EXECUTION COPY
EXHIBIT 3.41
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Limited Liability Company Agreement
Of
Weider Publications, LLC
Dated as of January 23, 2003
A Delaware Limited Liability Company
THE INTERESTS IN THE LLC HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR ANY
STATE SECURITIES LAWS OR THE LAWS OF ANY OTHER NATION OR
JURISDICTION AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED
UNLESS THE SAME HAVE BEEN INCLUDED IN AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE 1933 ACT OR AN OPINION OF
COUNSEL SATISFACTORY TO THE BOARD HAS BEEN RENDERED TO THE
LLC THAT AN EXEMPTION FROM REGISTRATION UNDER APPLICABLE
SECURITIES LAWS IS AVAILABLE. IN ADDITION, TRANSFER OR OTHER
DISPOSITION OF THE INTERESTS IN THE LLC IS RESTRICTED AS
PROVIDED IN THIS AGREEMENT. MEMBERS SHOULD BE AWARE THAT
THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS
INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
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PREAMBLE
This Limited Liability Company Agreement (this "Agreement") has been
entered into by the undersigned members ("Members") as of January 23, 2003
pursuant to the Delaware Limited Liability Company Act (6 Del. C. Section 18-101
et seq., as amended, the "Delaware Act") and is the operating agreement of
Weider Publications, LLC (the "LLC") for purposes of the Delaware Act.
Capitalized terms shall have the meanings as set forth in Article XII hereof or
as otherwise defined herein.
RECITALS
WHEREAS, Weider Publication, Inc., a Delaware corporation ("WPI"), and
Weider Interactive Networks, Inc., a Delaware corporation ("WIN"), have formed
the LLC pursuant to the Delaware Act and have filed a Certificate of Formation
with the Delaware Secretary of State on November 26, 2002;
WHEREAS, WPI and WIN have contributed all of their assets to the LLC as a
capital contribution pursuant to the Asset Contribution Agreement, dated as of
the date hereof, by and among WPI, WIN and the LLC;
WHEREAS, American Media Operations, Inc., a Delaware corporation ("Buyer")
has agreed to acquire all of the Interests in the LLC from WPI and WIN pursuant
to the Purchase and Contribution Agreement, dated as of November 26, 2002 (the
"Purchase Agreement"), by and among the LLC, WIN, Weider Health and Fitness, a
Nevada corporation, Weider Health and Fitness, LLC, a Delaware limited liability
company, EMP Group L.L.C., a Delaware limited liability company, Buyer, and the
other parties thereto and thereby become the sole Member effective as of the
Closing (as defined in the Purchase Agreement); and
WHEREAS, the Members desire to enter into this Agreement which sets forth
their respective rights and obligations as Members and provides for the
management of the LLC.
AGREEMENT
ARTICLE I
ORGANIZATION
1.1 Formation. WPI and WIN have previously organized the LLC as a
Delaware limited liability company pursuant to the Delaware Act. The original
Certificate of Formation of the LLC was filed with the Delaware Secretary of
State on November 26, 2002. The undersigned Members hereby agree to continue a
Delaware limited liability company pursuant to the provisions of the Delaware
Act and agree that the rights, duties and liabilities of the Members shall be as
provided herein, unless otherwise required by the Delaware Act. Upon execution
of this Agreement, the undersigned shall be Members of the LLC.
1.2 Name. The name of the LLC shall be Weider Publications, LLC or such
other name or names as may be approved by the Members from time to time.
1.3 Certificate of Formation and Other Filings. The Board is hereby
authorized to cause the LLC to execute or cause to be executed all instruments,
certificates, notices and documents, and to do or cause to be done all such
filing, recording, publishing and other acts as may be deemed by the Board to be
necessary or appropriate from time to time to comply with all applicable
requirements for the formation, operation or, when appropriate, termination of a
limited liability company in the State of Delaware and all other jurisdictions
where the LLC does or shall desire to conduct its business.
1.4 Purpose. Members agree that the LLC has been formed to own and
operate the publishing and magazine and such other businesses contributed to the
LLC by WPI and WIN, and to engage in activities that are necessary, customary,
convenient or incidental thereto.
1.5 Place of Business. The principal place of business of the LLC shall
be at 00000 Xxxxx Xxxxxx, Xxxxxxxx Xxxxx, Xxxxxxxxxx, 00000, or at such other
location as the Board determines from time to time.
1.6 Registered Office and Agent. The initial registered office of the
LLC in the State of Delaware is National Registered Agents, Inc. The name of its
initial registered agent at such address is 0 Xxxx Xxxxxxxxxx Xxxxxx, Xxxxx,
Xxxxxxxx 00000. The LLC's registered office and registered agent may be changed
from time to time by filing the address of the new registered office or the name
of the new registered agent with the Delaware Secretary of State pursuant to the
Delaware Act.
1.7 Fiscal Periods. The fiscal year and taxable year of the LLC (each, a
"Fiscal Year") shall be the year ending the last Tuesday of the month of March
unless otherwise required by the Code.
1.8 Powers. Subject to the provisions of this Agreement, the LLC and the
Board acting on behalf of the LLC pursuant to Article IV, shall be empowered to
do or cause to be done, or not to do, any acts as are necessary to effectuate
the provisions of this Agreement.
ARTICLE II
MEMBERS
2.1 Members. The initial Members are listed on Schedule A hereto.
Effective upon the Closing, the initial Members shall each be deemed to have
withdrawn as, and cease to be, Members and Buyer shall be the sole Member as of
and following the Closing.
2.2 LLC Property; LLC Interest. No real or other property of the LLC
shall be deemed to be owned by any Member individually, but shall be owned by
and title shall be vested solely in the LLC, except that the Board may cause
legal title to any property of the LLC to be held by, or in the name of, any
Person as nominee. The Interests of the Members shall be personal property of
each of them giving only the rights specifically set forth in this Agreement or
the Delaware Act.
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2.3 Reimbursement. Notwithstanding anything in this Agreement to the
contrary, the Directors shall be entitled to reimbursement from the LLC for
reasonable expenses incurred by them which are attributable to the organization,
operation and management of the LLC.
ARTICLE III
MEETINGS OF THE MEMBERS
3.1 Meetings. The LLC shall not be required to hold annual meetings.
Special meetings of the Members may be called by Members holding a majority of
the Units then outstanding upon 10 days' notice to all Members in writing or by
telephone or facsimile. No business shall be acted upon at a special meeting
that is not stated in the notice of the meeting. Meetings of Members may be held
by telephone or any other communications equipment by means of which all
participating Members can simultaneously hear each other during the meeting.
3.2 Quorum. No action may be taken at a meeting of Members unless a
quorum consisting of the Members holding a majority of the Units then
outstanding is present in person or by proxy.
3.3 Action by Written Consent. Subject to Article IV, any action which
may be taken by the Members, or by any class of Members, under this Agreement
may be taken without a meeting if consents in writing setting forth the action
so taken are signed by Members holding a majority of the Units then outstanding;
provided, however, that if an action by written consent is solicited by the LLC,
a Member shall be deemed to have withheld consent to such action unless such
Member consents in writing within 15 business days of such Member's receipt of
the solicitation.
3.4 Voting Rights; Required Vote. Each Member shall be entitled to vote
its Interests with respect to any action required or permitted to be taken by
the Members under this Agreement. Except as otherwise expressly provided in this
Agreement, any action required or permitted to be taken by the Members must be
approved by the consent of the Members holding a majority of the Units then
outstanding.
3.5 Waivers of Notice. Whenever the giving of any notice to Members is
required by statute or this Agreement, a waiver thereof, in writing and
delivered to the LLC signed by the Member entitled to such notice, whether
before or after the event as to which such notice is required, shall be deemed
equivalent to notice. Attendance of a Member at a meeting or execution of a
written consent to any action shall constitute a waiver of notice of such
meeting or action.
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ARTICLE IV
MANAGEMENT; BOARD
4.1 Management by Board of Directors.
(a) Except for situations in which the approval of all the
Directors is expressly required by nonwaivable provisions of applicable law or
as otherwise provided in this Agreement, (i) the powers of the LLC shall be
exercised by or under the authority of, and the business and affairs of the LLC
shall be managed under the direction of, a supervisory Board of Directors (the
"Board"), and (ii) subject to the provisions of this Article IV and Article V, a
majority of the Board may make all decisions and take all actions for the LLC
not otherwise provided in this Agreement. The day-to-day activities of the LLC
will be conducted by the Officers of the LLC, who will be agents of the LLC.
(b) Notwithstanding the foregoing, without the unanimous written
consent of the Members,
(i) the Board shall not have authority to take, and the LLC
shall not take, any action that has the purpose or effect, either directly
or indirectly, of adversely affecting the rights, privileges or
obligations of any Member under this Agreement or otherwise, except to the
extent any such action affects all of the rights, privileges or
obligations of all of the Members on an equal or proportional basis,
including, but not limited to, any such actions to:
(A) terminate the LLC, including, without limitation,
by way of liquidation, dissolution, winding-up, voluntary
bankruptcy or insolvency of the LLC; or
(B) distribute property or assets (including cash) of
the LLC to the Members; and
(ii) the Board shall not have authority to take, and the LLC
shall not take, any actions to elect for the LLC to be treated as other
than a partnership for federal, and applicable state income tax purposes
(except in connection with an underwritten public offering by the LLC of
its shares of capital stock pursuant to a registration statement under the
1933 Act on Form S-1 (as defined in the 1933 Act)); or
(iii) the Board shall not have authority to take, and the LLC
shall not take, any actions to agree or commit to agree to do any of the
foregoing.
4.2 Number and Qualifications. The number of Directors of the LLC shall
initially be three, but may be increased or decreased (but not below three (3))
with the consent of the Members holding a majority of the Units then
outstanding. Each Member shall appoint that number of Directors equal to such
Member's Percentage Interest multiplied by the then-current number of Directors
of the LLC (the product being rounded to the nearest whole number if necessary).
The Directors of the LLC following the Closing are those individuals whose names
are listed on Schedule B to this Agreement.
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4.3 Vote of Directors. Each Director shall be entitled to one vote.
4.4 Term. Each Director shall hold office for one year until his or her
successor shall be elected and qualified, or until his or her earlier death,
resignation or removal as provided in this Agreement.
4.5 Vacancy. Any Director position to be filled by reason of an increase
in the number of Directors may be filled by the consent of the Members holding a
majority of the Units then outstanding. Any vacancy occurring in the Board other
than by reason of an increase in the number of Directors or by reason of the
decrease in any Member's Units may be filled by the Member that originally
appointed such Director. A Director elected to fill a vacancy other than by
reason of an increase in the number of Directors shall be elected for the
unexpired term of its predecessor or in office.
4.6 Removal. Any Director may be removed at any time, with or without
cause, by the Member, or its successor or assign, that appointed such Director
or by action of any other Director on behalf of a Member that has become
entitled to the position of such Director by virtue of a change in the number of
such Member's Units.
4.7 Resignation. Any Director may resign at any time. Such resignation
shall be made in writing and shall take effect at the time specified therein or,
if no time is specified therein, at the time of its receipt by the remaining
Directors. The acceptance of a resignation shall not be necessary to make it
effective, unless so expressly provided in the resignation.
4.8 Place of Meetings of Board. All meetings of the Board may be held
either within or without the State of Delaware at such place or places as shall
be determined from time to time by resolution of the Board.
4.9 Meetings of Board. Meetings of the Board may be held when called by
a majority of the Directors. The Directors calling any meeting shall cause
notice to be given of such meeting, including the time, date and place of such
meeting, to each Director at least two business days before such meeting. The
business to be transacted at, or the purpose of, any meeting of the Board shall
be specified in the notice or waiver of notice of any such meeting. If fewer
than all the Directors are present in person, by telephone or by proxy, business
transacted at any such meeting shall be confined to the business or purposes
specifically stated in the notice or waiver of notice of such meeting.
4.10 Quorum; Vote. The vote of a majority of the votes entitled to be
cast by the Directors (a "majority vote") present in person, by telephone or by
proxy at a meeting at which a quorum is present in person, by telephone or by
proxy shall be the act of the Board, except as otherwise provided by law, the
Certificate of Formation or this Agreement. If a quorum shall not be present in
person, by telephone or by proxy at any meeting of the Board, the Directors
present in person, by telephone or by proxy at the meeting may adjourn the
meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall be present in person, by telephone or by proxy.
4.11 Methods of Voting; Proxies. A Director may vote either in person, by
telephone or by proxy executed in writing by such Director; provided, however,
that the Person designated
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to act as proxy shall be a Director. A telegram, telex, cablegram or similar
transmission by a Director, or a photographic, photostatic, facsimile or similar
reproduction of a writing executed by a Director shall be treated as an
execution in writing for purposes of this Section 4.11. Proxies for use at any
meeting of the Board or in connection with the taking of any action by written
consent shall be filed with the Board before or at the time of the meeting or
execution of the written consent, as the case may be. All proxies shall be
received and taken charge of and all ballots shall be received and canvassed by
the Board who shall decide all questions touching upon the qualifications of
voters, the validity of the proxies, and the acceptance or rejection of votes.
No proxy shall be valid after 30 days from the date of its execution unless
otherwise provided in the proxy. A proxy shall be revocable unless the proxy
form conspicuously states that the proxy is irrevocable and the proxy is coupled
with an interest. Should a proxy designate two or more Directors to act as
proxies, unless that instrument shall provide to the contrary, a majority of
such Directors present in person or by telephone at any meeting at which their
powers thereunder may be exercised shall have and may exercise all the powers of
voting or giving consents thereby conferred, or if only one such Director be
present, then such powers may be exercised by that one Director; or, if an even
number of such Directors attend in person or by telephone and a majority do not
agree on any particular issue, the Board shall not be required to recognize such
proxy with respect to such issue if such proxy does not specify how the votes
that are the subject of such proxy are to be voted with respect to such issue.
4.12 Order of Business. The Directors may adopt such rules and procedures
relating to their activities as they may deem appropriate, provided that such
rules and procedures are not inconsistent with or do not violate the provisions
of this Agreement. The secretary of the meeting shall prepare minutes of the
meeting and place a copy thereof in the minute books of the LLC. A copy of the
minutes of the meeting will be delivered promptly to each Director and Member.
4.13 Attendance and Waiver of Notice. Attendance of a Director at any
meeting shall constitute a waiver of notice of such meeting, except where a
Director attends a meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.
4.14 Compensation of Directors. Directors, as such, shall not receive any
stated salary for their services. Out-of-pocket expenses of attendance, if any,
for attendance at each meeting of the Board shall be reimbursed by the LLC;
provided, however, that nothing contained in this Agreement shall be construed
to preclude any Director from serving the LLC in any other capacity and
receiving compensation for such service.
4.15 Actions Without a Meeting. Any action required or permitted to be
taken at a meeting of the Board or any committee thereof may be taken without a
meeting, with notice as provided in Section 4.9, and without a vote, if a
consent in writing, setting forth the action so taken, is signed by each of the
Directors or each member of the committee, as the case may be. Such consent
shall have the same force and effect, as of the date stated therein, as a vote
of such Directors or members of the committee, as the case may be, and may be
stated as such in any document or instrument filed with the Secretary of State
of the State of Delaware or in any certificate or other document delivered to
any Person or entity. The signed consent shall be placed in the minute book of
the LLC.
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4.16 Telephone and Similar Meetings. The Directors, or members of any
committee thereof, may participate in and hold meetings by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other. Such participation in any such
meeting shall constitute presence in person at such meeting, except where a
Person participates in such meeting for the express purpose of objecting to the
transaction of any business on the ground that such meeting is not lawfully
called or convened.
4.17 Limitation on Directors' Authority. Except as otherwise specifically
provided in this Agreement or by agreement of all the Members, (i) no Director
or group of Directors will have any actual or apparent authority to enter into
contracts on behalf of, or to otherwise bind, the LLC, or take any action or
incur any obligation, liability, debt, cost or expense in the name of or on
behalf of the LLC or conduct any business of the LLC other than by action of the
Board taken in accordance with the provisions of this Agreement, and (ii) no
Director will have the power or authority to delegate to any Person such
Director's rights and powers as a Director to manage the business and affairs of
the business and affairs of the LLC.
ARTICLE V
OFFICERS
5.1 Designation; Term; Qualifications.
(a) The Board may, from time to time, designate any Person to be a
Senior Officer of the LLC. Any Senior Officer so designated shall have such
authority and perform such duties as the Board may, from time to time, delegate
to such Senior Officer. The Board may assign additional titles to particular
Senior Officers, and the assignment of such additional titles shall constitute
the delegation to such Senior Officer of the authority and duties that are
normally associated with that office, subject to any specific delegation of
authority and duties made to such Senior Officer by the Board pursuant to this
Section 5.1.
(b) The Chief Executive Officer of the LLC (the "Chief Executive
Officer") may, from time to time, designate one or more Persons to be Officers
(other than Senior Officers) of the LLC, subject to Board approval. Any such
Officer so designated shall have such authority and perform such duties as the
Chief Executive Officer with the Board's approval may, from time to time,
delegate to such Officer. The Chief Executive Officer with the Board's approval
may assign titles to particular Officers, and the assignment of such title shall
constitute the delegation to such Officer of the authority and duties that are
normally associated with that office, subject to any specific delegation of
authority and duties made to such Officer by the Chief Executive Officer with
the Board's approval pursuant to this Section 5.1.
(c) Each Officer shall hold office for the term for which such
Officer is designated and until its successor shall be duly designated and shall
qualify or until its death, resignation or removal as provided in this
Agreement. Any Person may hold any number of offices. No Officer need be a
Director, a Member, a Delaware resident, or a United States
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citizen. Designation of a Person as an Officer of the LLC shall not of itself
create any contract rights.
5.2 Other Officers. In accordance with Section 5.1, the Board may
designate any other Officers of the LLC who will exercise the powers and will
perform the duties incident to their offices, subject to the direction of the
Board.
5.3 Removal and Resignation. Any Officer may be removed as such, with or
without cause, by a majority vote of the votes entitled to be cast by the
Directors whenever in their judgment the best interests of the LLC will be
served thereby; provided, however, that such removal shall be without prejudice
to the contract rights, if any, of the Person so removed. Any Officer may resign
as such at any time upon written notice to the LLC. Such resignation shall be
made in writing and shall take effect at the time specified therein, or if no
time is specified therein, at the time of its receipt by the Board. The
acceptance of a resignation shall not be necessary to make it effective, unless
expressly so provided in the resignation.
5.4 Vacancies. Other than as set forth above, any vacancy occurring in
any office of the LLC may be filled by the majority vote of the Board.
5.5 Compensation. The compensation, if any, of the Officers shall be
fixed from time to time by majority vote of the Board.
ARTICLE VI
REDEMPTIONS; SUBSTITUTES; DISTRIBUTIONS
6.1 No Right to Redemption. Members will not be entitled to require that
their Interests in the LLC be redeemed.
6.2 Nonliquidating Distributions. All distributions to the Members prior
to and not in conjunction with an Event of Termination in accordance with
Section 9.2 shall be made to the Members only at such times as the Board deems
appropriate and shall be made in proportion to each Member's Percentage
Interest.
6.3 Distributions In Kind. The LLC shall not make any nonliquidating
distribution of property or assets (including cash) to any Member without the
consent of the Members holding a majority of the Units then outstanding given
pursuant to Article III.
6.4 Withholding. Notwithstanding anything expressed or implied to the
contrary in this Agreement, the Board is authorized to take any action necessary
or appropriate to cause the LLC to comply with any foreign or United States
federal, state or local withholding requirement with respect to any payment or
distribution by the LLC to any Member or other Person. All amounts so withheld,
shall be treated as distributions to the applicable Members under the applicable
provision of this Agreement. If any such withholding requirement with respect to
any Member exceeds the amount distributable to such Member under this Agreement,
or if any such withholding requirement was not satisfied with respect to any
amount previously paid or distributed to such Member, such Member or any
successor or assignee with respect to such
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Member's Interest hereby indemnifies and agrees to hold harmless the other
Members and the LLC for such excess amount or such withholding requirement, as
the case may be, together with all interest and penalties payable.
ARTICLE VII
BOOKS OF ACCOUNT, RECORDS AND REPORTS
7.1 Maintenance of Books and Records, Etc. The LLC shall maintain such
books and records on the basis utilized in preparing the LLC's federal income
tax return, incorporating the accrual or cash method of accounting, as the Board
may determine to be in the best interest of the LLC, and such other records as
may be required in connection with the preparation and filing of the LLC's
federal, state and local income tax returns or other tax returns or reports or
to make the computations called for in this Article VII. All such books and
records shall at all times be made available at the principal office of the LLC
and shall be open to the reasonable inspection and examination of the Members or
their duly authorized representatives or designees during normal business hours.
7.2 Reports to Members. As soon as practicable after the end of each
Fiscal Year, the LLC shall send each Person who was a Member at any time during
the calendar year then ended (including any assignee, whether or not a
substituted Member) such LLC tax information as shall be necessary for the
preparation by such Person of its federal, state and local income tax returns.
ARTICLE VIII
LIMITATIONS OF LIABILITY
8.1 Liability of Certain Persons. None of the Directors, Members or any
officer, employee or agent of the LLC shall be liable, responsible or
accountable in damages or otherwise to any of the Members or any of their
successors in interest for any act or omission performed or omitted to be
performed in good faith on behalf of the LLC and in a manner reasonably believed
to be within the scope of the authority granted by this Agreement and in the
best interests of the LLC, but shall be so liable, responsible or accountable;
(i) for fraud, intentional misconduct or a knowing violation of law with respect
to such acts or omissions; (ii) for any breach of such Person's duty of loyalty
to the LLC or its Members or Directors; (iii) for any transaction relating to
the LLC from which such Person received an improper benefit; or (iv) for any
breach by a Member or Director of this Agreement. Without limitation as to other
sources of indemnification, each such Person shall be indemnified and held
harmless by the LLC from and against any and all claims, demands, liabilities,
costs, damages and causes of action of any nature whatsoever arising out of or
incidental to such Person's management of the LLC's affairs, except to the
extent it has been Finally Determined that such Person is liable for any of the
actions set forth in clauses (i) through (iv) in the immediately preceding
sentence. In addition, no Director or any officer, employee or agent of the LLC
shall be deemed to have violated a standard of care unless such a violation has
been Finally Determined. The LLC shall advance expenses incurred by any Director
or any officer, employee or agent of the LLC prior to
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the final disposition of a matter as to which indemnification is sought
hereunder, subject to receipt of an undertaking to repay such amounts if it is
Finally Determined that the indemnified Person is not entitled to
indemnification in accordance with this Section 8.1. The Board may obtain
insurance for Directors, Officers or employees with respect to the above as an
expense of the LLC.
8.2 Not Liable for Return of Capital. No Person (including, without
limitation, any Member or Director) shall be personally liable for the return of
the capital of any Member or any portion thereof or interest thereon, and such
return shall be made solely from available LLC assets, if any.
ARTICLE IX
TERM
9.1 Term. The existence of the LLC commenced on the date of the filing
of a certificate of formation described in Section 18-201 of the Delaware Act in
the office of the Secretary of State of the State of Delaware in accordance with
the Delaware Act, which date was November 26, 2002 (the "Certificate of
Formation") and shall continue until a determination by the Members to terminate
the LLC (an "Event of Termination") by a vote of the Members holding a majority
of Units then outstanding taken pursuant to Article III.
9.2 Winding-Up. Upon the occurrence of an Event of Termination, the LLC
shall be dissolved and wound up. In connection with the dissolution and
winding-up of the LLC, the Board or a liquidator or other representative
appointed by it (the "Representative") shall promptly proceed with the sale or
liquidation of all of the assets of the LLC and shall apply and distribute the
proceeds of such sale or liquidation in the following order of priority, unless
otherwise required by mandatory provisions of applicable law:
(a) first, to pay (or to make provision for the payment of) all
creditors of the LLC and the expenses of liquidation, in the order of priority
provided by law or otherwise, in satisfaction of all debts, liabilities or
obligations of the LLC due such creditors and of such expenses of liquidation;
(b) second, to the establishment of any reserve which the Board or
the Representative, as the case may be, may deem reasonably necessary for any
contingent or unforeseen liabilities or obligations of the LLC (such reserve may
be paid over by the Board or the Representative to an escrow agent acceptable
thereto, to be held for disbursement in payment of any of the aforementioned
liabilities and, at the expiration of such period as shall be deemed advisable
by the Board or the Representative, for distribution of the balance in the
manner hereinafter provided in this Section 9.2 hereof); and
(c) third, after the payment (or the provision for payment) of all
debts, liabilities and obligations of the LLC in accordance with Sections 9.2(a)
and (b) above, to the Members or their legal representatives in accordance with
such Members' respective Capital Account balances by the end of the taxable year
in which such dissolution and winding up occurs or, if later, within 90 days
after the date of dissolution.
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9.3 Distributions Upon Dissolution. Upon dissolution and winding up of
the LLC, the Board or the Representative, as the case may be, shall distribute
LLC assets to the Members in accordance with such Members' respective Capital
Account balances either in cash or in kind as the Board determines in its sole
discretion; provided, however, that no Member shall be required to accept
non-cash consideration except on a pro-rata basis with the other Members. Each
Member shall look solely to the assets of the LLC for all distributions with
respect to the LLC, its capital contributions thereto, its Capital Account and
shall have no recourse therefore against any other Member. Accordingly, if any
Member has a deficit balance in its Capital Account (after giving effect to all
contributions, distributions and allocations for all taxable years, including
the year during which the dissolution occurs) then such Member shall have no
obligation to make any capital contributions with respect to such deficit, and
such deficit shall not be considered a debt owed to the LLC or any other Person.
9.4 Time for Liquidation. A reasonable amount of time shall be allowed
for the orderly liquidation of the assets of the LLC and the discharge of
liabilities to creditors so as to enable the Board or the Representative to
minimize the losses attendant upon such liquidation.
9.5 Termination. Upon compliance with the foregoing distribution plan,
the LLC shall cease to be such, and the Board or the Representative, as the case
may be, shall execute, acknowledge and file (or cause to be executed,
acknowledged and filed) with the Secretary of State of the State of Delaware a
certificate of cancellation of the LLC pursuant to the power of attorney granted
pursuant to Section 13.13.
ARTICLE X
CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS; ALLOCATIONS
10.1 Capital Contributions.
The aggregate capital contribution made to the LLC by each Member at any
given time during the term of the LLC shall be as set forth in the LLC's books
and records. The initial capital contributions and Capital Account balances of
the Members are set forth on Schedule A hereto.
10.2 Capital Accounts.
(a) There shall be established for each Member on the books of the
LLC a capital account (the "Capital Account") reflecting the difference between
(i) the sum of (w) such Member's capital contributions, (x) such Member's share
of Profits, and (y) such Member's share of tax-exempt income of the LLC minus
(ii) the sum of (w) such Member's share of Losses, (x) such Member's share of
other LLC expenditures that are not deductible for federal income tax purposes
(not including principal payments on indebtedness or expenditures to the extent
included in the basis of any asset of the LLC), and (y) any distributions to
such Members.
(b) Notwithstanding any other provision in this Section 10.2 or
elsewhere in this Agreement, each Member's Capital Account shall be maintained
and adjusted in accordance with the Internal Revenue Code of 1986, as amended
(the "Code"), and the Treasury Regulations
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thereunder ("Regulations"), including Regulations Sections 1.704-1(b) and
1.704-2. It is intended that appropriate adjustments shall thereby be made to
Capital Accounts to give effect to any income, gain, loss or deduction (or items
thereof) that is allocated pursuant to this Agreement. In the event any Interest
in the LLC is transferred, the transferee shall succeed to the Capital Account
of the transferor to the extent it relates to the transferred Interest. In the
event that the Board shall determine that it is prudent to modify the manner in
which Capital Accounts, or any additions or subtractions thereto (including,
without limitation, adjustments relating to liabilities that are secured by
contributed or distributed property or that are assumed by the LLC or the
Members), are computed in order to comply with such Regulations, the Board shall
be entitled to make such modification, provided that it is not likely to have a
material effect on the amounts distributable to any Member pursuant to Section
9.2 upon dissolution of the LLC. The Board shall also make (a) any adjustments
that are necessary or appropriate to maintain equality between the Capital
Accounts of the Members and the amount of LLC capital reflected on the LLC's
balance sheet, as computed for book purposes, in accordance with Regulations
Section 1.704-1(b)(2)(iv)(q), and (b) any appropriate modifications in the event
that unanticipated events might otherwise cause this Agreement not to comply
with Regulations Section 1.704-1(b) or Section 1.704-2.
(c) The Board may in its discretion increase or decrease the
Capital Accounts of the Members to reflect a revaluation of LLC property on the
LLC's books and records, but only in accordance with the rules set forth in
Regulations Section 1.704-1(b)(2)(iv)(f). Following any such revaluation, the
Members' Capital Accounts shall be adjusted in accordance with Regulations
Section 1.704-1 (b)(2)(iv)(g) for allocations of depreciation, depletion,
amortization, and gain or loss as computed for book purposes with respect to
such property.
10.3 Timing and Amount of Allocations of Profits and Losses. Profits and
Losses of the LLC shall be determined and allocated with respect to each Fiscal
Year of the LLC as of the end of each such year. Subject to the other provisions
of this Agreement, an allocation to a Member of a share of Profits or Losses
shall be treated as an allocation of the same share of each item of income,
gain, loss or deduction that is taken into account in computing Profits or
Losses. "Profits" or "Losses" for each Fiscal Year of the LLC shall mean the net
income or net loss of the LLC, determined by the method of accounting for the
LLC as selected by the Board for federal income tax purposes, including, without
limitation, each item of LLC income, gain, loss and deduction; provided,
however, in the event of a revaluation of LLC property as described in Section
10.2(c), Profits and Losses of the LLC shall be adjusted in accordance with
Regulations Section 1.704-1(b)(2)(iv)(g).
10.4 Allocations.
(a) Except as otherwise provided in this Article X, all Profits
and Losses of the LLC shall be allocated to the Members in proportion to their
respective Percentage Interests.
(b) Notwithstanding Section 10.4(a):
(i) If there is a net decrease in LLC Minimum Gain or Member
Minimum Gain during any Fiscal Year, the Members shall be allocated items of LLC
income
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and gain for such year (and, if necessary, for subsequent years) in accordance
with Regulations Section 1.704-2(f) or Section 1.704-2(i)(4), as applicable.
(ii) Any Member Nonrecourse Deductions for any Fiscal Year
shall be specially allocated to the Member(s) who bears the economic risk of
loss with respect to the Member Nonrecourse Debt to which such Member
Nonrecourse Deductions are attributable, in accordance with Regulations Section
1.704-2(i).
(iii) Items of LLC income and gain shall be allocated to the
Members in accordance with the "qualified income offset" requirements of
Regulations Section 1.704-1(b)(2)(ii)(d).
(iv) To the extent any allocation of losses would cause or
increase an Adjusted Capital Account Deficit as to any Member, such allocation
of losses shall be reallocated among the other Members in proportion to their
respective Percentage Interests, but in a manner that will not produce an
Adjusted Capital Account Deficit as to any other Member.
(v) The allocations set forth in Sections 10.4(b)(i) through
(iv) above and Section 10.4(d) below (the "Regulatory Allocations") are intended
to comply with certain regulatory requirements, including the requirements of
Regulations Sections 1.704-1(b) and 1.704-2. Notwithstanding Section 10.4(a),
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 allocations 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.
(c) For any Fiscal Year during which a Member's Interest is
assigned by such Member (or by an assignee or successor in interest to a
Member), the portion of the Profits or Losses of the LLC that is allocable in
respect of such Member's Interest shall be apportioned between the assignor and
the assignee on any basis selected by the Board, provided such basis is
permitted by Section 706(d)(2) of the Code.
(d) Tax Allocations
(i) Except as otherwise provided in this Section 10.4(d),
each item of income, gain, loss and deduction shall be allocated for income tax
purposes among the Members in the same manner as its correlative item of "book"
income, gain, loss or deduction is allocated pursuant to this Article X.
(ii) Notwithstanding the foregoing provisions of this Article
X, income, gain, loss and deduction with respect to property contributed to the
LLC by a Member shall be allocated among the Members, pursuant to Regulations
promulgated under Section 704(c) of the Code, so as to take account of the
variation, if any, between the adjusted basis of such property to the LLC and
its initial value. The LLC shall account for such variation under any method
approved under Section 704(c) of the Code and the applicable Regulations as
chosen by the Board; provided, however, that the LLC shall use the "traditional
method" described in Regulations Section 1.704-3(b) with respect to property
contributed to the LLC by WPI and WIN. In the event the value of any LLC asset
is adjusted pursuant to Section 10.2(c), subsequent
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allocations of income, gain, loss and deduction with respect to such asset shall
take account of the variation, if any, between the adjusted basis of such asset
for federal income tax purposes and its value in the same manner as under
Section 704(c) of the Code and the applicable Regulations, consistent with the
requirements of Regulations Section 1.704-1(b)(2)(iv)(g), using any method
approved under Section 704(c) of the Code and the applicable Regulations, as
chosen by the Board. Allocations pursuant to this Section 10.4(d) are solely for
purposes of federal, state and local income taxes and shall not affect, or in
any way be taken into account in computing, any Member's Capital Account or
share of Profits, Losses, other tax items or distributions pursuant to any
provision of this Agreement.
10.5 No Right of Withdrawal. No Member shall have the right to withdraw
or demand distribution of any portion of its capital contributions or Capital
Account, except in those cases where distributions are required pursuant to this
Agreement.
ARTICLE XI
AMENDMENTS
11.1 The terms and provisions of this Agreement may be modified or
amended at any time and from time to time with the unanimous consent of the
Members.
11.2 If the LLC and the Members change the classification of the LLC to
that of a corporation for federal income tax purposes, the Board shall be
entitled to amend this Agreement, without the approval of the Members, to the
extent the Board reasonably determines necessary to cause the allocation of the
tax items of the LLC to comply with the applicable provisions of the Code and
the Regulations. Such amendments shall not adversely impact the economic rights
of the Members with respect to distributions from the LLC.
ARTICLE XII
DEFINITIONS
12.1 Defined Terms. As used herein the following terms shall have the
following respective meanings:
"1933 Act" means the Securities Act of 1933, as amended.
"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) decrease such deficit by any amounts which such Member is
obligated to restore pursuant to this Agreement or is deemed to be
obligated to restore to the LLC pursuant to Regulations Section
1.704-1(b)(2)(ii)(c) or the penultimate sentence of each of Regulations
Sections 1.704-2(g)(1) and 1.704-2(i)(5); and
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(ii) increase such deficit by such Member's share of the items
described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).
"Affiliate" has the meaning set forth in Rule 12b-2 of the
regulations promulgated under the Securities Exchange Act of 1934, as amended.
"Agreement" has the meaning set forth in the preamble to this
agreement.
"Board" has the meaning set forth in Section 4.1.
"Buyer" has the meaning set forth in the recitals to this Agreement.
"Capital Account" has the meaning set forth in Section 10.2.
"Certificate of Formation" has the meaning set forth in Section 9.1.
"Chief Executive Officer" has the meaning set forth in Section
5.1(b).
"Closing" has the meaning set forth in the recitals to this
Agreement.
"Code" has the meaning set forth in Section 10.2.
"Delaware Act" has the meaning set forth in the preamble to this
Agreement.
"Director" means any Person hereafter elected as a Director of the
LLC as provided in this Agreement, but does not include any Person who has
ceased to be a Director of the LLC.
"Event of Termination" has the meaning set forth in Section 9.1.
"Fair Market Value" means the fair market value of the LLC's assets
as determined pursuant to procedures adopted from time to time by the Members.
"Finally Determined" or "Final Determination" means there has been a
final, unappealable decision by a court of competent jurisdiction.
"Fiscal Year" has the meaning set forth in Section 1.7.
"Interest" means all of a Member's rights, title and interests in
the LLC, including such Member's right to vote and such Member's right to
allocations, if any, and distributions from the LLC.
"LLC" has the meaning set forth in the preamble to this Agreement.
"LLC Minimum Gain" has the meaning set forth in Regulations Section
1.704-2(b)(2) for the term "partnership minimum gain."
"Losses" has the meaning set forth in Section 10.3.
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"majority vote" has the meaning set forth in Section 4.10.
"Members" has the meaning set forth in the preamble to this
Agreement.
"Member Minimum Gain" means gain attributable to Member Nonrecourse
Debt determined in accordance with Regulations Section 1.704-(2)(i).
"Member Nonrecourse Debt" has the meaning set forth in Regulations
Section 1.704-2(b)(4) for the term "partner nonrecourse debt."
"Member Nonrecourse Deductions" has the meaning set forth in
Regulations Section 1.704-2(i)(2) for the term "partner nonrecourse deductions."
"Nonrecourse Deductions" has the meaning set forth in Regulations
Section 1.704-2(b)(1).
"Officers" means all Persons designated as Officers of the LLC
pursuant to Article V, including Senior Officers, unless stated otherwise in
this Agreement.
"Percentage Interests" means, for each Member, the percentage
interest set forth opposite such Member's name on Schedule A hereto, as it may
be amended or supplemented from time to time.
"Person" means a natural person or a corporation, limited liability
company, association, trust, estate or partnership.
"Profits" has the meaning set forth in Section 10.3.
"Regulations" has the meaning set forth in Section 10.2(b).
"Regulatory Allocations" has the meaning set forth in Section 10.4.
"Representative" has the meaning set forth in Section 9.2.
"Senior Officers" means (A) prior to the Closing, J. Xxxxxxx Xxxxxx
as Chief Executive Officer, and (B) following the Closing, the following
persons: (1) Xxxxx Xxxxxx shall be the Chief Executive Officer, (2) Xxxx Xxxxx
shall be the Chief Financial Officer, and (3) Xxxxxxx Xxxxxx shall be the
Secretary.
"Units" means, with respect to any Member, the units evidencing such
Member's Interests issued to such Member opposite such Member's name on Schedule
A hereto, as it may be amended or supplemented from time to time.
"WIN" has the meaning set forth in the recitals to this Agreement.
"WPI" has the meaning set forth in the recitals to this Agreement.
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ARTICLE XIII
MISCELLANEOUS
13.1 Certification of Limited Liability. Each limited liability company
Interest and its corresponding Unit in the LLC shall be represented by a
certificate and shall be a "security" within the meaning of Article 8 of the
Uniform Commercial Code and shall be governed by Article 8 of the Uniform
Commercial Code.
13.2 Pledge of Limited Liability Company Interests. Notwithstanding
anything in this Agreement to the contrary, the LLC hereby permits the pledge of
its limited liability company Interests and its corresponding Units. The LLC
confirms that a pledgee of its limited liability company Interests and its
corresponding Units can exercise all of the rights of the pledgor and that no
consent of any member or the LLC will be required to permit the pledgee (or the
pledgee's assignee) to become a member of the LLC.
13.3 Waiver of Partition. Each of the Members hereby irrevocably waives
any and all rights that such Member may have to maintain any action for
partition of any of the LLC's property.
13.4 Entire Agreement. This Agreement together with the documents
expressly referred to herein, each as amended or supplemented, constitutes the
entire agreement among the parties with respect to the subject matter herein or
therein. This Agreement and such other documents supersede any prior agreement
or understanding among the parties hereto with respect to the subject hereof and
thereof.
13.5 Successors and Assigns. Except as otherwise specifically provided
herein, this Agreement shall be binding upon and inure to the benefit of the
parties and their legal representatives, heirs, administrators, executors,
successors and assigns.
13.6 Interpretation. Wherever from the context it appears appropriate,
each term stated in either the singular or the plural shall include the singular
and the plural, and pronouns stated in the masculine, the feminine or neuter
gender shall include the masculine, the feminine and the neuter.
13.7 Captions. Captions contained in this Agreement are inserted only as
a matter of convenience and in no way define, limit or extend or otherwise
affect the scope or intent of this Agreement or any provision hereof.
13.8 Severability. If any provision of this Agreement, or the application
of such provision to any Person or circumstance, shall be held invalid, illegal
or unenforceable in any jurisdiction, the validity, legality and enforceability
of the remaining provisions of this Agreement, or the application of such
provision in jurisdictions or to Persons or circumstances other than those to
which it is held invalid, illegal or unenforceable shall not be affected
thereby.
13.9 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument. It shall not be necessary for all
Members to execute the same counterpart hereof.
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13.10 Additional Documents. Subject to the provisions of this Agreement,
each party hereto agrees to execute, with acknowledgment or affidavit, if
required, any and all documents and writings which may be necessary or expedient
in connection with the creation of the LLC and the achievement of its purposes,
specifically including (a) any amendments to this Agreement and such
certificates and other documents as the Board deems necessary or appropriate to
form, qualify or continue the LLC as a limited liability company in all
jurisdictions in which the LLC conducts or plans to conduct business and (b) all
such agreements, certificates, tax statements, tax returns and other documents
as may be required of the LLC or its Members by the laws of the United States of
America or any jurisdiction in which the LLC conducts or plans to conduct
business, or any political subdivision or agency thereof.
13.11 Non-Waiver. No provision of this Agreement shall be deemed to have
been waived unless such waiver is contained in a written notice signed by the
waiving party and given to the party claiming such waiver has occurred;
provided, however, that no such waiver shall be deemed to be a waiver of any
other or further obligation or liability of the party or parties in whose favor
the waiver was given.
13.12 Notices. To be effective, unless otherwise specified in this
Agreement, all notices and demands, consents and other communications under this
Agreement must be in writing and must be given (a) by depositing the same in the
United States mail, postage prepaid, certified or registered, return receipt
requested, (b) by delivering the same in person and, (c) by sending the same by
an internationally recognized overnight delivery service or (d) by telecopy. For
purposes of notices, demands, consents and other communications under this
Agreement, the addresses of the Members shall be as set forth on Schedule A to
this Agreement and the address of the LLC shall be as set forth in Section 1.5.
Notices, demands, consents and other communications mailed in accordance with
the foregoing clause (a) shall be deemed to have been given and made three
business days following the date so mailed. Notices, demands, consents and other
communications given in accordance with the foregoing clauses (b) (c) and (d)
shall be deemed to have been given when delivered. Any Member or its assignee
may designate a different address to which notices or demands shall thereafter
be directed, and such designation shall be made by written notice given in the
manner hereinabove required. Notices to any assignee of a Member shall be given
to such assigning Member unless such assignee has designated a different address
therefor by written notice given in the manner hereinabove required.
13.13 Power of Attorney.
(a) Each Member hereby irrevocably constitutes and appoints the
Buyer, as its or true and lawful attorney and agent, in its or name, place and
stead to make, execute, acknowledge and, if necessary, to file and record:
(i) any certificates or other instruments or amendments
thereof which the LLC may be required to file under the laws of the State of
Delaware or pursuant to the requirements of any governmental authority having
jurisdiction over the LLC or, subject to the terms of this Agreement, which the
Board shall deem advisable to file, including, without limitation, this
Agreement, any amended Agreement and a certificate of cancellation as provided
in Section 9.5;
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(ii) any certificates or other instruments (including
counterparts of this Agreement) and all amendments thereto which the Board shall
deem appropriate or necessary to qualify, or continue the qualification of, the
LLC as a limited liability company and to preserve the limited liability status
of the Members of the LLC; and
(iii) any certificates or other instruments which may be
required under the Delaware Act in order to effectuate any change in the
membership of the LLC or to effectuate the dissolution and termination of the
LLC pursuant to Article IX.
(b) The powers of attorney granted under this Section 13.13 shall
be deemed irrevocable and to be coupled with an interest. A copy of each
document executed by a Member pursuant to the powers of attorney granted in this
Section 13.13 hereof shall be transmitted to the other Members promptly after
the date of the execution of any such document.
(c) The powers of attorney granted in this Section 13.13 shall
survive the death, incapacity or adjudication of incompetency of a Member and
shall extend to such Member's successors and assigns.
(d) Except as expressly set forth in this Agreement, the powers of
attorney granted under this Section 13.13 cannot be utilized by a Member for the
purpose of increasing or extending any financial obligation or liability of a
Member or effecting any amendment hereto not approved by a Member without the
written consent of such Member.
13.14 Entity Characterization. It is the intention of the Members that the
LLC be treated as a partnership for income tax purposes.
13.15 Survival. All indemnities and reimbursement obligations made
pursuant to this Agreement shall survive dissolution and liquidation of the LLC
until expiration of the longest applicable statute of limitations (including
extensions and waivers) with respect to the matter for which a party would be
entitled to be indemnified or reimbursed, as the case may be.
13.16 Jurisdiction; Waiver of Jury Trial.
(a) The parties irrevocably submit to the non-exclusive
jurisdiction of (i) the Xxx Xxxx Xxxxx Xxxxxx xxx (xx) xxx Xxxxxx Xxxxxx Court
for the Southern District of New York for the purposes of any action arising out
of this Agreement or any transaction contemplated hereby. The parties further
agree that service of any process, summons, notice or document hand delivered or
sent by U.S. registered mail to such party's respective address set forth in
Schedule A shall be effective service of process for any action in New York with
respect to any matters to which it has submitted to jurisdiction as set forth in
the immediately preceding sentence. The parties irrevocably and unconditionally
waive any objection to the laying of venue of any action arising out of this
Agreement or the transactions contemplated hereby in (i) the New York State
Courts or (ii) the United States District Court for the Southern District of New
York, and hereby further irrevocably and unconditionally waive and agree not to
plead or claim in any such court that any such action brought in any such court
has been brought in an inconvenient forum.
(b) EACH OF THE PARTIES IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER
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BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS
AGREEMENT, THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR THE ACTIONS OF THE
PARTIES IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF.
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IN WITNESS WHEREOF, this Agreement has been executed by the Members as of
the date first above written.
INITIAL MEMBERS:
WEIDER PUBLICATIONS, INC.,
a Delaware Corporation
By: /s/ J. Xxxxxxx Xxxxxx
-----------------------
Name: J. Xxxxxxx Xxxxxx
Title: President and Chief Executive Officer
WEIDER INTERACTIVE NETWORKS, INC.,
a Delaware Corporation
By: /s/ J. Xxxxxxx Xxxxxx
-----------------------
Name: J. Xxxxxxx Xxxxxx
Title: President
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IN WITNESS WHEREOF, this Agreement has been executed by the Buyer as of
the Closing.
MEMBER:
AMERICAN MEDIA OPERATIONS, INC.
a Delaware Corporation
By: /s/ Xxxx X Xxxxx
-----------------------
Name: Xxxx X. Miley
Title: Executive Vice President and
Chief Financial Officer
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SCHEDULE A
INITIAL MEMBERS
PERCENTAGE
NAME ADDRESS INTEREST UNITS
---- ------- -------- -----
Weider Publications, Inc. 00000 Xxxxx Xxxxxx, 99% 9,900
Xxxxxxxx Xxxxx,
Xxxxxxxxxx, 00000
Weider Interactive Networks, Inc. 00000 Xxxxx Xxxxxx, 0% 000
Xxxxxxxx Xxxxx,
Xxxxxxxxxx, 00000
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SCHEDULE B
POST-CLOSING DIRECTORS
Xxxxx Xxxxxx
Xxxx Xxxxx
Xxxxxxx Xxxxxx
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