EXHIBIT 5
LIMITED LIABILITY COMPANY AGREEMENT
OF
AIF IV/RRRR LLC
This Limited Liability Company Agreement (the "Agreement") of AIF
IV/RRRR LLC, is entered into by the persons named as Members on Annex A hereto
(the "Members") and the Manager (as defined herein) as of June 3, 1999.
WHEREAS, the Members hereby desire to form a limited liability company
under the Delaware Limited Liability Company Act (6 Del. C. (S)18-101, et seq.),
as amended from time to time (the "Act"), pursuant to this Agreement and the
Certificate of Formation which is being filed with the Secretary of State of the
State of Delaware in connection with the execution of this Agreement; and
WHEREAS, the Members desire to form this limited liability company for
the purpose of holding certain securities in Rare Medium Group, Inc. (the
"Company") and the parties hereto hereby acknowledge that the limited liability
company formed hereby is acquiring and holding certain securities in the
Company, as set forth on Annex B hereto (the "Securities") on the same basis and
subject to the same terms, conditions and restrictions, whether contractual or
legal, as those terms, conditions and restrictions applicable to the Apollo
Funds (as defined herein);
NOW THEREFORE, the parties hereto hereby agree as follows:
1. Name. (a) The name of the limited liability company is AIF
IV/RRRR LLC (the "LLC"). The business of the LLC may be conducted
under any other name deemed necessary or desirable by the Manager.
(b) The Members hereby agree to form the LLC as a limited liability
company pursuant to the provisions of the Act and of this Agreement.
The rights, duties and liabilities of the Members and the Manager
shall be as provided in the Act for members and managers except as
provided herein.
2. Purpose. The LLC is formed for the principal purpose of engaging
in acquiring, holding, protecting and disposing of the Securities, and
distributions and proceeds thereon and engaging in any and all activities
necessary or incidental to the foregoing.
3. Registered Office; Registered Agent. The address of the
registered office of the LLC in the State of Delaware is c/o The Corporation
Trust Company, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000. The name and address of the registered
agent of the LLC for service of process on the LLC in the State of
Delaware is The Corporation Trust Company, 0000 Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000.
4. Principal Office. The principal office address of the LLC should
be c/o Apollo Management IV, L.P., 0 Xxxxxxxxxxxxxx Xxxx, Xxxxxxxx,
XX 00000, or such other place as the Members may determine from
time to time.
5. Members. The name and the mailing address of each Member is as
set forth in Annex A hereto. Each Member is hereby admitted as a
member of the LLC and agrees to be bound by the terms of this
Agreement.
6. Authorized Persons; Power of Attorney. (a) Each of Xxxx X.
Xxxxxx, Xxxxxxx X. Xxxxxx, Xxxxxx X. Xxxxxx, Xxxxxxxx Xxx and
Xxxxxxx Xxxxxxxxxx is hereby designated as an authorized person,
within the meaning of the Act, to execute, deliver and file the
Certificate of Formation of the LLC (and any amendments and/or
restatements thereof) and any other certificates (and any
amendments and/or restatements thereof) necessary for the LLC to
qualify to do business in any jurisdiction in which the LLC may
wish to conduct business.
(b) Each Member does hereby constitute and appoint the Manager
as the true and lawful representative and attorney-in-fact of such
Member, in the name, place and stead of such Member, with full power
of substitution, to make, execute, sign and file the Certificate, any
amendment thereof, any amendments to this Agreement made in accordance
with Section 21 and such other instruments, documents and certificates
which may from time to time be required by the laws of the United
States of America, the State of Delaware or any other state or country
in which the LLC shall determine to do business or any political
subdivision or agency thereof, to effectuate, implement and continue
the valid and subsisting existence or qualification to do business of
the LLC or in connection with any tax returns, filings or related
matters.
7. Management. (a) The management of the LLC shall be vested
exclusively in one or more managers. The Members, in such capacity,
shall have no part in the management of the LLC and shall have no
authority to or right to act on behalf of or bind the LLC in
connection with any matter, nor have any further voting rights
except as to certain matters as deemed necessary or appropriate by
the Manager. The Members hereby irrevocably appoint Apollo
Management IV, L.P., a Delaware limited partnership, as the manager
of the LLC (the "Manager") and the Manager hereby accepts such
appointment and agrees to be bound by the provisions of this
Agreement. To the extent permitted by law, the Manager shall be
authorized to act on behalf of and to bind the LLC in all respects,
without any further consent, vote or approval of the Members, and
the Manager's powers shall include, without limitation, the
authority to negotiate, complete, execute and deliver any and all
agreements, deeds, instruments, receipts, certificates and other
documents on behalf of the LLC, and to take all such other actions
on behalf of the LLC as the Manager may consider necessary or
advisable in connection with the management of the LLC.
(b) Any Manager appointed pursuant to Section 7(a) may resign at
any time upon written notice to the Members, provided, that prior
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to the effectiveness of any such resignation, the Manager shall
provide for the substitution of a new manager that is reasonably
acceptable to the Members, or for the liquidation of the LLC.
(c) The Members agree that all determinations, decisions and
actions made or taken by the Manager in accordance with this
Agreement shall be conclusive and absolutely binding upon the LLC,
the Members and their respective successors, assigns and personal
representatives.
(d) Persons dealing with the LLC are entitled to rely
conclusively upon the power and authority of the Manager as herein
set forth.
(e) The Manager and Members hereby acknowledge that certain
entities managed by the Manager and its affiliates, including
Apollo Investment Fund IV, L.P. and Apollo Overseas Partners IV,
L.P. (collectively the "Apollo Funds") also hold interests in the
Securities. The Manager hereby agrees that whenever the Manager
makes any disposition or transfer or takes any other action (a
"Transaction") with respect to the Securities held by the Apollo
Funds, the LLC will participate in any such Transaction on a pro
rata basis in accordance with the aggregate amount invested by each
of the Apollo Funds and the LLC in the Securities.
8. Capital Contributions. The Members have made or will make a
contribution to the capital of the LLC in the amounts set forth on
a schedule maintained by the Manager. The Members shall have no
obligation to make any additional capital contributions to the LLC.
The Manager may, but is not required to, contribute capital to the
LLC. The LLC may, from time to time, participate with the Apollo
Funds in certain co-investment opportunities respecting the
Company's securities and/or follow-on investment opportunities in
which the Company participates. Such co-investment opportunities,
if any, will be subject to, among other things, the contribution by
Members of additional capital to the LLC. In that regard, the
Members acknowledge and understand that in the event such
additional capital is not made available to the LLC, the LLC may be
precluded from participating with the Apollo Funds in any such
additional investment opportunity.
9. Additional Contributions. The Members, with the consent of the
Manager, may make such additional capital contributions to the LLC
as the Members in their discretion may deem necessary or advisable
in connection with the business of the LLC.
10. Capital Accounts. The LLC shall maintain for each Member a
capital account in accordance with this Section 10 and in
accordance with the rules of Treasury Regulation Section 1.704-
1(b)(2)(iv). The Member's capital account shall have an initial
balance equal to the amount of cash constituting the Member's
initial contribution to the capital of the LLC. The Member's
capital account shall be increased by the same of (a) the amount of
cash constituting additional contributions by the Members to the
capital of the LLC, plus (b) any profits allocated to the Member's
capital account pursuant to Section 11. The Member's capital
account shall be reduced by the sum of (a) the amount of cash and
the fair value of any property distributed by the LLC to the
Members, plus (b) any losses allocated to the Member's capital
account pursuant to Section 11.
11. Allocations. The LLC's profits and losses shall be allocated to
the Members pro rata in accordance with their relative capital
account balances as established by Section 10 hereof, taking into
account any variation between the adjusted tax basis and book value
of the LLC's property in accordance with the principles of Section
704(c) of the Internal Revenue Code (the "Code") (and Treasury
Regulation (S)1.704(b)(2)(iv)(f)).
12. Distributions. (a) The Members shall not (i) be entitled to
interest on their capital contributions to the LLC or (ii) have the
right to distributions or the return of any contribution to the
capital of the LLC except (A) for distributions in accordance with
this Section 12 or (B) upon dissolution of the LLC. The entitlement
to any such return at such time shall be limited to the value of
the capital account of the Member. To the fullest extent permitted
by the Act, the Members shall not be liable for the return of any
such amounts. The Company shall not make a distribution to a Member
if such distribution would violate Section 18-607 of the Act.
(b) Distributions shall be made to the Members at the times and
in the aggregate amounts determined by the Manager. The Manager
hereby agrees that, to the extent considered feasible by the
Manager, any distributions made to the Members by the Manager with
respect to Transactions involving the Securities shall be made on
the same terms as those distributions made to the Apollo Funds with
respect to Transactions involving the Securities.
(c) If the LLC incurs a withholding tax or other tax obligation with
respect to the share of LLC income allocable to any Member, then the
Manager, without limitation of any other rights of the LLC, may cause
the amount of such obligation to be offset against any amounts then
distributable to such Member. Any amount offset pursuant to the
preceding sentence shall be treated, for purposes of Section 12(b) and
17, as having been distributed to the affected Member. If the amount
of such taxes is greater than any such then distributable amounts,
then such Member and any successor to such Member's interest shall
indemnify and hold harmless the LLC and the Manager against, and shall
reimburse the LLC within 10 days after the demand of the Manager, the
amount of such excess.
13. Fiscal Year. The Fiscal Year of the LLC for accounting and tax
purposes shall begin on January 1 and end on December 31 of each
year, except for the short taxable years in the years of the LLC's
formation and termination and as otherwise required by the Code.
14. Assignments and Transfers of Interests. (a) A Member may not
transfer, dispose, withdraw or otherwise pledge any portion of its
interest in the LLC to any person at any time without the prior
written consent of the Manager, which consent shall not be
unreasonably withheld or delayed.
(b) A permitted transferee shall be entitled to the allocations and
distributions attributable to the interest in the LLC transferred to such
transferee and to transfer such interest in accordance with the term of this
Agreement; provided, however, that such transferee shall not be entitled to the
other rights of a Member as a result of such transfer until it becomes a
substituted Member. No transferee may become a substituted Member except with
the consent of the Manager (which consent may be withheld in its sole and
absolute discretion). Such transferee shall be admitted to the LLC as a
substituted Member upon execution of a counterpart of this Agreement or such
other instrument evidencing, to the satisfaction of the Manager, such Member's
intent to become a Member. Notwithstanding the above, the LLC and the Manager
shall incur no liability for allocations and distributions made in good faith to
the transferring Member until a written instrument of transfer has been received
and accepted by the LLC and recorded on its books and the effective date of the
Transfer has passed.
15. Admissions of Additional Members. The Manager may at any time
cause the LLC to admit additional Members in its discretion;
provided, however, that no such admission shall result in the
diminution of any existing Member's participation percentage or
capital account without such existing Member's consent. An
additional Member shall be deemed admitted as a Member upon the
execution by such Member of this Agreement or any other instrument
manifesting, to the satisfaction of the Manager, such additional
Member's intent to become a Member. Upon admission, such additional
Member shall be bound by all provisions of this Agreement. The
Schedule of Members shall be subsequently amended to reflect the
admission of any new Member.
16. Liability of Members A Member shall not have any liability for
the obligations or liabilities of the LLC except to the extent
provided in the Act.
17. Dissolution. (a) Subject to the occurrence of an event of
dissolution pursuant to Section 17(b), the LLC shall have perpetual
existence.
(b) The Company shall dissolve, and its affairs shall be wound up upon
the first to occur of the following: (i) the written consent of the
Manager, (ii) the entry of a decree of judicial dissolution under
Section 18-802 of the Act or (iii) 90 days after the occurrence of any
of the following events: the death, insanity, retirement, resignation,
expulsion, or bankruptcy of the Manager or the occurrence of any other
event which terminates the continued status of the Manager as such
under the Act unless, within 90 days of the occurrence of such event,
a majority of the Members consent to continue the business of the LLC
in accordance with this Agreement and in the event of such
continuation, the LLC shall not be dissolved.
18. Indemnification. To the fullest extent permitted by law, the LLC
shall (a) indemnify any person or such person's heirs,
distributees, next of kin, successors, appointees, executors,
administrators, legal representatives or assigns who was or is a
party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative by reason of the fact
that such person is or was a member, manager, director, officer,
authorized person, employee or agent of the LLC or is or was
serving at the request of the LLC or its members as a member,
manager, director, officer, authorized person, employee or agent of
another corporation, limited liability company, partnership, joint
venture, trust or other enterprise, domestic or foreign, against
expenses, attorneys' fees, court costs, judgments, fines, amounts
paid in settlement and other losses actually and reasonably
incurred by such person in connection with such action, suit or
proceedings and (b) advance expenses incurred by a member, manager,
officer, authorized person or director in defending such civil or
criminal action, suit or proceeding to the full extent authorized
or permitted by the laws of the State of Delaware. A manager shall
have no personal liability to the LLC or its members for monetary
damages for breach of fiduciary duty as a manager; provided,
however, that the foregoing provision shall not eliminate the
liability of a manager for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law
or for any transaction from which the manager derived an improper
personal benefit.
19. Information. (a) To the extent the Manager receives financial
reports or other information from the Company, pursuant to Section
7.3 of
the Securities Purchase Agreement among the LLC, the Apollo Funds,
the Company and certain other parties thereto, dated as of May 7,
1999, as amended and restated, the Manager shall furnish any Member
with such information at the Member's request.
a. Each Member hereby agrees to maintain the confidentiality of any
confidential and proprietary information regarding the Company and its
subsidiaries; provided, however, that the foregoing shall in no way
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limit or otherwise restrict the ability of such Member or any of its
representatives to disclose any such information concerning the
Company and each Subsidiary which it may be required to disclose (i)
to its partners to the extent required to satisfy its fiduciary
obligations to such persons, or (ii) otherwise pursuant to or as
required by law. Each member acknowledges that the U.S. securities
laws restrict any person who has material non-public information about
a company from purchasing or selling securities of such company or
from communicating such information to any other person under
circumstances in which it is reasonably foreseeable that such person
is likely to purchase or sell such securities.
(c) A member and its duly authorized representatives may, for any
reason reasonably related to its interest as a Member of the LLC, examine the
LLC's books of account and make copies and extracts therefrom at its own
expense. The Manager shall maintain the records of the LLC for three years
following the termination of the LLC. The Manager shall be permitted to keep
information confidential from the Members pursuant to 18-305(c) of the Act.
20. Acknowledgments by Members. Each Member hereby acknowledges and
agrees that (i) his interest in the LLC and his underlying interest
in the Securities represent an illiquid investment, (ii) he does
not hold nor is he entitled to hold any voting, dispositive or
investment determination rights with respect to the Securities, and
that such rights are vested exclusively in the Manager, (iii) the
Manager has sole and exclusive voting, dispositive and investment
determination rights over the Securities held by the LLC and (iv)
his appointment of the Manager as the "manager" of the LLC made
herein is irrevocable except that the Manager may be removed by the
Members for "cause."
For purposes of this agreement "cause" as it relates to the removal of the
Manager shall mean that such Manager has been found by a court of competent
jurisdiction to have committed any act (or to have failed to take any action)
which constitutes a material breach by the Manager of its obligations to the
LLC under this Agreement resulting in material financial harm to the LLC or
which constitutes fraud, gross negligence or willful malfeasance resulting in
material financial harm to the LLC.
21. Amendments. Amendments to this Agreement may be made from time
to time by the Manager without the consent of the Members;
provided, however, that without the consent of each Member affected
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thereby, no such amendment shall require any Member to make
additional capital contributions without its consent, or permit the
admission of additional Members or increase the liability, or
reduce the interest, of any Member hereunder.
22. Agreement Binding Upon Successors and Assigns. This Agreement
shall be binding and inure to the benefit of the Members hereto and
to their respective successors, but the rights and obligations of
the Members hereunder shall not be assignable, transferable or
delegable except as expressly provided herein, and any attempted
assignment, transfer or delegation thereof which is not made in
accordance with such express provisions shall be void.
23. Not for Benefit of Creditors. The provisions of this Agreement
are intended only for the regulation of relations among Members and
between Members and former or prospective Members and the LLC. This
Agreement is not intended for the benefit of non-Member creditors
and no rights are granted to non-Member creditors under this
Agreement.
24. Counterparts. This Agreement may be executed in any number of
counterparts and by different parties to this Agreement in separate
counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one
and the same Agreement.
25. Governing Law. This Agreement shall be governed by, and
construed under, the laws of the State of Delaware, all rights and
remedies being governed by said laws. The Members intend the
provisions of the Act to be controlling as to any matters not set
forth in this Agreement.
IN WITNESS WHEREOF, the undersigned, intending to be legally bound
hereby, have duly executed this Limited Liability Company Agreement as of the
day first above written.
Manager:
APOLLO MANAGEMENT IV, L.P.
By: AIF IV Management, Inc.
its General Partner
By: __________________________
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
Members:
Each of the persons hereafter admitted to the LLC as Members, as of the date
hereof as set forth in the Schedule of Members, pursuant to the powers of
attorney executed by such persons in favor of, and delivered to, the
undersigned.
By: Apollo Management IV, L.P.,
Attorney-in-Fact
By: __________________________
Xxxxxxx X. Xxxxxx
Vice President
