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EXHIBIT 10.88
THE SECURITIES HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE RESOLD UNLESS REGISTERED
UNDER THE SECURITIES ACT OF 1933 AND APPLICABLE STATE SECURITIES LAWS OR
PURSUANT TO EXEMPTION FROM REGISTRATION
OPERATING AGREEMENT
OF
DIVERSITY ENTERTAINMENT TELEVISION/ATLANTA, LLC.
a limited liability company
organized under the Georgia Limited Liability Company Act
THIS OPERATING AGREEMENT is made and entered into as of the 30th day of
June 1997 by and among the undersigned parties. Unless otherwise indicated by
the context, as used herein the term "Members" refers to the undersigned parties
at this date and to other persons who hereafter became parties hereto in
accordance with the terms hereof.
R E C I T A L S:
1. DIVERSITY ENTERTAINMENT TELEVISION/ATLANTA, LLC (the "Company") was
formed as a Georgia limited liability company on June 12, 1997, by execution and
delivery of Articles of Organization to the Secretary of State of Georgia in
accordance with the provisions of the Georgia Limited Liability Company Act, as
amended (the "Act").
2. The business purpose of the Company is to develop and operate a large
screen video display system in the Underground Atlanta area of Atlanta, Georgia.
3. The Members desire to organize the Company with themselves as its
members and to set out the terms of their agreement with respect to the Company,
its operations, and their own respective rights and interests therein.
AGREEMENT:
In consideration of the Recitals, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
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ARTICLE I
OFFICES; SEAL
1.1 Registered Office, Agent. The Company shall at all times maintain a
registered office in the State of Georgia and a registered agent at that address
but may have other offices located within or without the State of Georgia.
1.2 Principal Office. The Company shall maintain its principal office
within the State of Georgia unless otherwise determined by the Board of
Managers.
1.3 Seal. The seal of the Company shall be in such form as the Board of
Managers may from time to time determine. If it is inconvenient to use such a
seal at any time, the signature of the Company followed by the word "Seal"
enclosed in parentheses or scroll shall be deemed the seal of the Company.
ARTICLE II
LLC SHARES AND INTERESTS
2.1 LLC Shares. The ownership of the Company shall be divided initially
into 6,900 equal shares ("Limited Liability Company Shares" or "LLC Shares");
provided, however, that the said number of LLC Shares may be increased or
reduced by the Board of Managers from time to time as hereinafter provided.
2.2 Initial Members. The names, addresses and federal tax identification
numbers of the initial Members are set out in Exhibit A hereto. Each of the
initial Members shall make an initial capital contribution to the Company in
cash or in kind as set out in Exhibit A and receive in consideration thereof the
number of LLC Shares specified therein. Exhibit A is incorporated herein by
reference and made a part of this Agreement.
2.3 Additional LLC Shares. (a) The Company by action of the Board of
Managers may from time to time increase the number of LLC Shares of the Company
by selling additional LLC Shares for fair value in cash or in kind to one or
more persons who are already Members or to other persons who are not already
Members; provided, however, that the Company may not sell LLC Shares to any
person unless the person at such time (i) agrees in writing to become a party
to, and to be bound as a Member by the terms and conditions of, this Agreement,
and (ii) pays in full the agreed consideration for the LLC Shares. Upon receipt
by the Company of the agreed original capital contribution of a Member in
respect of an LLC Share, the LLC Share and the resulting Interest of the Member
shall be fully paid and non-assessable. No Member shall have any preemptive
rights with respect to the purchase of any such additional LLC Shares.
(b) In connection with the sale of additional LLC Shares the Board of
Managers may, if it deems such action to be necessary and appropriate, at the
time of the sale thereof designate
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certain LLC Shares as Preferred Distribution LLC Shares. Preferred Distribution
LLC Shares shall be entitled to Preferred Distributions in accordance with
Section 8.2 of this Agreement.
2.4 Reduction of Shares. Except as prohibited by the Act, the Company by
action of the Board of Managers may from time to time agree to repurchase the
LLC Shares of a Member for fair value.
2.5 Options. The Company may also by action of the Board of Managers grant
options to such Members or non-Members as it may deem appropriate for purchase
of LLC Shares upon such terms and conditions and at such option purchase price
(not less than fair value of the LLC Shares on the date of grant) as the Board
of Managers may deem appropriate; provided, however, that upon exercise of any
such option the exercising person must satisfy the requirements of clauses (i)
and (ii) in Section 2.3(a) above.
2.6 Interests of Members. The limited liability company interest (the
"Interest") of each Member at any time shall be the percentage that the number
of LLC Shares owned by such Member constitutes of the aggregate number of LLC
Shares at such time.
2.7 LLC Share Certificates; Register. The Company shall issue certificates
to the Members evidencing their respective ownership of LLC Shares. LLC Share
certificates shall be numbered in the order in which they are issued. They shall
be signed by the President and Secretary and the seal of the Company shall be
affixed thereto. The name, address and federal tax identification number of the
Member owning the LLC Shares, the number of LLC Shares, and the date acquired
shall be entered in a register maintained by the Secretary. LLC Share
certificates exchanged or returned shall be canceled and retained by the
Secretary.
2.8 Voting. The holders of the shares of LLC Shares shall be entitled to
one vote for each LLC Share owned of record.
ARTICLE III
MEMBERS MEETINGS
3.1 Annual Meeting. A meeting of Members shall be held annually. The
annual meeting shall be held at such time and place and on such date as the
Board of Managers shall determine from time to time and as shall be specified in
the notice of the meeting.
3.2 Special Meetings. Special meetings of the Members may be called at any
time by the Board of Managers, the President or Members owning at least 50% of
the LLC Shares. Special meetings shall be held at such time and place and on
such date as shall be specified in the notice of the meeting.
3.3 Place. Annual or special meetings of Members may be held within or
without the State of Georgia.
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3.4 Notice. Notice of annual or special Members meetings stating the
place, day and hour of the meeting shall be given in writing not less than 10
nor more than 60 days before the date of the meeting, either mailed to the last
known address of or personally given to each Member. Notice of any special
meeting of Members shall state the purpose or purposes for which the meeting is
called. Notice of any meeting at which amendments to the Operating Agreement,
merger of the Company, or the disposition of all or substantially all of the
assets of the Company are to be considered shall state such purpose. Notice of a
meeting may be waived by an instrument in writing executed before or after the
meeting. The waiver need not specify the purpose of the meeting or the business
transacted. Attendance at a meeting in person or by proxy shall constitute a
waiver of notice thereof unless the Member shall provide written notice to the
Company prior to the taking of any action by the Members at the meeting that the
Member's attendance is not to be deemed a waiver of the requirement that notice
be given or of the adequacy of any notice that may have been given to the
Members.
3.5 Quorum; Vote Required. At all meetings of Members the Members holding
a majority of the outstanding LLC Shares, whether present in person or by proxy,
shall constitute a quorum for the transaction of business. Action by the Members
on all matters shall require the affirmative vote of Members holding a majority
of the LLC Shares represented at a meeting at which a quorum is present, except
that the affirmative vote of Members holding 80% of all of the LLC Shares
outstanding shall be required (i) to approve the Company's engaging in any
business not reasonably related to the business purpose of the Company, or (ii)
to approve the Company's guaranty or collateralization of the debt of any person
other than a wholly-owned subsidiary of the Company. A lesser number may adjourn
a meeting from day to day, and shall announce the time and place to which the
meeting is adjourned.
3.6 Action in Lieu of Meeting. Any action that may be taken at a meeting
of the Members may be taken without a meeting if a consent in writing setting
forth the action so taken shall be signed by Members holding a majority of the
outstanding LLC Shares or such greater number as would be required if the action
were taken at a meeting of the Members.
ARTICLE IV
BOARD OF MANAGERS
4.1 Management. Subject to the terms of this Agreement, or any other
lawful agreement among the Members, the full and entire management of the
affairs and business of the Company shall be vested in the Board of Managers,
which shall have and may exercise all of the powers that may be exercised or
performed by the Company.
4.2 Number of Managers. The Members shall fix by resolution the precise
number of members of the Board of Managers. Managers shall be elected by and
serve at the pleasure of the Members. Membership on the Board of Managers is not
limited to Members. A majority of the Managers shall constitute a quorum for the
transaction of business. The Board of Managers shall act by the affirmative vote
of a majority of the Managers.
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4.3 Meetings. The Managers shall meet annually, without notice, following
the annual meeting of the Members. Special meetings of the Managers may be
called at any time by the President or by a majority of the Managers, on two
days' written notice to each Manager, which notice shall specify the date, time,
and place of the meeting. Notice of a meeting may be waived by an instrument in
writing executed before or after the meeting. Managers may attend and
participate in meetings either in person or by means of communications equipment
by which all persons participating in the meeting can hear each other.
Attendance at a meeting shall constitute a waiver of notice thereof.
4.4 Action in Lieu of Meeting. Any action that may be taken at a meeting
of the Managers may be taken without a meeting if a consent in writing, setting
forth the action so taken, shall be signed by all of the Managers.
ARTICLE V
OFFICERS
5.1 General Provisions. The officers of the Company shall consist of a
President and a Secretary who shall be elected by the Board of Managers from
among its members, and such other officers, including a General Manager, as may
be elected by the Board of Managers or appointed as provided in this Agreement.
Each officer shall be elected or appointed to serve at the pleasure of the Board
of Managers. Any two or more offices may be held by the same person.
5.2 President. The President shall be the chief executive officer of the
Company and shall have general and active management of the operations of the
Company, subject to the directions and authority of the Board of Managers. The
President shall be responsible for the administration of the Company, including
general supervision of the policies of the Company and management of its
financial affairs, and shall execute bonds, mortgages or other contracts in the
name and on behalf of the Company within the general powers of the office and
otherwise in accordance with the direction and authority of the Board of
Managers.
5.3 Secretary. The Secretary shall keep minutes of all meetings of the
Members and Managers and have charge of the minute books and seal of the Company
and shall perform such other duties and have such other powers as may from time
to time be delegated to him or her by the President or the Board of Managers.
5.4 Assistant Officers. Assistants to the Secretary may be appointed by
the President or by the Board of Managers and shall have such duties as shall be
delegated to them by the President or the Board of Managers.
5.5 Vice Presidents. The Company may have one or more Vice Presidents,
elected by the Board of Managers, who shall perform such duties as may be
delegated by the President or the Board of Managers.
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ARTICLE VI
CAPITAL ACCOUNTS
6.1 Capital Accounts. "Capital Account" means an account that shall be
maintained in respect of each Member and which, as of any given date, shall be
equal to the sum of the following:
(i) The aggregate amount of cash that has been contributed to the
capital of the Company as of such date by or on behalf of such Member in
payment for its LLC Shares or otherwise; plus
(ii) The value of any property other than cash that has been
contributed to the capital of the Company as of such date by such Member in
payment for its LLC Shares or otherwise, and the amount of liabilities
assumed by any such Member under Regulation Section 1.752 or which are
secured by any Company property distributed to such Member; plus
(iii) The aggregate amount of the Company's Net Profit that has been
allocated to such Member as of such date pursuant to the provisions of
Article VII or any items of income or gain which are specifically allocated
to such Member or other positive adjustments required by the Regulations
and which have not been previously taken into account in calculating
Capital Accounts; minus
(iv) The aggregate amount of the Company's Net Loss that has been
allocated to such Member as of such date pursuant to Article VII and the
amount of any item of expense deduction or loss which is specially
allocated to such Member; minus
(v) The aggregate amount of cash and the value of all other property
(as of the date of distribution) that has been distributed to or on behalf
of such Member and the amount of any liabilities of such Member assumed by
the Company under Regulations Section 1.752 or which are secured by any
property contributed by such Member to the Company and other negative
adjustments required by the Regulations; and
(vi) In the case of a Member who has acquired all or any part of his
or her LLC Shares by succession or assignment from another Member, plus or
minus (as the case may be) an aliquot portion of the Capital Account
balance or Capital Account Deficit of such predecessor in interest at the
date of such acquisition.
6.2 The provisions of this Article 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.
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ARTICLE VII
TAX ALLOCATIONS AND DISTRIBUTIONS
7.1 Tax Allocations of Net Profit and Net Losses.
(a) The Company's Net Profit or Net Losses for each fiscal year for
federal and state income tax purposes shall be allocated to the Members in
proportion to, and to the extent of, their respective ownership Interests
pursuant to Article II or as it is later amended.
(b) Net Losses allocated pursuant to subsection (a) hereof shall not
exceed the maximum amount of Net Losses that can be so allocated without
causing any Member to have an Adjusted Capital Account Deficit at the end
of any fiscal year. In the event some but not all of the Members would have
Adjusted Capital Account Deficits as a consequence of an allocation of Net
Losses pursuant to subsection (a) hereof, the limitation set forth in this
subsection (b) shall be applied on a Member-by-Member basis so as to
allocate the maximum permissible Net Losses to each Member under Section
1.704-1(b)(2)(ii)(d) of the Regulations.
(c) To the extent a Member is allocated Net Losses which otherwise
would have been allocated to another Member, or a result of the application
of subsection (b) hereof, then the Member that was allocated additional Net
Losses pursuant to subsection (b) hereof shall be allocated as quickly as
possible additional Net Profit in an amount equal to such Net Losses.
7.2 Distribution of Assets. If the Company at any time distributes any of
its assets in kind to any Member, the Capital Account of each Member shall be
adjusted to account for that Member's allocable share of the Net Profits or Net
Losses that would have been realized by the Company had it sold its assets that
were distributed at their respective fair market values immediately prior to
their distribution.
7.3 Qualified Income Offset. In the event any Member unexpectedly receives
any adjustments, allocations, or distributions described in Regulations Section
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6),
items of Company income and gain shall be specially allocated to each such
Member in an amount and manner sufficient to eliminate, to the extent required
by the Regulations, the Adjusted Capital Account Deficit of such Member as
quickly as possible, provided that an allocation pursuant to this Section shall
be made only if and only to the extent that such Member would have an Adjusted
Capital Account Deficit after all other allocations provided for in this Article
have been tentatively made as if this Section were not in this Agreement.
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7.4 Gross Income Allocation. In the event any Member has a deficit Capital
Account balance at the end of any fiscal year, each such Member shall be
specially allocated items of Company income and gain in the amount of such
excess as quickly as possible, provided that an allocation pursuant to this
Section shall be made if and only to the extent that such Member would have a
deficit Capital Account balance in excess of such sum after all other
allocations provided for in this Article have been tentatively made as if the
immediately preceding Section and this Section were not in this Agreement.
7.5 Section 704(c) Allocation.
(a) Notwithstanding any other provision of this Agreement to the
contrary, any gain or loss and any depreciation or other cost recovery
deductions recognized by the Company for income tax purposes in any fiscal
year with respect to all or any part of the Company's property that is
required or permitted to be allocated among the Members in accordance with
Section 704(c) of the Code and any Regulations promulgated thereunder so as
to take into account the variation, if any, between the adjusted tax basis
of such property at the time of its contribution and the fair market value
of such property at the time of its contribution, shall be allocated to the
Members for income tax purposes in the manner so required or permitted.
(b) Any elections or other decisions relating to such allocations
shall be made by the Board of Managers in any manner that reasonably
reflects the purpose and intention of this Agreement. Allocations pursuant
to this Section are solely for purposes of federal, state and local taxes
and shall not affect, or in any way be taken into account in computing, any
Member's Capital Account or share of net profit, net loss, other items, or
distributions pursuant to any provision of this Agreement.
7.6 Section 754 Election. In connection with any permitted transfer of an
LLC Share in the Company, the Board of Managers shall cause the Company, at the
written request of the transferor, the transferee or any of the Members, on
behalf of the Company and at the time and in the manner provided in Regulations
Section 1.754-1(b), to make an election to adjust the basis of the Company's
property in the manner provided in Sections 734(b) and 743(b) of the Code, and
such transferee shall pay all costs incurred by the Company in connection
therewith, including, without limitation, attorneys' and accountants' fees that
are reasonable in the aggregate.
7.7 Adjusted Capital Account Deficit. As used herein, the term "Adjusted
Capital Account Deficit" means, with respect to any Member, the Member's
Adjusted Capital Account Deficit shall be the deficit balance, if any, in the
Member's Capital Account as of the end of the relevant fiscal year or at any
time, after giving effect to the following adjustments:
(i) Credit to the Member's Capital Account any amount which the
Member is obligated to restore pursuant to any provision of this Agreement
or is deemed obligated to restore pursuant to the penultimate sentence of
Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5); and
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(ii) Debit to the Member's Capital Account the items described in
Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and
1.704-1(b)(2)(ii)(d)(6) of the Regulations.
The foregoing definition of Adjusted Capital Account Deficit is intended to
comply with the provisions of Section 1.704-1(b)(2)(ii)(d) of the Regulations
and shall be interpreted consistently therewith.
7.8 Gross Asset Value. As used herein, the term "Gross Asset Value" means,
with respect to any asset, the asset's adjusted tax basis for federal income tax
purposes, except as follows:
(i) The initial Gross Asset Value of any asset contributed by a
Member to the Company shall be the gross fair market value of the asset as
determined by the contributing Member and the Company;
(ii) The Gross Asset Values of all Company assets shall be adjusted to
equal their respective gross fair market values, as determined by the Board
of Managers, as of the following times: (A) the acquisition of an
additional LLC Share in the Company by any new or existing Member in
exchange for more than a de minimis capital contribution; (B) the
distribution by the Company to a Member of more than a de minimis amount of
Company property as consideration for such Member's LLC Shares in the
Company; and (C) the liquidation of the Company within the meaning of
Regulations Section 1.704-1(b)(2)(ii)(g); provided, however, that
adjustments pursuant to clauses (A) and (B) above shall be made only if the
Board of Managers reasonably determines that such adjustments are necessary
or appropriate to reflect the relative economic interests of the Members in
the Company;
(iii) The Gross Asset Value of any Company asset distributed to any
Member shall be the gross fair market value of the asset on the date of
distribution;
(iv) The Gross Asset Values of Company assets shall be increased (or
decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to Code Section 734(b) or Code Section 743(b), but only to the
extent that such adjustments are taken into account in determining Capital
Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m) hereof;
provided, however, that Gross Asset Values shall not be adjusted pursuant
to this paragraph to the extent the Board of Managers determines that an
adjustment pursuant to paragraph (ii) above is necessary or appropriate in
connection with a transaction that would otherwise result in an adjustment
pursuant to this paragraph; and
(v) If the Gross Asset Value of an asset has been determined or
adjusted pursuant to paragraphs (i), (ii) or (iii) above, the Gross Asset
Value shall hereafter be
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adjusted by the depreciation taken into account with respect to the asset
for purposes of computing Net Profits and Net Losses.
7.9 Net Profits and Net Losses. As used herein, the terms "Net Profits"
and Net Losses" mean for each fiscal year or other period an amount equal to the
Company's taxable income or loss for such fiscal 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:
(i) Any income of the Company that is exempt from federal income tax
and not otherwise taken into account in computing Net Profits or Net Losses
pursuant to this Section shall be added to such taxable income or loss;
(ii) Any expenditures of the Company described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(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 Losses pursuant to this Section
shall be subtracted from such taxable income or loss;
(iii) In the event the Gross Asset Value of any Company asset is
adjusted pursuant to paragraphs (ii) or (iii) above, the amount of such
adjustment shall be taken into account as gain or loss from the disposition
of such asset for purposes of computing Net Profits or Net Losses;
(iv) Gain or loss resulting from any disposition of Company property
with respect to which gain or loss is recognized for federal income tax
purposes shall be computed by reference to the Gross Asset Value of the
property disposed of, notwithstanding that the adjusted tax basis of such
property differs from its Gross Asset Value;
(v) Notwithstanding any other provision of this Section, any items
which are specially allocated pursuant to Sections 7.3, 7.4 or 7.5 hereof
shall not be taken into account in computing Net Profits and Net Losses;
and
(vi) The amounts of the items of Company income, gain, loss or
deduction to be specially allocated pursuant to Sections 7.3, 7.4 or 7.5
hereof shall be determined by applying rules analogous to those set forth
in paragraphs (i) through (iv) above.
7.10 Special Allocations. (a) Notwithstanding anything to the contrary in
this Article:
(i) All Nonrecourse Deductions for each Fiscal Year shall be
allocated to the Members in accordance with their relative Interests.
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(ii) All Member Nonrecourse Deductions for each Fiscal Year shall be
allocated to the Members who bear the economic risk of loss with respect to
the Member Nonrecourse Debt giving rise to such deductions, in accordance
with Regulation ss.1.704-2(i)(1).
(iii) If there is a net decrease in Minimum Gain during a Fiscal Year,
then before any other allocation is made for such Fiscal Year , the Members
shall be allocated items of income and gain for such Fiscal Year (and, if
necessary, subsequent Fiscal Years) in the amount and in the proportions
necessary to satisfy the requirements of a "minimum gain chargeback" under
Regulation ss.1.704-2(f).
(iv) If there is a net decrease in Member Minimum Gain during a Fiscal
Year, then before any other allocation is made for such Fiscal year, the
Members shall be allocated items of income and gain for such Fiscal Year
(and, if necessary, subsequent Fiscal Years) in the amount and in the
proportions necessary to satisfy the requirements of a "partner nonrecourse
debt minimum gain chargeback" under Regulation ss.1.704-2(i)(4).
(v) The allocations set forth in subsections (i) through (iv) above
(the "Regulatory Allocations") are intended to comply with certain
requirements of Treasury Regulation xx.xx. 1.704-1(b) and 1.704-2.
Notwithstanding any other provision of this Section (other than the
Regulatory Allocations), the Regulatory Allocations shall be taken into
account in allocating other items of income, gain, loss and deduction among
the Members so that, to the extent possible, the net amount of such
allocation of other items and the Regulatory Allocations to each Member
shall be equal to the net amount that would have been allocated to each
such Member if the Regulatory Allocations had not occurred.
(b) As used in subsection (a) above, the following terms have the
following meanings:
(i) Member Minimum Gain means an amount determined by computing, with
respect to each Member Nonrecourse Debt, the Minimum Gain that would result
if such Member Nonrecourse Debt were treated as a nonrecourse liability,
determined in accordance with Regulation ss. 1.704-2(i)(3).
(ii) Member Nonrecourse Debt means nonrecourse Company debt for which
one or more Members bears an economic risk of loss, determined in
accordance with Regulation ss. 1.704-2(b)(4).
(iii) Member Nonrecourse Deductions means, for each Fiscal Year, the
Company deductions which are attributable to Member Nonrecourse Debt and
are characterized as "partner nonrecourse deductions" under Regulation ss.
1.704-2(i)(2).
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(iv) Minimum Gain means an amount determined by computing, with
respect to each nonrecourse liability of the Company, the amount of gain
(of whatever character), if any, that would be realized by the Company if
it disposed of (in a taxable transaction) the Company property subject to
such liability for no consideration other than full satisfaction of such
liability, and by then aggregating the amounts so computed. Such amount
shall be determined in a manner consistent with Regulation ss.1.704-2(d).
ARTICLE VIII
CASH DISTRIBUTIONS
8.1 Cash Flow. The Board of Managers, in the exercise of its discretion,
shall determine whether the financial condition and financing agreements and
commitments of the Company will permit the distribution of any monies of the
Company; provided, however, that the Board of Managers, in making such
determination, may provide for the retention of a reasonable cash reserve
(taking into consideration the availability in the future of other assets or
income of the Company), as determined by the Board of Managers, in an amount at
least equivalent to the sums determined by it in its discretion as necessary to
be retained for future growth and future contemplated capital expenditures,
expenses and obligations of the Company. The Board of Managers shall make a
determination at least as of the end of each calendar year as to whether there
are funds available for distribution.
8.2 Distribution of Cash Flow. All funds so determined by the Board of
Managers to be available for distribution (the "Distributable Funds") shall be
distributed as follows:
(i) First, until the Members holding Preferred Distribution LLC
Shares shall have received Preferred Distributions in the amounts that were
designated by the Board of Managers at the time of sale of the Preferred
Distribution LLC Shares by the Company (not to exceed $4,140,000 in the
aggregate), (A) two-thirds of the Distributable Funds shall be distributed
to the Members holding Preferred Distribution LLC Shares, and (B) the
balance of the Distributable Funds shall be distributed to the other
Members, in each case pro rata in accordance with their Interests.
(ii) Second, thereafter to all of the Members in accordance with their
Interests.
8.3 Time of Distribution. Distribution to Members shall be made quarterly
and at such other intervals as the Board of Managers in its sole discretion
deems advisable.
8.4 Limitations on Distributions. No distribution shall be made to Members
if prohibited by Section 00-00-000 of the Act.
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ARTICLE IX
PROTECTIONS AND POWERS
9.1 The Members do not intend to be liable for any debt, obligation or
liability of the Company or for any act or omission of its Managers or agents,
however arising.
9.3 The Company shall indemnify the Members, members of the Board of
Managers and officers of the Company to the maximum extent authorized by the
Act.
9.3 No Member, acting solely in his or her capacity as a Member, is an
agent of the Company.
ARTICLE X
DISSOCIATION OF A MEMBER
10.1 Dissociation. Except as otherwise provided in this article, a Member
shall cease to be a Member as of the date of the occurrence of any of the events
under Section 14-11-601(a) of the Act.
10.2 No Dissociation. Notwithstanding the Act and Section 10.1 above, a
Member shall not cease to be a Member upon the occurrence of any of the events
under Sections 14-11-601(a)(1), 14-11-601(a)(5), 14-11-601(a)(6),
14-11-601(a)(7) or 14-11-601(c) of the Act.
10.3 Death or Dissolution, etc. In the event of the death or dissolution of
a Member, or the occurrence of any of the events of Sections 14-11-601(a)(5),
(6) or (7), the Member's successor-in-interest shall, except as may be otherwise
provided by law, be deemed to be an assignee of the Member's LLC Shares and
Interest but not a Member.
10.4 No Withdrawal. No Members may by voluntary act withdraw from the
Company.
10.5 Transfer; Repurchase. A Member shall cease to be a Member of the
Company upon transfer in compliance with this Agreement of all of his or her LLC
Shares or upon repurchase thereof by the Company.
ARTICLE XI
DISSOLUTION AND WINDING UP
11.1 Dissolution. The Company shall be dissolved upon the occurrence of any
of the following events ("Dissolution Event"):
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(i) The expiration of the period fixed for the duration of the
Company as set out in the Articles of Organization of the Company, namely,
December 31, 2025;
(ii) The Members agree by majority vote of the LLC Shares to dissolve
the Company; or
(iii) The Board of Managers determines that dissolution of the Company
is appropriate and so notifies the Members.
11.2 Effect of Dissolution. Upon dissolution, the Company shall cease to
carry on its business, except as permitted by Section 00-00-000 of the Act. Upon
dissolution the Company shall file a statement of commencement of winding up
pursuant to Section 00-00-000 of the Act and publish the notice permitted by
Section 00-00-000 of the Act.
11.3 Winding Up, Liquidation and Distribution of Assets.
(a) Upon dissolution, an accounting shall be made by the Company's
independent accountants of the accounts of the Company and of the Company's
assets, liabilities and operations, from the date of the last previous
accounting until the date of dissolution. The Board of Managers shall
immediately proceed to wind up the affairs of the Company.
(b) If the Company is dissolved and its affairs are to be wound up,
the Board of Managers shall, subject to the availability of assets of the
Company for such purposes:
(i) Sell or otherwise liquidate all of the Company's assets as
promptly as practicable (except to the extent the Board of Managers
may determine to distribute any assets to the Members in kind);
(ii) Allocate any profit or loss resulting from such sales to the
Members in accordance with Article VII;
(iii) Discharge all liabilities of the Company, other than
liabilities to Members, and establish such reserves as may be
reasonably necessary to provide for contingent liabilities of the
Company;
(iv) Discharge liabilities of the Company to Members; and
(v) Make distributions to the Members in accordance with Section
8.2 of this Agreement. Any such distributions to the Members in
respect of their Interests shall be made in accordance with the time
requirements set forth in Section 1.704-1(b)(2)(ii)(b)(2) of the
Regulations.
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(c) Notwithstanding anything to the contrary in this Agreement, upon
a liquidation within the meaning of Section 1.704-1(b)(2)(ii)(g) of the
Regulations, if any Member has an Adjusted Capital Account Deficit (after
giving effect to all contributions, distributions, allocations and other
Capital Account adjustments for all taxable years, including the year
during which such liquidation occurs), such Member shall have no obligation
to make any Capital Contribution, and the negative balance of such Member's
Capital Account shall not be considered a debt owed by such Member to the
Company or to any other person for any purpose whatsoever.
(d) Upon completion of the winding up, liquidation and distribution
of the assets, the Company shall be deemed terminated.
(e) The Board of Managers shall comply with any applicable
requirements of applicable law pertaining to the winding up of the affairs
of the Company and the final distribution of its assets.
11.4 Certificate of Termination. When all debts, liabilities and
obligations have been paid and discharged or adequate provisions have been made
therefor and all of the remaining property and assets have been distributed to
the Members, a Certificate of Termination shall be executed and filed with the
Secretary of State of Georgia in accordance with Section 00-00-000 of the Act.
ARTICLE XII
DISPOSITION OF LLC SHARES
12.1 Disposition. No Member shall have the right to assign, transfer, sell,
or convey its LLC Shares in the Company or any of its rights and obligations as
a Member, without the written consent of the Board of Managers.
12.2 Securities Law Compliance. No Member shall sell, pledge or otherwise
dispose of or transfer any LLC Share unless registered under the Securities Act
of 1933, as amended, and applicable state securities laws, or an opinion is
given by counsel satisfactory to the Company that such registration is not
required.
12.3 Dispositions not in Compliance with this Article Void. Any attempted
assignment, transfer, sale or conveyance of an Interest not in compliance with
this Article is null and void.
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ARTICLE XIII
TAX MATTERS REPRESENTATIVE
13.1 The initial Tax Matter Representative, as defined in Section 6231 of
the Code, shall be Xxxxxx X. Xxxxxxx. A successor Tax Matter Representative may
be selected by majority vote of the Members from time to time in their
discretion.
ARTICLE XIV
AMENDMENT
14.1 Amendment. This Agreement may be amended or modified from time to time
only by vote of Members holding a majority of the LLC Shares, except that in no
event shall any amendment hereto, without the unanimous consent of the Members:
(i) Create any individual liability of any Members to any other
Members or to third parties, without express written consent of any Member
to be obligated thereby, or
(ii) Create any obligation of any Members to the Company, including
(but not by way of limitation) any obligation to pay any assessment or make
any capital contribution to the Company, without express written consent of
any Member to be obligated thereby; or
(iii) Alter or amend the voting rights of the LLC Shares or their
relative participation in the net profits and net losses of the Company; or
(iv) Extend the date specified in the Articles of Organization of the
Company for dissolution of the Company.
ARTICLE XV
MISCELLANEOUS PROVISIONS
15.1 Entire Agreement. This Agreement represents the entire Agreement among
all the Members.
15.2 No Partnership Intended for Non-tax Purposes. The Company is formed
under the Act, and the Members expressly do not intend hereby to form a
partnership under either the State Uniform Partnership Act nor the State Uniform
Limited Partnership Act. The Members do not intend to be partners one to another
or partners as to any third party.
15.3 Application of Georgia Law. This Agreement, the application and
interpretation hereof shall be governed exclusively by its terms and the laws of
the State of Georgia and specifically the Act.
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15.4 Execution of Additional Instruments. Each Member hereby agrees to
execute such other and further statements of interest and holdings,
designations, powers of attorney and other instruments necessary to comply with
any laws, rules or regulations.
15.5 Construction. When required by the context, whenever the singular form
is used in this Agreement, the same shall include the plural and vice versa, and
the masculine gender shall include the feminine and neuter genders and vice
versa.
15.6 Headings. The headings in this Agreement are inserted for convenience
only and are in no way intended to describe, interpret, define, or limit the
scope, extent or intent of this Agreement or any provision hereof.
15.7 Waivers. The failure of any party to seek redress for violation of or
to insist upon the strict performance of any covenant or condition of this
Agreement shall not prevent a subsequent act, which would have originally
constituted a violation, from having the effect of an original violation.
15.8 Rights and Remedies Cumulative. The rights and remedies provided by
this Agreement are cumulative and the use of any one right or remedy by any
party shall not preclude or waive the right to use any or all other remedies.
Such rights and remedies are given in addition to any other rights the parties
may have by law, statute, ordinance or otherwise.
15.9 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original but all of which shall constitute one and the
same instrument.
15.10 Certification of Non-Foreign Status. In order to comply with Section
1445 of the Code and the applicable Treasury Regulations thereunder, in the
event of the disposition by the Company of a United States real property
interest as defined in the Code and Treasury Regulations, each Member shall
provide to the Company, an affidavit stating, under penalties of perjury, (i)
the Member's address, (ii) United States taxpayer identification number, and
(iii) that the Member is not a foreign person as that term is defined in the
Code and Treasury Regulations.
15.11 Withholding.
(a) The Company shall withhold and pay over to the Internal Revenue
Service or other applicable taxing authority, all taxes or withholdings,
and all interest, penalties, additions to tax, and similar liabilities in
connection therewith or attributable thereto (hereinafter "Withheld Taxes")
to the extent that the Board of Managers determines that such withholding
and/or payment is required by the Code or any other law, rule, or
regulation, including, without limitation, Sections 1441, 1442, 1445, or
1446 of the Code and Section 48-7-129 of the Official Code of Georgia. The
Board of Managers shall determine in good faith to which Member such
Withheld Taxes are attributable. All amounts withheld pursuant to this
paragraph with respect to any
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allocation, payment or distribution to any Member shall be treated as
amounts distributed to such Member pursuant to Article VII hereof for all
purposes of this Agreement.
(b) If an amount payable to the Company is reduced because the Member
paying that amount withholds and/or pays over to the Internal Revenue
Service or other applicable taxing authority any amount as a result of the
status of a Member, the Board of Managers shall make such adjustments to
amounts distributed and allocated among Members as it determines to be fair
and equitable. (For example, if a portion of interest income earned by the
Company is withheld by the payor and paid over to the Internal Revenue
Service because a particular Member is a non-U.S. Person, the Manger might
include such withheld and paid over amount in computing amounts available
for distribution to the Members pursuant to Article VII and rate such
withheld and paid over amount as if that amount were distributed to the
Member in satisfaction of whose tax liability such amount was withheld and
paid over.)
15.12 Banking. All funds of the Company shall be deposited in its name in
an account or accounts of a financial institution as shall be designated from
time to time by the Board of Managers. All funds of the Company shall be used
solely for the business and affairs of the Company. All withdrawals from the
Company bank accounts shall be made only upon checks or other instructions
signed by the Board of Managers or by such other persons as the Board of
Managers may designate from time to time.
15.13 Attorney-in-fact. The Members hereby severally designate and appoint
the President of the Company, as the same may be from time to time, as their
agent and attorney-in-fact for the purpose of executing on their behalf and in
their stead one or more amendments to this Agreement from time to time for the
purpose of adding new Members to this Agreement in accordance with the terms
hereof, specifying their respective ownership of LLC Shares, and identifying the
consideration to be received by the Company in payment for such LLC Shares or
the Member from whom the LLC Shares are being transferred.
15.14 Authorization to Transact Business in Other States. The Board of
Managers is authorized, empowered and directed to undertake any and all actions
that may be necessary or appropriate to enable the Company to transact business
in those states in which the Company is required to qualify to transact
business.
15.15 Determination of Matters Not Provided for in This Agreement. The
Board of Managers shall decide any questions arising with respect to the Company
and this Agreement which are not specifically or expressly provided for in this
Agreement.
15.16 Further Assurances. The Members each agree to cooperate, and to
execute and deliver in a timely fashion any and all additional documents
necessary to effectuate the purposes of the Company and this Agreement.
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15.17 Time. TIME IS OF THE ESSENCE OF THIS AGREEMENT, AND TO ANY PAYMENTS,
ALLOCATIONS AND DISTRIBUTIONS SPECIFIED UNDER THIS AGREEMENT.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and affixed their seals.
VIDEO COMMUNICATIONS NETWORK, LLC.
Attest:
/s/ Xxxxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxxxx
---------------------------- ------------------------------------
Secretary Authorized Officer
DIAMOND CAPITAL COMPANY, INC.
Attest:
/s/ Xxxxxx X. Diamond By: /s/ Xxxxxx X. Diamond
---------------------------- ------------------------------------
Secretary Authorized Officer
/s/ J. Xxxx Xxx Xxxx
----------------------------
Witness
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EXHIBIT A
to Operating Agreement of
DIVERSITY ENTERTAINMENT TELEVISION/ATLANTA, LLC.
a limited liability company
organized under the laws of Georgia
Name, address and federal tax identification LLC Shares Capital Contribution by
number of initial Members Received Member
------------------------- -------- ------
1. Video Communications Network, LLC. 6,762 $676.20
0000 Xxxxxx Xxxxxx, XX
Xxxxxxx, XX 00000
Tax I.D. No.: 00-000-0000
2. Diamond Capital Company, Inc. 138 13.80
000 Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
Tax I.D. No.: 00-0000000
----- -------
Totals 6,900 $690.00
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