Exhibit 99.1
CROWN ATLANTIC COMPANY LLC
OPERATING AGREEMENT
THIS OPERATING AGREEMENT (this "Operating Agreement") is made and
entered into as of March 31, 1999 (the "Effective Date") by and between
Cellco Partnership, a Delaware general partnership doing business as Xxxx
Atlantic Mobile ("BAM"), and CROWN ATLANTIC HOLDING SUB LLC, a Delaware
limited liability company ("HOLDCO SUB") (and such other persons who shall
be admitted in the future in accordance with the terms hereof and shall
have agreed to be bound hereby), being hereinafter sometimes referred to
individually as a "Member" and collectively as the "Members."
WHEREAS, BAM, Crown Castle International Corp., a Delaware
corporation ("CCIC"), CCA Investment Corp., a Delaware corporation ("CCIC
Member") and a wholly-owned indirect subsidiary of CCIC, and certain
transferring partnerships (the "Transferring Partnerships") have entered
into a Formation Agreement dated as of December 8, 1998, as amended by
Amendment Number One to such Formation Agreement dated as of March 31, 1999
and as further amended by the Schedule updates contemplated by Sections
6.1.2 and 6.2.1 of such Formation Agreement (as so amended, the "Formation
Agreement"), pursuant to which, among other things, BAM and the
Transferring Partnerships will (i) contribute the BAM Contributed Assets
and the BAM Assumed Liabilities (both as defined in the Formation
Agreement) to Crown Atlantic Company LLC, a Delaware limited liability
company ("OpCo" or the "Company") in exchange for membership interests in
OpCo; (ii) thereafter, contribute their membership interests in OpCo (other
than the BAM Retained Interest (as hereinafter defined)) to Crown Atlantic
Holding Sub LLC, a Delaware limited liability company ("HoldCo Sub") in
exchange for membership interests in HoldCo Sub; and (iii) thereafter,
contribute their membership interests in HoldCo Sub to Crown Atlantic
Holding Company LLC, a Delaware limited liability company ("HoldCo"), and,
in addition, CCIC Member will contribute the CCIC Contributed Shares (as
defined below) to HoldCo, in exchange for membership interests in HoldCo;
WHEREAS, in exchange for membership interests in HoldCo Sub, each
Transferring Partnership, BAM and CCIC Member will contribute their
membership interests in the Company (other than the BAM Retained Interest)
to HoldCo Sub immediately following the formation of the Company;
WHEREAS for federal income tax purposes it is intended that the
transaction qualify in part as a sale and in part as a contribution of the
BAM Contributed Assets (as defined below) situated in Pennsylvania to the
Company;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
GENERAL PROVISIONS
SECTION 1.1 Certain Definitions. As used in this Agreement, the
following terms have the respective meanings assigned to them below:
"Affiliates" means, with respect to any Person, any Persons
controlling, controlled by or under common control with that Person, as
well as any executive officers, directors and majority-owned entities of
that Person or its other Affiliates.
"Anticipated Financing" shall mean the proposed financing by
HoldCo Sub contemplated by Section 3.6 of the Formation Agreement of an
amount equal to not less than One Hundred Eighty Million Dollars
($180,000,000.00) (the "Closing Financing Amount"), except as adjusted
pursuant to its terms and conditions.
"BAM" is defined in the Preamble.
"BAM Assumed Liabilities" is defined in Section 2.3.3 of the
Formation Agreement.
"BAM Contributed Assets" is defined in Section 2.3.1 of the
Formation Agreement.
"BAM Retained Interest" shall mean the .001 Percentage Interest
in the Company held by BAM.
"Bidder Services Agreement" shall mean the Services Agreement
among CCIC, OpCo and HoldCo Sub, in form and substance reasonably
acceptable to BAM and CCIC and consistent with the terms set forth in the
letter agreement between BAM and CCIC set forth as Exhibit 2.7 to the
Formation Agreement, pursuant to which CCIC shall offer to OpCo and HoldCo
Sub certain services with respect to the tower structures owned by OpCo and
HoldCo Sub on the terms and conditions described therein.
"Build-to-Suit Agreement" shall mean the Build-to-Suit Agreement
among OpCo, HoldCo Sub and BAM (for itself and on behalf of the
Transferring Partnerships) pursuant to which BAM and the Transferring
Partnerships shall offer to OpCo and HoldCo Sub from time to time the right
to build tower structures on the terms and conditions described therein.
"Business Plan" is defined in Section 10.3.
"CCIC" is defined in the Preamble.
"CCIC Common Stock" shall mean the common stock, $.01 par value
of CCIC.
"CCIC Contributed Shares" shall mean those shares of CCIC Common
Stock contributed to HoldCo by CCIC Member pursuant to Section 3.5 of the
Formation Agreement.
"CCIC Member" is defined in the Preamble.
"Contingent Obligations" is defined in Section 3.8(h).
"CPI" means the Consumer Price Index for All Urban Consumers,
U.S. City Average, for All Items (1982-1984 = 100), as published by the
Bureau of Labor Statistics of the U.S. Department of Labor, and any
successor index. If the CPI is discontinued and there is no successor
index, BAM shall in good faith select a comparable index to replace the CPI
and the index selected by BAM shall be subject to CCIC Member's approval,
which approval shall not be unreasonably withheld or delayed.
"Effective Date" is defined in the Preamble.
"Encumbrance" means any lien, mortgage, security interest,
pledge, restriction on transferability, defect of title, option or other
claim, charge or encumbrance of any nature whatsoever on any property or
property interest.
"Exchange Act" is defined in Section 10.4(a).
"Financing Documents" is defined in Section 4.2 of the Formation
Agreement.
"Formation Agreement" is defined in the Preamble. All terms not
defined herein shall have the meaning given to them in the Formation
Agreement.
"GAAP" is defined in Section 3.8(e).
"Global Lease" shall mean the Global Lease Agreement among OpCo
and BAM (for itself and on behalf of the Transferring Partnerships)
pursuant to which OpCo shall lease to BAM and the Transferring Partnerships
space on certain communications towers.
"HoldCo" is defined in the Preamble.
"HoldCo Operating Agreement" shall mean the Operating Agreement
of HoldCo entered into as of March 31, 1999 by BAM and CCIC Member.
"HoldCo Sub" is defined in the Preamble.
"Indebtedness" is defined in Section 3.8(e).
"Law" means any administrative, judicial, legislative or other
statute, law, ordinance, regulation, rule, order, decree, writ, award or
decision (including without limitation the common law), including those
covering environmental, energy, safety, health, transportation, bribery,
recordkeeping, zoning, antidiscrimination, antitrust, wage and hour, and
price and wage control matters.
"Lender" shall mean Key Corporate Capital Inc.
"Liability" shall mean any direct or indirect liability,
indebtedness, obligation, expense, claim, loss, damage, deficiency,
guaranty or endorsement of (other than endorsements for collection or
deposit in the ordinary course of business) or by any Person.
"Management Agreement" shall mean the Management Agreement, in
form and substance reasonably acceptable to BAM and CCIC and consistent
with the terms set forth in the letter agreement between BAM and CCIC as
set forth on Exhibit 2.7 to the Formation Agreement, between HoldCo Sub and
OpCo pursuant to which HoldCo Sub shall manage and lease OpCo's assets.
"Managers" is defined in Section 1.2.
"Members" is defined in the Preamble.
"OpCo Towers" is defined in Section 10.3.
"Permitted Encumbrances" means (i) liens for current real or
personal property taxes not yet due and payable, (ii) liens or other rights
of third parties disclosed in the Schedules to Section 5.1 of the Formation
Agreement, (iii) worker's, carrier's and materialman's liens not yet due
and payable, (iv) with respect to Leased Sites (as defined below in the
definition of Tower Sites), any liens placed upon such real property other
than in connection with obligations or liabilities of BAM, (v) easements,
rights of way or similar grants of rights to a third party for access to or
across any real property, including, without limitation, rights of way or
similar rights granted to any utility or similar entity in connection with
the provision of electric, water, sewage, telephone, gas or similar
services, (vi) the Tower Leases, and (vii) liens that are immaterial in
character, amount, and extent, and that do not detract from the value or
interfere in any material respect with the present use of the properties
they affect.
"Person" means any natural person or entity.
"Solvent" is defined in Section 3.8(c).
"Taxes" means all taxes, duties, charges, fees, levies or other
assessments imposed by any taxing authority, whether domestic or foreign,
including, without limitation, income (net, gross or other including
recapture of any tax items such as investment tax credits), alternative or
add-on minimum tax, capital gains, gross receipts, value-added, excise,
withholding, personal property, real estate, sale, use, ad valorem,
license, lease, service, severance, stamp, transfer, payroll, employment,
customs, duties, alternative, add-on minimum, estimated and franchise taxes
(including any interest, levies, charges, penalties or additions
attributable to or imposed on or with respect to any such assessment).
"Tower Leases" are the leases of rights to use spaces on the
Tower Structures as identified in Annex III to the Formation Agreement.
"Tower Sites" shall mean the sites of the Tower Structures that
are owned or leased by BAM or the Transferring Partnerships, including all
fee, ground leasehold interests and easements pertaining to such tower
sites owned by BAM or the Transferring Partnerships and shall include a fee
ownership in the real property associated with the Tower Structures
designated as "Owned Sites" in Annex I of the Formation Agreement, and the
leasehold interest in and to the real property associated with the Tower
Structures designed as "Leased Sites" in Annex I of the Formation Agreement
pursuant to the terms of the ground leases related thereto identified in
Annex II of the Formation Agreement (the "Site Leases").
"Tower Structures" shall mean the communications tower structures
situated at the locations identified in Annex I of the Formation Agreement,
and owned or leased by BAM or the Transferring Partnerships, and BAM's and
the Transferring Partnerships' rights to all attached tower lighting
equipment, grounding systems and physical improvements on each Tower Site,
including fencing, along with any tenant leases, easement rights necessary
for access to the Tower Structure and for location of the Tower Structure
and guy wires, if any, associated therewith; provided, however, such term
does not include any equipment, property or other assets placed upon the
Tower Structures or Tower Sites by third parties pursuant to Tower Leases
or other Contracts or any Excluded Asset as defined in Section 2.3.2 of the
Formation Agreement. This definition shall include any Tower Structures
constructed pursuant to the terms of the Build-to-Suit Agreement.
"Transaction Documents" means, collectively, the Formation
Agreement, the Global Lease, the Build-to-Suit Agreement, the Bidder
Services Agreement, the Management Agreement and each of the other
documents and agreements listed in Section 4.2 of the Formation Agreement.
"Transferring Partnership" is defined in the Preamble.
SECTION 1.2 Formation. Upon the filing of the Certificate of
Formation (the "Certificate") with the Secretary of State of the State of
Delaware, BAM, CCIC Member and the
Transferring Partnerships have formed Crown Atlantic Company LLC, a limited
liability company, pursuant to the Delaware Limited Liability Company Act
of 1992, as amended from time to time (the "Act"), for the purposes
hereinafter set forth. BAM, CCIC Member and the Transferring Partnerships,
after the filing of the Certificate and prior to the execution and delivery
of this Agreement, transferred all of their respective interests in the
Company (other than the BAM Retained Interest) to HoldCo Sub. The Company
was formed as a limited liability company managed by its managers (the
"Managers") under the supervision of the Board of Representatives (as
defined in Section 1.10) and the laws of the State of Delaware, upon the
terms and conditions hereinafter set forth. The Members intend that the
Company shall be taxed as a partnership. Promptly following the execution
hereof, the Members shall execute or cause to be executed all other
necessary certificates and documents, and shall make all other such filings
and recordings, and shall do all other acts as may be necessary or
appropriate from time to time to comply with all requirements for the
formation, continued existence and operation of a limited liability company
in the State of Delaware. This Operating Agreement is intended to serve as
a "limited liability company agreement" as such term is defined in ss.
18-101(7) of the Act.
SECTION 1.3 Company Name and Address. The Company shall do
business under the name Crown Atlantic Company LLC or such other name as
the Board of Representatives (as defined in Section 1.10) may determine
from time to time. The Board of Representatives shall promptly notify the
Members of any change of name of the Company. The initial registered agent
for the Company shall be CT Corporation System. The initial registered
office of the Company in the State of Delaware shall be 0000 Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000. The registered office and the registered agent
may be changed from time to time by action of the Board of Representatives
by filing notice of such change with the Secretary of State of the State of
Delaware. The Board of Representatives will promptly notify the Members of
any change of the registered office or registered agent. The Company may
also have offices at such other places within or outside of the State of
Delaware as the Board of Representatives may from time to time
determine.
SECTION 1.4 Term. The Company shall commence operating as of the
date the Certificate is filed with the Secretary of the State of Delaware,
and shall have perpetual existence unless terminated or dissolved pursuant
to Section 9.1 of this Operating Agreement.
SECTION 1.5 Business of the Company. Subject to the limitations
set forth in this Operating Agreement, the purpose of the Company is the
ownership, operation and maintenance of the Tower Structures, the
performance of its obligations under the ground leases, easements and
rights of way and the performance of its rights and obligations under the
Build-to-Suit Agreement, the Management Agreement, the Global Lease, the
other Transaction Documents and any leases or subleases of tower capacity
with respect to the Tower Structures (including, without limitation, Tower
Structures developed pursuant to the Build-to-Suit Agreement). The Company
shall not engage in any line of business or activity except those set forth
in the preceding sentence. The Company shall possess and may exercise all
the powers and privileges
granted by the Act or by any other law, together with any powers incidental
thereto, so far as such powers and privileges are necessary or convenient to
the conduct, promotion or attainment of the business, purposes or activities
of the Company.
SECTION 1.6 Names and Addresses of the Members. The names and
addresses of the Members are set forth in Schedule A.
SECTION 1.7 Partition. No Member, nor any successor-in-interest
to any Member, shall have the right, while this Operating Agreement remains
in effect, to have the property of the Company partitioned, or to file a
complaint or institute any proceeding at law or in equity to have the
property of the Company partitioned, and each of the Members, on behalf of
itself and its successors, representatives and assigns, hereby irrevocably
waives any such right.
SECTION 1.8 Fiscal Year. The fiscal year of the Company shall
begin on January 1 and end on December 31 of each calendar year.
SECTION 1.9 Title to Company Property. All property owned by the
Company, whether real or personal, tangible or intangible, shall be deemed
to be owned by the Company, and no Member individually shall have any
interest in such property. Title to all such property may be held in the
name of the Company or a designee, which designee may be a Member or an
entity affiliated with a Member.
SECTION 1.10 Board of Representatives.
(a) General. A Board of Representatives (the "Board of
Representatives") shall be established to oversee the Managers and review
the Business Plan (as defined in Section 10.3). There shall be no less than
five (5) Representatives, nor more than fifteen (15) Representatives, as
may be determined from time to time by the Board of Representatives.
Initially, there shall be six (6) Representatives. Each Member shall
designate that number of Representatives determined by multiplying the
total number of Representatives by that Member's Percentage Interest in the
Company (excluding, however, the BAM Retained Interest) and rounding to the
nearest whole number. If such calculation shall result in a greater number
of Representatives than the total to be designated, then the Board of
Representatives shall be expanded to the extent permitted by the second
sentence of this Section 1.10(a) or if, despite such expansion, there would
still be a greater number of Representatives than the total to be
designated, the Members shall by vote determine a proportionate
readjustment with each Member entitled to a number of votes equal to its
Percentage Interest. Notwithstanding the foregoing, for so long as BAM has
the right to designate at least one (1) Representative to the Board of
Representatives of HoldCo, the Representatives and Alternates of HoldCo
shall also serve as the Representatives and Alternates of the Company and
HoldCo Sub, and such Representatives and Alternates shall be selected in
accordance with the provisions of Section 1.10 of the HoldCo Operating
Agreement.
(b) Representatives and Alternates. Each Member shall also
be entitled to designate one (1) alternate to each such Representative
(each, an "Alternate"). In the event a Representative is unable to attend a
meeting of the Board of Representatives or otherwise participate in any
action to be taken by the Board of Representatives, the Alternate
associated with such Representative shall take such Representative's place
for all purposes on the Board of Representatives. Each Member shall
designate its Representatives and the associated Alternates by written
notice to the Company and each other Member. The initial Representatives
and Alternates of each Member are set forth on Schedule B. The
Representatives and Alternates shall at all times be executive officers or
other full-time employees of either such Member or any affiliate of such
Member.
(c) Resignation. A Representative or Alternate of the
Company may resign at any time by giving written notice to the Company or
to the Member who designated such Representative or Alternate.
(d) Removal. Each Member may, at any time, replace any of
its Representatives or Alternates with a new Representative or Alternate
and, upon such change or upon the death or resignation of any
Representative or Alternate, a successor shall be designated in writing by
the Member that appointed the Representative or Alternate being replaced.
(e) Vacancies. Any vacancy with respect to any
Representative or Alternate occurring for any reason may be filled by the
Member who designated the Representative or Alternate who vacated or was
removed from his or her position.
(f) Compensation. Without the approval of the Members, the
Representatives or Alternates will not be entitled to compensation for
their services as Representatives or Alternates. The Company shall,
however, reimburse the Representatives and Alternates for their reasonable
expenses incurred in connection with their services to the Company.
SECTION 1.11 Membership Interests Uncertificated. The interests
of the Members in the Company shall not be certificated.
ARTICLE II
MEETINGS GENERALLY
SECTION 2.1 Manner of Giving Notice.
(a) A notice of meeting shall specify the place, day and
hour of the meeting and any other information required by any provision of
the Act, the Certificate or this Operating Agreement.
(b) When a meeting at which there is a duly constituted
quorum is adjourned, it shall not be necessary to give any notice of the
adjourned meeting or of the business to be transacted at an adjourned
meeting, other than by announcement at the meeting at which the adjournment
is taken, unless the adjournment is for more than sixty (60) days in which
event notice shall be given in accordance with Section 2.2 or Section 2.3,
as applicable.
SECTION 2.2 Notice of Meetings of the Board of Representatives.
Notice of every meeting of the Board of Representatives shall be given to
each Representative by telephone or in writing at least 24 hours (in the
case of notice by telephone, telex or facsimile transmission) or 48 hours
(in the case of notice by telegraph, courier service or express mail) or
five days (in the case of notice by first class mail) before the time at
which the meeting is to be held. Every such notice shall state the time and
place of the meeting. Subject to the provisions of Sections 3.3 and 4.5,
neither the business to be transacted at, nor the purpose of, any meeting
of the Board of Representatives need be specified in a notice of the
meeting.
SECTION 2.3 Notice of Meetings of Members. Written notice of
every meeting of the Members shall be given to each Member of record
entitled to vote at the meeting at least five (5) days prior to the day
named for the meeting. If the Managers neglect or refuse to give notice of
a meeting, the person or persons calling the meeting may do so.
SECTION 2.4 Waiver of Notice.
(a) Whenever any written notice is required to be given
under the provisions of the Act, the Certificate or this Operating
Agreement, a waiver thereof in writing, signed by the person or persons
entitled to the notice, whether before or after the time stated therein,
shall be deemed equivalent to the giving of the notice. Neither the
business to be transacted at, nor the purpose of, a meeting need be
specified in the waiver of notice of the meeting.
(b) Attendance of a person at any meeting shall constitute a
waiver of notice of the meeting except where a person attends a meeting for
the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting was not lawfully called or
convened.
SECTION 2.5 Use of Conference Telephone and Similar Equipment.
Any Representative may participate in any meeting of the Board of
Representatives, and any Member may participate in any meeting of the
Members, by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can
hear each other. Participation in a meeting pursuant to this Section shall
constitute presence in person at the meeting.
SECTION 2.6 Consent in Lieu of Meeting. Any action required or
permitted to be taken at a meeting of the Board of Representatives or
Members may be taken without a meeting
if, prior or subsequent to the action, written consents describing the
action to be taken are signed by the minimum number of Representatives or
Members that would be necessary to authorize the action at a meeting at
which all Representatives or Members entitled to vote thereon were present
and voting; provided that, prior to any such written consent becoming
effective, such written consent has been provided to all Representatives or
Members entitled to vote, and the Representatives or Members shall have ten
(10) days to review such consent prior to such written consent becoming
effective (unless otherwise agreed to by all Representatives or their
respective Alternates or each Member, respectively). The consents shall be
filed with the Managers. Prompt notice of the taking of Company action
without a meeting by less than unanimous written consent shall be given to
those Members who have not consented in writing.
ARTICLE III
MANAGEMENT
SECTION 3.1 Management of the Company Generally. The business
and affairs of the Company shall be managed by its Managers under the
supervision of the Board of Representatives (a) in accordance with the
provisions of this Operating Agreement and the Business Plans and the other
resolutions and directives of the Board of Representatives adopted by the
Board of Representatives and in effect from time to time, and (b) subject
to the provisions of the Act, the Certificate and this Operating Agreement
including, without limitation, the provisions of Section 3.8 hereof. Unless
authorized to do so by this Operating Agreement or by Board of
Representatives or the Managers of the Company (provided that the Managers
are authorized to grant such authority), no attorney-in-fact, employee,
officer or agent of the Company other than the Managers shall have any
power or authority to bind the Company in any way, to pledge its credit or
to render it liable pecuniarily for any purpose. No Member shall have any
power or authority to bind the Company unless the Member has been expressly
authorized by the Board of Representatives to act as an agent of the
Company. All Managers of the Company, as between themselves and the
Company, shall have such authority and perform such duties in the
management of the Company as may be provided by or pursuant to resolutions
or orders of the Board of Representatives or in the Business Plan or, in
the absence of controlling provisions in the resolutions or orders of the
Board of Representatives, as may be determined by or pursuant to this
Operating Agreement. The Board of Representatives may confer upon any
Manager such titles as the Board deems appropriate, including, but not
limited to, President, Vice President, Secretary or Treasurer, and subject
to the limitations set forth in Section 3.8 of this Operating Agreement,
delegate specifically defined duties to the Managers. Notwithstanding the
foregoing or any other provision of this Operating Agreement or of the Act
to the contrary, no Manager of the Company shall have the power or
authority to do or perform any act with respect to any of the matters set
forth in Section 3.8 of this Operating Agreement unless such matter has
been approved by the mutual consent of BAM and CCIC Member in accordance
with the provisions of this Operating Agreement.
SECTION 3.2 Meetings of the Board of Representatives. Meetings
of the Board of Representatives shall be held at such time and place within
or without the State of Delaware as shall be designated from time to time
by resolution of the Board of Representatives or by written notice of any
Manager or by written notice of any Member; provided that meetings of the
Board of Representatives shall be held no less than quarterly, on a date to
be determined by the mutual consent of BAM and CCIC Member. At each meeting
of the Board of Representatives, the Managers shall (i) provide the Board
of Representatives with a report on the financial condition and operations
of the Company, including, without limitation, a report on the results of
operations compared to the then applicable Business Plan, (ii) disclose to
the Board of Representatives any material event or contingency occurring
since the previous meeting and (iii) disclose to the Board of
Representatives all matters which would require disclosure to, or the
approval of, the board of directors of a Delaware corporation. For so long
as BAM is entitled to designate at least one (1) Representative to the
Board of Representatives of HoldCo, any meeting of the Board of
Representatives of HoldCo shall also be deemed to be a meeting of the
Boards of Representatives of the Company and HoldCo Sub.
SECTION 3.3 Quorum. The presence of at least one of the
Representatives or Alternates designated by each of BAM and CCIC Member
shall be necessary to constitute a quorum for the transaction of business
at a meeting of the Board of Representatives and the acts of a majority of
the Representatives or Alternates present and voting at a meeting at which
a quorum is present shall be the acts of the Representatives or Alternates;
provided, however, that if notice of a meeting is provided to the
Representatives and Alternates, and such notice describes the business to
be considered, the actions to be taken and the matters to be voted on at
the meeting in reasonable detail, and insufficient Representatives or
Alternates attend the meeting to constitute a quorum, the meeting may be
adjourned by those Representatives or Alternates attending such meeting for
a period not to exceed twenty (20) days. Such meeting may be reconvened by
providing notice of the reconvened meeting to the Representatives and
Alternates no less than ten (10) days prior to the date of the meeting
specifying that the business to be considered, the actions to be taken and
the matters to be voted upon are those set forth in the notice of the
original adjourned meeting. If, at the reconvened meeting, a quorum of
Representatives or Alternates is not present, a majority of the
Representatives and Alternates present and voting will constitute a quorum
for purposes of the reconvened meeting; provided, however that such
Representatives and Alternates may only consider the business, take the
actions or vote upon the matters set forth in the notice of the original
meeting. Notwithstanding the foregoing, or any other provision in this
Agreement, no Representative, Alternate or Manager shall have any power or
authority to do or perform any act with respect to any of the matters set
forth in Section 3.8 of this Operating Agreement unless such matter has been
approved by the mutual consent of BAM and CCIC Member in accordance with the
provisions of this Operating Agreement.
SECTION 3.4 Manner of Acting. Other than any action contemplated
by Section 3.8, which shall require the mutual consent of CCIC Member and
BAM, whenever any Company action is to be taken by a vote of the Board of
Representatives, it shall be authorized
upon receiving the affirmative vote of a majority of the Representatives
and Alternates present and voting at a duly constituted meeting at which a
quorum is present.
SECTION 3.5 Designation of Managers. CCIC Member shall designate
all Managers. The initial Managers are set forth on Schedule C. CCIC Member
shall promptly give each Member notice of the designation of any new
Manager.
SECTION 3.6 Qualifications. Each Manager of the Company shall be
a natural person of full age who need not be a resident of the State of
Delaware.
SECTION 3.7 Number, Selection and Term of Office.
(a) There shall be no less than 2 Managers, nor more than
11, as may be determined from time to time by the Board of Representatives.
Initially, there shall be 11 Managers.
(b) Each Manager shall hold office until a successor has
been selected and qualified or until his or her earlier death, resignation
or removal.
SECTION 3.8 Approval of Certain Matters by the Members.
Notwithstanding any provision of this Operating Agreement or the Act to the
contrary, for so long as BAM or any permitted transferee under Section 8.3
holds the BAM Retained Interest, the following matters require the mutual
consent of BAM and CCIC Member, given by their respective Representatives
(acting as a group) at a meeting of the Board of Representatives or by
written consent, or if BAM has no Representatives, such consent shall be
given by BAM in its capacity as a Member, and the Managers shall have no
power or authority to do or perform any act with respect to any of the
following matters without the mutual consent of BAM and CCIC Member, given
in accordance with the provisions of this Operating Agreement:
(a) Certain Contracts. The entering into any contract,
agreement or arrangement (whether written or oral) by the Company, other
than agreements and contracts in force as of the date hereof and renewals
thereof, which (i) contains provisions restricting the Company or any
member thereof from competing in any business activity in any geographic
area, (ii) contains provisions requiring the Company or any member thereof
to deal exclusively with any third party with respect to providing any
goods, services or rights to or acquiring any goods or services or rights
from such third party, (iii) contains provisions which are inconsistent
with the obligations of the Company under any of the Transaction Documents,
or (iv) provides for the purchase or sale of goods, services or rights
involving an amount in excess of $10,000,000 per year in any transaction or
series of similar transactions.
(b) Conduct of Business. The engagement by the Company in
any line of business other than the ownership, operation and maintenance of
the Tower Structures, the performance of its obligations under the ground
leases, easements and rights-of-way and the
performance of its rights and obligations under the Build-to-Suit
Agreement, the Management Agreement the Global Lease, the other Transaction
Documents and any leases or subleases of tower capacity with respect to the
Tower Structures (including, without limitation, Tower Structures developed
pursuant to the Build-to-Suit Agreement). The making by the Company of any
investment in, or the acquisition by the Company of any equity securities
of, any Person.
(c) Solvency. The voluntary taking of any action by the
Company that would cause it to cease to be Solvent. As used herein, the
term "Solvent" means that the aggregate present fair saleable value of the
Company's assets is in excess of the total cost of its probable liability
on its existing debts to third parties as they become absolute and matured,
the Company has not incurred debts beyond its foreseeable ability to pay
such debts as they mature, and the Company has capital adequate to conduct
the business in which it is presently employed.
(d) Bankruptcy. The voluntary dissolution or liquidation of
the Company, the making by the Company of a voluntary assignment for the
benefit of creditors, the filing of a petition in bankruptcy by the
Company, the Company petitioning or applying to any tribunal for any
receiver or trustee, the Company commencing any proceeding relating to
itself under any bankruptcy, reorganization, readjustment of debt,
dissolution or liquidation law or statute of any jurisdiction, the Company
indicating its consent to, approval of or acquiescence in any such
proceeding and failing to use its best efforts to have discharged the
appointment of any receiver of or trustee for the Company or any
substantial part of their respective properties.
(e) Indebtedness. The Company directly or indirectly,
remaining liable, creating, incurring, assuming, guaranteeing, or otherwise
becoming or remaining directly or indirectly liable with respect to any
Indebtedness. As used herein, "Indebtedness" means, at any time, (i)
liabilities for borrowed money, (ii) liabilities for the deferred purchase
price of property acquired by the Company (excluding accounts payable
arising in the ordinary course of business but including all liabilities
created or arising under any conditional sale or other title retention
agreement with respect to any such property); (iii) all liabilities
appearing on its balance sheet in accordance with generally accepted
accounting principles consistently applied throughout the periods involved
("GAAP") in respect of capital leases; (iv) all liabilities for borrowed
money secured by any Encumbrance with respect to any property owned by the
Company (whether or not it has assumed or otherwise become liable for such
liabilities); (v) all liabilities in respect of letters of credit or
instruments serving a similar function issued or accepted for its account
by banks and other financial institutions (whether or not representing
obligations for borrowed money); and (vi) any guaranty of the Company with
respect to liabilities of a type described in any of clauses (i) through
(v) hereof.
(f) Liens. The Company, directly or indirectly, maintaining,
creating, incurring, assuming or permitting to exist any Encumbrance (other
than Permitted Encumbrances) on or with respect to any property or asset
(including any document or instrument in respect of goods or accounts
receivable) of the Company, whether now owned or hereafter acquired, or any
income or profits therefrom.
(g) Issuance of Interests. The authorization or issuance of
any interests in, or the admission of any members to, the Company, other
than BAM and HoldCo Sub, including, without limitation, the authorization
or issuance of any additional interests in the Company to BAM or HoldCo Sub
beyond those interests authorized and issued in connection with the
formation of the Company.
(h) Contingent Obligations. The Company, directly or
indirectly, creating or becoming or being liable with respect to any
Contingent Obligation except:
(1) Contingent Obligations of the Company arising under
the BAM Assumed Liabilities and successor liabilities thereto;
(2) Contingent Obligations resulting from endorsement
of negotiable instruments for collection in the ordinary course of
business;
(3) Contingent Obligations under the Management
Agreement, the Build-to-Suit Agreement and the Global Lease;
As used herein, the term "Contingent Obligations" means any direct or
indirect liability, contingent or otherwise (i) with respect to any
indebtedness, lease, dividend or other obligation of another if the primary
purpose or intent thereof is to provide assurance to the obligee of such
obligation of another that such obligation of another will be paid or
discharged, or that any agreements relating thereto will be complied with,
or that the holders of such obligations will be protected (in whole or in
part) against loss in respect thereof and (ii) with respect to any letter
of credit. Contingent Obligations shall include with respect to the
Company, without limitation, the direct or indirect guaranty, endorsement
(otherwise than for the collection or deposit in the ordinary course of
business), co-making, discounting with recourse or sale with recourse by
the Company, the obligation to make take-or-pay or similar payments if
required regardless of non-performance by any other party or parties to an
agreement, and any liability of the Company for the obligations of another
through any agreement (contingent or otherwise) (x) to purchase, repurchase
or otherwise acquire such obligation or any security therefor, or to
provide funds for the payment or discharge of such obligation (whether in
the form of loans, advances, stock purchases, capital contributions or
otherwise), and (y) to maintain the solvency or any balance sheet item,
level of income or financial condition of another, if in the case of any
agreement described under subclause (x) or (y) of this sentence, the
primary purpose or intent thereof is as described in the preceding
sentence.
(i) Preservation of Existence. Any action contrary to the
preservation and maintenance of the Company's existence, rights, franchises
and privileges as a limited liability company under the laws of the State
of Delaware. Any action which would prevent the Company from qualifying and
remaining qualified as a foreign limited liability company in each
jurisdiction in which such qualification is necessary or desirable in view
of its business and operations or the ownership or lease of its properties.
(j) Merger or Sale of Assets. Any merger or consolidation by
the Company with any Person. Any sale, assignment, lease or other
disposition by the Company of (whether in one transaction or in a series of
transactions), or any voluntarily parting with the control of (whether in
one transaction or in a series of transactions), a material portion of the
Company's assets (whether now owned or hereinafter acquired), except in
accordance with the provisions of any of the Transaction Documents, and
except for sales or other dispositions of assets in the ordinary course of
business. Any sale, assignment or other disposition of (whether in one
transaction or in a series of transactions) any of the Company's accounts
receivable (whether now in existence or hereinafter created) at a discount
or with recourse, to any Person, except for sales or other dispositions of
assets in the ordinary course of business, or except as permitted under the
terms of the Global Lease Agreement.
(k) Dealings with Affiliates. Except pursuant to the
Transaction Documents, the entering into by the Company of any transaction,
including, without limitation, any loans or extensions of credit or royalty
agreements with any Representative, Manager, officer or member of the
Company or HoldCo or any officer, director of CCIC or CCIC Member or holder
of more than five percent (5%) of the outstanding CCIC Common Stock, or any
member of their respective immediate families or any corporation or other
entity directly or indirectly controlled by one or more of such officers,
directors or stockholders or members of their immediate families except in
the ordinary course of business and on terms not less favorable to the
Company than it would reasonably expect to obtain in a transaction between
unrelated parties.
(l) Dividends; Distributions. The declaration or payment by
the Company of any dividend, or making by the Company of any distribution
or return of capital, or the redemption by the Company of any equity
interest, or the making by the Company of any similar payments or transfer
of property to its members (excluding payments for goods or services) in
amounts in excess of those amounts which would otherwise be payable under
the Management Agreement and then only to the extent that such amounts had
not been paid pursuant to the Management Agreement; provided, however, that
the consent of BAM shall not be required as a condition to OpCo taking any
of the aforesaid actions under this Section 3.8(1) if (1) BAM has disposed
of all of its percentage interest in HoldCo and (2) (x) there are no
further loans or other obligations outstanding under the Financing
Documents, (y) all commitments in connection with the Financing Documents
have been terminated and (z) no letters of credit issued under the
Financing Documents are outstanding.
(m) Method of Certain Calculations. The determination of any
method to be used in calculating any of the payments to be made under the
Management Agreement or the Bidder Services Agreement.
(n) Business Plan. The approval of the Business Plan as set
forth in Section 10.3.
SECTION 3.9 Exculpation. No Member, Manager, Representative,
Alternate or officer shall be liable to the Company or to any Member for
any losses, claims, damages or liabilities arising from, related to, or in
connection with, this Operating Agreement or the business or affairs of the
Company, except for any losses, claims, damages or liabilities as are
determined by final judgment of a court of competent jurisdiction to have
resulted from such Member, Manager, Representative, Alternate or officer's
gross negligence or willful misconduct. To the extent that, at law or in
equity, any Member, Manager, Representative, Alternate or officer has duties
(including fiduciary duties) and liabilities relating thereto to the
Company or to any Member, such Member, Manager, Representative, Alternate
or officer acting in connection with this Operating Agreement or the
business or affairs of the Company shall not be liable to the Company or to
any Member, Manager, Representative, Alternate or officer for its good
faith conduct in accordance with the provisions of this Agreement or any
approval or authorization granted by the Company or any Member, Manager,
Representative, Alternate or officer. The provisions of this Operating
Agreement, to the extent that they restrict the duties and liabilities of
any Member, Manager, Representative, Alternate or officer otherwise
existing at law or in equity, are agreed by the Members to replace such
other duties and liabilities of such Member, Manager, Representative,
Alternate or officer.
SECTION 3.10 Reliance on Reports and Information by Member,
Representative, Alternate or Manager. A Member, Representative, Alternate
or Manager of the Company 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 of its other
Managers, Members, Representatives, Alternates, officers, employees or
committees of the Company, or by any other person, as to matters the
Member, Representative, Alternate or Manager 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 or losses of the Company or any other facts
pertinent to the existence and amount of assets from which distributions to
Members might properly be paid.
SECTION 3.11 Bank Accounts. The Managers may from time to time
open bank accounts in the name of the Company, and the Managers, or any of
them, shall be the sole signatory or signatories thereon, unless the
Managers determine otherwise.
SECTION 3.12 Resignation. A Manager of the Company may resign at
any time by giving written notice to the Company. The resignation of a
Manager shall be effective upon receipt of such notice or at such later
time as shall be specified in the notice. Unless otherwise specified in the
notice, the acceptance of the resignation shall not be necessary to make
such resignation effective.
SECTION 3.13 Removal. Any individual Manager may be removed from
office at any time, without assigning any cause, by CCIC Member.
SECTION 3.14 Vacancies. Any vacancy with respect to a Manager
occurring for any reason may be filled by CCIC Member.
SECTION 3.15 Salaries. The salaries of the Managers shall be
fixed from time to time by the Board of Representatives in accordance with
the Business Plan or by such Manager as may be designated by resolution of
the Board of Representatives. The salaries or other compensation of any
other employees and other agents shall be fixed from time to time by the
Board of Representatives or by such Manager as may be designated by
resolution of the Board of Representatives.
ARTICLE IV
MEMBERS
SECTION 4.1 Admission of Members.
(a) A person acquiring an interest in the Company in
connection with its formation shall be admitted as a Member of the Company
upon the later to occur of the formation of the Company or when the
admission of the person is reflected in the records of the Company.
(b) After the formation of the Company, a person acquiring
an interest in the Company from the Company, is admitted as a Member upon
the satisfaction of all requirements in Section 9.1 and Section 9.2 of this
Operating Agreement.
SECTION 4.2 Meetings. Meetings of the Members, for any purpose
or purposes, unless otherwise prescribed by statute, may be called by any
Manager or by any Member.
SECTION 4.3 Place of Meeting. The Managers or Members calling a
meeting pursuant to Section 4.2 may designate any place as the place for
any meeting of the Members. If no designation is made, the place of meeting
shall be the principal office of the Company.
SECTION 4.4 Record Date. For the purpose of determining Members
entitled to notice of, or to vote at, any meeting of Members or any
adjournment of the meeting, or Members entitled to receive payment of any
distribution, or to make a determination of Members for any other purpose,
the date on which notice of the meeting is mailed or the date on which the
resolution declaring the distribution or relating to such other purpose is
adopted, as the case may be, shall be the record date for the determination
of Members. Only Members of record on the date fixed shall be so entitled
notwithstanding any permitted transfer of a Member's Membership
Interest after any record date fixed as provided in this Section. When a
determination of Members entitled to vote at any meeting of Members has
been made as provided in this section, the determination shall apply to any
adjournment of the meeting.
SECTION 4.5 Quorum. A meeting of Members of the Company duly
called shall not be organized for the transaction of business unless a
quorum is present. The presence of each Member, represented in person or by
proxy, shall constitute a quorum at any meeting of Members; provided,
however, that if notice of a meeting is provided to the Members, and such
notice describes the business to be considered, the actions to be taken and
the matters to be voted on at the meeting in reasonable detail, and
insufficient Members attend the meeting to constitute a quorum, the meeting
may be adjourned by those Members attending such meeting for a period not
to exceed twenty (20) days. Such meeting may be reconvened by providing
notice of the reconvened meeting to the Members no less than ten (10) days
prior to the date of the meeting specifying that the business to be
considered, the actions to be taken and the matters to be voted upon are
those set forth in the notice of the original adjourned meeting. If, at the
reconvened meeting, a quorum of Members is not present, a majority of the
Members present and voting will constitute a quorum for purposes of the
reconvened meeting; provided, however that such Members may only consider
the business, take the actions or vote upon the matters set forth in the
notice of the original meeting. At an adjourned meeting at which a quorum
shall be present or represented, any business may be transacted which might
have been transacted at the meeting as originally noticed. The Members
present at a duly organized meeting may continue to transact business until
adjournment, notwithstanding the withdrawal during the meeting of Members
whose absence would cause less than a quorum.
Notwithstanding the foregoing or any other provision in this Agreement, no
Member shall have any power or authority to do or perform any act with respect
to any of the matters set forth in Section 3.8 of this Operating Agreement
unless such matter has been approved by the mutual consent of BAM and CCIC
Member in accordance with the provisions of this Operating Agreement.
SECTION 4.6 Manner of Acting. Except as otherwise provided in
the Act or the Certificate or this Operating Agreement, including, without
limitation, Section 3.8 hereof, whenever any Company action is to be taken
by vote of the Members of the Company, it shall be authorized upon
receiving the affirmative vote of Members entitled to vote who own a
majority of the Percentage Interests then held by Members.
SECTION 4.7 Voting Rights of Members. Unless otherwise provided
in the Certificate, every Member of the Company shall be entitled to a
percentage of the total votes equal to that Member's then current
Percentage Interest (as defined in Section 6.1).
SECTION 4.8 Relationship of Members. Except as otherwise
expressly and specifically provided in or as authorized pursuant to the
Certificate or this Operating Agreement, (a) in the event that any Member
(or any of such Member's shareholders, partners, members,
owners, or Affiliates (collectively, the "Liable Member")) has incurred any
indebtedness or obligation prior to the date of this Agreement that relates
to or otherwise affects the Company, neither the Company nor any other
Member shall have any liability or responsibility for or with respect to
such indebtedness or obligation unless such indebtedness or obligation is
assumed by the Company pursuant to this Operating Agreement, the Formation
Agreement or any of the other Transaction Documents, or a written
instrument signed by all Members; (b) neither the Company nor any Member
shall be responsible or liable for any indebtedness or obligation that is
incurred after the date of this Agreement by any Liable Member, and in the
event that a Liable Member, whether prior to or after the date hereof,
incurs (or has incurred) any debt or obligation that neither the Company
nor any of the other Members is to have any responsibility or liability
for, the Liable Member shall indemnify and hold harmless the Company and
the other Members from any liability or obligation they may incur in
respect thereof; (c) nothing contained herein shall render any Member
personally liable for any debts, obligations or liabilities incurred by the
other Members or the Company whether arising in contract, tort or otherwise
or for the acts or omissions of any other Member, Manager, agent or
employee of the Company; (d) no Member shall be constituted an agent of the
other Members or the Company; (e) nothing contained herein shall create any
interest on the part of any Member in the business or other assets of the
other Members; (f) nothing contained herein shall be deemed to restrict or
limit in any way the carrying on (directly or indirectly) of separate
businesses or activities by any Member now or in the future, even if such
businesses or activities are competitive with the Company; and (g) no
Member shall have any authority to act for, or to assume any obligation on
behalf of, the other Members or the Company. No Member or any of its
Affiliates or any of their respective officers, directors, employees or
former employees shall have any obligation, or be liable, to the Company or
any other Member pursuant to this Agreement for or arising out of the
conduct described in the preceding clause (f), for exercising, performing
or observing or failing to exercise, perform or observe, any of its rights
or obligations under the Formation Agreement or any other Transaction
Document, for exercising or failing to exercise its rights as a Member or,
solely by reason of such conduct, for breach of any fiduciary or other duty
to the Company or any Member. In the event that a Member, any of its
Affiliates or any of their respective officers, directors, employees or
former employees acquires knowledge of a potential transaction, agreement,
arrangement or other matter which may be a corporate opportunity for both
the Member and the Company, neither the Member nor such Affiliate,
officers, directors, employees or former employees shall have any duty to
communicate or offer such corporate opportunity to the Company, and neither
the Member nor such Affiliate, officers, directors, employees or former
employees shall be liable to the Company for breach of any fiduciary or
other duty, as a member or otherwise, by reason of the fact that the Member
or such Affiliate, officers, directors, employees or former employees
pursue or acquire such corporate opportunity for the Member, direct such
corporate opportunity to another person or entity or fail to communicate
such corporate opportunity or information regarding such corporate
opportunity to the Company.
SECTION 4.9 Business Transactions of Member, Representative or
Alternate with the Company. A Member, Representative or Alternate may lend
money to, borrow money from, act as a surety, guarantor or endorser for,
guarantee or assume one or more obligations of,
provide collateral for, and transact any and all other business with the
Company and, subject to other applicable law, has the same rights and
obligations with respect to any such matter as a person who is not a Member,
Representative or Alternate.
ARTICLE V
INDEMNIFICATION
SECTION 5.1 Indemnification by the Company.
(a) The Company shall indemnify an indemnified
representative against any liability incurred in connection with any
proceeding in which the indemnified representative may be involved as a
party or otherwise, as and when incurred, by reason of the fact that such
person is or was serving in an indemnified capacity, including, without
limitation, liabilities resulting from any actual or alleged breach or
neglect of duty, error, misstatement or misleading statement, negligence,
gross negligence or act giving rise to liability, except:
(1) where such indemnification is expressly prohibited
by applicable law;
(2) where the conduct of the indemnified representative
has been finally determined:
(i) to constitute willful misconduct or
recklessness sufficient in the circumstances to bar indemnification against
liabilities arising from the conduct; or
(ii) to be based upon or attributable to the
receipt by the indemnified representative from the Company of a personal
benefit to which the indemnified representative is not legally entitled; or
(3) to the extent such indemnification has been finally
determined in a final adjudication to be otherwise unlawful.
(b) If an indemnified representative is entitled to
indemnification in respect of a portion, but not all, of any liabilities to
which such person may be subject, the Company shall indemnify such
indemnified representative to the maximum extent for such portion of the
liabilities.
(c) The termination of a proceeding by judgment, order,
settlement or conviction or upon a plea of nolo contendere or its
equivalent shall not of itself create a presumption that the indemnified
representative is not entitled to indemnification.
(d) Definitions. For purposes of this Article:
(1) "indemnified capacity" means any and all past,
present and future service by an indemnified representative in one or more
capacities as a Member, Manager, Representative, Alternate or authorized
agent of the Company;
(2) "indemnified representative" means any and all
Members, Managers, Representatives, Alternates and authorized agents of the
Company and any other person designated as an indemnified representative by
the mutual consent of BAM and CCIC Member, given in accordance with the
provisions of this Operating Agreement;
(3) "liability" means any damage, judgment, amount paid
in settlement, fine, penalty, punitive damages, excise tax assessed with
respect to an employee benefit plan, or cost or expense of any nature
(including, without limitation, attorneys' fees and disbursements); and
(4) "proceeding" means any threatened, pending or
completed action, suit, appeal or other proceeding of any nature, whether
civil, criminal, administrative or investigative, whether formal or
informal, and whether brought by or in the right of the Company, a class of
its Members or security holders or otherwise.
SECTION 5.2 Proceedings Initiated by Indemnified Representatives.
Notwithstanding any other provision of this Article, the Company shall not
indemnify under this Article an indemnified representative for any
liability incurred in a proceeding initiated (which shall not be deemed to
include counterclaims or affirmative defenses) or participated in as an
intervenor or amicus curiae by the person seeking indemnification unless
such initiation of or participation in the proceeding is authorized, either
before or after its commencement, by the unanimous consent of the Board of
Representatives. This Section does not apply to reimbursement of expenses
incurred in successfully prosecuting or defending the rights of an
indemnified representative granted by or pursuant to this Article.
SECTION 5.3 Advancing Expenses. The Company shall pay the
expenses (including attorneys' fees and disbursements) incurred in good
faith by an indemnified representative in advance of the final disposition
of a proceeding described in Section 5.1 or the initiation of or
participation in which is authorized pursuant to Section 5.2 upon receipt
of an undertaking by or on behalf of the indemnified representative to
repay the amount if it is ultimately determined that such person is not
entitled to be indemnified by the Company pursuant to this Article. The
financial ability of an indemnified representative to repay an advance
shall not be a prerequisite to the making of such advance.
SECTION 5.4 Payment of Indemnification. An indemnified
representative shall be entitled to indemnification within thirty (30) days
after a written request for indemnification has been delivered to the
secretary of the Company.
SECTION 5.5 Arbitration.
(a) Any dispute related to the right to indemnification,
contribution or advancement of expenses as provided under this Article,
except with respect to indemnification for liabilities arising under the
Securities Act of 1933, as amended, that the Company has undertaken to
submit to a court for adjudication, shall be decided only by arbitration in
the metropolitan area in which the principal executive offices of the
Company are located at the time, in accordance with the commercial
arbitration rules then in effect of the American Arbitration Association
("AAA"), before a panel of three arbitrators, one of whom shall be selected
by the Company, the second of whom shall be selected by the Indemnified
Representative and the third of whom shall be selected by the other two
arbitrators. In the absence of the AAA, or if for any reason arbitration
under the arbitration rules of the AAA cannot be initiated, and if one of
the parties fails or refuses to select an arbitrator or the arbitrators
selected by the Company and the Indemnified Representative cannot agree on
the selection of the third arbitrator within thirty (30) days after such
time as the Company and the Indemnified Representative have each been
notified of the selection of the other's arbitrator, the necessary
arbitrator or arbitrators shall be selected by the presiding judge of the
court of general jurisdiction in such metropolitan area.
(b) Each arbitrator selected as provided in this Section is
required to be or have been a manager, director or executive officer of a
limited liability company, corporation or other entity whose equity
securities were listed during at least one (1) year of such service on the
New York Stock Exchange or the American Stock Exchange or quoted on the
National Association of Securities Dealers Automated Quotations System.
(c) The party or parties challenging the right of an
Indemnified Representative to the benefits of this Article shall have the
burden of proof.
(d) The Company shall reimburse an Indemnified
Representative for the expenses (including attorneys' fees and
disbursements) incurred in successfully prosecuting or defending such
arbitration.
(e) Any award entered by the arbitrators shall be final,
binding and nonappealable and judgment may be entered thereon by any party
in accordance with applicable law in any court of competent jurisdiction,
except that the Company shall be entitled to interpose as a defense in any
such judicial enforcement proceeding any prior final judicial determination
adverse to the indemnified representative under Section 5.1 in a proceeding
not directly involving indemnification under this Article. This arbitration
provision shall be specifically enforceable.
SECTION 5.6 Contribution. If the indemnification provided for in
this Article or otherwise is unavailable for any reason in respect of any
liability or portion thereof, the Company shall contribute to the
liabilities to which the indemnified representative may be subject in such
proportion as is appropriate to reflect the intent of this Article or
otherwise.
SECTION 5.7 Mandatory Indemnification of Members and Managers.
To the extent that an indemnified representative of the Company has been
successful on the merits or otherwise in defense of any proceeding or in
defense of any claim, issue or matter therein, such person shall be
indemnified against expenses (including attorneys' fees and disbursements)
actually and reasonably incurred by such person in connection therewith.
SECTION 5.8 Contract Rights; Amendment or Repeal. All rights
under this Article shall be deemed a contract between the Company and the
indemnified representative pursuant to which the Company and each
indemnified representative intend to be legally bound. Any repeal,
amendment or modification hereof shall be prospective only and shall not
affect any rights or obligations then existing.
SECTION 5.9 Scope of Article. The rights granted by this Article
shall not be deemed exclusive of any other rights to which those seeking
indemnification, contribution or advancement of expenses may be entitled
under any statute, agreement, vote of disinterested Members or
disinterested Representatives, Alternates, Managers, or otherwise, both as
to action in an indemnified capacity and as to action in any other
capacity. The indemnification, contribution and advancement of expenses
provided by or granted pursuant to this Article shall continue as to a
person who has ceased to be an indemnified representative in respect of
matters arising prior to such time, and shall inure to the benefit of the
heirs, executors, administrators, personal representatives, successors and
permitted assigns of such a person.
SECTION 5.10 Reliance on Provisions. Each person who shall act
as an indemnified representative of the Company shall be deemed to be doing
so in reliance upon the rights of indemnification, contribution and
advancement of expenses provided by this Article.
ARTICLE VI
CAPITAL ACCOUNTS
SECTION 6.1 Definitions. For the purposes of this Operating
Agreement, unless the context otherwise requires:
(a) "Adjusted Capital Account" shall mean, for any Member,
its Capital Account balance maintained and adjusted as required by Treasury
Regulation Section 1.704-1(b)(2)(iv).
(b) "Capital Account" shall mean, with respect to a Member,
such Member's capital account established and maintained in accordance with
the provisions of Section 6.5.
(c) "Capital Contribution" means any contribution to the
capital of the Company in cash, property or expertise by a Member whenever
made. A loan by a Member of the Company shall not be considered a Capital
Contribution.
(d) "IRC" shall mean the Internal Revenue Code of 1986, as
amended.
(e) "Membership Interest" means a Member's interest in the
Company.
(f) "Percentage Interest" means, with respect to any Member,
the Percentage Interest set forth opposite such Member's name on Schedule A
attached hereto, as amended from time to time to reflect transfers of
Membership Interests in accordance with this Operating Agreement.
(g) "Profits" and "Losses" mean, for each fiscal year, an
amount equal to the Company's taxable income or loss for such fiscal year,
determined in accordance with IRC ss.703(a). For the purpose of this
definition, all items of income, gain, loss or deduction required to be
stated separately pursuant to IRC ss.703(a)(1) shall be included in taxable
income or loss with the following adjustments:
(1) Any income of the Company that is exempt from
federal income tax and not otherwise taken into account in
computing Profits or Losses pursuant to this Section shall
be added to such taxable income or loss;
(2) Any expenditures of the Company described in IRC
ss.705(a)(2)(B) or treated as IRC ss.705(a)(2)(B)
expenditures pursuant to Treasury Regulation
ss.1.704-1(b)(2)(iv)(i), and not otherwise taken into
account in computing Profits or Losses pursuant to this
Section shall be subtracted from such taxable income or
loss.
(h) "Treasury Regulations" include proposed, temporary and
final regulations promulgated under the IRC in effect as of the date of
this Operating Agreement and the corresponding sections of any regulations
subsequently issued that amend or supersede such regulations.
SECTION 6.2 Determination of Tax Book Value of Company Assets.
(a) Except as set forth below, the "Tax Book Value" of any
Company asset is its adjusted basis for federal income tax purposes.
(b) The initial Tax Book Value of any assets contributed by
a Member to the Company shall be the agreed fair market value of such
assets, increased by the amount of liabilities of the contributing Member
assumed by the Company in connection with the contribution of such assets
plus the amount of any other liabilities to which such assets are subject.
(c) The Tax Book Values of all Company assets may be
adjusted by the Managers to equal their respective gross fair market values
as of the following times: (i) the admission of an additional Member to the
Company or the acquisition by an existing Member of an additional
Membership Interest; (ii) the distribution by the Company of money or
property to a withdrawing, retiring or continuing Member in consideration
for the retirement of all or a portion of such Member's Membership
Interest; and (iii) the termination of the Company for Federal income tax
purposes pursuant to Section 708(b)(1)(B) of the IRC.
SECTION 6.3 Capital Contributions.
(a) The initial capital contributions to be made by the
Members shall be contributed in cash, property, services rendered, as a
credit for expenses incurred by such Member for the benefit of the Company
or a promissory note or other obligation to contribute cash or property or
perform services. The initial capital contribution of each Member is set
forth on the books and records of the Company.
(b) No Member shall be obligated to make any capital
contributions to the Company in excess of its initial capital contribution.
(c) No Member shall be permitted to make any capital
contributions to the Company unless mutually agreed by BAM and CCIC Member.
SECTION 6.4 Liability for Contribution.
(a) A Member of the Company is obligated to the Company to
perform any promise to contribute cash or property or to perform services,
even if the Member is unable to perform because of death, disability or any
other reason. If a Member does not make the required contribution of
property or services, the Member is obligated at the option of the Company
to contribute cash equal to that portion of the agreed value (as stated in
the records of the Company) of the contribution that has not been made. The
foregoing option shall be in addition to, and not in lieu of, any other
rights, including the right to specific performance, that the Company may
have against such Member under applicable law.
(b) The obligation of a Member of the Company to make a
contribution or return money or other property paid or distributed in
violation of the Act may be compromised only by consent of all the Members.
Notwithstanding the compromise, a creditor of the
Company who extends credit, after entering into this Operating Agreement or
an amendment hereof which, in either case, reflects the obligation, and
before the amendment hereof to reflect the compromise, may enforce the
original obligation to the extent that, in extending credit, the creditor
reasonably relied on the obligation of a Member to make a contribution or
return. A conditional obligation of a Member to make a contribution or
return money or other property to the Company may not be enforced unless
the conditions of the obligation have been satisfied or waived as to or by
such Member. Conditional obligations include contributions payable upon a
discretionary call of the Company prior to the time the call occurs.
SECTION 6.5 Capital Accounts. A separate Capital Account will be
maintained for each Member. The initial Capital Accounts shall consist
solely of the initial capital contributed by the Members pursuant to
Section 6.3. Notwithstanding any other provision hereof, the Company shall
determine and adjust the Capital Accounts in accordance with the rules of
Treasury Regulation Section 1.704-1(b)(2)(iv). Except as otherwise required
in the Act, no Member shall have any liability to restore all or any
portion of a deficit balance in the Member's Capital Account.
SECTION 6.6 No Interest on or Return of Capital. No Member shall
be entitled to interest on any Capital Contribution or Capital Account. No
Member shall have the right to demand or receive the return of all or any
part of any Capital Contribution or Capital Account except as may be
expressly provided herein, and no Member shall be personally liable for the
return of the Capital Contributions of any other Member.
SECTION 6.7 Percentage Interest. The Percentage Interests of the
Members are as set forth on Schedule A. The Percentage Interests shall be
updated by the Managers to reflect any transfers of Membership Interests,
set forth on a revised Schedule A and filed with the records of the
Company. The sum of the Percentage Interests for all Members shall equal
100 percent.
SECTION 6.8 Allocations of Profits and Losses Generally. After
the allocations in Section 6.9, at the end of each year (or shorter period
if necessary or longer period if agreed by all of the Partners), Profits
and Losses shall be allocated as follows:
(a) Profits. Profits shall be allocated to the Members in
proportion to their respective Percentage Interests.
(b) Losses. Losses shall be allocated to the Members in
proportion to their respective Percentage Interests.
SECTION 6.9 Allocations Under Regulations.
(a) Company Nonrecourse Deductions. Loss attributable (under
Treasury Regulation Section 1.704-2(c)) to "partnership nonrecourse
liabilities" (within the meaning of Treasury Regulation Section
1.704-2(b)(1)) shall be allocated among the Members in the same proportion
as their respective Percentage Interests.
(b) Member Nonrecourse Deductions. Loss attributable (under
Treasury Regulation Section 1.704-2(i)(2)) to "partner nonrecourse debt"
(within the meaning of Treasury Regulation Section 1.704-2(b)(4)) shall be
allocated, in accordance with Treasury Regulation Section 1.704- 2(i)(1),
to the Member who bears the economic risk of loss with respect to the debt
to which the Loss is attributable. The Members acknowledge that the
Anticipated Financing shall be treated as "partner nonrecourse debt."
(c) Minimum Gain Chargeback. Each Member will be allocated
Profits at such times and in such amounts as necessary to satisfy the
minimum gain chargeback requirements of Treasury Regulation Sections
1.704-2(f) and 1.704-2(i)(4).
(d) Qualified Income Offset. Losses and items of income and
gain shall be specially allocated when and to the extent required to
satisfy the "qualified income offset" requirement within the meaning of
Treasury Regulation Section 1.704-1(b)(2)(ii)(d).
SECTION 6.10 Other Allocations.
(a) Allocations when Tax Book Value Differs from Tax Basis.
When the Tax Book Value of a Company asset is different from its adjusted
tax basis for income tax purposes, then, solely for federal, state and
local income tax purposes and not for purposes of computing Capital
Accounts, income, gain, loss, deduction and credit with respect to such
assets ("Section 704(c) Assets") shall be allocated among the Members to
take this difference into account in accordance with the principles of IRC
Section 704(c), as set forth herein and in the Treasury Regulations
thereunder and under IRC Section 704(b). Except to the extent otherwise
required by final Treasury Regulations, the calculation and allocations
eliminating the differences between Tax Book Value and adjusted tax basis
of the Section 704(c) Assets shall be made on an asset-by-asset basis
without curative or remedial allocations to overcome the "ceiling rule" of
Treasury Regulation Section l.704-1(c)(2) and Treasury Regulation Section
1.704-3(b)(1).
(b) Change in Member's Interest.
(1) If during any fiscal year of the Company there is a
change in any Member's Membership Interest, then for
purposes of complying with IRC Section 706(d), the
determination of Company items allocable to any period
shall be made by using any method permissible under IRC Section 706(d) and
the Regulations thereunder as may be determined by the Managers.
(2) The Members agree to be bound by the provisions of
this Section 6.10(b) in reporting their shares of Company
income, gain, loss, and deduction for tax purposes.
(c) Allocations on Liquidation. Notwithstanding any other
provision of this Article VI to the contrary, in the taxable year in which
there is a liquidation of the Company, after the allocations in Sections
6.8 and 6.9 hereof, the Capital Accounts of the Members will, to the extent
possible, be brought to the amount of the liquidating distributions to be
made to them under Section 9.5 hereof by allocations of items of profit and
loss and, if necessary, by guaranteed payments (within the meaning of Code
Section 707(c)) credited to the Capital Account of a Member whose Capital
Account is less than the amount to be distributed to it and debited from
the Capital Account of the Member whose Capital Account is greater than the
amount to be distributed to it.
SECTION 6.11 Limitations Upon Liability of Members. Except as
otherwise expressly and specifically provided in or required by the
Certificate or this Operating Agreement, the personal liability of each
Member to the Company, to the other Members, to the creditors of the
Company or any third party for the losses, debts or liabilities of the
Company shall be limited to the amount of its Capital Contribution which
has not theretofore been returned to it as a distribution (including a
distribution upon liquidation). For purposes of the foregoing sentence,
distributions to a Member shall first be deemed a return of its Capital
Contribution. No Member shall at any time be liable or held accountable to
the Company, to the other Members, to the creditors of the Company or to
any other third party for or on account of any negative balance in its
Capital Account.
ARTICLE VII
DISTRIBUTIONS
SECTION 7.1 Net Cash From Operations and Distributions.
(a) Except as otherwise provided in this Operating Agreement
including, without limitation, in Section 3.8 hereof, and subject to any
restrictions contained in any credit or other agreements to which the
Company is a party, Net Cash From Operations, if any, shall be determined
annually by the Managers and distributed for each fiscal year to the
Members in accordance with their Percentage Interests.
(b) For purposes of this Operating Agreement, "Net Cash From
Operations" means the gross cash proceeds from Company operations less the
portion thereof
used to, or expected to be used to, pay expenses, debt payments, capital
improvements, replacements and increases to reserves therefor. "Net Cash
From Operations" shall not be reduced by depreciation, amortization, cost
recovery deductions or similar allowances, but shall be increased by any
reductions to reserves previously established.
SECTION 7.2 Limitations on Distributions.
(a) The Company shall not make a distribution to a Member to
the extent that at the time of the distribution, after giving effect to the
distribution, all liabilities of the Company, other than liabilities to
Members on account of their interests in the Company and liabilities for
which the recourse of creditors is limited to specified property of the
Company, exceed the fair value of the assets of the Company, except that
the fair value of property that is subject to a liability for which the
recourse of creditors is limited shall be included in the assets of the
Company only to the extent that the fair value of that property exceeds
that liability.
(b) A Member who receives a distribution in violation of
subsection (a), and who knew at the time of the distribution that the
distribution violated this section, shall be liable to the Company for the
amount of the distribution. A Member who receives a distribution in
violation of this section, and who did not know at the time of the
distribution that the distribution violated this section, shall not be
liable for the amount of the distribution. Subject to subsection (c), this
subsection shall not affect any obligation or liability of a Member under
other applicable law for the amount of a distribution.
(c) A Member who receives a distribution from the Company
shall have no liability under this Section, the Act or other applicable law
for the amount of the distribution after the expiration of three (3) years
from the date of the distribution unless an action to recover the
distribution from such Member is commenced prior to the expiration of the
said three(3)-year period and an adjudication of liability against such
Member is made in the action.
SECTION 7.3 Amounts of Tax Paid or Withheld. All amounts paid or
withheld pursuant to the IRC or any provision of any state or local tax law
with respect to any Member shall be treated as amounts distributed to the
Member pursuant to this Article for all purposes under this Operating
Agreement.
SECTION 7.4 Distribution in Kind. The Company shall not
distribute any assets in kind, except pursuant to a dissolution in
accordance with Article IX.
ARTICLE VIII
TRANSFERABILITY
SECTION 8.1 Effect of Transfer.
(a) In addition to satisfaction of Section 4.1 above, no
assignee or transferee of all or part of a Membership Interest in the
Company shall have the right to become admitted as a Member, unless and
until:
(1) the assignee or transferee has executed an
instrument reasonably satisfactory to the Managers accepting
and adopting the provisions of this Operating Agreement;
(2) the assignee or transferee has paid all reasonable
expenses of the Company requested to be paid by the Managers
in connection with the admission of such assignee or
transferee as a Member; and
(3) such assignment or transfer shall be reflected in a
revised Schedule A to this Operating Agreement.
(b) A person who is a permitted assignee of an interest in
the Company transferred in compliance with the provisions of this Article
VIII shall be admitted to the Company as a Member and shall receive an
interest in the Company without making a contribution or being obligated to
make a contribution to the Company.
SECTION 8.2 No Resignation of Members. A Member may not withdraw
or resign from the Company prior to dissolution or winding up of the
Company. If a Member is a corporation, trust or other entity and is
dissolved or terminated, the powers of that Member may be exercised by its
legal representative or successor.
SECTION 8.3 Transfer of BAM Retained Interest. Without the prior
written consent of CCIC, BAM shall not, directly or indirectly, sell,
assign, transfer, pledge (except the pledge of the BAM Retained Interest to
the Lender to secure the Anticipated Financing), hypothecate, mortgage or
dispose of, by gift or otherwise, or in any way encumber, the BAM Retained
Interest unless either (a) the transfer is made to an entity of which
either BAM or Xxxx Atlantic Corporation owns directly or indirectly all of
the voting power of the outstanding capital stock or (b) the transfer is
made in connection with a merger or consolidation transaction to which BAM
or Xxxx Atlantic Corporation is a party.
ARTICLE IX
DISSOLUTION AND TERMINATION
SECTION 9.1 Dissolution. The Company shall be dissolved upon the
occurrence of any of the following events:
(a) By the written consent of both BAM and CCIC Member; or
(b) Upon the entry of a decree of judicial dissolution under
ss. 18-802 of the Act.
SECTION 9.2 Events of Bankruptcy of Member. The occurrence of
any of the events set forth in this Section 9.2, with respect to any
Member, shall not result in the dissolution of the Company. Such Member
shall cease to be a Member of the Company, but shall, however, retain its
interest in allocations and distributions, upon the happening of any of the
following bankruptcy events:
(a) A Member takes any of the following actions:
(1) Makes an assignment for the benefit of creditors.
(2) Files a voluntary petition in bankruptcy.
(3) Is adjudged a bankrupt or insolvent, or has entered
against the Member an order for relief, in any bankruptcy or
insolvency proceeding.
(4) Files a petition or answer seeking for the Member
any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any
statute, law or regulation.
(5) Files an answer or other pleading admitting or
failing to contest the material allegations of a petition
filed against the Member in any proceeding of this nature.
(6) Seeks, consents to or acquiesces in the appointment
of a trustee, receiver or liquidator of the Member or of all
or any substantial part of the properties of the Member.
(b) one hundred twenty (120) days after the commencement of
any proceeding against the Member seeking reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under
any statute, law or regulation, if the proceeding has not been dismissed,
or if within ninety (90) days after the appointment without the consent or
acquiescence of the Member, of a trustee, receiver or liquidator of the
Member or of all or any substantial part of the properties of the Member,
the appointment is not vacated or stayed, or within ninety (90) days after
the expiration of any such stay, the appointment is not vacated.
SECTION 9.3 Judicial Dissolution. On application by or for a
Member or a Manager, a court may decree dissolution of the Company whenever
it is not reasonably practicable to carry on the business in conformity
with this Operating Agreement.
SECTION 9.4 Winding Up.
(a) The Managers shall wind up the affairs of the Company or
may appoint any person or entity, including a Member, who has not
wrongfully dissolved the Company, to do so (the "Liquidating Trustee").
(b) Upon dissolution of the Company and until the filing of
a certificate of cancellation as provided in Section 9.6, the persons
winding up the affairs of the Company may, in the name of, and for and on
behalf of, the Company, prosecute and defend suits, whether civil, criminal
or administrative, gradually settle and close the business of the Company,
dispose of and convey the property of the Company, discharge or make
reasonable provision for the liabilities of the Company, and distribute to
the Members any remaining assets of the Company, all without affecting the
liability of Members and Managers and without imposing liability on a
Liquidating Trustee.
SECTION 9.5 Distribution of Assets.
(a) In the event of a dissolution of the Company, upon the
winding up of the Company, its assets shall be distributed as follows:
(1) First, to creditors, including Members and Managers
who are creditors, to the extent otherwise permitted by law,
in satisfaction of liabilities of the Company (whether by
payment or the making of reasonable provision for payment
thereof) other than liabilities for which reasonable
provision for payment has been made; and
(2) Then, to the Members in proportion to their
Percentage Interests.
Notwithstanding the foregoing, the foregoing distribution procedures shall be
subject to, and carried out in a manner consistent with, the provisions of the
Transaction Documents.
(b) Notwithstanding the provisions of the previous
subsection (a), BAM shall have the right of first offer with respect to any
assets of the Company to be distributed in connection with any dissolution
and winding up of the Company in accordance with the provisions of this
subsection (b).
(1) Upon a determination by the Company to distribute
any of its assets in connection with any dissolution and
winding up of the Company, the Company shall give written
notice thereof to BAM at the address for BAM set forth on
Schedule A. During the thirty (30) day period commencing on
the date that BAM receives such notice, BAM shall have the
right of first offer with respect to the subject asset.
BAM's right of first offer shall be exercised by BAM
providing to the Company (at the address for the Company set
forth on Schedule A) a written, reasonably detailed offer
(the "BAM Offer") for the subject asset prior to the
expiration of such thirty (30) day period. The Company shall
have ten (10) days from the date of its receipt of the BAM
Offer to give written notice to BAM (at the address for BAM
set forth on Schedule A) that the Company either accepts or
rejects the BAM Offer.
(2) If the Company accepts the BAM Offer, the Company's
written notice of acceptance shall, when taken in
conjunction with the BAM Offer, be deemed to constitute a
valid, legally binding and enforceable agreement for the
sale and purchase of the subject asset.
(3) If the Company rejects the BAM Offer and thereafter
the Company wishes to sell or distribute the subject asset,
the Company shall submit a written offer to sell the asset
to BAM (at the address for BAM set forth on Schedule A) on
terms and conditions, including price, not less favorable to
BAM than those on which the Company proposes to sell the
asset to any other purchaser or transferee (the "Company
Offer"). The Company Offer shall disclose the identity of
the proposed purchaser or transferee, the asset to be sold
or distributed, the terms of the sale or distribution, and
any other material facts relating to the sale or
distribution. BAM shall act upon the Company Offer as soon
as practicable after receipt thereof, and in all events
within 30 days after receipt thereof. If BAM elects on a
timely basis to purchase the asset covered by the Company
Offer, BAM shall give written notice thereof to the Company
(at the address for the Company set forth on Schedule A),
which notice shall, when taken in conjunction with the
Company Offer, be deemed to constitute a valid, legally
binding and enforceable agreement for the sale and purchase
of the subject asset.
(4) If BAM does not elect on a timely basis to purchase
the asset covered by the Company Offer, the subject asset
may be sold or distributed by the Company at any time within
ninety (90) days after the expiration of the Company Offer.
Any such sale or distribution shall be to the same proposed
purchaser or transferee, at not less than the price and upon
other terms and conditions, if any, not more favorable to
the purchaser or transferee than those specified in the
Company Offer. If the asset is not sold or distributed
within such ninety (90) day period, the asset shall continue
to be subject to the requirements of a prior offer pursuant
to the preceding clause (iii) of this subsection (b).
(c) The Company following dissolution shall pay or make
reasonable provision to pay all claims and obligations, including all
contingent, conditional or unmatured claims and obligations, known to the
Company and all claims and obligations which are known to the Company but
for which the identity of the claimant is unknown. If there are sufficient
assets, such claims and obligations shall be paid in full and any such
provision for payment made shall be made in full. If there are insufficient
assets, such claims and obligations shall be paid or provided for according
to their priority and, among claims and obligations of equal priority,
ratably to the extent of assets available therefor. Any remaining assets
shall be distributed as provided in Subsection (a). Any Liquidating Trustee
winding up the affairs of the Company who has complied with this Section
shall not be personally liable to the claimants of the dissolved Company by
reason of such person's actions in winding up the Company.
SECTION 9.6 Cancellation of Certificate. The Certificate of the
Company shall be canceled upon the dissolution and the completion of
winding up of the Company.
ARTICLE X
BOOKS; REPORTS TO MEMBERS; TAX ELECTIONS
SECTION 10.1 Books and Records.
(a) The Managers shall maintain separate books of account
for the Company which shall show a true and accurate record of all costs
and expenses incurred, all charges made, all credits made and received and
all income derived in connection with the conduct of the Company and the
operation of its business, and, to the extent inconsistent therewith, in
accordance with this Operating Agreement.
(b) Except as and until otherwise required by the IRC, the
books of the Company shall be kept in accordance with the accrual method of
accounting.
(c) Each Member of the Company has the right to obtain from
the Company from time to time upon demand for any purpose reasonably
related to the Member's interest as a Member of the Company:
(1) True and full information regarding the status of
the business and financial condition of the Company.
(2) Promptly after they become available, a copy of the
federal, state and local income tax returns for each year of
the Company.
(3) A current list of the name and last known business,
residence or mailing address of each Member and Manager.
(4) A copy of this Operating Agreement, the Certificate
and all amendments thereto.
(5) Any information or report deemed necessary by
either BAM or CCIC Member in order to prepare Securities and
Exchange Commission filing documents, financial statements
or tax returns.
(6) Other information regarding the affairs of the
Company as is just and reasonable.
(d) Each Manager shall have the right to examine all of the
information described in subsection (c) of this Section for a purpose
reasonably related to its position as a Manager.
SECTION 10.2 Tax Information. Within ninety (90) days after the
end of each fiscal year, the Company shall supply to each Member all
information necessary and appropriate to be included in each Member's
income tax returns for that year.
SECTION 10.3 Business Plans. On or before November 30 of each
year, the Managers of the Company shall, in consultation with BAM, develop
a business plan and budget for the Company (including HoldCo and HoldCo
Sub) (the "Business Plan") for the following calendar year of HoldCo (and
HoldCo Sub and OpCo). The Business Plan for the period between the
Effective Date and December 31, 1999 is attached hereto as Schedule D. Each
subsequent Business Plan shall be submitted to the Members for review and,
subject to the second following sentence, comment, and shall be adopted
only with the mutual consent of BAM and CCIC Member. The Company shall use
commercially reasonable efforts, and cause each of HoldCo and HoldCo Sub
to, to conduct their respective businesses in accordance with the then
current Business Plan.
If by the first date of any year the proposed Business Plan for that year
has not been adopted, the Business Plan for such year shall be deemed to be
the expense portion of the Business Plan in effect for the preceding year
increased, at the discretion of CCIC Member, to an amount not to exceed the
sum of:
(a) the average operating cost per communications tower
owned by OpCo (or of which it has the economic benefit) (the
"OpCo Towers") based on the most recent quarterly financial
statements available as of the first day of the current year
multiplied by fifty percent (50%) of the sum of (i) the aggregate
number of OpCo Towers constructed, completed or otherwise
acquired in the course of the prior year and (ii) the aggregate
number of OpCo Towers projected to be constructed, completed or
otherwise acquired in the current year in the Business Plan for
the prior year; and
(b) the sum of (x) with respect to all contractual price
increases with respect to contracts and agreements to which OpCo
is a party and all increases in Taxes with respect to OpCo
Towers, the amount of such increase and (y) with respect to all
other expense items in the previous year's budget, (A) the amount
of such expenses multiplied by (B) the sum of one (1) plus an
amount equal to the percentage increase in the CPI during the
previous year.
If BAM and CCIC Member are unable to mutually agree on the Business Plan for
the year commencing January 1, 2000, the Business Plan for such year shall be
deemed to be the quotient of (a) the expense portion of the initial Business
Plan for the period ending December 31, 1999, increased as contemplated by the
foregoing sentence, multiplied by three hundred and sixty-five (365) (b)
divided by the number of days elapsed between the Effective Date and
December 31, 1999 (including both the Effective Date and December 31, 1999).
Notwithstanding the foregoing, each Business Plan that is implemented
pursuant to the foregoing two paragraphs of this Section 10.3 because BAM
and CCIC Member are unable to mutually agree on the Business Plan must
provide for the payment by OpCo, prior to the allocation of revenues
pursuant to such two paragraphs, of: (i) any and all costs, expenses or
payments reasonably necessary to fulfill OpCo's obligations under the
Global Lease; (ii) any and all costs, expenses or payments reasonably
necessary to fulfill OpCo's obligations under the Build-to-Suit Agreement;
(iii) any and all taxes of any kind due and owing by OpCo; (iv) any
payments or expenditures required under any lease of real estate, grant of
easement, right of way or similar agreement to which OpCo is a party; (v)
any and all costs, expenses or payments reasonably necessary to fulfill
OpCo's obligations under any lease or sublease of tower space or real
estate to any third party; (vi) insurance premiums (including without
limitation, any payments pursuant to premium financing) and/or deductibles
of OpCo; (vii) payments to third parties for equipment or any other goods
and services required to perform OpCo's obligations under existing
agreements including, without limitation, payments required to satisfy any
mechanics's liens; (viii) salaries, commissions, compensation, benefits,
and payments or obligations of a similar nature; and (ix) any and all
costs, expenses and payments required to comply with, or payable pursuant
to any applicable laws, rule, regulations, ordinances, permits or licenses.
Further, any such Business Plan may have the effect of reducing amounts
payable under the Management Agreement so long as the Anticipated Financing
remains outstanding.
SECTION 10.4 Reports. The Company shall cause to be prepared,
and each Member furnished with, financial statements accompanied by a
report thereon of the Company's accountants stating that such statements
are prepared and fairly stated in all material respects in accordance with
generally accepted accounting principles, and, to the extent inconsistent
therewith, in accordance with this Operating Agreement, including the
following:
(a) within thirty (30) days of the end of each month, the
Company shall deliver to BAM and CCIC Member an unaudited income statement
and schedule as to the
sources and application of funds for such month and an unaudited balance
sheet of the Company as of the end of such month, in reasonable detail and
prepared in accordance with GAAP (except as permitted by Form 10-Q under
the Securities Exchange Act of 1934, as amended (the "Exchange Act")),
together with an analysis by management of the Company's financial
condition and results of operations during such period and explanation by
management of any differences between such condition or results and the
budget and business plan for such period;
(b) as soon as practicable, but in any event within ninety
(90) days after the end of each fiscal year of the Company, a consolidated
income statement for such fiscal year, a consolidated balance sheet of the
Company as of the end of such year, a schedule as to the cash flow and a
statement of the Members' Capital Accounts, changes thereto for such fiscal
year and Percentage Interests at the end of such year, such year-end
financial reports to be in reasonable detail, prepared in accordance with
GAAP, and audited and certified by the Company's independent public
accountants;
(c) as soon as practicable, but in any event within thirty
(30) days after the end of each of the first three (3) quarters of each
fiscal year of the Company, an unaudited consolidated profit or loss
statement and schedule as to consolidated cash flow for such fiscal quarter
and an unaudited consolidated balance sheet of the Company as of the end of
such fiscal quarter, in reasonable detail and prepared in accordance with
GAAP (except as permitted by Form 10-Q under the Exchange Act); and
(d) such other information relating to the financial
condition, business, prospects or limited liability company affairs of the
Company as any Member may from time to time reasonably request.
SECTION 10.5 Tax Matters Partner.
(a) BAM is hereby appointed and shall serve as the tax
matters partner of the Company (the "Tax Matters Partner") within the
meaning of IRC ss.6231(a)(7) for so long as it is not the subject of a
bankruptcy event as defined in Section 9.2 and otherwise is entitled to act
as the Tax Matters Partner. The Tax Matters Partner may file a designation
of itself as such with the Internal Revenue Service. The Tax Matters
Partner shall (i) furnish to each Member affected by an audit of the
Company income tax returns a copy of each notice or other communication
received from the IRS or applicable state authority, (ii) keep such Member
informed of any administrative or judicial proceeding, as required by
Section 6223(g) of the Code, and (iii) allow such Member an opportunity to
participate in all such administrative and judicial proceedings. The Tax
Matters Partner shall take such action as may be reasonably necessary to
constitute the other Member a "notice partner" within the meaning of
Section 6231(a)(8) of the Code, provided that the other Member provides the
Tax Matters Partner with the information that is necessary to take such
action.
(b) The Company shall not be obligated to pay any fees or
other compensation to the Tax Matters Partner in its capacity as such.
However, the Company shall reimburse the expenses (including reasonable
attorneys' and other professional fees) incurred by the Tax Matters Partner
in such capacity. Each Member who elects to participate in Company
administrative tax proceedings shall be responsible for its own expenses
incurred in connection with such participation. In addition, the cost of
any adjustments to a Member and the cost of any resulting audits or
adjustments of a Member's tax return shall be borne solely by the affected
Member.
(c) The Company shall indemnify and hold harmless the Tax
Matters Partner from and against any loss, liability, damage, cost or
expense (including reasonable attorneys' fees) sustained or incurred as a
result of any act or decision concerning Company tax matters and within the
scope of such Member's responsibilities as Tax Matters Partner, so long as
such act or decision was not the result of gross negligence, fraud, bad
faith or willful misconduct by the Tax Matters Partner. The Tax Matters
Partner shall be entitled to rely on the advice of legal counsel as to the
nature and scope of its responsibilities and authority as Tax Matters
Partner, and any act or omission of the Tax Matters Partner pursuant to
such advice shall in no event subject the Tax Matters Partner to liability
to the Company or any Member.
SECTION 10.6 Tax Audits/Special Assessments. If the federal tax
return of either the Company or an individual Member with respect to an
item or items of Company income, loss, deduction, etc., potentially
affecting the tax liability of the Members generally is subject to an audit
by the Internal Revenue Service, the Managers may, in the exercise of their
business judgment, determine that it is necessary to contest proposed
adjustments to such return or items. If such a determination is made, the
Managers will finance the contest of the proposed adjustments out of the
Net Cash From Operations.
SECTION 10.7 Tax Elections. The Company will elect to amortize
organizational costs. Upon the death of a Member, or in the event of the
distribution of property, the Company may file an election, in accordance
with applicable Treasury Regulations, to cause the basis of the Company's
property to be adjusted for federal income tax purposes as provided by IRC
ss.734, IRC ss.743 and IRC ss.754. The determination whether to make and
file any such election shall be made by the Managers in their sole
discretion.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Binding Effect. This Operating Agreement shall be
binding upon any person who executes this Operating Agreement or any
permitted transferee or permitted assignee of an interest in the Company.
SECTION 11.2 Entire Agreement. This Operating Agreement, the
Certificate, the Formation Agreement and the other Transaction Documents
contain the entire agreement of the parties hereto with respect to the
subject matter hereof and supersede all prior understandings and agreements
of the parties with respect thereto.
SECTION 11.3 Amendments. The Certificate and this Operating
Agreement may not be amended except by the written agreement of all of the
Members.
SECTION 11.4 Choice of Law. Notwithstanding the place where this
Operating Agreement may be executed by any of the parties hereto, the
parties expressly agree that all the terms and provisions hereof shall be
construed under the laws of Delaware (without regard to any conflicts of
law principles).
SECTION 11.5 Notices. Except as otherwise provided in this
Operating Agreement, any notice, demand or communication required or
permitted to be given by any provision of this Operating Agreement shall be
deemed to have been sufficiently given or served for all purposes if
delivered personally or sent by facsimile transmission or overnight express
to the party or to an executive officer of the party to whom the same is
directed or, if sent by registered or certified mail, postage and charges
prepaid, addressed to the Member's or Company's address, as appropriate,
which is set forth in this Operating Agreement or Schedule A hereto.
SECTION 11.6 Headings. The titles of the Articles and the
headings of the Sections of this Operating Agreement are for convenience of
reference only and are not to be considered in construing the terms and
provisions of this Operating Agreement.
SECTION 11.7 Pronouns. All pronouns shall be deemed to refer to
the masculine, feminine, neuter, singular or plural, as the identity of the
person or persons, firm or corporation may require in the context thereof.
SECTION 11.8 Waivers. The failure of any party to seek redress
for violation of or to insist upon the strict performance of any covenant
or condition of this Operating Agreement shall not prevent a subsequent
act, that would have originally constituted a violation, from having the
effect of an original violation.
SECTION 11.9 Severability. If any provision of this Operating
Agreement or its application to any person or circumstance shall be
invalid, illegal or unenforceable to any extent, the remainder of this
Operating Agreement and its application shall not be affected and shall be
enforceable to the fullest extent permitted by law.
SECTION 11.10 No Third Party Beneficiaries. None of the
provisions of this Operating Agreement shall be for the benefit of or
enforceable by any person other than the parties to this Agreement and
their respective permitted successors and permitted transferees and
assigns.
SECTION 11.11 Interpretation. It is the intention of the Members
that, during the term of this Operating Agreement, the rights of the
Members and their successors-in-interest shall be governed by the terms of
this Agreement, and that the right of any Member or successor-in-interest
to assign, transfer, sell or otherwise dispose of any interest in the
Company shall be subject to limitations and restrictions of this Operating
Agreement.
SECTION 11.12 Further Assurances. Each Member shall execute all
such certificates and other documents and shall do all such other acts as
the Managers deem appropriate to comply with the requirements of law for
the formation of the Company and to comply with any laws, rules,
regulations and third-party requests relating to the acquisition, operation
or holding of the property of the Company.
SECTION 11.13 Counterparts. This Operating Agreement may be
executed in counterparts, each of which shall be deemed an original, but
all of which taken together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned Members, intending to be
legally bound, have executed this Operating Agreement as of the date first
above written.
CELLCO PARTNERSHIP
By XXXX ATLANTIC MOBILE INC., its managing
general partner
By: /s/ X.X. Xxxxxx
------------------------------------
Name: X.X. Xxxxxx
Title: Vice President
Network Planning and
Administration
CROWN ATLANTIC HOLDING SUB LLC
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Name: Xxxxx X. Xxxxx
Title: President
