LIMITED LIABILITY COMPANY OPERATING AGREEMENT
OF
REVISION LLC
a Delaware Limited Liability Company
dated as of June 10, 1998
LIMITED LIABILITY COMPANY OPERATING AGREEMENT
OF
REVISION LLC
a Delaware Limited Liability Company
This Limited Liability Company Operating Agreement (the "Agreement")
of Revision LLC (the "Company") dated as of June 10, 1998 is adopted and agreed
to by the undersigned Members.
ARTICLE 1.
PURPOSE AND POWERS
1.1 Purpose. The Company has been organized to acquire, invest in,
trade in, sell or otherwise dispose of capital stock of, or other securities
issued by, Total-Tel USA Communications, Inc. (the "Subject Company") and to
engage in any other lawful business activity related or incident thereto.
1.2 Powers. The Company shall have the power and authority to enter
into, make and perform all contracts, agreements and undertakings, and to do
any and all acts and things necessary, appropriate, incidental or convenient to
the accomplishment of its purposes and for the protection and benefit of the
Company. Without limitation of the foregoing, the Company may borrow, pledge
its assets and take any and all steps necessary to exercise active control over
the Subject Company. The Company may act directly or through one or more
subsidiaries, through joint ventures, partnerships or otherwise in carrying out
its purpose.
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ARTICLE 2.
MEMBERS AND INTERESTS
2.1 Members; Voting Rights.
(a) There shall be two classes of Members: the Voting Members and
the Non-voting Members. On any matter requiring a vote, consent or approval of
the Members, the Voting Members shall be the only persons to whom the matter is
required to be submitted, and each shall have one vote. Except as otherwise
provided herein, or as required by applicable law, the vote, consent or
approval of a majority of the Voting Members shall constitute the act of the
Company. No Non-voting Member shall have a voice or vote in any matter, except
as specifically provided herein.
(b) The initial Members of the Company shall be Xxxx Xxxxxxxx
("Xxxxxxxx") and Gold & Xxxxx Transfer, SA, a British Virgin Islands
corporation ("G&A"). Xxxxxxxx shall be a Voting Member, and G&A shall be a
Non-voting Member. Additional Members may be admitted to the Company, but
unless otherwise specifically provided by amendment to this Agreement, any such
additional Member shall be a Non-voting Member. Each Member shall execute a
counterpart of this Agreement indicating his agreement to the terms and
provisions hereof.
2.2 Membership Interests. Each Member's ownership interest in the
Company is herein referred to generally as a "Membership Interest." The
respective rights of each Member to share in the capital of the Company, either
by way of distributions or on liquidation, will be determined by reference to
the Capital Account (as defined herein) of such Member; and each Member's
interest in the profits and losses of the Company shall be established as
provided herein. Each Member shall have the rights and powers set forth in this
Agreement.
2.3 Meetings.
(a) The Members shall have a regular annual meeting each year
beginning in 1999, on a date established by the Manager for the purpose of
electing Managers and conducting such other business as may properly come
before the meeting. Special meetings of the Members may be called by the
Manager.
(b) Written notice stating the place, day and hour of each meeting
of Members and the general purpose or purposes for which the meeting is called
shall be given not less than seven (7) nor more than thirty (30) days before
the date of the meeting to each Member, including the Non-voting Members.
(c) A Member may waive any notice required by law or this
Agreement, before or after the date and time of the meeting that is the subject
of such notice. Except as provided in the next sentence, the waiver shall be in
writing, signed by the Member entitled to the notice and delivered to the
Manager for inclusion in the Company's minutes or records. A
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Member's attendance at or participation in a meeting shall be deemed to waive
any required notice to such Member of the meeting unless the Member, at the
beginning of the meeting or promptly upon such Member's arrival, objects to the
transaction of any business at such meeting on the ground that such meeting is
not lawfully called or convened. A Member may participate in a meeting in
person or by proxy.
(d) Any vote, consent or approval of the Members may be
accomplished by written consent in lieu of a meeting signed by Members
constituting the required vote for the action so taken.
(e) Members may participate in a regular or special meeting by, or
conduct the meeting through, the use of any means of communication by which all
Members participating may simultaneously hear each other during the meeting.
Any Member who participates in a meeting in this manner is deemed to be present
in person at the meeting, except where a Member participates in the 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.
ARTICLE 3.
MANAGEMENT OF THE COMPANY
3.1 Managers. Except as otherwise limited by this Agreement or
applicable law, all powers of the Company shall be exercised by or under the
authority of, and the business and affairs of the Company shall be managed
under the direction of, the Company's Manager(s).
3.2 Number, Term and Election. Unless otherwise agreed by a unanimous
vote of the Members, there shall be one Manager who shall be designated by the
Voting Member. The initial Manager shall be Xxxxxxxx. A Manager shall hold
office until his or her death, resignation or retirement or until his successor
is elected and assumes office. A Manager need not be a Member of the Company.
For the avoidance of doubt, Non-voting Members shall have no authority to
appoint or remove a Manager for any reason.
3.3 Officers. The Manager may appoint such officers who shall have
such power and authority as may be specified in a resolution of the Manager.
Officers shall serve at the pleasure of the Manager.
3.4 Meetings.
(a) An annual meeting of the Manager(s) shall be held immediately
following each annual meeting of Members for the purpose of appointing
officers, if any, and carrying on such other business as may properly come
before the meeting.
(b) Special meetings of the Manager(s) may be called by any
Manager.
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(c) Notices of meetings of the Manager(s) shall be given to each
Manager not less than twenty-four (24) hours before the meeting. Any such
notice shall set forth the time and place of the meeting.
(d) A Manager may waive any notice required by law or this
Agreement before or after the date and time stated in the notice and such
waiver shall be equivalent to the giving of such notice. The waiver shall be in
writing, signed by the Manager entitled to the notice and filed with the
Company's minutes or records; provided that a Manager's attendance at or
participation in a meeting waives any required notice to him or her of the
meeting.
(e) A quorum for the transaction of business at a meeting of the
Manager shall consist of all of the Managers.
(f) Any or all Managers may participate in a regular or special
meeting by, or conduct the meeting through, the use of any means of
communication by which all Managers participating may simultaneously hear each
other during the meeting. A Manager participating in a meeting in this manner
is deemed to be present in person at the meeting.
(g) Any action of the Company that may be authorized by the
Manager(s) at a meeting may be authorized by written consent in lieu of meeting
of the Manager(s) signed by the Manager(s) constituting the required vote for
the action so taken, and any such consent shall be filed with the Company's
minutes or records.
3.5 Management Decisions.
(a) Except to the extent that the Manager(s) agree to delegate the
authority with respect to specified matters, all decisions shall be made by a
unanimous vote of the Manager(s).
(b) Any disbursement of funds of the Company will require such
signatures as may be determined by the Manager(s).
3.6 Management Compensation. The Manager(s) shall not be entitled to
receive from the Company compensation for his or their services to the Company.
In all events, the Manager(s) shall be entitled to reimbursement for all
reasonable expenses incurred on the Company's behalf.
ARTICLE 4.
FINANCIAL INTERESTS OF MEMBERS
4.1 General. The Company has been organized with the intention that it
qualify for taxation as a partnership for U.S. federal income tax purposes. The
Members acknowledge that the provisions of Subchapter K of the Internal Revenue
Code of l986, as amended (the "Code") and the Treasury Regulations (the
"Regulations") promulgated thereunder will apply to the
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Company, and intend that the allocations of taxable income and loss,
distributions to the Members and maintenance of capital accounts all conform to
the requirements of the Code and the applicable Regulations.
4.2 Capital Contributions. The Voting Member shall contribute $100,
and the Non-voting Member shall contribute all of its rights and ownership in
859,717 shares of common stock, par value $0.05 per share (the "Common
Shares"), of the Subject Company and the right to purchase 69,000 Common Shares
pursuant to an Agreement between Xxxxx X. Xxxxxx and G&A, dated as of January
6, 1998, to the capital of the Company ("Capital Contributions"). Additional
Capital Contributions may (but need not) be made by the Members on such basis
as the contributing Member and the Manager shall mutually agree upon.
4.3 Capital Accounts.
(a) A separate capital account ("Capital Account") shall be
established and maintained for each Member on the books of the Company which
will reflect the capital contributions, distributions and share of profits and
losses of the Company of the Member in accordance with the Regulations.
(b) No Member shall be entitled to receive interest on his Capital
Contributions.
(c) No Member shall be entitled to withdraw all or any part of his
Capital Account prior to the dissolution of the Company except as permitted by
the Manager in his sole discretion.
(d) Loans or advances by any Member to the Company shall not be
considered Capital Contributions and shall not increase the Capital Account of
the lending or advancing Member.
(e) Except as provided in this Agreement, no Member shall be
required under any circumstances to contribute or lend any additional money or
property to the Company.
4.4 Sharing Percentages; Allocations of Profits and Losses.
(a) The percentage interests of the Members in the net profits of
the Company (the "Sharing percentages") are 2% - Xxxxxxxx and 98% - G&A.
(b) Net income of the Company for a fiscal year or other period
shall be allocated among the Members (i) first, to the extent of cumulative
losses of the Company to the date of allocation, proportionately among the
Members who have borne such losses, and (ii) the balance in accordance with
their Sharing Percentages.
(c) Net losses of the Company for a fiscal year or other period
shall be allocated among the Members in accordance with the positive balances
in their Capital Accounts.
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In general, no Member shall be allocated net losses in excess of the positive
balance in his Capital Account; however, in the event net losses exceed Company
capital, allocations shall be made among the Members, if any, who bear such
losses as provided in the Regulations.
(d) Items of income, gain, loss, deduction and credit that are
recognized by the Company for tax purposes shall be allocated among the Members
in such manner as equitably reflects amounts credited or debited to the
Members' Capital Accounts pursuant hereto. To the extent profits or losses have
been reflected in Capital Accounts prior to their recognition for tax purposes,
allocations shall be made consistent with the principles of Code Section
704(c).
4.5 Distributions. Distributions to or among the Members to the extent
of the positive balances in their Capital Accounts may be made from time to
time as the Manager determines.
ARTICLE 5.
TRANSFERS AND THE ADMISSION OF ADDITIONAL MEMBERS
5.1 Transfers Generally. Membership Interests may be assigned, in
whole or in part, (each such assignment, a "Transfer") only in accordance with
this Article.
5.2 Effect of Transfers.
(a) Except as provided in paragraph (b) below, any Transfer of a
Membership Interest by a person (the "Transferor") shall be effective only to
give the transferee (the "Transferee") the right to the share of allocations
and distributions to which the Transferor would otherwise be entitled, and no
Transferee of a Membership Interest shall be admitted as a Member, (ii) the
Transferee shall have no right to vote on or consent to any matter submitted to
the Members or otherwise participate in the management of the business and
affairs of the Company, and (iii) subject to 5.3(c) below, the Transferor, if
he retains a Membership Interest, shall retain such rights and shall have the
power to exercise any rights of a Member, except the right to receive
allocations and distributions to the extent those rights are assigned.
(b) A Transferee of a Membership Interest shall, upon such
Transfer, be admitted as a Member with all the rights and powers of his
Transferor if, prior to such Transfer, the Manager consents to the admission of
the Transferee as a Member.
(c) The Manager may, in its discretion, charge a reasonable fee to
cover the expenses incurred by the Company in connection with or as a
consequence of the Transfer of all or part of a Membership Interest.
(d) The Company, the Manager, each Member and any other person or
persons having business with the Company, need deal only with holders of
Membership Interests who are admitted as Members of the Company, and shall not
be required to deal with any Transferee who has not been admitted as a Member.
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5.3 Admission of Members. The Managing Directors may from time to time
admit additional Members to the Company on such terms and conditions, including
such contributions to the capital of the Company, as the Managing Directors
shall determine. Any such additional Members shall join in and agree to be
bound by the terms of this Agreement.
ARTICLE 6.
TERM AND TERMINATION OF THE COMPANY
6.1 Term of the Company. The term of the Company commenced upon the
filing of the certificate of formation with the Secretary of State of Delaware
on June 10, 1998. The term of the Company shall be five (5) years from the date
of formation unless the term of the Company is extended by consent of the
Voting Members or if the Company is dissolved and terminated as provided in
this Agreement.
6.2 Events of Dissolution. The Company shall be dissolved upon the
occurrence of any of the following events:
(a) The vote of a two-thirds majority of the Voting Members to
dissolve the Company;
(b) The death, retirement, resignation, bankruptcy (which shall
mean being the subject of an order for relief under Title 11 of the United
States Code), or dissolution of any Member ( a "Dissolution Event") unless,
within sixty (60) days following the occurrence of any such event, the business
of the Company is continued by the consent of a majority-in-interest of the
remaining Members and, in the case of a Dissolution Event with respect to the
Manager, the remaining Members, including the Non-voting Members if there is no
remaining Voting Member, appoint a substitute Manager;
(c) As otherwise required by the Delaware Limited Liability
Company Act.
As used in this Article VI, consent of a majority-in-interest means consent
of Members (including for this purpose Voting and Non-voting Members) owning
Capital Accounts representing a majority of Company capital.
6.3 Conclusion of Affairs. In the event of dissolution of the Company
for any reason, the Manager, or if no Manager remains, the Members, by vote of
a majority-in-interest, shall appoint a person (the "Liquidator"), who may but
need not be a Manager and/or Member, and the Liquidator shall proceed, as soon
as reasonably practicable, to wind up the affairs of the Company. The Members
(and their successors in interest) shall continue to share in allocations of
income and loss and distributions during the period of winding up in the same
manner as before the dissolution. The Liquidator shall have reasonable
discretion to determine the time, manner and terms of any sale or sales of
Company property pursuant to such winding up, having due regard to the activity
and the condition of the Company and relevant market and financial and economic
conditions, and consistent with his obligations to the Members.
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6.4 Liquidating Distributions. After paying or providing for the
payment of all debts and liabilities of the Company and all expenses of winding
up, and subject to the right of the Liquidator to set up such reserves as it
may deem reasonably necessary for any contingent or unforeseen liabilities or
obligations of the Company, the proceeds of the liquidation, and any other
remaining assets of the Company, shall be distributed to or for the benefit of
the Members (and their successors in interest) in accordance with their
respective Capital Accounts. No Member shall have any right to demand or
receive property other than cash upon dissolution and winding up of the
Company; provided, however, the Liquidator shall have the right and power to
distribute assets in kind (whether to some or all of the persons entitled to
such distributions), valued at the then estimated fair market value of such
assets, as a liquidating distribution to the Members (and their successors in
interest).
6.5 Termination. Within a reasonable time following the completion of
the winding up of the Company, the Liquidator shall supply to each Member a
statement which shall set forth the assets and the liabilities of the Company
as of the date of complete winding up and each Member's portion of the
distributions pursuant to this Agreement. Upon completion of the winding up of
the Company and the distribution of all Company assets, the Company shall
terminate, and the Liquidator shall execute and file a certificate of
cancellation of the Company with the Secretary of State of Delaware, and shall
take all other action necessary to effectuate the dissolution and termination
of the Company.
ARTICLE 7.
GENERAL AND ADMINISTRATIVE PROVISIONS
7.1 Principal Office. The principal office of the Company shall be at
such location or locations as may be determined by the Manager from time to
time.
7.2 Indemnification. To the fullest extent permitted by law, the
Company shall indemnify and hold harmless, and may advance expenses to, any
Member or Manager (collectively, the "Indemnitees"), from and against any and
all claims and demands whatsoever arising out of the business and affairs of
the Company; provided, however, that no indemnification may be made to or on
behalf of any Indemnitee if a judgment or other final adjudication adverse to
such Indemnitee establishes (a) that his or her acts were committed in bad
faith or were the result of active and deliberate dishonesty and were material
to the cause of action so adjudicated or (b) that he or she personally gained
in fact a financial profit or other advantage to which he or she was not
legally entitled. The provision of this section shall continue to afford
protection to each Indemnitee regardless of whether such Indemnitee remains a
Member, Manager, employee or agent of the Company.
7.3 Fiscal Year. Unless otherwise determined by the Manager, the
fiscal year of the Company shall end on the thirty-first of December.
7.4 Books and Records. At all times during the term of the Company,
the Manager shall keep, or cause to be kept at the Company's principal office,
the books and records of the Company.
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7.5 Reports. As soon as practicable following the end of each fiscal
year, the Company shall provide each Member a financial report of the results
of operations, including audited or unaudited financial statements, as
determined by the Manager.
7.6 Notices. Any notice to be given under this Agreement may be given
either personally or by mail, telephone, telegraph, teletype, telecopy or other
form of wire or wireless communication, or by overnight courier. If mailed,
notice shall be deemed to be effective three (3) days after deposited in
registered or certified mail with postage thereon prepaid addressed if to a
Member at its address as it appears on the signature page to this Agreement (or
at such other address for any party as such party shall notify the other
parties), and if to the Company at its principal office. If given in any other
manner, such notice shall be deemed to be effective (i) when given personally,
(ii) when given by telephone, teletype, telecopy or other form of wire or
wireless communication (if followed by a copy delivered by registered or
certified mail) or (iii) one (1) day after given to an overnight courier to be
delivered.
7.7 Headings. The headings of the sections hereof are inserted for
convenience only and shall not control or affect the meaning or construction of
any of the provisions hereof.
7.8 Gender; Number. Where the context so requires, the masculine
gender shall be construed to include the female, a corporation, a trust or
other entity, and the singular shall be construed to include the plural and the
plural the singular.
7.9 Amendments. This Agreement may be modified or amended by unanimous
written agreement of the Voting Members; provided, that, no amendment may
modify the economic interest of a Member without such Member's consent.
7.10 Entire Agreement. This Agreement sets forth the entire
understanding of the parties hereto.
7.11 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the undersigned have affixed their signatures
signifying their adoption of this Agreement:
/s/ Xxxx Xxxxxxxx
-----------------------------------
Xxxx Xxxxxxxx
Address: 0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
GOLD & XXXXX TRANSFER, S.A.
By: /s/ Xxxx Xxxxxxxx
--------------------------------
Xxxx Xxxxxxxx, Attorney-In-Fact for
Gold & Xxxxx Transfer, S.A.
Address: Xxxx Xxxxxx Building
Wickhams Cay
Road Town
Tortula, BVI
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TABLE OF CONTENTS
Page
ARTICLE I
PURPOSE AND POWERS.................................................1
1.1 Purpose...................................................1
1.2 Powers....................................................1
ARTICLE II
MEMBERS AND INTERESTS..............................................2
2.1 Members; Voting Rights....................................2
2.2 Membership Interests......................................2
2.3 Meetings..................................................2
ARTICLE III
MANAGEMENT OF THE COMPANY..........................................3
3.1 Managers..................................................3
3.2 Number, Term and Election.................................3
3.3 Officers..................................................3
3.4 Meetings..................................................3
3.5 Management Decisions......................................4
3.6 Management Compensation...................................4
ARTICLE IV
FINANCIAL INTERESTS OF MEMBERS.....................................5
4.1 General...................................................5
4.2 Capital Contributions.....................................5
4.3 Capital Accounts..........................................5
4.4 Sharing Percentages; Allocations of Profits and Losses....6
4.5 Distributions.............................................6
ARTICLE V
TRANSFERS AND THE ADMISSION OF ADDITIONAL MEMBERS..................6
5.1 Transfers Generally.......................................6
5.2 Effect of Transfers.......................................6
5.3 Admission of Members......................................7
ARTICLE VI
TERM AND TERMINATION OF THE COMPANY................................7
6.1 Term of the Company.......................................7
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6.2 Events of Dissolution.....................................7
6.3 Conclusion of Affairs.....................................8
6.4 Liquidating Distributions.................................8
6.5 Termination...............................................8
ARTICLE VII
GENERAL AND ADMINISTRATIVE PROVISIONS..............................8
7.1 Principal Office..........................................8
7.2 Indemnification...........................................9
7.3 Fiscal Year...............................................9
7.4 Books and Records.........................................9
7.5 Reports...................................................9
7.6 Notices...................................................9
7.7 Headings..................................................9
7.8 Gender; Number............................................9
7.9 Amendments................................................9
7.10 Entire Agreement.........................................10
7.11 Counterparts.............................................10
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