Exhibit 10.3
AMENDMENT NO. 2
TO
THIRD AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
THIS AMENDMENT NO. 2 (this “Amendment”) to the Third Amended and Restated
Limited Liability Company Agreement of DiscoverReady LLC, dated as of
November 2, 2009 (the “Agreement”), by and among (i) DiscoverReady LLC, a
Delaware limited liability company (the “Company”), (ii) The Dolan Company, a
Delaware corporation (formerly Dolan Media Company) (“Dolan”), (iii) DR Holdco
LLC, a Delaware limited liability company (the “Minority Member”), and (iv) for
certain limited purposes set forth therein, the members of the Minority Member,
is made and entered into to be effective for all purposes as of May 11, 2011,
among each of the Company, Dolan and the Minority Member.
RECITAL
The Company, Dolan and the Minority Member now desire to amend the Agreement as
set forth below.
In consideration of the mutual promises, covenants and agreements contained
herein, the sufficiency of which is hereby agreed to and acknowledged, the
parties hereto agree to amend the Agreement as follows:
AGREEMENTS

1.  
Amendments.

1.1 Deleted Definitions. The definitions of “Exiting Minority Member “Forced
Sale Purchase Price”, “Mays Employment Term”, “Parkhill Securities”, “Put
Closing”, “Put Closing Date”, “Put Delivery Date”, “Put Equity Value Per Common
Unit”, “Put Notice”, “Put Purchase Price”, “Put Purchase Price Calculation” and
“Put Purchase Price Objection Notice” are hereby deleted from Article I of the
Agreement in their entirety.
1.2 New Definitions. The following definitions are hereby added to Article I of
the Agreement in their applicable alphabetical order:
“Appraiser of Original Common Units” is defined in Section 7.7(f).
“Appraiser of Undiscounted Common Units” is defined in Section 7.7(g).
“First Undiscounted Put Closing” is defined in Section 7.7(d).
“First Undiscounted Put Closing Date” is defined in Section 7.7(d).
“First Undiscounted Put Delivery Date” is defined in Section 7.7(a).
“First Undiscounted Put Notice” is defined in Section 7.7(a).
“Second Undiscounted Put Closing” is defined in Section 7.7(d).
“Second Undiscounted Put Closing Date” is defined in Section 7.7(d).

 

 

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“Second Undiscounted Put Delivery Date” is defined in Section 7.7(c).
“Second Undiscounted Put Notice” is defined in Section 7.7(c)
“Original Put Closing” is defined in Section 7.7(e).
“Original Put Equity Value Per Common Unit” means, as of a specified date, an
amount equal to (a) 0.95 multiplied by (b) the Equity Value Per Common Unit.
“Original Put Notice” is defined in Section 7.7(e).
“Original Put Purchase Price” means an amont equal to the product of (i) the
Discounted Put Equity Value Per Common Unit, multiplied by (ii) the number of
Common Units represented by the Discounted Put Securities (determined on a
Common Equivalent Basis.)
“Original Put Purchase Price Calculation” is defined in Section 7.7(g).
“Original Put Purchase Price Objection Notice” is defined in Section 7.7(g).
“Original Put Securities” is defined in Section 7.7(e).
“Remaining Undiscounted Common Units” means an amount equal to 92,877 minus the
number of Common Units purchased under the First Undiscounted Put Closing.
“Undiscounted Put Closing” is defined in Section 7.7(d).
“Undiscounted Put Notice” is defined in Section 7.7(c).
“Undiscounted Put Purchase Price” means an amount equal to the product of
(i) the Undiscounted Put Equity Value Per Common Unit, multiplied by (ii) the
number of Common Units respresented by the Undiscounted Put Securities.
“Undiscounted Put Purchase Price Calculation” is defined in Section 7.7(f).
“Undiscounted Put Purchase Price Objection Notice” is defined in Section 7.7(e).
“Undiscounted Put Securities” is defined in Section 7.7(d).
“Undiscounted Put Equity Value Per Common Unit” means, as of a specified date,
an amount equal to (a) 1.0 multiplied by (b) the Equity Value Per Common Unit.
1.3 Amended and Restated Definitions. The following definitions in Article I of
the Agreement are hereby amended, restated and replaced with the following:
“Call Equity Value Per Common Unit” means, as of a specified date, an amount
equal to (a) 1.0 multiplied by (b) the Equity Value Per Common Unit.

 

 

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1.4 Section 7.7. Section 7.7 of the Agreement is hereby deleted in its entirety
and replaced with the following:
7.7 Put Right.
(a) Notwithstanding anything to the contrary in Section 7.5, during the period
commencing on November 2, 2012 and ending on February 2, 2013, the Minority
Member will have the right to require the Company to purchase 46,497 (or such
lesser amount as may be agreed upon by the Minority Member and the Company) of
the Common Units held by the Minority Member for an aggregate purchase price
equal to the Undiscounted Put Purchase Price by delivering written notice of the
exercise of such right to the Manager (the “First Undiscounted Put Notice”). The
date on which the Manager receives the First Undiscounted Put Notice hereinafter
is referred to as the “First Undiscounted Put Delivery Date”. The Company and
the Minority Member each acknowledge and agree that, for purposes of calculating
the Undiscounted Put Purchase Price applicable to the First Undiscounted Put
Closing (as defined below), the specified date with respect to the Put Equity
Value Per Common Unit shall be the last day of the calendar month ending
immediately prior to the First Put Closing Date (as defined below).
(b) Notwithstanding anything to the contrary in Section 7.5, during the period
commencing on November 2, 2012 and ending on February 2, 2013, the Minority
Member will have the right to require the Company to purchase 7,446 (or such
lesser amount as may be agreed upon by the Minority Member and the Company) of
the Common Units held by the Minority Member for an aggregate purchase price
equal to the Original Put Purchase Price by delivering written notice of the
exercise of such right to the Manager (the “Original Put Notice”). The date on
which the Manager receives the Original Put Notice hereinafter is referred to as
the “Original Put Delivery Date”. The Company and the Minority Member each
acknowledge and agree that, for purposes of calculating the Original Put
Purchase Price applicable to the Original Put Closing (as defined below), the
specified date with respect to the Original Put Equity Value Per Common Unit
shall be the last day of the calendar month ending immediately prior to the
Original Put Closing Date (as defined below).
(c) Notwithstanding anything to the contrary in Section 7.5, during the period
commencing on November 2, 2013 and ending on February 2, 2014, the Minority
Member will have the right to require the Company to purchase all of the
Remaining Undiscounted Common Units (or such lesser amount as may be agreed upon
by the Minority Member and the Company) held by the Minority Member for an
aggregate purchase price equal to the Undiscounted Put Purchase Price by
delivering written notice of the exercise of such right to the Manager (the
“Second Undiscounted Put Notice,” and together with the First Undiscounted Put
Notice, each an “Undiscounted Put Notice”). The date on which the Manager
receives the Second Undiscounted Put Notice hereinafter is referred to as the
“Second Undiscounted Put Delivery Date”. The Company and the Minority Member
each acknowledge and agree that, for purposes of calculating the Undiscounted
Put Purchase Price applicable to the Second Undiscounted Put Closing (as defined
below), the specified date with respect to the Undiscounted Put Equity Value Per
Common Unit shall be the last day of the calendar month ending immediately prior
to the Second Undiscounted Put Closing Date (as defined below).

 

 

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(d) The Company shall be obligated to purchase all of the Minority Member’s
Common Units to be purchased pursuant to Section 7.7(a) or Section 7.7(c) hereof
(in either such case, the “Undiscounted Put Securities”), at a closing (such
closing with respect to the First Undiscounted Put Notice, the “First
Undiscounted Put Closing,” and such closing with respect to the Second
Undiscounted Put Notice, the “Second Undiscounted Put Closing,” and together
with the First Undiscounted Put Closing, each an “Undiscounted Put Closing”) on
such date as mutually agreed to by the Manager and the Minority Member, which
date shall not be prior to the later of (i) with respect to the First
Undiscounted Put Closing, (1) sixty (60) days after the First Undiscounted Put
Delivery Date or (2) ten (10) days after the final determination of the
Undiscounted Put Purchase Price applicable to the First Undiscounted Put Closing
pursuant to Section 7.7(d) (such date of closing, the “First Undiscounted Put
Closing Date”), or (ii) with respect to the Second Undiscounted Put Closing,
(1) sixty (60) days after the Second Undiscounted Put Delivery Date or (2) ten
(10) days after the final determination of the Undiscounted Put Purchase Price
applicable to the Second Undiscounted Put Closing pursuant to Section 7.7(d)
(such date of closing, the “Second Undiscounted Put Closing Date”). At the
applicable Undiscounted Put Closing, (i) the Minority Member shall (A) endorse
and deliver to the Manager any certificates (but only if certificates
representing Common Units have been issued) representing the Undiscounted Put
Securities held by the Minority Member to be purchased by the Company at such
Undiscounted Put Closing, (B) execute and deliver any other instruments
requested by the Manager to evidence the purchase of the Undiscounted Put
Securities by the Company at such Undiscounted Put Closing, and (C) execute and
deliver to the Manager a Transfer Agreement, and (ii) (A) the Company shall pay
to the Minority Member all or such portion of the applicable Undiscounted Put
Purchase Price by wire transfer of immediately available funds that the Company
is permitted to pay at such time pursuant to the terms and conditions of the
Senior Credit Agreement and (B) to the extent that any portion of such
Undiscounted Put Purchase Price is not paid in cash at such Undiscounted Put
Closing, then the Company shall issue and deliver to the Minority Member a Put
Note in an aggregate principal amount equal to the unpaid portion of the
Undiscounted Put Purchase Price to be paid at such Put Closing.
(e) The Company shall be obligated to purchase all of the Minority Member’s
Common Units to be purchased pursuant to Section 7.7(b) hereof (in either such
case, the “Original Put Securities”), at a closing (the “Original Put Closing,”)
on such date as mutually agreed to by the Manager and the Minority Member, which
date shall not be prior to the later of (1) sixty (60) days after the Original
Put Delivery Date or (2) ten (10) days after the final determination of the
Original Put Purchase Price applicable to the Original Put Closing pursuant to
Section 7.7(g) (such date of closing, the “Original Put Closing Date”.) At the
Original Put Closing, (i) the Minority Member shall (A) endorse and deliver to
the Manager any certificates (but only if certificates representing Common Units
have been issued) representing the Put Securities held by the Minority Member to
be purchased by the Company at such Original Put Closing, (B) execute and
deliver any other instruments requested by the Manager to evidence the purchase
of the Original Put Securities by the Company at such Original Put Closing, and
(C) execute and deliver to the Manager a Transfer Agreement, and (ii) (A) the
Company shall pay to the Minority Member all or such portion of the applicable
Original Put Purchase Price by wire transfer of immediately available funds that
the Company is permitted to pay at such time pursuant to the terms and
conditions of the Senior Credit Agreement and (B) to the extent that any portion
of such Undiscounted Put Purchase Price is not paid in cash at such Original Put
Closing, then the Company shall issue and deliver to the Minority Member a Put
Note in an aggregate principal amount equal to the unpaid portion of the
Original Put Purchase Price to be paid at such Put Closing.

 

 

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(f) Appraisal of the Undiscounted Common Units. Within ten (10) days after
either the First Undiscounted Put Notice or the Second Undiscounted Put Notice
shall have been received by the Manager, the Manager shall deliver to the
Minority Member its good faith determination of the Undiscounted Put Purchase
Price applicable to such Undiscounted Put Closing (each an “Undiscounted Put
Purchase Price Calculation”). The Minority Member shall have ten (10) days from
the date of receipt of such Undiscounted Put Purchase Price Calculation to
deliver to the Manager a notice of objection (each an “Undiscounted Put Purchase
Price Objection Notice”) with respect to the applicable Undiscounted Put
Purchase Price Calculation. If no Undiscounted Put Purchase Price Objection
Notice is delivered by the Minority Member to the Manager before the expiration
of such ten (10) day period, then the Undiscounted Put Purchase Price
Calculation shall be final and binding on the Minority Member for the applicable
Undiscounted Put Closing. If an Undiscounted Put Purchase Price Objection Notice
is delivered in accordance with this Section 7.7(f), the Manager and the
Minority Member shall consult with each other with respect to the objection set
forth therein. If the Manager and the Minority Member are unable to reach
agreement within ten (10) days after such an Undiscounted Put Purchase Price
Objection Notice has been given, then the Manager shall, within fifteen
(15) days thereafter, select in good faith an independent investment bank or
independent appraiser (such Person, the “Appraiser of the Undiscounted Common
Units”) to make an independent determination of the applicable Undiscounted Put
Purchase Price. The Appraiser of the Undiscounted Common Units shall determine
the applicable Undiscounted Put Purchase Price within thirty (30) days of
selection. The determination of the applicable Undiscounted Put Purchase Price
by the Appraiser of the Undiscounted Common Units shall be final and binding on
the Company and the Minority Member for purposes of the applicable Undiscounted
Put Closing. The Company, on the one hand, and the Minority Member, on the other
hand, shall share equally the costs of engagement of an Appraiser of the
Undiscounted Common Units for any determination of the Undiscounted Put Purchase
Price.
(g) Appraisal of Original Common Units. Within ten (10) days after Original Put
Notice shall have been received by the Manager, the Manager shall deliver to the
Minority Member its good faith determination of the Original Put Purchase Price
(the “Original Put Purchase Price Calculation”). The Minority Member shall have
ten (10) days from the date of receipt of such Original Put Purchase Price
Calculation to deliver to the Manager a notice of objection (the “Original Put
Purchase Price Objection Notice”.) If no Original Put Purchase Price Objection
Notice is delivered by the Minority Member to the Manager before the expiration
of such ten (10) day period, then the Original Put Purchase Price Calculation
shall be final and binding on the Minority Member for the Original Put Closing.
If a Original Put Purchase Price Objection Notice is delivered in accordance
with this Section 7.7(g), the Manager and the Minority Member shall consult with
each other with respect to the objection set forth therein. If the Manager and
the Minority Member are unable to reach agreement within ten (10) days after
such a Original Put Purchase Price Objection Notice has been given, then the
Manager shall, within fifteen (15) days thereafter, select in good faith an
independent investment bank or independent appraiser (such Person, the
“Appraiser of Original Common Units”) to make an independent determination of
the applicable Original Put Purchase Price. The Appraiser of Original Common
Units shall determine the applicable Original Put Purchase Price within thirty
(30) days of selection. The determination of the applicable Original Put
Purchase Price by the Appraiser of Original Common Units shall be final and
binding on the Company and the Minority Member for purposes of the applicable
Original Put Closing. The Company, on the one hand, and the Minority Member, on
the other hand, shall share equally the costs of engagement of an Appraiser of
Original Common Units for any determination of the Original Put Purchase Price.
(h) In addition to the rights set forth above, in the event that a Guarantor (as
defined in the Membership Interests Purchase Agreement) ceases to be an employee
of the Company on account of (i) the Company terminating such Guarantor’s
employment with the Company without Cause (as such term is defined in such
Guarantor’s Employment Agreement) or (ii) such Guarantor terminating his
employment with the Company for Good Reason (as such term is defined in such
Guarantor’s Employment Agreement), then the Minority Member shall have the right
to require the Company to purchase the Proportionate Amount as such term applies
to such Guarantor (or such lesser amount as may be agreed to by such Guarantor,
the Manager and the Minority Member) of the Minority Member’s Common Units for
an aggregate purchase price equal to the Put Purchase Price pursuant to the
procedures set forth in this Section 7.7.

 

 

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1.5 Section 7.8(a). The first sentence of Section 7.8(a) of the Agreement is
hereby deleted in its entirety and replaced with the following:
Notwithstanding anything to the contrary in Section 7.5, at any time during the
period commencing on November 2, 2013, and ending on February 2, 2014, Dolan
will have the continuing right to purchase all or any portion of the Minority
Member’s Common Units (any such Member, a “Selling Minority Member”) for an
aggregate purchase price equal to the Call Purchase Price by delivering written
notice of the exercise of such right to such Selling Minority Member (the “Call
Notice”).
1.5 Exhibit A. Exhibit A attached to the Agreement is hereby amended and
replaced in its entirety with Exhibit A attached to this Amendment.
2. Reference to and Effect on the Agreement.
2.1 Each reference in the Agreement to “this Agreement”, “hereunder”, “hereof”,
“herein”, or words of like import shall mean and be a reference to the Agreement
as amended hereby.
2.2 Except as specifically amended above, the Agreement shall remain in full
force and effect and is hereby ratified and confirmed.
3. Miscellaneous.
3.1 This Amendment may be executed in separate counterparts, each of which when
so executed and delivered shall be deemed to be an original and all of which
taken together shall constitute one and the same instrument. This Amendment will
become effective after (i) a counterpart to this Amendment has been executed and
delivered by the Company, Dolan and the Minority Member, (ii) a counterpart to
the Transfer Agreement, dated as of the date of this Amendment, by and between
the Minority Member and Dolan has been executed and delivered by each of DR
Holdco and Dolan, (iii) a counterpart to the First Amendment to Employment
Agreement, dated as of the date of this Amendment, by and between the Company
and Steven R. Harber (“Harber”), has been executed and delivered by the Company
and Harber, and (iv) a counterpart to the First Amendment to Employment
Agreement, dated as of the date of this Amendment, by and between the Company
and James K. Wagner (“Wagner”), has been executed and delivered by the Company
and Wagner. This Amendment, and any amendments hereto, to the extent signed and
delivered by means of a facsimile machine or other electronic transmission
(including transmission in portable document format by electronic mail), shall
be treated in all manners and respects and for all purposes as an original
agreement and shall be considered to have the same binding legal effect as if it
were the original signed version thereof delivered in person.
3.2 Section headings in this Amendment are included herein for convenience of
reference only and shall not constitute a part of this Amendment for any other
purpose.
3.3 The language used in this Amendment will be deemed to be the language chosen
by the parties to express their mutual intent, and no rules of strict
construction will be applied against any party.

 

 

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3.4 If and to the extent there are any inconsistencies between the Agreement and
this Amendment, the terms of this Amendment shall control.
3.5 This Amendment shall be governed by and construed in accordance with the
laws of the State of Delaware without regard to its conflict of laws doctrines.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 2 as of
the date first written above.

            COMPANY:

DISCOVERREADY LLC
      By:   /s/ Scott J. Pollei         Name:   Scott J. Pollei        Title:  
Vice President     
MEMBERS:

THE DOLAN COMPANY
      By:   /s/ Scott J. Pollei         Name:   Scott J. Pollei        Title:  
Executive Vice President     
DR HOLDCO LLC
      By:   /s/ James K. Wagner, Jr.         Name:   James K. Wagner, Jr.       
Title:   CEO and Manager   

 

 

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EXHIBIT A
List of Members, Capital Contributions,
Common Units and Participating Percentages

                  Name, Address, Phone             and Fax of Member   Common
Units     Participating Percentage  
 
               
The Dolan Company
222 South Ninth Street, Suite 2300
Minneapolis, Minnesota 55402
Attention: James P. Dolan
Phone: (612) 317-9425
Fax:     (612) 317-9434
    899,556       90 %
 
               
DR Holdco, LLC
55 Broadway, 6th Floor
New York, New York 10006
Attention: James K. Wagner
                 Steven R. Harber
Phone: (212) 699-3965
Fax:     (212) 699-3970
    100,444       10 %              
 
               
TOTAL
    1,000,000       100.0 %