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Operating Agreement

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Title:

Operating Agreement

Entities:

Getty Images, Inc.; Getty Investments LLC

Date:

2006

Size:

78KB total

Price:

$40

ID:

#2548779

► Business ► Operating Agreements
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OPERATING AGREEMENT

GETTY INVESTMENTS CONTINUATION L.L.C.

This Limited Liability Company Operating Agreement (this Agreement) of GETTY INVESTMENTS CONTINUATION L.L.C. (the Company), a limited liability company formed pursuant to the Delaware Limited Liability Company Act, by and among the Members whose names are listed on Schedule A (the Members) attached hereto as part of this Agreement.

WHEREAS, the Company was formed on October 4, 2006 in accordance with the Delaware Limited Company Act;

WHEREAS, pursuant to the Agreement and Plan of Merger, dated as of the date hereof and by and between Getty Investments L.L.C. (the Prior Company) and the Company, the Prior Company will merge with and into the Company, with the Company being the surviving entity (the Merger);

WHEREAS, the Members desire to set forth their agreement for the conduct of the Companys affairs in writing and agree that this Agreement shall be effective when executed by or on behalf of the Members.

NOW THEREFORE, in consideration of the mutual terms, covenants and conditions herein contained and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

1.	DEFINITIONS

	As used herein, the following terms shall have the following meanings:

1.1	Acquisition Costs Costs of acquiring equity interests in a business pursuant to section 3.1, including transaction costs and costs related to evaluating such investment opportunity.

1.2	Act The Delaware Limited Liability Company Act, as amended from time to time.

1.3	Articles The Certificate of Formation of the Company and Amendments thereto and restatements thereof filed with the Delaware Secretary of State pursuant to the Act, the current form of which is attached hereto as Exhibit 1.3.

1.4	Assignee A transferee of the economic benefit and related obligations (but not the voting or management rights) of a Membership Interest.

1.5	Auditors The firm of independent certified public accountants chosen pursuant to Article 7.3 hereof.

1.6	Bankruptcy With respect to any person, a Bankruptcy occurs when such Person:

	(a)	makes an assignment for the benefit of creditors;

	(b)	files voluntary petition in bankruptcy;

	(c)	is adjudged a bankrupt or insolvent, or has entered against him an order for relief as the debtor, in any bankruptcy or insolvency proceeding;

	(d)	files a petition or answer seeking for himself any insolvency reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law or regulation;

	(e)	files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against him in any proceedings of the nature contemplated by this Article 1.6; or

	(f)	seeks, consents to or acquiesces in the appointment of a trustee in bankruptcy, receiver or liquidator of the Member or of all or any substantial part if his properties.

1.7 Board of Directors The Directors of the Company or any Committee thereof, in each case duly appointed pursuant to Article 4.2. Each Director shall be a Manager of the Company within the meaning of the Act.

1.8	Capital Account The Capital Account on the books of the Company with respect to each Members Interest in the Company (each a Capital Account). The Capital Account of each Member as of the date hereof is set forth on Schedule A hereto. The Capital Account of each Member shall be maintained as follows:

	(a)	each Capital Account shall be increased by the amount of:

		(i)	any additional Capital Contributions made to the Company with respect to such Members Interests; and

		(ii)	any GI Profit allocated to such Member pursuant to Article 9 of this Agreement;

	(b)	each Capital Account shall be decreased by the amount of:

		(i)	any Distribution received by such Member with respect to its Interest in the Company other than upon a partial or complete withdrawal; and

	(ii)	any GI Loss allocated to such Member pursuant to Article 9 of this Agreement;

(c)		when any Interest in the Company is withdrawn, the amount in the Capital Account attributable to such Interest (or withdrawn portion of such Interest) shall be eliminated; and

(d)		to the extent a valid Section 754 election has been made by the Company, each Capital Account shall be increased or decreased where appropriate, to reflect any adjustments to the tax basis of the Company Property pursuant to Section 734 or 743 of the Code. Such Capital Accounts are intended to, and shall, comply with the requirements of Treasury Regulations Section 1.704-1(b)(2)(iv).


1.9	Capital Contribution or Contribution Any contribution of Money or other consideration made by or on behalf of a Member to the Company under the terms of this Agreement.

1.10	Code The Internal Revenue Code of 1986, as amended from time to time.

1.11	Commitment The Capital Contributions that a Member has made to date, the amount of which, and/or categories of which are set forth opposite such Members name on Schedule B hereto plus the additional Capital Contributions which a Member may be required to make from time to time pursuant to Article 5 and Article 8 hereof.

1.12	Company GETTY INVESTMENTS CONTINUATION LLC, a limited liability company formed under the laws of the State of Delaware.

1.13	Company Liability Any enforceable debt or obligation for which the Company is liable or which is secured by any property of the Company.

1.14	Company Minimum Gain The amount, if any, that would be realized by the Company if it sold all of the Company Property subject to any Company Nonrecourse Liability for an amount equal to the amount of the Company Nonrecourse Liability secured by such property, and determined in accordance with the Treasury Regulations Section 1.704-2.

1.15	Company Nonrecourse Liability A Company Liability to the extent that no Member or Related Person bears the economic risk of loss (as defined in Treasury Regulations Section 1.752-2) with respect to the liability.

1.16	Costs All or any of, as the context so admits, Acquisition Costs, the Lock Up Fees, Running Costs and/or Exceptional Costs.

1.17	Directors The Directors elected or appointed by the Members.

1.18	Dissociation or Dissociate The resignation, Bankruptcy or dissolution of a Member or occurrence of any other event under the Act (except assignment of a Members Interest

	voluntarily or by operation of law) that terminates the continued membership of a Member in the Company.

1.19	Dissolution Event An event, the occurrence of which will result in the dissolution of the Company under Article 10.

1.20	Distribution A redemption of a Members Interest (in whole or in part) by means of a transfer of Money or Property to such Member in the Company.

1.21	Exceptional Costs Costs incurred in connection with the obligations of the Company under Articles 5.13(b) and 7.6 hereof.

1.22	Getty Images Getty Images, Inc., a corporation formed under the laws of the State of Delaware.

1.23	Getty Images Stock Shares or other securities, of whatever class may at the relevant date be authorized in the share capital of Getty Images and, prior to the Scheme of Arrangement, the Class A Ordinary Shares and Class B Ordinary Shares of Getty Communications plc.

1.24	GI Profit/(Loss) The Companys unconsolidated net profit or net loss for the relevant fiscal year (or shorter fiscal period) of the Company, which shall include the change in value of each portfolio investment of the Company. The value of each portfolio investment of the Company shall be adjusted to equal its fair market value (and in the case of the Companys holding of Getty Images common stock shall be marked-to- market based on the price of Getty Images common stock listed and traded on the New York Stock Exchange), as reported by the Officer from published sources (such as the Wall Street Journal), as of the following times: (a) the end of the Companys fiscal year; (b) the acquisition of an additional interest by any new or existing Member in exchange for more than a de minimus Capital Contribution; (c) the distribution by the Company to a Member of more than a de minimus amount of Property as consideration for an Interest; (d) the liquidation of the Company within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g); and (e) any other time determined by the Officer in his good faith discretion.

1.25	Indemnity Agreement That certain Indemnity Agreement dated 9 February 1998 between Getty Images, the Company (as successor to the Prior Company) and the Members, as amended from time to time.

1.26	[Intentionally Deleted]

1.27	Majority With respect to the Members, Members who own Interests entitling them to a majority of all the Sharing Ratios attributable to the Interests of all Members. With respect to the Board of Directors, a Majority shall consist of a majority in number of the Directors. Assignees and, in the case of approvals to withdrawal where consent of the remaining Members is required, dissociating Members shall not be considered Members

	entitled to vote for the purpose of determining a Majority. In the case of a Member who has disposed of that Members entire Membership Interest to an Assignee, but has not been removed as provided in this Agreement, the Sharing Ratio of such Assignee shall be considered in determining a Majority and such members vote or consent shall be determined by such Sharing Ratio.

1.28	Member Minimum Gain The amount, if any, that would be realized by the Company if it sold all of the Company Property subject to any Member Nonrecourse Liability of an amount equal to the amount of the Member Nonrecourse Liability secured by such Property, and determined in accordance with Treasury Regulations Section 1.704-2.

1.29	Member Nonrecourse Liability Any Company Liability to the extent the liability is nonrecourse under state law, and on which a Member or Related Person bears the economic risk of loss under Treasury Regulations Section 1.752-2 because, for example, the Member or Related person is the creditor or a guarantor.

1.30	Membership Interest or Interest A limited liability company interest in the Company which represents the rights of a Member or, in the case of an Assignee, the rights of the assigning Member to Distributions and allocations of the profits, losses, gains, deductions, and credits of the Company.

1.31	Money Property, cash or other legal tender of the United States or the United Kingdom, or any obligation that is immediately reducible to legal tender without delay or discount. Money shall be considered to have a fair market value equal to its face amount.

1.32	Person An individual, trust, estate, or any organization permitted to be a member of a limited liability company under the laws of Delaware.

1.33	Proceeding Any administrative, judicial, or other adversary proceeding, including without limitation, litigation, arbitration, administrative adjudication, mediation, and appeal or review of any of the foregoing.

1.34	Property Any property real or personal, tangible or intangible, including money and securities and any legal or equitable interest in such property, but excluding services and promises to perform services in the future.

1.35	Qualified Investments

	(a)	any bonds or obligations which as to principal and interest constitute direct obligations of or are guaranteed by the United States of America;

	(b)	certificates of deposit of, or other accounts in an amount not to exceed $100,000 with, banks or trust companies which are organized under the laws of the United States of America or any state thereof or under the laws of Great Britain and which have capital and surplus of at least $50,000,000;

	(c)	commercial paper or finance company paper which is rated not less than prime- one or A-1 or their equivalents by Moodys Investor Service, Inc. or Standard & Poors Corporation or their successors;

	(d)	a repurchase agreement secured by any one or more of the foregoing;

	(e)	money market funds sponsored or affiliated with nationally recognized brokerage or investment advisory firms; and

	(f)	narrower range investments within the meaning of Schedule 1 of the Trustee Investments Act 1961 of Great Britain.

1.36	Registration Rights Agreement That certain Registration Rights Agreement dated as of 9 February 1998 between the Company (as successor to the Prior Company) and Getty Images, as amended from time to time.

1.37	Related Person A person having a relationship to a Member shat is described in Section 1.752-4(b) of the Treasury Regulations.

1.38	Restated Option Agreement That certain Restated Option Agreement dated as of 9 February 1998 between the Company (as successor to the Prior Company), Getty Images and Getty Communications plc, as amended from time to time.

1.39	[Intentionally Deleted]

1.40	Running Costs Those costs incurred in connection with the day to day administration of the company including without limitation the matters referred to in Article 5.13(a) hereof.

1.41	Scheme of Arrangement The scheme of arrangement under Section 425 of the Companies Act of 1985 pursuant to which Ordinary Shares of Getty Communications plc are converted to shares of common stock of Getty Images.

1.42	Sharing Ratio(s) With respect to any Member at any time, a fraction (expressed as a percentage ), the numerator of which is the balance of that Members Capital Account at that time and the denominator is the balances of the Capital Accounts of all the Members at that time.

1.43	Stockholders Agreement That certain Stockholders Agreement dated as of 9 February 1998 among Getty Images, the Company, Mark Getty, Jonathan Klein, Crediton Limited, October 1993 Trust, PDI, L.L.C., Mark Torrance and Wade Torrance, as amended from time to time.

1.44	Subsidiary A company where the Company (or another Subsidiary) holds either a majority of the shares, a majority of the votes or the right to appoint a majority of the members of the board of directors.

1.45	Substitute Member A transferee who has been admitted as a Member.

1.46	Taxable Year The taxable year of the Company as determined pursuant to Section 706 of the Code.

1.47	Taxing Jurisdiction Any state, local, or foreign government that collects tax, interest or penalties, however designated, on any Members share of the income or gain attributable to the Company.

1.48	Transfer Any sale, transfer (whether voluntary or otherwise) or other disposition of any Interest or any right to acquire or subscribe to any Interest or any interest (legal or equitable) in any Membership Interest.

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