any other
location agreed upon by the Managers.
2.4 AGENT FOR SERVICE OF PROCESS. The name and address of the LLC's agent
for service of process is Tim Novoselski, 22313 Carbon Mesa Road, Malibu,
California 90265.
2.5 PERIOD OF DURATION. The period of duration of the LLC ("Period of
Duration") shall be thirty (30) years, commencing on the date of the filing of
the Articles of Organization with the California Secretary of State, unless the
LLC is terminated or dissolved sooner, in accordance with the provisions of this
Agreement.
2.6 BUSINESS AND PURPOSE OF THE LLC. The purpose of the LLC is to engage
in any lawful activities for which a LLC may be organized under the Statute,
including, but not limited to ownership, operation, and management of a custom
publishing business; provided that the LLC shall not conduct any banking,
insurance or trust company business.
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ARTICLE 3
MEMBERS AND CAPITAL CONTRIBUTIONS
3.1 NAMES AND ADDRESSES OF INITIAL MEMBERS. The names and addresses of the
Initial Members are as follows:
Tim Novoselski, an individual, whose address is 22313 Carbon
Mesa Road, Malibu, California 90265
Denise Novoselski, an individual, whose address is 22313
Carbon Mesa Road, Malibu, California 90265
3.2 CONTRIBUTIONS. The Initial Members shall contribute the aggregate sum
of Five Thousand Dollars ($5,000.00), to the LLC in proportion to their
Percentage Interest.
3.3 ADDITIONAL CONTRIBUTIONS. No Member shall be required to (a) make any
additional Capital Contributions, (b) make any loan, or (c) cause to be loaned
any money or other assets to the LLC.
3.4 RIGHTS WITH RESPECT TO CAPITAL.
3.4.1 LLC CAPITAL. No Member shall have the right to withdraw, or
receive any return of, its Capital Contribution, and no Capital
Contribution may be returned in the form of property other than cash
except as specifically provided herein.
3.4.2 NO INTEREST ON CAPITAL. No Capital Contribution of any Member
shall bear any interest or otherwise entitle the contributing Member to
any compensation for use of the contributed capital.
3.4.3 ESTABLISHMENT OF CAPITAL ACCOUNTS. A separate capital account
("Capital Account") shall be maintained for each Member. For book
purposes, each Member's Capital Account will be separated into a
contribution account and an income (loss) account and will be maintained
according to generally accepted accounting principles. Sections 3.6 and
3.7 below describe the appropriate accounting treatment for tax purposes
of the Capital Accounts.
3.5 GENERAL RULES FOR ADJUSTMENT OF CAPITAL ACCOUNTS. The Capital Account
of each Member shall be:
3.5.1 INCREASES. Increased by:
(i) Such Member's cash contributions;
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(ii) The agreed fair market value of property contributed by
such Member (net of liabilities secured by such contributed property
that the LLC is considered to assume or take subject to under Code
Section 752);
(iii) All items of LLC income and gain (including income and
gain exempt from tax) allocated to such Member pursuant to Article 4
or other provisions of this Agreement; and
3.5.2 DECREASES. Decreased by:
(i) The amount of cash distributed to such Member:
(ii) The agreed fair market value of all actual and deemed
distributions of property made to such Member pursuant to this
Agreement (net of liabilities secured by such distributed property
that the Member is considered to assume or take subject to under
Code Section 752);
(iii) All items of LLC deduction and loss allocated to such
Member pursuant to Article 4 or other provisions of this Agreement.
3.6 SPECIAL RULES WITH RESPECT TO CAPITAL ACCOUNTS.
3.6.1 TIME OF ADJUSTMENT FOR CAPITAL CONTRIBUTIONS. For purposes of
computing the balance in a Member's Capital Account, no credit shall be
given for any Capital Contribution which such Member is to make until such
contribution is actually made. "Capital Contribution" refers to the total
amount of cash and the agreed fair market value (net of liabilities)
contributed to the LLC by that Member and any subsequent contributions of
cash and the agreed fair market value (net of liabilities) of any other
property subsequently contributed to the LLC by that Member.
3.6.2 INTENT TO COMPLY WITH TREASURY REGULATIONS. The foregoing
provisions of Sections 3.6 and 3.7 and the other provisions of this
Agreement relating to the maintenance of Capital Accounts are intended to
comply with Regulations Section 1.704-1(b), and shall be interpreted and
applied in a manner consistent with such Regulations Section. To the
extent such provisions are inconsistent with such Regulations Section or
are incomplete with respect thereto, Capital Accounts shall be maintained
in accordance with such Regulations Section.
3.7 TRANSFEREE'S CAPITAL ACCOUNT. In the event a Member, of the holder of
an Economic Interest, transfers an Interest in accordance with the terms of this
Agreement, the transferee shall succeed to the Capital Account of the transferor
to the extent it relates to the transferred Interest.
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ARTICLE 4
ALLOCATION OF PROFITS ANTI LOSSES
4.1 ALLOCATION OF NET PROFITS AND LOSSES. Except as otherwise provided in
this Article 4, Net Profits and Net Loss of the LLC in each Fiscal Year shall be
allocated among the Members as follows:
4.1.1 NET PROFITS. Net Profits shall be allocated among the Members
as follows:
(i) first, to each of the Members until the cumulative Net
Profits allocated to such Member pursuant to this Section 4.1.1 is
equal to the cumulative Net Loss allocated to the Member pursuant to
Section 4.1.2 for any prior period; and
(ii) thereafter, to the Members in accordance with their
Percentage Interests.
4.1.2 ALLOCATION OF NET LOSS. Except as otherwise provided in this
Article 4, Net Loss shall be allocated among the Members as follows:
(i) first, to offset any Net Profits allocated pursuant to
Section 4.1.1(i) hereof, and then to offset any Net Profits
allocated pursuant to Section 4.1.1(ii) hereof (in each case pro
rata in proportion to their shares of Net Profits being offset);
(ii) second, in proportion to the positive balances, if any,
in the Members' respective Capital Accounts, until such balances are
reduced to zero; and
(iii) third, to the Members, pro rata, in accordance with
their Percentage Interests; provided, however, that if, and to the
extent that the allocation of Net Loss in this manner would cause a
Member to have an Adjusted Capital Account Deficit at the end of the
Fiscal Year, then such Net Loss shall instead be allocated to the
Member who has the largest Percentage Interest.
4.2 RESIDUAL ALLOCATIONS. Except as otherwise provided in this Agreement,
all items of LLC income, gain, loss, deduction, and any other allocations not
otherwise provided for shall be divided among the Members in the same
proportions as they share Net Profits or Net Losses, as the case may be, for the
Fiscal Year.
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4.3 QUALIFIED INCOME OFFSET. If any Member unexpectedly receives any
adjustments, allocation or distributions described in clauses (4), (5) or (6) of
Regulations Section 1.704-1(b)(2)(ii)(d), items of LLC income shall be specially
allocated to such Member in an amount and manner sufficient to eliminate the
Adjusted Capital Account Deficit created by such adjustments, allocations or
distributions as quickly as possible. This Section 4.3 is intended to constitute
a "qualified income offset" within the meaning of Regulations Section
1.704-1(b)(2)(ii)(d)(3).
4.4 MINIMUM GAIN CHARGEBACK. If there is a net decrease in LLC Minimum
Gain during a Fiscal Year, each Member will be allocated, before any other
allocation under this Article 4, items of income and gain for such Fiscal Year
(and if necessary, subsequent years) in proportion to and to the extent of an
amount equal to such Member's share of the net decrease in LLC Minimum Gain
determined in accordance with Regulations Section l.704-2(g)(2). This Section
4.4 is intended to comply with, and shall be interpreted consistently with, the
"minimum gain chargeback" provisions of Regulations Section 1.704-2(f).
4.5 MEMBER NONRECOURSE DEBT MINIMUM GAIN CHARGEBACK. Notwithstanding any
other provision of this Article 4, but except Section 4.4, if there is a net
decrease in Member Nonrecourse Debt Minimum Gain attributable to a Member
Nonrecourse Debt during any Fiscal Year of the LLC, each Member who has a share
of the Member Nonrecourse Debt Minimum Gain attributable to such Member
Nonrecourse Debt, determined in accordance with Treasury Regulations Section
1.704-2(i)(5), shall be specially allocated items of LLC income and gain for
such year (and, if necessary, subsequent years) in an amount equal such Member's
share of the net decrease in Member Nonrecourse Debt Minimum Gain attributable
to such Member Nonrecourse Debt, determined in accordance with Regulations
Section 1.704-2(i)(4). Allocations pursuant to the previous sentence shall be
made in proportion to the respective amounts required to be allocated to each
Member pursuant thereto. The items to be so allocated shall be determined in
accordance with Regulations Section 1.704-2(i)(4). This Section 4.5 is intended
to comply with a minimum gain chargeback requirement of that Section of the
Regulations and shall be interpreted consistently therewith.
4.6 MEMBER NONRECOURSE DEDUCTIONS. Any Member Nonrecourse Deductions for
any Fiscal Year or other period shall be specially allocated to the Member who
bears (or is deemed to bear) the economic risk of loss with respect to the
Member Nonrecourse Debt to which such Member Nonrecourse Deductions are
attributable in accordance with Regulations Section 1.704-2(i)(2).
4.7 SPECIAL ALLOCATIONS. Any special allocations of items of Net Profits
pursuant to Sections 4.4, 4.5 and 4.6 shall be taken into account in computing
subsequent allocations of Net Profits pursuant to Section 4.1, so that the net
amount of any items so allocated and the gain, loss and any other item allocated
to each Member pursuant to Section 4.1 shall, to the extent possible, be equal
to the net amount that would have been
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allocated to each such Member pursuant to the provisions of this Article if such
special allocations had not occurred.
4.8 FEES TO MEMBERS OR AFFILIATES. Notwithstanding the provisions of
Section 4.1, in the event that any fees, interest, or other amounts paid to any
Member or any Affiliate thereof pursuant to this Agreement or any other
agreement between the LLC and any Member or Affiliate thereof providing for the
payment of such amount, and deducted by the LLC in reliance on Section 707(a)
and/or 707(c) of the Code, are disallowed as deductions to the LLC on its
federal income tax return and are treated as LLC distributions, then
4.8.1 the Net Profits or Net Loss, as the case may be, for the
Fiscal Year in which such fees, interest, or other amounts were paid shall
be increased or decreased, as the case may be, by the amount of such fees,
interest, or other amounts that are treated as LLC distributions; and
4.8.2 there shall be allocated to the Member to which (or to whose
Affiliate) such fees, interest, or other amounts were paid, prior to the
allocations pursuant to Section 4.1, an amount of gross income for the
Fiscal Year equal to the amount of such fees, interest, or other amounts
that are treated as LLC distributions.
4.9 SECTION 704(c) ALLOCATION. Any item of income, gain, loss, and
deduction with respect to any property (other than cash) that has been
contributed by a Member to the capital of the LLC and which is required or
permitted to be allocated to such Member for income tax purposes under Section
704(c) of the Code so as to take into account the variation between the tax
basis of such property and its fair market value at the time of its contribution
shall be allocated to such Member solely for income tax purposes in the manner
so required or permitted.
ARTICLE 5
DISTRIBUTIONS
5.1 AVAILABLE CASH FLOW. Available Cash Flow of the LLC shall be
distributed to the Members in accordance with the following priority and
agreements:
5.1.1 FIRST. Pro rata among the Members, in the ratio of the
principal loan balances outstanding, until all of the accrued but unpaid
interest on all LLC Loans, if any, has been paid, and then the principal
amounts thereof.
5.1.2 SECOND. To the Members, pari passu, on a pro rata basis, until
all Net Capital Contributions are reduced to zero.
5.1.3 THIRD. To the Members in accordance with their applicable
Percentage Interests as of the time of such distribution.
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ARTICLE 6
RIGHTS, DUTIES, OBLIGATIONS AND COMPENSATION
OF MANAGERS AND OFFICERS
6.1 CO-MANAGERS. The LLC shall be managed by TIM NOVOSELSKI and DENISE
NOVOSELSKI (the "Managers"). The Managers shall have such rights, duties and
powers as are specified in this Agreement, or conferred upon the Managers by
Vote of the Members.
6.1.1 DUTIES OF THE MANAGERS. The Managers shall share the duties
described in Section 6.1.1. The Managers are the co-general managers and
co-chief executive officers of the LLC and have, subject to the control of
the Members, general supervision, direction, and control of the business
of the LLC. The Managers shall preside at all meetings of the Members. The
Managers shall have the general powers and duties of management typically
vested in the office of president of a corporation, and such other powers
and duties as may be prescribed by the Members. The Members acknowledge
that Tim Novoselski and Denise Novoselski have other business interests
related to Miramar Communications, Inc., and otherwise, which take a
substantial portion of their time, and, accordingly, the Managers shall be
required to devote to the LLC business the time and attention that each in
his/her sole discretion shall determine is necessary.
6.1.2 ELECTION. Each Manager shall hold office until the Manager
resigns or shall be removed or otherwise disqualified to serve, or the
Manager's successor is elected and qualified. In voting for Managers, each
Member shall have a number of votes equal to its Percentage Interest in
the LLC.
6.1.3 SUBORDINATE OFFICERS. The Members may appoint a secretary, a
chief financial officer, and such other officers of the LLC as the
Business of the LLC may require, each of whom shall hold office for such
period, have such authority and perform such duties as are provided in
this Agreement, or as the Members determine.
6.1.4 REMOVAL AND RESIGNATION. Any Manager or other officer of the
LLC may be removed, with or without cause, by the Vote of the Members. Any
Manager or other officer of the LLC may resign at any time without
prejudice to any rights of the LLC under any contract to which the Manager
or other officer of the LLC is a party, by giving written notice to the
Members, or to the Manager, as applicable. Any such resignation shall take
effect at the date of the receipt of such notice or at any later time
specified therein; and unless otherwise specified therein, the acceptance
of such resignation shall not be necessary to make it effective.
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6.1.5 VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification or any other cause shall be filled
by a Vote of the Members through the appointment of a successor Manager,
or officer who shall hold the office for the unexpired term.
6.2 MEETINGS OF MANAGERS. Meetings of the Managers shall be held at the
principal office of the LLC, unless some other place is designated in the notice
of the meeting. Any Manager may participate in a meeting through use of a
conference telephone or similar communication equipment so long as all Managers
participating in such a meeting can hear one another.
6.2.1 Regular meetings of the Managers shall be held immediately
following the adjournment of the annual meeting of the Members. No notice
need be given of such regular meetings.
6.2.2 Special meetings of the Managers for any purpose may be called
at any time by any Manager. At least forty-eight (48) hours notice of the
time and place of a special meeting of the Managers shall be delivered
personally to the Managers or personally communicated to them by an
officer of the LLC by telephone, telegraph or facsimile. If the notice is
sent to a Manager by letter, it shall be addressed to him at his last
known business address as it is shown on the records of the LLC. In case
such notice is mailed, it shall be deposited in the United States mail,
first-class postage, prepaid, in the place in which the principal office
of the LLC is located at least four (4) days prior to the time of the
holding of the meeting. Such mailing, telegraphing, telephoning or
delivery as above provided shall be considered due, legal and personal
notice to such Manager.
6.2.3 With respect to a special meeting which has not been duly
called or noticed pursuant to the provisions of Section 6.2.2,
transactions carried out at the meeting are as valid as if had at a
meeting regularly called and noticed if: (i) all Managers are present at
the meeting, and sign a written consent to the holding of such meeting, or
(ii) if a majority of the Managers are present and if those not present
sign a waiver of notice of such meeting or a consent to holding the
meeting or an approval of the minutes thereof, whether prior to or after
the holding of such meeting, which waiver, consent or approval shall be
filed with the other records of the LLC, or (iii) if a Manager attends a
meeting without notice and does not protest prior to the meeting or at its
commencement that notice was not given to him or her.
6.2.4. Any action required or permitted to be taken by the Managers
may be taken without a meeting and will have the same force and effect as
if taken by a vote of Managers at a meeting properly called and noticed,
if authorized by a writing signed individually or collectively by all, but
not less than all, the Managers. Such consent shall be filed with the
records of the LLC.
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6.2.5 A majority of the total number of incumbent Managers shall be
necessary to constitute a quorum for the transaction of business at any
meeting of the Managers, and except as otherwise provided in this
Agreement or by the Statute, the action of a majority of the Managers
present at any meeting at which there is a quorum, when duly assembled, is
valid. A meeting at which a quorum is initially present may continue to
transact business, notwithstanding the withdrawal of Managers, if any
action taken is approved by a majority of the required quorum for such
meeting.
6.3 LIMITATIONS ON RIGHTS AND POWERS. Except by the unanimous agreement of
the Members which is evidenced in writing, neither the Manager nor any other
officer of the LLC shall have authority to:
6.3.1 Enter into or commit to any agreement, contract, commitment or
obligation on behalf of the LLC obligating any Member or Principal to find
additional capital, to make or guarantee a loan or to increase its
personal liability either to the LLC or to third parties;
6.3.2 Receive or permit any Member or Principal to receive any fee
or rebate, or to participate in any reciprocal business arrangements that
would have the effect of circumventing any of the provisions hereof;
6.3.3 Materially alter the Business of the LLC or deviate from any
approved business plan of the LLC as set forth in this Agreement;
6.3.4 Permit the LLC's fund to be commingled with the funds of
any other Person;
6.3.5 Do any act in contravention of this Agreement;
6.3.6 Possess Property, or assign rights in specific Property, for
other than a LLC purpose;
6.3.7 Do any act of which would make it impossible to carry on the
Business of the LLC;
6.3.8 Admit any person as a Member, except as otherwise provided in
this Agreement;
6.3.9 Sell, lease, pledge or grant or specify interest in any
Property, except in the ordinary course of business; and
6.3.10 Attempt to dissolve from the LLC.
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6.4 COMPENSATION OF MANAGERS. The LLC shall pay to the Manager such salary
and other benefits, as shall be approved from time to time by Vote of the
Members. The LLC shall reimburse the Manager for any expense paid by the Manager
that properly is to be borne by the LLC.
6.5 COMPENSATION OF MEMBERS. Except as expressly permitted by this
Agreement or any other written agreement, the LLC shall pay no compensation to
any Member or any Principal of any Member for their services to the LLC.
6.6 EXPENSE REIMBURSEMENT. The LLC shall reimburse the Members for any
expense paid by them that properly is to be borne by the LLC, as pre-approved
from time to time by the Managers.
6.7 RELATED PARTY TRANSACTIONS. The Managers may cause the LLC to provide,
or obtain, products or services to or from Miramar Communications, Inc. or other
entities controlling, controlled by, or under common control with the Members,
and to receive from, or to pay, such entities reasonable fees for such products
and services.
ARTICLE 7
MEMBERS' MEETINGS
7.1 PLACE OF MEETINGS. Meetings of the Members shall be held at the
principal office of the LLC, unless some other appropriate and convenient
location, either within or without the state where the Articles of Organization
were filed, shall be designated for that purpose from time to time by the
Manager.
7.2 ANNUAL MEETINGS OF MEMBERS. An annual meeting of the Members shall be
held, each year, on the anniversary of the date of this Agreement, at 10:00 a.m.
If this day shall be a legal holiday, then the meeting shall be held on the next
succeeding business day, at the same time. At the annual meeting, the Members
shall elect the Manager (or Managers) and transact such other business as may be
properly brought before the meeting.
7.3 SPECIAL MEETINGS. Special meetings of the Members may be called at any
time by the Manager or by one or more Members holding in the aggregate more than
ten percent (10%) of the Percentage Interests. Upon receipt of a written
request, which request may be mailed or delivered personally to the Manager, by
any Person entitled to call a special meeting of Members, the Manager shall
cause notice to be given to the Members that a meeting will be held at a time
requested by the Person or Persons calling the meeting, which time for the
meeting shall be not less than ten (10) nor more than sixty (60) days after the
receipt of such request. If such notice is not given within twenty (20) days
after receipt of such request, the Persons calling the meeting may give notice
thereof in the manner provided by this Agreement.
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7.4 NOTICE OF MEETINGS. Except as provided for in Section 7.3 for special
meetings, notice of meetings shall be given to the Members in writing not less
than ten (10) nor more than sixty (60) days before the date of the meeting by
the Manager. Notices for regular and special meetings shall be given personally,
by mail, or by facsimile, and shall be sent to each Member's last known business
address appearing on the books of the LLC. Such notice shall be deemed given at
the time it is delivered personally, or deposited in the mail, or sent by
facsimile. Notice of any meeting of Members shall specify the place, the day and
the hour of the meeting, and (i) in case of a special meeting, the general
nature of the business to be transacted, or (ii) in the case of an annual
meeting, those matters which the Manager, at the date of mailing, intends to
present for action by the Members.
7.5 VALIDATION OF MEMBERS' MEETINGS. The transactions of a meeting of
Members which was not called or noticed pursuant to the provisions of Section
7.3 or 7.4 shall be valid as though transacted at a meeting duly held after
regular call and notice, if Members holding in the aggregate fifty-one percent
(51%) or more of the Percentage Interests are present, and if, either before or
after the meeting, each of the Members entitled to vote but not present (whether
in person or by proxy, as that term is used in the Statute) at the meeting signs
a written waiver of notice, or a consent to the holding of such meeting, or an
approval of the minutes thereof. All such waivers, consents or approvals shall
be filed with the records of the LLC. Attendance shall constitute a waiver of
notice, unless objection shall be made.
7.6 ACTIONS WITHOUT A MEETING.
7.6.1 Any action which may be taken at any annual or special meeting
of Members may be taken without a meeting and without prior notice if a
consent in writing, setting forth the action so taken, shall be signed by
Members holding in the aggregate the number of votes equal to or greater
than the Vote, unless a lesser vote is provided for by this Agreement or
the Statute; provided, however, that any action which by the terms of this
Agreement or by the Statute is required to be taken pursuant to a greater
vote of the Members may only be taken by a written consent which has been
signed by Members holding the requisite number of votes.
7.6.2 Unless the consents of all Members have been given in writing,
notice of any approval made by the Members without a meeting by less than
unanimous written consent shall be given at least ten (10) days before the
consummation of the action authorized by such approval. Any Member giving
a written consent may revoke the consent by a writing received by the LLC
prior to the time that written consents of Members required to authorize
the proposed action have been filed with the LLC. Such revocation is
effective upon its receipt by the LLC.
7.7 QUORUM AND EFFECT OF VOTE. Each Member shall have a number of votes
equal to the Percentage Interest held by such Member, provided that if, pursuant
to the Statute or the terms of this Agreement, a Member is not entitled to vote
on a specific
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matter, then such Member's number of votes and Percentage Interest shall not be
considered for purposes of determining whether a quorum is present, or whether
approval by Vote of the Members has been obtained, in respect of such specific
matter. Members holding an aggregate of fifty-one percent (51%) or more of the
Percentage Interests shall constitute a quorum at all meetings of the Members
for the transaction of business, and the Vote of Members shall be required to
approve any action, unless a greater vote is required or a lesser vote is
provided for by this Agreement or by the Statute.
ARTICLE 8
RESTRICTIONS ON TRANSFER OR CONVERSION
OF LLC INTERESTS, ADDITIONAL CAPITAL CONTRIBUTIONS;
ADMISSION OF NEW MEMBERS
8.1 TRANSFER OR ASSIGNMENT OF MEMBER'S INTEREST, The Interest of each
Member and the Economic Interest of a Person who is not a Member constitutes
personal property of the Member or Economic Interest holder. Each Member and
each Economic Interest holder has no interest in the Property.
8.1.1 A Member's Interest or an Economic Interest may be transferred
or assigned only as provided in this Agreement.
8.1.2 No transfer, encumbrance or assignment ("Transfer") of a
Member's Interest, or an Economic Interest, or any part thereof, in the
LLC will be valid without the consent of a Majority in Interest of the
Members, other than the Members proposing to dispose of its Interest.
8.1.3 Any holder of an Economic Interest shall have no right to vote
or to participate in the management of the business and affairs of the LLC
or to become or exercise any rights of a Member thereof.
8.2 VOID TRANSFERS. Any Transfer of an Interest which does not satisfy the
requirements of Article 8, including, without limitation, Section 8.1.2, shall
be null and void.
8.3 ADMISSION OF NEW MEMBERS. A new Member may be admitted into the LLC
only upon the unanimous consent of all of the Members, which consent may be
given or withheld in the sole and absolute discretion of each Member.
8.3.1 The amount of Capital Contribution which must be made by a new
Member shall be determined by the Vote of all existing Members.
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8.3.2 A new Member shall not be deemed admitted into the LLC until
the Capital Contribution required of such Person shall have been made and
such Person has become a party to this Agreement.
8.3.3 A new Member shall not be deemed admitted into the LLC until
receipt by the Managers of a signed and acknowledged request from the
Member proposing to Transfer an Interest that the proposed assignee be
admitted as a Member, and execution by the proposed assignee of an
amendment to the Agreement agreeing to be bound by the terms and
provisions thereof.
ARTICLE 9
BOOKS, RECORDS, REPORTS AND BANK ACCOUNTS
9.1 MAINTENANCE OF BOOKS AND RECORDS. The LLC shall cause books and
records of the LLC to be maintained in accordance with generally accepted
accounting principles, and shall give reports to the Members in accordance with
prudent business practices and the Statute. There shall be kept at the principal
office of the LLC, as well as at the office of record of the LLC specified in
Section 2.3, if different, the following LLC documents:
9.1.1 A current list of the full name and last known business or
residence address of each Member and of each holder of an Economic
Interest in the LLC set forth in alphabetical order, together with the
Capital Contributions and share in Net Profits and Net Loss of each Member
and holder of an Economic Interest;
9.1.2 A current list of the full name and business or residence
address of each Manager;
9.1.3 A copy of the Articles of Organization and any amendments
thereto, together with any powers of attorney pursuant to which the
Articles of Organization and any amendments thereto were executed;
9.1.4 Copies of the LLC's federal, state and local income tax or
information returns and reports, if any, for the six most recent Fiscal
Years;
9.1.5 A copy of this Agreement and any amendments thereto, together
with any powers of attorney pursuant to which this Agreement and any
amendments thereto were executed;
9.1.6 Copies of the financial statements of the LLC, if any, for the
six most recent Fiscal Years;
9.1.7 The LLC's books and records as they relate to the internal
affairs of the LLC for at least the current and past four Fiscal Years;
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9.1.8 Originals or copies of all minutes, actions by written
consent, consents to action and waivers of notice to Members and Member
Votes, actions and consents; and
9.1.9 Any other information required to be maintained by the LLC
pursuant to the Statute.
9.2 ANNUAL ACCOUNTING. Within 120 days after the close of each Fiscal Year
of the LLC, the LLC shall (i) cause to be prepared and submitted to each Member
a balance sheet and income statement for the preceding Fiscal Year of the LLC
(or portion thereof) in conformity with generally accepted accounting principles
and (ii) provide to the Members all information necessary for them to complete
federal and state tax returns.
9.3 INSPECTION AND AUDIT RIGHTS. Each Member and each holder of an
Economic Interest in the LLC who is not a Member has the right upon reasonable
request, for purposes reasonably related to the interest of that Person, to
inspect and copy during normal business hours any of the LLC books and records
required to be maintained in accordance with Section 9.1. Such right may be
exercised by the Person or by that Person's agent or attorney. Any Member may
require a review and/or audit of the books, records and reports of the LLC. The
determination of the Manager as to adjustments to the financial reports, books,
records and returns of the LLC, in the absence of fraud or gross negligence,
shall be final and binding upon the LLC and all of the Members.
9.4 RIGHTS OF MEMBERS AND NON-MEMBERS. Upon the request of a Member or a
holder of an Economic Interest who is not a Member, for purposes reasonably
related to the interest of that Person, the Manager shall promptly deliver to
the Member or holder of an Economic Interest, at the expense of the LLC, a copy
of this Agreement and a copy of the information listed in Sections 9.1.1, 9.1.2
and 9.1.4 of this Agreement.
9.5 BANK ACCOUNTS. The bank accounts of the LLC shall be maintained in
such banking institutions as the Manager shall determine, provided such
institutions have a net worth in excess of One Hundred Million Dollars
($100,000,000).
9.6 TAX MATTERS HANDLED BY MANAGERS. One of the Managers who is also a
Member, or in the event no Manager is a Member, a Member or an officer of a
corporate Member, shall be designated as "Tax Matters Partner" (as defined in
Code section 6231), to represent the LLC (at the LLC's expense) in connection
with all examinations of the LLC's affairs by tax authorities, including
resulting judicial and administrative proceedings, and to expend LLC funds for
professional services and costs associated therewith. In its capacity as "Tax
Matters Partner," the designated Person shall oversee the LLC tax affairs in the
overall best interests of the LLC. Unless the Members designate another Member
to be "Tax Matters Partner," Tim Novoselski shall be the "Tax Matters Partner."
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9.7 FEDERAL INCOME TAX ELECTIONS MADE BY MANAGERS. The Manager on behalf
of the LLC may make all elections for federal income tax purposes, including but
not limited to, the following:
9.7.1 USE OF ACCELERATED DEPRECIATION METHODS. To the extent
permitted by applicable law and regulations, the LLC may elect to use an
accelerated depreciation method on any depreciable unit of the assets of
the LLC; and
9.7.2 ADJUSTMENT OF BASIS OF ASSETS. In case of a transfer of all or
part of the Interest of any Member, the LLC may elect, pursuant to code
Sections 734, 743, and 754 of the Code to adjust the basis of the assets
of the LLC.
9.7.3 ACCOUNTING METHOD. For financial reporting purposes, the books
and records of the LLC shall be kept on the accrual method of accounting
applied in a consistent manner and shall reflect all transactions of the
LLC and be appropriate and adequate for the purposes of the LLC.
9.8 OBLIGATIONS OF MEMBERS TO REPORT ALLOCATIONS. The Members are aware of
the income tax consequences of the allocations made by this Agreement and hereby
agree to be bound by the provisions of this Section 9.8 in reporting their
shares of the LLC income and loss for income tax purposes.
ARTICLE 10
TERMINATION AND DISSOLUTION
10.1 DISSOLUTION. The LLC shall be dissolved upon the occurrence of any of
the following events:
10.1.1 When the Period of Duration of the LLC expires;
10.1.2 The written approval by a Majority In Interest of the Members
to dissolve the LLC;
10.1.3 The death, withdrawal, resignation, expulsion, bankruptcy or
dissolution of a Member or the occurrence of any other event which
terminates the Member's continued membership in the LLC, unless the
Managers and a Majority in Interest of the remaining Members, within
ninety (90) days of the happening of that event, consent to continue any
business of the LLC. For purposes of this Section 10.1.3, a "Majority in
Interest" means a majority of both capital and profits interest, as
determined under Revenue Procedure 94-46, 1994-28 I.R.B. 129.
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10.2 STATEMENT OF INTENT TO DISSOLVE. As soon as possible after the
occurrence of any of the events specified in Section 10.1 above, the LLC shall
execute a Statement of Intent to Dissolve in such form as prescribed by the
Secretary of State.
10.3 CONDUCT OF BUSINESS. Upon the filing of the Statement of Intent to
Dissolve with the Secretary of State, the LLC shall cease to carry on its
business, except insofar as may be necessary for the winding up of its business,
but the LLC's separate existence shall continue until the Articles of
Dissolution have been filed with the Secretary of State or until a decree
dissolving the LLC has been entered by a court of competent jurisdiction.
10.4 DISTRIBUTION OF NET PROCEEDS. The Members shall continue to divide
Net Profits and Losses and Available Cash Flow during the winding-up period in
the same manner and the same priorities as provided for in Articles 4 and 5
hereof. The proceeds from the liquidation of Property shall be applied in the
following order:
10.4.1 To the payment of creditors, in the order of priority as
provided by law, except to Members on account of their contributions;
10.4.2 To the payment of loans or advances that may have been made
by any of the Members or their Principals for working capital or other
requirements of the LLC;
10.4.3 To the Members in accordance with the positive balances in
their Capital Accounts after adjustments for all allocations of Net
Profits and Net Loss.
Where the distribution pursuant to this Section 10.4 consists both of cash
(or cash equivalents) and non-cash assets, the cash (or cash equivalents) shall
first be distributed, in a descending order, to fully satisfy each category
starting with the most preferred category above. In the case of noncash assets,
the distribution values are to be based on the fair market value thereof as
determined in good faith by the liquidator, and the shortest maturity portion of
such non-cash assets (e.g., notes or other indebtedness) shall, to the extent
such non-cash assets are readily divisible, be distributed, in a descending
order, to fully satisfy each category above, starting with the most preferred
category.
ARTICLE 11
INDEMNIFICATION OF THE MEMBERS, MANAGERS,
AND THEIR AFFILIATES
11.1 INDEMNIFICATION OF THE MEMBERS AND THEIR PRINCIPALS. The LLC shall
indemnify and hold harmless the Members, the Managers, their Affiliates and
their respective officers, directors, employees, agents and Principals
(individually, an "Indemnitee") from and against any and all losses, claims,
demands, costs, damages,
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liabilities, joint and several, expenses of any nature (including reasonable
attorneys' fees and disbursements), judgments, fines, settlements and other
amounts arising from any and all claims, demands, actions, suits or proceedings,
whether civil, criminal, administrative or investigative, in which the
Indemnitee was involved or may be involved, or threatened to be involved, as a
party or otherwise, arising out of or incidental to the Business of the LLC,
excluding liabilities to any Member, regardless of whether the Indemnitee
continues to be a Member, an Affiliate, or an officer, director, employee, agent
or Principal of the Member at the time any such liability or expense is paid or
incurred, to the fullest extent permitted by the Statute and all other
applicable laws. No Manager shall be liable to any of the Members for good faith
errors (meaning mistakes of judgment or losses due to such mistakes or to the
negligence or bad faith of any employee, broker, adviser or other agent or
representative of the LLC, provided that such agent or representative was
selected with reasonable care). The Managers may consult with legal counsel and
shall have no liability for the consequences of any action or omission resulting
from good faith reliance on the advice of such counsel. The exculpation provided
herein also shall apply to the agents, employees and other legal representatives
of each Manager.
11.2 EXPENSES. Expenses incurred by an Indemnitee in defending any claim,
demand, action, suit or proceeding subject to Section 11.1 shall, from time to
time, be advanced by the LLC prior to the final disposition of such claim,
demand, action, suit or proceeding upon receipt by the LLC of an undertaking by
or on behalf of the Indemnitee to repay such amount if it shall be determined
that such Person is not entitled to be indemnified as authorized in Section
11.1.
11.3 INDEMNIFICATION RIGHTS NON-EXCLUSIVE. The indemnification provided by
Section 11.1 shall be in addition to any other rights to which those indemnified
may be entitled under any agreement, vote of the Members, as a matter of law or
equity or otherwise, both as to action in the Indemnitee's capacity as a Member,
as an Affiliate or as an officer, director, employee, agent or Principal of a
Member and as to any action in another capacity, and shall continue as to an
Indemnitee who has ceased to serve in such capacity and shall inure to the
benefit of the heirs, successors, assigns and administrators of the Indemnitee.
11.4 ERRORS AND OMISSIONS INSURANCE. The LLC may purchase and maintain
insurance, at the LLC's expense, on behalf of the Members and such other Persons
as the Members shall determine, against any liability that may be asserted
against, or any expense that may be incurred by, such Person in connection with
the activities of the LLC and/or the Members' acts or omissions as the Members
of the LLC regardless of whether the LLC would have the power to indemnify such
Person against such liability under the provisions of this Agreement.
11.5 ASSETS OF THE LLC. Any indemnification under Section 11.1 shall be
satisfied solely out of the assets of the LLC. No Member shall be subject to
personal liability or required to fund or to cause to be funded any obligation
by reason of these indemnification provisions.
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ARTICLE 12
ISSUANCE OF LLC CERTIFICATES
12.1 ISSUANCE OF LLC CERTIFICATES. The interest of each Member in the LLC
shall be represented by an LLC Certificate. Upon the execution of this Agreement
and the payment of the Capital Contributions by the Members pursuant to Section
3.2 hereof, the Manager shall cause the LLC to issue one or more LLC
Certificates in the name of each Member certifying that the Person named therein
is the record holder of the LLC Units (representing such Member's Percentage
Interest of the total of the initial 1,000 LLC Units) set forth therein. For
purposes of this Agreement, the term "record holder" shall mean the person whose
name appears in Section 1.27 as the Member owning the LLC Interest at issue.
12.2 TRANSFER OF LLC CERTIFICATES. An LLC Interest which is transferred in
accordance with the terms of Article 8.1 of this Agreement shall be transferable
on the books of the LLC by the record holder thereof in person or by such record
holder's duly authorized attorney, but, except as provided in Section 12.3
hereof with respect to lost, stolen or destroyed certificates, no transfer of an
LLC Interest shall be entered until the previously issued LLC Certificate
representing such LLC Interest shall have been surrendered to the LLC and
cancelled and a replacement LLC Certificate issued to the assignee of such LLC
Interest in accordance with such procedures as the Manager may establish. The
Manager shall issue to the transferring Member a new LLC Certificate
representing the LLC Units not being transferred by the Member, in the event
such Member only transferred some, but not all, of the LLC Units represented by
the original LLC Certificate. Except as otherwise required by law, the LLC shall
be entitled to treat the record holder of an LLC Certificate on its books as the
owner thereof for all purposes regardless of any notice or knowledge to the
contrary.
12.3 LOST, STOLEN OR DESTROYED CERTIFICATES. The LLC shall issue a new LLC
Certificate in place of any LLC Certificate previously issued if the record
holder of the LLC Certificate:
12.3.1 makes proof by affidavit, in form and substance satisfactory
to the Manager, that a previously issued LLC Certificate has been lost,
destroyed or stolen;
12.3.2 requests the issuance of a new LLC Certificate before the LLC
has notice that the LLC Certificate has been acquired by a purchaser for
value in good faith and without notice of an adverse claim
12.3.3 if requested by the Manager, delivers to the LLC a bond, in
form and substance reasonably satisfactory to the Manager, with such
surety or sureties and with fixed or open penalty as the Manager may
direct, in his reasonable discretion, to
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indemnify the LLC against any claim that may be made on account of the
alleged loss, destruction or theft of the LLC Certificate; and
12.3.4 satisfies any other reasonable requirements imposed by the
Manager.
If a Member fails to notify the LLC within a reasonable time after it has
notice of the loss, destruction or theft of an LLC Certificate, and a transfer
of the LLC Interest represented by the LLC Certificate is registered before
receiving such notification, the LLC shall have no liability with respect to any
claim against the LLC for such transfer or for a new LLC Certificate.
ARTICLE 13
AMENDMENTS
13.1 AMENDMENT OF AGREEMENT. This Agreement may be adopted, altered,
amended, or repealed and a new operating agreement may be adopted by consent of
the Managers and a Majority In Interest of the Members, which consent may be
given or withheld in the sole and absolute discretion of the Managers and the
Members.
13.2 AMENDMENT OF ARTICLES OF ORGANIZATION. Notwithstanding any provision
to the contrary in the Articles of Organization or this Agreement, in no event
shall the Articles of Organization be amended without the consent of the
Managers and a Majority In Interest of the Members, which consent may be given
or withheld in the sale and absolute discretion of the Managers and the Members.
ARTICLE 14
MISCELLANEOUS PROVISIONS
14.1 COUNTERPARTS. This Agreement may be executed in several counterparts,
and all counterparts so executed shall constitute one Agreement, binding on all
of the parties hereto, notwithstanding that all of the parties are not signatory
to the original or the same counterpart.
14.2 SURVIVAL OF RIGHTS. This Agreement shall be binding upon, and, as to
permitted or accepted successors, transferees and assigns, inure to the benefit
of the Members and the LLC and their respective heirs, legatees, legal
representatives, successors, transferees and assigns, in all cases whether by
the laws of descent and distribution, merger, reverse merger, consolidation,
sale of assets, other sale, operation of law or otherwise.
Page 24 of 28
14.3 SEVERABILITY. In the event any Section, or any sentence within any
Section, is declared by a court of competent jurisdiction to be void or
unenforceable, such sentence or Section shall be deemed severed from the
remainder of this Agreement and the balance of this Agreement shall remain in
full force and effect.
14.4 NOTIFICATION OR NOTICES. Except for notices to be given under
Articles 6 and 7 for purposes of meetings of Managers and meetings of Members,
any notice or other communication required or permitted hereunder shall be in
writing and shall be deemed to have been given if personally delivered,
transmitted by facsimile (with mechanical confirmation of transmission), or
deposited in the United States mail, registered or certified, postage prepaid,
addressed to the parties' addresses set forth below. Notices given in the manner
provided for in this Section 14.4 shall be deemed effective on the third day
following deposit in the mail or on the day of transmission or delivery if given
by facsimile or by hand. Notices must be addressed to the parties hereto at the
following addresses, unless the same shall have been changed by notice in
accordance herewith:
14.5 CONSTRUCTION. The language in all parts of this Agreement shall be in
all cases construed simply according to its fair meaning and not strictly for or
against any of the Members.
14.6 SECTION HEADINGS. The captions of the Articles or Sections in this
Agreement are for convenience only and in no way define, limit, extend or
describe the scope or intent of any of the provisions hereof, shall not be
deemed part of this Agreement and shall not be used in construing or
interpreting this Agreement.
14.7 GOVERNING LAW. This Agreement shall be construed according to the
laws of the State of California.
14.8 ADDITIONAL DOCUMENTS. Each Member, upon the request of another
Member, agrees to perform all further acts and execute, acknowledge and deliver
all documents which may be reasonably necessary, appropriate or desirable to
carry out the provisions of this Agreement, including but not limited to
acknowledging before a notary public any signature heretofore or hereafter made
by a Member.
14.9 PRONOUNS AND PLURALS. Whenever the context may require, any pronoun
used in this Agreement shall include the corresponding masculine, feminine and
neuter forms, and the singular form of nouns, pronouns and verbs shall include
the plural and vice versa.
14.10 TIME OF THE ESSENCE. Except as otherwise provided herein, time is of
the essence in connection with each and every provision of this Agreement.
14.11 FURTHER ACTIONS. Each of the Members agrees to execute, acknowledge
and deliver such additional documents, and take such further actions, as may
reasonably be required from time to time to carry out each of the provisions,
and the intent, of
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this Agreement, and every agreement or document relating hereto, or entered into
in connection herewith.
14.12 MANDATORY ARBITRATION. Subject to the provision of Section 14.13
below, in the event of any controversy, dispute or claim arising out of or
related to this agreement, or the interpretation, breach, termination or
validity hereof, the parties shall submit such controversy, dispute or claim to
binding arbitration hereunder. All arbitration proceedings pursuant to this
section shall be before a retired judge of the United States District Court for
the Central District of California, Los Angeles Division, or the Los Angeles
County Superior Court or such other arbitrator as the parties shall mutually
agree upon. In the event that the parties are unable to agree upon the selection
of an arbitrator, any party may request the presiding judge of the United States
District Court for the Central District of California, Los Angeles Division, or
the Los Angeles County Superior Court to appoint such arbitrator. Arbitration of
the dispute shall commence no later than thirty (30) days after the selection or
appointment of such arbitrator. The arbitrator shall be bound by the express
terms of this agreement and shall endeavor to reach his or her decision as
quickly as possible, which decision shall be final and binding on the parties to
this agreement. The arbitrator shall also have the power to award costs and
expenses (including, without limitation, attorneys' fees) to the prevailing
party. Application to enforce the arbitrator's decision can be made in any court
or other tribunal of competent jurisdiction; any other application or dispute
shall be submitted to the United States District Court for the Central District
of California, Los Angeles Division, or the Los Angeles County Superior Court
for determination. The rules of discovery then pertaining to the United States
District Court for the Central District of California, Los Angeles Division, or
a California State Court of Law, as the case may be, shall apply to any such
arbitration, including, without limitation, sections 1283.01 and 1283.05 of the
California Code of Civil Procedure, the provisions of which are hereby
incorporated herein and made a part hereof by reference. The provisions of the
California Arbitration Statute, contained in the California Code of Civil
Procedure Section 1280 et seq. Shall apply. The parties hereby consent to
arbitration to be held within the City of Los Angeles, State of California and
agree that all actions or proceedings relating to this agreement shall take
place in the City of Los Angeles, and waive any objections that they may have
based on improper venue or forum non conveniens.
NOTICE: BY SIGNING THIS AGREEMENT, YOU ARE AGREEING TO HAVE ANY DISPUTE
ARISING OUT OF THE MATTERS INCLUDED IN THE MANDATORY ARBITRATION OF DISPUTES'
PROVISION DECIDED BY NEUTRAL ARBITRATION AND YOU ARE GIVING UP ANY RIGHTS YOU
MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY
INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO
DISCOVERY AND APPEAL, UNLESS SUCH RIGHTS ARE SPECIFICALLY INCLUDED IN THE
ARBITRATION OF DISPUTES' PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER
AGREEING TO THIS PROVISION YOU MAY BE COMPELLED TO ARBITRATE UNDER THE AUTHORITY
OF THE APPLICABLE STATE STATUTE. YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS
VOLUNTARY.
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WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES
ARISING OUT OF THE MATTERS INCLUDED IN THE ARBITRATION OF DISPUTES' PROVISION TO
NEUTRAL ARBITRATION.
14.13 EQUITABLE RELIEF. Each party agrees that a monetary remedy for any
breach or threatened breach of any provision of Article 8 would be inadequate
and impracticable and extremely difficult to prove, and that such breach or
threatened breach would cause the other parties irrevocable harm. Accordingly,
each party agrees that the other parties shall be entitled to temporary and
permanent injunctive relief, specific performance and other equitable relief for
any breach or threatened breach of any provision of Article 8 above, without the
necessity of proving actual damages. Nothing contained in this section, however,
shall be deemed to constitute a waiver of the right of arbitration or shall be
construed as prohibiting or precluding any party from pursuing any other rights
and remedies that may be available to such party for such breach or threatened
breach, including, without limitation, recovery of damages from the defaulting
party.
14.14 WAIVER OF JURY. Waiver of jury with respect to any dispute arising
under or in connection with this agreement or any related agreement, as to which
no member invokes the right to arbitration hereinabove provided, or as to which
legal action nevertheless occurs, each member hereby irrevocably waives all
rights it may have to demand a jury trial. This waiver is knowingly,
intentionally, and voluntarily made by the members and each member acknowledges
that none of the other members nor any person acting on behalf of the other
parties has made any representation of fact to induce this waiver of trial by
jury or in any way to modify or nullify its effect. The members each further
acknowledge that it has been represented (or has had the opportunity to be
represented) in the signing of this agreement and in the making of this waiver
by independent legal counsel, selected of its own free will, and that it has had
the opportunity to discuss this waiver with counsel. The members each further
acknowledges that it has read and understand the meaning and ramifications of
this waiver provision.
14.15 THIRD PARTY BENEFICIARIES. There are no third party beneficiaries of
this Agreement except (i) Affiliates and Principals of the Members and (ii) any
other Persons as may be entitled to the benefits of Article 11.1 hereof.
14.16 TAX ELECTIONS. The Managers, in their sole discretion, shall cause
the LLC to make or not make all elections required or permitted to be made for
income tax purposes.
14.17 PARTITION. The Members agree that the Property that the LLC may own
or have an interest in is not suitable for partition. Each of the Members hereby
irrevocably waives any and all rights that it may have to maintain any action
for partition of any Property the LLC may at any time have an interest in.
14.18 ENTIRE AGREEMENT. This Agreement and the Articles of Organization
constitute the entire agreement of the Members with respect to, and supersedes
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all prior written and oral agreements, understandings and negotiations with
respect to, the subject matter hereof.
14.19 WAIVER. No failure by any party to insist upon the strict
performance of any covenant, duty, agreement or condition of this Agreement or
to exercise any right or remedy consequent upon a breach thereof shall
constitute a waiver of any such breach or any other covenant, duty, agreement or
condition.
14.20 ATTORNEYS' FEES. In the event of any litigation, arbitration or
other dispute arising as a result of or by reason of this Agreement, the
prevailing party in any such litigation, arbitration or other dispute shall be
entitled to, in addition to any other damages assessed, its reasonable
attorneys' fees, and all other costs and expenses incurred in connection with
settling or resolving such dispute. The attorneys' fees which the prevailing
party is entitled to recover shall include fees for prosecuting or defending any
appeal and shall be awarded for any supplemental proceedings until the final
judgment is satisfied in full. In addition to the foregoing award of attorneys'
fees to the prevailing party, the prevailing party in any lawsuit or arbitration
procedure on this Agreement shall be entitled to its reasonable attorneys' fees
incurred in any post judgment proceedings to collect or enforce the judgment.
This attorneys' fees provision is separate and several and shall survive the
merger of this Agreement into any judgment.
14.21 CONFIDENTIALITY. The Members and their respective Affiliates and
Principals hereby agree that it is in all of their best interests to keep this
Agreement and the Business of the LLC and all information concerning such
business confidential.
IN WITNESS WHEREOF, the parties hereto have hereunto executed this
Agreement as of the date first written above.
/s/ Tim Novoselski
--------------------------------
TIM NOVOSELSKI
/s/ Denise Novoselski
--------------------------------
DENISE NOVOSELSKI
Page 28 of 28
EXHIBIT A
(FACE OF CERTIFICATE)
THE LLC INTERESTS AND LLC UNITS REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES
LAWS OF ANY STATE. SUCH LLC INTERESTS AND LLC UNITS MAY NOT BE SOLD OR
TRANSFERRED UNLESS SUBSEQUENTLY REGISTERED OR UNLESS AN EXEMPTION FROM
REGISTRATION IS AVAILABLE. THE LLC AGREEMENT (AS DEFINED BELOW) PROVIDES FOR
FURTHER RESTRICTIONS ON TRANSFER OF THE LLC INTERESTS AND LLC UNITS REPRESENTED
HEREBY.
CERTIFICATE FOR LLC INTEREST
IN
COMMCORP, LLC
Certificate No. ___________ _________ LLC UNITS
TIM NOVOSELSKI and DENISE NOVOSELSKI, as the Managers of CommCorp,
LLC, a California limited liability LLC (the "LLC"), hereby certify that
_________________________________________________ is the holder of _________ LLC
Offered Interest, as that term is defined in the Operating Agreement of
California, LLC, dated as of October 14, 1997, as amended and restated from time
to time (the "Agreement") (copies of which are on file at the principal office
of the LLC).
This Certificate is not negotiable or transferable except by
operation of law, or as otherwise provided in the Agreement, and any such
transfer will be valid only upon delivery of this Certificate, together with an
assignment in the form set forth on the reverse hereof (or otherwise acceptable
to the Managers and sufficient to convey an interest in an LLC pursuant to the
(California) Beverly-Killea Limited Liability LLC Act, as it may be amended and
in effect from time to time, or any successor statute thereto), duly executed,
to the Managers of the LLC.
Dated:________________ ____________________________________
TIM NOVOSELSKI and DENISE NOVOSELSKI
Managers of CommCorp, LLC
A California Limited Liability Company
EXHIBIT A
- 1 -
(REVERSE OF CERTIFICATE)
ASSIGNMENT OF LLC INTEREST
IN
COMMCORP, LLC
FOR VALUE RECEIVED, the undersigned ("Assignor") hereby assigns,
conveys, sells and transfers unto
________________________________________________________________________________
("Assignee")
________________________________________ _____________________________
(Please insert Social Security (Please print or typewrite
or other identifying number of Assignee) name and address of Assignee)
all rights and interest of Assignor in _________ LLC Units evidenced hereby and
directs that all future distributions and allocations with respect to such
specified assigned LLC Units be paid or allocated by the LLC to such Assignee.
The Assignor hereby irrevocably constitutes and appoints the Managers, and each
of them, as Assignor's attorney-in-fact with full power of substitution in the
premises to transfer the same on the books of the LLC.
Dated: __________________________ _______________________________
Signature of Assignor
Signature guaranteed: _________________________________________
Note: The signature to any assignment must correspond with the name as
written upon the face of this Certificate, in every particular,
without alteration or enlargement or any change whatever. If the
assignment is executed by an attorney, executor, administrator,
trustee or guardian, the person executing the assignment must give
such person's full title in such capacity, and proper evidence of
authority to act in such capacity, if not on file with the LLC or
its transfer agent, must be forwarded with this Certificate.
EXHIBIT A
- 2 -
The undersigned, the Managers of the LLC, hereby consents to this
Assignment pursuant to Section 12.2 of the Agreement.
Dated: _____________________
____________________________ _____________________________
TIM NOVOSELSKI DENISE NOVOSELSKI
Manager Manager
THE LLC INTEREST AND LLC UNITS EVIDENCED HEREBY ARE SUBJECT TO ALL
TERMS AND CONDITIONS OF THE AGREEMENT AND UNLESS AND UNTIL ADMITTED TO THE LLC
AS A MEMBER, NO ASSIGNEE SHALL BE ENTITLED TO ANY OF THE RIGHTS, POWERS OR
PRIVILEGES OF THE ASSIGNOR EXCEPT THAT ASSIGNEE SHALL BE ENTITLED TO THE
DISTRIBUTIONS PAID AND ALLOCATIONS MADE WITH RESPECT TO SUCH INTEREST AS
DIRECTED BY THE ASSIGNOR ABOVE.
EXHIBIT A
- 3 -
AMENDMENT TO
LIMITED LIABILITY COMPANY OPERATING AGREEMENT OF
COMMCORP, LLC
A CALIFORNIA LIMITED LIABILITY COMPANY
AMENDMENT, dated as of October 1, 1998 (this "Amendment"), to the Limited
Liability Company Operating Agreement (the "Agreement") of CommCorp, LLC, a
California Limited Liability Company ("CommCorp"), dated as of October 14, 1997,
among PRIMEDIA Intertec Corporation, a Delaware corporation ("Intertec"), and
Plaza Communications, Inc., a Delaware corporation ("Plaza," together with
Intertec, "Purchaser").
W I T N E S S E T H
WHEREAS, Purchaser has entered into a Purchase Agreement pursuant to which
Purchaser acquired all of the issued and outstanding membership interests of
CommCorp as of October 1, 1998; and
WHEREAS, Purchaser desires to amend the Agreement as provided hereunder;
NOW, THEREFORE, Purchaser has acquired all the membership interests of
CommCorp and are now the sole parties to the Agreement and the parties hereto
agree as follows:
1. Amendments. (a) Article 1 of the Agreement is hereby amended by
deleting both of the Initial Members' names and interest percentages in Section
1.26 and inserting new Members and interest percentages as follows:
"PRIMEDIA Intertec Corporation, a Delaware corporation: 99%
"Plaza Communications, Inc., a Delaware corporation: 1%."
(b) Article 3 of the Agreement is hereby amended by deleting both of the
Initial Members in Section 3.1 and inserting new Members in Section 3.1 as
follows:
"PRIMEDIA Intertec Corporation, a Delaware corporation, whose address is
9800 Metcalf, Overland Park, Kansas 66212-2215.
"Plaza Communications, Inc., a Delaware corporation, whose address is 745
Fifth Avenue, New York, New York 10151-0099."
(c) Article 6 of the Agreement is hereby amended by deleting Tim
Novoselski and Denise Novoselski as Managers and replacing them with Charles G.
McCurdy and Beverly C. Chell, who shall serve as the Managers of CommCorp.
(d) Other than as set forth in this Amendment, all terms and conditions of
the Agreement shall remain unchanged in full force and effect.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the
date first above written.
PRIMEDIA INTERTEC CORPORATION
By: /s/ Beverly C. Chell
----------------------------------
Name: Beverly C. Chell
Title: Vice Chairman
PLAZA COMMUNICATIONS, INC.
By: /s/ Ann M. Riposanu
----------------------------------
Name: Ann M. Riposanu
Title: Vice Chairman