Exhibit 4.4
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
ICG FUNDING, LLC
DATED AS OF SEPTEMBER 23, 1997
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT OF
ICG FUNDING, LLC
This Amended and Restated Limited Liability Company
Agreement of ICG Funding, LLC (the "Company") is made as of
September 23, 1997, among ICG Communications, Inc. ("ICG") and
Xxxxx X. Xxxxxxxx ("Xxxxxxxx"), as current Members (as defined
below) of the Company and the Persons (as defined below) who
become Members of the Company in accordance with the provisions
hereof.
WHEREAS, ICG and Xxxxxxxx have heretofore formed a
limited liability company pursuant to the Delaware Limited
Liability Company Act. 6 Del. C. Section 18-101, et seq., as
amended from time to time (the "Delaware Act"), by filing a
Certificate of Formation of the Company with the office of the
Secretary of State of the State of Delaware on September 17,
1997, and entering into a Limited Liability Company Agreement of
the Company dated as of September 17, 1997 (the "Original Limited
Liability Company Agreement");
WHEREAS, the Members desire to continue the Company as
a limited liability company under the Delaware Act and to amend
and restate the Original Limited Liability Company Agreement in
its entirety;
WHEREAS, it is a condition to closing under the
Placement Agreement dated September 18, 1997, among ICG and
certain other parties to so amend and restate the Original
Limited Liability Company Agreement in its entirety; and
WHEREAS, Xxxxxxxx desires to resign as the provisional
Member of the Company.
NOW, THEREFORE, in consideration of the agreements and
obligations set forth herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Members hereby amend and restate the Original
Limited Liability Company Agreement, as amended, in its entirety
and agree as follows:
ARTICLE I
DEFINED TERMS
SECTION 1.1. DEFINITIONS. The terms defined in this
Article I shall, for the purposes of this Agreement, have the
meanings herein specified.
"Adjusted Capital Account" means the Capital Account
established for a Member, as the same is specially computed to
reflect the adjustments required or permitted by the Treasury
Regulations under Section 704(b) of the Code to be taken into
account in applying the second sentence of section
1.704-1(b)(2)(ii)(d) of the Treasury Regulations.
"Affiliate" means with respect to a specified Person,
any Person that directly or indirectly controls, is controlled
by, or is under common control with, the specified Person. As
used in this definition, the term "control" means the possession,
directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether
through ownership of voting securities, by contract or otherwise.
"Agreement" means this Amended and Restated Limited
Liability Company Agreement of the Company, as amended, modified,
supplemented or restated from time to time.
"Capital Account" shall have the meaning set forth in
Section 4.5.
"Certificate" means the Certificate of Formation
referred to in the first recital of this Agreement and any and
all amendments thereto and restatements thereof filed on behalf
of the Company with the office of the Secretary of State of the
State of Delaware pursuant to the Delaware Act.
"Closing Date" shall have the meaning set forth in
Article III.
"Code" means the Internal Revenue Code of 1986, as
amended from time to time, or any corresponding federal tax
statute enacted after the date of this Agreement. A reference to
a specific section (Section) of the Code refers not only to such
specific section but also to any corresponding provision of any
federal tax statute enacted after the date of this Agreement, as
such specific section or corresponding provision is in effect on
the date of application of the provisions of this Agreement
containing such reference.
"Common Member" means a Member that holds one or more
Common Securities.
"Common Securities" means the Interests in the Company
which represent common limited liability company interests in the
Company and are described in this Agreement.
"Company Dividend Junior Securities" shall have the
meaning set forth in Section 9.3 of this Agreement.
"Company Dividend Parity Securities" shall have the
meaning set forth in Section 9.3 of this Agreement.
"Company Liquidation Parity Securities" shall have the
meaning set forth in Section 15.5 of this Agreement.
"Covered Person" means the Manager, any Affiliate of
the Manager or any officers, directors, managers, shareholders,
partners, members, employees, representatives or agents of the
Manager, or any employee or agent of the Company or its
Affiliates.
"Dividend Payment Date" has the meaning set forth in
Section 9.1(c) of this Agreement.
"Escrow Account" shall have the meaning set forth in
Section 4.4.
"Escrow Agreement" shall have the meaning set forth in
Section 4.4.
"Exchange Agent" means ICG Communications, Inc.
"Fiscal Period" means a calendar month.
"Funding Date" shall have the meaning set forth in
Section 3.1.
"Guarantee" means the Guarantee Agreement to be entered
into between ICG and the Company for the benefit of the Preferred
Members, as amended from time to time.
"ICG Common Stock" means the Common Stock, $.01 par
value per share, of ICG.
"ICG Preferred Stock" means the Preferred Stock
Mandatorily Redeemable 2009, $.01 par value per share, of ICG.
"Indemnified Person" means the Common Member, any
Affiliate of the Common Member or any officers, directors,
managers, shareholders, partners, members, employees,
representatives or agents of the Common Member, or any employee
or agent of the Company or its Affiliates.
"Interest" means a limited liability company interest
in the Company, including the right of the holder thereof to any
and all benefits to which a Member may be entitled as provided in
this Agreement, together with the obligations of a Member to
comply with all of the terms and provisions of this Agreement.
"Liquidation Distribution" shall have the meaning set
forth in Section 15.5 of this Agreement.
"LP Act" means the Delaware Revised Uniform Limited
Partnership Act. 6 Del C. Section 17-101, et seq., as amended
from time to time.
"Majority in Liquidation Preference" means Preferred
Members who are the record owners of Preferred Securities whose
aggregate liquidation preferences represent more than 50% of the
aggregate liquidation preference of all Preferred Securities of
any particular series or all series, as the context requires,
then outstanding.
"Manager" means ICG, in its capacity as the manager of
the Company and as the Member that holds Common Securities.
"Member" means any Person that holds an Interest in the
Company and is admitted as a member of the Company pursuant to
the provisions of this Agreement, in its capacity as a member of
the Company. For purposes of the Delaware Act, the Common Member
and the Preferred Members shall constitute separate classes or
groups of Members.
"Net Income" and "Net Loss", respectively, for any
Fiscal Period means the income and loss, respectively, of the
Company for such Fiscal Period as determined in accordance with
the method of accounting followed by the Company for federal
income tax purposes, including, for all purposes, any tax-exempt
income and any expenditures of the Company which are described in
Section 705(a)(2)(B) of the Code (or treated as so described
under Section 1.704-1(b)(2)(iv)(i) of the Treasury Regulations);
provided, however, that any item allocated under Section 4.7
shall be excluded from the computation of Net Income and Net
Loss.
"Notice of Exchange" means a notice to the Exchange
Agent given by a Preferred Member of such Member's desire to
exercise its exchange right under the Preferred Securities
Designation.
"Offering" shall have the meaning set forth in Section
3.1.
"Person" means any individual, corporation,
association, partnership (general or limited), joint venture,
trust, estate, limited liability company, or other legal entity
or organization.
"Preferred Certificate" means a certificate evidencing
the Preferred Securities held by a Preferred Member.
"Preferred Member" means a Member that holds one or
more Preferred Securities.
"Preferred Securities" means the Interests which
represent preferred limited liability company interests in the
Company and are described in this Agreement.
"Preferred Securities Designation" means any written
action of the Manager pursuant to Section 7.1(b) of this
Agreement providing for the issue of a series of Preferred
Securities.
"Tax Matters Partner" means the Manager designated as
such in Section 11.1(b) of this Agreement.
"Third Party Creditors" shall have the meaning set
forth in Section 13.1 of this Agreement.
"U.S. Government Securities" mean instruments which
evidence any security issued or guaranteed as to principal or
interest by the United States, or by a person controlled or
supervised by and acting as an instrumentality of the government
of the United States pursuant to authority granted by the
Congress of the United States, or any certificate of deposit for
any of the foregoing.
SECTION 1.2. HEADINGS. The headings and subheadings in this
Agreement are included for convenience and identification only
and are in no way intended to describe, interpret, define or
limit the scope, extent or intent of this Agreement or any
provision hereof.
ARTICLE II
CONTINUATION AND TERM; ADMISSION OF MEMBERS
SECTION 2.1. CONTINUATION; WITHDRAWAL OF MEMBER.
(a) The Members hereby agree to continue the Company
as a limited liability company under and pursuant to the
provisions of the Delaware Act and agree that the rights, duties
and liabilities of the Members shall be as provided in the
Delaware Act, except as otherwise provided herein.
(b) Upon the execution of this Agreement, ICG shall
continue to be a Member and shall be designated as the Common
Member and shall be the holder of all of the Common Securities
and Xxxxxxxx shall resign and withdraw as a provisional Member of
the Company upon the admission of any other Member in the Company
and, at such time, all of Xxxxxxxx'x interest in the Company
shall be cancelled. Xxxxxxxx shall not be entitled to any
distribution upon his withdrawal and resignation.
(c) The Manager, as an authorized person within the
meaning of the Delaware Act, shall execute, deliver and file any
and all amendments to and restatements of the Certificate.
SECTION 2.2. NAME. The name of the Company heretofore
formed and continued hereby is ICG Funding, LLC. The business of
the Company may be conducted upon compliance with all applicable
laws under any other name designated by the Manager.
SECTION 2.3. TERM. The term of the Company commenced on the
date the Certificate was filed in the office of the Secretary of
State of the State of Delaware and the Original Limited Liability
Company Agreement was entered into, and shall continue until
December 31, 2050, unless dissolved before such date in
accordance with the provisions of this Agreement.
SECTION 2.4. REGISTERED AGENT AND OFFICE. The Company's
registered agent and office in Delaware shall be Corporation
Service Company, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000. At any time, the Manager may designate
another registered agent and/or registered office.
SECTION 2.5. PRINCIPAL PLACE OF BUSINESS. The principal
place of business of the Company shall be at 0000 Xxxx Xxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000. The Manager may change the
location of the Company's principal place of business.
SECTION 2.6. QUALIFICATION IN OTHER JURISDICTIONS. The
Manager shall cause the Company to be qualified, formed or
registered under assumed or fictitious name statutes or similar
laws in any jurisdiction in which the Company conducts business
and in which such qualification, formation or registration is
required by law or deemed advisable by the Manager. The Manager,
as an authorized person within the meaning of the Delaware Act,
shall execute, deliver and file any certificates (and any
amendments and/or restatements thereof) necessary for the Company
to qualify to do business in a jurisdiction in which the Company
may wish to conduct business.
SECTION 2.7. ADMISSION OF MEMBERS.
(a) A Person shall be admitted as a Member and shall
become bound by the terms of this Agreement, without execution of
this Agreement, if such Person (or a representative authorized by
such Person orally, in writing or by other action such as payment
for an Interest) complies with the conditions for becoming a
Member as set forth in Section 2.7(b) and requests (which request
shall be deemed to have been made upon acquisition of an Interest
directly from the Company or upon an assignment of an Interest
from another Person) that the records of the Company reflect such
admission. The Company shall be promptly notified of any
assignment of an Interest.
The Company will reflect the admission of a Member in
the records of the Company as soon as is reasonably practicable
after either of the following events: (i) in the case of a Person
acquiring an Interest directly from the Company, at the time of
payment therefor, and (ii) in the case of an assignment, upon
notification thereof (the Company being entitled to assume, in
the absence of knowledge to the contrary, that proper payment has
been made by the assignee).
(b) Subject to the restrictions on transfer of Common
Securities set forth in Sections 7.1(e) and 14.1 of this
Agreement, whether acquiring an Interest directly from the
Company or by assignment, a Person shall be admitted as a Member
upon the acquisition or assignment, as the case may be, of such
Interest and the reflection of such Person's admission as a
Member on the registration books maintained by or on behalf of
the Company. The consent of any other Member or the Manager shall
not be required for the admission of a Member.
SECTION 2.8. MERGER, CONSOLIDATION, ETC. OF THE COMPANY.
The Company may not consolidate with, merge with or into, or be
replaced by, or convey, transfer or lease its properties and
assets as an entirety or substantially as an entirety to any
Person, except with the prior approval of Preferred Members
holding not less than a Majority in Liquidation Preference of the
outstanding Preferred Securities of each series or except as set
forth in this Section 2.8. The Company may, without the consent
of Preferred Members, consolidate with, merge with or into, or be
replaced by, or convey, transfer or lease its assets as an
entirety or substantially as an entirety to, a limited liability
company, limited partnership or trust organized as such under the
laws of any state of the United States of America or the District
of Columbia, provided that (i) such successor entity either (x)
expressly assumes all of the obligations of the Company under the
Preferred Securities or (y) substitutes for the Preferred
Securities of each series other securities having substantially
the same terms as such Preferred Securities of each series (the
"Successor Securities") so long as the Successor Securities rank,
with respect to participation in the profits or assets of the
successor entity, at least as high as the Preferred Securities of
the related series rank with respect to payment of dividends and
distribution of assets upon the liquidation, dissolution or
winding-up of the Company, (ii) ICG expressly acknowledges such
successor entity as the holder of the ICG Preferred Stock
relating to such Preferred Securities and its obligations under
the Guarantee with respect to the Successor Securities, (iii)
such merger, consolidation, replacement, conveyance, transfer or
lease does not cause the Preferred Securities or the Successor
Securities, if any, to be delisted (or, in the case of any
Successor Securities, to fail to be listed) by any national
securities exchange or other organization on which such Preferred
Securities are then listed, (iv) such merger, consolidation,
replacement, conveyance, transfer or lease does not cause the
Preferred Securities or Successor Securities, if any, to be
downgraded (or put on a "watch list" for possible downgrading) by
any "nationally recognized statistical rating organization," as
that term is defined by the Securities and Exchange Commission
for purposes of Rule 436(g)(2) under the Securities Act of 1933,
as amended, (v) such merger, consolidation, replacement,
conveyance, transfer or lease does not adversely affect the
powers, preferences and other special rights of Preferred Members
or the holders of the Successor Securities, if any, in any
material respect (other than with respect to any dilution of the
holders' interest in the new entity) and (vi) prior to such
merger, consolidation, replacement, conveyance, transfer or
lease, ICG has received an opinion of nationally recognized
independent legal counsel to the Company experienced in such
matters to the effect that (x) such successor entity will be
treated as a partnership or as a grantor trust, as appropriate,
for federal income tax purposes, (y) following such merger,
consolidation, replacement, conveyance, transfer or lease, ICG
and such successor entity will be in compliance with the
Investment Company Act of 1940, as amended, without registering
thereunder as an investment company and (z) such merger,
consolidation, replacement, conveyance, transfer or lease will
not adversely affect the limited liability of the Preferred
Members or the holders of the Successor Securities, if any, or
result in federal income tax liability to such Preferred Members
or holders other than with respect to any fractional share
interests converted into cash.
ARTICLE III
PURPOSE AND POWERS OF THE COMPANY
The purposes of the Company are (a) to issue Interests
and to use at least 85% all of the proceeds from the issuance
thereof (the "Offering") and the related capital contributions to
purchase shares of ICG Preferred Stock from ICG, (b) to invest up
to 15% of such proceeds in Treasury strips and other U.S.
Government Securities and (c) except as otherwise limited herein,
to enter into, make and perform all contracts and other
undertakings, and to take any and all actions necessary,
appropriate, proper, advisable, incidental or convenient to or
for the furtherance of the purpose of the Company as set forth
herein. On the closing date of the issuance of the Preferred
Securities (the "Closing Date"), the Manager, on behalf of the
Company, shall purchase, and place in escrow, Treasury strips in
an amount sufficient to fund the cash payment of the first 13
dividends on the Preferred Securities. From the Closing Date to
a date selected by the Manager, on behalf of the Company (the
"Funding Date"), that is no more than six months after the
Closing Date, the entire proceeds of the Offering, less the
amount used to purchase Treasury strips, shall be invested by the
Manager, on behalf of the Company, in U.S. Government Securities.
On the Funding Date, the Manager, on behalf of the Company, shall
use the earnings of and principal of such U.S. Government
Securities to pay $97.75 million to ICG as consideration for ICG
Preferred Stock. In the event such earnings and principal do not
equal $97.75 million, the Company shall receive a distribution on
the ICG Preferred Stock from ICG of shares of ICG Common Stock in
a number that will be sufficient, when sold by the Company in the
open market, to eliminate such cash shortfall. Dividends on the
ICG Preferred Stock will, at the option of ICG, be payable either
in cash or in shares of ICG Common Stock. Such shares may, at
the option of the Manager, on behalf of the Company, be used to
pay dividends on the Preferred Securities or sold to raise funds
to pay cash dividends on the Preferred Securities. The Company
may not conduct any other business or operations or voluntarily
incur any obligations except as contemplated by this Agreement.
ARTICLE IV
CAPITAL CONTRIBUTIONS, ALLOCATIONS AND DISTRIBUTIONS
SECTION 4.1. FORM OF CONTRIBUTION. The contribution of a
Member to the Company may, as determined by the Manager in its
discretion, be in cash, a promissory note or other legal
consideration.
SECTION 4.2. CONTRIBUTION BY THE COMMON MEMBER. The Common
Member shall make an initial contribution to the Company in
connection with the purchase of one Common Security so as to
cause its Common Security to be entitled to .01% of all interests
in the capital, income, gain, loss, deduction and credit of the
Company at all times, provided, however, that in no event shall
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total cash contributions by the Common Member be an amount in
excess of $1.00 in the aggregate.
SECTION 4.3. CONTRIBUTIONS BY THE PREFERRED MEMBERS. The
Preferred Members shall make contributions to the Company in
accordance with the applicable terms of Section 7.1 of this
Agreement. Preferred Members, in their capacity as Members of the
Company, shall not be required to make any additional
contributions to the Company and shall have no additional
liability solely by reason of being Preferred Members (subject to
their obligation to return distributions wrongfully distributed
to them as required by applicable law).
SECTION 4.4. INVESTMENT OF CAPITAL CONTRIBUTIONS. On the
Closing Date, the Manager shall establish an escrow account (the
"Escrow Account") with Norwest Bank Colorado, National
Association, as escrow agent (the "Escrow Agent") pursuant to the
terms of an Escrow Agreement, dated the Closing Date, between the
Company and the Escrow Agent. The Manager shall deposit with the
Escrow Agent, in accordance with the Escrow Agreement, the
Treasury strips purchased pursuant to Article III and the Manager
on behalf of the Company shall pledge the Treasury strips to the
Escrow Agent for the benefit of the Preferred Members pursuant to
the terms of the Escrow Agreement.
SECTION 4.5. CAPITAL ACCOUNTS. An individual capital
account (a "Capital Account") shall be established and maintained
on the books of the Company for each Member in compliance with
Treasury Regulation Sections 1.704-1(b)(2)(iv) and 1.704-2, as
amended. Subject to the preceding sentence, each Capital Account
will be increased by the amount of the capital contributions made
by, and the Net Income allocated to, such Member and reduced by
the amount of distributions made by the Company and Net Losses
allocated to the Member. In addition, a Member's Capital Account
shall be increased or decreased, as the case may be, for any
items specially allocated to such Member under Section 4.7 of
this Agreement.
SECTION 4.6. GENERAL ALLOCATIONS. After giving effect to
the special allocations set forth in Section 4.7 of this
Agreement:
(a) Except as provided in Sections 4.6(c) and (d), the
Company's Net Income for each Fiscal Period shall be
allocated, as of the close of business on the last day of
such Fiscal Period, as follows:
(i) First, to the Preferred Members, in
proportion to the number of Preferred Securities held
by each such Member, in an amount equal to the excess
of (x) the amount of all dividends accrued on such
Preferred Member's Preferred Securities from the
issuance of such Preferred Securities through the close
of business on the last day of such Fiscal Period
(whether or not paid), over (y) the amount of Net
Income allocated to such Preferred Member (and his
predecessors in interest) in respect of such Preferred
Securities pursuant to this Section 4.6(a)(i) for all
prior Fiscal Periods.
(ii) Second, to each Preferred Member, in an
amount equal to the excess of (x) the amount of all Net
Losses allocated to such Preferred Member from the date
of issuance of such Preferred Member's Preferred
Securities through the close of business for such
Fiscal Period pursuant to Section 4.6(b)(ii) over (y)
the amount of Net Income allocated to such Preferred
Member (and his predecessors in interest) in respect of
such Preferred Securities pursuant to this Section
4.6(a)(ii) for all prior Fiscal Periods.
(iii) Any remaining Net Income shall be
allocated to the Common Member.
(b) Except as provided in Section 4.6(d), the
Company's Net Loss for each Fiscal Period shall be
allocated, as of the close of business on the record date
for such Fiscal Period, as follows:
(i) First, to the Common Member until the balance
of the Common Member's Adjusted Capital Account is
reduced to zero.
(ii) Second, to the Preferred Members (in
proportion to their respective aggregate Adjusted
Capital Account balances) until their Adjusted Capital
Account balances are reduced to zero.
(iii) Any remaining Net Loss shall be
allocated to the Common Member.
(c) Notwithstanding any other allocation provided for
in this Agreement, any gain realized on an exchange or
disposition of ICG Preferred Stock or U.S. Government Securities
(whether pursuant to a redemption or otherwise) shall be
allocated to the Preferred Members in proportion to the number of
Preferred Securities owned by each such member.
(d) The Manager may make such changes to the
allocations in Sections 4.6(a), 4.6(b) and 4.6(c) as it
deems reasonably necessary so that, immediately prior to the
Company's liquidation (or the exchange of Preferred
Securities for shares of ICG Common Stock), the positive
balances in the Capital Accounts of the Preferred Members
shall, to the maximum extent possible, equal their
respective Liquidation Distributions; provided, however,
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that no allocation pursuant to this Section 4.6(c) may
result in the Manager being required to make a capital
contribution pursuant to this Agreement or otherwise, other
than that set forth in Section 4.2.
(e) Notwithstanding any other provision of this
Agreement to the contrary, the allocation of Net Losses to any
Preferred Member shall not reduce the Liquidation Distribution of
the Preferred Securities held by such Preferred Member.
SECTION 4.7. SPECIAL ALLOCATIONS.
(a) If a Preferred Member delivers a Notice of
Exchange to the Exchange Agent pursuant to the appropriate
Preferred Securities Designation, which instructs the Exchange
Agent to exchange Preferred Securities for shares of ICG Common
Stock, such Preferred Member shall be allocated its pro rata
share of any dividend income accruing on a daily basis on the ICG
Preferred Stock pursuant to Section 305(c) of the Code or
original issue discount accruing on a daily basis until the date
of such exchange, but only to the extent such income was not
previously allocated to the Members in a prior Fiscal Period
under Section 4.6 of this Agreement or this Section 4.7.
(b) If the Exchange Agent exchanges all of the
Preferred Securities of a particular series for shares of ICG
Common Stock, pursuant to the appropriate Preferred Securities
Designation, the Preferred Members of such series shall be
allocated (in proportion to the liquidation preferences of such
Preferred Securities held by each such Preferred Member) any
dividend income accruing on a daily basis on the ICG Preferred
Stock pursuant to Section 305(c) of the Code or original issue
discount accruing on a daily basis so exchanged until the date of
such exchange, but only to the extent such income was not
previously allocated to the Members in prior Fiscal Periods under
Section 4.6 of this Agreement or this Section 4.7.
(c) If the Company is deemed to receive a dividend
under Section 305(c) of the Code with respect to any series of
ICG Preferred Stock or original issue discount with respect to
debt obligations it is holding, the Preferred Members holding
Preferred Securities of the related series shall be allocated (in
proportion to the liquidation preferences of such Preferred
Securities held by each such Preferred Member) such income.
(d) All items of loss and deduction in respect of
expenses incurred by or on behalf of the Company and paid by the
Common Member (or out of the Common Member's share of
distributions) shall be allocated entirely to the Common Member.
(e) For purposes of determining the Net Income, Net
Loss or any other items allocable to any Fiscal Period, Net
Income, Net Loss and any such other items shall be determined on
a daily, monthly or other basis, as determined by the Manager
using any method that is permissible under Section 706 of the
Code and the Treasury Regulations promulgated thereunder. Unless
otherwise specified, such Net Income, Net Loss or other items
shall be determined for each Fiscal Period.
(f) Notwithstanding anything to the contrary that may
be expressed or implied in this Article IV, the interest of the
Common Member, in the aggregate, in each item of income, gain,
loss, deduction and credit will be equal to at least (i) at any
time that aggregate capital contributions to the Company are
equal to or less than $50,000,000, 1% of each such item and (ii)
at any time that aggregate capital contributions to the Company
are greater than $50,000,000, at least 1% multiplied by a
fraction (not exceeding one and not less than 0.2), the numerator
of which is $50,000,000 and the denominator of which is the
lesser of the aggregate balances of the Capital Accounts of all
Members at such time and the aggregate capital contributions to
the Company of all Members at such time.
(g) Notwithstanding any other provision of this
Agreement to the contrary, the allocation of Net Losses to any
Preferred Member shall not reduce the Liquidation Distribution of
the Preferred Securities held by such Preferred Member.
SECTION 4.8. ALLOCATIONS FOR INCOME TAX PURPOSES. The
income, gains, losses, deductions and credits of the Company
shall be allocated in the same manner as the items entering into
the computation of Net Income and Net Loss are allocated under
Section 4.6 of this Agreement or as such items are otherwise
allocated under Section 4.7 of this Agreement; provided, however,
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that solely for federal, state and local income and franchise tax
purposes, but not for book or Capital Account purposes, income,
gain, loss and deductions with respect to any property properly
carried on the Company's books at a value other than the tax
basis of such property shall be allocated in a manner determined
in the Manager's discretion, so as to take into account
(consistently with the principles of Section 704(c) of the Code)
the difference between such property's book value and its tax
basis.
SECTION 4.9. WITHHOLDING. The Manager, on behalf of the
Company, shall comply with withholding requirements under
federal, state and local law and shall remit amounts withheld to
and file required forms with applicable jurisdictions. To the
extent that the Company is required to withhold and pay over any
amounts to any authority with respect to distributions or
allocations to any Member, the amount withheld shall be deemed to
be a distribution in the amount of the withholding to the Member.
In the event of any claimed over-withholding, Members shall be
limited to an action against the applicable jurisdiction. If the
amount withheld was not withheld from actual distributions, the
Manager, on behalf of the Company, may reduce subsequent
distributions by the amount of such withholding. Each Member
agrees to furnish the Company with such representations and forms
as shall reasonably be requested by the Company to assist it in
determining the extent of, and in fulfilling, its withholding
obligations.
SECTION 4.10. ALLOCATION OF DISTRIBUTIONS. The
distributions of the Company shall, subject to the applicable
terms of Sections 7.1, 9.1, 9.2, 9.3, 15.4 and 15.5 of this
Agreement and of any series of Preferred Securities (including
the preferential allocation of distributions, if any), be
allocated entirely to the Common Member.
SECTION 4.11. INTERESTS AS PERSONAL PROPERTY. Each Member
hereby agrees that its Interest shall for all purposes be
personal property. A Member has no interest in specific Company
property.
ARTICLE V
MEMBERS
SECTION 5.1. POWERS OF MEMBERS. The Members shall have the
power to exercise any and all rights or powers granted to the
Members pursuant to the express terms of this Agreement and the
terms of the interests held by such Members.
SECTION 5.2. PARTITION. Each Member waives any and all
rights that it may have to maintain an action for partition of
the Company's property.
SECTION 5.3. RESIGNATION. The Common Member shall have no
right to withdraw from the Company. Any other Member may withdraw
from the Company prior to the liquidation, dissolution or winding
up of the Company only upon the assignment of its Interest
(including any redemption, repurchase, exchange or other
acquisition by the Company of such Interest) in accordance with
the provisions of this Agreement. A withdrawing Member shall not
be entitled to receive any distribution and shall not otherwise
be entitled to receive the fair value of its Interest except as
otherwise expressly provided for in this Agreement.
ARTICLE VI
MANAGEMENT
SECTION 6.1. MANAGEMENT OF THE COMPANY. Except as otherwise
provided herein, the business and affairs of the Company shall be
managed, and all actions required under this Agreement shall be
determined, solely and exclusively by the Manager, which shall
have all rights and powers on behalf and in the name of the
Company to perform all acts necessary and desirable to the
objects and purposes of the Company (subject to Article III).
Without limiting the generality of the foregoing, the Manager, in
its capacity as the Common Member and not by virtue of any
delegation of management power from any Member, shall have
(subject to Article III) the power on behalf of the Company to:
(a) authorize and engage in transactions and dealings
on behalf of the Company, including transactions and dealings
with any Member (including the Common Member) or any Affiliate of
any Member;
(b) call meetings of Members or any class or series
thereof;
(c) issue Interests, including Common Securities,
Preferred Securities and classes and series thereof, in
accordance with this Agreement;
(d) pay all expenses incurred in forming the Company;
(e) lend money, with or without security, to ICG or
any Affiliate thereof;
(f) determine and make distributions (hereinafter
sometimes referred to as "dividends"), in cash or otherwise, on
Interests, in accordance with the provisions of this Agreement,
the Delaware Act and, if applicable, each Preferred Securities
Designation;
(g) establish a record date with respect to all
actions to be taken hereunder that require a record date to be
established, including with respect to allocations, dividends and
voting rights;
(h) redeem, repurchase or exchange, on behalf of the
Company, Interests which may be so redeemed, repurchased or
exchanged;
(i) appoint (and dismiss from appointment) attorneys
and agents on behalf of the Company, and employ (and dismiss from
employment) any and all persons providing legal, accounting or
financial services to the Company, or such other employees or
agents as the Manager deems necessary or desirable for the
management and operation of the Company, including, without
limitation, any Member (including the Common Member) or any
Affiliate of any Member;
(j) open accounts and deposit, maintain and withdraw
funds in the name of the Company in banks, savings and loan
associations, brokerage firms or other financial institutions;
(k) effect a dissolution of the Company and act as
liquidating trustee or the Person winding up the Company's
affairs, all in accordance with the provisions of this Agreement,
the Delaware Act and, if applicable, each Preferred Securities
Designation;
(l) bring and defend on behalf of the Company actions
and proceedings at law or equity before any court or
governmental, administrative or other regulatory agency, body or
commission or otherwise;
(m) prepare and cause to be prepared reports,
statements and other relevant information for distribution to
Members as may be required or determined to be necessary or
desirable by the Manager from time to time;
(n) prepare and file all necessary returns and
statements and pay all taxes, assessments and other impositions
applicable to the assets of the Company; and
(o) execute all other documents or instruments,
perform all duties and powers and do all things for and on behalf
of the Company in all matters necessary or desirable or
incidental to the foregoing.
The Manager is authorized and directed to conduct its
affairs and to operate the Company in such a way that the Company
will not be deemed to be an "investment company" required to be
registered under the Investment Company Act of 1940, as amended.
In this connection, the Manager is authorized to take any action
not inconsistent with applicable law, this Agreement and the
applicable Preferred Securities Designation and that the Manager
determines in its discretion to be necessary or desirable for
such purposes.
The expression of any power or authority of the Manager
in this Agreement shall not in any way limit or exclude any other
power or authority which is not specifically or expressly set
forth in this Agreement.
SECTION 6.2. RELIANCE BY THIRD PARTIES. Persons dealing
with the Company are entitled to rely conclusively upon the power
and authority of the Manager herein set forth.
SECTION 6.3. NO MANAGEMENT BY ANY PREFERRED MEMBERS OR ICG.
Except as otherwise expressly provided herein, no Preferred
Member shall take part in the day-to-day management, operation or
control of the business and affairs of the Company. Neither the
Preferred Members, in their capacity as Preferred Members of the
Company, nor ICG, in its capacity as the Common Member, shall be
agents of the Company or have any right, power or authority to
transact any business in the name of the Company or to act for or
on behalf of or to bind the Company.
SECTION 6.4. BUSINESS TRANSACTIONS OF THE MANAGER WITH THE
COMPANY. The Manager or its Affiliates may lend money to, act as
surety, guarantor or endorser for, guarantee or assume one or
more obligations of, provide collateral for, and transact other
business with, the Company and, subject to applicable law, shall
have the same rights and obligations with respect to any such
matter as a Person who is not the Manager or an Affiliate
thereof.
SECTION 6.5. OUTSIDE BUSINESSES. Any Member and/or the
Manager in its capacity as same may possess an interest in other
business ventures of any nature or description, independently or
with others, similar or dissimilar to the business of the
Company, and the Company and the Members shall have no rights by
virtue of this Agreement in and to such independent ventures or
the income or profits derived therefrom, and the pursuit of any
such venture, even if competitive with the business of the
Company, shall not be deemed wrongful or improper. No Member or
Affiliate thereof shall be obligated to present any particular
investment opportunity to the Company even if such opportunity is
of a character that, if presented to the Company, could be taken
by the Company, and any Member or Affiliate thereof shall have
the right to take for its own account (individually or as a
partner or fiduciary) or to recommend to others any such
particular investment opportunity.
ARTICLE VII
COMMON SECURITIES AND PREFERRED SECURITIES
SECTION 7.1. COMMON SECURITIES AND PREFERRED SECURITIES.
(a) The Interests in the Company shall initially be
divided into two classes, Common Securities and Preferred
Securities.
(b) The Preferred Securities may be issued from time
to time in one or more series with such relative rights, powers,
preferences, limitations and restrictions as may from time to
time be established in a written action or actions of the Manager
providing for the issue of such series of Preferred Securities as
hereinafter provided. Authority is hereby expressly granted to
the Manager, subject to the provisions of this Agreement, to
authorize the issue of one or more series of Preferred Securities
and to establish each such series by a written action or actions
(including without limitation an amendment of this Agreement)
providing for the issue of such series:
(i) the number of Preferred Securities to constitute
such series and the distinctive designation thereof;
(ii) whether the Preferred Securities of such series
shall have voting rights in addition to those set forth in this
Agreement or required by law and, if so, the terms of such voting
rights;
(iii) the annual dividend rate (or method of
calculation thereof), if any, on the Preferred Securities of such
series, the conditions and dates upon which such dividends shall
be payable and the ability of the Company, if any, to defer the
dividend payment period for the Preferred Securities of such
series, the dates from which such dividends shall accrue, the
preference or relation, if other than pari passu, which such
dividends have with respect to dividends payable on any other
class or classes of Interests or on any other series of Preferred
Securities, and whether such dividends shall be cumulative or
noncumulative;
(iv) whether the Preferred Securities of such series
shall be subject to redemption by the Company, and, if made
subject to redemption, the times and other terms and conditions
of such redemption (including the mandatory or optional nature of
such redemption, whether such redemption shall be in whole and/or
in part, and the amount and kind of consideration to be received
upon such redemption);
(v) the amount or amounts which shall be paid out of
the assets of the Company to Preferred Members holding the
Preferred Securities of such series upon voluntary or involuntary
liquidation, dissolution or winding up of the Company, and any
rights in addition to those set forth in this Agreement of the
Preferred Members that hold Preferred Securities of such series
upon the liquidation, dissolution or winding up of the Company;
(vi) whether or not the Preferred Securities of such
series shall be subject to the operation of a retirement or
sinking fund, and, if so, the extent to and manner in which any
such retirement or sinking fund shall be applied to the purchase
or redemption of the Preferred Securities of such series for
retirement and the terms and provisions relative to the operation
thereof;
(vii) whether or not the Preferred Securities of
such series shall be convertible into, or exchangeable for,
Interests of any other class or classes, or of any other series
of Preferred Securities, or securities of any other kind,
including those issued by ICG or any of its Affiliates, and if so
convertible or exchangeable, the terms and conditions of such
conversion or exchange, including the price or prices or the rate
or rates of conversion or exchange; the method, if any, of
adjusting the same and the terms of any right to terminate such
conversion or exchange privilege;
(viii) any limitations and restrictions in addition
to those set forth in this Agreement to be effective while any
Preferred Securities of such series are outstanding upon the
payment of dividends or other distributions on, and upon the
purchase, redemption or other acquisition by the Company of,
Common Securities or any other series of Preferred Securities;
(ix) any conditions or restrictions in addition to
those set forth in this Agreement upon the issue of any
additional Interests (including additional Preferred Securities
of such series or Interests of any other series ranking pari
passu with or senior to the Preferred Securities of such series
as to the payment of dividends or distribution of assets on
dissolution);
(x) the times, prices and other terms and conditions
for the offering of the Preferred Securities of such series; and
(xi) any other relative rights, powers, preferences,
limitations and restrictions as shall not be inconsistent with
this Section 7.1.
In connection with the foregoing and without limiting
the generality thereof, the Manager is hereby expressly
authorized, without the vote or approval of any other Member, to
take any action to create under the provisions of this Agreement
a series of Preferred Securities that was not previously
outstanding. Without the vote or approval of any other Member,
the Manager may execute, swear to, acknowledge, deliver, file and
record whatever documents may be required in connection with the
issue from time to time of Preferred Securities in one or more
series as shall be necessary, convenient or desirable to reflect
the issue of such series. The Manager shall do all things it
deems to be appropriate or necessary to comply with the Delaware
Act and is authorized and directed to do all things it may deem
to be necessary or permissible in connection with any future
issuance, including compliance with any statute, rule, regulation
or guideline of any federal, state or other governmental agency
or any securities exchange.
Any action or actions taken by the Manager pursuant to
the provisions of this paragraph (b) shall be deemed an amendment
and supplement to and part of this Agreement.
(c) All Preferred Securities shall rank senior to the
Common Securities in respect of the right to receive dividends
and the right to receive payments out of the assets of the
Company upon voluntary or involuntary liquidation, dissolution or
winding up of the Company. All Preferred Securities redeemed,
purchased or otherwise acquired by the Company (including
Preferred Securities surrendered for conversion or exchange)
shall be cancelled and thereupon restored to the status of
authorized but unissued Preferred Securities undesignated as to
series.
(d) No Member shall be entitled as a matter of right
to subscribe for or purchase, or have any preemptive right with
respect to, any part of any new or additional issue of Common
Securities or Preferred Securities of any series whatsoever, or
of securities convertible into any Common Securities or Preferred
Securities of any series whatsoever, whether now or hereafter
authorized and whether issued for cash or other consideration or
by way of dividend.
(e) Common Securities shall not be evidenced by any
certificate or other written instrument, but shall only be
evidenced by this Agreement. Common Securities shall be
non-assignable and non-transferable, and may only be issued to
and held by ICG (or a successor of ICG in accordance with the
provisions of the Guarantee). Any transfer or purported transfer
of any Common Security shall be null and void. Preferred
Securities shall be freely assignable and transferable.
(f) Any Person purchasing Preferred Securities
(whether from the Company or upon assignment) shall be admitted
to the Company as a Preferred Member upon compliance with Section
2.7 of this Agreement.
SECTION 7.2. PERSONS DEEMED PREFERRED MEMBERS. The Company
may treat the Person in whose name any Preferred Certificate
shall be registered on the books and records of the Company as a
Preferred Member and the sole holder of such Preferred
Certificate for purposes of receiving dividends and for all other
purposes whatsoever and, accordingly, shall not be bound to
recognize any equitable or other claims to or interest in such
Preferred Certificate on the part of any other Person, whether or
not the Company shall have actual or other notice thereof.
ARTICLE VIII
VOTING AND MEETINGS
SECTION 8.1. VOTING RIGHTS OF HOLDERS OF PREFERRED
SECURITIES.
(a) Except as shall be otherwise provided in this
Agreement, including without limitation, Section 16.1 hereof, or
in the Preferred Securities Designation for any series of
Preferred Securities and except as otherwise required by the
Delaware Act, the Preferred Members holding Preferred Securities
shall have, with respect to such Preferred Securities, no right
or power to vote on any question or matter or in any proceeding
or to be represented at, or to receive notice of, any meeting of
Members.
(b) If any proposed amendment to this Agreement or the
Preferred Securities Designation for any series of Preferred
Securities provides for, or the Manager otherwise proposes to
effect:
(i) any action that would have a material adverse
effect on the powers, preferences or special rights of the
Preferred Securities of such series, whether by way of
amendment of this Agreement, such Preferred Securities
Designation or otherwise (including, without limitation, the
authorization or issuance of any Interests in the Company
purporting to rank, as to payment of dividends or
distribution of assets upon liquidation, dissolution or
winding up of the Company, senior to the Preferred
Securities of such series), or
(ii) the liquidation, dissolution or winding up of
the Company (in any case other than in connection with the
exchange of Preferred Securities of such series for other
securities pursuant to the terms of such series of Preferred
Securities),
then the Preferred Members holding outstanding Preferred
Securities of such series, together with, if any such amendment
or action described in clause (i) above would materially
adversely affect the powers, preferences or special rights of any
Company Dividend Parity Securities or any Company Liquidation
Parity Securities, the holders of such Company Dividend Parity
Securities or such Company Liquidation Parity Securities, as the
case may be, or, with respect to any such amendment or action
described in clause (ii) above, the holders of all Company
Liquidation Parity Securities, will be entitled to vote together
as a class on such resolution or action of the Manager (but not
any other resolution or action) and such amendment or action
shall not be effective except with the approval of the Preferred
Members holding at least a Majority in Liquidation Preference of
such outstanding securities including, if applicable the holders
of either or both of the Company Dividend Parity Securities and
the Company Liquidation Party Securities, as the case may be;
provided, however, that no such approval shall be required if (1)
-------- -------
the liquidation, dissolution or winding-up of the Company is
proposed or initiated upon the occurrence of any of the events
specified in Section 15.2 (except Section 15.2(c)) or (2) this
Agreement is amended pursuant to Section 16.1.
The Manager shall not, without the approval of the
holders of at least a Majority in Liquidation Preference of the
Preferred Securities, vote such ICG Preferred Stock with respect
to proposed actions that would have an adverse effect on the
specific rights, preferences, privileges or voting rights of the
Company with respect to the ICG Preferred Stock, or cause the
dissolution, winding-up or termination of the Company.
Notwithstanding any other provision of this Agreement to the
contrary, the Preferred Members shall be entitled to vote in
connection with any solicitation by the Manager for the consent
of the Preferred Members to the voting by the Manager of the
Company's ICG Preferred Stock. The powers, preferences or
special rights of the Preferred Securities of any series will be
deemed not to be adversely affected by the creation or issuance
of, and no vote will be required for the creation or issuance of,
any further Interests in the Company ranking junior to or pari
passu with the Preferred Securities of such series with respect
to voting rights or rights to payment of dividends or
distribution of assets upon liquidation, dissolution or
winding-up of the Company.
(c) Notwithstanding any provision to the contrary
herein, the first sentence of Section 14.1 of this Agreement may
only be amended with the consent of each Preferred Member;
provided that, to the fullest extent permitted by applicable law,
any such amendment shall not permit the Preferred Members to
approve any transferee of Common Securities.
(d) Notwithstanding that Preferred Members holding
Preferred Securities of any series are entitled to vote or
consent under any of the circumstances described in this
Agreement, any of the Preferred Securities of any series that are
owned by ICG or by any entity more than 50% of which is owned by
ICG, either directly or indirectly, shall not be entitled to vote
or consent and shall, for the purposes of such vote or consent,
be treated as if they were not outstanding.
SECTION 8.2. VOTING RIGHTS OF HOLDER OF COMMON SECURITIES.
Except as otherwise provided herein or in the Preferred
Securities Designation for any series of Preferred Securities and
except as otherwise required by the Delaware Act, all voting
rights of the Company shall be vested exclusively in the Common
Member. The Common Securities shall entitle the Common Member to
vote upon all matters upon which the Common Member has the right
to vote. The Common Member shall have the right to vote
separately as a class on any matter on which the Common Member
has the right to vote regardless of the voting rights of any
other Member.
SECTION 8.3. MEETINGS OF THE MEMBERS.
(a) Meetings of the Members of any class or series or
of all classes or series of Interests may be called at any time
by the Manager or as provided by any applicable Preferred
Securities Designation. Except to the extent otherwise provided,
the following provisions shall apply to meetings of Members.
(b) Members may vote in person or by proxy at such
meeting. Whenever a vote, consent or approval of Members is
permitted or required under this Agreement or any applicable
Preferred Securities Designation, such vote, consent or approval
may be given at a meeting of Members or by written consent.
(c) Each Member may authorize any Person to act for it
by proxy on all matters in which a Member is entitled to vote,
including waiving notice of any meeting, or voting or
participating at a meeting. Every proxy must be signed by the
Member or its attorney-in-fact and shall be revocable at the
pleasure of the Member executing it at any time before it is
voted.
(d) Each meeting of Members shall be conducted by the
Manager or by such other Person that the Manager may designate.
(e) Any required approval of Preferred Members holding
Preferred Securities of a series may be given at a separate
meeting of such Preferred Members convened for such purpose or at
a meeting of Members of the Company or pursuant to written
consents. The Manager will cause a notice of any meeting at which
Preferred Members holding Preferred Securities of a series are
entitled to vote, or of any matter upon which action by written
consent of such Preferred Members is to be taken, to be mailed to
each Preferred Member holding Preferred Securities of such
series. Each such notice will include a statement setting forth
(i) the date of such meeting or the date by which such action is
to be taken, (ii) a description of any matter on which such
Preferred Members are entitled to vote or of such matter upon
which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
(f) Subject to Section 8.3(e) and the applicable
Preferred Securities Designation, the Manager, in its sole
discretion, shall establish all other provisions relating to
meetings of Members, including notice of the time, place or
purpose of any meeting at which any matter is to be voted on by
any Members, waiver of any such notice, action by consent without
a meeting, the establishment of a record date, quorum
requirements (but in no event higher than a Majority in
Liquidation Preference of the Preferred Securities of any
series), voting in person or by proxy or any other matter with
respect to the exercise of any such right to vote.
ARTICLE IX
DIVIDENDS
SECTION 9.1. DIVIDENDS.
(a) Preferred Members shall receive periodic dividends,
if any, in accordance with the Preferred Securities Designation
for the Preferred Securities of any particular series, as and
when declared by the Manager, and the Common Member shall receive
periodic dividends, subject to Section 9.3 of this Agreement, the
applicable terms of any series of Preferred Securities and the
provisions of the Delaware Act, as and when declared by the
Manager, in its discretion out of funds of the Company legally
available therefor.
(b) Dividends on the Preferred Securities shall be
declared by the Manager to the extent that the Manager reasonably
anticipates that at the time of payment the Company will have,
and must be paid by the Company to the extent that at the time of
proposed payment it has funds legally available for the payment
of such dividends.
(c) A Preferred Member shall not be entitled to
receive any dividend with respect to the Preferred Securities of
any series, irrespective of whether such dividend has been
declared by the Manager, prior to the date on which such dividend
is payable as set forth in the Preferred Securities Designation
(the "Dividend Payment Date") and until such time as the Company
has received the dividend payment on the ICG Preferred Stock of
the related series for the dividend payment date corresponding to
such Divided Payment Date and such monies are available for
distribution to the Preferred Member pursuant to the terms of
this Agreement and the Delaware Act.
SECTION 9.2. LIMITATIONS ON DISTRIBUTIONS. Notwithstanding
any provision to the contrary contained in this Agreement, the
Company shall not make a distribution (including a dividend) to
any Member on account of its Interest if such distribution would
violate Section 18-607 or 18-804 of the Delaware Act or other
applicable law.
SECTION 9.3. CERTAIN RESTRICTIONS ON THE PAYMENT OF
DIVIDENDS. If accumulated dividends have not been paid in full on
the Preferred Securities of any series then outstanding, the
Company shall not:
(i) pay, or declare and set aside for payment, any
dividends on the Preferred Securities of any other series or
any other Interests in the Company ranking pari passu with
the Preferred Securities of such series as to the payment of
dividends ("Company Dividend Parity Securities"), unless the
amount of any dividends declared on such Company Dividend
Parity Securities is paid on such Company Dividend Parity
Securities and the Preferred Securities of such series on a
pro rata basis on the date such dividends are paid on such
Company Dividend Parity Securities, so that the ratio of
(x) (A) the aggregate amount paid as dividends
on the Preferred Securities of such series to (B) the
aggregate amount paid as dividends on the Company
Dividend Parity Securities is the same as the ratio of
(y) (A) the aggregate amount of all accumulated
arrears of unpaid dividends on the Preferred Securities
of such series to (B) the aggregate amount of all
accumulated arrears of unpaid dividends on the Company
Dividend Parity Securities;
(ii) pay, or declare and set aside for payment, any
dividends on any Interests in the Company ranking junior to
the Preferred Securities of such series as to the payment of
dividends ("Company Dividend Junior Securities"); or
(iii) redeem, purchase or otherwise acquire any
Company Dividend Parity Securities or Company Dividend
Junior Securities (other than purchases or acquisitions
resulting from the reclassification of such Securities or
the exchange or conversion of any Company Dividend Parity
Security or Company Dividend Junior Security pursuant to the
terms thereof or the purchase of fractional interests
therein upon such conversion or exchange);
until, in each case, such time as all accumulated and unpaid
dividends on all of the Preferred Securities of such series
shall have been paid in full or have been irrevocably set
aside for payment in full for all dividend periods
terminating on or prior to, in the case of clauses (i) and
(ii), the date of such payment, and in the case of clause
(iii), the date of such redemption, purchase or other
acquisition.
ARTICLE X
BOOKS AND RECORDS
SECTION 10.1. BOOKS AND RECORDS; ACCOUNTING. The Manager
shall keep or cause to be kept at the address of the Manager (or
at such other place as the Manager shall advise the other Members
in writing) true and full books and records regarding the status
of the business and financial condition of the Company.
SECTION 10.2. FISCAL YEAR. The fiscal year of the Company
for federal income tax and accounting purposes shall, except as
otherwise required in accordance with the Code, end on December
31 of each year.
SECTION 10.3. LIMITATION ON ACCESS TO RECORDS.
Notwithstanding any provision of this Agreement, the Manager may,
to the maximum extent permitted by law, keep confidential from
the Preferred Members any information the disclosure of which the
Manager reasonably believes is not in the best interest of the
Company or could damage the Company or its business or which the
Company or the Manager is required by law or by an agreement with
any Person to keep confidential.
ARTICLE XI
TAX MATTERS
SECTION 11.1. COMPANY TAX RETURNS.
(a) The Manager shall cause to be prepared and timely
filed all tax returns required to be filed for the Company. The
Manager may, in its discretion, make or refrain from making any
federal, state or local income or other tax elections for the
Company that it deems necessary or advisable, including, without
limitation, any election under Section 754 of the Code or any
successor provision.
(b) The Manager is hereby designated as the Company's
"Tax Matters Partner" under Code Section 6231(a)(7) and shall
have all the powers and responsibilities of such position as
provided in the Code. The Manager is specifically directed and
authorized to take whatever steps the Manager, in its discretion,
deems necessary or desirable to perfect such designation,
including filing any forms or documents with the Internal Revenue
Service and taking such other action as may from time to time be
required under the regulations issued under the Code. Expenses
incurred by the Tax Matters Partner, in its capacity as such,
will be borne by the Company.
SECTION 11.2. TAX REPORTS. The Manager shall, as promptly
as practicable and in any event within 90 days after the end of
each fiscal year, cause to be prepared and mailed to each
Preferred Member of record federal income tax form K-1 and any
other forms which are necessary or advisable.
SECTION 11.3. TAXATION AS PARTNERSHIP. The Members
recognize that the Company will be treated as a partnership for
U.S. federal income tax purposes, and the Manager shall operate
the Company in such a manner and will take all necessary action
as will preserve its treatment as a partnership for U.S. federal
income tax purposes.
SECTION 11.4 INVESTMENT PARTNERSHIP. The Manager shall
cause the Company not to "engage in a trade or business" or make
any investments or take any action that would cause the Company
to fail to qualify as an "investment partnership" as such term is
defined in Section 731(c)(3)(C) of the Code.
ARTICLE XII
EXPENSES
Except as otherwise provided in this Agreement, the
Company shall be responsible for and shall pay all expenses out
of funds of the Company determined by the Manager to be available
for such purpose, provided that such expenses or obligations are
those of the Company or are otherwise incurred by the Manager in
connection with this Agreement, including, without limitation:
(a) all costs and expenses related to the business of
the Company and all routine administrative expenses of the
Company, including the maintenance of books and records of
the Company, the preparation and dispatch to the Members of
checks, financial reports, tax returns and notices required
pursuant to this Agreement and the holding of any meetings
of the Members;
(b) all expenses incurred in connection with any
litigation involving the Company (including the cost of any
investigation and preparation) and the amount of any
judgment or settlement paid in connection therewith (other
than expenses incurred by the Manager in connection with any
litigation brought by or on behalf of any Member against the
Manager);
(c) all expenses for indemnity or contribution payable
by the Company to any Person;
(d) all expenses incurred in connection with the
collection of amounts due to the Company from any Person;
(e) all expenses incurred in connection with the
preparation of amendments to this Agreement; and
(f) all expenses incurred in connection with the
liquidation, dissolution or winding-up of the Company.
ARTICLE XIII
LIABILITY
SECTION 13.1. LIABILITY OF COMMON MEMBER. The Common
Member, by acquiring its Interest and being admitted to the
Company as the Common Member, shall be liable to the creditors of
the Company (other than to Members holding other classes or
series of Interests, in their capacity as Members) (hereinafter
referred to individually as a "Third Party Creditor," and
collectively as the "Third Party Creditors") to the same extent
that a general partner of a limited partnership formed under the
LP Act is liable under Section 17-403(b) of the LP Act to
creditors of the limited partnership (other than the other
partners in their capacity as partners), as if the Company were a
limited partnership formed under the LP Act and the Common Member
was a general partner of the limited partnership. In furtherance
but not in limitation of the generality of the foregoing, the
Common Member is liable for any and all debts, obligations and
other liabilities of the Company, whether arising under contract
or by tort, statute, operation of law or otherwise, all of which
shall be enforceable directly and absolutely against the Common
Member by each Third Party Creditor.
SECTION 13.2. LIABILITY OF PREFERRED MEMBERS.
(a) Except as otherwise provided by the Delaware Act,
(i) the debts, obligations and liabilities of the Company,
whether arising by contract, tort, statute, operation of law
or otherwise, shall be solely the debts, obligations and
liabilities of the Company and, to the extent set forth in
Section 13.1 of this Agreement, the Common Member and (ii)
no Preferred Member shall be obligated personally for any
such debt, obligation or liability of the Company solely by
reason of being a Preferred Member of the Company.
(b) A Preferred Member, in its capacity as such, shall
have no liability in excess of (i) the amount of its capital
contributions, (ii) its share of any assets and
undistributed profits of the Company, (iii) any amounts
required to be paid by such Preferred Member in the
Preferred Securities Designation for the series of Preferred
Securities held by such Preferred Member and (iv) the amount
of any distributions wrongfully distributed to the extent
required by Section 18-607 of the Delaware Act or other
applicable law.
ARTICLE XIV
ASSIGNMENT OF INTERESTS
SECTION 14.1. ASSIGNMENT OF INTERESTS. Notwithstanding
anything to the contrary in this Agreement, after the date hereof
Common Securities shall be non-assignable and non-transferable
(other than pursuant to a merger or consolidation of the Common
Member), and may only be issued to and held by ICG or its
successor. Preferred Securities shall be freely assignable and
transferable, subject to the provisions of Section 2.7 of this
Agreement.
SECTION 14.2. RIGHT OF ASSIGNEE TO BECOME A MEMBER. An
assignee of a Preferred Security shall become a Preferred Member
upon compliance with the provisions of Section 2.7 of this
Agreement.
SECTION 14.3. EVENTS OF CESSATION OF MEMBERSHIP. A Person
shall cease to be a Member upon (i) the assignment of its
Interests in accordance with this Agreement, such assignment to
be effective immediately after the admission of its transferee,
(ii) any redemption, exchange or other repurchase by the Company
or the Common Member; or (iii) as otherwise provided herein.
ARTICLE XV
DISSOLUTION, LIQUIDATION AND TERMINATION
SECTION 15.1. NO DISSOLUTION. The Company shall not be
dissolved by the admission of Members in accordance with the
terms of this Agreement. Except as provided in Sections 15.2(b)
of this Agreement, the death, retirement, resignation, expulsion,
bankruptcy or dissolution of a Member, or the occurrence of any
other event which terminates the continued membership of a Member
in the Company, shall not cause the Company to be dissolved and
its affairs wound up so long as the Company at all times has at
least two Members. Upon the occurrence of any such event, the
business of the Company shall be continued without dissolution.
SECTION 15.2. EVENTS CAUSING DISSOLUTION. The Company shall
be dissolved and its affairs shall be wound up upon the earliest
to occur of any of the following events:
(a) the expiration of the term of the Company, as
provided in Section 2.3 of this Agreement;
(b) the dissolution, winding-up or liquidation of the
Common Member or the occurrence of any other event that
terminates the continued membership of the Common Member
under the Delaware Act;
(c) the decision made by the Manager (subject to the
voting rights of Preferred Members set forth in Section 8.1
of this Agreement) to dissolve the Company;
(d) the entry of a decree of judicial dissolution of
the Company under Section 18-802 of the Delaware Act;
(e) the election of the Manager, in connection with
the exchange of all series of Preferred Securities
outstanding (in accordance with the Preferred Securities
Designation for such series of Preferred Securities) for the
ICG Common Stock or the redemption of all series of
Preferred Securities outstanding (in accordance with the
Preferred Securities Designation for such series of
Preferred Securities); or
(f) the written consent of all Members.
SECTION 15.3. NOTICE OF DISSOLUTION. Upon the dissolution
of the Company, the Manager shall promptly notify the Members of
such dissolution.
SECTION 15.4. LIQUIDATION. Upon dissolution of the Company,
the Manager or, in the event that the dissolution is caused by an
event described in Section 15.2(b) or (c) and there is no
Manager, a Person or Persons who may be approved by the Preferred
Members holding a Majority in Liquidation Preference of the
Preferred Securities, as liquidating trustees, shall immediately
commence to wind-up the Company's affairs; provided, however,
that a reasonable time shall be allowed for the orderly
liquidation of the assets of the Company and the satisfaction of
liabilities to creditors so as to enable the Members to minimize
the normal losses attendant upon a liquidation. The proceeds of
liquidation shall be distributed, as realized, in the manner
provided in Section 18-804 of the Delaware Act, subject (after
compliance with Section 18.804(a)(i) of the Delaware Act) to the
Preferred Securities Designation for any series of Preferred
Securities and Section 15.5 of this Agreement.
SECTION 15.5. CERTAIN RESTRICTIONS ON LIQUIDATION PAYMENTS.
In the event of any voluntary or involuntary liquidation,
dissolution or winding-up of the Company other than in connection
with the exchange of all series of Preferred Securities
outstanding (in accordance with the Preferred Securities
Designation for each such series of Preferred Securities) for the
ICG Common Stock, Preferred Members holding Preferred Securities
of each series at the time outstanding will be entitled to
receive out of the assets of the Company legally available for
distribution to Members, before any distribution of assets is
made to the Common Member or Members holding any other class of
Interests in the Company ranking junior to the Preferred
Securities of such series as to the distribution of assets upon
liquidation, dissolution or winding-up of the Company, but
together with Preferred Members holding Preferred Securities of
any other series or any other Interests in the Company then
outstanding ranking pari passu with the Preferred Securities of
such series as to the distribution of assets upon liquidation,
dissolution or winding-up of the Company ("Company Liquidation
Parity Securities"), an amount equal to the aggregate liquidation
preference for Preferred Securities of such series as set forth
in the applicable Preferred Securities Designation plus all
accumulated and unpaid dividends (whether or not earned or
declared), to the date of payment (the "Liquidation
Distribution"). If, upon any such liquidation, dissolution or
winding-up, the Liquidation Distributions can be paid only in
part because the Company has insufficient assets available to pay
in full the aggregate Liquidation Distributions and the aggregate
maximum liquidation distributions on the Company Liquidation
Parity Securities, then the amounts payable by the Company on the
Preferred Securities of such series and on such Company
Liquidation Parity Securities shall be paid on a pro rata basis,
so that the ratio of
(i) (x) the aggregate amount paid as Liquidation
Distributions on the Preferred Securities of such series to
(y) the aggregate amount paid as Liquidation Distributions
on the Company Liquidation Parity Securities, is the same as
the ratio of
(ii) (x) the aggregate Liquidation Distributions on
the Preferred Securities of such series to (y) the aggregate
maximum Liquidation Distributions on the Company Liquidation
Parity Securities.
SECTION 15.6. TERMINATION. The Company shall terminate when
all of the assets of the Company have been distributed in the
manner provided for in this Article XV, and the Certificate shall
have been cancelled in the manner required by the Delaware Act.
ARTICLE XVI
MISCELLANEOUS
SECTION 16.1. AMENDMENTS. Except as otherwise provided in
this Agreement, this Agreement may be amended by a written
instrument executed by the Common Member if, in the opinion of
independent counsel, such amendment does not materially adversely
affect the rights, powers and preferences of the Preferred
Members; if, however, in the opinion of such counsel, such
amendment would materially adversely affect the rights, powers
and preferences of the Preferred Members, such amendment shall
require the consent of the Majority in Liquidation Preference of
such Preferred Members.
SECTION 16.2. SUCCESSORS; COUNTERPARTS. This Agreement (a)
shall be binding as to the executors, administrators, estates,
heirs and legal successors, or nominees or representatives, of
the Members and (b) may be executed in several counterparts with
the same effect as if the parties executing the several
counterparts had all executed one counterpart. No person other
than the Members and their respective executors, administrators,
estates, heirs and legal successors, or their nominees or
representatives, shall obtain any rights by virtue of this
Agreement.
SECTION 16.3. GOVERNING LAW; SEVERABILITY. This Agreement
shall be governed by and construed in accordance with the laws of
the State of Delaware. In particular, this Agreement shall be
construed to the maximum extent possible to comply with all of
the terms and conditions of the Delaware Act. If, nevertheless,
it shall be determined by a court of competent jurisdiction that
any provisions or wording of this Agreement shall be invalid or
unenforceable under the Delaware Act or other applicable law,
such invalidity or unenforceability shall not invalidate the
entire Agreement. In that case, this Agreement shall be construed
so as to limit any term or provision so as to make it enforceable
or valid within the requirements of applicable law, and, in the
event such term or provisions cannot be so limited, this
Agreement shall be construed to omit such invalid or
unenforceable provisions. If it shall be determined by a court of
competent jurisdiction that any provision relating to the
distributions and allocations of the Company or to any fee
payable by the Company is invalid or unenforceable, this
Agreement shall be construed or interpreted so as (a) to make it
enforceable or valid and (b) to make the distributions and
allocations as closely equivalent to those set forth in this
Agreement as is permissible under applicable law.
SECTION 16.4. FILINGS. Following the execution and
delivery of this Agreement, the Manager shall promptly prepare
any documents required to be filed and recorded under the
Delaware Act, and the Manager shall promptly cause each such
document to be filed and recorded in accordance with the Delaware
Act and, to the extent required by local law, to be filed and
recorded or notice thereof to be published in the appropriate
place in each jurisdiction in which the Company may hereafter
establish a place of business. The Manager shall also promptly
cause to be filed, recorded and published such statements or
other instruments required by any provision of any applicable law
of the United States or any state or other jurisdiction which
governs the conduct of its business from time to time.
SECTION 16.5. POWER OF ATTORNEY. Each Preferred Member does
hereby constitute and appoint the Manager as its true and lawful
representative and attorney-in-fact, in its name, place and stead
to make, execute, sign, deliver and file (a) any amendment of the
Certificate required because of an amendment to this Agreement or
in order to effectuate any change in the membership of the
Company, (b) any amendment to this Agreement made in accordance
with the terms hereof and (c) all such other instruments,
documents and certificates which may from time to time be
required by the laws of the United States of America, the State
of Delaware or any other jurisdiction, or any political
subdivision of agency thereof, to effectuate, implement and
continue the valid and subsisting existence of the Company or to
dissolve the Company or for any other purpose consistent with
this Agreement and the transactions contemplated hereby.
The power of attorney granted hereby is coupled with an
interest and shall (a) survive and not be affected by the
subsequent death, incapacity, disability, dissolution,
termination or bankruptcy of the Preferred Member granting the
same or the transfer of all or any portion of such Preferred
Member's Interest and (b) extend to such Preferred Member's
successors, assigns and legal representatives.
SECTION 16.6. EXCULPATION.
(a) No Covered Person shall be liable to the Company
or any Member for any loss, damage or claim incurred by reason of
any act or omission performed or omitted by such Covered Person
in good faith on behalf of the Company and in a manner reasonably
believed to be within the scope of authority conferred on such
Covered Person by this Agreement.
(b) A Covered Person shall be fully protected in relying in
good faith upon the records of the Company and upon such
information, opinions, reports or statements presented to the
Company by any Person as to matters the Covered Person reasonably
believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or
on behalf of the Company, including information, opinions,
reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the
existence and amount of assets from which distributions to
Members might properly be paid.
SECTION 16.7. INDEMNIFICATION. To the fullest extent
permitted by applicable law, an Indemnified Person shall be
entitled to indemnification from the Company for any loss, damage
or claim incurred by such Indemnified Person by reason of any act
or omission performed or omitted by such Indemnified Person in
good faith on behalf of the Company and in a manner reasonably
believed to be within the scope of authority conferred on such
Indemnified Person by this Agreement; provided, however, that any
indemnity under this Section 16.7 shall be provided out of and to
the extent of Company assets only, and no Member shall have any
personal liability on account thereof. The right of
indemnification pursuant to this Section 16.7 shall include the
right to be paid, in advance, or reimbursed by the Company for
the reasonable expenses incurred by an Indemnified Person who
was, is, or is threatened to be made a named defendant or
respondent in a proceeding.
SECTION 16.8. ADDITIONAL DOCUMENTS. Each Preferred Member,
upon the request of the Manager, agrees to perform all further
acts and execute, acknowledge and deliver any documents that may
be reasonably necessary to carry out the provisions of this
Agreement.
SECTION 16.9. NOTICES. All notices provided for in this
Agreement shall be in writing, duly signed by the party giving
such notice, and shall be delivered, telecopied or mailed by
registered or certified mail, as follows:
(i) If given to the Company, in care of Manager
at the Company's mailing address set forth below:
c/o ICG Communications, Inc.
0000 Xxxx Xxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxx, Xxxxxxxx 00000-0000
Facsimile No.: (000) 000-0000
Attention: Executive Vice President and
Chief Financial Officer
with copies to:
Xxxx & Priest LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx, Esq.
(ii) If given to any Member, at the address set
forth on the registration books maintained by or on
behalf of the Company.
Each such notice, request or other communication shall be
effective (a) if given by telecopier, when transmitted to the
number specified in such registration books and the appropriate
confirmation is received, (b) if given by mail, 72 hours after
such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid, or (c) if given by any
other means, when delivered at the address specified in such
registration books.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above stated.
COMMON MEMBER AND MANAGER:
ICG COMMUNICATIONS, INC.
By: /s/ J. Xxxxxx Xxxxx
----------------------------
J. Xxxxxx Xxxxx
President and
Chief Executive Officer
WITHDRAWING PROVISIONAL MEMBER:
/s/ Xxxxx X. Xxxxxxxx
------------------------------
XXXXX X. XXXXXXXX
