EXHIBIT 10.12
OPERATING AGREEMENT
THIS AGREEMENT, dated as of January 14th, 2000, is by and among NEXT
BIG STAR, LLC, a Delaware limited liability company (the "Company"), and each of
VICTORY INTERNET PRODUCTIONS, INC., XXXXXXX COMMUNICATIONS INC., and such other
Persons who may become members of the Company from time to time in accordance
with the provisions hereof.
WHEREAS, there has been formed a Delaware limited liability company
known as NEXT BIG STAR, LLC pursuant to the Delaware Limited Liability Company
Act;
WHEREAS, the Persons signing this Agreement desire to establish
their respective rights and obligations pursuant to the Delaware Limited
Liability Company Act in connection with the Company;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are acknowledged, the individuals and entities signing this
Agreement below agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. In this Agreement, the following terms shall have the
meanings set forth below:
(a) "AFFILIATE" shall mean, with respect to any Person, any other
Person directly or indirectly controlling, controlled by, or under common
control with such Person. A Members is presumed to control a Person if the
Member beneficially owns 20 percent or more of the outstanding voting securities
of a Person which is a corporation, or beneficially owns a partnership interest
in 20 percent or more of the distributable profits or losses of a Person which
is a partnership. A Person is presumed to control a Member if the Person
beneficially owns 20 percent or more of the outstanding voting securities of a
Member which is a corporation, or beneficially owns a partnership interest in 20
percent or more of the distributable profits or losses of a Member which is a
partnership. A Person is presumed to be under common control with a Member if
the same Person controls both the Member and another Person by beneficially
owning 20 percent or more of the outstanding voting securities of a Member or
Person which is a corporation, or by beneficially owning a partnership interest
in 20 percent or more of the distributable profits or losses of a Member or
Person which is a partnership.
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(b) "CAPITAL ACCOUNT" as of any date shall mean the Capital
Contribution to the Company by a Member, adjusted as of such date pursuant to
this Agreement.
(c) "CAPITAL CONTRIBUTION" shall mean any contribution by a Member
to the capital of the Company in cash, property or services rendered or a
promissory note or other obligation to contribute cash or property or to render
services.
(d) "CERTIFICATE OF FORMATION" shall mean the Certificate of
Formation of the Company filed with the Delaware Secretary of State on January
18, 2000, as it may from time to time be amended.
(e) "CODE" shall mean the Internal Revenue Code of 1986, as amended,
or any superseding federal revenue statute.
(f) "COMPANY" shall refer to NEXT BIG STAR, LLC.
(g) "DELAWARE ACT" shall mean the Delaware Limited Liability Company
Act, as it may from time to time be amended.
(h) "DISTRIBUTION" means any cash and other property paid to a
Member by the Company from the operations of the Company.
(i) "FISCAL YEAR" shall mean the fiscal year of the Company, which
shall be the year ending December 31.
(j) "MEMBERSHIP INTERESTS" shall mean with respect to the Company
the percentage interest set forth in Exhibit A to this Agreement, as from time
to time amended.
(k) "MANAGER" shall mean each Person listed in Exhibit B to this
Agreement, any other Person that succeeds him or her as a Manager pursuant to
this Agreement or any additional Manager(s) added from time to time pursuant to
this Agreement.
(l) "MEMBER" shall mean each Person who or which executes a
counterpart of this Agreement as a Member and each Person who or which may
hereafter become a party to this Agreement.
(m) "NET LOSSES" shall mean the losses of the Company, if any,
determined under the cash method of accounting consistently with the
requirements of the regulations under Section 704 of the Code.
(n) "NET PROFITS" shall mean the net income of the Company, if any,
determined under the cash method of accounting consistently with the
requirements of the regulations under Section 704 of the Code.
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(o) "PERSON" shall mean any individual, corporation, governmental
authority, limited liability company, partnership, trust, unincorporated
association or other entity.
(p) "PERMANENT DISABILITY" shall mean a state of physical or mental
incapacity, based upon a medical certificate from a physician or physicians
reasonably satisfactory to the Company, such that it is expected that the
individual so diagnosed will be unable to fulfill the requirements of his
position(s) with the Company.
(q) "SELLING MEMBER" shall mean a Member desiring to sell his
Membership Interest.
(r) "TREASURY REGULATIONS" shall mean all temporary and final
regulations promulgated under the Code as from time to time in effect.
(s) " WITHDRAWAL DATE" shall mean with respect to a Member that date
on which the withdrawal of his Membership Interest is effective.
(t) "WITHDRAWING MEMBER" shall mean a Member desiring to withdraw
his Membership Interest.
ARTICLE II
ORGANIZATION
2.1 FORMATION. One or more Persons has acted as an organizer or
organizers to form a limited liability company by preparing, executing and
filing with the Delaware Secretary of State the Certificate of Formation
pursuant to the Delaware Act.
2.2 NAME. The name of the Company is NEXT BIG STAR, LLC.
2.3 PRINCIPAL PLACE OF BUSINESS. The principal place of business of the
Company shall be at 1000 Universal Studios Florida, Building 22-A, Xxxxxxx,
Xxxxxxx 00000. The Company may establish any other places of business as the
Manager may from time to time deem advisable.
2.4 REGISTERED AGENT. The Company's registered agent shall be The
Company Corporation, 0000 Xxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000. The
registered agent may be changed from time to time by amending the Certificate of
Formation pursuant to the Delaware Act.
2.5 TERM. The term of the Company shall be perpetual, unless the Company
is dissolved pursuant to this Agreement or the Delaware Act.
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2.6 PURPOSES. The Company is formed to develop, produce and exploit
"xxxxxxxxxxx.xxx", an Internet website which will function as an online "talent
search" (the "Website") and to engage in any other lawful business purpose or
purposes.
ARTICLE III
MEMBERS
3.1 NAMES, ADDRESSES AND MEMBERSHIP INTERESTS. The names, addresses and
Membership Interests of the Members are as set forth in Exhibit A to this
Agreement.
3.2 ADDITIONAL MEMBERS. A Person may be admitted as a Member after the
date of this Agreement only upon the vote or written consent of Members holding
100% of the then-outstanding Membership Interests or as otherwise expressly
provided herein.
3.3 BOOKS AND RECORDS. The Company shall keep books and records of
accounts and minutes of all meetings of the Members. Such books and records
shall be maintained on a cash basis in accordance with this Agreement.
3.4 INFORMATION. Each Member may inspect during ordinary business hours
and at the principal place of business of the Company the Certificate of
Formation, this Agreement, the minutes of any meeting of the Members, any
financial records and tax returns of the Company for the current immediately
preceding three Fiscal Years and all contracts and agreements to which the
Company is a party.
3.5 LIMITATION OF LIABILITY. Each Member's liability shall be limited as
set forth in this Agreement, the Delaware Act and other applicable law. A Member
shall not be personally liable for any indebtedness, liability or obligation of
the Company, except that such Member shall remain personally liable for the
payment of his or her Capital Contribution and as otherwise set forth in this
Agreement, the Delaware Act and any other applicable law.
3.6 SALE OF ALL ASSETS. The Members shall have the right, by the vote or
written consent of all Membership Interests, to approve the sale, lease,
exchange or other disposition of all or substantially all of the assets of the
Company.
3.7 PRIORITY AND RETURN OF CAPITAL. No Member shall have priority over
any other Member, whether for the return of a Capital Contribution or for Net
Profits, Net Losses or a Distribution; PROVIDED, HOWEVER, that this section
shall not apply to loan or other indebtedness (as distinguished from a Capital
Contribution) made by a Member to the Company.
3.8 LIABILITY OF A MEMBER TO THE COMPANY. A Member who rightfully
receives the return of any portion of a Capital Contribution is liable to the
Company only to the extent now
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or hereafter provided by the Delaware Act. A Member who receives a Distribution
made by the Company in violation of this Agreement or made when the Company's
liabilities exceed its assets (after giving effect to such Distribution) shall
be liable to the Company for the amount of such Distribution.
3.9 FINANCIAL ADJUSTMENTS. No Members admitted after the date of this
Agreement shall be entitled to any retroactive allocation of losses, income or
expense deductions incurred by the Company. The Manager(s) may, at the
discretion of the Manager(s), at the time a Member is admitted, close the books
and records of the Company (as though the Fiscal Year had ended) or make PRO
RATA allocations of loss, income and expense deductions to such Member for that
portion of the Fiscal Year in which such Member was admitted in accordance with
the Code.
3.10 NO WITHDRAWAL. No interest shall be paid by the Company on Capital
Contributions or on the balance in any Capital Account and no Member shall have
the right to withdraw his Capital Contribution or to demand or receive a return
of his Capital Contribution.
ARTICLE IV
MANAGEMENT
4.1 MANAGEMENT. Management of the Company shall be vested in the
Managers. Managers may, but are not required to be, Members.
4.2 NUMBER, TENURE AND QUALIFICATIONS OF MANAGERS. The Company shall
initially have two Managers whose names are set forth on Exhibit B to this
Agreement. The number of Managers of the Company may be amended from time to
time by the vote or written consent of all of the Membership Interests and need
not be residents of the State of Delaware.
4.3 POWERS OF MANAGERS. Except as expressly set forth in this Agreement,
the Manager(s) shall have power and authority, on behalf of the Company to (a)
purchase, lease or otherwise acquire from, or sell, lease or otherwise dispose
of to, any Person any property, (b) open bank accounts and otherwise invest the
funds of the Company, (c) purchase insurance on the business and assets of the
Company, (d) commence lawsuits and other proceedings, (e) enter into any
agreement, instrument or other writing, (f) retain accountants, attorneys or
other agents and (g) take any other lawful action that the Manager(s) consider
necessary, convenient or advisable in connection with any business of the
Company.
4.4 BINDING AUTHORITY. Unless authorized to do so by this Agreement or
all of the Managers in writing, no Person shall have any power or authority to
bind the Company. No Person shall have any power or authority to bind the
Company unless such Person has been
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authorized by the Managers to act on behalf of the Company in accordance with
the immediately preceding sentence.
4.5 LIABILITY FOR CERTAIN ACTS. Each Manager shall perform its duties in
good faith, in a manner he or she reasonably believes to be in the best
interests of the Company and with such care as an ordinarily prudent person in a
similar position would use under similar circumstances. A Manager who so
performs such duties shall not have any liability by reason of being or having
been a Manager. The Managers shall not be liable to the Company or any Member
for any loss or damage sustained by the Company or any Member, unless the loss
or damage shall have been the result of the gross negligence or willful
misconduct of such Manager. Without limiting the generality of the preceding
sentence, a Manager does not in any way guaranty the return of any Capital
Contribution to a Member or a profit for the Members from the operations of the
Company.
4.6 NO EXCLUSIVE DUTY TO COMPANY. Subject to the terms of any written
employment agreement or other agreement between the Company and any Manager(s)
or officer(s): (i) no Manager or officer shall be required to manage or serve
the Company as his or her sole and exclusive function and he or she may have
other business interests and may engage in other activities in addition to those
relating to the Company; (ii) neither the Company nor any Member shall have any
right pursuant to this Agreement to share or participate in such other business
interests or activities or to the income or proceeds derived therefrom; and
(iii) no Manager or officer shall incur any liability to the Company or any
Member or Manager as a result of engaging in any other business interests or
activities.
4.7 INDEMNIFICATION. The Company shall indemnify and hold harmless the
Manager(s) and the officers from and against all claims and demands to the
maximum extent permitted under the Delaware Act.
4.8 RESIGNATION. Any Manager or officer may resign at any time by giving
written notice to the Company. The resignation of any Manager shall take effect
upon receipt of such notice or at any later time specified in such notice.
Unless otherwise specified in such notice, the acceptance of the resignation
shall not be necessary to make it effective. The resignation of a Manager or
officer who is also a Member shall not affect said Manager's or officer's rights
as a Member and shall not constitute a withdrawal of a Member.
4.9 REMOVAL. Subject to the terms of any written employment agreement or
other agreement between the Company and any Manager, any Manager may be removed
or replaced with or without cause upon the affirmative vote of Members holding
one hundred percent (100%) of the Membership Interests. The removal of a Manager
shall not affect said Manager's rights as a Member and shall not constitute a
withdrawal of such Member.
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4.10 VACANCIES. Any vacancy occurring for any reason in the number of
Managers may be filled by the vote or written consent of all of the Membership
Interests. A Manager elected to fill a vacancy shall be elected for the
unexpired term of the Manager's predecessor in office and shall hold office
until the expiration of such term and until the Manager's successor has been
elected and qualified. A Manager chosen to fill a position resulting from an
increase in the number of Managers shall hold office until the next annual
meeting of Members and until a successor has been elected and qualified.
4.11 SALARIES. The salaries and other compensation of the Manager(s), if
any, shall be fixed from time to time by the vote or written consent of all of
the Membership Interests. No Manager shall be prevented from receiving such a
salary or other compensation because such Manager is also a Member.
4.12 OFFICERS. The individuals set forth on Exhibit C to this Agreement
shall serve as officers of the Company and shall hold the office(s) set forth
opposite his or her name. The Manager(s) may designate one or more additional
individuals as officers of the Company, who shall have such titles and exercise
and perform such powers and duties as shall be assigned to them from time to
time by the Manager(s). Any officer may be removed by the Manager(s) at any
time, with or without cause. Each officer shall hold office until his or her
successor is elected and qualified. Any number of offices may be held by the
same individual. The salaries and other compensation of the officers shall be
fixed by the Manager(s). The officers may, but need not, be Members and/or
Manager(s) of the Company.
4.13 TRANSACTIONS WITH AFFILIATES. Nothing contained in this Agreement
shall preclude the employment by the Managers, on behalf of and at the expense
of the Company, of itself or any Affiliate or any agent or their party to
operate and manage all or any portion of the business or to provide any service
relating to the business, subject to the control of the Manager. The Manager
may, on behalf of the Company, engage one or more Affiliates of the Manager to
render services to the Company. Neither the Company nor any of the Members shall
have, as a consequence of the relationship created hereby, any right in or to an
income or profits derived by the Manager or an Affiliate of any of the Manager
from any business arrangements with the Company which are consistent with this
Section.
4.14 EXPENSES. The Company shall pay all costs and expenses arising from
or relating to the organization of the Company, the acquisition of Property and
the commencement and continuation of Company operations. The Company shall
reimburse the Manager and its Affiliates for overhead expenses incurred by them
in providing services to the Company.
4.15 Notwithstanding anything to the contrary contained herein, the
unanimous consent of all Membership Interests the Company shall be required in
order for the Company to:
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(a) entry into any line of business or venture other than
development, production and exploitation of the Website and transactions related
thereto;
(b) entry into any contract, agreement or understanding providing
for payments or other non-monetary obligations in excess of $50,000.00;
(c) enter into any contract or agreement with any Affiliate of any
Member or Manager providing for payments or other non-monetary obligations in
excess of $50,000.00;
(d) sell, transfer, convey or encumber all or substantially all of
the Company's assets;
(e) borrow, or enter into any agreement to borrow, in excess of an
aggregate of $200,000.00 at any one time;
(f) merge, consolidate with or into any other Person;
(g) admission of new or substitute Members;
(h) any expenditure or series of expenditures related to a single
project or venture in excess of $200,000.00; or
(i) amend this Agreement or the Certificate of Formation of the
Company.
ARTICLE V
MEETINGS OF MEMBERS
5.1 ANNUAL MEETING. The annual meeting of the Members shall be held on
the 1st day of June of each year or at such other time as shall be determined by
the vote or written consent of all of the Membership Interests for the purpose
of the transaction of any business as may come before such meeting.
5.2 SPECIAL MEETINGS. Special meetings of the Members, for any purpose
or purposes, may be called by any Manager or any Member holding not less than
ten percent of the Membership Interests.
5.3 PLACE OF MEETINGS. Meetings of the Members may be held at any place,
within or outside the State of Delaware, for any meeting of the Members
designated in any notice of such meeting. If no such designation is made, the
place of any such meeting shall be the principal executive office of the
Company.
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5.4 NOTICE OF MEETINGS. Written notice stating the place, day and hour
of the meeting indicating that it is being issued by or at the direction of the
person or persons calling the meeting, stating the purpose or purposes for which
the meeting is called shall be delivered no fewer than ten nor more than sixty
days before the date of the meeting.
5.5 RECORD DATE. For the purpose of determining the Members entitled to
notice of or to vote at any meeting of Members or any adjournment of such
meeting, or Members entitled to receive payment of any Distribution, or to make
a determination of Members for any other purpose, the date on which notice of
the meeting is mailed or the date on which the resolution declaring Distribution
is adopted, as the case may be, shall be the record date for making such a
determination. When a determination of Members entitled to vote at any meeting
of Members has been made pursuant to this Section, the determination shall apply
to any adjournment of the meeting.
5.6 QUORUM. Members holding not less than seventy-five percent of all
Membership Interests, represented in person or by proxy, shall constitute a
quorum at any meeting of Members. In the absence of a quorum at any meeting of
Members, a majority of the Membership Interests so represented may adjourn the
meeting from time to time for a period not to exceed sixty days without further
notice. However, if the adjournment is for more than sixty days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each Member of record entitled to vote
at such meeting. At an adjourned meeting at which a quorum shall be present or
represented, any business may be transacted that might have been transacted at
the meeting as originally noticed. The Members present at a meeting may continue
to transact business until adjournment, notwithstanding the withdrawal during
the meeting of Membership Interests whose absence results in less than a quorum
being present.
5.7 MANNER OF ACTING. If a quorum is present at any meeting, the vote or
written consent of Members holding not less than a majority of Membership
Interests shall be the act of the Members, unless the vote of a greater or
lesser proportion or number is otherwise required by the Delaware Act, the
Certificate of Formation or this Agreement.
5.8 ACTION BY MEMBERS WITHOUT A MEETING.
(a) Whenever the Members of the Company are required or permitted to
take any action by vote, such action may be taken without a meeting, without
prior notice and without a vote, if a consent or consents in writing, setting
forth the action so taken shall be signed by Members who hold the voting
interests having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all of the
Members entitled to vote therein were present and voted and shall be delivered
to the office of the Company, its principal place of business or a Manager,
employee or agent of the
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Company. Delivery made to the office of the Company shall be by hand or by
certified or registered mail, return receipt requested.
(b) Every written consent shall bear the date of signature of each
Member who signs the consent, and no written consent shall be effective to take
the action referred to therein unless, within sixty days of the earliest dated
consent delivered in the manner required by this Section to the Company, written
consents signed by a sufficient number of Members to take the action are
delivered to the office the Company, its principal place of business or a
Manager, employee or agent of the Company having custody of the records of the
Company. Delivery made to such office, principal place of business of Manager,
employee or agent shall be by hand or by certified or registered mail, return
receipt requested.
(c) Prompt notice of the taking of the action without a meeting by
less than unanimous written consent shall be given to each Member who has not
consented in writing but who would have been entitled to vote thereon had such
action been taken at a meeting.
5.9 WAIVER OF NOTICE. Notice of a meeting need not be given to any
Member who submits a signed waiver of notice, in person or by proxy, whether
before or after the meeting. The attendance of any Member at a meeting, in
person or by proxy, without protesting prior to the conclusion of the meeting
the lack of notice of such meeting, shall constitute a waiver of notice by said
Member.
5.10 VOTING AGREEMENTS. An agreement between two or more Members, if in
writing and signed by the parties thereto, may provide that in exercising any
voting rights, the Membership Interest held by them shall be voted as therein
provided, or as they may agree, or as determined in accordance with a procedure
agreed upon by them.
ARTICLE VI
CAPITAL CONTRIBUTIONS
6.1 CAPITAL CONTRIBUTIONS. Each Member shall contribute the amount set
forth in Exhibit A to this Agreement as the Capital Contribution to be made by
him or her.
6.2 ADDITIONAL CONTRIBUTIONS. Except as set forth in Section 6.1 of this
Agreement, no Member shall be required to make any Capital Contribution.
6.3 CAPITAL ACCOUNTS. A Capital Account shall be maintained for each
Member. Each Member's Capital Account shall be increased by the value of each
Capital Contribution made by the Member, allocations to such Member of the Net
Profits and any other allocations to such Member of income pursuant to the Code.
Each Member's Capital Account will be de-
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creased by the value of each Distribution made to the Member by the Company,
allocations to such Member of Net Losses and other allocations to such Member
pursuant to the Code.
6.4 TRANSFERS. Upon a permitted sale or other transfer of a Membership
Interest in the Company, the Capital Account of the Member transferring his
Membership Interest shall become the Capital Account of the Person to which or
whom such Membership Interest is sold or transferred in accordance with Section
1.704-1(b)(2)(iv) of the Treasury Regulations.
6.5 MODIFICATIONS. The manner in which Capital Accounts are to be
maintained pursuant to this Section is intended to comply with the requirements
of Section 704(b) of the Code. If in the opinion of the Manager(s) the manner in
which Capital Accounts are to be maintained pursuant to this Agreement should be
modified to comply with Section 704(b) of the Code, then the method in which
Capital Accounts are maintained shall be so modified; PROVIDED, HOWEVER, that
any change in the manner of maintaining Capital Accounts shall not materially
alter the economic agreement between or among the Members.
6.6 DEFICIT CAPITAL ACCOUNT. Except as otherwise required by the
Delaware Act or this Agreement, no Member shall have any liability to restore
all or any portion of a deficit balance in a Capital Account.
6.7 WITHDRAWAL OR REDUCTION OF CAPITAL CONTRIBUTIONS. A Member shall not
receive from the Company any portion of a Capital Contribution until all
indebtedness and liabilities of the Company, except any indebtedness,
liabilities and obligations to Members on account of their Capital
Contributions, have been paid or there remains property of the Company, in the
reasonable discretion of the Managers, sufficient to pay them. A Member,
irrespective of the nature of the Capital Contribution of such Member, has only
the right to demand and receive cash in return for such Capital Contribution.
ARTICLE VII
ALLOCATIONS AND DISTRIBUTIONS
7.1 ALLOCATIONS OF PROFITS AND LOSSES. The Net Profits for any fiscal
period shall be allocated to the Members PRO RATA in proportion to their
Membership Interests as of the beginning of such fiscal period. The Net Losses
for any fiscal period shall be allocated 100% to VIP.
7.2 DISTRIBUTIONS AND ACCOUNTING. The Manager(s) shall, within ninety
(90) days following the end of the fiscal year, at least annually, distribute
Net Profits to the Members. All Distributions shall be made to the Members PRO
RATA in proportion to their Membership Interests as of the record data set forth
such Distribution. No Distribution shall be made if it
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will cause any Member to have a negative balance in such Member's Capital
Account as of the record date set forth such Distribution. Operating budgets for
the Company shall be prepared and approved by the Managers annually and
accountings shall be rendered to the Managers at least quarterly.
7.3 OFFSET. The Company may offset all amounts owing to the Company by a
Member against any Distribution to be made to such Member.
7.4 LIMITATION UPON DISTRIBUTIONS. No Distribution shall be declared and
paid unless, after such Distribution is made, the assets of the Company exceed
all liabilities of the Company.
7.5 INTEREST ON AND RETURN OF CAPITAL CONTRIBUTIONS. No Member shall be
entitled to interest on his, her or its Capital Contribution or to a return of
his, her or its Capital Contribution, except as specifically set forth in this
Agreement.
7.6 ACCOUNTING PERIOD. The accounting period of the Company shall
be the Fiscal Year.
ARTICLE VIII
TAXES
8.1 TAX RETURNS. The Manager(s) shall cause to be prepared and filed all
necessary federal, state and local income and other tax returns for the Company.
Each Member shall furnish to the Managers all pertinent information in its
possession relating to Company operations that is necessary to enable the
Company's income tax returns to be prepared and filed.
8.2 TAX ELECTIONS. The Company shall make the following elections
on the appropriate tax returns:
(a) To adopt the Fiscal Year;
(b) To adopt the cash method of accounting and keep the Company's
books and records on the income tax method;
(c) To elect to amortize the organizational expenses of the Company
and the start-up expenditures of the Company under Section 195 of the Code
ratably over a period of sixty months as permitted by Section 709(b) of the
Code; and
(d) Any other election that the Manager(s) may deem appropriate and
in the best interests of the Members. Neither the Company nor any Member may
make an election
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for the Company to be excluded from the application of Subchapter K of Chapter 1
of Subtitle A of the Code or any similar provisions of applicable state law, and
no provisions of this Agreement shall be interpreted to authorize any such
election.
8.3 TAX MATTERS PARTNERS. The Managers shall designate one Manager to be
the "tax matters partner" of the Company pursuant to Section 6231(a)(7) of the
Code. Any Manager who is designated "tax matters partner" shall take any action
as may be necessary to cause each Member to receive notice as provided in
Section 6223 of the Code.
ARTICLE IX
TRANSFERABILITY
9.1 GENERAL. Except as set forth in this Agreement, no Member shall
gift, sell, assign, pledge, hypothecate, exchange or otherwise transfer (each, a
"Disposition") to another Person any portion of a Membership Interest.
9.2 NO DISPOSITION OF PARTIAL INTEREST. No Member may make any
Disposition of less than all of such Member's Membership Interest in the
Company.
9.3 RIGHT OF FIRST NEGOTIATION AND REFUSAL. Each Member hereby grants to
the Company an irrevocable right of first negotiation and first refusal,
exercisable as hereinafter set forth, with respect to all Membership Interests
now or hereafter owned by any Member such that, in the event any Member desires
to effect a Disposition of such Member's Membership Interest, such Member (the
"Selling Member") shall first deliver written notice of such desire to the
Company and shall, for a period of no less than ninety (90) days, negotiate in
good faith with the Company with respect to the sale of such Membership Interest
to the Company.
9.4 OFFER TO ACQUIRE. If the Company and the Selling Member are unable
to agree on the terms and conditions of a sale of such Selling Member's
Membership Interest, the Selling Member may, for a period of up to one hundred
and eighty (180) days thereafter, seek a third party purchaser of such
Membership Interest. If the Selling Member obtains an interested purchaser for
such Selling Member's Membership Interest, such Selling Member shall obtain from
such third party a binding, written BONA FIDE offer (the "Offer") to purchase
such Membership Interest, stating the terms and conditions upon which the
purchase is to be made. Such Member shall give written notification to the
Company of its intention to sell such Membership Interest and a copy of such
Offer.
9.5 RIGHT OF FIRST REFUSAL. The Company shall have the right to exercise
a right of first refusal to purchase all (but not less than all) of the
Membership Interest proposed to be
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sold by the Selling Member upon the same terms and conditions as stated in the
Offer (subject to the provisions of Section 9.1l(a) below) by giving written
notification to the Selling Member of its intention to do so within ten (10)
business days after receiving a copy of the Offer from the Selling Member. The
failure of the Company to so notify the Selling Member of a desire to exercise
such right of first refusal within such ten-day period shall result in the
termination of such right of first refusal, and the Selling Member shall be
entitled to consummate the sale of his Membership Interest with respect to which
such right of first refusal has not been exercised to the third party offering
to do so pursuant to the Offer. If the Selling Member fails to sell his
Membership Interest within sixty (60) days after receiving the right to do so,
his right to do so terminates and the terms and conditions of this Section 9.5
shall again be in effect.
9.6 CLOSING. If the Company gives written notice to the Selling Member
of its desire to exercise such right of first refusal and to purchase all of the
Selling Member's Membership Interest, the Company shall have the right to
designate the time, date and place of closing within ninety (90) days after
receipt of written notification from the Selling Member of the Offer. The terms
and conditions of such purchase shall be the same as those set forth in the
Offer, subject to the provisions of Section 9.11 (a) below.
9.7 TRANSFEREE NOT A MEMBER. No Person acquiring a Membership Interest
pursuant to this Article 9 other than a Member shall become a Member unless such
Person is approved by the unanimous vote or written consent of all Members in
their sole and absolute discretion. If no such approval is obtained, such
Person's Membership Interest shall entitle such Person only to receive the
distributions and allocations of profits and losses to which the Member from
whom or which such Person received such Membership Interest would be entitled.
Any such approval may be subject to any terms and conditions imposed by the
Members.
9.8 TRANSFERS TO AFFILIATE OF MEMBER. Notwithstanding anything contained
herein to the contrary, any Member may, upon written notice to the other
Member(s), gift, sell, assign, pledge, hypothecate, exchange or otherwise
transfer to any Affiliate of said Member all or any portion of his Membership
Interest.
9.9 EFFECTIVE DATE. Any sale of a Membership Interest or admission of a
Member pursuant to this Article shall be deemed effective as of the last day of
the calendar month in which such sale or admission occurs.
9.10 DISPOSITION ON DEATH OR DISABILITY OF EM. If EM shall die or become
Permanently Disabled (each, a "Triggering Event"), MCI shall, within six (6)
months of such Triggering Event (the "Sale Period"), sell to the Company all of
the Membership Interest owned by MCI, upon the terms and in the manner set forth
in Section 9.11(b). Notwithstanding the foregoing, if, at the time of a
Triggering Event, Xxxxxx XxXxxxx ("PM") is then living and
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VIP and PM are able, after good faith negotiations, to mutually agree upon a
successor to EM as the primary host of the Company's "xxxxxxxxxxx.xxx" talent
search prior to the expiration of the Sale Period, the provisions of this
Section 9.10 shall not apply and MCI shall not be required to sell its
Membership Interest.
9.11 CLOSING; VALUATION OF MEMBERSHIP INTEREST.
(a) Notwithstanding anything to the contrary set forth in the terms
of the bona fide offer (if applicable), in the event of a sale of a Membership
Interest to the Company pursuant to Section 9.3 or 9.5, the Company shall have
the option, in its sole discretion, to pay to the Selling Member the purchase
price for such Membership Interest in twelve (12) equal monthly installments.
(b) In the event of a sale of a Membership Interest to the Company
pursuant to Section 9.10, the purchase price for such Membership Interest shall
be equal to the most recent prior valuation of the Company agreed to by the
Members if such valuation occurred no more than twelve (12) months from the date
of the sale contemplated by Section 9.10 or, absent such valuation, as agreed by
the Company and the Selling Member (or his legal representative) after good
faith negotiations. If there shall be no valuation and the Company and the
Selling Member (or his legal representative) are unable to agree on the purchase
price after good faith negotiations, the Company and the Selling Member (or his
legal representative) shall select an appraiser who shall determine the value of
the Membership Interest the subject of the sale and, if they are unable to agree
on appraiser, the Company and the Selling Member shall each select an appraiser
and such appraisers shall mutually select a third appraiser experienced in
valuing media and entertainment companies to perform a binding appraisal. As
soon as practicable following determination of the purchase price, the Company
and the Selling Member (or his legal representative) shall consummate the sale.
The Company shall have the option, in its sole discretion, to pay the purchase
price called for in thirty-six (36) equal monthly installments.
ARTICLE X
DISSOLUTION
10.1 DISSOLUTION. The Company shall be dissolved and its affairs shall be
wound up upon the first to occur of the following:
(a) The vote or written consent of all Membership Interests;
or
(b) The death, bankruptcy, dissolution, expulsion, or withdrawal of
any Member or the occurrence of any other event that terminates the continued
membership of any
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Member, unless within one hundred eighty (180) days after such event the Company
is continued by the vote or written consent of all of the remaining Members.
10.2 WINDING UP. Upon the dissolution of the Company the Manager(s) may,
in the name of and for and on behalf of the Company, prosecute and defend suits,
whether civil, criminal or administrative, sell and close the Company's
business, dispose of and convey the Company's property, discharge the Company's
liabilities and distribute to the Members any remaining assets of the Company,
all without affecting the liability of Members. Upon winding up of the Company,
the assets shall be distributed as follows:
(a) To creditors, including any Member who is a creditor, to the
extent permitted by law, in satisfaction of liabilities of the Company, whether
by payment or by establishment of adequate reserves, other than liabilities for
distributions to Members under Section 601 or Section 604 of the Delaware Act;
(b) To Members and former Members in satisfaction of liabilities for
Distributions under Section 601 or Section 604 of the Delaware Act; and
(c) To Members first for the return of their Capital Contributions,
to the extent not previously returned, and second respecting their Membership
Interests, in the proportions in which the Members share in Distributions in
accordance with this Agreement.
10.3 ARTICLES OF DISSOLUTION. Within ninety (90) days following the
dissolution and the commencement of winding up of the Company, or at any other
time when there are no Members, articles of dissolution shall be filed with the
Delaware Secretary of State pursuant to the Delaware Act.
10.4 DEFICIT CAPITAL ACCOUNT. Upon a liquidation of the Company, if any
Member has a deficit capital account (after giving effect to all contributions,
distributions, allocations and other adjustments for all Fiscal Years, including
the Fiscal Year in which such liquidation occurs), the Member shall have no
obligation to make any Capital Contribution, and the negative balance of any
Capital Account shall not be considered a debt owed by the Member to the Company
or to any other Person for any purpose.
10.5 NONRECOURSE TO OTHER MEMBERS. Except as provided by applicable law
or as expressly provided in this Agreement, upon dissolution, each Member shall
receive a return of his Capital Contribution solely from the assets of the
Company. If the assets of the Company remaining after the payment or discharge
of the debts and liabilities of the Company are insufficient to return any
Capital Contribution of any Member, such Member shall have no recourse against
any other Member.
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10.6 TERMINATION. Upon completion of the dissolution, winding up,
liquidation, and distribution of the assets of the Company, the Company shall be
deemed terminated.
ARTICLE XI
GENERAL PROVISIONS
11.1 NOTICES. Any notice, demand or other communication required or
permitted to be given pursuant to this Agreement shall have been sufficiently
given for all purposes if (a) delivered personally to the party or to an
executive officer of the party to whom such notice, demand or other
communication is directed or (b) sent by registered or certified mail, postage
prepaid, addressed to the Member or the Company at his or its address set forth
in this Agreement. Except as otherwise provided in this Agreement, any such
notice shall be deemed to be given three (3) business days after the date on
which it was deposited in a regularly maintained receptacle for the deposit of
United States mail, addressed and sent as set forth in this Section.
11.2 AMENDMENTS. This Agreement contains the entire agreement among the
Members with respect to the subject matter of this Agreement, and supersedes
each course of conduct previously pursued or acquiesced in, and each oral or
written agreement and representation previously made, by the Members with
respect thereto, whether or not relied or acted upon. No course of performance
or other conduct subsequently pursued or acquiesced in, and no oral agreement or
representation subsequently made, by the Members, whether or not relied or acted
upon, and no usage of trade, whether or not relied or acted upon, shall amend
this Agreement or impair or otherwise affect any Member's obligations pursuant
to this Agreement or any rights and remedies of a Member pursuant to this
Agreement. No amendment to this Agreement shall be effective unless made in a
writing duly executed by all Members and specifically referring to each
provision of this Agreement being amended.
11.3 INSURANCE. The Company may purchase and maintain life and disability
insurance for each of the Managers and officers of the Company, in such amounts
and on such terms as the Members may mutually agree. Except as the Members may
otherwise agree, if life insurance is purchased for an individual whose death
results in a sale under Section 9.10 hereof, the purchase price of such
Membership Interest shall be no less than the full proceeds of any life
insurance currently maintained on the deceased individual.
11.4 CONSTRUCTION. Whenever the singular number is used in this Agreement
and when required by the context, the same shall include the plural and VICE
VERSA, and the masculine gender shall include the feminine and neuter genders
and VICE VERSA.
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11.5 HEADINGS. The headings in this Agreement are for convenience only
and shall not be used to interpret or construe any provision of this Agreement.
11.6 WAIVER. No failure of a Member to exercise, and no delay by a Member
in exercising, any right or remedy under this Agreement shall constitute a
waiver of such right or remedy. No waiver by a Member of any such right or
remedy under this Agreement shall be effective unless made in a writing duly
executed by all Members and specifically referring to each such right or remedy
being waived.
11.7 PARTITION. Each Member irrevocably waives any right that he may have
to maintain any action for partition with respect to Company property.
11.8 SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law. However, if any provision of this Agreement shall be prohibited
by or invalid under such law, it shall be deemed modified to conform to the
minimum requirements of such law or, if for any reason it is not deemed so
modified, it shall be prohibited or invalid only to the extent of such
prohibition or invalidity without the remainder thereof or any other such
provision being prohibited or invalid.
11.9 BINDING. This Agreement shall be binding upon and inure to the
benefit of all Members, and each of the successors and permitted assignees or
the Members, except that no right or obligation of a Member under this Agreement
may be assigned by such Member to another Person except in accordance with this
Agreement.
11.10 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed an original and all of which shall constitute one and
the same instrument.
11.11 GOVERNING LAW. This Agreement shall be governed by, and
interpreted and construed in accordance with, the laws of the State of Delaware,
without regard to principles of conflict of laws. The courts of the State of New
York, County of New York, shall have exclusive jurisdiction to hear and
determine any dispute between the parties hereto pertaining directly to this
Agreement or any matter arising therefrom, and the parties expressly consent and
submit in advance to such jurisdiction in any action or proceeding commenced in
such courts by either party hereto.
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IN WITNESS WHEREOF, the individuals signing this Agreement below
conclusively evidence their agreement to the terms and conditions of this
Agreement by so signing this Agreement as of the date first above written.
THE COMPANY:
NEXT BIG STAR, LLC
By: _________________________________
Name: Xx XxXxxxx
Title: Manager and Chairman
By: _________________________________
Name: Xxxxxxx Xxxxxx
Title: Manager, President and CEO
THE MEMBERS:
VICTORY INTERNET PRODUCTIONS, INC.
By: _________________________________
Name: Xxxxxxx Xxxxxx
Title: President
XxXXXXX COMMUNICATIONS, INC.
By: _________________________________
Name: Xx XxXxxxx
Title: President
EXHIBIT A
MEMBERS
Capital Membership
Name Address Contribution Interest
------------------- ------------------------- ---------------- --------------
Victory Internet 1000 Universal Studios $ 100.00 50%
Productions, Inc. Xxxxxxx
Xxxxxxxx 00-X
Xxxxxxx, XX 00000
XxXxxxx 00000 Xxxxx Xxxxx $ 100.00 50%
Communications, Inc. Xxxxxxx Xxxxx, XX 00000
EXHIBIT B
MANAGERS
Xxxxxxx Xxxxxx
Xx XxXxxxx
EXHIBIT C
OFFICERS
Xx XxXxxxx Chairman
Xxxxxxx Xxxxxx President and CEO
Xxxxxxx X. XxXxxxx Vice President & COO
Xxxxx X. Xxxxxxxxxx, Xx. Secretary/Treasurer
NEXT BIG STAR, LLC
AGREEMENT AMONG MEMBERS
AGREEMENT made and entered into as of the 14th day of January 2000,
by and among VICTORY INTERNET PRODUCTIONS, INC. ("VIP"), c/o Victory
Entertainment Corporation, 0000 Xxxxxxxxx Xxxxxxx Xxxxx, Xxxxxxxx 00X, Xxxxxxx,
Xxxxxxx 00000, Attention: Xxxxxxx Xxxxxx, President and XxXXXXX COMMUNICATIONS,
INC. ("MCI"), [address] (hereinafter, VIP and MCI are each sometimes referred to
individually as a "Member" and together as the "Members"), Xx XxXxxxx ("EM") and
Xxxxxxx Xxxxxx ("MG"; hereinafter, EM and MG each are sometimes referred to
individually as a Manager and together as the "Managers") and Next Big Star,
LLC, a Delaware limited liability company (the "Company").
W I T N E S S E T H :
WHEREAS, as of the date hereof VIP and MCI each own fifty percent
(50%) of the outstanding membership interests in the Company (the "Membership
Interests"), which allocation is set forth in the Company's operating agreement
(the "Operating Agreement");
WHEREAS, as of the date hereof EM and MG constitute all of the
Managers (as defined in the Operating Agreement) of the Company; and
WHEREAS, to assure the orderly management and growth of the Company,
(a) the Members agree to vote their membership interests as provided in
Paragraph I hereof for Managers, (b) the Managers agree to vote for officers of
the Company as provided in Paragraph I hereof, and (c) the Company, the Members
and the Managers expressly consent to and approve certain transactions and agree
to provide for certain restrictions upon the management of the Company.
NOW, THEREFORE, in consideration of the foregoing premises and of
the mutual covenants hereinafter contained, the parties hereto hereby agree as
follows:
1. MANAGEMENT:
(a) Each Member hereby agrees to vote his Membership Interests for
the election of MG and EM as Managers of the Company.
(b) Each Manager hereby agrees to vote for the election of the
following as officers of the Corporation:
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Xx XxXxxxx - Chairman
Xxxxxxx Xxxxxx - President and CEO
Xxxxxxx X. XxXxxxx - Vice-President & COO
Xxxxx X. Xxxxxxxxxx, Xx. - Secretary/Treasurer
(c) Each Manager agrees that his services as a Manager and as an
officer of the Company shall be rendered to the best of his ability as necessary
to conduct the business affairs of the Corporation and as required by any
third-party commitments, but in all events as set forth in this Agreement.
2. PROJECT DEVELOPMENT.
(a) The primary purpose of the Company will initially be the
development, production and other exploitation of "xxxxxxxxxxx.xxx", an Internet
website which will function as an online "talent search", as more fully
described in the project description materials attached hereto as Exhibit A (the
"Website"). The Company, with the cooperation and assistance of the Members,
shall develop the overall look, design and graphics for the Website, and shall
seek advertisers and develop a marketing and promotional campaign for the
Website. In addition to the foregoing, the Company and the Members have agreed
to the following further allocation of specific responsibilities with respect
thereto:
(i) VIP will be responsible for day-to-day management of the
Website, including financing of the Website and all/legal/business affairs and
related corporate functions; personnel and other technical oversight of the
Website, and supervision of all "below-the-line" functions of any programming;
and
(ii) MCI and VIP will jointly be responsible for all
"above-the-line" functions of any programming, including the selection of
competition categories, production of interstitial programming, and interviewing
professional talent and/or guest stars.
(b) After launch of the Website, the Company, with the cooperation
and assistance of the Members, will commence development of a series of
television specials derived from the "Next Big Star" brand name, on which the
Website talent search finalists will appear and on which the winners will be
selected by live, on-line voting. The Company, with the cooperation and
assistance of the Members, shall seek network or other commitment to a regular
quarterly schedule for such programming, and also to develop spin-off specials
and other programming based upon material made available to the Company through
the operation of the Website. The Company shall retain VIP and MCI to serve as
co-executive producers of
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all such television and other ancillary programming (each of the foregoing a
"Project"), with compensation for each party within then current industry norms
for comparable programming, based upon the production budget of each such
Project and the intended initial medium of exploitation. The Company will employ
Xxxxxx Xxxxxxxxx as Executive Producer of the Television Programs at a
compensation rate consistent with then current industry norms for comparable
programming, based upon the production budget of each such Project and the
intended initial medium of exploitation. The Company and each of the Members
hereby acknowledges and pre-approves Victory Entertainment Corporation ("VEC"),
the corporate parent of VIP, as the worldwide distributor in all media of all
Projects produced hereunder, such services to be performed for VEC's customary
distribution fees and expenses.
3. EXCLUSIVITY. In consideration of each Member's investment of
resources in the Website and related activities, and the compensation received
by MG and EM in connection therewith, MG and EM each agree that until the
earlier of (i) two (2) years after xxxxxxxxxxx.xxx ceases to be operated by the
Company as a Website or (ii) two (2) years after the withdrawal of VIP or MCI as
a Member of the Company, each of them will act as a producer, executive
producer, host or other managerial capacity for "talent search" programming only
through and on behalf of the Company, with a resulting allocation of income to
the Company from such services as provided in Paragraph 4.
4. WEBSITE AND PROJECT INCOME AND EXPENSE ALLOCATION; FEE
ARRANGEMENTS. Income generated by the Company from the Website and any Project
shall be allocated as follows:
(a) With respect to the Website, the Company and each of the Members
agrees that the budget will include a fee to MCI of Ten Thousand Dollars ($ 10,
000) per month during the development and pre-launch phase commencing January 1,
2000. Commencing with the actual launch of the Website scheduled for April 15,
2000, such fee will increase to Five Hundred Thousand Dollars ($500,000) per
annum, payable in twelve (12) equal monthly installments. MCI represents and
warrants that the foregoing fees will fully cover the on-screen and other
Website hosting services of EM, and the related creative consultant services for
the Website of Xxxxxx Xxxxxxxxx. VIP will be entitled to a management fee equal
to ten percent (10%) of the gross revenues derived from the Website, whether in
the form of fees, advances, royalties, profit participations or otherwise, such
management fee to be paid on a monthly basis or at such other interval as VIP
may reasonably determine.
(b) The Members shall, prior to committing the Company to any
Project, agree among themselves regarding the allocation of fees, royalties,
profits, and any other consideration which may be paid to the Company, on the
one hand, and one or more of the Members on the other hand, for providing rights
and/or services with respect to such Project.
-4-
(c) Costs and expenses incurred by the Members in connection with
any Project shall, whenever practicable, be deducted from the specific income
attributable to such Project prior to distribution of such income to any Member
and the Company as provided above. If costs or expenses are not clearly
attributable to a specific source of income, they shall be deducted pro-rata
from all current sources of income of the Company.
5. NO LIENS. Each Member represents and warrants to the other that
no other person has any right, title or interest in or to its Membership
Interest and that such Membership Interest has not been pledged, hypothecated or
otherwise encumbered by such Member.
6. TERMINATION. This Agreement, with the exception of the provisions
of Paragraphs 7 and 9(e) hereof, which shall survive any termination hereof,
shall automatically terminate upon the occurrence of any of the following
events:
(a) the unanimous vote of the Company's Members;
(b) ownership by any one person or entity of all of the outstanding
Membership Interests in the Company; or
(c) upon the declaration of effectiveness of a registration
statement under the Securities Act of 1933, as amended, or any successor statute
thereto, and the appropriate rules or regulations thereunder with respect to a
public offering of equity securities of the Company, or any successor to the
Company.
7. NOTICES. All notices and other communications given hereunder
shall be in writing and shall be delivered in person or shall be sent by telefax
or by registered or certified mail, return receipt requested, addressed to the
party for whom or for which intended, to such address as each Members shall have
given notice to the other parties hereto in the manner herein provided. Copies
of all notices to the Company shall be sent to Xxx Xxxxxxx & Xxxxx LLP,
Attention: Xxxxxxx Xxxxxxx, Esq., Xxx Xxx Xxxxxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, Telecopier: 000-000-0000.
8. COUNSEL. The Company, the Managers and each of the Members
acknowledges that Xxx Xxxxxxx & Xxxxx LLP ("KCB") has acted as legal counsel to
the Members and the Company in connection with the preparation of the Company's
Operating Agreement and this Agreement Among Members. Each party acknowledges
that KCB has historically acted as counsel to VIP (as well as VEC and other
affiliates of VIP) and EM with respect to a variety of other matters, and each
party acknowledges that KCB has informed the Company and each of the Members
that each party might consider seeking separate counsel with respect to the
matters addressed herein. Each party has nonetheless requested KCB to
-5-
continue to act for it in this matter. Neither the Company, any Manager or any
Member or any affiliate of any of them, will at any time assert an action, claim
or defense against the other, or any action or claim against KCB, based upon
KCB's action on behalf of the parties in connection with the matters
contemplated herein.
9. MISCELLANEOUS.
(a) No delay, omission or forbearance on the part of any party
hereto to exercise any right, option, duty or power arising out of any breach or
default by another party hereto shall constitute a wavier by the non-defaulting
party to enforce any such right, option, duty or power as against the defaulting
party or as to a subsequent breach or default of the defaulting party.
(b) This Agreement, together with the Company's Operating Agreement,
constitutes the entire agreement among the parties hereto and supersedes all
prior understandings and agreements among the parties hereto or any of them
relating to the matters hereby covered. No waiver or modification of the terms
hereof shall be valid unless in writing and signed by the party to be charged
therewith and then only to the extent therein set forth. In the event of a
conflict between the terms hereof and the terms of the Operating Agreement, the
provisions of this Agreement shall control.
(c) The provisions of this Agreement shall inure to the benefit of,
and be binding upon, the respective executors, administrators, heirs,
distributees, successors and assigns of the parties hereto.
(d) The Members acknowledge that the equal allocation of Membership
Interests in the Company, and the appointment of one Manager by each Member to
manage the affairs of the Company, could in certain instances result in a
deadlock. While it is the intention of the Members that no new Project be
developed, produced or otherwise exploited without joint approval, in certain
instances deadlock involving a material aspect of ongoing administration of the
Website or any Project may require a resolution by an independent third party.
In such instances, where all goodfaith efforts by the Members to achieve
consensus have failed, the Members agree to submit to arbitration before a
three-member panel in New York, New York under the rules of the American
Arbitration Association then pertaining to such matters, and the costs involved
in such arbitration shall be deemed a business expense of the Corporation.
(e) The terms and provisions of this Agreement shall be construed
and regulated by the laws of the State of New York.
-6-
This Agreement may be extended in any number of counterparts which
will individually and collectively constitute one Agreement.
-7-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first given above.
THE MEMBERS: THE COMPANY:
VICTORY INTERNET PRODUCTIONS, INC. NEXT BIG STAR, LLC.
By:_______________________________ By:______________________________
Xxxxxxx Xxxxxx Xx XxXxxxx
President Manager and Chairman
By:______________________________
Xxxxxxx Xxxxxx
Manager, President and CEO
XXXXXXX COMMUNICATIONS, INC.
By:_______________________________
Xx XxXxxxx
President
THE MANAGERS:
__________________________________
Xx XxXxxxx
__________________________________
Xxxxxxx Xxxxxx
NEXT BIG STAR, LLC
FIRST AMENDMENT TO AGREEMENT AMONG MEMBERS
This First Amendment dated as of May 30, 2000 (the "Amendment") is
to the agreement dated January 14, 2000 (the "Agreement") by and among VICTORY
INTERNET PRODUCTIONS, INC. ("VIP"), XxXXXXX COMMUNICATIONS, INC. ("MCI")
(hereinafter, VIP and MCI are each sometimes referred to individually as a
"Member" and together as the "Members"), Xx XxXxxxx ("EM"), Xxxxxxx Xxxxxx
("MG"; hereinafter, EM and MG each are sometimes referred to individually as a
"Manager" and together as the "Managers") and Next Big Star, LLC, a Delaware
limited liability company (the "Company"). Capitalized terms used herein and not
otherwise defined shall have the meanings ascribed thereto in the Agreement.
WHEREAS, Section 9(b) of the Agreement provides that the Agreement
may be modified in writing from time to time; and
WHEREAS, the parties to the Agreement wish to amend the Agreement as
provided for herein and acknowledge that such amendment is for their mutual
benefit.
NOW, THEREFORE, in consideration of the foregoing premises and of
the mutual covenants contained herein and in the Agreement, the parties hereto
agree to amend the Agreement as follows:
1. Section 1 of the Agreement is hereby amended by adding the
following clause (c):
"(c) In the case of all other matters to be acted upon from time to
time by the Company or its Members, MCI hereby authorizes and empowers
VIP, in accordance with Section 5.10 of the Operating Agreement and
Section 18-404 of the Delaware Limited Liability Company Act, to
represent, vote and otherwise act (by voting at any meeting of the Members
of the Company, by written consent in lieu thereof or otherwise) with
respect to any and all Membership Interests owned or held by MCI on any
and all such matters until such time as MG ceases to be a Manager of the
Company, to the same extent and with the same effect as MCI might or could
do under applicable law, rules and regulations."
All other provisions of the Agreement remain in full force and
effect.
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The terms and provisions of this Amendment shall be construed and
regulated by the laws of the State of New York.
This Amendment shall be retroactive as of January 14, 2000 and shall
be effective as of that date.
This Amendment may be executed in any number of counterparts which
will individually and collectively constitute one agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment
as of the date first given above.
THE MEMBERS: THE COMPANY:
VICTORY INTERNET PRODUCTIONS, INC. NEXT BIG STAR, LLC
By:_______________________________ By:_______________________________
Xxxxxxx Xxxxxx Xx XxXxxxx
President Manager and Chairman
By:_______________________________
Xxxxxxx Xxxxxx
Manager, President and CEO
XXXXXXX COMMUNICATIONS, INC.
By:_______________________________
Xx XxXxxxx
President
THE MANAGERS:
__________________________________
Xx XxXxxxx
__________________________________
Xxxxxxx Xxxxxx
