Exhibit 10.02
SECOND AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
▇▇▇▇▇▇▇▇.▇▇▇ LLC
A DELAWARE LIMITED LIABILITY COMPANY
SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT of
▇▇▇▇▇▇▇▇.▇▇▇ LLC, a Delaware limited liability company (the "Company"), dated as
of March 25, 1999, by and among ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇"), Internet World
Media, Inc. ("Internet World") and the additional persons and entities listed on
Exhibit A and Exhibit C hereto (the "Members").
W I T N E S E T H:
WHEREAS, Internet World (the "Original Member") has formed a limited
liability company pursuant to the provisions of the Delaware Limited Liability
Company Act, Del. Code tit. 6, Section 18-101, et seq., as amended from time to
time (the "Act");
WHEREAS, pursuant to that certain Agreement and Plan of Merger (the
"Merger Agreement"), dated as of October 7, 1998, by and among Penton Media,
Inc., Internet World, Mecklermedia Corporation and ▇▇▇▇▇▇▇, the Original Member
agreed to sell an 80.1% interest in the Company to ▇▇▇▇▇▇▇ promptly following
the consummation of the Merger (as defined in the Merger Agreement);
WHEREAS, effective immediately upon consummation of the transactions
described in the Merger Agreement, the Original Member amended and restated the
Agreement to (i) admit ▇▇▇▇▇▇▇ as the Managing Member; (ii) reduce the Interest
of the Original Member; and (iii) provide for the affairs of the Company to be
conducted as set forth herein;
WHEREAS, in consideration of the additional Capital Contributions
set forth on Exhibit A, the Company now desires to issue Units to the persons
set forth on Exhibit A and to admit each person set forth on Exhibit A who is
not an existing Member as an additional Member;
WHEREAS, in consideration for the performance of services on behalf
of the Company, the Company now desires to admit the persons listed on Exhibit C
hereto as additional Members; and
WHEREAS, the Members hereby constitute themselves a limited
liability company for the purposes and on the terms and conditions set forth in
this Agreement.
NOW, THEREFORE, in consideration of the mutual promises of the
parties hereto, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, it is mutually agreed by and among
the parties hereto as follows:
ARTICLE I.
Introductory Provisions
Section 1.1. Certain Definitions. As used herein:
"Act" shall have the meaning set forth in the preamble.
"Affiliate" shall mean, with respect to any Person, any other Person
who directly or indirectly controls, is controlled by or is under common control
with such Person, or, in the case of a natural person, any immediate family
member of such Person.
"Agreement" shall mean this Second Amended and Restated Limited
Liability Company Agreement of ▇▇▇▇▇▇▇▇.▇▇▇ LLC, as originally executed and as
amended, modified or supplemented pursuant to the provisions hereof.
"Book Value" shall have the meaning given to it in Section 2.2.
"Board" shall have the meaning given to it in Section 3.2.
"Capital Account" has the meaning specified in Section 4.1.
"Capital Contribution" means a contribution by a Member to the
capital of the Company pursuant to this Agreement. A Capital Contribution may be
in cash or in such other form, including tangible and intangible assets, at such
valuation as shall be established by the Board.
"Certificate" means the Certificate of Formation of the Company as
filed with the Secretary of State of Delaware, as it may be amended from time to
time.
"Change in Control" means the acquisition or acquisitions, directly
or indirectly, by any one or more individuals, entities or groups (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended, other than ▇▇▇▇▇▇▇ or a member of his immediate family or any
Affiliate of 50% or more of the aggregate Units.
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"Code" means the Internal Revenue Code of 1986, as amended. Any
reference to a section of the Code shall include a reference to any amendatory
or successor provision thereto.
"Fiscal Year" has the meaning specified in Section 4.3.
"Indemnified Persons" has the meaning specified in Section 3.3.
"Initial Public Offering" shall mean an initial public offering of
the securities of the Company or of shares of common stock of any corporate
successor to the Company pursuant to a registration statement filed under the
Securities Act.
"Management Interest" shall mean, with respect to any Management
Member, as of any date, a fraction with a numerator equal to the Management
Points allocated to such Management Member and a denominator equal to the total
number of Management Points allocated to all Management Members on or before
such date (as set forth in Exhibit C hereto).
"Management Member" shall mean any Person listed on Exhibit C hereto
and "Management Members" shall collectively mean all Persons listed on Exhibit C
hereto.
"Managing Member" shall mean ▇▇▇▇▇▇▇.
"Management Points" shall mean, in respect of any Management Member,
the number of Management Points, if any, allocated to such Management Member on
the date hereof (as set forth in Exhibit C hereto). It is the intention of the
parties that all Management Points allocated on the date hereof shall qualify as
"profits interests" within the meaning of Revenue Procedure 93-27.
"Net Profits" and "Net Losses" means the income and loss of the
Company as determined in accordance with the accounting methods followed by the
Company for Federal income tax purposes but including as an item of profit
income exempt from tax and described in Code Section 705(a)(1)(B), treating as
deductions items of expenditure described in, or under Treasury Regulations
deemed described in, Code Section 705(a)(2)(B) and treating as an item of gain
(or loss) both any increase (decrease) in the Book Value of the Company's
property under Section 2.2(c) and the excess (deficit), if any, of the fair
market value (taking Section 7701(g) of the Code into account) of distributed
property over (under) its Book Value. Depreciation, depletion, amortization,
income and gain (or loss) with respect to Company assets shall be computed with
reference to their Book Value rather than to their adjusted bases in an amount
consistent
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with Treasury Regulations ss. 1.704-1(b)(2)(iv)(g). Profit or loss resulting
from the disposition of assets shall be determined by reference to Book Value
rather than adjusted tax basis.
"Net Profits from Operations" and "Net Losses from Operations"
means Net Profits and Net Losses, respectively, of the Company other than Net
Profits or Net Losses from Capital Transactions.
"Net Profits from Capital Transactions" and "Net Losses from Capital
Transactions" means Net Profits and Net Losses, respectively, of the Company
attributable to the disposition of property of the Company, including for this
purpose any increase (decrease) in the Book Value of the Company's property
under Section 2.2(c) and the excess (deficit), if any, of the fair market value
(taking Section 7701(g) of the Code into account) of distributed property over
(under) its Book Value.
"Notices" has the meaning specified in Section 8.1(a).
"Ownership Percentage" means the percentage that is equal to the
number of Units held by a Member divided by the total number of Units
outstanding, each as specified on Exhibit A hereto, as such Exhibit may be
amended from time to time.
"Person" means an individual, corporation, association, limited
liability company, limited liability partnership, partnership, estate, trust,
unincorporated organization or a government or any agency or political
subdivision thereof.
"Tax Distribution" has the meaning specified in Section 6.3.
"Transfer" has the meaning specified in Section 2.6(a).
"Treasury Regulations" means the regulations promulgated by the
U.S. Department of the Treasury under the Code.
"Unit" has the meaning set forth in Section 2.1.
"Warrant" means that certain Warrant to Purchase Units of the
Company executed on November 24, 1999 and issued to Internet World.
Section 1.2. Name. The name of the Company shall be "▇▇▇▇▇▇▇▇.▇▇▇
LLC."
Section 1.3. Principal Place of Business. The Company's principal
place of business shall be at such place as the Managing Member shall designate
from time to time.
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Section 1.4. Purposes. The purposes of the Company shall be to
conduct the Business (as hereinafter defined), as well as any other lawful
business, purpose or activity related to the Internet industry and otherwise
permitted under the laws of the State of Delaware, and all acts and things
necessary, appropriate, proper, advisable, incidental to or convenient for the
furtherance and accomplishment of such purposes. For purposes of this Agreement,
the Company's "Business" consists of an Internet web site that contains the
latest news and resources for the Internet industry, directories of Internet
products and services, back issues of Internet World's print publications and
information about Internet World's Internet World trade shows and conferences.
Section 1.5. Duration. The Company was formed upon the filing of a
Certificate of Formation with the Office of the Secretary of State of Delaware
pursuant to the Act and shall continue until dissolved pursuant to Section 7.1.
Section 1.6. Limitation of Liability. All debts, obligations and
liabilities of the Company shall be debts, obligations and liabilities of the
Company as an entity, and shall be paid or satisfied from the assets of the
Company. In no event shall any of the debts, obligations or liabilities of the
Company be payable in whole or in part by (a) any Member, employee, agent,
advisor or other representative of the Company; (b) any direct or indirect
member, general or limited partner or shareholder in, or ultimate beneficial
owner of, a Member, or any other Affiliate (other than the Company itself) of a
Member; or (c) any board member, managing director, officer, employee, agent,
advisor or other representative of any of the Persons referred to in the
preceding clause (b).
ARTICLE II.
Capital Contributions; Other Financing;
Units
Section 2.1. Capital Contributions; Units. (a) The Capital
Contributions of each Member shall be represented by membership units or
fractions thereof ("Units," and each, a "Unit"). At the initial date of this
Agreement, the number of Units and the corresponding Capital Contribution (which
shall, in the case of ▇▇▇▇▇▇▇ and his Affiliates, be equal to the amount paid by
▇▇▇▇▇▇▇ and his Affiliates to Internet World for their respective interests in
the Company) and Ownership Percentage for each Member shall be as set forth on
Exhibit A attached hereto. Exhibit A shall be amended from time to time in
accordance with
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the terms hereof to reflect (i) the admission of new Members and (ii)
appropriate adjustments to such Ownership Percentages and Capital Contributions.
(b) Except as provided in Section 2.7 or Section 3.2, no
Person (including any Member) shall be required or permitted to make any
additional Capital Contribution to the Company.
Section 2.2. Determination of Book Value of Company Assets.
(a) Book Value. Except as set forth below, Book Value of any
Company asset is its adjusted basis for federal income tax purposes.
(b) Initial Book Value. The initial Book Value of any assets
contributed by a Member to the Company shall be the gross fair market value of
such assets at the time of such contribution.
(c) Adjustments. The Book Values of all of the Company's
assets shall be adjusted by the Company to equal their respective gross fair
market values, as determined by the Board by unanimous vote, as of the following
times: (a) the admission of a new Member to the Company or the acquisition by an
existing Member of an additional interest in the Company from the Company
(including the issuance of Warrant Units to Internet World pursuant to the
exercise of the Warrant); (b) the distribution by the Company of money or
property to a retiring or continuing Member in consideration for all or a
portion of such Member's interest in the Company; (c) the liquidation of the
Company; and (d) such other times as determined by the Board by unanimous vote.
(d) Depreciation and Amortization. The Book Value of a Company
asset shall be adjusted (i) for the depreciation and amortization of such asset
taken into account in computing Net Profits and Net Losses and (ii) for Company
expenditures and transactions that increase or decrease the asset's Federal
income tax basis.
Section 2.3. Withdrawal of Capital; Limitation on Distributions. No
Member shall be entitled to withdraw any part of its Capital Contributions to,
or to receive any distributions from, the Company except as provided in Section
6.1 and Section 7.2. No Member shall be entitled to demand or receive (i)
interest on its Capital Contributions or (ii) any property from the Company
other than cash except as provided in Section 7.2(a).
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Section 2.4. Allocation of Net Profits and Net Losses.
(a) Allocation of Net Profits and Losses from Operations
(i)(a) Net Profits from Operations shall first be allocated in
proportion to, and to the extent of, the excess of prior allocations of Net
Losses from Operations under Section 2.4(a)(ii)(b) below over prior allocations
of Net Profits from Operations under this Section 2.4(a)(i)(a) and, then, (b)
among the Members in proportion to their Ownership Percentages.
(ii)(a) Net Losses from Operations shall first be allocated
among the Members in proportion to their Ownership Percentages until the Capital
Account of any Member is reduced to zero, then (b) among the Members in
proportion to, and to the extent of, their positive Capital Account balances
and, finally, (c) to the Members in proportion to their Ownership Percentages.
(b) Allocation of Net Profits and Losses from Capital Transactions
(i)(a) Net Profits from Capital Transactions shall first be
allocated in proportion to and to the extent of, the excess of prior allocations
of Net Losses from Capital Transactions under Section 2.4(b)(ii)(b) below over
prior allocations of Net Profits from Capital Transactions under this Section
2.4(b)(i)(a) and, then, (b) except as provided in Section 2.4(b)(iii) below, to
the Management Members in accordance with their respective Management Interests
until the aggregate Capital Account of the Management Members is equal to 4% of
the aggregate Capital Accounts of all Members and, finally, (c) among the
Members in proportion to their Ownership Percentages. At such time as the
aggregate Capital Account of the Management Members is equal to 4% of the
aggregate Capital Accounts of all Members, (i) the Management Members shall be
deemed to own Incentive Units equal to 4% of the total Units outstanding and to
have an aggregate Ownership Percentage equal to 4%; and (ii) the Ownership
Percentage of each Member other than the Management Members shall be diluted
proportionately by the deemed issuance of such Incentive Units to the Management
Members, in each case for all purposes of this Agreement, including for purposes
of any further allocations of Net Profits or Net Losses under this Section 2.4.
The percentages set forth in the preceding sentence shall be appropriately
adjusted to account for the issuance of additional Units by the Company under
Section 3.2 after the date of this Agreement.
(ii)(a) Net Losses from Capital Transactions shall first be
allocated among the Members in proportion to their
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Ownership Percentages until the Capital Account of any Member is reduced to
zero, then (b) among the Members in proportion to, and to the extent of, their
positive Capital Account balances and, finally, (c) to the Members in proportion
to their Ownership Percentages.
(iii) Notwithstanding Section 2.4(b)(i)(a), upon the exercise
of the Warrant by Internet World, Net Profits from Capital Transactions shall
first be allocated to Internet World until the Capital Account balance of
Internet World bears the same proportion to the total of the Capital Account
balances of all Members other than the Capital Account balances of the
Management Members in respect of their Management Interests (taking into account
the amount contributed to the Company by Internet World pursuant to such
exercise and all amounts allocated pursuant to this Section 2.4(b)(iii)) as the
number of Units held by Internet World immediately after such exercise bears to
the total number of Units (other than Incentive Units) held by all Members
immediately after such exercise.
(c) Other Items
(a) Tax credits shall be allocated among the Members in
proportion to their Ownership Percentages or as otherwise required by the Code
or Treasury Regulations.
(b) When the Book Value of a Company asset differs from its
basis for Federal or other income tax purposes, solely for purposes of the
relevant tax and not for purposes of computing Capital Account balances, income,
gain, loss, deduction and credit shall be allocated among the Members under the
traditional method without curative allocations under Treasury Regulation
Section 1.704-3(b).
Section 2.5 Special Allocations. Notwithstanding the general
allocation rules set forth in Section 2.4, the following special allocation
rules (the "Regulatory Allocations") shall apply under the circumstances
described therein:
(a) Deficit Capital Account and Nonrecourse Debt Rules. The
special rules in this Section 2.5(a) apply, in the following order, to take into
account the possibility of Members having deficit Capital Account balances for
which they are not economically responsible and the effect of the Company or any
entity taxed as a partnership in which the Company has an ownership interest
incurring nonrecourse debt.
(i) Partnership Minimum Gain Chargeback. If there is a net
decrease in "partnership minimum gain" during any year, to be determined in
accordance with Treasury Regulations ss.
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1.704-2, including the tiered partnership rules of Treasury Regulations ss.
l.704-2(k), each Member shall be allocated items of income and gain for such
year equal to such Member's share of the net decrease in partnership minimum
gain within the meaning of Treasury Regulations ss. l.704-2(g)(2), except to the
extent not required by Treasury Regulations ss. 1.704-2(f). To the extent that
this Section 2.5(a)(i) is inconsistent with Treasury Regulations ss. l.704-2(f)
or 1.704-2(k) or incomplete with respect to such regulations, the minimum gain
chargeback provided for herein shall be applied and interpreted in accordance
with such regulations.
(ii) Partner Nonrecourse Debt Minimum Gain Chargeback. If
there is a net decrease in "partner nonrecourse debt minimum gain" during any
year, within the meaning of Treasury Regulations ss. 1.704-2(i)(2), each Member
who has a share of the partner nonrecourse debt minimum gain attributable to
such partner nonrecourse debt, determined in accordance with Treasury
Regulations ss. 1.704-2(i)(5), shall be allocated items of income and gain for
such year (and, if necessary, subsequent years) equal to such Member's share of
the net decrease in partner nonrecourse debt minimum gain. This allocation will
be made in accordance with Treasury Regulations ss. 1.704-2(i)(4) and
1.704-2(f)(5). To the extent that this Section 2.5(a)(ii) is inconsistent with
Treasury Regulations ss. 1.704-2(i) or 1.704-2(k) or incomplete with respect to
such regulations, the partner nonrecourse debt minimum gain chargeback provided
for herein shall be applied and interpreted in accordance with such regulations.
(iii) Deficit Capital Account Chargeback and Qualified Income
Offset. If any Member has a deficit balance in its Capital Account in excess of
such Member's share of partnership minimum gain and partner nonrecourse debt
minimum gain at the end of any year, including a deficit balance for such Member
caused or increased by an adjustment, allocation or distribution described in
Treasury Regulations ss. 1.704-1(b)(2)(ii)(d)(4), (5) or (6), such Member shall
be allocated items of income and gain (consisting of a pro rata portion of each
item of Company income, including gross income and gain) in an amount and manner
sufficient to eliminate such deficit balance in its Capital Account as quickly
as possible to the extent required by Treasury Regulations ss.
1.704-1(b)(2)(ii). This Section 2.5(a)(iii) is intended to constitute a
"qualified income offset" pursuant to Treasury Regulations ss.
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
(iv) Partner Nonrecourse Deductions. Any partner nonrecourse
deductions for any year or other period shall be allocated to the Member who
bears the economic risk of loss with
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respect to the partner nonrecourse debt to which such partner nonrecourse
deductions are attributable in accordance with Treasury Regulations ss.
1.704-2(i) or 1.704-2(k).
(v) Curative Allocations. The Regulatory Allocations described
in this Section 2.5(a) may not be consistent with the manner in which the
Members intend to divide Net Profits, Net Losses and similar items. Accordingly,
Net Profits, Net Losses and other items will be reallocated among the Members
(in the same year and to the extent necessary, in subsequent years) in a manner
consistent with Treasury Regulations ss. 1.704-1(b) and 1.704-2 so as to prevent
the Regulatory Allocations from distorting the manner in which Net Profits, Net
Losses and other items are intended to be allocated among the Members pursuant
to Section 2.4 and in making such reallocations, account shall be taken of
future Regulatory Allocations that will in all likelihood occur.
(vi) Section 754 Adjustments. To the extent an adjustment to
the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b)
of the Code is required, pursuant to Treasury Regulations ss.
1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts,
the amount of such adjustment to the Capital Accounts shall be treated as an
item of profit (if the adjustment increases the basis of the asset) or loss (if
the adjustment decreases such basis) and such profit or loss shall be specially
allocated to the Member in a manner consistent with the manner in which their
Capital Accounts are required to be adjusted pursuant to such section of the
Treasury Regulations.
(b) Change in Member's Interest. If there is a change in
any Member's share of the Company's Net Profits, Net Losses or other items
during any year, allocations among the Members shall be made in accordance with
their interests in the Company from time to time during such year in accordance
with Section 706 of the Code, using the closing-of-the-books method, except that
depreciation, amortization and similar items shall be deemed to accrue ratably
on a daily basis over the entire year during which the corresponding asset is
owned by the Company for the entire year, and over the portion of a year after
such asset is placed in service by the Company if such asset is placed in
service during the year.
(c) Nonrecourse Debt Sharing. For purposes of this
Agreement, the Members shall be deemed to be allocated nonrecourse deductions,
within the meaning of Treasury Regulations ss. 1.704-2(b)(1), in accordance with
their proportionate number of Units. Solely for purposes of determining an
Member's proportionate share of the "excess
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nonrecourse liabilities" of the Company within the meaning of Treasury
Regulations ss. 1.752-3(a)(3), each Member's interest in the Company profits is
equal to the number of Units owned by such Member divided by the number of
outstanding Units.
Section 2.6 Restrictions on Transfers.
(a) Transfer of Units. (i) Except as expressly provided in
this Agreement, a Member may not sell, exchange, transfer, assign, pledge,
hypothecate or otherwise dispose of all or any portion of any of such Member's
Units or, in the case of a Management Member, such Management Member's
Management Interest, or any interest therein (a "Transfer") (except for a
Transfer by Internet World to any Person or by any Member to a Permitted
Transferee) without the written consent of the Board, which consent may be
withheld for any reason. The Company shall not register any Transfer of a
Member's Units, a Management Member's Management Interest, or any interest
therein, and any such Transfer or registration of Transfer shall be null and
void, without the written consent of the Board. An assignee who has not been
admitted as a Member shall be entitled only to allocations and distributions
with respect to such interest in accordance with this Agreement, and shall have
no right to any information or, to the fullest extent permitted by law,
accounting of the affairs of the Company, shall not be entitled to inspect the
books or records of the Company and shall not have any of the rights of a Member
under the Act or this Agreement, but shall otherwise assume in writing prior to
such Transfer, other than a pledge (in respect of which such compliance shall be
required after sale or foreclosure), all obligations of the assignor hereunder
as if such assignee were the assignor; no such assignment shall be valid unless
the assumption of obligations described in this sentence has been executed.
Neither a Transfer of Units nor the admission of the Transferee thereof as a
Member shall discharge the transferor from any obligation hereunder.
(ii) The restrictions contained in this Section 2.6(a) shall not
apply with respect to any Transfer of Units or any part thereof by any Member
(a) among its Affiliates, (b) to any lender to whom a Member's Units or any part
thereof are assigned or pledged pursuant to a loan agreement, (c) to any
Member's spouse or children or to a trust or the trustee or trustees of a trust
directly or indirectly for the benefit of the Member's spouse, children or a
charitable organization, (d) to the Member's executors, administrator,
testamentary trustee, legatees or beneficiaries upon the Member's death or (e)
by gift (all such transferees shall be collectively referred to as the
"Permitted Transferees"); provided, that the Permitted Transferee shall execute
a counterpart of this Agreement; and provided, further that the restrictions
contained in this Agreement shall
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continue to apply to the Units after such Transfer by reference to the original
Member; and provided, further, that the transferor shall remain liable for all
of its obligations under this Agreement that survive.
(b) Rights of First Refusal. (i) In addition to the
restrictions contained in Section 2.6(a), no Member shall Transfer its Units or
any part thereof (other than to a Permitted Transferee) or exercise any
Drag-Along Right unless the Member desiring to make the Transfer or exercise
such Drag-Along Right (hereinafter referred to as the "Transferor") shall have
first made the offers to sell to the other Members (the "Other Members") as
contemplated by Section 2.6(b)(ii) through 2.5(b)(vii), and such offers shall
not have been accepted.
(ii) Offer by Transferor. Copies of the Transferor's offer
shall be given to all Other Members and shall consist of an offer to sell to
such Other Members all of the Units then proposed to be transferred by the
Transferor (the "Subject Units") pursuant to a bona fide offer of a third party,
other than an Affiliate of the Transferor, to which copies shall be attached a
statement of intention to Transfer to such third party, the name and address of
the prospective third party transferee, the portion of the Units involved in the
proposed Transfer, and terms of such Transfer which must include (A) all
consideration payable at closing and (B) that the offer is not contingent on any
event other than the non-acceptance of the Transferor's offer by the Other
Members.
(iii) Acceptance of Offer. Within 20 days after the receipt of
the offer described in Section 2.6(b)(ii), one or more of the Other Members (the
"Participating Other Members") may, at their option, elect to purchase all, but
not less than all, of the Subject Units, in such proportion per Participating
Other Member as shall be determined by the Participating Other Members;
provided, that should the Participating Other Members be unable to determine the
proportion of the Subject Units to be purchased by each within 20 days after the
receipt of the offer, each Participating Other Member which has not withdrawn
its election to purchase shall purchase a proportion of the Subject Units equal
to the Subject Units multiplied by the Ownership Percentage of such
Participating Other Member. The Participating Other Members shall exercise such
option by giving notice thereof to the Transferor within such 20-day period. The
notice required to be given by the Participating Other Members (the
"Purchasers") shall specify a date for the closing of the purchase which shall
not be more than 30 days after the date of the giving of such notice. In the
event that any party shall initiate an appraisal procedure pursuant to Section
2.6(b)(v) and (vi), such 20-day period shall be suspended as of (and including)
the date
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immediately following the date on which notice of such appraisal procedure is
given pursuant to Section 2.6(b)(v) and shall resume on (and including) the date
on which the appraisal procedure is completed pursuant to Section 2.6(b)(vi).
(iv) Purchase Price. The purchase price for the Subject Units
shall be the price for the Subject Units offered to be paid by the prospective
transferee described in the offer, which price shall be paid in cash or, if
described in the offer of the prospective transferee, cash plus deferred
payments of cash in the same proportions, and with the same terms of deferred
payments, as therein set forth.
(v) Consideration Other Than Cash. If the offer of a Subject
Units under this Section 2.6(b) is for consideration other than cash or cash
plus deferred payments of cash, the Purchaser shall pay the cash equivalent of
such other consideration. If the Transferor and the Purchaser cannot agree on
the amount of such cash equivalent within 10 days after the beginning of the
20-day period under Section 2.6(b)(iii), any of such parties may, by three days'
written notice to the other, initiate appraisal proceedings under Section
2.6(b)(vi) for determination of the cash equivalent. The Purchaser may give
written notice to the Transferor revoking an election to purchase the Subject
Units within 10 days after determination of the appraised value, if it chooses
not to purchase the Subject Units.
(vi) Appraisal Procedure. If any party shall initiate an
appraisal procedure to determine the amount of the cash equivalent of any
consideration for a Subject Units under Section 2.6(b)(v), then the Transferor,
on the one hand, and the Purchaser, on the other hand, shall each promptly, but
in no event later than 10 days following written notice of such appraisal
procedure pursuant to Section 2.6(b)(v), appoint as an appraiser an individual
who shall be a member of a nationally-recognized investment banking firm. Each
appraiser shall, within 30 days of appointment, separately investigate the value
of the consideration for the Subject Units as of the proposed transfer date and
shall submit a notice of an appraisal of that value to each party. Each
appraiser shall be instructed to determine such value without regard to income
tax consequences to the Transferor as a result of receiving cash rather than
other consideration. If the appraised values of such consideration (the "Earlier
Appraisals") vary by less than 10%, the average of the two appraisals shall be
controlling as the amount of the cash equivalent. If the appraised values vary
by more than 10%, the appraisers, within 10 days of the submission of the last
appraisal, shall appoint a third appraiser who shall be a member of a nationally
recognized investment banking firm. The third appraiser shall, within 30 days of
his appointment, appraise the
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value of the consideration for the Subject Units (without regard to the income
tax consequences to the Transferor as a result of receiving cash rather than
other consideration) as of the proposed transfer date and submit notice of his
appraisal to each party. The value determined by the third appraiser shall be
controlling as the amount of the cash equivalent unless the value is greater
than the two Earlier Appraisals, in which case the higher of the two Earlier
Appraisals will control, and unless that value is lower than the two Earlier
Appraisals, in which case the lower of the two Earlier Appraisals will control.
If any party fails to appoint an appraiser or if one of the two initial
appraisers fails after appointment to submit his appraisal within the required
period, the appraisal submitted by the remaining appraiser shall be controlling.
The cost of the foregoing appraisals shall be shared one-half by the Transferor
and one-half by the Purchaser.
(vii) Closing of Purchase. The closing of the purchase shall
take place at the office of the Company or such other location as shall be
mutually agreeable and the purchase price, in cash, shall be paid at the
closing. At the closing, the Transferor shall deliver to the Purchaser or
Purchasers documentation reasonably satisfactory to the Purchaser or Purchasers
evidencing the transfer of ownership of the Subject Units from the Transferor to
the Purchaser or Purchasers.
(c) Right of Co-Sale. In the event ▇▇▇▇▇▇▇ intends to Transfer
(i) all or part of his equity interest in the Company pursuant to an offering
registered under the Securities Act of 1933, as amended (the "Securities Act")
or (ii) at least 30% of his Units in any other transaction, other than to a
Permitted Transferee, ▇▇▇▇▇▇▇ shall notify each other Member, in writing, of
such Transfer and its terms and conditions. Within twenty (20) days of the date
of such notice, each Member shall notify ▇▇▇▇▇▇▇ if it elects to participate in
such Transfer. Each Member that so notifies ▇▇▇▇▇▇▇ shall have the right to
sell, at the same price and on the same terms as ▇▇▇▇▇▇▇, a percentage of such
Member's Units equal to the percentage of ▇▇▇▇▇▇▇'▇ Units that the third party
actually proposes to purchase. For purposes of this Section 2.6(c) only, the
term "▇▇▇▇▇▇▇" shall include ▇▇▇▇▇▇▇ and/or his Permitted Transferees or
Affiliates and/or their Permitted Transferees or Affiliates, as the case may be,
and the term "Member" shall not include ▇▇▇▇▇▇▇ or his Affiliates.
Notwithstanding the foregoing, this Section 2.6(c) shall not apply to any
Management Interest of the Management Members until such time as the Management
Members are deemed to own Incentive Units equal to 4% (as adjusted under Section
3.2) of the total Units outstanding pursuant to Section 2.4 of this Agreement.
14
(d) Drag Along Right. (i) Subject to Section 2.6(b), if, at
any time and from time to time after the date of this Agreement, ▇▇▇▇▇▇▇ wishes
to Transfer in a bona fide arms' length sale (for purposes of this Section
2.6(d), the "Proposed Transfer") 30% or more of his Units to any Person or
Persons who are not Affiliates of ▇▇▇▇▇▇▇ (for purposes of this Section 2.6(d),
the "Proposed Transferee"), ▇▇▇▇▇▇▇ shall have the right (for purposes of this
Section 2.6(d), the "Drag-Along Right") to require each Member to sell to the
Proposed Transferee all or a ratable portion of each such Member's Units, as the
case may be, (for the same proportional consideration received by ▇▇▇▇▇▇▇,
taking into account all consideration received by ▇▇▇▇▇▇▇ under related
agreements) then owned by such Member. Each Member agrees to take all steps
necessary to enable him or it to comply with the provisions of this Section
2.6(d). For purposes of this Section 2.6(d) only, the term "▇▇▇▇▇▇▇" shall
include ▇▇▇▇▇▇▇ and/or his Permitted Transferees or Affiliates and/or their
Permitted Transferees or Affiliates, as the case may be, and the term "Member"
shall not include ▇▇▇▇▇▇▇ or his Affiliates, but only to the extent that ▇▇▇▇▇▇▇
or his Affiliates do not participate in the Proposed Transfer. Notwithstanding
the foregoing, this Section 2.6(d) shall not apply to any Management Interest of
the Management Members until such time as the Management Members are deemed to
own Incentive Units equal to 4% (as adjusted under Section 3.2) of the total
Units outstanding pursuant to Section 2.4 of this Agreement.
(ii) To exercise a Drag-Along Right, ▇▇▇▇▇▇▇ shall comply with
Section 2.6(b) and, if the Other Members do not exercise their rights
thereunder, give each Member a written notice (for purposes of this Section
2.6(d), a "Drag-Along Notice") containing (i) the name and address of the
Proposed Transferee and (ii) the proposed purchase price, terms of payment and
other material terms and conditions of the Proposed Transferee's offer. Subject
to Section 2.6(b), each Member shall thereafter be obligated to sell its Units
subject to such Drag-Along Notice, provided, that the sale to the Proposed
Transferee is consummated within ninety (90) days of delivery of the Drag-Along
Notice. If the sale is not consummated within such 90-day period, then each
Member shall no longer be obligated to sell such Member's shares pursuant to
that specific Drag-Along Right but shall remain subject to the provisions of
this Section 2.6(d).
(iii) Notwithstanding anything contained in this Section
2.6(d), in the event that all or a portion of the purchase price consists of
securities and the sale of such securities to the Members would require either a
registration under the Securities Act or the preparation of a disclosure
document pursuant to Regulation D under the Securities Act (or
15
any successor regulation) or a similar provision of any state securities law,
then, at the Managing Member's option, the Members may receive, in lieu of such
securities, the fair market value of such securities in cash, as determined in
good faith by the Board.
Section 2.7 Management Incentive Units. The Managing Member may
authorize Units for grant or sale to key employees of the Company other than
▇▇▇▇▇▇▇ (the "Incentive Units"), in such amounts, with such terms and
conditions, and in such manner -- including incentive and non-qualified Unit
options, restricted Unit grants, Unit bonuses or other option or incentive
programs -- as the Managing Member shall determine from time to time; provided,
however, that in no event shall the number of outstanding Incentive Units exceed
49.3343219; and provided, further, that it shall be a condition to the issuance
of any Incentive Units that the employee or other recipient, as the case may be,
execute and deliver to the Company and each party hereto a counterpart of this
Agreement. Upon such execution and delivery, Exhibit A hereto shall be deemed to
be amended to include the name of such employee or other recipient, as the case
may be, and such employee or other recipient, as the case may be, shall be
deemed to be a Member for all purposes hereof. In the event a Member ceases to
own beneficially Incentive Units, such Member shall no longer be deemed a Member
for any purpose hereunder. The Ownership Percentage of each Member shall be
diluted proportionally by the issuance of any additional Units pursuant to this
Section 2.7.
Section 2.8 Call Option on Management Interests. In the event that
the Company does not undergo a Change in Control or an Initial Public Offering
by March 25, 2004, the Company shall have the right, but not the obligation, to
purchase any or all of the Management Interests from one or more Management
Members for $100 per Management Point, or fraction thereof.
ARTICLE III.
Management
Section 3.1. Management by the Members.
(a) General Provisions. The management of the Company shall be
vested in the Managing Member. Except as otherwise provided in this Agreement,
the Managing Member shall have all authority, rights and powers in the
management of the Company business to do any and all acts and things necessary,
proper, appropriate, advisable, incidental or convenient to effectuate the
purposes of this Agreement. Any action taken by the Managing Member on behalf of
the Company in accordance with
16
the foregoing provisions shall constitute the act of and shall serve to bind the
Company.
(b) Board. (i) Certain actions by the Company, as further set
forth herein, shall be taken by the Company only upon approval by the Managing
Board (the "Board"), which shall be composed of three persons, consisting of (A)
two Persons (one of whom may be ▇▇▇▇▇▇▇, and neither of whom need be Members)
designated by ▇▇▇▇▇▇▇ and (B) one Person (who need not be a Member) designated
by Internet World (collectively, "Board Members"). Each of ▇▇▇▇▇▇▇ and Internet
World shall reserve the right to remove and replace at any time any Board Member
that they have designated to sit on the Board pursuant to this Section
3.1(b)(i).
(ii) Meetings of the Board shall be held either within or
without the State of Delaware at such times and locations as may be determined
by the Managing Member. Notice of each meeting shall be given by the Managing
Member to each Board Member and shall state the place, date and time of the
meeting. Notice of such meeting shall be mailed, postage prepaid, to each Board
Member addressed to him at his address or usual place of business by first class
mail, at least two (2) days before the day on which such meeting is to be held,
or shall be sent addressed to such Board Member at such place by facsimile,
overnight courier, telex, or be delivered to him personally or by telephone, at
least twenty-four (24) hours before the time at which such meeting is to be
held.
(iii) A majority of the Board Members shall constitute a
quorum for the transaction of business. If a quorum shall not be present at any
meeting of the Board, the Board Members present thereat may adjourn the meeting
to another time and place. Notice of such time and place of the adjourned
meeting shall be given to all of the Board Members unless such time and place
were announced at the meeting at which the adjournment was taken, in which case
such notice shall only be given to the Board Members who were not present
thereat. At such adjourned meeting at which a quorum is present, any business
may be transacted which might have been transacted at the meeting as originally
called. Wherever approval by the Board is required by this Agreement, such
approval shall, except as otherwise set forth herein, consist of the affirmative
vote of a majority of the Board Members.
(iv) (A) Any action required or permitted to be taken by the
Board may be taken without a meeting if all the Board Members consent in
writing, and (B) one or more Board Members may participate in any meeting of the
Board by means of conference telephone or similar communications equipment by
means
17
of which all persons participating in the meeting can hear each other, and such
participation in the meeting pursuant to this Section 3.1(b)(iv)(B) shall
constitute presence in person at the meeting.
(c) Delegation of Powers. The Managing Member may by
instrument in writing delegate its powers, but not its responsibilities, to
officers or agents or employees of the Company or of any Member or to any other
Person; provided, however, that no Person shall be entitled to rely on such
delegation unless presented with a copy of such written instrument.
(d) Bank Accounts. The Managing Member shall cause the Company
to open and maintain bank accounts, and all funds of every kind and nature
received by the Company shall be deposited in such accounts. Signatories for
such accounts shall be authorized from time to time by the Managing Member.
Section 3.2. Admission of New Members; Sale of Additional Units.
(a) Subject to Section 3.2(b), the Company may sell additional
Units on such terms and conditions as the Board shall from time to time
determine. The Ownership Percentage of each Member shall be diluted
proportionally by the issuance of any additional Units. All persons to whom
additional Units are sold shall be admitted as Members. In the event of the
admission of new or additional Members, Exhibits A and B hereto shall be amended
accordingly.
(b) In the event that the Company determines to issue any
Units, other than (i) pursuant to Section 2.7, (ii) the issuance of additional
Units and admittance of additional Members in connection with any acquisition,
merger, reorganization or other business combination by or involving the Company
or (iii) in connection with an Initial Public Offering, the Company shall first
offer to each Member the right to subscribe for a portion of such Units in an
amount equal to the product of (i) the total number of Units to be issued by the
Company pursuant to this Section 3.2(b) and (ii) a fraction, the numerator of
which is the number of Units held by such Member prior to such issuance, and the
denominator of which is the total number of Units held prior to such issuance by
all Members other than Members that acquired their interest pursuant to Section
2.7. For a period of 30 days after such offer, each Member shall have the right,
but not the obligation, to acquire such Units. After the expiration of such 30
day period, the Company shall have the right, during the 90 days after the
expiration of the 30 day period, to sell the unsubscribed portion of such Units
to any third party on terms
18
(including payment terms) not less favorable to the Company than those on which
the Units were offered to the Members. If the Company is able to sell the
unsubscribed Units to third parties, or if all of the offered Units are
subscribed by Members, then each subscribing Member shall be obligated to, and
shall, purchase its subscribed portion of the offered Units. If the Company is
not able to sell the unsubscribed Units to third parties, or if all of the
offered Units are not subscribed by Members, respectively, then each subscribing
Member shall have the right, but not the obligation, to purchase its subscribed
portion of the offered Units on the terms of its subscription.
(c) Internet World may exercise its rights under the Warrant
Agreement dated November 24, 1998 by and among Internet World, ▇▇▇▇▇▇▇ and the
Company (the "Warrant Agreement"). Section 3.2(b) shall not apply to any
interest acquired by Internet World pursuant to the Warrant Agreement.
Section 3.3. Indemnification. Any Person made, or threatened to be
made, a party to any action or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that such Person is or
was (i) a Member, or (ii) an employee, officer, director, shareholder or partner
of a Member, or (iii) such other persons (including employees of the Company) as
the Board may designate from time to time, in its sole and absolute discretion
(collectively, the "Indemnified Persons"), shall be indemnified by the Company
for any losses or damage sustained with respect to such action or proceeding,
and the Company shall advance such Indemnified Person's reasonable related
expenses to the fullest extent permitted by law. The Company shall have the
power to purchase and maintain insurance on behalf of the Indemnified Persons
against any liability asserted against or incurred by them. The duty of the
Company to indemnify the Indemnified Persons under this Section 3.3 shall not
extend to actions or omissions of any Indemnified Person which are grossly
negligent or which involve fraud, misrepresentation, bad faith, or other willful
misconduct by such Indemnified Person or which are in material breach or
violation by such Indemnified Person of this Agreement, in each case as
determined by a court of competent jurisdiction. No Indemnified Person shall be
liable to the Company or any other Member for actions taken in good faith. The
Company may indemnify other Persons of the Company. The duty of the Company to
indemnify the Indemnified Persons under this Section 3.3 shall be limited to the
assets of the Company, and no recourse shall be available against any Member for
satisfaction of such indemnification obligations of the Company.
19
Section 3.4. Management Members Rights. Management Members shall
have no rights as a Member except as specifically set forth in this Agreement.
ARTICLE IV.
Books; Elections; Budgets; Fiscal Year
Section 4.1. Administrative Services, Books, Records and Reports.
(a) The Managing Member shall cause to be performed all general and
administrative services on behalf of the Company in order to assure that
complete and accurate books and records of the Company are maintained at the
Company's principal place of business showing the names, addresses and number of
Units of each of the Members, all receipts and expenditures, assets and
liabilities, profits and losses, and all other records necessary for recording
the Company's business and affairs, including a capital account for each Member
(a "Capital Account").
(b) As of the date of this Agreement, Exhibit A sets forth the
agreed Capital Account balances of each Member, which balances reflect the sum
of the initial Capital Account balances of each Member and, in the case of any
Member of the Company immediately prior to the date of this Agreement, the
interim Net Profits and Losses of the Company allocable to such Member pursuant
to Section 2.4 hereof, as adjusted by the "book up" of the assets of the Company
pursuant to Section 2.2(c) hereof, since November 24, 1998. The initial Capital
Account of the Management Members in respect of their Management Interests as of
the date of this Agreement shall be zero.
(c) Each Member's Capital Account shall be increased by:
(i) the amount of any money contributed by the Member to the
Company;
(ii) the fair market value of any property contributed by the
Member to the Company;
(iii) the amount of Net Profits allocated to the Member; and
(iv) the amount of any Company liabilities assumed by such
Member (or taken subject to) if property is distributed to the
Member by the Company;
and shall be decreased by:
(v) the amount of any money distributed to the Member by the
Company;
20
(vi) the fair market value of any property distributed to the
Member by the Company;
(vii) the amount of Net Losses allocated to the Member; and
(viii) the amount of any Member liabilities assumed by the
Company (or taken subject to) if property is contributed to the
Company by the Member.
(d) Upon the exercise of the Warrant by Internet World, in the event
that the amount of Net Profits from Capital Transactions allocated to Internet
World pursuant to Section 2.4(b)(iii) for the Fiscal Year of such exercise is
insufficient to cause the Capital Account balance of Internet World to bear the
same proportion to the Capital Account balances of all Members other than the
Capital Account balances of the Management Members in respect of their
Management Interests (taking into account the amount contributed to the Company
by Internet World pursuant to such exercise and all amounts allocated pursuant
to Section 2.4(b)(iii)) as the number of Units held by Internet World
immediately after such exercise bears to the total number of Units other than
Incentive Units immediately after such exercise, then the Capital Account
balance of Internet World shall be increased by the amount necessary to achieve
such result, and the Capital Account balances of all other Members other than
the Capital Account balances of the Management Members in respect of their
Management Interests shall be reduced in the aggregate by an equal amount, in
proportion to their respective Capital Account balances.
(e) The Capital Accounts shall be adjusted by all other adjustments
required by Treasury Regulations ss. 1.704-1(b)(2)(iv). The foregoing provisions
and the other provisions of this Agreement relating to the maintenance of
Capital Accounts are intended to comply with Treasury Regulations under Section
704(b) of the Code and, to the extent not inconsistent with the provisions of
this Agreement, shall be interpreted and applied in a manner consistent with
such Regulations.
Section 4.2. Federal Income Tax Elections; Method of Depreciation.
The Managing Member shall determine the method of depreciation to be utilized by
the Company for tax purposes and all elections to be made by the Company for tax
purposes. The Managing Member shall be the "tax matters partner" for all
purposes of the Code but shall have no authority to bind any other Member
without such Member's consent.
Section 4.3. Fiscal Year. The fiscal year of the Company (the
"Fiscal Year") shall end on December 31.
21
Section 4.4. Section 83(b) Election. The Members acknowledge that
each Management Member intends to make a protective election under Section 83(b)
of the Code with respect to the receipt of a Management Interest on the date of
this Agreement.
ARTICLE V.
Employment of Affiliates
Section 5.1. Parties Employed. Subject to the approval of the Board
by unanimous consent, the Company may contract for services to be performed for
the Company by Members or Affiliates of any Member; provided, however, that no
Board approval shall be required for the employment by the Company of ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ or any employee of the Company who becomes a Member as a
result of the receipt of Units by such employee pursuant to Section 2.7. In the
case of the employment of a Member or of Affiliates of a Member, the
compensation to be paid by the Company to such Member or Affiliates shall be not
greater than the compensation generally paid to third parties for comparable
services in comparable locations. Each of the Services Agreement and the
Trademark Licensing Agreement between Internet World and the Company is by
execution of this Agreement deemed to be approved by the Board.
ARTICLE VI.
Distributions
Section 6.1. Distributions. Subject to the provisions of Article
VII, distributions shall be made at such time and in such amounts as determined
by the Board and shall be made among the Members in cash and in proportion to
the relative number of Units held by each Member.
Section 6.2. Restoration of Funds. Except as otherwise provided by
law, no Member shall be required to restore to the Company any funds properly
distributed to it pursuant to Section 6.1.
Section 6.3. Special Tax Distributions. Notwithstanding the
provisions of Section 6.1 above, if the Company has net taxable income for
federal income tax purposes for any taxable year of the Company, then the
Company shall first distribute at least an amount of cash (a "Tax Distribution")
to each Member which, when combined with all other distributions to such Member
in the current and all preceding taxable years of the Company, equals the
product of (A) the highest combined federal,
22
state and local marginal income tax rate hypothetically applicable to any Member
and (B) the excess, if any, of (i) the aggregate net taxable income allocated to
such Member under this Agreement in the current and all preceding taxable years
of the Company over (ii) the aggregate net taxable loss allocated to such Member
under this Agreement in all preceding taxable years of the Company.
ARTICLE VII.
Dissolution and Liquidation
Section 7.1. Dissolution.
(a) Except as otherwise required by the Act, the Company shall
have perpetual existence unless the Board shall by unanimous written consent
elect to dissolve the Company or there is an entry of a decree of judicial
dissolution of the LLC under Section 18-802 of the Act.
(b) The death, retirement, resignation, expulsion, bankruptcy
or dissolution of any Member or the occurrence of any other event that
terminates the continued membership of any Member in the Company shall not, in
and of itself, cause dissolution of the Company.
Section 7.2. Winding up Affairs and Distribution of Assets.
(a) Upon a winding up of the Company, the Managing Member
shall be the liquidating Member (the "Liquidating Member") and shall proceed to
wind up the affairs of the Company, liquidate the remaining property and assets
of the Company and wind-up and terminate the business of the Company. The
Liquidating Member shall cause a full accounting of the assets and liabilities
of the Company to be taken and shall cause the assets to be liquidated and the
business to be wound up as promptly as possible by either or both of the
following methods: (1) selling the Company assets and distributing the net
proceeds therefrom (after the payment of Company liabilities) to each Member in
satisfaction of its Capital Account; or (2) distributing the Company assets to
the Members in kind and debiting the Capital Account of each Member with the
fair market value of such assets, each Member accepting an undivided interest in
the partnership assets (subject to their liabilities) in proportion to and to
the extent of each Member's positive Capital Account balance after allocating
and crediting to the Capital Accounts the unrealized gain or loss to the Members
as if such
23
gain or loss had been recognized and allocated pursuant to Section 2.4.
(b) If the Company shall employ method (1) as set forth in
Section 7.2(a) in whole or part as a means of liquidation, then the proceeds of
such liquidation shall be applied in the following order of priority: (i) first,
to the expenses of such liquidation; (ii) second, to the debts and liabilities
of the Company to third parties, if any, in the order of priority provided by
law; (iii) third, a reasonable reserve shall be set up to provide for any
contingent or unforeseen liabilities or obligations of the Company to third
parties (to be held and disbursed, at the discretion of the Liquidating Member,
by an escrow agent selected by the Liquidating Member) and at the expiration of
such period as the Liquidating Member may deem advisable, the balance remaining
in such reserve shall be distributed as provided herein; (iv) fourth, to debts
of the Company to the Members or their Affiliates and any fees and
reimbursements payable under this Agreement; and (v) fifth, to the Members in
proportion to their respective positive Capital Account balances determined
after all allocations of Net Profit and Net Loss have been made.
(c) In connection with the liquidation of the Company, the
Members severally, jointly, or in any combination upon which they may agree,
shall have the first opportunity to make bids or tenders for all or any portion
of the assets of the Company, and such assets shall not be sold to an outsider
except only for a price higher than the highest and best bid of a single Member,
the Members jointly, or a combination of Members. Any bid made by a Member or
Members for all or any portion of the assets shall be made, if at all, within
thirty (30) days after the Liquidating Member or any other Member shall have
requested such bids. A copy of each bid shall be delivered by the Liquidating
Member to each Member. Unless otherwise agreed by all Members, no Member shall
be entitled to raise its bid after submission thereof, whether in response to a
bid received by the Company from any other Member or third party, or otherwise.
ARTICLE VIII.
Miscellaneous
Section 8.1. Notices.
(a) All Notices, consents, approvals, reports, designations,
requests, waivers, elections and other communications (collectively, "Notices")
authorized or required to be given pursuant to this Agreement shall be given in
writing
24
and either personally delivered to the Member to whom it is given or delivered
by an established delivery service by which receipts are given or mailed by
registered or certified mail, postage prepaid, or sent by telex or telegram or
electronic telecopier, addressed to the Member at its address listed on Exhibit
B or C hereto.
(b) All Notices shall be deemed given when delivered or, if
mailed as provided in Section 8.1(a), on the third (3rd) day after the day of
mailing, and if sent by telex or telegram or telecopier or overnight delivery
service, twenty-four (24) hours after the time of dispatch. Any Member may
change its address for the receipt of Notices at any time by giving Notice
thereof to all of the other Members, in which event Exhibit B hereto shall be
amended accordingly. Notwithstanding the requirement in Section 8.1(a) as to the
use of registered or certified mail, any routine reports required by this
Agreement to be submitted to Members at specified times may be sent by
first-class mail.
Section 8.2. Certificate Requirements. From time to time the Members
shall sign and acknowledge all such writings as are required to amend the
Certificate or for the carrying out of the terms of this Agreement or, upon
dissolution of the Company, to cancel such Certificate.
Section 8.3. Entire Agreement. This Agreement, together with the
agreements listed in Section 5.1, supersedes all prior agreements and
understandings among the Members with respect to the subject matter hereof.
Section 8.4. 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 at least 85% of the Members; provided, that if such
change or modification would not have a material adverse effect on the rights or
obligations of another Member, such change or modification may be made by the
Board without the approval of other Members, and provided further, that Members
who became Members as the result of the grant or sale of Incentive Units
pursuant to Section 2.7 shall not be deemed Members for purposes of this Section
8.4.
Section 8.5. 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 8.6. Severability. If any provision of this Agreement shall
be held to be invalid, illegal or unenforceable,
25
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
Section 8.7. 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.
Section 8.8. Governing Law. This Agreement shall be governed by and
be construed in accordance with the laws of the State of Delaware.
Section 8.9. 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 8.10. 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 8.11. Brokers and Finders. Each Member shall indemnify and
hold all of the other Members and the Company harmless from and against any
commission, fee or other payment due any broker, finder or other Person in
connection with such Member's decision to invest in the Company.
Section 8.12. Number and Gender. As used in this Agreement, all
pronouns and any variation thereof shall be deemed to refer to the masculine,
feminine or neuter, singular or plural, as the identity of the Person or Persons
may require.
Section 8.13. Fiduciaries. Whenever any trust or estate is acting as
a Member under this Agreement, any obligation or liability created hereunder
shall bind only the assets of such trust or estate. No such obligation or
liability shall be personally binding upon, nor shall resort be had to, nor
recourse or satisfaction sought from, any individual or entity, or the property
of any individual or entity, at any time acting as a fiduciary of any such trust
or estate, whether the claim giving rise to such obligation or liability is
based on contract, tort or otherwise.
Section 8.14. 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 8.15. Securities Laws. All offerings and Transfers of Units
shall be made in compliance with applicable federal and state securities laws.
Each Member indemnifies the
26
other Members and the Company for any loss, cost, liability or damage arising
from its breach of the foregoing sentence.
Section 8.16. Attorneys' Fees. In the event of any litigation or
arbitration regarding the rights and obligations under this Agreement, the
prevailing party shall be entitled to recover reasonable attorneys' fees and
court costs in addition to any other relief which may be granted. The
"prevailing party" shall mean the party who receives substantially the relief
desired, whether by settlement, dismissal, summary judgment, judgment or
otherwise.
Section 8.17. Waiver of Partition. Each Member hereby waives its
right to bring an action for partition of any of the property owned by the
Company.
Section 8.18. Authorized Persons. Each Member is hereby designated
as an authorized person to sign the Company's Certificate of Formation and any
other documents that are appropriate and necessary to effectuate the purpose of
this Agreement.
27
IN WITNESS HEREOF, the Members have duly executed this Agreement as
of the date first above written.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
INTERNET WORLD MEDIA, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: President
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ TRUST, DATED NOVEMBER
6, 1993
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as Trustee
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ TRUST, DATED
NOVEMBER 6, 1993
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as Trustee
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ TRUST, DATED
NOVEMBER 6, 1993
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as Trustee
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ TRUST, DATED NOVEMBER
6, 1993
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as Trustee
28
NEW RIVER CAPITAL PARTNERS
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: President
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------------
H. ▇▇▇▇▇▇ ▇▇▇▇▇
/s/ H. ▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------------
29
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Flatness
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Flatness
-----------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
30
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ III
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ III
-----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------------
31
EXHIBITS
The exhibits to this Second Amended and Restated Limited Liability Company
Agreement of ▇▇▇▇▇▇▇▇.▇▇▇ LLC are not being filed herewith. The Registrant
undertakes to furnish supplementally a copy of any omitted exhibit to the
Commission upon request. Set forth below is a list of the omitted exhibits.
Exhibit A Capital Contributions
Exhibit B Members' Addresses
Exhibit C Allocation of Management Interests
