EXHIBIT 1
OPERATING AGREEMENT
FOR
CONSOLIDATED ENTERTAINMENT, LLC
A CALIFORNIA LIMITED LIABILITY COMPANY
This Operating Agreement (this "Agreement"), is made as of the 19th
day of February, 1998, by and among XXXXX XXXXXXX ("Xxxxx") and XXXX XXXXXXX,
TRUSTEE OF THE ASIA PACIFIC CAPITAL TRUST (the "Trust") (collectively referred
to as the "Members" or individually as a "Member"), with reference to the
following facts:
A. On February 19, 1998, Articles of Organization (the "Articles")
for Consolidated Entertainment, LLC (the "Company"), a limited liability company
under the laws of the State of California, were filed with the California
Secretary of State.
B. The Members desire to adopt and approve an operating agreement
for the Company under the Xxxxxxx-Xxxxxx Limited Liability Company Act (the
"Act").
NOW, THEREFORE, the Members by this Agreement set forth the
operating agreement for the Company upon the terms and subject to the conditions
of this Agreement.
ARTICLE I
ORGANIZATIONAL MATTERS
1.1 Name. The name of the Company shall be "Consolidated
Entertainment, LLC." The Company may conduct business under that name, the name
"Straw Dogs" or any other name approved by the Members. The Company shall file a
fictitious business name statement for the name "Straw Dogs" in accordance with
the California Business and Professions Code.
1.2 Term. The term of the Company commenced as of the date of the
filing of the Articles and shall continue in existence until dissolved as
provided by this Agreement or the Act.
1.3 Office and Agent. The Company shall continuously maintain an
office and registered agent in the State of California as required by the Act.
The principal office of the Company shall be at 0000 Xxxxxx Xxxxxx, 0xx Xxxxx,
Xxxxx Xxxxxx, Xxxxxxxxxx 00000 or such location as the Members may determine.
The registered agent shall be as stated in the Articles or as otherwise
determined by the Members. The Company shall take all appropriate action to
qualify to do business in any other state where it conducts regular business
activities.
1.4 Business of the Company. The Company shall engage in the
business of television commercial and music video production, and such other
activities directly related to the foregoing business as may be necessary or
advisable in the reasonable opinion of the Members to further such business. The
Company shall not engage in any businesses other than as described in the
preceding sentence.
ARTICLE II
CAPITAL CONTRIBUTIONS
2.1 Capital Contributions. Each Member shall make a contribution to
the capital of the Company in the amount shown opposite the Member's name on
Exhibit A attached hereto. No Member shall be required to make any additional
contributions to the capital of the Company. Additional contributions to the
capital of the Company shall be made only with the unanimous consent of the
Members. Except as provided in this Agreement, no Member may withdraw his
capital contribution. All of the Members shall be required to personally
guarantee any debt, lease, loan or other obligation of the Company if any one
Member (or the beneficial owner of a Member) is required to provide such a
personal guarantee. In the event a Member, or the beneficial owner of a Member,
is required to make a payment pursuant to any such personal guarantee
disproportionate to such Member's Membership Interest, the other Member shall
reimburse the first Member in such amount that results in both Members
contributing to such guarantee in proportion to their Membership Interests.
2.2 Capital Accounts. The Company shall establish an individual
capital account ("Capital Account") for each Member. The Company shall determine
and maintain each Capital Account in accordance with Treasury Regulations
Section 1.704-1(b)(2)(iv). Upon a valid transfer of a Member's interest in the
Company ("Membership Interest") in accordance with Article VI, such Member's
Capital Account shall carry over to the new owner.
2.3 No Interest. The Company shall not pay any interest on capital
contributions.
ARTICLE III
NEW MEMBERS
3.1 Admission of Additional Members. Additional Members may be
admitted with the unanimous approval of all of the Members. Additional Members
will participate in the management, "Net Profits", "Net Losses" (as such terms
are defined in Paragraph 5.1), and distributions of the Company on such terms as
are determined by the unanimous approval of all of the Members. Exhibit A shall
be amended upon the admission of an additional Member to set forth such Member's
name and capital contribution.
ARTICLE IV
MANAGEMENT AND CONTROL OF THE COMPANY
4.1 Management and Powers. Xxxxx shall have the title of Manager, as
defined in the Act. Notwithstanding that Xxxxx is named as Manager, the Company
shall be managed by the Members. Xxxxx shall also be named President of the
Company. The Members acknowledge that Craig's compensation shall be based upon a
reasonable allocation of duties between Xxxxx and Xxxxx Xxxxx ("Xxxxx"), and
that if Xxxxx is unavailable and unable to perform such duties due to long-term
commitments outside of this Company, such as directing a motion picture, the
Members should hold good faith discussions regarding whether an adjustment to
Craig's compensation is warranted.
4.2 Decision Making. Except as specifically provided in this
Agreement, it is the intention of the Members that all material business
decisions regarding the regular and ordinary business of the Company be made
jointly by Xxxxx and by Xxxxx on behalf of the Trust, but in the event they do
not agree on an issue, then such decision shall be decided by a majority of
Membership Interests then outstanding. Notwithstanding the preceding sentence,
Xxxxx and Xxxxx xxx at any time delegate decision-making authority over one or
more of such issues to the other, or revoke such delegation.
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4.2.1 The Trust shall have the authority to sell substantially
all of the assets of the Company in connection with an "overall deal" pursuant
to which the purchaser acquires the rights to Jesse's services as a producer or
director in the filmed entertainment industry and finances all or part of
Jesse's activities in the filmed entertainment industry. Any other merger,
liquidation, reorganization, transfer of assets or acquisition shall require the
unanimous consent of the Members.
4.2.2 All other decisions pertaining to the Company not
described in Paragraph 4.2, or in subparagraph 4.2.1, or addressed elsewhere in
this Agreement, shall be decided by a majority of the Membership Interests then
outstanding.
4.3 Member Approval. No annual or regular meetings of the Members
are required to be held. However, if such meetings are held, such meetings shall
be noticed, held and conducted pursuant to the Act. In any instance in which the
approval of the Members is required under this Agreement, such approval may be
obtained in any manner permitted by the Act. Unless otherwise provided in this
Agreement, approval of the Members shall mean the approval of Members who hold a
majority of the Membership Interests.
4.4 Devotion of Time. Xxxxx shall devote his full-time exclusive
services to the business of the Company. The Trust shall not be required to
provide any services to the Company. Xxxxx shall provide his exclusive services
as a producer and director of television commercials and music videos and as an
executive in the television commercial and music video production industries to
the Company, although the Members acknowledge that Xxxxx shall not be required
or available to perform those services on a full-time basis.
4.5 Compensation. No Member shall be entitled to compensation as a
Member of the Company. Xxxxx shall be entitled to reasonable compensation as
President of the Company. Xxxxx shall be entitled to compensation, including
applicable profit percentages, on any commercials and music videos he directs
and/or produces on behalf of the Company as may be determined on a
project-by-project basis.
ARTICLE V
ALLOCATIONS OF NET PROFITS AND NET LOSSES AND DISTRIBUTIONS
5.1 Definitions. When used in this Agreement, the following terms
shall have the meanings set forth below:
"Adjusted Capital Account Deficit" means, with respect to any
Member, the deficit balance, if any, in such Member's Capital Account as of the
end of the relevant fiscal year, after giving effect to the following
adjustments:
(i) Credit to such Capital Account any amounts which
such Member is obligated to restore or is deemed to be obligated to restore
pursuant to the penultimate sentences of Regulations Sections 1.704-2(g)(1) and
1.704-2(i)(5); and
(ii) Debit to such 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.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, the provisions of succeeding law, and to the extent
applicable, the Treasury Regulations.
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"Net Profits" and "Net Losses" shall mean the income, gain,
loss, deductions, and credits of the Company in the aggregate or separately
stated, as appropriate, determined in accordance with the method of accounting
at the close of each fiscal year employed on the Company's information tax
return filed for federal income tax purposes.
"Percentage Interest" shall mean the percentage of a Member
set forth opposite the name of such Member under the column "Member's Percentage
Interest" in Exhibit "A" attached hereto, as such percentage may be adjusted
from time to time pursuant to the terms of this Agreement.
"Treasury Regulations" shall mean the final or temporary
regulations that have been issued by the U.S. Department of Treasury pursuant to
its authority under the Code, and any successor regulations.
5.2 Allocations of Net Profit and Net Loss.
A. Net Loss. Net Loss shall be allocated to the Members in
proportion to their Percentage Interests.
Notwithstanding any other provision of this Article, no Member
shall receive an allocation of Net Losses or any other item of loss or deduction
that would create or increase an Adjusted Capital Account Deficit of the Member.
Any loss not allocated to a Member because of the foregoing provision shall be
allocated to the other Members (to the extent the other Members are not limited
in respect of the allocation of losses under this Paragraph 5.2A). In the event
that any loss cannot be allocated by reason of the limitations set forth in the
preceding two sentences, such loss shall be allocated to all of the Members in
accordance with their respective Percentage Interests. Any loss reallocated
under this Paragraph 5.2A shall be taken into account in computing subsequent
allocations of income and losses pursuant to this Article V, so that the net
amount of any item so allocated and the income and losses allocated to each
Member pursuant to this Article V, to the extent possible, shall be equal to the
net amount that would have been allocated to each such Member pursuant to this
Article V if no reallocation of losses had occurred under this Paragraph 5.2A.
B. Net Profit. After giving effect to any adjustment required
by reason of the last sentence of Paragraph 5.2A, Net Profit shall be allocated
to the Members in proportion to their Percentage Interests.
5.3 Code Section 704(c) Allocations. Notwithstanding any other
provision in this Article V, in accordance with Code Section 704(c) and the
Treasury Regulations promulgated thereunder, income, gain, loss, and deduction
with respect to any property contributed to the capital of the Company shall,
solely for tax purposes, be allocated among the Members so as to take account of
any variation between the adjusted basis of such property to the Company for
federal income tax purposes and its fair market value on the date of
contribution. Allocations pursuant to this Paragraph 5.3 are solely for purposes
of federal, state and local taxes. As such, they shall not affect or in any way
be taken into account in computing a Member's Capital Account or share of
profits, losses, or other items of distributions pursuant to any provision of
this Agreement.
5.4 Distribution of Assets by the Company. Subject to applicable law
and any limitations contained elsewhere in this Agreement, the Members may
unanimously elect from time to time to cause the Company to make cash or other
distributions. Distributions shall be first to the Members in proportion to
their unreturned capital contributions until each Member has recovered its
capital contributions, and then to the Members in proportion to their Percentage
Interests. A Member's capital contribution shall, for purposes of this Paragraph
5.4, be deemed to include any payments by a Member of an affiliate of a Member
pursuant to a personal guarantee on any obligations of the Company.
Notwithstanding the preceding terms of this
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Paragraph 5.4, except to the extent such distribution may be in violation of the
Act, the Company shall distribute annually to the Members an amount equal to the
State and Federal income tax liability of a Member at the appropriate combined
State and Federal marginal tax brackets which such Member would incur on account
of the Member being required to report on his State or Federal income tax return
such Member's pro rata share of the Net Profits of the Company allocated to such
Member pursuant to Paragraph 5.2 (as applicable to an individual residing solely
in California and determined after giving effect to any deduction of State taxes
for Federal income tax purposes), prior to the due date for such payment to the
appropriate tax authority.
ARTICLE VI
TRANSFER AND ASSIGNMENT OF INTERESTS
6.1 Transfer and Assignment of Interests. No Member shall be
entitled to transfer, assign, convey, sell, encumber or in any way alienate all
or any part of his or her Membership Interest (collectively, "Transfer") except
with the prior written approval of all Members, which approval may be given or
withheld, conditioned or delayed, as each of the other Members may determine in
their sole and absolute discretion.
6.2 Substitution of Members. A transferee of a Membership Interest
shall have the right to become a substitute Member only if (i) consent of the
Members is given in accordance with Section 6.1, (ii) such person executes an
instrument satisfactory to the Members accepting and adopting the terms and
provisions of this Agreement, and (iii) such person pays any reasonable expenses
in connection with his or her admission as a new Member. The admission of a
substitute Member shall not release the Member who assigned the Membership
Interest from any liability that such Member may have to the Company.
6.3 Transfers in Violation of this Agreement. Upon a Transfer in
violation of this Article VI, the transferee shall have no right to vote or
participate in the management of the Company, its property, or its affairs, or
to exercise any rights of a Member. Such transferee shall not be entitled to
receive the share of the Company's Net Profits, Net Losses and distributions of
the Company's assets proportionate to such Membership Interest.
6.4 Permitted Transfers. Notwithstanding anything to the contrary
set forth in Section 6.1, a Member who is a natural person shall be permitted
without the approval of any other Member to transfer such Member's interest to a
revocable living trust established for the benefit of such Member, such Member's
spouse, and such Member's lineal descendants, or any of them.
ARTICLE VII
CONSEQUENCES OF TRIGGERING EVENTS AND
BUYOUT OF MEMBERSHIP INTEREST
7.1 Triggering Event. Except as otherwise provided in Article IX
hereof, upon the occurrence of the death of Xxxxx or Xxxxx, the permanent
disability of Xxxxx or Xxxxx that prevents that person from performing the
services described in Paragraph 4.4, the resignation of a Member from the
Company, or the failure of either Xxxxx or Xxxxx to perform the services
described in Paragraph 4.4 ("Triggering Event"), the Membership Interest of the
Member who is the subject of the Triggering Event (the Trust in the case of
Jesse's death, permanent disability, or failure to perform services) shall be
purchased by the other Member or the other Member's designee for the price and
according to the terms set forth in Paragraphs 7.2 and 7.4. A Member with
respect to which a Triggering Event has occurred (or the legal representative of
that Member) shall be referred to as a "Former Member" and the other Member
shall be referred to as the "Remaining Member."
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7.2 Purchase Price. Except as otherwise provided in Paragraph 7.6,
below, the purchase price for the Former Member's Interest shall be the fair
market value of the Former Member's Interest as determined by an independent
appraisal in accordance with this Paragraph 7.2. The Former Member and the
Remaining Member shall each select one (1) independent appraiser, and the two
appraisers so selected shall complete their appraisals of the Company within
ninety (90) days after the Triggering Event. If the higher of the two appraisals
is no more than ten percent (10%) above the lower appraisal then the average of
the two appraisals shall equal the fair market value of the Company. If the
higher of the two appraisals is more than ten percent (10%) above the lower
appraisal, then the two appraisers shall jointly select a third appraiser who
shall complete the appraisal of the Company within one hundred eighty (180) days
following the Triggering Event. If the third appraisal is no more than ten
percent (10%) above or below one of the first two appraisals, then the value of
the Company shall be equal to the average of those two appraisals. If the third
appraisal is more than ten percent (10%) above or below the other two
appraisals, then the fair market value of the Company shall be equal to the
average of all three appraisals. The purchase price of the Former Member's
Interest shall be equal to the value of the Company as determined hereinabove,
multiplied by the Percentage Interest of the Former Member, i.e. there shall be
no premium or discount attributable to a majority or minority Interest. The
Company and the Former Member shall each pay one-half of the cost of all of the
appraisals required herein.
7.3 Effect of Triggering Event. From and after the date (the
"Triggering Event Date") on which a Triggering Event occurs with respect to a
Former Member, such Former Member shall have no right to participate in the
management, property, and affairs of the Company. Such Former Member shall be
entitled to an allocation of Net Profits and Net Losses and receive
distributions with respect to the operation of the Company through and including
the Triggering Event Date. A Former Member shall not be entitled to receive an
allocation of Net Profits, Net Losses, or distributions with respect to any
business or operations following the Triggering Event Date.
7.4 Payment of Purchase Price. The purchase price for the Former
Member's Interest shall be paid within sixty (60) days after the determination
of the fair market value of the Former Member's Interest, except that if the
purchase price is greater than Fifty Thousand Dollars ($50,000.00), the purchase
price shall be paid in sixty (60) equal monthly installments on the first day of
each calendar month beginning on the first day of the second calendar month
following the determination of the fair market value of the Former Member's
Interest. All payments described in this Paragraph 7.4 shall include interest
from the Triggering Event Date at the prime rate of interest charged by Bank of
America NT & SA on the Triggering Event Date.
7.5 Application of Article VII. The terms of this Article VII shall
apply notwithstanding that the death of a Member or the purchase of a Former
Member's Interest by the Remaining Member may cause the technical termination
and dissolution of the Company under the Code or the Act. No Former Member or
Remaining Member shall be entitled to a distribution on account of a technical
termination of the Company as the result of a Triggering Event.
7.6 Adjustment to Buy-Out Price. In the event of either (i) a
Member's notice of resignation or failure by either Xxxxx or Xxxxx to perform
services described in Paragraph 4.4 prior to July 1, 1999; or (ii) the notice of
resignation of a Member or failure by either Xxxxx or Xxxxx to perform the
services described in Paragraph 4.4 upon less than six (6) months advance notice
of same to the Company, the purchase price for the Former Member's Membership
Interest shall be the lesser of one-half of the fair market value of the Former
Member's Membership Interest, or the payment otherwise due to the Former Member
if the Company were then liquidated in accordance with Article IX.
7.7 Non-Solicitation. For a period of one (1) year after a
Triggering Event Date, the Former Member (or Xxxxx if the Trust is the Former
Member) shall not directly or indirectly, as principal, agent,
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employer, employee, director, officer, stockholder or in any other individual or
representative capacity, solicit any employees of the Company or any of its
affiliates who were employed or otherwise under contract to the Company as of
the Triggering Event Date. For purposes of the preceding sentence, the term
"employees" shall include all music video and television commercial directors
under contract to the Company or any affiliates, whether employed directly,
through a loan-out corporation or through any other form of entity.
ARTICLE VIII
ACCOUNTING, RECORDS, REPORTING BY MEMBERS
8.1 Books and Records. The books and records of the Company shall be
kept in accordance with the accounting methods followed for federal income tax
purposes. The Company shall maintain at its principal office in California all
of the following:
A. A current list of the full name and last known business or
residence address of each Member set forth in alphabetical order, together with
the capital contributions, capital account and Membership Interest of each
Member;
B. A copy of the Articles and any and all amendments thereto
together with executed copies of any powers of attorney pursuant to which the
Articles or any amendments thereto have been executed;
C. Copies of the Company's federal, state, and local income
tax or information returns and reports, if any, for the six (6) most recent
taxable years;
D. A copy of this Agreement and any and all amendments thereto
together with executed copies of any powers of attorney pursuant to which this
Agreement or any amendments thereto have been executed;
E. Copies of the financial statements of the Company, if any,
for the six (6) most recent fiscal years; and
F. The Company's books and records as they relate to the
internal affairs of the Company for at least the current and past four (4)
fiscal years.
8.2 Reports. The Company shall cause to be filed, in accordance with
the Act, all reports and documents required to be filed with any governmental
agency. The Company shall cause to be prepared at least annually information
concerning the Company's operations necessary for the completion of the Members'
federal and state income tax returns. The Company shall send or cause to be sent
to each Member within ninety (90) days after the end of each taxable year (i)
such information as is necessary to complete the Members' federal and state
income tax or information returns and (ii) a copy of the Company's federal,
state, and local income tax or information returns for the year.
8.3 Bank Accounts. The Members shall maintain the funds of the
Company in one or more separate bank accounts in the name of the Company, and
shall not permit the funds of the Company to be commingled in any fashion with
the funds of any other person.
8.4 Tax Matters for the Company. Xxxxx is designated as "Tax Matters
Partner" (as defined in Code Section 6231), to represent the Company (at the
Company's expense) in connection with all examination of the Company's affairs
by tax authorities and to expend Company funds for professional services and
costs associated therewith.
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ARTICLE IX
DISSOLUTION AND WINDING UP
9.1 Conditions of Dissolution. The Company shall dissolve upon the
occurrence of any of the following events:
A. Upon the entry of a decree of judicial dissolution pursuant
to Section 17351 of the Corporations Code;
B. Upon the unanimous vote of Members;
C. The sale of all or substantially all of the assets of
Company;
D. In the case of a Triggering Event caused by the resignation
of a Member or the failure of Xxxxx or Xxxxx to provide the services described
in Paragraph 4.4, upon the vote of the Remaining Member; or
E. As may otherwise be required by law, except as provided in
Paragraph 7.5.
9.2 Winding Up. Upon the dissolution of the Company, the Company's
assets shall be disposed of and its affairs wound up. The Company shall give
written notice of the commencement of the dissolution to all of its known
creditors.
9.3 Order of Payment of Liabilities Upon Dissolution. After
determining that all the known debts and liabilities of the Company have been
paid or adequately provided for, the remaining assets shall be distributed to
the Members in accordance with their positive capital account balances, after
taking into account the allocation of Net Profits and Net Losses for the
Company's taxable year during which liquidation occurs.
9.4 Limitations on Payments Made in Dissolution. Except as otherwise
specifically provided in this Agreement, each Member shall be entitled to look
only to the assets of the Company for the return of its positive Capital Account
balance and shall have no recourse for its Capital Contribution and/or share of
Net Profits against any other Member.
9.5 Certificates. The Company shall file with the California
Secretary of State a Certificate of Dissolution upon the dissolution of the
Company and a Certificate of Cancellation upon the completion of the winding up
of the Company's affairs.
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ARTICLE X
INDEMNIFICATION AND INSURANCE
10.1 Indemnification of Agents. The Company shall indemnify any
Member and may indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding
by reason of the fact that he or she is or was a Member, officer, employee or
other agent of the Company or that, being or having been such a Member, officer,
employee or agent, he or she is or was serving at the request of the Company as
a manager, director, officer, employee or other agent of another limited
liability company, corporation, partnership, joint venture, trust or other
enterprise (all such persons being referred to hereinafter as an "agent"), to
the fullest extent permitted by applicable law in effect on the date hereof and
to such greater extent as applicable law may hereafter from time to time permit.
10.2 Insurance. The Company shall have the power to purchase and
maintain insurance on behalf of any person (including without limitation any
Member) who is or was an agent of the Company against any liability asserted
against such Person and incurred by such person in any such capacity, or arising
out of such person's status as an agent, whether or not the Company would have
the power to indemnify such person against such liability under the provisions
of Paragraph 10.1 or under applicable law.
ARTICLE XI
MISCELLANEOUS
11.1 Complete Agreement. This Agreement and the Articles constitute
the complete and exclusive statement of agreement among the Members with respect
to the subject matter herein and therein and replace and supersede all prior
written and oral agreements among the Members. No representation, statement,
condition, or warranty not contained in this Agreement or the Articles shall be
binding on the Members or have any force or effect whatsoever. To the extent
that any provision of the Articles conflict with any provision of this
Agreement, the Articles shall control.
11.2 Binding Effect. Subject to the provisions of this Agreement
relating to transferability, this Agreement will be binding upon and inure to
the benefit of the Members, and their respective successors and assigns.
11.3 Parties in Interest. Except as expressly provided in the Act,
nothing in this Agreement shall confer any rights or remedies under or by reason
of this Agreement on any Persons other than the Members and their respective
successors and assigns nor shall anything in this Agreement relieve or discharge
the obligation or liability of any third person to any party to this Agreement,
nor shall any provision give any third person any right of subrogation or action
over or against any party to this Agreement.
11.4 Pronouns; Statutory References. All pronouns and all variations
thereof shall be deemed to refer to the masculine, feminine, or neuter, singular
or plural, as the context in which they are used may require. Any reference to
the Code, the Regulations, the Act, Corporations Code or other statutes or laws
will include all amendments, modifications, or replacements of the specific
sections and provisions concerned.
11.5 Headings. All headings herein are inserted only for convenience
and ease of reference and are not to be considered in the construction or
interpretation of any provision of this Agreement.
11.6 Interpretation. In the event any claim is made by any Member
relating to any conflict, omission or ambiguity in this Agreement, no
presumption or burden of proof or persuasion shall be implied by virtue of the
fact that this Agreement was prepared by or at the request of a particular
Member or his or her counsel.
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11.7 References to this Agreement. Numbered or lettered articles,
sections and subsections herein contained refer to articles, sections and
subsections of this Agreement unless otherwise expressly stated.
11.8 Jurisdiction. Each Member hereby consents to the exclusive
jurisdiction of the courts sitting in Los Angeles County, California in any
action on a claim arising out of, under or in connection with this Agreement or
the transactions contemplated by this Agreement.
11.9 Exhibits. All Exhibits attached to this Agreement are
incorporated and shall be treated as if set forth herein.
11.10 Severability. If any provision of this Agreement or the
application of such provision to any person or circumstance shall be held
invalid, the remainder of this Agreement or the application of such provision to
persons or circumstances other than those to which it is held invalid shall not
be affected thereby.
11.11 Additional Documents and Acts. Each Member agrees to execute
and deliver such additional documents and instruments and to perform such
additional acts as may be necessary or appropriate to effectuate, carry out and
perform all of the terms, provisions, and conditions of this Agreement and the
transactions contemplated hereby.
11.12 Notices. Any notice to be given or to be served upon the
Company or any party hereto in connection with this Agreement must be in writing
(which may include facsimile) and will be deemed to have been given and received
when delivered to the address specified by the party to receive the notice. Such
notices will be given to a Member at the address specified in Exhibit A hereto.
Any party may, at any time by giving five (5) days' prior written notice to the
other parties, designate any other address in substitution of the foregoing
address to which such notice will be given.
11.13 Amendments. All amendments to this Agreement will be in
writing and signed by all of the Members.
11.14 No Interest in Company Property; Waiver of Action for
Partition. No Member has any interest in specific property of the Company.
Without limiting the foregoing, each Member irrevocably waives during the term
of the Company any right that he may have to maintain any action for partition
with respect to the property of the Company.
11.15 Multiple Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same instrument.
11.16 Attorney Fees. In the event that any dispute between the
Company and the Members or among the Members should result in litigation or
arbitration, the prevailing party in such dispute shall be entitled to recover
from the other party all reasonable fees, costs and expenses of enforcing any
right of the prevailing party, including without limitation, reasonable
attorneys' fees and expenses, all of which shall be deemed to have accrued upon
the commencement of such action and shall be paid whether or not such action is
prosecuted to judgment. Any judgment or order entered in such action shall
contain a specific provision providing for the recovery of attorney fees and
costs incurred in enforcing such judgment and an award of prejudgment interest
from the date of the breach at the maximum rate of interest allowed by law. For
the purposes of this Section: (a) attorney fees shall include, without
limitation, fees incurred in the following: (1) postjudgment motions; (2)
contempt proceedings; (3) garnishment, levy, and debtor and third party
examinations; (4) discovery; and (5) bankruptcy litigation and (b) prevailing
party shall mean the party who is determined in the proceeding to have prevailed
or who prevails by dismissal, default or otherwise.
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11.17 Remedies Cumulative. The remedies under this Agreement are
cumulative and shall not exclude any other remedies to which any person may be
lawfully entitled.
11.18 Time is of the Essence. All dates and times in this Agreement
are of the essence.
IN WITNESS WHEREOF, all of the Members of CONSOLIDATED
ENTERTAINMENT, LLC, a California Limited Liability Company, have executed this
Agreement, effective as of the date written above.
MEMBER:
/S/ Xxxxx Xxxxxxx
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XXXXX XXXXXXX
/S/ Xxxx Xxxxxxx
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XXXX XXXXXXX, TRUSTEE OF THE ASIA PACIFIC
CAPITAL TRUST
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ACKNOWLEDGMENT
The undersigned acknowledges that he has read and that he
understands the terms and conditions of this Operating Agreement of CONSOLIDATED
ENTERTAINMENT, LLC, and that he agrees on behalf of himself, his successors and
assigns to be bound by all of the terms and conditions thereof as they pertain
to the undersigned and to the Trust.
/S/ Xxxxx Xxxxx
----------------------------------
XXXXX XXXXX
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EXHIBIT A
CAPITAL CONTRIBUTION AND ADDRESSES OF MEMBERS
OF
CONSOLIDATED ENTERTAINMENT, LLC
AS OF
FEBRUARY 19, 1998
Member's Capital Member's
Member's Name Member's Address Contribution Percentage Interest
---------------------- ------------------------ ---------------- -------------------
Xxxx Xxxxxxx, $51.00 Fifty-one Percent
Trustee of the Asia (51%)
Pacific Capital Trust
Xxxxx Xxxxxxx $49.00 Forty-nine Percent
(49%)
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ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT ("Agreement") is entered into
this 15th day of August, 1999, by and between Xxxx Xxxxxxx, Trustee of the Asia
Pacific Capital Trust ("Assignor") and Xxxxx Xxxxx ("Assignee").
Assignor, for good and valuable consideration, hereby sells, assigns,
transfers, conveys and delivers to Assignee all right, title and interest of
Assignor as a member in Consolidated Entertainment, LLC ("LLC Interest").
Assignee hereby agrees to assume and discharge all debts, liabilities and
other obligations of Assignor in connection with the ownership of the LLC
Interest from and after the date hereof.
IN WITNESS WHEREOF, Assignor and Assignee have executed this Agreement to
be effective the date first set forth above.
"ASSIGNOR" "ASSIGNEE"
/S/ Xxxx Xxxxxxx By: /S/ Xxxxx Xxxxx
--------------------------------- ----------------------------------
XXXX XXXXXXX, TRUSTEE OF THE XXXXX XXXXX
ASIA PACIFIC CAPITAL TRUST
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