<PAGE>
Page 1 of 13
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO
RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)
(Amendment No. 3)/1/
COLLEGE TELEVISION NETWORK, INC.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock
- --------------------------------------------------------------------------------
(Title of Class of Securities)
194506101
- --------------------------------------------------------------------------------
(CUSIP Number)
Neil H. Dickson, Esq., Morris, Manning & Martin, L.L.P.
3343 Peachtree Road, N.E., 1600 Atlanta Financial Center
Atlanta, Georgia 30326 (404) 233-7000
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
July 23, 1999
- --------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13D-1(b)(3) or (4), check the following box [ ].
NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
(Continued on following pages)
- --------------------------
/1/ The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
SCHEDULE 13D
CUSIP No. 194506101 Page 2 of 13 Pages
---------------
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
U-C Holdings, L.L.C.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(E) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware limited liability company
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 0
SHARES -----------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 13,603,348/2//3/
REPORTING -----------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH
0
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
13,603,348
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
13,603,348
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
82.8%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO (limited liability company)
- --------------------------------------------------------------------------------
- -----------------------------
/2/ Number of shares reflects one-for-five reverse stock split effected November
12, 1997.
/3/ This figure is the total number of shares of the Common Stock of the Issuer
owned or controlled by the reporting person as of July 23, 1999. U-C Holdings,
L.L.C. ("Holdings"), majority stockholder of the Issuer, purchased shares of
Convertible Preferred Stock of the Issuer pursuant to a certain Purchase
Agreement by and between the Issuer and Holdings dated July 23, 1999. In
accordance with the Purchase Agreement, Holdings purchased 309,998 shares of the
Issuer's Convertible Preferred Stock, which as of the date of issuance, is
convertible into 678,432 shares of Common Stock. This figure also includes
1,060,518 shares of Common Stock that may be purchased by Holdings upon the
exercise of the Warrant described in Item 4 hereof, the Warrant issued to
Holdings on October 5, 1998 and the Warrant issued to Holdings April 25, 1997.
<PAGE>
SCHEDULE 13D
CUSIP No. 194506101 Page 3 of 13 Pages
---------------
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
John R. Willis
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(E) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S. Citizen
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 0
SHARES -----------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 13,603,348/2//3/
REPORTING -----------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH
0
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
13,603,348
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
13,603,348/4/
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
82.8%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
- -----------------------------
/4/ Mr. Willis disclaims such beneficial ownership of the securities held by
Holdings except to the extent of his indirect beneficial interest as a Founding
Member of Willis Stein & Partners, L.L.C., the general partner of Willis Stein
& Partners, L.P., which is the Managing Member of Holdings.
<PAGE>
SCHEDULE 13D
CUSIP No. 194506101 Page 4 of 13 Pages
---------------
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
Avy H. Stein
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(E) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 0
SHARES -----------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 13,603,348/2/ /3/
REPORTING -----------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH
0
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
13,603,348
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
13,603,348/5/
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
82.8%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
- ----------
/5/ Mr. Stein disclaims such beneficial ownership of the securities held by
Holdings except to the extent of his indirect beneficial interest as a Founding
Member of Willis Stein & Partners, L.L.C., the general partner of Willis Stein &
Partners, L.P., which is the Managing Member of Holdings.
<PAGE>
SCHEDULE 13D
CUSIP No. 194506101 Page 5 of 13 Pages
---------------
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
Daniel M. Gill
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(E) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 0
SHARES -----------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 13,603,348/2/ /3/
REPORTING -----------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH
0
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
13,603,348
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
13,603,348/6/
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
82.8%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
- ----------
/6/ Mr. Gill disclaims such beneficial ownership of the securities held by
Holdings except to the extent of his indirect beneficial interest as a Founding
Member of Willis Stein & Partners, L.L.C., the general partner of Willis Stein &
Partners, L.P., which is the Managing Member of Holdings.
<PAGE>
SCHEDULE 13D
CUSIP No. 194506101 Page 6 of 13 Pages
---------------
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
Daniel H. Blumenthal
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) or 2(E) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 0
SHARES -----------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 13,603,348/2/ /3/
REPORTING -----------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH
0
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
13,603,348
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
13,603,348/7/
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
82.8%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
- ----------
/7/ Mr. Blumenthal disclaims such beneficial ownership of the securities held by
Holdings except to the extent of his indirect beneficial interest as a Founding
Member of Willis Stein & Partners, L.L.C., the general partner of Willis Stein &
Partners, L.P., which is the Managing Member of Holdings.
<PAGE>
Item 1. Security and Issuer.
- ------- -------------------
This Statement on Schedule 13D relates to the shares of Common Stock,
$.005 par value, of College Television Network, Inc. (the "Issuer"), formerly UC
Television Network Corp. (the "Common Stock"). The address of the principal
executive office of the Issuer is College Television Network, Inc., 5784 Lake
Forrest Drive, Suite 275, Atlanta, Georgia 30328.
Item 2. Identity and Background.
- ------- -----------------------
This Statement is filed by the following persons:
(a) U-C Holdings, L.L.C. ("Holdings"), a limited liability company
organized under the laws of the State of Delaware with its principal business
address at 227 West Monroe Street, Suite 4300, Chicago, Illinois 60606.
Holdings' principal business is investing in the securities of the Issuer.
(b) John R. Willis, an individual whose business address is 227 West
Monroe Street, Suite 4300, Chicago, Illinois 60606. Mr. Willis' principal
occupation is serving as a Manager and Founding Member of Willis Stein &
Partners, L.L.C., the general partner of Willis Stein & Partners, L.P., a
private equity investment limited partnership. Mr. Willis is a citizen of the
United States of America.
(c) Avy H. Stein, an individual whose business address is 227 West Monroe
Street, Suite 4300, Chicago, Illinois 60606. Mr. Stein's principal occupation
is serving as a Manager and Founding Member of Willis Stein & Partners, L.L.C.,
the general partner of Willis Stein & Partners, L.P., a private equity
investment limited partnership. Mr. Stein is a citizen of the United States of
America.
(d) Daniel H. Blumenthal, an individual whose business address is 227 West
Monroe Street, Suite 4300, Chicago, Illinois 60606. Mr. Blumenthal's principal
occupation is serving as a Founding Member of Willis Stein & Partners, L.L.C.,
the general partner of Willis Stein & Partners, L.P., a private equity
investment limited partnership. Mr. Blumenthal is a citizen of the United
States of America.
(e) Daniel M. Gill, an individual whose business address is 227 West
Monroe Street, Suite 4300, Chicago, Illinois 60606. Mr. Gill's principal
occupation is serving as a Founding Member of Willis Stein & Partners, L.L.C.,
the general partner of Willis Stein & Partners, L.P., a private equity
investment limited partnership. Mr. Gill is a citizen of the United States of
America.
In addition, information relating to the following entities and persons is
provided pursuant to General Instruction C to Schedule 13D:
(g) Willis Stein & Partners, L.P., a limited partnership organized under
the laws of the State of Delaware with its principal business address at 227
West Monroe Street, Suite 4300, Chicago, Illinois 60606. The principal business
of Willis Stein & Partners, L.P. is investing in equity securities. Willis
Stein & Partners, L.P. serves as the Managing Member of Holdings.
(h) Willis Stein & Partners, L.L.C., a limited liability company organized
under the laws of the State of Delaware with its principal business address at
227 West Monroe Street, Suite 4300, Chicago, Illinois 60606. The principal
business of Willis Stein & Partners, L.L.C. is serving as the General Partner of
Willis Stein & Partners, L.P., a private equity investment limited partnership.
<PAGE>
During the past five years, none of the entities or persons listed above
has been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) or has been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws, or finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
- ------- -------------------------------------------------
The funds used to acquire the Convertible Preferred Stock and the Warrant
of the Issuer described in Item 5 below were taken from the equity contributions
to capital of Holdings made by its members. The purchase price of the
Convertible Preferred Stock and the Warrant of the Issuer reported herein
pursuant to the Purchase Agreement (described in Item 4) executed by and between
the Issuer and Holdings was $4,649,970.
Item 4. Purpose of Transaction.
- ------- ----------------------
On July 23, 1999, the Issuer issued to Holdings 309,998 shares of
convertible preferred stock, $.001 par value per share ("Convertible Preferred
Stock"), and a Class D Warrant for the purchase of Common Stock in exchange for
an aggregate purchase price of $4,649,970 pursuant to a Purchase Agreement
between Holdings and the Issuer dated July 23, 1999 (the "Purchase Agreement").
The purpose of Holdings' purchase of shares and a warrant pursuant to the
Purchase Agreement was to enable the Issuer to raise $4,649,970 in gross
proceeds needed for the Issuer's general working capital needs and for capital
expenditures in connection with the installation of the Issuer's satellite
receptor system and television sets at colleges and universities. This
investment by Holdings was a condition to a $12,000,000 loan from LaSalle Bank
National Association.
The conversion ratio of the Convertible Preferred Stock into common stock
of the Issuer, $.005 par value per share ("Common Stock"), is computed by
multiplying the number of shares of Convertible Preferred Stock to be converted
by the $15.00 per share purchase price and dividing the result by the conversion
price of the Convertible Preferred Stock (the "Conversion Price") then in effect
with respect to such shares. On the date of issuance, the Conversion Price was
$6.854 (the 30-day average trading price of the Common Stock listed on Nasdaq
("Average Trading Price")). From the date of issuance to and including the third
anniversary of the date of issuance of the Convertible Preferred Stock, the
Conversion Price is subject to adjustment if at the end of any quarter the
Average Trading Price of the Common Stock is less than the Conversion Price then
in effect, in which case such Conversion Price shall be reduced to equal such
Average Trading Price; provided that in no event shall the Conversion Price be
reduced below $2.75 as adjusted for stock splits, stock dividends and other
similar events. The Convertible Preferred Stock is voting stock which votes on
an as-converted basis to Common Stock based upon the number of shares of Common
Stock the Convertible Preferred Stock is convertible into on the date of
issuance or 678,432 shares of voting stock.
If Holdings converted the Convertible Preferred Stock based upon the
current conversion price it would acquire 678,432 shares of Common Stock of the
Company after which conversion Holdings would own approximately 81.2% of the
outstanding shares of the Common Stock of the Company. If the Conversion Price
is adjusted to $2.75 as adjusted for stock splits, stock dividends and other
similar events (the minimum Conversion Price), the Convertible Preferred
Stock would convert into 1,690,898 shares of Common Stock, after which
conversion Holdings would own 82.3% of the outstanding shares of Common Stock of
the Company.
Under the terms of the Class D Warrant, Holdings has the right to purchase
135,686 shares of Common Stock at an initial exercise price equal to $6.854 per
share (the "Warrant"). From the date of issuance to and including the third
anniversary of the date of issuance of the Warrant, such exercise price shall be
<PAGE>
subject to adjustment on a quarterly basis such that if at the end of any
quarter in which case the Average Trading Price is less than the exercise price
then in effect, the exercise price shall be reduced to equal such Average
Trading Price; provided that in no event shall the exercise price be reduced
below $2.75 as adjusted for stock splits, stock dividends and other similar
events. If the exercise price was reduced to $2.75 per share, Holdings could
acquire 338,179 shares of Common Stock. The Warrant expires on July 23, 2006.
Holdings has agreed not to "short sell" the Common Stock of the Issuer.
The share numbers set forth herein reflect the purchase of shares of
Convertible Preferred Stock by Holdings pursuant to the Purchase Agreement, and
include the shares issuable upon exercise of the Warrant described herein and
the Warrant issued to Holdings by the Issuer on October 5, 1998. The persons
identified in response to Item 2 of this Statement will make the determination
as to when or whether to convert the Convertible Preferred Stock and/or to
exercise the Warrants to acquire additional shares of the Issuer's Common Stock.
While they reserve the right to develop plans or proposals in the future
regarding the following items, at the present time none of the persons
identified in response to Item 2 of this Statement have any plans or proposals
which relate to or would result in any of the following, except that Holdings
may make an additional investment in the Issuer in connection with a proposed
acquisition (See Form 8-K filed by the Issuer on August 3, 1999):
(a) the acquisition of additional securities of the Issuer, or the
disposition of securities of the Issuer;
(b) an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Issuer or any of its subsidiaries;
(c) sale or transfer of a material amount of assets of the Issuer or any
of its subsidiaries;
(d) any change in the present board of directors or management of the
Issuer, including any plans or proposals to change the number or term of
directors or to fill any existing vacancies on the board;
(e) any material change in the present capitalization or dividend policy
of the Issuer, other than pursuant to the Purchase Agreement described above;
(f) any other material change in the Issuer's business or corporate
structure;
(g) any changes in the Issuer's charter, bylaws or instruments
corresponding thereto or other actions which may impede the acquisition of
control of the Issuer by any person;
(h) causing a class of securities of the Issuer to be delisted from a
national securities exchange or cease to be authorized to be quoted in an inter-
dealer quotation system of a registered national security association;
(i) a class of equity securities of the Issuer becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Exchange Act; or
(j) any action similar to those enumerated above.
<PAGE>
Item 5. Interest in Securities of the Issuer.
- ------- ------------------------------------
(a) Immediately prior to the consummation of the Purchase Agreement, there
were 14,409,055 shares of the Issuer's Common Stock outstanding, of which
Holdings directly owned 11,576,612 shares, or 80.3% of the outstanding Common
Stock. On of the date of issuance, if Holdings were to convert all of its
shares of Convertible Preferred Stock and exercise the Warrants it holds,
including the Warrant issued to Holdings on October 5, 1998 and the Warrant
issued to Holdings on April 25, 1997, Holdings would own 13,603,348 shares of
the Common Stock, or 82.8% of the Issuer's outstanding Common Stock. John R.
Willis and Avy H. Stein (collectively, the "Managers"), as the Managers of, and
John R. Willis, Avy H. Stein, Daniel M. Gill and Daniel H. Blumenthal
(collectively, the "Founding Members"), as the Founding Members of, Willis Stein
& Partners, L.L.C., the general partner of Willis Stein & Partners, L.P., which
is the Managing Member of Holdings, may be deemed to share the power to direct
the voting and disposition of the shares of Common Stock held by Holdings and
may be deemed to beneficially own such shares. Each of the Founding Members
disclaims beneficial ownership of the securities held by Holdings except to the
extent of his indirect beneficial interest as a Founding Member of Willis Stein
& Partners, L.L.C., the general partner of Willis Stein & Partners L.P., which
is the Managing Member of Holdings.
(b) None of the Founding Members directly owns any shares of the Issuer's
Common Stock, but the Founding Members may be deemed to share the power to vote
or to direct the vote as well as the power to dispose of or to direct the
disposition of all of the shares of Common Stock held by Holdings, by virtue of
such persons' status as Managers and/or Founding Members of Willis Stein &
Partners, L.L.C., the general partner of Willis Stein & Partners, L.P., which
is the Managing Member of Holdings. Each of the Founding Members disclaims
beneficial ownership of the securities held by Holdings except to the extent of
his indirect beneficial interest as a Founding Member of Willis Stein &
Partners, L.L.C., the general partner of Willis Stein L.P., which is the
Managing Member of Holdings.
(c) Other than the securities acquired pursuant to the Purchase Agreement
and purchase by Holdings of the Warrant described herein, there were no
transactions in the class of securities reported on that were effected during
the past sixty (60) days or since the most recent filing of Schedule 13D by the
persons named in response to Paragraph (a).
(d) Pursuant to the Third Amended and Restated Limited Liability Company
Agreement of U-C Holdings, L.L.C., dated July 23, 1999 (the "Operating
Agreement"), the following persons are members of Holdings and, as such, have
the right to receive distributions from Holdings: Jason Elkin, Thomas Gatti,
Joseph D. Gersh, George Giatzis, James Harder, Peter Kauff, Hollis W.
Rademacher, Patrick Doran, Sergio Zyman, Martin Grant and Willis Stein &
Partners, L.P. The sole investment of Holdings is its interest in securities of
the Issuer; therefore, any dividends paid by the Issuer to Holdings will be
distributed to the members of Holdings in accordance with the distribution
provisions of the Operating Agreement. As a result, the members of Holdings
have the right to receive dividends from, as well as the proceeds from the sale
of, securities of the Issuer held by Holdings.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
- ------ ---------------------------------------------------------------------
to Securities of the Issuer.
- ---------------------------
The Operating Agreement (described in Item 5(d) above) provides that
Willis Stein & Partners, L.P., as the Managing Member of Holdings, shall have
the sole authority with respect to the
Holdings has agreed not to "short sell" the Common Stock of the Issuer.
<PAGE>
transfer and voting of the securities owned by Holdings. The Operating Agreement
contains provisions regarding the transfer and voting of the securities of the
Issuer held by Holdings. The Operating Agreement was entered into among the
members of Holdings named in response to Item 5(d) above.
Item 7. Material to be Filed as Exhibits.
- ------ --------------------------------
The following documents are filed as exhibits hereto:
(a) Joint Filing Agreement, dated August 2, 1999, among U-C Holdings,
L.L.C., John R. Willis, Avy H. Stein, Daniel M. Gill and Daniel H. Blumenthal.
(b) Third Amended and Restated Limited Liability Company Agreement of U-C
Holdings, L.L.C. dated as of July 23, 1999.
(c) Certificate of Designations of the Convertible Preferred Stock filed
with the State of Delaware July 22, 1999 (incorporated by reference to Exhibit
4.3 to Issuer's Form 8-K filed August 3, 1999).
(d) Purchase Agreement between U-C Holdings, L.L.C. and College Television
Network, Inc., dated as of July 23, 1999 (incorporated by reference to Exhibit
4.1 to Issuer's Form 8-K filed August 3, 1999).
(e) Class D Warrant No. D-1 issued by College Television Network, Inc. to
U-C Holdings, L.L.C. (incorporated by reference to Exhibit 4.2 to Issuer's Form
8-K filed August 3, 1999).
(f) Form of Class C Warrant No. C-2 issued by College Television Network,
Inc. to U-C Holdings, L.L.C. (incorporated by reference to Exhibit 4.14 to the
Issuer's Registration Statement on Form S-3 (SEC File No. 333-58479), as
amended, declared effective on July 28, 1998).
(g) Form of Class C Warrant No. C-1 issued by College Television Network,
Inc. to U-C Holdings, L.L.C. (incorporated by reference to Exhibit 4.2 to the
Schedule 13D filed on May 5, 1997).
<PAGE>
SIGNATURES
After reasonable inquiry, and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct as of this 2nd day of August, 1999.
U-C HOLDINGS, L.L.C.
By: Willis Stein & Partners, L.P.
Its Managing Member
By: Willis Stein & Partners, L.L.C.
Its General Partner
By: /s/ Avy H. Stein
----------------
Avy H. Stein
Its Manager
/s/ John R Willis
-----------------
John R. Willis
/s/ Avy H. Stein
----------------
Avy H. Stein
/s/ Daniel M. Gill
------------------
Daniel M. Gill
/s/ Daniel H. Blumenthal
------------------------
Daniel H. Blumenthal
<PAGE>
EXHIBIT A
JOINT FILING AGREEMENT
----------------------
The undersigned hereby agree that the Statement on Schedule 13D to which
this Agreement is attached, relating to shares of Common Stock, par value $.005
per share, of College Television Network, Inc., and any amendments to such
statement, will be filed on behalf of each of the undersigned.
This Agreement may be executed in two (2) or more counterparts, each of
which shall be an original, but all of which shall constitute but one agreement.
Agreed this 2nd day of August, 1999.
U-C HOLDINGS, L.L.C.
By: Willis Stein & Partners, L.P.
Its Managing Member
By: Willis Stein & Partners, L.L.C.
Its General Partner
By: /s/ Avy H. Stein
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Avy H. Stein
Its Manager
/s/ John R. Willis
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John R. Willis
/s/ Avy H. Stein
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Avy H. Stein
/s/ Daniel M. Gill
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Daniel M. Gill
/s/ Daniel H. Blumenthal
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Daniel H. Blumenthal
<PAGE>
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U-C HOLDINGS, L.L.C.
A Delaware Limited Liability Company
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THIRD AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
Dated as of July 23, 1999
THE MEMBERSHIP INTERESTS REPRESENTED BY THIS LIMITED LIABILITY COMPANY AGREEMENT
HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED, OR UNDER ANY OTHER APPLICABLE SECURITIES LAWS. SUCH INTERESTS MAY NOT
BE SOLD, ASSIGNED, PLEDGED OR OTHERWISE DISPOSED OF AT ANY TIME WITHOUT
EFFECTIVE REGISTRATION UNDER SUCH ACT AND LAWS OR EXEMPTION THEREFROM, AND
COMPLIANCE WITH THE OTHER RESTRICTIONS ON TRANSFERABILITY SET FORTH HEREIN.
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS......................................................................................................... 1
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1.1 Certain Definitions............................................................................................ 1
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1.2 Other Definitions.............................................................................................. 5
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1.3 Construction................................................................................................... 6
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ARTICLE II
ORGANIZATION........................................................................................................ 6
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2.1 Formation...................................................................................................... 6
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2.2 Name........................................................................................................... 6
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2.3 Registered Office; Registered Agent; Principal Office; Other Offices........................................... 6
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2.4 Purposes....................................................................................................... 6
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2.5 Term........................................................................................................... 7
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2.6 No State-Law Partnership....................................................................................... 7
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ARTICLE III
MEMBERSHIP; MEMBER UNITS............................................................................................ 7
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3.1 Members........................................................................................................ 7
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3.2 Liability of Members........................................................................................... 8
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3.3 No Authority to Bind Company................................................................................... 8
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3.4 Member Units................................................................................................... 8
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3.5 Issuance of Additional Units and Interests; Admission of New Members; Additional Capital Contributions......... 8
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3.6 Representations, Warranties and Agreements of the Members...................................................... 10
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3.7 Initial Capital Contributions.................................................................................. 11
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3.8 Defaulting Members............................................................................................. 11
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3.9 Outstanding Units.............................................................................................. 11
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ARTICLE IV
CAPITAL ACCOUNTS.................................................................................................... 12
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4.1 Establishment and Determination of Capital Accounts............................................................ 12
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4.2 Computation of Amounts......................................................................................... 12
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4.3 Interest; Withdrawal........................................................................................... 12
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ARTICLE V
DISTRIBUTIONS; ALLOCATIONS OF PROFITS AND LOSSES.................................................................... 13
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5.1 Generally...................................................................................................... 13
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5.2 Distributions................................................................................................. 13
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5.3................................................................................................................ 14
5.4 Initial Capital Contributions................................................................................. 15
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5.5 Tax Allocations; Code Section 704(c).......................................................................... 15
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ARTICLE VI
MANAGEMENT OF THE COMPANY.......................................................................................... 16
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6.1 Managing Member............................................................................................... 16
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6.2 Delegation by Managing Member................................................................................. 16
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6.3 Resignation; Vacancy; Removal................................................................................. 16
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6.4 Compensation.................................................................................................. 17
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6.5 Board Membership of Subsidiaries.............................................................................. 17
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ARTICLE VII
MEMBERS............................................................................................................ 18
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7.1 Membership Status; Resignation................................................................................ 18
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7.2 No Participation in Management................................................................................ 18
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7.3 Voting Rights Generally; Voting of Units...................................................................... 18
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7.4 Conflicts of Interest......................................................................................... 18
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7.5 Outside Activities............................................................................................ 18
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7.6 Confidentiality............................................................................................... 18
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ARTICLE VIII
EXCULPATION AND INDEMNIFICATION.................................................................................... 19
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8.1 Exculpation................................................................................................... 19
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8.2 Right to Indemnification...................................................................................... 19
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8.3 Advance Payment............................................................................................... 20
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8.4 Indemnification of Employees and Agents....................................................................... 20
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8.5 Appearance as a Witness....................................................................................... 20
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8.6 Nonexclusivity of Rights...................................................................................... 20
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8.7 Savings Clause................................................................................................ 20
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ARTICLE IX
TAXES.............................................................................................................. 21
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9.1 Tax Returns................................................................................................... 21
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9.2 Tax Matters Partner........................................................................................... 21
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ARTICLE X
BOOKS, REPORTS..................................................................................................... 21
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10.1 Maintenance of Books.......................................................................................... 21
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10.2 Member Tax Information........................................................................................ 21
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ARTICLE XI
TRANSFERS........................................................................................................... 21
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11.1 Assignment by Members......................................................................................... 21
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11.2 Void Transfers................................................................................................ 22
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11.3 Substituted Member............................................................................................ 22
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11.4 Effect of Assignment.......................................................................................... 22
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11.5 Permitted Transfers........................................................................................... 23
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11.6 Deliveries for Transfer....................................................................................... 23
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11.7 Prospective Transferees....................................................................................... 23
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11.8 Legend........................................................................................................ 24
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11.9 Effective Date................................................................................................ 24
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ARTICLE XII
DISSOLUTION, LIQUIDATION AND TERMINATION............................................................................ 24
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12.1 Dissolution................................................................................................... 24
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12.2 Liquidation and Termination................................................................................... 24
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12.3 Management Holder Give Back................................................................................... 25
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12.4 Cancellation of Certificate................................................................................... 26
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ARTICLE XIII
GENERAL PROVISIONS.................................................................................................. 26
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13.1 Notices....................................................................................................... 26
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13.2 Entire Agreement.............................................................................................. 26
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13.3 Effect of Waiver or Consent................................................................................... 26
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13.4 Amendment, Modification or Waiver............................................................................. 27
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13.5 Binding Effect................................................................................................ 27
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13.6 Governing Law; Severability................................................................................... 27
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13.7 Further Assurances............................................................................................ 27
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13.8 Waiver of Certain Rights...................................................................................... 27
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13.9 Indemnification and Reimbursement for Payments on Behalf of a Member.......................................... 27
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13.10 Notice to Members of Provisions............................................................................... 28
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13.11 Counterparts.................................................................................................. 28
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13.12 Consent to Jurisdiction....................................................................................... 28
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13.13 Headings...................................................................................................... 28
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13.14 Remedies...................................................................................................... 28
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13.15 Parties in Interest........................................................................................... 29
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<PAGE>
THIRD AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF U-C HOLDINGS, L.L.C.
A Delaware Limited Liability Company
THIS THIRD AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF
U-C HOLDINGS, L.L.C. (this "Agreement"), dated as of July 23, 1999, is adopted
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by, and executed and agreed to, for good and valuable consideration, by Willis
Stein & Partners, L.P., a Delaware limited partnership ("Willis Stein"), and the
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other Persons listed on Schedule A hereto and amends and restates in its
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entirety the Limited Liability Company Agreement, dated as of April 25, 1997,
and as amended and restated as of May 9, 1997, by and among Willis Stein and the
other parties signatory thereto as further amended and restated as of May 15,
1997, by and among Willis Stein and the other parties signatory thereto.
ARTICLE I
DEFINITIONS
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1.1 Certain Definitions. As used in this Agreement, the following
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terms have the following meanings:
"Act" means the Delaware Limited Liability Company Act, Title 6,
---
Sections 18-106 to 18-1107 and any successor statute, as amended from time to
time.
"Adjusted Capital Account Deficit" shall mean, with respect to any
--------------------------------
Member, the deficit balance, if any, in such Member's Capital Account as of the
end of the relevant Fiscal Year or other period, after giving effect to the
following adjustments:
(i) Crediting to such Capital Account any amounts which such Member
is obligated to restore to the Company pursuant to any provision of this
Agreement or is deemed to be obligated to restore pursuant to the penultimate
sentences of Treasury Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5); and
(ii) Debiting to such Capital Account the items described in Treasury
Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and
1.704-1(b)(2)(ii)(d)(6). This definition of Adjusted Capital Account Deficit is
intended to comply with the provisions of Treasury Regulations Section 1.704-
1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
"Affiliate" means, with respect to a Person, another Person that
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directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such Person, where "control"
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means the possession, directly or indirectly, of the power to direct the
management and policies of a Person whether through the ownership of voting
securities, contract or otherwise.
<PAGE>
"Applicable Class A Percentage" means, on any date of determination,
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the lesser of (i) 20% or (ii) 20% of the quotient obtained by dividing (A) the
number of outstanding Class A Management Units on such date by (B) 2,000.
"Applicable Class B Percentage" means, on any date of determination,
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the lesser of (i) 5% or (ii) 5% of the quotient obtained by dividing (A) the
number of outstanding Class B Management Units on such date by (B) 500.
"Book Value" means, with respect to any Company property, the
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Company's adjusted basis for federal income tax purposes, adjusted from time to
time to reflect the adjustments required or permitted by Treasury Regulation
Sections 1.704-l(b)(2)(iv)(d)-(g).
"Business Day" means any day other than a Saturday, a Sunday or a
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holiday on which national banking associations in the State of Illinois are
closed.
"Capital Contribution" means the aggregate contributions made by a
--------------------
Member to the capital of the Company. The aggregate Capital Contributions as of
the date hereof of each Member is shown opposite such Member's name on
Schedule A, as the same may be amended from time to time.
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"Cash Inflows" means, with respect to the Investors, all payments or
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distributions of cash received by such Investors directly from the Company with
respect to the Investor Units issued to the Investors pursuant to this
Agreement.
"Cash Outflows" means, with respect to the Investors, all Capital
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Contributions made by such Investors with respect to Investor Units issued to
the Investors pursuant to this Agreement.
"Class A Management Units" means (i) the Class A Management Units
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issued and outstanding as of the date hereof and held by Jason Elkin, Joseph D.
Gersh, George Giatzis, Peter Kauff and Martin Grant or allocated to the Pool
pursuant to this Agreement and designated as Class A Management Units on
Schedule A and (ii) any Class A Management Units issued with respect to such
- ----------
Class A Management Units by way of dividend or Unit split or in connection with
a combination of Units, recapitalization, merger or other reorganization. A
Class A Management Unit will continue to be a Class A Management Unit in the
hands of any Person to which such Unit is transferred.
"Class B Management Units" means (i) the Class B Management Units
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originally issued and outstanding pursuant to this Agreement to the applicable
persons listed on Schedule A or allocated to the Pool pursuant to this Agreement
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and designated as Class B Management Units on Schedule A and (ii) any Class B
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Management Units issued with respect to such Class B Management Units by way of
dividend or Unit split or in connection with a combination of Units,
recapitalization, merger or other reorganization. A Class B Management Unit will
continue to be a Class B Management Unit in the hands of any Person to which
such Unit is transferred.
"Class R Management Units" means (i) the Class R Management Units
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originally issued to Jason Elkin and Joseph D. Gersh and designated as Class R
Management Units on Schedule A, and (ii) any Class R Management Units issued
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with respect to such Class R Management Units by way of dividend or Unit split
or in connection with a combination of Units, recapitalization, merger or other
reorganization.
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A Class R Management Unit will continue to be a Class R Management Unit in the
hands of any person to which such Unit is transferred.
"Code" means the Internal Revenue Code of 1986, as amended, and any
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successor statute. Such term shall be deemed to include any future amendments to
the Code or any successor statute to the extent the Managing Member determines
that any such amendments do not adversely affect the relative economic interests
of the Members hereunder.
"Company" means U-C Holdings, L.L.C., a Delaware limited liability
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company.
"CTN" means College Television Network, Inc., a Delaware corporation.
---
"Entity" means any general partnership, limited partnership,
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corporation, association, cooperative, joint stock company, trust, limited
liability company, business trust, joint venture, unincorporated organization,
governmental entity (or any department, agency or political subdivision thereof)
or other entity.
"Equity Protection Agreements" means those certain Equity Protection
----------------------------
Agreements dated as of April 25, 1997 by and between the Company and CTN, as
amended and modified from time to time.
"Family Group" means a Unitholder's spouse and descendants (whether
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natural or adopted) and any trust solely for the benefit of such Unitholder
and/or such Unitholder's spouse and/or descendants.
"Fiscal Year" of the Company means the Company's annual accounting
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period ending on December 31.
"Investor" means any holder of Investor Units.
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"Investor Preferred Yield" means at any time an amount calculated on a
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daily basis (without daily compounding) at the rate of 12.5% per annum,
compounded annually, on the Unreturned Preferred Capital and the Unpaid
Preferred Yield.
"Investor Units" means (i) any Investor Units originally issued to the
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Investors pursuant to this Agreement and designated as Investor Units on
Schedule A, (ii) any Investor Units otherwise acquired by a Person holding
- ----------
Investor Units and (iii) any Investor Units issued with respect to the Investor
Units referred to in clauses (i) or (ii) by way of dividend or Unit split or in
connection with a combination of Units, recapitalization, merger or other
reorganization. An Investor Unit will continue to be an Investor Unit in the
hands of any Person to which such Unit is transferred.
"IRR" means the annual interest rate (compounded annually) which, when
---
used to calculate the net present value of (i) all Cash Inflows received by the
Investors and (ii) all Cash Outflows made by the Investors through the date of
determination, causes such net present value to equal zero. The IRR calculation
required pursuant to this Agreement shall be determined by the Company's regular
outside accounting firm. For purposes of any such net present value calculation,
each Cash Inflow and each Cash Outflow specified above shall be deemed to have
been received or made on the first day of the month nearest to the actual date
of such payment.
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"IRR Target" means that the Investors have achieved an IRR equal to
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30%.
"Losses" for any period means all items of Company loss, deduction and
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expense for such period determined in accordance with Section 4.2.
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"Management Holder" means any holder of Management Units.
-----------------
"Management Units" means, collectively, the Class A Management Units,
----------------
the Class B Management Units and the Class R Management Units.
"Member" means any Person executing this Agreement as of the date of
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this Agreement as a Member or hereafter admitted to the Company as a Member in
accordance with this Agreement and the Act, but does not include any Person who
has ceased to be a member of the Company or no longer owns Units. The Members
shall constitute the "members" (as that term is defined in the Act) of the
Company.
"Person" means any individual or Entity, and the heirs, executors,
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administrators, legal representatives, successors and assigns of such Person
where the context so permits.
"Permitted Transferee" means (i) with respect to any Unitholder who is
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a natural person, a member of such Unitholder's Family Group and any Transferee
pursuant to applicable laws of descent and distribution and (ii) with respect to
any Unitholder which is an Entity, any of such Unitholder's Affiliates.
"Pool" means, collectively, (i) any Class B Management Units that have
----
not been allocated to any Member or have become unallocated due to repurchase by
the Company and (ii) those certain Class A Management Units listed as of the
date hereof on Schedule A across from the caption "Unallocated Pool".
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"Preferred Units" means (i) any Preferred Units originally issued to
---------------
Willis Stein pursuant to this Agreement and designated as Preferred Units on
Schedule A, and (ii) any Preferred Units issued with respect to the Preferred
- ----------
Units referred to in clause (i) by way of dividend or Unit split or in
connection with a combination of Units, recapitalization, merger or other
reorganization. A Preferred Unit will continue to be a Preferred Unit in the
hands of any Person to which such Unit is transferred.
"Profits" for any period means all items of Company income and gain
-------
for such period determined in accordance with Section 4.2.
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"Required Interests" means each of (i) the Members holding at least a
------------------
majority of the Investor Units and (ii) the Members holding at least a majority
of the Management Units.
"Restricted Securities" means (i) the securities issued hereunder, and
---------------------
(ii) any securities issued with respect to the securities referred to in clause
(i) above in connection with a conversion, combination of shares,
recapitalization, merger, consolidation or other reorganization.
"Securities Act" means the U.S. Securities Act of 1933, as amended.
--------------
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<PAGE>
"Subsidiary" shall mean, with respect to any Person, (a) any
----------
corporation of which an aggregate of more than 50% of the outstanding Stock
having ordinary voting power to elect a majority of the board of directors of
such corporation (irrespective of whether, at the time, Stock of any other class
or classes of such corporation shall have or might have voting power by reason
of the happening of any contingency) is at the time, directly or indirectly,
owned legally or beneficially by such Person and/or one or more Subsidiaries of
such Person, and (b) any partnership, limited liability company or other entity
in which such Person and/or one or more Subsidiaries of such Person shall have
an interest (whether in the form of voting or participation in profits or
capital contribution) of more than 50%.
"Taxable Year" means the Company's taxable year ending December 31 (or
------------
part thereof, in the case of the Company's last taxable year), or such other
year as is (i) required by Section 706 of the Code or (ii) determined by the
Managing Manager.
"Transfer" means any sale, transfer, assignment, pledge, mortgage,
--------
exchange, hypothecation, grant of a security interest or other direct or
indirect disposition or encumbrance of an interest (including, without
limitation, by operation of law) or the acts thereof. The terms "Transferee,"
----------
"Transferred," and other forms of the word "Transfer" shall have correlative
-----------
meanings.
"Treasury Regulations" means the income tax regulations promulgated
--------------------
under the Code and effective as of the date hereof. Such term shall be deemed to
include any future amendments to such regulations and any corresponding
provisions of succeeding regulations to the extent the Managing Member
determines that any such amendments and succeeding regulations do not adversely
affect the relative economic interests of the Members hereunder.
"Unitholder" means any holder of a Unit.
----------
"Unpaid Preferred Yield" means at any time an amount equal to the
----------------------
excess, if any, of (a) the aggregate Investor Preferred Yield accrued through
such date, over (b) all prior distributions made by the Company to the holders
of Investor Units pursuant to Section 5.2(a).
--------------
"Unreturned Preferred Capital" means at any time the aggregate Capital
----------------------------
Contributions with respect to the Investor Units reduced by all prior
distributions made to the holders of Investor Units by the Company pursuant to
Section 5.2(b).
- --------------
"Warrants" means those certain Class C Warrants to purchase common
--------
stock of CTN issued to the Company by CTN on April 25, 1997 and those certain
Class D Warrants to purchase common stock of CTN issued to the Company by CTN
pursuant to the Purchase Agreement as of July 23, 1999, all as amended and
modified from time to time.
1.2 Other Definitions. Each of the following defined terms has the
-----------------
meaning given such term in the Section set forth opposite such defined term:
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<PAGE>
Defined Term Section
------------ -------
"Agreement" Preamble
---------
"Capital Account" 4.1
---------------
"Certificate" 2.1
-----------
"Certificated Units" 11.8
------------------
"Indemnifying Member" 13.11
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"Initial Capital Account" 3.1
-----------------------
"Management Notes" 5.6
----------------
"Managing Member" 6.1
---------------
"Proceeding" 8.2
----------
"Remaining Assets" 12.2(d)
----------------
"Tax Matters Member" 9.2
------------------
"Unit" 3.4
----
1.3 Construction. Whenever the context requires, the gender of all
------------
words used in this Agreement includes the masculine, feminine and neuter. All
references to Articles and Sections refer to articles and sections of this
Agreement, and all references to Schedules are to schedules attached hereto,
each of which is made a part hereof for all purposes.
ARTICLE II
ORGANIZATION
------------
2.1 Formation. The Company has been organized as a Delaware limited
---------
liability company by the filing of a Certificate of Formation (the
"Certificate") under and pursuant to the Act. The rights and liabilities of the
-----------
Members shall be determined pursuant to the Act and this Agreement. To the
extent that the rights or obligations of any Member are different by reason of
any provision of this Agreement than they would be in the absence of such
provision, this Agreement, to the extent permitted by the Act, shall control.
2.2 Name. The name of the Company is "U-C Holdings, L.L.C." and all
----
Company business shall be conducted in that name or such other names that comply
with applicable law as the Managing Member may select from time to time.
2.3 Registered Office: Registered Agent: Principal Office: Other
------------------------------------------------------------
Offices. The registered office of the Company required by the Act to be
- -------
maintained in the State of Delaware shall be the office of the initial
registered agent named in the Certificate or such other office (which need not
be a place of business of the Company) as the Managing Member may designate from
time to time in the manner provided by law. The principal office of the Company
shall be at such place as the Managing Member may designate, from time to time,
which need not be in the State of Delaware, and the Company shall maintain
records there.
2.4 Purposes. The nature of the business or purposes to be conducted
--------
or promoted by the Company is to engage in any lawful act or activity for which
limited liability companies may be organized under the Act. The Company may
engage in any and all activities necessary, desirable or
-6-
<PAGE>
incidental to the accomplishment of the foregoing. Notwithstanding anything
herein to the contrary, nothing set forth herein shall be construed as
authorizing the Company to possess any purpose or power, or to do any act or
thing, forbidden by law to a limited liability company organized under the laws
of the State of Delaware. The Company shall not (i) create, incur, assume or
suffer to exist any indebtedness for borrowed money or issue evidences of
indebtedness or guaranty indebtedness or secure the same by a mortgage, pledge
or other lien on the assets of the Company, or (ii) enter into or engage in any
transaction which is reasonably likely to cause Willis Stein or any of its
limited partners which are exempt from income taxation under Code (S) 501(a)
and, if applicable, any pension plan that any such trust may be a part of, to
recognize unrelated business taxable income as defined in Code (S)(S) 512 and
514. Without limiting the generality of the preceding sentence, the Company
shall not: (i) engage in any trade or business other than the passive investment
in securities of a corporation (a "Passive Investment") or (ii) create, incur,
------------------
assume or suffer to exist any indebtedness for borrowed money or issue evidences
of indebtedness or guarantee indebtedness in connection with a Passive
Investment, or secure the Passive Investment by a mortgage, pledge or other lien
on the assets of the Company, for any length of time. It is understood and
agreed to by the Members and the Company that the Negative Pledge Agreement by
and between the Company and LaSalle Bank National Association is hereby approved
by the Members and that such Negative Pledge Agreement shall in no way be deemed
to be a violation of subclause (i) of this Section 2.4.
------- ---
2.5 Term. The term of the Company commenced on the date the
----
Certificate was filed with the office of the Secretary of State of Delaware and
shall continue in existence until December 31, 2007 or termination and
dissolution of the Company as determined under Section 12.1 of this Agreement.
------- ----
2.6 No State-Law Partnership. The Members intend that the Company
------------------------
shall not be a partnership (including, without limitation, a limited
partnership) or joint venture, and that no Member or the Company shall be a
partner or joint venturer of any other Member or the Company, for any purposes
other than federal and, if applicable, state tax purposes, and this Agreement
shall not be construed to the contrary. The Members intend that the Company
shall be treated as a partnership for federal and, if applicable, state income
tax purposes, and each Member and the Company shall file all tax returns and
shall otherwise take all tax and financial reporting positions in a manner
consistent with such treatment.
ARTICLE III
MEMBERSHIP; MEMBER UNITS
------------------------
3.1 Members. The name and address of each Member, the number of Units
-------
of each class owned by such Member at any time, the percentage of each class of
Units owned by such Member, and the initial Capital Contribution and initial
Capital Account (the "Initial Capital Account") of such Member with respect to
-----------------------
such Units (as determined in accordance with Section 4.1) shall be set forth
-----------
next to each Member's name on Schedule A hereto, as amended from time to time in
----------
accordance with this Agreement. Each Person listed on Schedule A, upon (i) his
----------
or its execution of this Agreement or counterpart thereof and (ii) receipt (or
deemed receipt) of such Person's initial Capital Contribution as set forth on
Schedule A, is hereby admitted to the Company as a Member of the Company. No
- ----------
Member shall be required to make any additional Capital Contribution except as
required by applicable law or by Section 3.5.
-----------
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<PAGE>
3.2 Liability of Members. Except as otherwise required by applicable
--------------------
law and as expressly set forth in this Agreement, no Member shall have any
personal liability whatsoever in his capacity as a Member, whether to the
Company, to any of the other Members, to the creditors of the Company or to any
other third party, for the debts, liabilities, commitments or any other
obligations of the Company or for any losses of the Company, and therefore, a
Member shall be liable only to make the payments provided herein. In accordance
with the Act and the laws of the State of Delaware, a member of a limited
liability company may, under certain circumstances, be required to return
amounts previously distributed to such member. It is the intent of the Members
that no distribution to any Member pursuant to Article V hereof shall be deemed
---------
a return of money or other property paid or distributed in violation of the Act.
3.3 No Authority to Bind Company. No Member (in such Member's
----------------------------
capacity as a Member) shall have the authority or power to represent or act for
or on behalf of the Company, to do any act that would be binding on the Company
or to make any expenditures or incur any obligations on behalf of the Company
other than the Managing Member. Each Member hereby consents to the exercise by
the Managing Member of the powers conferred on such Managing Member by law and
this Agreement.
3.4 Member Units. Each Member's interest in the Company, including
------------
such Member's interest, if any, in the capital, income, gains, losses,
deductions and expenses of the Company and the right to vote, if any, on certain
Company matters as provided in this Agreement, shall be represented by "Units"
-----
(each, individually, a "Unit," and any number of Units, including fractions
----
thereof, "Units"). Initially, the Units shall be comprised of "Investor Units,"
----- --------------
"Preferred Units," "Class A Management Units," "Class R Management Units" and
--------------- ------------------------ ------------------------
"Class B Management Units." The ownership by a Member of "Investor Units,"
------------------------ --------------
"Preferred Units," "Class A Management Units," "Class R Management Units" and
--------------- ------------------------ ------------------------ ---
"Class B Management Units" shall entitle such Member to allocations of Profits
------------------------
and Losses and other items and distributions of cash and other property with
respect to such Units as set forth in Article V hereof. Ownership of a Unit by a
---------
Member shall entitle such Member to one (1) vote on any matter voted on by all
Members as provided in this Agreement and/or as required by applicable law. The
Managing Member may cause the Company to issue to a Member certificates
representing the Units held by such Member.
3.5 Issuance Of Additional Units and Interests; Admission of New
------------------------------------------------------------
Members; Additional Capital Contributions.
- -----------------------------------------
(a) Subject to obtaining the consent of the Required Interests and as
otherwise provided in this Agreement, the Managing Member shall have the right
to cause the Company to issue (i) additional Units or other interests in the
Company (including other classes or series thereof having different rights),
(ii) obligations, evidences of indebtedness or other securities or interests
convertible or exchangeable into Units or other interests in the Company and
(iii) warrants, options or other rights to purchase or otherwise acquire Units
or other interests in the Company; provided, however, that at any time following
-------- -------
the date hereof, the Company shall not issue Units to any Person unless such
Person shall have executed a joinder agreement in form satisfactory to the
Managing Member pursuant to which such Person agrees to be bound by the
provisions of this Agreement; and provided further that no consent of the
-------- -------
Required Interests shall be required in connection with the issuance of the
Management Notes or the issuance of the additional Units as of the date of the
third amendment and restatement of this Agreement. The Managing Member shall
determine the terms and conditions governing the issuance of such additional
interests, including the number and designation of such additional interests,
the preference (with respect to distributions, in
-8-
<PAGE>
liquidation or otherwise) over any other Units and any required contributions in
connection therewith. Subject to Section 3.5(b) below, a Person to which the
--------------
Company issues Units or other interests in the Company shall be admitted as a
Member of the Company only with the prior written consent of the Managing Member
and if such Person has executed and delivered a counterpart of this Agreement.
Notwithstanding the foregoing, the Managing Member shall have the right, without
obtaining the consent of the Required Interests or any Member, to cause the
Company to issue additional Investor Units, on the same terms as the repurchased
units, in connection with the repurchase by the Company of any Units held by any
Member pursuant to an agreement with such Member. At least 10 days prior to the
issuance and sale of any additional Investor Units in connection with any such
repurchase, the Company shall give written notice of such issuance to the
Investors (other than any Investor whose Units are being repurchased) and, to
the extent permitted under applicable securities laws without material
expenditure by the Company, each such Investor shall be entitled to purchase in
connection with such issuance a number of additional Investor Units equal to
such Investor's pro rata share (based upon the number of Investor Units held by
such Investor and the number of Investor Units held by all Investors other than
any Investor whose Units are being repurchased) of such additional Investor
Units. Any Investor Units which remain unpurchased after such offer to such
Investors, shall be reoffered to such Investors on a pro rata basis until all of
such Investor Units shall have been purchased. Each such Investor may elect to
purchase additional Investor Units by delivering written notice of such election
to the Company together with the purchase price therefor (in the form specified
in the Company's notice) within 10 days after receipt of the Company notice.
Each purchasing Investor shall be entitled to purchase such additional Investor
Units at the same price and on the same terms as such Investor Units are offered
by the Company to the other Investors.
(b) Notwithstanding anything herein to the contrary, Jason Elkin
shall have the right in his sole discretion, without obtaining the consent of
the Required Interests or any Member, to (i) cause the Company to issue those
certain Class A Management Units contained in the Pool as of the date hereof, or
(ii) cause the Company to issue any Class B Management Units, or allocate any
unallocated Class B Management Units from the Pool, in an amount not to exceed
an aggregate issued and outstanding number equal to 500 Class B Management
Units, in each case to employees of any Subsidiary of the Company (including,
without limitation, employees of CTN); provided, however, that prior to any such
issuance, Jason Elkin shall require such employees to enter into agreements
providing for the repurchase of such Management Units upon termination of
employment and shall obtain the consent of the Managing Member solely with
respect to adequacy of any repurchase rights in favor of the Company regarding
such Class A Management Units or Class B Management Units; and provided further
that the Company shall not issue Class A Management Units or Class B Management
Units, or allocate any unallocated Class A Management Units or Class B
Management Units from the Pool, to any Person unless such Person shall have
executed a joinder agreement in form satisfactory to the Managing Member
pursuant to which such Person agrees to be bound by the provisions of this
Agreement, which such form has already been approved by the Managing Member. In
the event Jason Elkin ceases to be an employee of any Subsidiary of the Company
(including, without limitation, CTN) or ceases to be a Member, the Managing
Member shall have the right to issue any additional Class A Management Units or
Class B Management Units, or allocate any unallocated Class A Management Units
or Class B Management Units from the Pool.
(c) Notwithstanding anything to the contrary in Section 3.5(a) above,
--------------
each Investor shall be required to make additional Capital Contributions to the
Company from time to time with respect to the Investor Units held by such
Investor when and as called by the Managing Member upon ten days prior
-9-
<PAGE>
written notice solely to fund the exercise by the Company of the Warrants or the
exercise by the Company of the purchase rights granted pursuant to the Equity
Protection Agreements. The amount of any such additional Capital Contribution by
such Investor shall be limited to such Investor's pro rata share (based upon the
number of outstanding Investor Units held by such Investor and the number of
outstanding Investor Units held by all Investors) of the aggregate Capital
Contribution being made by all Investors pursuant to such capital call by the
Managing Member. No additional Investor Units will be issued in connection with
any such additional Capital Contribution.
3.6 Representation, Warranties and Agreements of the Members. Each
--------------------------------------------------------
Member hereby represents and warrants (severally as to itself only) that:
(a) The Units have been purchased by such Member and not by any other
Person, with the Member's own funds and not with the funds of any other Person,
and for the account of such Member, not as a nominee or agent and not for the
account of any other Person. Such Member has purchased the Units for investment
for an indefinite period, not with a view to the sale or distribution of any
part of all thereof by public or private sale or other disposition.
(b) Such Member has been advised that the Units have not been
registered under the Securities Act or registered or qualified under any other
securities law, on the ground, among others, that no distribution or public
offering of the Units is to be effected and the Units will be issued by the
Company in connection with a transaction that does not involve any public
offering within the meaning of Section 4(2) of the Securities Act, or the rules
and regulations of the Securities and Exchange Commission and under comparable
exemptive provisions of the securities laws, rules and regulations of other
jurisdictions. Such Member understands that the Company is relying in part on
the Member's representations as set forth herein for purposes of claiming such
exemptions and that the basis for such exemptions may not be present if,
notwithstanding such Member's representations, such Member has in mind merely
acquiring Units for resale on the occurrence or non-occurrence of some
predetermined event. Such Member has no such intention.
(c) Such Member has such knowledge and experience in financial and
business matters that such Member is capable of evaluating the merits and risks
of an investment in Units and has the capacity to protect such Member's own
interests in connection with such Member's proposed investment in Units.
(d) Such Member acknowledges that such Member has been furnished with
such financial and other information concerning the Company as such Member
considers necessary in connection with such Member's investment in Units. Such
Member has carefully reviewed such information and is thoroughly familiar with
the proposed business, operations, properties and financial condition of the
Company and has discussed with representatives of the Company any questions the
Purchase may have had with respect thereto. Such Member understands: (i) the
risks involved in this offering, including the speculative nature of the
investment; (ii) the financial hazards involved in this offering, including the
risk of losing such Member's entire investment; (iii) the lack of liquidity and
restrictions on transfers of Units; and (iv) the tax consequences of this
investment. Such Member has consulted with such Member's own legal, accounting,
tax, investment and other advisers with respect to the tax treatment of an
investment by such Member in Units and the merits and risks of an investment in
Units. Such Member is an "accredited investor" as defined under the Securities
Act or has provided
-10-
<PAGE>
written notice to the Company that such Member is not an "accredited investor"
prior to purchasing any Units or other interest in the Company.
(e) The execution, delivery and performance by such Member of this
Agreement have been duly authorized by such Member. This Agreement constitutes a
valid and binding obligation of such Member, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights and subject, as to enforceability, to general principles of
equity (regardless of whether enforcement is sought in a proceeding in equity or
at law).
(f) Such Member understands that the Units will be "restricted
securities" as that term is defined in Rule 144 under the Securities Act and,
accordingly, that the Units must be held indefinitely unless they are
subsequently registered under the Securities Act and qualified under any other
applicable securities law or exemptions from such registration and qualification
are available. Such Member understands that the Company is under no obligation
to register or qualify Units under the Securities Act, or any other securities
law.
(g) Such Member is a resident of the jurisdiction set forth in such
Member's address on Schedule A.
----------
3.7 Initial Capital Contributions. Each Member shall make an initial
-----------------------------
Capital Contribution to the Company in cash or assets in the amount set forth
opposite such Member's name on Schedule A hereto. Upon receipt of the initial
----------
Capital Contribution set forth opposite such Member's name on Schedule A, each
----------
Member shall be deemed to own the number of Investor Units and Management Units
set forth opposite such Member's name on Schedule A.
----------
3.8 Defaulting Members. If any Member (a "Defaulting Member")
------------------ -----------------
fails to make full payment of any portion of any additional Capital Contribution
called by the Managing Member pursuant to Section 3.5(c), the Managing Member
--------------
may undertake any one or more of the following steps:
(a) The Managing Member may pursue and enforce all rights and
remedies the Company may have against such Defaulting Member, including a
lawsuit to collect the overdue amount, with interest calculated thereon at
a rate equal to 12%.
(b) Notwithstanding anything herein to the contrary, from and after
any date on which a Defaulting Member's fails to make any additional
Capital Contribution pursuant to Section 3.5(c), if such Defaulting Member
--------------
continues to hold Units, such Defaulting Member shall have no right to
receive any distributions from the Company until such time as the amount of
distributions that would have been made to the Defaulting Member shall have
been reduced by an amount equal to the sum of (A) an amount equal to 18%
per annum, compounded annually, of the unpaid additional Capital
Contribution and (B) an amount equal to the unpaid Capital Contribution,
and such reduced amount shall have been distributed to the Investors other
than the Defaulting Member pursuant to Section 5.2(b).
--------------
3.9 Outstanding Units. Any Units issued pursuant to this Agreement
-----------------
which are subsequently held by the Company as a result of any repurchase of such
Units by the Company or
-11-
<PAGE>
otherwise, shall not be considered outstanding Units for any purpose hereunder,
including Class A Management Units and Class B Management Units allocated from
the Pool.
ARTICLE IV
CAPITAL ACCOUNTS
----------------
4.1 Establishment and Determination of Capital Accounts. A capital
---------------------------------------------------
account ("Capital Account") shall be established for each Member in accordance
---------------
with the Treasury Regulations under Section 704(b) of the Code. In accordance
with such Treasury Regulations, the Capital Account of each Member shall consist
of such Member's initial Capital Contribution and shall be (i) increased by any
additional Capital Contributions made by such Member pursuant to the terms of
this Agreement and such Member's share of items of income and gain allocated to
such Member pursuant to Article V and (ii) decreased by such Member's share of
---------
items of loss, deduction and expense allocated to such Member pursuant to
Article V and any distributions to such Member of cash or the fair market value
- ---------
of any other property (net of liabilities assumed by such Member and liabilities
to which such property is subject) distributed to such Member. Any references
in this Agreement to the Capital Account of a Member shall be deemed to refer to
such Capital Account as the same may be increased or decreased from time to time
as set forth above. The Capital Account maintenance rules set forth in this
Section 4.1 are intended to be consistent with the capital account maintenance
- -----------
rules of Treasury Regulation Section 1.704-1(b)(2)(iv).
4.2 Computation of Amounts. For purposes of computing the amount of
----------------------
any item of income, gain, loss, deduction or expense to be reflected in Capital
Accounts, the determination, recognition and classification of each such item
shall be the same as its determination, recognition and classification for
federal income tax purposes; provided that (a) any income that is exempt from
-------------
federal income tax shall be added to such taxable income or losses; (b) any
expenditures of the Company described in Section 705(a)(2)(B) of the Code or
treated as Code Section 705(a)(2)(B) expenditures pursuant to Treasury
Regulation Section 1.704-1(b)(2)(iv)(i), shall be subtracted from such taxable
income or losses; (c) if the Book Value of any Company property is adjusted
pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(e) (in connection with
a distribution of such property) or (f) (in connection with a revaluation of
Capital Accounts), the amount of such adjustment shall be taken into account as
gain or loss from the disposition of such property; (d) if property that is
reflected on the books of the Company has a Book Value that differs from the
adjusted tax basis of such property, depreciation, amortization and gain or loss
with respect to such property shall be determined by reference to such Book
Value; and (e) the computation of all items of income, gain, loss, deduction and
expense shall be made without regard to any election pursuant to Section 754 of
the Code that may be made by the Company, unless the adjustment to basis of
Company property pursuant to such election is reflected in Capital Accounts
pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m).
4.3 Interest; Withdrawal. No Member shall be paid interest on any
--------------------
Capital Contributions to the Company or on the balance of such Member's Capital
Account. No Member shall have any right (a) to demand the return of such
Member's Capital Contributions or any other distribution from the Company
(whether upon resignation, withdrawal or otherwise), except upon dissolution of
the Company pursuant to Article XII hereof, or (b) to cause a partition of the
-----------
Company's assets.
-12-
<PAGE>
ARTICLE V
DISTRIBUTIONS; ALLOCATIONS OF PROFITS AND LOSSES
-------------------------------------------------
5.1 Generally. Subject to the provisions of Section 18-607 of the
---------
Act, the Managing Member shall have sole discretion regarding the amounts and
timing of distributions to Members, in each case subject to the retention and
establishment of reasonable reserves of, or payment to third parties of, such
funds as the Managing Member deems necessary with respect to the reasonable
business needs of the Company which shall include the payment or the making of
provision for the payment when due of the Company's obligations, including the
payment of any management or administrative fees and expenses or any other
obligations.
5.2 Distributions. Except as provided in Section 5.4, distributions
------------- -----------
to be made at any time shall be made in the following order and priority:
(a) First, to the holders of Investor Units pro rata according to
-----
their Unpaid Preferred Yield until the aggregate distributions with respect to
the Investor Units made pursuant to this Section 5.2(a) reduces the aggregate
--------------
Unpaid Preferred Yield to zero; and
(b) Second, to the holders of Investor Units pro rata according to
------
their ownership of outstanding Investor Units until the aggregate distributions
with respect to the Investor Units made pursuant to this Section 5.2(b)
--------------
reduces the aggregate Unreturned Preferred Capital to zero; and
(c) Third, to the holders of the Class R Management Units pro rata
-----
according to their ownership of the outstanding Class R Management Units until
the aggregate distributions with respect to the Class R Management Units made
pursuant to this Section 5.2(c) equals $750,000; and
--------------
(d) Fourth, to the holders of the Class A Management Units pro rata
------
according to their ownership of the outstanding Class A Management Units until
the aggregate distributions with respect to the Class A Management Units made
pursuant to this Section 5.2(d) equals the Applicable Class A Percentage of
--------------
all distributions made pursuant to Section 5.2(a) and this Section 5.2(d); and
-------------- --------------
(e) Fifth, until such time as the IRR Target has been achieved, the
-----
Applicable Class A Percentage to the holders of Class A Management Units pro
rata according to their ownership of outstanding Class A Management Units and
the remainder to the holders of Investor Units pro rata according to their
ownership of outstanding Investor Units; and
(f) Sixth, after such time as the IRR Target has been achieved (i)
-----
the Applicable Class A Percentage to the holders of Class A Management Units pro
rata according to their ownership of outstanding Class A Management Units and
(ii) the remainder to the holders of Class B Management Units, pro rata
according to their ownership of outstanding Class B Management Units, until the
aggregate distributions with respect to the Class B Management Units made
pursuant to this Section 5.2(f) is equal to the Applicable Class B Percentage of
--------------
the aggregate distributions made pursuant to Section 5.2(a), (d), (e) and this
------------------------
Section 5.2(f) with respect to the Investor Units and Management Units;
- --------------
-13-
<PAGE>
(g) Seventh, the Applicable Class A Percentage to the holders of
-------
Class A Management Units pro rata according to their ownership of outstanding
Class A Management Units, the Applicable Class B Percentage to the holders of
the Class B Management Units pro rata according to their ownership of
outstanding Class B Management Units and the remainder to the holders of
Investor Units pro rata according to their ownership of outstanding Investor
Units.
(h) Notwithstanding Sections 5.2(c) through (g), if subsequent to the
--------------- ---
making of any distribution pursuant to Sections 5.2(c) through (g), a Capital
--------------- ---
Contribution with respect to any Investor Units occurs (a "Post-Distribution
---- ------------
Capital Contributions"), then in such case (i) the amount that would otherwise
- ---------------------
be distributed to holders of Class B Management Units pursuant to Sections
--------
5.2(f) and (g) shall be reduced (and such amount shall be distributed in
- ------
accordance with Sections 5.2(a) through (e) hereof) by an amount equal to the
--------------- ---
excess, if any, of (x) the aggregate amount of all distributions previously made
to the holders of Class B Management Units pursuant to Sections 5.2(f) and (g)
--------------- ---
over (y) the aggregate amount of the distributions that would have been made to
the holders of Class B Management Units pursuant to Sections 5.2(f) and (g) if
--------------- ---
all Post-Distribution Capital Contributions had been taken into account for
purposes of determining whether the IRR Target was met on the date of such
distributions, and (ii) the amount that would otherwise be distributed to
holders of Class A Management Units pursuant to Sections 5.2(c) through (g) and
--------------- ---
and clause (i) of this Section 5.2(h) shall be reduced (and such amount shall
--------------
be distributed in accordance with Sections 5.2(a) and (b) hereof) by an amount
--------------- ---
equal to the excess of (x) the aggregate amount of all distributions previously
made to the holders of Class A Management Units pursuant to Sections 5.2(c)
---------------
through (g) over (y) the aggregate amount of the distributions that would have
---
been made to the holders of Class A Management Units pursuant to Sections 5.2(c)
---------------
through (g) if all Post-Distribution Capital Contributions had been taken into
---
account for purposes of determining whether the Unpaid Yield and the Unreturned
Capital had been reduced to zero on the date of such distributions;
(g) Attached hereto as Schedule B is an illustrative example of the
----------
operation of this Section 5.2.
-----------
5.3 Allocation of Profits and Losses.
--------------------------------
(a) Except as set forth in Section 5.3(b) hereof, for each Fiscal
Year of the Company, all Profits and Losses shall be allocated to the Members'
Capital Accounts in a manner such that, as of the end of such Fiscal Year, the
Capital Account of each Member (which may be either a positive or negative
balance) shall be equal to (a) the amount which would be distributed to such
Member, determined as if the Company were to liquidate all of its assets for the
Book Value thereof and distribute the proceeds thereof pursuant to Section 12.2
------------
hereof, minus (b) the sum of (i) such Member's share of partnership minimum gain
-----
(as determined according to Treasury Regulation Sections 1.704-2(d) and (g)(3))
and partner minimum gain (as determined according to Treasury Regulation Section
1.704-2(i)) and (ii) the amount, if any, which such Member is obligated to
contribute to the capital of the Company as of the last day of such Fiscal Year.
(b) If any Unitholder that unexpectedly receives an adjustment,
allocation or distribution described in Treasury Regulation Section 1.704-
1(b)(2)(ii)(d)(4), (5) and (6) has an Adjusted Capital Account Deficit as of the
end of any Taxable Year, then Profits for such Taxable Year shall be allocated
to such Unitholder in proportion to, and to the extent of, such Adjusted Capital
Account Deficit. This
-14-
<PAGE>
Section 5.3(b) is intended to be a qualified income offset provision as
- --------------
described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and shall be
interpreted in a manner consistent therewith.
5.4 Initial Capital Contributions. Notwithstanding anything to the
-----------------------------
contrary contained in Section 5.2, the Members acknowledge that the Management
-----------
Holders paid a portion of their initial Capital Contributions by the delivery of
promissory notes to the Company, which notes outstanding as of the date hereof
are listed on Schedule A (as amended and restated from time to time, the
"Management Notes") and that all principal and accrued interest with respect to
----------------
the Management Notes which is paid to the Company by such Management Holders
shall be distributed solely to the holders of the Preferred Units. Each of the
Management Holders acknowledges and agrees that until such time as all principal
and accrued interest with respect to the Management Note of such Management
Holder is paid in full, such Management Holder shall have no right to receive
any distributions from the Company and all distributions which would have been
paid by the Company to such Management Holder shall be retained by the Company
as payment with respect to the Management Note of such Management Holder and
distributed in accordance with the immediately preceding sentence until such
Management Notes and all accrued and unpaid interest thereon is paid in full.
Any distributions to the holders of Preferred Units upon any payment with
respect to a Management Note shall be deemed a return of capital to the holders
of Preferred Units. Of the aggregate Capital Contributions made by Willis Stein,
an amount equal to the aggregate principal amount of all Management Notes shall
be treated as contributed with respect to Preferred Units, and the remainder
shall be treated as contributed with respect to Investor Units. The Company and
the Members acknowledge and agree that the principle amount of any Management
Note shall be treated as a Capital Contribution and included in the Capital
Account of the Member issuing such Management Note as of the original date of
issuance of such Management Note, or as of the date of assumption of such
Management Note, and that any assumption of the obligation to repay any such
Management Note shall be treated as an assumption of the rights and obligations
associated with such related Capital Contribution.
5.5 Tax Allocations; Code Section 704(c).
------------------------------------
(a) The income, gains, losses, deductions and expenses of the Company
shall be allocated, for federal, state and local income tax purposes, among the
Members in accordance with the allocation of such income, gains, losses,
deductions and expenses among the Members for computing their Capital Accounts,
except that if any such allocation is not permitted by the Code or other
- -----------
applicable law, the Company's subsequent income, gains, losses, deductions and
expenses shall be allocated among the Members so as to reflect as nearly as
possible the allocation set forth herein in computing their Capital Accounts.
(b) In accordance with Code Section 704(c) and the Treasury
Regulations thereunder, income, gain, loss, deduction and expense with respect
to any property contributed to the capital of the Company shall, solely for tax
purposes, be allocated among the Members so as to take account of any variation
between the adjusted basis of such property to the Company for federal income
tax purposes and its fair market value at the time of contribution.
(c) If the Book Value of any Company asset is adjusted pursuant to
Section 4.2, subsequent allocations of items of taxable income, gain, loss,
- -----------
deduction and expense with respect to such
-15-
<PAGE>
asset shall take account of any variation between the adjusted basis of such
asset for federal income tax purposes and its Book Value in the same manner as
under Code Section 704(c).
(d) Any elections or other decisions relating to such allocations
shall be made by the Members in any manner that reasonably reflects the purpose
and intent of this Agreement. Allocations pursuant to this Section 5.5 are
-----------
solely for purposes of federal, state and local taxes and shall not affect, or
in any way be taken into account in computing, any Member's Capital Account or
share of profits, losses, other items or distributions pursuant to any
provisions of this Agreement.
(e) The Company and the Members agree to use the "traditional method"
with respect to Section 704(c) of the Code.
ARTICLE VI
MANAGEMENT OF THE COMPANY
-------------------------
6.1 Managing Member. Except as otherwise required by the Act, the
---------------
business and affairs of the Company shall be managed by or under the direction
of a "manager"(as that term is defined in the Act) who shall be a Member (the
"Managing Member"). The initial Managing Member shall be Willis Stein. Except
----------------
as otherwise expressly provided for in this Agreement, the Members hereby
consent to the exercise by the Managing Member of all such powers and rights
conferred on it by the Act with respect to the management and control of the
Company. The Managing Member shall have the power on behalf and in the name of
the Company to carry out any and all of the objectives and purposes of the
Company and to perform all acts and enter into and perform all contracts and
other undertakings which the Managing Member, in its sole discretion, deems
necessary or advisable or incidental thereto, including the power to dispose of
or vote any security held by the Company (including any securities of CTN) or
exercise any right to acquire securities held by the Company (including the
Warrants and the Equity Protection Agreements). Notwithstanding the foregoing
and except as explicitly set forth in this Agreement, if a vote, consent or
approval of the Members is required by the Act or other applicable law with
respect to any act to be taken by the Company or matter considered by the
Managing Member, the Members agree that they shall be deemed to have consented
to or approved such act or voted on such matter in accordance with the
determination of the Managing Member on such act or matter. No Member, in his or
its capacity as a Member, shall have any power to act for, sign for or do any
act that would bind the Company. The Managing Member shall devote such time and
effort to the affairs of the Company as he or it may deem appropriate for the
oversight of the management and affairs of the Company.
6.2 Delegation by Managing Member. The Managing Member shall have the
-----------------------------
power and authority to delegate to one or more other Persons the Managing
Member's rights and powers to manage and control the business and affairs of the
Company, including to delegate to agents and employees of a Member or the
Company, and to delegate by a written agreement with, or otherwise to, other
Persons. The Managing Member may authorize any Person (including, without
limitation, any Member) to enter into and perform under any document on behalf
of the Company.
6.3 Resignation; Vacancy; Removal. The Managing Member may resign by
-----------------------------
delivering his or its written resignation to the Company and to the other
Members. Such resignation shall be effective
-16-
<PAGE>
fourteen (14) business days following receipt of such resignation by the Company
unless some later time is specified in such resignation. If a vacancy in the
position of Managing Member should for any reason occur, a replacement Managing
Member shall be appointed by Willis Stein. Any subsequent Managing Member may be
removed only by Willis Stein. The initial Managing Member may not be removed for
any reason.
6.4 Compensation. The Managing Member shall not be entitled to
------------
compensation from the Company in connection with its activities as Managing
Member; provided that the foregoing shall not prevent the Managing Member from
-------------
receiving reimbursement for out-of-pocket expenses incurred by the Managing
Member on behalf of the Company, receiving distributions as a Member pursuant to
this Agreement or otherwise receiving compensation from the Company for actions
unrelated to its activities as Managing Member.
6.5 Board Membership of Subsidiaries.
--------------------------------
(a) The Managing Member and each other Member shall cause the Company
to vote all voting securities of CTN over which the Company has voting
control and shall take all other necessary or desirable actions within its
control (including in its capacity as a member of the Board, as defined
below) so that the following individuals shall be elected to the board of
directors of CTN (the "Board") and shall remain directors of the Board
-----
until removed in accordance with Sections 6.5(b) and 6.5(c):
--------------- ------
(i) two representatives designated by the holders of a majority
of the Investor Units (the "Investor Directors"), which Investor
------------------
Directors shall initially be Avy H. Stein and Daniel M. Gill;
(ii) Jason Elkin, Peter Kauff and Martin Grant (the "Management
----------
Directors"), so long as each such Management Director is employed by
---------
CTN; and
(iii) up to six additional representatives designated by the
holders of a majority of the Investor Units, who shall initially include
Thomas McMillian (the "Other Directors").
---------------
(b) The removal from the Board (with or without cause) of any
Investor Director or any Other directors shall only be upon the written
request of the Managing Member and under no other circumstances.
(c) Each Management Director shall be removed from the Board
automatically if such Management Director ceases to be employed by CTN for
any reason.
(d) In the event that any representative designated hereunder ceases
to serve as a member of the Board during his term of office for any reason,
the resulting vacancy on the Board shall be filled by a representative
designated by the same group or Person that designated such prior
representative.
-17-
<PAGE>
ARTICLE VII
MEMBERS
-------
7.1 Membership Status; Resignation. A Transfer by a Member of all of
------------------------------
such Member's Units shall be deemed to be a resignation by such Member effective
upon consummation of such Transfer and such Member shall not be entitled to any
distributions or payments of any kind from the Company as a consequence of such
transfer and the transferee shall succeed to the rights, benefits and interests
in all such Units. Transfers may only be made pursuant to Article XI hereof.
----------
To the fullest extent permitted by law, a Member may not resign or withdraw as a
Member of the Company without the consent of the Managing Member, which consent
may be withheld in its sole discretion.
7.2 No Participation in Management. The management of the business
------------------------------
and affairs of the Company shall be vested in whole in the Managing Member in
accordance with Article VI of this Agreement. Except with respect to the
----------
execution and filing of the Certificate, as otherwise specifically provided by
this Agreement or required by the Act, no Member, acting solely in the capacity
of Member, shall participate in the management of or be an agent of the Company
or have any authority to act for or bind the Company.
7.3 Voting Rights Generally; Voting of Units. Except as expressly
----------------------------------------
provided in this Agreement or as may be required by the Act, Members shall have
no voting, approval or consent rights. Each Member shall be entitled to one (1)
vote for each Unit held by such Member upon any matter upon which Members are
entitled to vote submitted to a vote at a meeting of the Members called by the
Managing Member. Any action required to, or which may be, taken by Members may
be taken without a meeting if consented thereto in a writing setting forth the
action so taken and signed by the Members who constitute a Required Interest and
who are entitled to vote with respect to the subject matter thereof.
7.4 Conflicts of Interest. The Company may transact business with any
---------------------
Member, its Affiliates and each of their respective stockholders, directors,
officers, controlling persons, members, partners and employees; provided, the
terms of those transactions are no less favorable than those the Company could
obtain from unrelated third parties or are approved by a majority of the Members
who have no direct or indirect interest in that transaction.
7.5 Outside Activities. Each Member of the Company, in its capacity
------------------
as such, its Affiliates and each of their respective stockholders, directors,
officers, controlling persons, members, partners and employees may at any time
and from time to time may engage in and own interests in other business ventures
of any and every type and description, independently or with others (including
ones in competition with the Company) with no obligation to offer to the Company
or any other Member or officer the right to participate therein. Neither the
Company nor any Member of the Company shall have any rights by virtue of this
Agreement or the limited liability company relationship created hereby in any
such business interests or activities of any such Person.
7.6 Confidentiality. Each Member agrees to maintain the
---------------
confidentiality of all proprietary, nonpublic information, documents and
materials relating to the business of the Company or any of its Subsidiaries
which the Member now or in the future may possess, except to the extent
disclosure
-18-
<PAGE>
of any such information is required by law or authorized by the Company or
reasonably occurs in connection with disputes over the terms of this Agreement.
ARTICLE VIII
EXCULPATION AND INDEMNIFICATION
-------------------------------
8.1 Exculpation. No Member (including the Managing Member) shall have
-----------
any duty to the Company or to any Member of the Company except as expressly set
forth herein. No Member (including the Managing Member) shall be liable to any
other Member or the Company for any loss or damage suffered by the Company or
any Member unless such loss or damage is caused by such Member's gross
negligence, willful misconduct, intentional violation of law or material breach
of this Agreement. No Member (including the Managing Member) shall be liable for
errors in judgment or for any acts or omissions that do not constitute gross
negligence, willful misconduct, intentional violation of law or material breach
of this Agreement. Any Member (including the Managing Member) may consult with
counsel and accountants in respect of Company affairs, and provided such Member
acts in good faith reliance upon the advice or opinion of such counsel or
accountants, such Member shall not be liable for any loss or damage suffered by
the Company or any Member in reliance thereon. The preceding sentence shall in
no way limit any Person's right to rely on information to the extent provided in
Section 18-406 of the Act.
8.2 Right to Indemnification. Subject to the limitations and
------------------------
conditions as provided in this Article VIII, each Person who was or is made a
------------
party or is threatened to be made a party to or is involved in any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative, arbitrative (hereinafter a "Proceeding"), or any appeal in such
----------
a Proceeding or any inquiry or investigation that could lead to such a
Proceeding, by reason of the fact that such Person, or a Person of whom such
Person is the legal representative, is or was a Member of the Company or while a
Member of the Company is or was serving at the request of the Company as a
manager, director, officer, partner, venturer, proprietor, trustee, employee,
agent or similar functionary of another foreign or domestic limited liability
company, corporation, partnership, joint venture, sole proprietorship, trust,
employee benefit plan or other enterprise, shall be indemnified by the Company
(to the extent of the Company's assets and without requiring any additional
Capital Contributions not otherwise required by this Agreement) to the fullest
extent permitted under applicable law, as the same exist or may hereafter be
amended (but, in the case of any such amendment, only to the extent that such
amendment permits the Company to provide broader indemnification rights than
said law permitted the Company to provide prior to such amendment) against
judgments, penalties (including excise and similar taxes and punitive damages),
fines, settlements and reasonable expenses (including, without limitation,
attorneys' fees) actually incurred by such Person in connection with such
Proceeding; provided that (a) such Person's course of conduct was pursued in
-------------
good faith and believed by such Person to be in the best interests of the
Company and (b) such course of conduct did not constitute gross negligence or
willful misconduct on the part of such Person and otherwise was in accordance
with the terms of this Agreement. Indemnification under this Article VIII shall
------------
continue as to a Person who has ceased to serve in the capacity which initially
entitled such Person to indemnity hereunder. The rights granted pursuant to this
Article VIII shall be deemed contractual rights, and no amendment, modification
- ------------
or repeal of this Article VIII shall have the effect of limiting or denying any
------------
such rights with respect to actions taken or Proceedings arising prior to any
amendment, modification or repeal.
-19-
<PAGE>
It is expressly acknowledged that the indemnification provided in this Article
-------
VIII could involve indemnification for negligence or under theories of strict
- ----
liability.
8.3 Advance Payment. The right to indemnification conferred in this
---------------
Article VIII shall include the right to be paid or reimbursed by the Company
- ------------
the reasonable expenses incurred by a Person of the type entitled to be
indemnified under Section 8.2 who was, is or is threatened to be made a named
-----------
defendant or respondent in a Proceeding in advance of the final disposition of
the Proceeding and without any determination as to the Person's ultimate
entitlement to indemnification; provided, however, that the payment of such
expenses incurred by any such Person in advance of the final disposition of a
Proceeding shall be made only upon delivery to the Company of a written
affirmation by such Person of his or her good faith belief that he has met the
standard of conduct necessary for indemnification under Article VIII and a
------------
written undertaking, by or on behalf of such Person, to repay all amounts so
advanced if it shall ultimately be determined that such indemnified Person is
not entitled to be indemnified under this Article VIII or otherwise.
------------
8.4 Indemnification of Employees and Agents. The Company shall
---------------------------------------
indemnify and advance expenses to any officer, director, partner, employee,
agent of the Managing Member or other Member or the Company to the same extent
and subject to the same conditions that it may indemnify and advance expenses to
the Members including the Managing Member under this Article VIII.
------------
8.5 Appearance as a Witness. Notwithstanding any other provision of
-----------------------
this Article VIII, the Company may pay or reimburse reasonable out-of-pocket
------------
expenses incurred by a Member, including the Managing Member or such Managing
Member's officers, directors, employees, partners and agents in connection with
such Person's appearance as a witness or other participation in a Proceeding
related to or arising out of the business of the Company at a time when such
Person is not a named defendant or respondent in the Proceeding.
8.6 Nonexclusivity of Rights. The right to indemnification and the
------------------------
advancement and payment of expenses conferred in this Article VIII shall not be
------------
exclusive of any other right which a Person indemnified pursuant to Article VII
-----------
may have or hereafter acquire under any law (common or statutory), provision of
the Certificate or this Agreement, agreement, vote of Members or otherwise.
8.7 Savings Clause. If this Article VIII or any portion hereof shall
-------------- ------------
be invalidated on any ground by any court of competent jurisdiction, then the
Company shall nevertheless indemnify and hold harmless each Person indemnified
pursuant to this Article VIII as to costs, charges and expenses (including
------------
attorneys' fees), judgments, fines and amounts paid in settlement with respect
to any action, suit or proceeding, whether civil, criminal, administrative or
investigative to the full extent permitted by any applicable portion of this
Article VIII that shall not have been invalidated and to the fullest extent
- ------------
permitted by applicable law.
-20-
<PAGE>
ARTICLE IX
TAXES
-----
9.1 Tax Returns. The Company shall cause to be prepared and filed all
-----------
necessary federal and state income tax returns for the Company, including making
any elections the Managing Member may deem appropriate and in the best interests
of the Members. Each Member shall furnish to the Managing Member 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.
9.2 Tax Matters Partner. The Managing Member shall be the "tax
-------------------
matters partner" of the Company pursuant to Section 6231(a)(7) of the Code (the
"Tax Matters Member"). The Tax Matters Member is authorized to represent the
------------------
Company before the Internal Revenue Service and any other governmental agency
with jurisdiction, and to sign such consents and to enter into settlements and
other agreements with such agencies as the Managing Member deems necessary or
advisable.
ARTICLE X
BOOKS, REPORTS
--------------
10.1 Maintenance of Books. The Company shall keep appropriate books
--------------------
and records of accounts and shall keep appropriate minutes of the proceedings of
its Members and any committees. The Fiscal Year of the Company shall be the
calendar year.
10.2 Member Tax Information. Within forty-five (45) days after the end
----------------------
of each Taxable Year, the Company will cause to be delivered to each Person who
was a Member at any time during such Taxable Year a Form K-1 and such other
information, if any, with respect to the Company as may be necessary for the
preparation of such Member's federal, state and local income tax returns.
ARTICLE XI
TRANSFERS
---------
11.1 Assignment by Members. Subject to Section 3.5(b) regarding the
--------------------- --------------
rights of Jason Elkin to allocate the Pool, no Management Holder shall transfer
any Management Units of the Company, or offer to Transfer all or any part of
such Management Holder's Management Units in the Company (whether voluntarily or
involuntarily) without the consent of the Managing Member, which consent may be
withheld in the Managing Member's sole discretion, other than a transfer to the
Company to reallocated Management Units to the unallocated Pool. Each transferee
of Units or other interest in the Company shall as a condition prior to such
Transfer execute a joinder agreement in a form satisfactory to the Managing
Member pursuant to which such transferee shall agree to be bound by the
provisions of this Agreement (it being understood that any such Transfer shall
have the effect of Transferring an economic interest in such Units and shall not
have the effect of Transferring any other rights of a Member unless such
Transferee is admitted as a substitute Member pursuant to Section 11.3). Any
------------
Transfer by a Member of
-21-
<PAGE>
any part of Units to a Person who is not a Member shall not relieve such Member
of any of its obligations with respect to such Units.
11.2 Void Transfers. Any Transfer by any Member of any Units or other
--------------
interest in the Company (a) in contravention of this Agreement (including,
without limitation, the failure of the transferee to execute a counterpart in
accordance with Section 11.1) or (b) which would cause the Company to not be
------------
treated as a partnership for U.S. federal income tax purposes, shall be void and
ineffectual and shall not bind or be recognized by the Company or any other
party. No purported assignee pursuant to a void transfer shall have any right to
any profits, losses or distributions of the Company.
11.3 Substituted Member.
------------------
(a) An assignee of any Units or other interest in the Company held by
a Member, or any portion thereof, shall become a substituted Member entitled to
all the rights of a Member if and only if the assignor gives the assignee such
right, and prior written consent to such assignment and substitution has been
obtained from the Managing Member, which consent may be withheld in such
Managing Member's sole discretion.
(b) The Company and the Members shall be entitled to treat the record
owner of any Units or other interest in the Company as the absolute owner
thereof and shall incur no liability for distributions of cash or other property
made in good faith to such owner until such time as a written assignment of such
Units or other interest in the Company, which assignment is permitted pursuant
to the terms and conditions of Section 11.1 and Section 11.3 hereof, has been
------------ ------------
received and accepted by the Managing Member and recorded on the books of the
Company.
(c) Upon the admission of a substituted Member, Schedule A attached
----------
hereto shall be amended to reflect the name, address and Units of such
substituted Member and to eliminate the name and address of and other
information relating to the assigning Member with regard to the assigned Units.
11.4 Effect of Assignment.
--------------------
(a) Any Member who shall make a permitted assignment under this
Agreement of any Units or other interest in the Company shall cease to be a
Member of the Company with respect to such Units or other interest and shall no
longer have any rights or privileges of a Member with respect to such Units or
other interest, except that unless and until the assignee of such Member is
admitted as a substituted Member in accordance with the provisions of this
Article XI, such assigning Member shall retain the statutory rights and
- ----------
obligations of an assignor member under applicable law, including, but not by
way of limitation, the right to vote.
(b) Any Person who acquires in any manner whatsoever any Units or
other interest in the Company, irrespective of whether such Person has accepted
and adopted in writing the terms and provisions of this Agreement, shall be
deemed by the acceptance of the benefits of the acquisition thereof to have
agreed to be subject to and bound by of all the terms and conditions of this
Agreement that any predecessor in such Units or other interest in the Company of
such Person was subject to or by which such
-22-
<PAGE>
predecessor was bound. With respect to a permitted assignment, the Company shall
use the "closing of the books method" for all allocation purposes.
(c) Following an assignment of any Units or other interest that is
permitted under this Agreement, the transferee of such Units or interest shall
be treated as having made all of the Capital Contributions in respect of, and
received all of the distributions received in respect of, such Units or
interest, shall succeed to the Capital Account associated with such Units or
interest and shall receive allocations and distributions under Articles V and
----------
XII in respect of such Units or interest as if such transferee were a Member.
- ---
11.5 Permitted Transfers. Subject in all events to the general
-------------------
restrictions on Transfers contained in Sections 11.1, 11.2 and 11.3, the
------------- ---- ----
restrictions contained in the first sentence of Section 11.1 shall not apply to
------------
any Transfer of Units by any Unitholder among such Unitholder's Permitted
Transferees so long as such Permitted Transferee shall agree in writing to be
bound by the provisions of this Agreement prior to any such Transfer.
11.6 Deliveries for Transfer.
-----------------------
(a) In connection with the Transfer of any Restricted Securities, the
holder thereof will deliver written notice to the Company describing in
reasonable detail the Transfer or proposed Transfer. In addition, in the case of
any Certificated Units (as defined below), if the holder of such Restricted
Securities delivers to the Company an opinion such holder's counsel that no
subsequent Transfer of such Restricted Securities will require registration
under the Securities Act, the Company will promptly upon such contemplated
Transfer deliver new certificates or instruments, as the case may be, for such
Restricted Securities which do not bear the restrictive legend relating to the
Securities Act as set forth below. If the Company is not required to deliver new
certificates or instruments, as the case may be, for such Restricted Securities
not bearing such legend, the holder thereof will not Transfer the same until the
prospective transferee has confirmed to the Company in writing its agreement to
be bound by the conditions contained in this Section 11.6.
------------
(b) Notwithstanding any other provisions of this Article XI, no
----------
Transfer of Units or any other interest in the Company may be made unless in the
opinion of counsel (who may be counsel for the Company), satisfactory in form
and substance to the Managing Member and counsel for the Company (which opinion
may be waived, in whole or in part, at the discretion of the Managing Member),
such Transfer would not violate any federal securities laws or any state or
provincial securities or "blue sky" laws (including any investor suitability
standards) applicable to the Company or the interest to be transferred, or cause
the Company to be required to register as an Investment Company under the
Investment Company Act of 1940, as amended. Such opinion of counsel shall be
delivered in writing to the Company prior to the date of the Transfer.
11.7 Prospective Transferees. Subject to the terms of this Agreement,
-----------------------
the Company agrees to cooperate, as may reasonably be requested, in order to
provide any information and access to any information to any prospective
transferee in connection with a proposed Transfer.
-23-
<PAGE>
11.8 Legend. In the event that certificates representing the Units are
------
issued ("Certificated Units"), such certificates will bear a legend stating that
------------------
the Transfer of the Units is subject to the conditions specified in this
Agreement.
11.9 Effective Date. Any Transfer and any related admission of a
--------------
Person as a Member in compliance with this Article XI shall be deemed effective
----------
on such date that the transferee or successor in interest complies with the
requirements of this Agreement.
ARTICLE XII
DISSOLUTION, LIQUIDATION AND TERMINATION
----------------------------------------
12.1 Dissolution. The Company shall be dissolved and its affairs shall
-----------
be wound up on the first to occur of the following:
(a) the expiration of its term pursuant to Section 2.5;
-----------
(b) prior to April 25, 2002, the written consent of the Required
Interests to dissolve the Company;
(c) after April 25, 2002, the written determination of the Managing
Member (in its self-discretion) to dissolve the Company;
(d) upon the determination of the Managing Member in the event of a
sale of all or substantially all the Company's assets or in the event the
Company no longer owns any securities of CTN; and
(e) the entry of a decree of judicial dissolution of the Company
under Section 18-802 of the Act.
The death, retirement, resignation, expulsion, incapacity, bankruptcy or
dissolution of a Member, or the occurrence of any other event that terminates
the continued membership of a Member in the Company, shall not cause a
dissolution of the Company, and the Company shall continue in existence subject
to the terms and conditions of this Agreement.
12.2 Liquidation and Termination. On dissolution of the Company, the
---------------------------
Managing Member shall act as liquidator or may appoint one or more Members as
liquidator. The liquidator(s) shall proceed diligently to wind up the affairs of
the Company and make final distributions as provided herein and in the Act. The
costs of liquidation shall be borne as a Company expense. Until final
distribution, the liquidator(s) shall continue to operate the Company properties
with all of the power and authority of the Managing Member and the Members. The
steps to be accomplished by the liquidators are as follows:
(a) as promptly as possible after dissolution and again after final
liquidation, the liquidator(s) shall cause a proper accounting to be made by a
recognized firm of certified public
-24-
<PAGE>
accountants of the Company's assets, liabilities and operations through the last
day of the calendar month in which the dissolution occurs or the final
liquidation is completed, as applicable;
(b) the liquidator(s) shall cause the notice described in the Act to
be mailed to each known creditor of and claimant against the Company in the
manner described thereunder;
(c) the liquidator(s) shall pay, satisfy or discharge from Company
funds all of the debts, liabilities and obligations of the Company (including,
without limitation, all expenses incurred in liquidation) or otherwise make
adequate provision for payment and discharge thereof (including, without
limitation, the establishment of a cash fund for contingent liabilities in such
amount and for such term as the liquidator(s) may reasonably determine); and
(d) the remaining assets of the Company (the "Remaining Assets")
----------------
shall be distributed to the Members in accordance with Sections 5.2 and 5.4
------------ ---
hereof. The Remaining Assets shall be distributed by the end of the taxable year
of the Company during which the liquidation of the Company occurs (or, if later,
90 days after the date of the liquidation).
All distributions in kind to the Members shall be made subject to the liability
of each distributee for costs, expenses and liabilities theretofore incurred or
for which the Company has committed prior to the date of termination, and those
costs, expenses and liabilities shall be allocated to the distributees in
accordance with Sections 5.2 and 5.4. The distribution of cash and/or property
------------ ---
to a Member in accordance with the provisions of this Section 12.2 constitutes a
------------
complete return to the Member of its Capital Contributions and a complete
distribution to the Member of its interest in the Company and all the Company's
property and constitutes a compromise to which all Members have consented within
the meaning of the Act. To the extent that a Member returns funds to the
Company, it has no claim against any other Member for those funds. Any Company
assets distributed in kind will first be written up or down to their fair market
value, thus creating Profits or Losses (if any), which shall be allocated in
accordance with Section 5.3.
-----------
12.3 Management Holder Give Back. After the final distribution of the
---------------------------
assets of the Company among the Members as provided in Section 12.2 and Article
------------ -------
V, the Management Holders shall contribute to the Company an amount equal to the
- -
sum of the following:
- ---
(a) first, in the event that the Investors did not receive
-----
distributions in the aggregate pursuant to Sections 5.2(a) and (b) equal to
--------------- ---
their aggregate Capital Contributions plus the aggregate Investor Preferred
Yield accrued through such date, the Management Holders shall make a Capital
Contribution (pro rata according to their ownership of Management Units) to the
Company equal to such deficit and such amount will be distributed to the holders
of Investor Units, pro rata according to their respective Unreturned Preferred
Capital plus Unreturned Preferred Yield; and
(b) second, (i) in the event that distributions to holders of Class B
--- ------
Management Units were not reduced by the entire excess amount described in
Section 5.2(h)(i), the holders of Class B Management Units shall make a Capital
- -----------------
Contribution (pro rata according to their respective ownership of Class B
Management Units) to the Company equal to the amount by which distributions to
such holders were not reduced by the entire excess amount described in Section
5.2(h)(i) hereof and such amount will be distributed in accordance with the
- ---------
provisions of Section 5.2(a) through (e) hereof, and (ii) in the event that
-------------- ---
distributions to holders of Class A Management Units were not reduced by the
entire excess amount
-25-
<PAGE>
described in Section 5.2(h)(ii), the holders of Class A Management Units shall
------------------
make a Capital Contribution (pro rata according to their respective ownership of
Class A Management Units) to the Company equal to the amount by which
distributions to such holders were not reduced by the entire excess amount
described in the applicable clause of Section 5.2(h)(ii) hereof and such amount
------------------
will be distributed in accordance with the provisions of Section 5.2(a) and (b)
-------------- ---
hereof;
provided that such Management Holders' Capital Contribution shall not exceed
- -------------
100% of the net amount distributed to the Management Holders during the life of
the Company pursuant to Section 5.2. Except as otherwise provided in this
-----------
Section 12.3, and notwithstanding any custom or rule of law to the contrary, to
- ------------
the extent that any Member has a deficit Capital Account balance, upon
dissolution of the Company such deficit shall not be an asset of the Company and
such Members shall not be obligated to contribute such amount to the Company to
bring the balance of such Member's capital account to zero.
12.4 Cancellation of Certificate. On completion of the distribution of
---------------------------
Company assets as provided herein, the Company is terminated, and the Managing
Member (or such other Person or Persons as the Act may require or permit) shall
file a certificate of cancellation with the Secretary of State of Delaware,
cancel any other filings made pursuant to Section 2.5 and take such other
-----------
actions as may be necessary to terminate the Company.
ARTICLE XIII
GENERAL PROVISIONS
------------------
13.1 Notices. Except as expressly set forth to the contrary in this
-------
Agreement, all notices, requests or consents provided for or permitted to be
given under this Agreement must be in writing and shall be deemed delivered: (a)
upon delivery if delivered in person; (b) three (3) business days after deposit
in the United States mail, addressed to the recipient, postage paid, and
registered or certified with return receipt requested; (c) upon transmission if
sent via telecopier, with a confirmation copy sent via overnight mail, provided
--------
that confirmation of such overnight delivery is received; or (d) one (1)
- ----
business day after deposit with a national overnight courier provided that
-------------
confirmation of such overnight delivery is received. All notices, requests and
consents to be sent to a Member must be sent to or made at the address given for
that Member on Schedule A, or such other address as that Member may specify by
----------
notice to the other Members. Any notice, request, or consent to the Company or
the Managing Member must be given to the Managing Member at the address for the
Managing Member set forth on Schedule A. Whenever any notice is required to be
----------
given by law, the Certificate or this Agreement, a written waiver thereof,
signed by the Person entitled to notice, whether before or after the time stated
therein, shall be deemed equivalent to the giving of such notice.
13.2 Entire Agreement. This Agreement constitutes the entire agreement
----------------
of the Members and their Affiliates relating to the Company and supersedes all
prior contracts or agreements with respect to the Company, whether oral or
written.
13.3 Effect of Waiver or Consent. A waiver or consent, express or
---------------------------
implied, to or of any breach or default by any Person in the performance by that
Person of its obligations with respect to the Company is not a consent or waiver
to or of any other breach or default in the performance by that Person of the
same or any other obligations of that Person with respect to the Company.
Failure on the part of a
-26-
<PAGE>
Person to complain of any act of any Person or to declare any Person in default
with respect to the Company, irrespective of how long that failure continues,
does not constitute a waiver by that Person of its rights with respect to that
default until the applicable statute-of-limitations period has run.
13.4 Amendment, Modification or Waiver. Except as otherwise expressly
---------------------------------
provided herein, this Agreement may be amended, modified or waived from time to
time only by a written instrument adopted by the Managing Member; provided,
however, that (a) except as otherwise expressly provided herein, an amendment or
modification reducing disproportionately a Member's Units or other interest in
profits or losses or in distributions or increasing a Member's Capital
Contribution shall be effective only with that Member's consent, (b) an
amendment, modification or waiver to this Agreement which affects the
liabilities, obligations or rights of a particular class of Units in a manner
which is more adverse than such amendment, modification or waiver affects the
rights of all classes of Units shall be effective only with the consent of the
holders of a majority of the outstanding Units of such class, and (c) an
amendment, modification or waiver reducing the Required Interests for any
consent or vote in this Agreement shall be effective only with the consent or
vote of Members having the interest theretofore required, and provided further
that the Managing Member may amend and modify the provisions of this Agreement
and Schedule A hereto to the extent necessary to reflect the issuance of new
----------
Units or other interests in the Company as contemplated by Section 3.5 as
-----------
determined in good faith by the Managing Member.
13.5 Binding Effect. Subject to the restrictions on Transfers set
--------------
forth in this Agreement, this Agreement is binding on and shall inure to the
benefit of the Members and their respective heirs, legal representatives,
successors and assigns.
13.6 Governing Law; Severability. THIS AGREEMENT IS GOVERNED BY AND
---------------------------
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF DELAWARE,
EXCLUDING ANY CONFLICT-OF-LAWS RULE OR PRINCIPLE THAT MIGHT REFER THE GOVERNANCE
OR THE CONSTRUCTION OF THIS AGREEMENT TO THE LAW OF ANOTHER JURISDICTION. In the
event of a direct conflict between the provisions of this Agreement and any
provision of the Certificate or any mandatory provision of the Act, the
applicable provision of the Certificate or the Act shall control. If any
provision of this Agreement or the application thereof to any Person or
circumstance is held invalid or unenforceable to any extent, the remainder of
this Agreement and the application of that provision to other Persons or
circumstances is not affected thereby and that provision shall be enforced to
the greatest extent permitted by law.
13.7 Further Assurances. In connection with this Agreement and the
------------------
transactions contemplated hereby, each Member shall execute and deliver any
additional documents and instruments and perform any additional acts that may be
necessary or appropriate to effectuate and perform the provisions of this
Agreement and those transactions.
13.8 Waiver of Certain Rights. Each Member irrevocably waives any
------------------------
right it may have to demand any distributions or withdrawal of property from the
Company or to maintain any action for dissolution of the Company or for
partition of the property of the Company.
13.9 Indemnification and Reimbursement for Payments on Behalf of a
-------------------------------------------------------------
Member. If the Company is obligated to pay any amount to a governmental agency
- ------
(or otherwise makes a payment) because of a Member's status or otherwise
specifically attributable to a Member (including, without
-27-
<PAGE>
limitation, federal, state or local withholding taxes, state personal property
taxes, state unincorporated business taxes, state personal property replacement
taxes, etc.), then such Member (the "Indemnifying Member") shall indemnify the
-------------------
Company in full for the entire amount paid (including, without limitation, any
interest, penalties and expenses associated with such payments). The amount to
be indemnified shall be charged against the Capital Account of the Indemnifying
Member, and, at the option of the Members, either:
------
(a) promptly upon notification of an obligation to indemnify the
Company, the Indemnifying Member shall make a cash payment to the Company equal
to the full amount to be indemnified (and the amount paid shall be added to the
Indemnifying Member's Capital Account but shall not be treated as a Capital
Contribution), or
--
(b) the Company shall reduce distributions which would otherwise be
made to the Indemnifying Member, until the Company has recovered the amount to
be indemnified (and, notwithstanding Section 4.1, the amount withheld shall not
-----------
be treated as a Capital Contribution).
The provisions of this Section 13.9 shall survive a liquidation, dissolution or
------------
termination of the Company.
13.10 Notice of Members of Provisions. By executing this Agreement,
-------------------------------
each Member acknowledges that it has actual notice of (i) all of the provisions
hereof (including, without limitation, the restrictions on the transfer set
forth in Article XI) and (ii) all of the provisions of the Certificate.
----------
13.11 Counterparts. This Agreement may be executed in multiple
------------
counterparts with the same effect as if all signing parties had signed the same
document. All counterparts shall be construed together and constitute the same
instrument.
13.12 Consent to Jurisdiction. Each Member irrevocably submits to the
-----------------------
non-exclusive jurisdiction of the United States District Court for the Northern
District of Illinois and the state courts of the State of Illinois, sitting in
Chicago, for the purposes of any suit, action or other proceeding arising out of
this Agreement or any transaction contemplated hereby. Each Member further
agrees that service of any process, summons, notice or document by U.S.
certified or registered mail to such Member's respective address set forth above
shall be effective service of process in any action, suit or proceeding in
Illinois with respect to any matters to which it has submitted to jurisdiction
as set forth above in the immediately preceding sentence. Each Member
irrevocably and unconditionally waives any objection to the laying of venue of
any action, suit or proceeding arising out of this Agreement or the transactions
contemplated hereby in the United States District Court for the Northern
District of Illinois or the state courts of the State of Illinois, sitting in
Chicago, and hereby irrevocably and unconditionally waives and agrees not to
plead or claim in any such court that any such action, suit or proceeding
brought in such court has been brought in an inconvenient forum.
13.13 Headings. The headings used in this Agreement are for the
--------
purpose of reference only and will not otherwise affect the meaning or
interpretation of any provision of this Agreement.
13.14 Remedies. The Company and the Members shall be entitled to
--------
enforce their rights under this Agreement specifically, to recover damages by
reason of any breach of any provision of this Agreement (including costs of
enforcement) and to exercise any and all other rights existing in their favor.
The parties hereto agree and acknowledge that money damages may not be an
adequate remedy for any
-28-
<PAGE>
breach of the provisions of this Agreement and that the Company or any Member
may in its or his sole discretion apply to any court of law or equity of
competent jurisdiction for specific performance or injunctive relief (without
posting a bond or other security) in order to enforce or prevent any violation
or threatened violation of the provisions of this Agreement.
13.15 Parties in Interest. Except as expressly provided in the Act,
-------------------
nothing in this Agreement shall confer any rights or remedies under or by reason
of this Agreement on any Persons other than the Members and their respective
successors and assigns nor shall anything in this Agreement relieve or discharge
the obligation or liability of any other Person to any party to this Agreement,
nor shall any provision give any other Person any right of subrogation or action
over or against any party to this Agreement.
* * * * * *
-29-
<PAGE>
IN WITNESS WHEREOF, the Members have executed this Agreement as of the
date first set forth above.
MEMBERS:
WILLIS STEIN & PARTNERS, L.P.
By: Willis Stein & Partners, L.L.C.
Its General Partner
By: /s/ Daniel M. Gill
------------------------------------
Daniel M. Gill
Its:
________________________________________
Hollis W. Rademacher
________________________________________
Jason Elkin
________________________________________
Joseph D. Gersh
________________________________________
James Harder
________________________________________
Thomas Gatti
________________________________________
George Giatzis
________________________________________
Peter Kauff
________________________________________
Patrick Doran
________________________________________
Sergio Zyman
________________________________________
Martin Grant
<PAGE>
SCHEDULE A - As of July 22, 1999
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Capital
Number Account
Capital Account With % of of Class with
Number of Investor Units respect to the Investor Investor R respect to
Name and Address of Units Units Investor Class R
Members Units Mgmt.
Units
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Willis Stein & Partners, L.P.
227 West Monroe Street
Suite 4300 5/15/97 15,200,000 5/15/97 $15,200,000
Chicago, IL 60606 10/2/98 8,604,918 10/2/98 $ 8,604,918 0 $ 0
Telecopy: (312) 422-2424 ============ ===========
(312) 422-2400 subtotal 23,804,918 subtotal $23,804,918 93.3948%
Attention: Avy H. Stein
Daniel M. Gill
- ------------------------------------------------------------------------------------------------------------------------------------
Hollis W. Rademacher
55 West Monroe 5/15/97 75,000 5/15/97 $ 75,000
Suite 2530 10/2/98 42,458 10/2/98 $ 42,458 0 $ 0
Chicago, IL 60603 ============ ===========
Telecopy: (312) 444-9519 subtotal 117,458 subtotal $ 117,458 0.4608%
(312) 444-9369
- ------------------------------------------------------------------------------------------------------------------------------------
Jason Elkin 5/15/97 333,334 5/15/97 $ 333,334
5784 Lake Forrest Drive 5/20/98 166,667 5/20/98 $ 166,667 65 $ 65
Suite 275 10/2/98 283,057 10/2/98 $ 283,057
Atlanta, GA 30328 2/19/99 522,037 2/19/99 $ 522,037 5.1203%
============ ===========
subtotal 1,305,095 subtotal $ 1,305,095
- ------------------------------------------------------------------------------------------------------------------------------------
Joseph D. Gersh [FT 1]
5784 Lake Forrest Drive 0 $ 0 0.0000% 35 $ 35
Suite 275
Atlanta, GA 30328
- ------------------------------------------------------------------------------------------------------------------------------------
James Harder
1497 Sandburg Drive 0 $ 0 0.0000% 0 $ 0
Schaumburg, IL 60173
- ------------------------------------------------------------------------------------------------------------------------------------
Thomas Gatti
20 Sutton Place South 0 $ 0 0.0000% 0 $ 0
New York, NY 10026
- ------------------------------------------------------------------------------------------------------------------------------------
George Giatzis
6 Giordano Drive 0 $ 0 0.0000% 0 $ 0
Courtland Manor
New York, NY 10022
- ------------------------------------------------------------------------------------------------------------------------------------
Peter Kauff [FT 2] 5/20/98 166,666 5/20/98 $ 166,666
909 Third Avenue, 9th Fllor 10/2/98 94,352 10/2/98 $ 94,352 0 $ 0
New York, NY 10022 ============ ===========
subtotal 261,018 subtotal $ 261,018 1.0241%
- ------------------------------------------------------------------------------------------------------------------------------------
Patrick Doran
4780 Outlook Way 0 $ 0 0.0000% 0 $ 0
Marietta, Georgia 30066
- ------------------------------------------------------------------------------------------------------------------------------------
Sergio Zyman 0 $ 0 0.0000% 0 $ 0
- ------------------------------------------------------------------------------------------------------------------------------------
Martin Grant
2 Sleepy Hollow 0 $ 0 0.0000% 0 $ 0
Chappaqua, NY 10514
- ------------------------------------------------------------------------------------------------------------------------------------
Unallocated Pool 0 $ 0 0.0000% 0 0
- ------------------------------------------------------------------------------------------------------------------------------------
Total 25,488,489 25,488,489 100% 100 $100
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Capital
Number Account Capital
of Class with % of Number Account % of Number of
A Mgmt. repsect to Class A of Class with respect Class B Preferred
Name and Address of Units Class A Mgmt. B Mgmt to Class A Mgmt. Units
Members Mgmt. Units Units Mgmt. Units Units
Units
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Willis Stein & Partners, L.P.
227 West Monroe Street
Suite 4300 1000,000
Chicago, IL 60606 0 $ 0 0.00% 0 $ 0 0.00% 566,113
Telecopy: (312) 422-2424 =========
(312) 422-2400 1,566,113
Attention: Avy H. Stein
Daniel M. Gill
- ------------------------------------------------------------------------------------------------------------------------------------
Hollis W. Rademacher
55 West Monroe
Suite 2530 0 $ 0 0.00% 0 $ 0 0.00% 0
Chicago, IL 60603
Telecopy: (312) 444-9519
(312) 444-9369
- ------------------------------------------------------------------------------------------------------------------------------------
Jason Elkin
5784 Lake Forrest Drive 1,100 $ 1,100 55.00% 0 $ 0 0.00% 0
Suite 275
Atlanta, GA 30328
- ------------------------------------------------------------------------------------------------------------------------------------
Joseph D. Gersh [FT 1]
5784 Lake Forrest Drive 100 $ 100 5.00% 0 $ 0 0.00% 0
Suite 275
Atlanta, GA 30328
- ------------------------------------------------------------------------------------------------------------------------------------
James Harder
1497 Sandburg Drive 0 $ 0 0.00% 100 $100 20.00% 0
Schaumburg, IL 60173
- ------------------------------------------------------------------------------------------------------------------------------------
Thomas Gatti
20 Sutton Place South 0 $ 0 0.00% 100 $100 20.00% 0
New York, NY 10026
- ------------------------------------------------------------------------------------------------------------------------------------
George Giatzis
6 Giordano Drive 200 $ 200 10.00% 0 $ 0 0.00% 0
Courtland Manor
New York, NY 10022
- ------------------------------------------------------------------------------------------------------------------------------------
Peter Kauff [FT 2]
909 Third Avenue, 9th Fllor 100 $ 100 5.00% 0 $ 0 0.00% 0
New York, NY 10022
- ------------------------------------------------------------------------------------------------------------------------------------
Patrick Doran
4780 Outlook Way 0 $ 0 0.00% 50 $ 50 10.00% 0
Marietta, Georgia 30066
- ------------------------------------------------------------------------------------------------------------------------------------
Sergio Zyman 0 $ 0 0.00% 200 $200 40.00% 0
- ------------------------------------------------------------------------------------------------------------------------------------
Martin Grant
2 Sleepy Hollow 300 $ 300 15.00% 50 $ 50 10.00% 0
Chappaqua, NY 10514
- ------------------------------------------------------------------------------------------------------------------------------------
Unallocated Pool 200 $ 200 10.00% 0 $ 0 0.00% 0
- ------------------------------------------------------------------------------------------------------------------------------------
Total 2,000 2,000 100% 500 $500 100% 1,566,113
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Capital
Account with % Total Ending
respect to Preferred Capital Account
Preferred Units
Name and Address of Units
Members
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Willis Stein & Partners, L.P.
227 West Monroe Street
Suite 4300 $1,000,000
Chicago, IL 60606 $ 566,113 100.00% $25,371,031
Telecopy: (312) 422-2424 ========== ===========
(312) 422-2400 $1,566,113
Attention: Avy H. Stein
Daniel M. Gill
- ------------------------------------------------------------------------------------------------------------------------------------
Hollis W. Rademacher
55 West Monroe
Suite 2530 $ 0 0.00%
Chicago, IL 60603
Telecopy: (312) 444-9519 $ 117,458
(312) 444-9369 ===========
- ------------------------------------------------------------------------------------------------------------------------------------
Jason Elkin
5784 Lake Forrest Drive $ 0 0.00%
Suite 275
Atlanta, GA 30328
$ 1,305,095
===========
- ------------------------------------------------------------------------------------------------------------------------------------
Joseph D. Gersh [FT 1]
5784 Lake Forrest Drive $ 0 0.00% $ 0
Suite 275
Atlanta, GA 30328
- ------------------------------------------------------------------------------------------------------------------------------------
James Harder
1497 Sandburg Drive $ 0 0.00% $ 0
Schaumburg, IL 60173
- ------------------------------------------------------------------------------------------------------------------------------------
Thomas Gatti
20 Sutton Place South $ 0 0.00% $ 0
New York, NY 10026
- ------------------------------------------------------------------------------------------------------------------------------------
George Giatzis
6 Giordano Drive $ 0 0.00% $ 0
Courtland Manor
New York, NY 10022
- ------------------------------------------------------------------------------------------------------------------------------------
Peter Kauff [FT 2]
909 Third Avenue, 9th Fllor $ 0 0.00%
New York, NY 10022
$ 261,018
===========
- ------------------------------------------------------------------------------------------------------------------------------------
Patrick Doran
4780 Outlook Way $ 0 0.00% $ 0
Marietta, Georgia 30066
- ------------------------------------------------------------------------------------------------------------------------------------
Sergio Zyman $ 0 0.00% $ 0
- ------------------------------------------------------------------------------------------------------------------------------------
Martin Grant
2 Sleepy Hollow $ 0 0.00% $ 0
Chappaqua, NY 10514
- ------------------------------------------------------------------------------------------------------------------------------------
Unallocated Pool $ 0 0.00% $ 0
- ------------------------------------------------------------------------------------------------------------------------------------
Total $1,566,113 100% $27,054,602
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
FT 1 The Investor Units owned by Jason Elkin are subject to a Pledge Agreement
to secure payment of promissory notes issued by Jason on May 12, 1997 in
the principal amount of $333,333.4, May 20, 1998 in the principle amount of
$180,834, October 2, 1998 in the principle amount of $238,057 and March 1,
1999 in the principle amount of $581,281.75, all for an aggregate amount of
$1,378,506.15. The difference between this aggregate balance and the
related Units shown above is due to the capitalization of interest into
principle related to transfers of units but not included as a Capital
Contribution pursuant to the terms of this Agreement.
FT 2 The Investor Units owned by Peter Kauff are subject to a Pledge Agreement
to secure payment of promissory notes issued by Jason on May 20, 1998 in
the principal amount of $180,834, another prossory note dated May 20, 1998
in the priciple amount of $94,352 , all for an aggregate amount of
$322,806. The difference between this aggregate balance and the number of
Units shown above is due to the capitalization of capitalization of
interest into principle related to transfers of units but not included as a
Capital Contribution pursuant to the terms of this Agreement.
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
SCHEDULE A - As of July 23, 1999
- --------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Number Capital Capital
Capital Account %of of Class Account with Number of Account
Name and Address of Number of Investor respect to the Investor R Investors respect to Class A with
Members Units Investor Units Units Units Class A Mgmt Mgmt Units respect to
Class A
Mgmt Units
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Willis Stein & Parterns, L.P.
227 West Monroe Street
Suite 4300 5/15/97 15,200,000 5/15/97 $15,200,000
Chicago, IL 60606 10/2/98 8,604,918 10/2/98 $ 8,604,918 0 $ 0 0 $0
Telecopy: (312) 422-2424 7/21/99 4,342,830 7/21/99 $ 4,342,830
========== ===========
(312) 422-2400 subtotal 28,147,748 subtotal $28,147,748 93.3948%
Attention: Avy H. Stein
Daniel M. Gill
- ------------------------------------------------------------------------------------------------------------------------------------
Hollis W. Rademacher
55 West Monroe 5/15/97 75,000 5/15/97 $ 75,000
Suite 2530 10/2/98 42,458 10/2/98 $ 42,458 0 $ 0 0 $ 0
Chicago, IL 60603 7/21/99 21,427 7/21/99 $ 21,427
======= ===========
Telecopy: (312) 444-951 subtotal 138,885 subtotal $ 138,885 0.4608%
(312) 444-9369
- -----------------------------------------------------------------------------------------------------------------------------------
Jason Ebin [FT 1] 5/15/97 333,334 5/15/97 $ 333,334
5784 Lake Forrest Drive 5/20/98 166,667 5/20/98 $ 166,667 65 $ 65 1,100 $1,100
Suite 275 10/2/98 283,057 10/2/98 $ 283,057
Atlanta, GA 30328 2/19/99 522,037 2/19/99 $ 522,037 5.1203%
7/21/99 238,092 7/21/99 $ 238,092
========= ===========
subtotal 1,543,187 subtotal $ 1,543,187
- -----------------------------------------------------------------------------------------------------------------------------------
Joseph D. Gersh
5784 Lake Forrest Drive 0 $ 0 0.0000% 35 $ 35 100 $ 100
Suite 275
Atlanta, GA 30328
- -----------------------------------------------------------------------------------------------------------------------------------
James Harder
1497 Sandburg Drive 0 $ 0 0.0000% 0 $ 0 0 $ 0
Schaumburg, IL 60173
- -----------------------------------------------------------------------------------------------------------------------------------
Thomas Gatti
20 Sutton Place South 0 $ 0 0.0000% 0 $ 0 0 $ 0
New York, NY 10026
- -----------------------------------------------------------------------------------------------------------------------------------
George Giatzis
6 Giordano Drive 0 $ 0 0.0000% 0 $ 0 200 $ 200
Courtland Manor
New York, NY 10022
- -----------------------------------------------------------------------------------------------------------------------------------
Peter Kauff [FT 2] 5/20/98 166,666 5/20/98 $ 166,666
909 Third Avenue, 9th Fll 10/2/98 94,352 10/2/98 $ 94,352 0 $ 0 100 $ 100
New York, NY 10022 7/21/99 47,620 7/21/99 $ 47,620
======= ===========
subtotal 308,638 subtotal $ 308,638 1.0241%
- ------------------------------------------------------------------------------------------------------------------------------------
Patrick Doran
4780 Outlook Way 0 $ 0 0.0000% 0 $ 0 0 $ 0
Marietta, Georgia 30066
- ------------------------------------------------------------------------------------------------------------------------------------
Sergio Zyman 0 $ 0 0.0000% 0 $ 0 0 $ 0
- ------------------------------------------------------------------------------------------------------------------------------------
Martin Grant
2 Sleepy Hollow 0 $ 0 0.0000% 0 $ 0 300 $ 300
Chappaqua, NY 10514
- ------------------------------------------------------------------------------------------------------------------------------------
Unallocated Pool 0 $ 0 0.0000% 0 $ 0 200 $ 200
- ------------------------------------------------------------------------------------------------------------------------------------
Total 30,138,458 $30,138,458 100% 100 $ 100 2,000 2,000
- -----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Capital Capital
Account Account
% of Number with % of Number with Total
Class A of Class respect to Class B of respect to % Ending
Name and Address of Mgmt B Mgmt Class A Mgmt Preferred Preferred Preferred Capital
Members Units Units Mgmt Units Units Units Units Units Account
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Willis Stein & Parterns, L.P.
227 West Monroe Street
Suite 4300 1,000,000 $1,000,000
Chicago, IL 60606 0.00% 0 $ 0 0.00% 566,113 $566,113 100.00%
Telecopy: (312) 422-2424 285,712 $285,712
========= ========== ============
(312) 422-2400 1,851,825 $1,851,825 $ 29,999,573
Attention: Avy H. Stein
Daniel M. Gill
- ------------------------------------------------------------------------------------------------------------------------------------
Hollis W. Rademacher
55 West Monroe
Suite 2530 0.00% 0 $ 0 0.00% 0 $ 0 0.00%
Chicago, IL 60603
Telecopy: (312) 444-951 $ 138,885
(312) 444-9369 ============
- ------------------------------------------------------------------------------------------------------------------------------------
Jason Elkin [FT 1]
5784 Lake Forrest Drive 55.00% 0 $ 0 0.00% 0 $ 0 0.00%
Suite 275
Atlanta, GA 30328
$ 1,543,187
- ------------------------------------------------------------------------------------------------------------------------============
Joseph D. Gersh
5784 Lake Forrest Drive 5.00% 0 $ 0 0.00% 0 $ 0 0.00% $ 0
Suite 275
Atlanta, GA 30328
- ------------------------------------------------------------------------------------------------------------------------------------
James Harder
1497 Sandburg Drive 0.00% 100 $100 20.00% 0 $ 0 0.00% $ 0
Schaumburg, IL 60173
- ------------------------------------------------------------------------------------------------------------------------------------
Thomas Gatti
20 Sutton Place South 0.00% 100 $100 20.00% 0 $ 0 0.00% $ 0
New York, NY 10026
- ------------------------------------------------------------------------------------------------------------------------------------
George Giatzis
6 Giordano Drive 10.00% 0 0 0.00% 0 $ 0 0.00% $ 0
Courtland Manor
New York, NY 10022
- ------------------------------------------------------------------------------------------------------------------------------------
Peter Kauff [FT 2]
909 Third Avenue, 9th Fll 5.00% 0 $ 0 0.00% 0 $ 0 0.00%
New York, NY 10022
$ 308,638
- -------------------------------------------------------------------------------------------------------------------------===========
Patrick Doran
4780 Outlook Way 0.00% 50 $ 50 10.00% 0 $ 0 0.00% $ 0
Marietta, Georgia 30066
- ------------------------------------------------------------------------------------------------------------------------------------
Sergio Zyman 0.00% 200 $200 40.00% 0 $ 0 0.00% $ 0
- ------------------------------------------------------------------------------------------------------------------------------------
Martin Grant
2 Sleepy Hollow 15.00% 50 $ 50 10.00% 0 $ 0 0.00% $ 0
Chappaqua, NY 10514
- ------------------------------------------------------------------------------------------------------------------------------------
Unallocated Pool 10.00% 0 $ 0 0.00% 0 $ 0 0.00% $ 0
- ------------------------------------------------------------------------------------------------------------------------------------
Total 100% 500 $500 100% 1,851,825 $1,851,825 100% $31,990,283
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
FT 1 The Investor Units owned by Jason Elkin are subject to a Pledge
Agreement to secure payment of promissory notes issued by Jason on May
12, 1997 in the principal amount of $333,333.4, May 20, 1998 in the
principle amount of $180,834, October 2, 1998 in the principle amount of
$238,057, March 1, 1999 in the principle amount of $581,281.75 and as of
the date hereof in the principal amount of $238,092 all for an aggregate
amount of $1,616,598.15. The difference between this aggregate balance
and the related Units shown above is due to the capitalization of
interest into principle related to transfers of units but not included
as a Capital Contribution pursuant to the terms of this Agreement.
FT 2 The Investor Units owned by Peter Kauff are subject to a Pledge
Agreement to secure payment of promissory notes issued by Jason on May
20, 1998 in the principal amount of $180,834, another prossory note
dated May 20, 1998 in the priciple amount of $94,352 and as of the date
hereof in the principal amount of $47,620, all for an aggregate amount
of $322,806. The difference between this aggregate balance and the
number of Units shown above is due to the capitalization of
capitalization of interest into principle related to transfers of units
but not included as a Capital Contribution pursuant to the terms of this
Agreement.
