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MarketWatch.com LLC Agreement 10-29-1997

================================================================================

 

LIMITED LIABILITY COMPANY AGREEMENT

of

MARKETWATCH.COM, LLC

between

CBS INC.

and

DATA BROADCASTING CORPORATION

 

 

Dated as of October 29, 1997

 

================================================================================

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TABLE OF CONTENTS

 

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ARTICLE I

 

Definitions

 

SECTION 1.01. Definitions ................................................................................1

SECTION 1.02. Definitions Generally.......................................................................4

 

 

ARTICLE II

 

General Provisions

 

SECTION 2.01. Formation...................................................................................4

SECTION 2.02. Name .......................................................................................4

SECTION 2.03. Term .......................................................................................4

SECTION 2.04. Purpose ....................................................................................4

SECTION 2.05. Registered Office/Agent.....................................................................5

SECTION 2.06. Principal Office............................................................................5

SECTION 2.07. Members ....................................................................................5

 

 

ARTICLE III

 

Capital Contributions

 

SECTION 3.01. Initial Capital Contributions...............................................................5

SECTION 3.02. Additional Capital Contributions............................................................5

SECTION 3.03. Withdrawals, Interest and Capital Accounts..................................................5

 

 

ARTICLE IV

 

Distributions

 

SECTION 4.01. Distributions...............................................................................5

SECTION 4.02. Distributions in Kind.......................................................................5

SECTION 4.03. Tax Withholding.............................................................................6

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ARTICLE V

 

Allocations and Other Tax Matters

 

SECTION 5.01. Capital Accounts............................................................................6

SECTION 5.02. Allocation of Net Profits and Net Losses....................................................7

SECTION 5.03. Definition of Net Profits and Net Losses....................................................7

SECTION 5.04. Federal Income Tax Allocations..............................................................7

SECTION 5.05. Elections...................................................................................8

SECTION 5.06. Fiscal Year.................................................................................8

SECTION 5.07. Tax Matters Partner.........................................................................8

SECTION 5.08. Other Tax Matters...........................................................................8

 

 

ARTICLE VI

 

Management

 

SECTION 6.01. Delegation of Authority.....................................................................9

SECTION 6.02. Management Committee........................................................................9

SECTION 6.03. Employees; Officers.........................................................................11

SECTION 6.04. Business Plan...............................................................................11

SECTION 6.05. Matters Requiring the Consent of All Members................................................12

 

 

ARTICLE VII

 

Dispute Resolution

 

SECTION 7.01. Negotiation.................................................................................12

SECTION 7.02. Dispute Resolution..........................................................................12

 

 

ARTICLE VIII

 

Books and Records

 

SECTION 8.01. Books and Records...........................................................................14

SECTION 8.02. Reports to Members; Budgets.................................................................14

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ARTICLE IX

 

Admission of Members; Transfers

 

SECTION 9.01. Admission of Substitute or Additional Members...............................................15

SECTION 9.02. Restriction on Transfer.....................................................................15

SECTION 9.03. Right of First Refusal......................................................................15

 

 

ARTICLE X

 

Exculpation and Indemnification

 

SECTION 10.01. Exculpation and Indemnification.............................................................16

SECTION 10.02. Liability of the Members....................................................................17

 

 

ARTICLE XI

 

Dissolution, Liquidation and Transfer

 

SECTION 11.01. Dissolution.................................................................................17

SECTION 11.02. Liquidation.................................................................................17

SECTION 11.03. Time Limitation.............................................................................18

SECTION 11.04. Mandatory Transfers.........................................................................18

SECTION 11.05. Claims of Members...........................................................................19

 

 

ARTICLE XII

 

DBC Loan

 

SECTION 12.01. DBC Loan ...................................................................................19

 

 

ARTICLE XIII

 

Agreement Not To Compete

 

SECTION 13.01. Agreement Not To Compete....................................................................19

SECTION 13.02. Enforcement.................................................................................21

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ARTICLE XIV

 

Miscellaneous

 

SECTION 14.01. Amendments..................................................................................21

SECTION 14.02. Notices ....................................................................................21

SECTION 14.03. Counterparts................................................................................21

SECTION 14.04. Severability................................................................................21

SECTION 14.05. No Third-Party Beneficiaries................................................................22

SECTION 14.06. Governing Law...............................................................................22

SECTION 14.07. Publicity...................................................................................22

SECTION 14.08. WAIVER OF JURY TRIAL........................................................................22

SECTION 14.09. Consent to Jurisdiction.....................................................................22

SECTION 14.10. Headings ...................................................................................22

SECTION 14.11. Survival ...................................................................................22

SECTION 14.12. No Waiver...................................................................................23

SECTION 14.13. Entire Agreement............................................................................23

SECTION 14.14. Further Assurance...........................................................................23

 

 

EXHIBIT A Addresses for Notices

EXHIBIT B Management Committee

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LIMITED LIABILITY COMPANY AGREEMENT dated as of October 29,

1997, between CBS INC., a New York corporation ("CBS"), and DATA BROADCASTING

CORPORATION, a Delaware corporation ("DBC").

 

 

Preliminary Statement

 

WHEREAS, having formed a limited liability company with the

name "Marketwatch.Com, LLC" (the "Company") under the Act (as hereinafter

defined) by the filing of a Certificate of Formation with the Secretary of State

of the State of Delaware on the date hereof, the parties hereto now desire to

enter into this Agreement to govern their rights and obligations as members

thereof;

 

WHEREAS, immediately following the execution and delivery of

this Agreement, CBS ad DBC are entering into the Contribution Agreement dated as

of the date hereof (the "Contribution Agreement"), among CBS, DBC and the

Company; and

 

WHEREAS, simultaneously with the execution and delivery of the

Contribution Agreement, CBS and the Company are entering into the License

Agreement and DBC and the Company are entering into the DBC Services Agreement.

 

NOW, THEREFORE, in consideration of the premises and the

mutual agreements herein, and for other good and valuable consideration, the

receipt and adequacy of which are hereby acknowledged, the parties hereto,

intending to be legally bound by the terms hereof applicable to each of them,

hereby agree as follows:

 

ARTICLE I

 

Definitions

 

SECTION 1.01. Definitions. When used herein, the following

terms have the following meanings:

 

"Act" means the Delaware Limited Liability Company Act as in

effect from time to time, or any successor statute.

 

"Affiliate" means, with respect to any Person, any other

Person directly or indirectly, through one or more intermediaries, Controlling

or Controlled by or under common Control with such Person.

 

"Agreement" means this Limited Liability Company Agreement as

it may be amended, supplemented or otherwise modified from time to time.

 

"Arbitrator" has the meaning assigned to that term in Section

7.02.

 

"Business" means the business conducted by the Company, which

shall be the businesses conducted with the assets contributed to the Company by

DBC pursuant to the

 

 

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Contribution Agreement as such businesses may be expanded or otherwise changed

from time to time by the Company pursuant to the terms hereof.

 

"Business Day" means a day that is not a Saturday, Sunday or

other day on which banking institutions in the State of New York are authorized

or required by law, regulation or executive order to be closed.

 

"Business Plan" has the meaning assigned to that term in

Section 6.04.

 

"Capital Account" has the meaning assigned to that term in

Section 5.01.

 

"CBS" has the meaning assigned to that term in the preamble.

 

"CBS Competitive Activities" has the meaning assigned to that

term in Section 13.01(b).

 

"Certificate of Formation" means the Certificate of Formation

of the Company as filed with the Secretary of State of the State of Delaware on

the date hereof, as the same may be amended, modified or otherwise supplemented

from time to time in accordance with the terms hereof.

 

"Code" means the Internal Revenue Code of 1986, as amended

from time to time.

 

"Company" has the meaning assigned to that term in the

preamble.

 

"Contribution Agreement" has the meaning assigned to that term

in the preamble.

 

"Control" means the possession, directly or indirectly, of the

power to direct or cause the direction of the management or policies of a

Person, whether through the ownership of voting securities or general

partnership or managing member interests, by contract or otherwise, and

"Controlling" and "Controlled" shall have meanings correlative thereto. Without

limiting the generality of the foregoing, a Person shall be deemed to Control

any other Person in which it owns, directly or indirectly, a majority of the

ownership interests or a majority of all outstanding voting stock of such

Person.

 

"DBC" has the meaning assigned to that term in the preamble.

 

"DBC Change of Control" has the meaning assigned to that term

in Section 11.04.

 

"DBC Competitive Activities" has the meaning assigned to that

term in Section 13.01(a)(i).

 

"DBC Loan" has the meaning assigned to that term in Section

12.01.

 

"DBC Offer" has the meaning assigned to that term in Section

11.04.

 

 

 

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"DBC Services Agreement" means the Services Agreement dated as

of the date hereof, among DBC and the Company.

 

"Definitive Documents" means this Agreement, the Contribution

Agreement, the License Agreement, the DBC Services Agreement and all other

agreements and documents contemplated by any of the foregoing , as the same may

be amended, supplemented or otherwise modified in accordance with the terms

hereof or thereof, as applicable.

 

"Detrimental Activities" has the meaning assigned to that term

in Section 13.01.

 

"Initial Capital Contributions" has the meaning assigned to

that term in Section 3.01.

 

"Interest" means the interest of a Member in the Company at

any particular time, including the right of such Member to any and all benefits

to which such Member may be entitled as provided in this Agreement, together

with the obligations of such Member to comply with all the terms and provisions

of this Agreement.

 

"License Agreement" means the License Agreement dated as of

the date hereof, among CBS and the Company.

 

"Management Committee" has the meaning assigned to that term

in Section 6.01.

 

"Member Nonrecourse Debt" means any Company liability (or

portion thereof) that is a "partner nonrecourse debt" within the meaning of

Treasury Regulation Section 1.704-2(b)(4).

 

"Members" means CBS and DBC and any Persons admitted as

additional or substitute Members of the Company pursuant to Section 9.01.

 

"Membership Percentages" means, with respect to each Member,

such Member's ownership Interest in the Company, expressed as a percentage. The

initial Membership Percentages are 50% with respect to CBS and 50% with respect

to DBC.

 

"Negotiation Period" has the meaning assigned to that term in

Section 7.02.

 

"Net Losses" has the meaning assigned to that term in Section

5.03.

 

"Net Profits" has the meaning assigned to that term in Section

5.03.

 

"Nonselling Member" has the meaning assigned to that term in

Section 9.03.

 

"Offer Notification" has the meaning assigned to that term in

Section 9.03.

 

"Person" means any individual, corporation, partnership, joint

venture, limited liability company, limited liability partnership, association,

joint-stock company, trust, unincorporated organization or other organization,

whether or not a legal entity, and any governmental authority.

 

 

 

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"Section 704(c) Property" means any property that is

contributed to the Company at a time when its adjusted tax basis differs from

its fair market value and any Company property that is the subject of a

revaluation pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(f) at a

time when its adjusted tax basis differs from its fair market value.

 

"Selling Member" has the meaning assigned to that term in

Section 9.03.

 

"Submission Date" has the meaning assigned to that term in

Section 7.02.

 

"Third Party Offer" has the meaning assigned to that term in

Section 9.03.

 

"Transfer" means, with respect to any item of property, any

direct or indirect sale, assignment, disposition of or other transfer, pledge or

encumbrance of such item, and "Transferred" has a meaning correlative to the

foregoing.

 

"Triggering Event" has the meaning assigned to that term in

Section 11.04.

 

SECTION 1.02. Definitions Generally. Definitions in this

Agreement apply equally to both the singular and plural forms of the defined

terms. The words "include" and "including" shall be deemed to be followed by the

phrase "without limitation" when such phrase does not otherwise appear. The

terms "herein", "hereof" and "hereunder" and other words of similar import refer

to this Agreement as a whole and not to any particular section, paragraph or

subdivision. The article and section titles appear as a matter of convenience

only and shall not affect the interpretation of this Agreement. All article,

section, paragraph, clause, exhibit or schedule references not attributed to a

particular document shall be references to such parts of this Agreement.

 

ARTICLE II

 

General Provisions

 

SECTION 2.01. Formation. The Company has been formed as a

limited liability company pursuant to the provisions of the Act by the filing of

the Certificate of Formation with the Secretary of State of the State of

Delaware. Each member hereby adopts, confirms and ratifies the Certificate of

Formation and all acts taken in connection therewith.

 

SECTION 2.02. Name. The name of the Company is

"Marketwatch.Com, LLC". The Management Committee may change the name of the

Company or adopt such trade or fictitious names as it may determine with the

approval of the Members.

 

SECTION 2.03. Term. The term of the Company began on the date

hereof and shall continue in perpetuity or until terminated in accordance with

the terms hereof.

 

SECTION 2.04. Purpose. The purpose of the Company shall be to

carry on any lawful business, purpose or activity for a limited liability

company under the Act.

 

 

 

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SECTION 2.05. Registered Office/Agent. The registered office

of the Company in the State of Delaware is The Corporation Trust Company,

Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801. The

name and address of the registered agent of the Company for service of process

on the Company in the State of Delaware is The Corporation Trust Company,

Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801.

 

SECTION 2.06. Principal Office. The Company's principal place

of business will be at 1900 South Norfolk Street, San Mateo, CA 94403, or such

other address as the Management Committee shall specify from time to time by

written notice to the Members.

 

SECTION 2.07. Members. The addresses of the initial Members

are as set forth in Exhibit A attached hereto.

 

ARTICLE III

 

Capital Contributions

 

SECTION 3.01. Initial Capital Contributions. Pursuant to the

Contribution Agreement, each of the Members will make an initial capital

contribution (the "Initial Capital Contributions") as set forth in the

Contribution Agreement in exchange for the their respective Interests. The

Initial Capital Contributions made by each of the Members are deemed to have

equal discounted present values.

 

SECTION 3.02. Additional Capital Contributions. Upon request

from the Management Committee, and subject to the unanimous consent and approval

of the Members, the Members will make additional capital contributions to the

Company pro rata in accordance with their respective Membership Percentages.

 

SECTION 3.03. Withdrawals, Interest and Capital Accounts. No

member shall have the right to withdraw any part of its capital contribution or

to receive any distribution except in accordance with the provisions of this

Agreement. No interest shall be paid on any capital contribution to the Company

except as may be set forth in this Agreement. A member shall not have any

obligation to the Company or to any other Member to restore any negative balance

in the Capital Account of such Member.

 

ARTICLE IV

 

Distributions

 

SECTION 4.01. Distributions. The Company will make cash

distributions to the Members in accordance with their Membership Percentages at

such times and in such amounts as the Management Committee shall determine in

its sole discretion.

 

SECTION 4.02. Distributions in Kind. The Company shall not

distribute any assets in kind unless approved by all of the Members. Such

property distributions shall be distributed based upon their fair market value

in the same proportions as if cash were distributed.

 

 

 

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If cash and property in kind are to be distributed simultaneously, the Company

shall distribute such cash and property in kind in the same proportion to each

Member, unless otherwise agreed by the Members.

 

SECTION 4.03. Tax Withholding. Notwithstanding any provision

herein to the contrary, the Management Committee may take any and all actions

that it determines to be necessary or appropriate to ensure that the Company

satisfies any and all withholding and tax payment obligations under Section

1441, 1445 or 1446 of the Code or any other provision of the Code or other

applicable law. Without limiting the generality of the foregoing, the Management

Committee may withhold any amount of taxes that it determines is required to be

withheld from amounts otherwise distributable to any Member pursuant to this

Article IV; provided, however, that such amount shall be deemed to have been

distributed to such Member for purposes of applying this Agreement.

 

ARTICLE V

 

Allocations and Other Tax Matters

 

SECTION 5.01. Capital Accounts. (a) There shall be established

for each Member on the books of the Company an account (a "Capital Account") to

be maintained pursuant to this Agreement. The Capital Account of each Member

shall be credited with (i) the amount of all cash contributed by a Member to the

Company, (ii) the fair market value of any property contributed to the Company

(net of any liabilities secured by such property that the Company is considered

to assume or take subject to under Section 752 of the Code) and (iii) the amount

of any Net Profits (or items of income) allocated to a Member pursuant to

Section 5.02, and shall be decreased by (a) the amount of any cash distributed

to a Member by the Company, (b) the fair market value of any property

distributed to a Member by the Company (net of any liabilities secured by such

distributed property that such Member is considered to assume or take subject to

under Section 752 of the Code), (c) the amount of any expenditure of the Company

described in Section 705(a)(2)(B) of the Code (or treated as a Section

705(a)(2)(B) expenditure for purposes of Section 704(b) of the Code) that is

allocable to a Member and (d) the amount of any Net Losses (or item of loss or

deduction) allocated to a Member pursuant to Section 5.02. The Capital Accounts

of the Members shall also be adjusted appropriately for their respective shares

of any other adjustment required under Treasury Regulation Sections 1.704-1(b)

and 1.704-2.

 

(b) In the event that any Interest in the Company is

Transferred, the transferee of such Interest shall succeed to the pro rata

portion of the transferor's Capital Account attributable to such Interest.

 

(c) Upon the occurrence of any event specified in Treasury

Regulation Section 1.704-1(b) (2) (iv) (f), the Management Committee may cause

the Capital Accounts of the Members to be adjusted to reflect the fair market

value of the Company's property at such time, as provided in such regulation.

 

 

 

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SECTION 5.02. Allocation of Net Profits and Net Losses. (a)

Subject to Section 5.02(b), the Net Profits and Net Losses of the Company for

each taxable year shall be allocated among the Members pro rata in proportion to

their respective Membership Percentages.

 

(b) Notwithstanding Section 5.02(a), special allocations of

Net Profits, Net Losses or specific items of income, gain, loss or deduction may

be required for any taxable year as follows:

 

(i) The Company shall allocate items of Company income and

gain among the Members at such times and in such amounts as necessary

to satisfy the minimum gain chargeback requirements of Treasury

Regulation Sections 1.704-2(f) and 1.704-2(i)(4).

 

(ii) Any deductions attributable to Member Nonrecourse Debt

shall be allocated among the Members that bear the economic risk of

loss for such Member Nonrecourse Debt in accordance with the ratios in

which such Members share such economic risk of loss and in a manner

consistent with the requirements of Treasury Regulation Sections

1.704-2(c), 1.704-2(i)(2) and 1.704-2(j) (1).

 

(iii) The Company shall specially allocate Net Losses and

items of income and gain when and to the extent required to satisfy the

"qualified income offset" requirement within the meaning of Treasury

Regulation Section 1.704-1(b)(2)(ii) (d).

 

(iv) During the taxable year in which a liquidation occurs,

the Company shall allocate Net Profits or Net Losses and any other item

allocable to such taxable year such that the balance in each Member's

Capital Account equals the amount to be distributed to that Member

pursuant to Section 11.02(b).

 

(v) In the event a Member's contribution to the Company causes

any Member to recognize income for Federal income tax purposes, the

entire amount of any deductions associated with such contribution shall

be allocated to the Member that recognizes income or, if more than one

Member recognizes income as a result of such contributions to the

Company, shall be allocated proportionately based upon the amount of

income so recognized by each Member.

 

SECTION 5.03. Definition of Net Profits and Net Losses. The

"Net Profits" or "Net Losses" of the Company, as appropriate, shall be the

taxable income or tax loss of the Company as determined for Federal income tax

purposes for a given taxable year, taking into account any separately stated

items, increased by the amount of any tax exempt income of the Company during

such taxable year and decreased by the amount of any Code Section 705(a)(2)(B)

expenditures (within the meaning of Treasury Regulation Section

1.704-1(b)(2)(iv)(i)) of the Company during such taxable year; provided,

however, that items of income, gain, loss and deduction attributable to Section

704(c) Property shall be determined in accordance with the principles of

Treasury Regulation Section 1.704-1(b)(2)(iv)(g).

 

SECTION 5.04. Federal Income Tax Allocations. Section 5.02

provides for the allocation of Net Profits and Net Losses for accounting and

Capital Account maintenance

 

 

 

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purposes. The Company's ordinary income and losses and capital gains and losses

as determined for Federal income tax purposes (and each item of income, gain,

loss or deduction entering into the computation thereof) shall be allocated to

the Members in the same proportions as the corresponding "book" items are

allocated pursuant to the preceding provisions of this Article V; provided,

however, that items of income, gain, loss and deduction relating to Section

704(c) Property shall be allocated in accordance with Section 704(c)(1)(A) of

the Code and the Treasury Regulations thereunder. Items described in this

Section shall neither be credited nor charged to the Members' Capital Accounts.

 

SECTION 5.05. Elections. (a) The Management Committee shall

cause the Company to make an election under Section 754 of the Code upon receipt

of a written request therefor from any transferee of an Interest permitted

hereunder.

 

(b) The Members intend that the Company be treated as a

partnership for Federal income tax purposes. Accordingly, neither the Management

Committee nor any Member shall file any election on behalf of the Company that

is inconsistent with that intent.

 

(c) Except as otherwise expressly provided herein, any tax

elections required or permitted to be made by the Company under the Code or

otherwise shall be made in such manner as may be reasonably determined by the

Management Committee.

 

SECTION 5.06. Fiscal Year. The fiscal year of the Company

shall end on the last day of December of each year.

 

SECTION 5.07. Tax Matters Partner. DBC, or such other Member

as shall be designated by a majority in Membership Percentage, shall be the "tax

matters partner" of the Company within the meaning of Section 6231(a)(7) of the

Code and shall act in any similar capacity under state or local tax law. The

designated Member shall keep each other Member fully informed regarding matters

for which it is responsible while acting in such capacity. The designated Member

shall perform only ministerial duties in its capacity as "tax matters partner"

and shall not take any material action in such capacity without the consent of

the Management Committee. All reasonable expenses incurred by the "tax matters

partner" while acting in such capacity shall be paid or reimbursed by the

Company.

 

SECTION 5.08. Other Tax Matters. The Members agree to treat

contributions made pursuant to the Contribution Agreement as governed by Section

721 of the Code, unless a final determination (which shall include the execution

of a Form 870-AD or successor form) requires a different treatment for U.S.

Federal income tax purposes. In the event that any taxing authority contests

such agreed treatment of the contributions or the treatment of any other item as

agreed to by the Members in the Definitive Documents, a Member receiving notice

of such contest from such taxing authority shall promptly give written notice of

such contest to each other Member. Such other Members may, at their own expense,

participate in the defense of such contest. The Members shall reasonably

cooperate in defending any such contest, and no Member shall settle or otherwise

compromise such a contest without the written consent of the other Members

(which shall not be unreasonably delayed or withheld). In the event of a

Member's refusal to consent to a settlement, such Member shall, to the extent

permitted by law,

 

 

 

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assume control of the defense of such contest, and such Member shall bear any

legal fees incurred by such Member in undertaking such defense to the extent

incurred after the assumption.

 

ARTICLE VI

 

Management

 

SECTION 6.01. Delegation of Authority. Except as otherwise

provided herein, each of the Members agree that the power to direct and control

the Company shall be delegated to a management committee (the "Management

Committee"). Approval or action taken by the Management Committee in accordance

with this Agreement shall constitute approval or action by the Company and shall

be binding on each Member.

 

SECTION 6.02. Management Committee. (a) Voting and Members.

(i) CBS shall appoint three members of the Management Committee and DBC shall

appoint three members of the Management Committee. Each member of the Management

Committee, including any alternate member designated by any Member, shall be an

employee of the Member making such appointment or an employee of the Company.

The initial members and alternative members of the Management Committee and

their respective telephone and telecopier numbers are set forth in Exhibit B.

 

(ii) For purposes of any approval or action taken by the

Management Committee, each member of the Management Committee shall have one

vote. Except as set forth herein, a majority vote of all of the members of the

Management Committee shall constitute action on that matter that is binding upon

the Company and the Members. In the event that the Vote of the Management

Committee is evenly divided, and the members of the Management Committee cannot

resolve such conflict by good faith negotiation within 15 days, the Management

Committee shall, by written notice to the Members, submit such issue for

resolution as set forth in Article VII hereof.

 

(iii) The quorum necessary for any meeting of the Management

Committee shall be those members entitled to cast all of the votes held by the

members of the Management Committee. A quorum shall be deemed not be present at

any meeting for which notice was not properly given as provided for herein,

unless the member or members as to whom such notice was not properly given

attend such meeting without protesting the lack of notice or duly execute and

deliver a written waiver of notice or a written consent to the holding of such

meeting.

 

(iv) Each Member shall be entitled to name an alternate member

to serve in the place of any member of the Management Committee appointed by

such Member should any such member not be able to attend a meeting or meetings

of the Management Committee. Each member or alternate member shall serve at the

request of the designating Member and may be removed as such by the designating

Member with or without cause. Each Member shall bear any cost incurred by any

member designated by it to serve on the Management Committee, and no member of

the Management Committee shall be entitled to compensation from the Company for

serving in such capacity. Each member shall notify the other Member and the

Company of the

 

 

 

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name, business address and business telephone and facsimile numbers of each

member and each alternate member that such Member has appointed to the

Management Committee. Each Member shall promptly notify the other Member and the

Company of any change in such Member's appointments or of any change in any such

address or number. Each appointment by a Member to the Management Committee

shall remain in effect until the Member making such appointment notifies the

Company of a change in such appointment. The resignation or removal of a member

of the Management Committee shall not invalidate any act of such member taken

before the giving of such written notice of the removal or resignation of such

member.

 

(v) Any action taken by a member of the Management Committee

in such member's capacity as such shall, so far as the Members are concerned, be

deemed to have been duly authorized by the Member that appointed such member;

provided, however, that any such action shall not be deemed to be an approval,

consent or agreement of such Member for any purposes of this Agreement for which

approval, consent or agreement must be separately obtained from such Member

pursuant to the terms of this Agreement.

 

(vi) CBS shall be entitled to appoint the Chairman of the

Management Committee.

 

(b) Meetings and Notices. (i) Meetings of the Management

Committee, which shall be led by the Chairman of the Management Committee, shall

be held at the principal offices of the Company or at such other place as may be

determined by the Management Committee. A meeting of the Management Committee

may be held by conference telephone or similar communications equipment by means

of which all members participating in the meeting can be heard by all other

participants. Regular meetings of the Management Committee shall be held at

least semi-annually on such dates and at such times as shall be determined by

the Management Committee. Notice of any regular meeting shall be given to each

member of the Management Committee by the Company or any Member at least five

Business Days prior to such meeting. Special meetings of the Management

Committee may be called by any Member on at least five Business Days' notice to

each member and alternate member thereof, which notice shall state the purpose

or purposes for which such meeting is being called. The failure to identify

specifically any action to be taken or business to be transacted at a special

meeting shall not invalidate any action taken or business transacted at such

special meeting.

 

(ii) The actions taken by the Management Committee at any

meeting, however called and noticed, shall be as valid as though taken at a

meeting duly held after regular call and notice if (but not until), either

before, at or after the meeting, the member or members as to whom it was

improperly held duly executes and delivers a written waiver of notice or a

written consent to the holding of such meeting. A vote of the Management

Committee may be taken either in a meeting of the members thereof or by

unanimous written consent without a meeting.

 

(iii) Unless otherwise determined by the Management Committee

with respect to any meeting of the Management Committee, any member of the

Management Committee may bring a reasonable number of nonvoting observers

(including lawyers and accountants) to any meeting of the Management Committee.

The Management Committee may establish reasonable

 

 

 

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<PAGE> 16

 

rules and regulations to limit the number and participation of observers and

require them to observe confidentiality obligations.

 

(iv) The Management Committee may establish reasonable rules

and regulations to provide for the keeping of minutes and other internal

Management Committee governance not inconsistent with the terms of this

Agreement.

 

(c) Nothing in this Section shall derogate from the power of

the Members, which is absolute, to mutually agree in writing to cause the

Company to act or refrain from acting.

 

(d) Notwithstanding anything herein to the contrary, the

Company may enforce its rights under any agreement with any Member without such

Member's consent and without the approval of the members of the Management

Committee appointed by such Member.

 

SECTION 6.03. Employees; Officers. (a) General. (i) The

Management Committee shall retain and employ officers, including a Chief

Executive Officer and such other officers as shall be deemed necessary or

advisable to operate the Company; provided, however, that CBS shall be entitled

to appoint the Chairman of the Management Committee (pursuant to clause

6.01(a)(iv)) and DBC shall be entitled to appoint the Chief Executive Officer,

who shall be one of the members of the Management Committee appointed by DBC

hereunder.

 

(ii) The Chief Executive Officer and the Chairman of the

Management Committee shall jointly approve the appointment of all key personnel

of the Company other than the Chief Executive Officer, subject, in each case, to

the ratification of such appointments by the Management Committee. The officers

of the Company shall be subject to removal with or without cause by the

Management Committee; provided, however, that the Chief Executive Officer shall

be subject to removal without cause only by DBC, and the Chairman shall be

subject to removal without cause only by CBS.

 

(iii) All officers of the Company (other than the Chief

Executive Officer) shall (A) report to the Chief Executive Officer or another

officer designated by the Chief Executive Officer and (B) attend meetings of the

Management Committee as requested.

 

(b) The Chief Executive Officer. The Chief Executive Officer

shall be the most senior officer of the Company and shall be responsible for the

day to day operation of the Company, subject to the control of the Management

Committee. He or she shall report to the Management Committee.

 

SECTION 6.04. Business Plan. The Chief Executive Officer will

prepare annually a business plan for the Company which will be submitted to the

Management Committee for approval (the business plan so approved, the "Business

Plan"). If any annual update of the Business Plan is not approved as set forth

herein, then the prior Business Plan then in effect in accordance with this

Section will continue in effect.

 

 

 

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<PAGE> 17

 

SECTION 6.05. Matters Requiring the Consent of All Members.

(a) Each Member shall designate one individual who shall be authorized to act on

behalf of such Member in connection with consents or approvals necessary or

appropriate pursuant to the terms of this Agreement; provided that all such acts

on behalf of a Member shall be in writing. Each Member agrees to give any

consent or approval required pursuant to the terms of this Agreement, or to

indicate that such consent or approval will not be given, within 30 days of

written request by the other Member or the Company.

 

(b) Each provision of this Agreement that requires the vote,

consent or approval of the Members shall require the vote, consent or approval

of each Member, notwithstanding the size of such Member's Interest in the

Company or its entitlement to allocations or distributions.

 

ARTICLE VII

 

Dispute Resolution

 

SECTION 7.01. Negotiation. (a) The Members shall attempt in

good faith to resolve promptly any impasse on any issue before the Management

Committee by referring such matters to negotiation between Bill Korn, Executive

Vice President, Planning and Operations of CBS, and Mark Imperiale, Chief

Operating Officer of DBC, or, in the event that either of such officers is no

longer serving in such position or a comparable senior executive position, a

senior executive of such Member designated by such member.

 

(b) If any Member determines in good faith that there is a

disagreement among the Members as to the need for additional capital

contributions to the Company or as to the scope of the business or activities to

be conducted by the Company or any other fundamental strategic matter relating

to the Company, such Member shall give written notice to the other Members of

such disagreement. Such disagreement shall be referred for negotiation between

Bill Korn, Executive Vice President, Planning and Operations of CBS, and Mark

Imperiale, Chief Operating Officer of DBC, or, in the event that either of such

officers is no longer serving in such position or a comparable senior executive

position, a senior executive of such Member designated by such Member. In the

event that such disagreement has not been resolved to the mutual satisfaction of

each Member within 30 days after the delivery notice of such disagreement, any

Member may give notice in writing to the other Members of its election to

trigger the mandatory transfer provisions of Section 11.04.

 

SECTION 7.02. Dispute Resolution. Any claim or controversy

with respect to a matter which is within the authority of the Management

Committee and which is not resolved within 15 days (the "Negotiation Period")

after the Members receive written notice of the impasse of the Management

Committee pursuant to Section 6.02(a)(ii), will, upon the request of either

Member, be resolved by arbitration as set forth below. The Members agree that

the dispute resolution procedure described in this Section 7.02 shall not apply

to any matter other than those specifically contemplated by the previous

sentence, including, without limitation, any dispute regarding the

interpretation of this Agreement, the rights and obligations of the Members

 

 

 

12

<PAGE> 18

 

under this Agreement or other matters not involving the management of the

business, operations or affairs of the Company. Such arbitration shall be

conducted in accordance with the following:

 

(a) As promptly as practicable (and in any event within 10

days) after the expiration of the Negotiation Period, the Company shall appoint

an arbitrator from the list attached hereto as Schedule 7.02. The arbitrator

appointed shall be the first name listed on such Schedule or if such person does

not consent to serve as the arbitrator, the next such person on such Schedule

who so consents to serve (the "Arbitrator"). Notwithstanding the foregoing, in

the event that the Arbitrator so selected has already served as an arbitrator

under this Agreement, then such Arbitrator shall be disqualified if any of the

Members so elect and the next name listed on such Schedule (provided such next

person has not served in the capacity of arbitrator (as set forth above)) shall

be considered to be the "first name listed" for purposes of the selection of the

Arbitrator. The foregoing disqualification shall not occur if such disqualified

but otherwise consenting Arbitrator is the only consenting person on such

Schedule, or if all other persons on such Schedule are similarly disqualified

(i.e., have served as arbitrator an equal number of times). The Arbitrator shall

then proceed under the procedures outlined in this Section 7.02.

 

(b) Following the designation of the Arbitrator, the Members,

together with the Arbitrator, shall promptly undertake appropriate informal

efforts to mediate and negotiate a solution to the matter covered by the

original notice.

 

(c) If a negotiated solution cannot be achieved within 10

Business Days after the date on which the Arbitrator is appointed, then the

Arbitrator shall promptly notify the Members of such fact and the matter will be

resolved as set forth below.

 

(i) Each of the Members will submit to the Arbitrator (and

provide copies of the same to the other Member), in writing, within 5

Business Days after such notice from the Arbitrator (the date by which

both Members shall have made such submissions is referred to herein as

the "Submission Date"), its statement of facts with respect to the

disputed matter, together with its proposed resolution of the matter,

all in reasonable detail and containing such supporting materials as it

may choose to submit. The Arbitrator will resolve the dispute by

choosing one of the proposed resolutions, without modification, using

the principles set forth in subclause (ii) below to make such

determination:

 

(ii) In resolving the dispute, the Arbitrator shall select the

proposed resolution that it believes to be in the best interests of the

Company;

 

(iii) No hearings or other form of discovery shall be

conducted, provided that each Member shall make itself available to

respond to inquiries from, and provide information requested by, the

Arbitrator;

 

(iv) The Arbitrator shall issue a decision within 15 Business

Days after the Submission Date; and

 

 

 

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<PAGE> 19

 

(v) The fees and expenses of the Arbitrator will be shared

equally between the Members. All other costs incurred by a Member in

connection with such arbitration shall be borne by the Member incurring

such cost.

 

(d) In connection with the enforcement of the mediation and

arbitration provisions of this Section 7.02, any agreement, decision or award

shall be final and conclusive as to any such claim.

 

ARTICLE VIII

 

Books and Records

 

SECTION 8.01. Books and Records. The Management Committee

shall keep or cause to be kept complete and accurate books of account and

records with respect to the Company's business. The books of the Company shall

at all times be maintained by the Management Committee. Each Member and its duly

authorized representatives shall have the right to examine and copy the

Company's books, records and documents during normal business hours. The

Company's books of account shall be kept in accordance with generally accepted

accounting principles, consistently applied. The Company's independent auditors

shall be an independent public accounting firm selected by the Management

Committee.

 

SECTION 8.02. Reports to Members; Budgets. (a) Within 60 days

after the end of each of the first three fiscal quarters of each year, the

Company shall prepare and mail to the Members an unaudited report setting forth:

(i) a balance sheet of the Company as of the end of such fiscal quarter and (ii)

an income statement of the Company for such fiscal quarter, comparing actual

results to the budget for such period.

 

(b) The Company shall use diligent efforts to prepare (or

cause to be prepared) and mail to the Members, within 120 days after the end of

each fiscal year, an audited report setting forth: (i) a balance sheet of the

Company as of the end of such fiscal year, (ii) an income statement of the

Company for such fiscal year, and (iii) a statement of such Member's Capital

Account as of the end of such fiscal year.

 

(c) The Company shall use reasonable efforts to prepare or

cause the Company's independent accountants to prepare and transmit to each

Member within 90 days following each calendar quarter a Federal income tax

schedule and such other tax information as may be reasonably necessary to enable

such Member to prepare its Federal, state and local income tax returns as they

relate to the Company for such fiscal year. The Company will provide estimates

of the Company's taxable income as may be reasonably requested by any Member in

writing from time to time.

 

 

 

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<PAGE> 20

 

ARTICLE IX

 

Admission of Members; Transfers

 

SECTION 9.01. Admission of Substitute or Additional Members.

No substitute or additional Member shall be admitted to the Company without the

prior written approval of each of the other Members.

 

SECTION 9.02. Restrictions on Transfer. (a) No Member shall

Transfer its Interest in the Company except for Transfers in accordance with

Sections 9.02(b) or 11.04. Any purported Transfer of all or any part of any

Interest in the Company in violation of this Section 9.02(a) shall be null and

void ab initio and of no force or effect.

 

(b) The Interest of a Member in the Company may be Transferred

only in whole and not in part, may only be Transferred by a sale of such

Member's entire Interest in the Company and, other than Transfers by CBS

pursuant to the exception to the immediately succeeding sentence, may only be

transferred following the fifth anniversary of the date hereof. A Member may

Transfer its Interest only pursuant to a sale after such Member has fully

complied with the provisions of Section 9.03 with respect to such sale, except

that CBS may Transfer its Interest to any entity controlling, controlled by or

under common control with, CBS, or to any entity that acquires CBS by purchase

of stock or by merger or otherwise, or by acquiring all or substantially all of

CBS's assets, without complying with such provisions. Regardless of whether a

Transfer of an Interest in the Company is permitted hereunder, such Transfer

will not release the transferor from any liability under this Agreement, whether

arising before or after such Transfer, unless and until the transferee is

admitted as a Member of the Company in accordance with Section 9.01.

 

SECTION 9.03. Right of First Refusal. If at any time a Member

shall desire to Transfer its Interest in the Company to a third party, then such

Member (the "Selling Member") shall obtain a bona fide written offer from an

unaffiliated third party (a "Third Party Offer") to purchase all, but not less

than all, the Interest of the Selling Member. No Third Party Offer shall

encompass or be conditioned upon the sale of any property other than all, but

not less than all, the Interest of the Selling Member in the Company. If the

Selling Member wishes to accept a Third Party Offer, it shall give a notice (an

"Offer Notification") to the other Member (the "Nonselling Member") which shall

include a copy of the Third Party Offer and shall set forth in reasonable detail

the name and address of the proposed buyer, the identities of the proposed

buyer's business principals, the nature of the proposed buyer's and its

Affiliates' business, and the amount, terms and conditions of the sales price.

The Nonselling Member shall then have 60 days to give notice to the Selling

Member that it wishes to a acquire all, but not less than all, the Interest of

the Selling Member at the price and on the terms and conditions set forth in

such Third Party Offer; provided, however, that if any consideration to be paid

to the Selling Member pursuant to the Third Party Offer is other than cash, the

Nonselling Member shall have the option to pay either such non-cash,

consideration or the fair market value thereof in connection with exercising its

right of first refusal hereunder. Such notice from the Nonselling Member shall

state a closing date no later than the later of 90 days after the date of such

notice and the closing

 

 

 

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<PAGE> 21

 

date set forth in the Third Party Offer. If the Nonselling member (i) does not

give such notice within the 60-day period following the Offer Notification from

the Selling Member or (ii) does give such notice but fails to close the sale

within the time period stated in the immediately preceding sentence, then the

Selling Member may, no later than 120 days after the latter to occur of the

dates referred to in clauses (i) and (ii) above, sell all, but not less than

all, its Interest to the third party at the price and on terms and conditions no

less favorable to the Selling Member than those contained in the Third Party

Offer.

 

ARTICLE X

 

Exculpation and Indemnification

 

SECTION 10.01. Exculpation and Indemnification. (a) No Member

shall be liable to the Company or to any other Member for any losses, claims,

damages or liabilities arising from, relating to, or in connection with, this

Agreement or the business or affairs of the Company, except for any losses,

claims, damages or liabilities as are determined by final judgment of a court of

competent jurisdiction to have resulted from such Member's gross negligence,

willful misconduct or from the failure by such Member to make a capital

contribution required to be made by it pursuant to Article III.

 

(b) The Company shall, to the fullest extent permitted by

applicable law, indemnify and hold harmless each Member against any losses,

claims, damages or liabilities to which such Member may become subject in

connection with any matter arising from, relating to, or in connection with,

this Agreement or the business or affairs of the Company, except for any losses,

claims, damages or liabilities as are determined by final judgment of a court of

competent jurisdiction to have resulted from such Member's gross negligence,

willful misconduct or from the failure by such Member to make a capital

contribution required to be made by it pursuant to Article III. If any Member

becomes involved in any capacity in any action, proceeding or investigation in

connection with any matter arising from, relating to, or in connection with this

Agreement or the business or affairs of the Company, whether or not pending or

threatened and whether or not any Member is a party thereto, the Company will

periodically reimburse such Member for its actual legal and other expenses

(including the cost of any investigation and preparation) incurred in connection

therewith upon submission by such Member of paid receipts or other evidence of

such expenses satisfactory to the Company; provided, however, that such Member

shall promptly repay to the Company the amount of any such reimbursed expenses

paid to it to the extent that it shall ultimately be determined that such Member

is not entitled to be indemnified by the Company in connection with such action,

proceeding or investigation as provided in the exception contained in the

immediately preceding sentence. If for any reason (other than the gross

negligence or willful misconduct of such Member) the foregoing indemnification

is unavailable to such Member, or insufficient to hold it harmless, then the

Company shall contribute to the amount paid or payable by such member as a

result of such loss, claim, damage or liability in such proportion as is

appropriate to reflect the relative benefits received by the Company on the one

hand and such Member on the other hand or, if such allocation is not permitted

by applicable law, to reflect not only the relative benefits referred to above

but also any other relevant equitable considerations.

 

 

 

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<PAGE> 22

 

(c) Notwithstanding anything else contained in this Agreement,

the reimbursement, indemnity and contribution obligations of the Company under

paragraph (b) above shall (i) be in addition to any liability that the Company

may otherwise have, (ii) extend upon the same terms and conditions to the

directors, officers, trustees, committee members, employees, stockholders,

members, partners, agents and representatives of each Member and of each

Affiliate of each Member, (iii) be binding upon and inure to the benefit of any

successors or assigns permitted under this Agreement, heirs and personal

representatives of each member and (iv) be limited to the assets of the Company.

 

(d) The foregoing provisions of this Section shall survive any

termination of this Agreement.

 

SECTION 10.02. Liability of the Members. Except as otherwise

expressly provided in the Act, the debts, obligations and liabilities of the

Company, whether arising in contract, tort or otherwise, shall be solely the

debts, obligations and liabilities of the Company, and no Member shall be

obligated personally for any such debt, obligation or liability of the Company

solely by reason of being a Member. Except as otherwise expressly provided in

the Act, the liability of each Member for capital contributions shall be limited

to the amount of capital contributions required to be made by such Member in

accordance with the provisions of this Agreement, but only when and to the

extent the same shall become due pursuant to the provisions of this Agreement.

In no event shall any Member enter into any agreement or instrument that would

create or purport to create personal liability on the part of any other Member

for any debts, obligations or liabilities of the Company without the prior

written consent of such other Member.

 

ARTICLE XI

 

Dissolution, Liquidation and Transfer

 

SECTION 11.01. Dissolution. The Company shall be dissolved and

its affairs shall be wound up upon the bankruptcy or dissolution of any Member,

unless within 90 days of such event a majority of the remaining Members

determine to continue the business of the Company.

 

SECTION 11.02. Liquidation. (a) Upon a dissolution pursuant to

Section 11.01, the Company's business and assets shall be liquidated in an

orderly manner. The Management Committee shall act as the liquidator to wind up

the affairs of the Company pursuant to this Agreement. If there shall be no

Management Committee, the remaining Members may approve one or more liquidators

to act as the liquidator in carrying out such liquidation. In performing its

duties, the liquidator shall be authorized to sell, distribute, exchange or

otherwise dispose of Company assets in accordance with the Act in any reasonable

manner that the liquidator shall determine to be in the best interest of the

Members.

 

(b) The proceeds of the liquidation of the Company shall be

distributed in the following order and priority:

 

 

 

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<PAGE> 23

 

(i) first, to creditors of the Company that are not Members

(or Affiliates of Members) in order of priority as provided by law in

payment of unpaid liabilities of the Company to the extent required by

law or under agreement with such creditors;

 

(ii) second, to the setting of any reserves which the

liquidator reasonably deems necessary for any anticipated, contingent

or unforeseen liabilities or obligations of the Company arising out of

or in connection with the conduct of the Company's business, provided

that at the expiration of such period the balance thereof shall be

distributed in accordance with the balance of this Section 11.02(b);

 

(iii) third, to any Member (or Affiliate of a Member) for any

other loans or debts owing to such Member (or Affiliate) by the Company

(including reimbursement of costs or expenses incurred on behalf of the

Company in accordance with the terms hereof);

 

(iv) fourth, the balance, if any, pro rata to each Member in

accordance with its Membership Percentage.

 

SECTION 11.03. Time Limitation. Any liquidating distribution

pursuant to this Article XI (except pursuant to Section 11.02(b) (ii)) shall be

made no later than the later of (a) the end of the taxable year during which

such liquidation occurs and (b) 90 days after the date of such liquidation.

 

SECTION 11.04. Mandatory Transfers. (a) Not withstanding anything

herein to the contrary, and absent agreement of the Members to do otherwise, one

Member shall purchase the other Member's Interest in the Company pursuant to the

terms of Section 11.04(b) upon the earliest to occur of: (i) the mutual written

agreement by the Members to terminate the Company, (ii) CBS giving notice in

writing to DBC of its election to trigger the mandatory transfer provisions of

this Section 11.04 within 60 days after any Person has acquired ownership of

more than 30% of the outstanding shares of common stock, par value $.01 per

share or securities representing, in the aggregate, more than 30% of the voting

power, of DBC, or all or substantially all of DBC's assets, (a "DBC Change of

Control"), without the prior written consent of CBS, (iii) the entry of a decree

of judicial dissolution of the Company pursuant to Section 802 of the Act or

(iv) any Member giving notice in writing to the other Members of its election to

trigger the mandatory transfer provisions of this Section 11.04 pursuant to

Section 7.01(b) (each, a "Triggering Event"). The parties hereby agree that DBC

may give CBS confidential notice of its intent to enter into an agreement which

would cause a DBC Change of Control, together with a description of the party

with whom DBC intends to effect such a transaction. CBS shall have twenty (20)

days from receipt of such notice to respond to DBC in writing as to whether it

would elect to trigger the mandatory transfer provisions of this Section 11.04

with respect to such potential DBC Change of Control. If, and only if, CBS

notifies DBC that it would not make such election, CBS shall be deemed to have

waived its right to trigger such mandatory transfer provisions with respect to

such potential DBC Change of Control.

 

 

 

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<PAGE> 24

 

(b) Upon the occurrence of a Triggering Event and (i) prior to

the first anniversary of the date hereof, DBC shall pay CBS, within 45 days of

the occurrence of such event, the sum of 50% of the aggregate rate card value of

the advertising time actually contributed by CBS to the Company pursuant to the

terms of the Contribution Agreement (such amount not to exceed $5,000,000) and

30% of the net advertising revenue of the Company prior to such Triggering Event

in exchange for CBS's Interest, and (ii) on or after the first anniversary of

the date hereof, DBC shall, within 30 days of the date of the Triggering Event,

submit in writing to CBS and the Company an offer to purchase, within 45 days

from acceptance of such offer, for cash (the "DBC Offer") all of CBS's Interest;

thereafter, CBS shall have 30 days to accept such offer by written notice to DBC

and the Company or to purchase all of DBC's Interest for: (A) 245% of the DBC

Offer, if the Triggering Event occurred on or after the first anniversary and

before the second anniversary of the date hereof, (B) 163% of the DBC Offer, if

the Triggering Event occurred on or after the second anniversary and before the

third anniversary of the date hereof and (C) 100% of the DBC Offer, if the

Triggering Event occurred on or after the third anniversary of the date hereof.

Upon the consummation of a Transfer by either Member pursuant to the above, the

other Member shall be released from all of its rights and obligations hereunder

and under the Definitive Documents and shall no longer be a Member.

 

SECTION 11.05. Claims of Members. The Members shall look

solely to the Company's assets for the return of their capital contributions,

and if the assets of the Company remaining after payment of or reasonable

provision for the payment of all liabilities of the Company are insufficient to

return such capital contributions, the Member shall have no recourse against the

Company or any other Member.

 

ARTICLE XII

 

DBC Loan

 

SECTION 12.01. DBC Loan. Until the third anniversary of the

date hereof, DBC shall provide to the Company, on an unsecured, revolving basis,

loans in amounts up to an aggregate of $5,000,000 (the "DBC Loan") to be used by

the Company in connection with the Business, including but not limited to for

working capital financing. Any loans made by DBC to the Company pursuant to this

Article XII shall bear interest at a variable rate per annum equal to the rate

announced from time to time by The Chase Manhattan Bank as its prime rate in

effect at its principal office in New York City plus 2% (but in no event higher

than the highest lawful rate), and shall be repayable by the Company from time

to time as soon as possible at such time or times as the Company shall have

sufficient cash or cash equivalents to make such payment or payments after

taking into account the cash needs of the Company.

 

ARTICLE XIII

 

Agreement Not To Compete

 

SECTION 13.01. Agreement Not To Compete. (a) Agreement of DBC

Not To Compete. DBC understands that the Company shall be entitled to protect

and preserve the going concern value of the Business to the extent permitted by

law and, therefore, for a period ending

 

 

 

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<PAGE> 25

 

on the earlier of the fifth anniversary of the date hereof and such date on

which neither DBC or any of its wholly owned subsidiaries is a Member, DBC shall

not, and shall cause its Affiliates not to, directly or indirectly, without the

prior written consent of each other Member:

 

(i) (A) sell advertising on an Internet website that primarily

disseminates or delivers business or financial new or information or

(B) use the Internet to sell real time snap-quotes to institutional or

individual subscribers or customers who pay a fee for such information

("DBC Competitive Activities"), including assisting any person in any

way to do, or attempt to do, anything prohibited by this clause; and

 

(ii) perform any action, activity or course of conduct that is

substantially detrimental to the Business or business reputation

("Detrimental Activities"), including (A) soliciting, recruiting or

hiring any employees of the Business or persons who have worked for the

Business, (B) soliciting or encouraging any employee of the Business to

leave the employment of the Business and (C) disclosing or furnishing

to anyone any confidential information relating to the Business or

otherwise using such confidential information for its own benefit or

the benefit of any other person;

 

The Company acknowledges that the maintenance and continued

operation of dbc.com by DBC shall not be considered to be a violation of this

Section 13.01(a) provided that dbc.com does not engage in any DBC Competitive

Activities or Detrimental Activities.

 

(b) Agreement of CBS Not To Compete. CBS understands that the

Company shall be entitled to protect and preserve the going concern value of the

Business to the extent permitted by law and, therefore, for a period ending on

the earlier of the fifth anniversary of the date hereof and such date on which

neither CBS or any of its wholly owned subsidiaries is a Member, CBS shall cause

the CBS Television Network (which, for purposes of this Section 13.01(b), shall

mean the News, Sports and Entertainment Divisions of CBS Inc.) not to engage in

or establish any new on-line businesses that primarily engage in delivering

comprehensive real-time or delayed stock market quotations or financial news in

the English language over the Internet to consumers ("CBS Competitive

Activities").

 

(c) Sections 13.01(a) and 13.01(b) shall be deemed not

breached as a result of the ownership by CBS or DBC or any of their respective

Affiliates of:

 

(i) less than an aggregate of 5% of any class of stock of a

Person engaged, directly or indirectly, in CBS or DBC Competitive

Activities, respectively;

 

(ii) less than 10% in value of any instrument of indebtedness

of a Person engaged, directly or indirectly, in CBS or DBC Competitive

Activities, respectively;

 

(iii) a Person that engages, directly or indirectly, in CBS or

DBC Competitive Activities, respectively, if such CBS or DBC

Competitive Activities account for less than 10% of such Person's

consolidated annual revenues; or

 

 

 

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(iv) a Person that engages, directly or indirectly, in CBS or

DBC Competitive Activities, respectively, if such CBS or DBC

Competitive Activities are not the predominant business of such Person

and if CBS or DBC, or their respective Affiliates, as applicable, uses

reasonable efforts to divest the business of such Person that

constitutes a CBS or DBC Competitive Activity, as applicable, and

actually divests itself of such business within 270 days of the

acquisition thereof.

 

The Members and the Company acknowledge that the provisions of

this Section 13.01 shall terminate and cease to apply in the event that the

Company is dissolved or liquidated; provided, however, that the provisions of

this Section 13.01 or a successor provision mutually agreeable to CBS and DBC

shall continue to apply in the event that the Company's organization as a

limited liability company is terminated but the Business is continued by CBS and

DBC in the form of a new Person.

 

SECTION 13.02. Enforcement. Notwithstanding any other

provision of this Agreement, it is understood and agreed that the remedies at

law would be inadequate in the case of any breach of the covenants contained in

Sections 13.01(a) and 13.01(b). Therefore, the Company shall be entitled to

equitable relief, including the remedy of specific performance, with respect to

any breach or attempted breach of such covenants.

 

ARTICLE XIV

 

Miscellaneous

 

SECTION 14.01. Amendments. This Agreement and the Certificate

of Formation may be amended, supplemented or otherwise modified only by written

instrument executed by each Member.

 

SECTION 14.02. Notices. All notices or other communications

required or permitted to be given hereunder shall be in writing and shall be

delivered by hand or sent, postage prepaid, by registered, certified or express

mail or reputable overnight courier service and shall be deemed given when so

delivered by hand or, if mailed, three days after mailing (one business day in

the case of express mail or overnight courier service), at the address for such

Person set forth in Exhibit A or at such other address as such Person may

hereafter specify.

 

SECTION 14.03. Counterparts. This Agreement may be executed in

one or more counterparts, all of which shall be considered one and the same

agreement, and shall become effective when one or more such counterparts have

been signed by each of the parties and delivered to each of the other parties.

 

SECTION 14.04. Severability. If any provision of this

Agreement (or any portion thereof) or the application of any such provision (or

any portion thereof) to any Person or circumstance shall be held invalid,

illegal or unenforceable in any respect by a court of competent jurisdiction,

such invalidity, illegality or unenforceability shall not affect any other

provision hereof (or the remaining portion thereof) or the application of such

provision to any other Persons or circumstances.

 

 

 

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<PAGE> 27

 

SECTION 14.05. No Third-Party Beneficiaries. Except as

provided in Article X, this Agreement is for the sole benefit of the parties

hereto and their permitted assigns and nothing herein expressed or implied shall

give or be construed to give to any Person, other than the parties hereto and

such assigns, any legal or equitable rights hereunder.

 

SECTION 14.06. Governing Law. This Agreement shall be governed

by and construed in accordance with the internal laws of the State of New York

applicable to agreements made and to be performed entirely within such State,

without regard to the conflicts of laws principles of such state.

 

SECTION 14.07. Publicity. No advertisement, press release or

other publicity concerning this Agreement or the transactions contemplated by

this Agreement will be made or disseminated without the consent of the Members.

 

SECTION 14.08. WAIVER OF JURY TRIAL. THE MEMBERS HEREBY

IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR

PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

SECTION 14.09. Consent to Jurisdiction. Each Member

irrevocably submits to the exclusive jurisdiction of (a) the Supreme Court of

the State of New York, New York County, and (b) the United States District Court

for the Southern District of New York, for the purposes of any suit, action or

other proceeding arising out of this Agreement or any Definitive Document, or

any transaction contemplated hereby or thereby. Each Member agrees to commence

any such action, suit or proceeding either in the United States District Court

for the Southern District of New York or if such suit, action or other

proceeding may not be brought in such court for jurisdictional reasons, in the

Supreme Court of the State of New York, New York County. Each Member further

agrees that service of any process, summons, notice or document by U.S.

registered mail to such party's respective address set forth in Exhibit A shall

be effective service of process for any action, suit or proceeding in New York

with respect to any matters to which it has submitted to jurisdiction in this

Section 14.09. Each Member irrevocably and unconditionally waives any objection

to the laying of venue of any action, suit or proceeding arising out of this

Agreement, any Definitive Document or the transactions contemplated hereby and

thereby in (i) the Supreme Court of the State of New York, New York County, or

(ii) the United States District Court for the Southern District of New York, and

hereby and thereby further irrevocably and unconditionally waives and agrees not

to plead or claim in any such court that any such action, suit or proceeding

brought in any such court has been brought in an inconvenient forum.

 

SECTION 14.10. Headings. The headings contained in this

Agreement, in any Exhibit or Schedule hereto and in the table of contents to

this Agreement are for reference purposes only and shall not affect in any way

the meaning or interpretation of this Agreement.

 

SECTION 14.11. Survival. The covenants contained in this

Agreement which, by their terms, require their performance after the expiration

or termination of this Agreement shall be enforceable notwithstanding the

expiration or other termination of this Agreement.

 

 

 

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<PAGE> 28

 

SECTION 14.12. No Waiver. The failure of any Member to insist

in any one or more instances upon the strict performance of any one or more of

the agreements, terms, covenants, conditions or obligations of this Agreement,

or to exercise any right, remedy or election herein contained, shall not be

construed as a waiver or relinquishment for the future of the performance of any

one or more of said obligations of this Agreement or of the right to exercise

such election, but the same shall continue in full force and effect with respect

to any subsequent breach, act or omission, whether of a similar nature or

otherwise.

 

SECTION 14.13. Entire Agreement. This Agreement and the

Definitive Documents, along with the Schedules and Exhibits hereto and thereto,

contain the entire agreement and understanding between the parties hereto with

respect to the subject matter hereof and supersede all prior agreements and

understandings relating to such subject matter. Neither party shall be liable or

bound to any other party in any manner by any representations, warranties or

covenants relating to such subject matter except as specifically set forth

herein or in the Definitive Documents.

 

SECTION 14.14. Further Assurance. Each party hereto shall

execute and deliver all such other and additional instruments and documents and

do all such other acts and things as may be necessary more fully to effectuate

the terms of this Agreement.

 

 

 

23

<PAGE> 29

 

IN WITNESS WHEREOF, the undersigned have duly executed this

Agreement as of the date first above written.

 

CBS INC.,

 

by

 

/s/ FREDRIC G. REYNOLDS

-----------------------------------

Name: Fredric G. Reynolds

Title: Executive Vice President and

Chief Financial Officer

 

 

 

DATA BROADCASTING CORPORATION,

 

by

 

/s/ MARK F. IMPERIALE

-----------------------------------

Name: Mark F. Imperiale

Title: President

 

 

 

24

<PAGE> 30

 

EXHIBIT A

 

 

Addresses for Notices

 

 

(i) if to the Company,

 

c/o Data Broadcasting Corporation

1900 South Norfolk Street

San Mateo, CA 94403

 

Attention: Larry Kramer

 

with a copy to CBS and DBC as set forth below;

 

(ii) if to CBS,

 

CBS Inc.

51 West 52nd Street

New York, NY 10019

 

Attention: Derek Reisfield

 

with copies to:

 

CBS Inc.

51 West 52nd Street

New York, NY 10019

 

Attention: Sanford Kryle, and

 

Cravath, Swaine & Moore

825 Eighth Avenue

New York, NY 10019

 

Attention: Peter S. Wilson, Esq.; and

 

(iii) if to DBC,

 

Data Broadcasting Corporation

1900 South Norfolk Street

San Mateo, CA 94403

 

Attention: Mark Imperiale

 

 

 

<PAGE> 31

 

with a copy to:

 

Camhy Karlinsky & Stein LLP

1740 Broadway

Sixteenth Floor

New York, NY 10019

 

Attention: Alan I. Annex, Esq.

 

 

 

2

<PAGE> 32

 

EXHIBIT B

 

 

Management Committee

 

 

 

DBC Management Committee Members:

 

Larry Kramer

Mark Imperiale

James Kaplan

 

DBC Alternate Management Committee Members:

 

Allan Tessler

 

CBS Management Committee Members:

 

Harry Fuller

Linda Fluger

Derek Reisfield

 

CBS Alternate Management Committee Members:

 

Tom Gentile

 

 

 

<PAGE> 33

 

Schedule 7.02

 

 

Arbitrators

 

 

1. Peter Vestal, Esq.

Law Offices of Peter Vestal

300 Montgomery Street (Suite 300)

San Francisco, CA 94104

(415) 956-2580

 

2. Mr. Leonard Toboroff

c/o Riddell

900 Third Avenue

New York, NY 10022

(212) 826-4300

 

3. Theodore A. Kury, Esq.

Debevoise & Plimpton

875 Third Avenue

New York, NY 10022

(212) 909-6388

 

4. Mr. Robert H. Lessin

Vice Chairman

Smith Barney, Inc.

388 Greenwich Street

New York, NY 10013

(212) 816-7695

 

5. Robert McDowell, Esq.

9129 Old Courthouse Road

Vienna, VA

(703) 938-0128

 

6. Paulette Kendler, Esq.

Hutton Ingram Yuzek Gainen Carroll & Bertolotti

250 Park Avenue

New York, NY 10177

(212) 907-9600

 

7. Mr. Theodore MacVeagh

Bromberg & Sonstein LLP

125 Summer Street

Boston, MA 02110

(617) 661-6505

 

 

 

<PAGE> 34

 

8. Mr. Arthur Dubrof

Enhance Financial Services Inc.

335 Madison Avenue

New York, NY 10017

(212) 983-3100

 

9. Mr. Chris Gerard

Reynolds, Richards LLP

67 Wall Street

New York, NY 10005

 

10. Mr. John Castro

Merrill

1 Merrill Circle

St. Paul, MN 55108

(612) 646-4501

 

 

 

2