Exhibit 3.2
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY
OPERATING AGREEMENT
of
MEDIACOM BROADBAND LLC
Effective as of June 29, 2001
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY OPERATING AGREEMENT
OF
MEDIACOM BROADBAND LLC
THIS AMENDED AND RESTATED LIMITED LIABILITY COMPANY OPERATING AGREEMENT
(the "Agreement") of MEDIACOM BROADBAND LLC (the "Company") is made and entered
into effective as of June 29, 2001.
R E C I T A L S
- - - - - - - -
WHEREAS, the Company was formed and continues to exist as a limited
liability company pursuant to the Delaware Limited Liability Company Act (the
"Act") and has operated pursuant to an operating agreement dated as of June 6,
2001 (the "Original Operating Agreement");
WHEREAS, Mediacom Communications Corporation, a Delaware corporation, is
the sole Member and the Managing Member of the Company;
WHEREAS, on the date hereof the Company and Mediacom Broadband Corporation
issued $400 million aggregate principal amount of 11% Senior Notes (the "Senior
Notes") pursuant to an indenture, dated as of June 29, 2001 (the "Indenture"),
among the Company and Mediacom Broadband Corporation, as joint and several
obligors, and The Bank of New York, as Trustee (the "Senior Note Offering");
WHEREAS, as a result of the Senior Note Offering, the sole member of the
Company desires to amend and restate in its entirety the Original Operating
Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties executing this
Agreement below, intending to be legally bound, agree as follows:
ARTICLE I
DEFINITIONS; DEFAULT RULE
-------------------------
Section 1.1 Defined Terms. The following terms shall have the meanings
set forth below when used in this Agreement with initial capital letters:
"Act" or "the Delaware Limited Liability Company Act" shall mean the
--- ------------------------------------------
Delaware Limited Liability Company Act (Chapter 18 of Title 6 of the Delaware
Code), as the same may be amended from time to time.
-1-
"Affiliate" shall mean, with respect to any Person, any other Person that
---------
controls, is controlled by or is under common control with such Person.
"Agreement" shall mean this Agreement as it may be amended in writing from
---------
time to time; and the terms "hereof," "hereto," "hereby " and "hereunder," when
------ ------ ------ ---------
used with reference to this Agreement, refer to this Agreement as a whole,
unless the context otherwise requires,
"Available Cash" shall mean the cash funds of the Company on hand from time
--------------
to time (other than cash funds obtained as Capital Contributions or cash funds
obtained from loans to the Company) after (i) payment of all operating expenses
of the Company as of such time, (ii) provision for payment of all outstanding
and unpaid current obligations of the Company as of such time, (iii) provision
for a reasonable working capital reserve (including payment of anticipated
capital expenditures) and (iv) provision for a reasonable reserve for claims
against and debts and other obligations of the Company, the amounts of all of
which shall be determined by the Managing Member.
"Business" shall mean the activities of acquiring, owning, selling,
--------
investing in, developing, designing, constructing, managing, operating,
servicing, administering and/or maintaining, directly or indirectly, by or
through one or more Subsidiaries, one or more CATV Systems and/or related
businesses ancillary thereto (including, but not limited to, high-speed data
service, Internet access, telephony services, and other telecommunications and
telephony-related investments or businesses, and video wireless services and
wireless communication services and other wireless-related investments or
business) and/or one or more other businesses of the type and character now or
hereafter conducted or engaged in by cable television operators generally.
"Capital Account" shall mean the individual accounts established and
---------------
maintained for Members pursuant to Section 3.3 hereof.
"Capital Contribution" shall mean the total value of cash and property (net
--------------------
of liabilities assumed by the Company or to which the property is subject)
contributed to the Company by or on behalf of any Member.
"CATV System" shall mean any cable distribution system that receives
-----------
broadcast signals by antennae, microwave transmission, satellite transmission or
other device and amplifies and distributes such signals via cable.
"Certificate of Formation" shall mean the Certificate of Formation of the
------------------------
Company filed with the Secretary of State, as the same may be amended from time
to time.
"Claims" shall have the meaning set forth in Section 8.2 of this Agreement.
------
"Code" shall mean the Internal Revenue Code of 1986, as amended. All
----
references herein to sections of the Code shall include any corresponding
provision or provisions of succeeding law.
-2-
"Company" shall mean "Mediacom Broadband LLC," a Delaware limited liability
-------
company.
"Consent" shall mean the consent, approval, ratification or adoption by a
-------
Person of any action, determination or decision. The Consent of the Members
shall mean and require the Consent of Members owning all of the Membership
Interests.
"Contract" shall mean any contract, lease, license, easement, servitude,
--------
right-of-way, mortgage, security interest, bond, note or other agreement or
instrument which creates legally enforceable rights or obligations.
"Control" shall mean the possession, directly or indirectly, of the power
-------
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities or voting interests, by
contract or otherwise.
"Debt Covenant" shall mean any provision of any Contract to which the
-------------
Company is a party, or by which its assets are bound, which imposes one or more
restrictions on the financial activities or transactions of the Company,
including, but not limited to, the disbursement or other transfer of money or
property to Members.
"Default Rule" shall mean a rule stated in the Act that (a) structures,
------------
defines, or regulates the finances, governance, operations, or other aspects of
a limited liability company organized under the Act and (b) applies except to
the extent it is negated or modified through the provisions of a limited
liability company's certificate of formation or operating agreement.
"Dissolution Event" shall have the meaning set forth in section 7.1 hereof.
-----------------
"Effective Date" shall mean June 29, 2001.
--------------
"Entity" shall mean any association, corporation, general partnership,
------
limited partnership, limited liability partnership, limited liability company,
joint stock association, joint venture, firm, trust, employee benefit plan,
syndicate, business trust or cooperative, or any other enterprise of any nature,
foreign or domestic, through which associates join together for the conduct of
business or investment.
"Indemnified Persons" shall mean the Members, the Managing Member and the
-------------------
Tax Matters Partner, and their respective officers, directors, employees,
agents, stockholders, members and Affiliates, and any person who serves at the
request of the Managing Member on behalf of the Company as a partner, member,
officer, director, employee or agent of any other Person; provided that for
--------
purposes of this definition, an "agent" who or which is an independent agent
shall be an Indemnified Person only to the extent that the Company or the
Managing Member has a legal or contractual obligation to indemnify such agent,
it being understood that this Agreement is not intended to create any such
obligation, and that any indemnification of an independent agent shall be
subject to and limited by the terms of such legal or contractual obligation.
-3-
"Indenture" shall have the meaning set forth in the recitals hereof.
---------
"Liquidator" shall have the meaning set forth in Section 7.4 hereof.
----------
"Managing Member" shall mean the Person who, with respect to the affairs
---------------
and activities of the Company, shall have and possess, except as otherwise
expressly provided in this Agreement, all rights, powers, obligations and
authority of a managing member of a limited liability company under the Act,
subject to any restrictions and limitations imposed thereon by the Act or this
Agreement. Without limiting the generality of the foregoing, the Managing Member
shall have all rights, powers and authority to act for and legally bind the
Company as provided by Article IV of this Agreement and under applicable
provisions of the Act. The sole Managing Member shall be Mediacom Communications
Corporation.
"Mediacom Communications Corporation" shall mean Mediacom Communications
-----------------------------------
Corporation, a Delaware corporation.
"Mediacom Broadband LLC" shall mean Mediacom Broadband LLC, a Delaware
----------------------
limited liability company.
"Member" means any individual or Entity owning and holding a Membership
------
Interest. All owners and holders of Membership Interests are collectively
referred to as "Members."
-------
"Membership Interest" shall mean the entire ownership interest of a Member
-------------------
in the Company at any particular time, expressed as a percentage, including the
right of such Member to any and all benefits to which a Member may be entitled
as provided in this Agreement and under the Act, together with the obligations
of such Member to comply with all of the terms and provisions of this Agreement
and the Act.
"Net Profits" or "Net Losses" means the income or loss of the Company for
----------- ----------
"book" or "capital account" purposes under Treasury Regulations Section
1.704-1(b)(2)(iv).
"Non-Managing Member" shall mean any Member other than the Managing Member.
-------------------
"Person" shall mean any individual or Entity.
------
"Principal Office" shall mean the principal place of business of the
----------------
Company as may be established pursuant to Section 2.5 hereof.
"Secretary of State" shall mean the Secretary of State of the State of
------------------
Delaware.
"Subsidiary" shall mean any Entity Controlled by the Company.
----------
"Taxable Income" shall mean, with respect to each fiscal year of the
--------------
Company, the sum of (i) the amount by which the ordinary income of the Company
exceeds its ordinary loss, and (ii)
-4-
the amount by which the capital gain of the Company exceeds the sum of (A) its
capital loss and (B) the excess of its ordinary loss over its ordinary income.
"Transfer" or "Transferred" shall mean to give, sell, assign, pledge,
-------- -----------
hypothecate, devise, bequeath, or otherwise dispose of, encumber, or transfer,
or permit to be disposed of, encumbered, or transferred.
"Treasury Regulations" shall mean the regulations promulgated by the
--------------------
Internal Revenue Service under the Code, as the same from time to time may be
amended.
Section 1.2 Relationship of Agreement to Default Rules. Regardless
whether this Agreement specifically refers to a particular Default Rule: (a) if
any provision of this Agreement conflicts with a Default Rule, the provision of
this Agreement controls and the Default Rule is modified or negated accordingly;
and (b) if it is necessary to construe a Default Rule as modified or negated in
order to effectuate any provision of this Agreement, the Default Rule shall be
modified or negated accordingly.
Section 1.3 Relationship of Agreement of Certificate of Formation. If a
provision of this Agreement differs from a provision of the Certificate of
Formation, this Agreement shall govern to the extent allowed by law.
ARTICLE II
ORGANIZATION
------------
Section 2.1 Formation. The Company was formed as a limited liability
company under the Act by filing with the Secretary of State of Delaware a
Certificate of Formation for the Company. The Certificate of Formation of the
Company and the terms thereof are hereby ratified, adopted, approved, and
Consented to by the sole Member.
Section 2.2 Name. The Company's business, activities and affairs shall be
conducted and administered under the name of the Company as set forth in the
definition of the Company in Section 1.1 until such time as the Managing Member
shall hereafter determine a different name and file an amendment to the
Certificate of Formation in accordance with the Act designating such different
name as the name of the Company.
Section 2.3 Purpose. The Company has been formed for any lawful purpose
or purposes under the Act. The initial purpose of the Company shall be to engage
in and conduct the Business and to do all things incidental thereto. The Company
shall possess and shall be empowered to do all lawful acts and things that the
Managing Member may deem necessary, advisable, convenient, incidental to or
otherwise proper and appropriate for the furtherance and accomplishment of the
purposes of the Company.
Section 2.4 Term. The term of the Company commenced on the date of the
filing of the Certificate of Formation with the Secretary of State and shall
continue until the expiration
-5-
date, if any, set forth in such Certificate unless sooner terminated in
accordance with the provisions of this Agreement or by operation of law.
Section 2.5 Principal Office. The principal office of the Company shall
be 000 Xxxxxxx Xxx Xxxx, Xxxxxxxxxx, Xxx Xxxx 00000. The Company may establish
such other place(s) of business as the Managing Member may, from time to time,
deem necessary, convenient, advisable or otherwise appropriate.
Section 2.5 Registered Agent and Registered Office. The registered agent
and registered office of the Company shall be as designated in the Certificate
of Formation. The registered office and registered agent may be changed from
time to time by the Managing Member filing the address of the new registered
office and/or the name of the new registered agent with the Secretary of State
as provided in the Act.
Section 2.6 Foreign Qualification. Prior to the Company conducting
business in any jurisdiction other than the State of Delaware, the Managing
Member shall cause the Company to comply, to the extent procedures are
available, with all requirements necessary to qualify the Company as a foreign
limited liability company in such jurisdiction. Each Member shall execute,
acknowledge, swear to and deliver all certificates and other instruments
conforming to this Agreement that are necessary or appropriate to qualify, or,
as appropriate, to continue or terminate such qualification of the Company as a
foreign limited liability company in all such jurisdictions in which the Company
may conduct business.
ARTICLE III
MEMBERS
-------
Section 3.1 Membership Interests. (a) As of the date hereof, the
Membership Interests in the Company are owned and held as follows:
Membership Interest
Member Percentage Ownership
------ --------------------
Mediacom Communications Corporation 100%
(b) On or prior to the date upon which the Company has completed all of
the AT&T Acquisitions (as defined in the Indenture), the Company shall issue to
Mediacom Communications Corporation and/or one or more of its direct or indirect
Subsidiaries a preferred membership interest in the Company having an aggregate
stated amount of $150 million (the "Preferred Membership Interest"), against
payment to the Company of an amount in immediately available funds equal to the
aggregate stated amount of such interest. The Preferred Membership Interest will
entitle the holder to receive, in preference to any distributions to be made to
other holders of membership interests, dividends on the stated amount of the
Preferred Membership Interest at a rate per annum equal to 12.0%, payable in
quarterly installments. The Preferred Membership Interest will be a non-voting
interest. The holder of the Preferred Membership Interest shall have the right
to have the Company redeem the Preferred Membership Interest at
-6-
any time following the maturity, or earlier repayment in full, of the Senior
Notes; provided that if the right of such holder to require the Company to
redeem the Preferred Membership Interest would result in such Interest being
treated as a "Disqualified Equity Interest", "Disqualified Capital Stock", or a
term with similar meaning (as such terms are customarily defined) under any
future Indebtedness of the Company, then the Company shall have the right to
extend the maturity of the Preferred Membership Interest to a date such that the
Preferred Membership Interest would not be considered to be a "Disqualified
Equity Interest", "Disqualified Capital Stock" or other term with similar
meaning.
Section 3.2 Capital Contributions. No Member shall be obligated to make
any contributions to the capital of the Company.
Section 3.3 Capital and Capital Accounts.
(a) An individual capital account (the "Capital Account") shall
be established and maintained on behalf of each Member in accordance with
federal income tax accounting principles and Treasury Regulation Section
1.704-1(b).
(b) Except as may be determined by the Managing Member and
approved by the Consent of the Members, no Member shall be required to make any
Capital Contributions to the Company. The Capital Account of any Member who
makes a Capital Contribution shall be credited for the amount of such Capital
Contribution, but no such Member shall receive an increased Membership Interest
in the Company for making any Capital Contribution unless Consented to by the
Managing Member.
(c) No interest shall be paid on any Capital Contribution or on a
Member's balance in its Capital Account.
(d) Loans or services by any Member to the Company shall not be
considered contributions to the capital of the Company.
(e) No Member shall have the right to withdraw its Capital
Contribution or to demand and receive property of the Company or any
distribution in return for its Capital Contribution, except as may be
specifically provided in this Agreement or required by law.
(f) Except as may be required by the Act, no Member shall have
any liability or obligation to the Company or to another Member to restore a
negative or deficit balance in such Member's Capital Account.
(g) The Company shall increase or decrease the Capital Accounts
of all Members to reflect a revaluation of Company assets in accordance with,
and upon the happening of such events as described in, Treasury Regulations
Section 1.704-1(b)(2)(iv)(f).
Section 3.4 Limitation on Liability. No Member shall be liable under a
judgment, decree, or order of a court, or in any other manner, for a debt,
obligation or liability of the
-7-
Company, except as provided by law. No Member shall make or be required to make
a loan of funds to the Company, except that a Member may make a loan to the
Company with the written Consent of, and on such terms as are determined by, the
Managing Member.
Section 3.5 No Individual Authority. No Member shall have any authority
to act for, or to undertake or assume any obligation, debt, duty or
responsibility on behalf of, any other Member or the Company.
Section 3.6 No Member Responsible for Other Member's Commitment. In the
event any Member has incurred any indebtedness or obligation prior to the date
of formation of the Company 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 expressly assumed in writing by the Company
and Consented to by the Managing Member. Furthermore, neither the Company nor
any Member shall be responsible or liable for any indebtedness or obligation
that is hereafter incurred by any other Member except as expressly provided in
this Agreement. In the event that a Member, whether prior to or after the
effective date of this Agreement, incurs (or has incurred) any debt or
obligation for which neither the Company nor any other Member has any
responsibility or liability, the liable Member shall indemnify and hold harmless
the Company and the other Members from and against any liability or obligation
they may incur in respect thereof.
Section 3.7 Transfer of Membership Interests. No Member may Transfer all
or any part of its Membership Interest except upon the Consent of the Managing
Member.
ARTICLE IV
MANAGEMENT
----------
Section 4.1 Management. The overall management, operation and control of
the business, activities and affairs of the Company shall be vested exclusively
in the Managing Member, Mediacom Communications Corporation. In the event the
Managing Member is unable or unwilling to serve in such capacity, a replacement
and successor shall be chosen and appointed by Consent of the Members.
Section 4.2 Powers. The Managing Member shall have all of the rights,
powers and authority of a managing member of a limited liability company under
the Act and otherwise as provided by law. Except as otherwise expressly provided
in this Agreement, the Managing Member is hereby vested with the full, exclusive
and complete right, power, authority and discretion to manage, operate and
control the activities and affairs of the Company and to make all decisions
affecting the Company, as deemed necessary, advisable, convenient or otherwise
appropriate by the Managing Member to carry on the Business and purposes of the
Company. Without limiting the generality of the foregoing, the Members hereby
expressly agree and Consent that the Managing Member may, on behalf of the
Company, at any time, and without further notice to or Consent from any
Non-Managing Member (except to the extent otherwise expressly provided in this
Agreement), do or cause the company to do each of the following:
-8-
(a) own, sell, assign, mortgage, license or lease, any real or
personal property, tangible or intangible;
(b) acquire by purchase, license, lease, or otherwise, any real or
personal property, tangible or intangible;
(c) sell, trade, exchange or otherwise dispose of Company assets in
the ordinary course of the Company's business;
(d) supervise the management of the Company and provide or arrange
for managerial services or assistance to be provided to the Company;
(e) appoint, employ and dismiss from employment any and all
officers, employees, attorneys, accountants, consultants and other agents of the
Company;
(f) incur expenditures for, and pay all expenses, debts and
obligations of, the Company;
(g) open, maintain and close bank accounts of the Company and draw
checks or other orders for the payment of money thereon;
(h) borrow money, and extend or obtain credit, for and on behalf of
the Company;
(i) except as otherwise expressly provided in this Agreement, enter
into, execute, amend, supplement, acknowledge and deliver any and all Contracts
or other instruments or documents as that the Managing Member shall determine to
be necessary, advisable, convenient or otherwise appropriate in furtherance of
the Business or purposes of the Company;
(j) purchase at the expense of the Company liability and other
insurance to protect the Company's properties, business and employees and to
protect the Managing Member, Members, and any Affiliate, officer, director or
employee of any of the foregoing;
(k) xxx, prosecute, settle or compromise all claims against third
parties and compromise, settle or accept judgment in respect of claims against
the Company and execute all documents and make all representations, admissions
and waivers in connection therewith;
(l) act as the Tax Matters Partner of the Company and exercise any
authority permitted the Tax Matters Partner under the Code and Treasury
Regulations, and take whatever steps such Tax Matters Partner, in its reasonable
discretion, deems necessary or desirable to perfect such designation, including
filing any forms and documents with the Internal Revenue Service and taking such
other action as may from time to time be required under Treasury Regulations;
-9-
(m) execute any and all other instruments and documents which may be
necessary or, in the opinion of the Managing Member, desirable or convenient to
carry out the intent and purpose of this Agreement, including, but not limited
to, documents whose operation and effect extend beyond the term of the Company;
(n) form one or more Subsidiaries of the Company to acquire
properties, operate and conduct all or any portion of the Business and engage in
any and all activities authorized hereunder; and
(o) take any other lawful action that the Managing Member, in its
sole discretion, considers necessary, convenient or advisable in connection with
the Business, purposes and activities of the Company.
Section 4.3 Executive Committee. (a) Except where expressly provided to
the contrary herein, all decisions with respect to the management and control of
the Company that are duly made by the Managing Member shall be binding on the
Company and each of the Members.
(b) There is hereby established an Executive Committee of
the Company. The approval of the Executive Committee shall be required to
authorize certain acts or transactions as specified in this Agreement or in the
Indenture. The Executive Committee shall consist of three members. Xxxxx X.
Xxxxxxxx, the Chairman and Chief Executive Officer of the Managing Member, shall
be a member of the Executive Committee, shall serve as Chairman of the Executive
Committee and shall be entitled to designate the other members of the Executive
Committee, each of whom must be a member of senior management or a director of
the Managing Member or its subsidiaries. Other than as set forth in the
preceding sentence, the Chairman of the Executive Committee shall have complete
discretion with respect to the designation of Executive Committee members and
any change in membership shall become effective upon receipt of written notice
thereof by the Company.
(c) The presence of two members of the Executive Committee
shall constitute a quorum for the transaction of business of any specified item
of business requiring a vote of the Executive Committee. If a quorum shall not
be present at any meeting of the Executive Committee requiring a vote, the
meeting may adjourn from time to time without notice other than announcement at
the meeting, until a quorum shall be present. The Executive Committee shall act
at meetings thereof duly convened and held as provided in this Agreement. Each
member shall have one vote and, subject to Section 4.4(b), the vote of a
majority of the members of the Executive Committee shall be the act of the
Executive Committee.
(d) Any one or more members of the Executive Committee may
participate in a meeting thereof by means of conference telephone or similar
communications equipment allowing all Persons participating in the meeting to
hear each other at the same time. Participation by such means shall constitute
presence in person at a meeting. Any action required or permitted by this
Agreement to be taken by the Executive Committee may be taken if all members of
such Committee consent in writing to the adoption of a resolution authorizing
the
-10-
action. Such resolution and the written consents thereto shall be filed with the
minutes of the proceedings of the Executive Committee.
(e) Meetings of the Executive Committee may be called by any
member thereof on five days' notice to the other members either personally or by
facsimile at such address as shall be specified in writing by each
representative for purposes of notice, which notice shall specify the time,
place, and purpose of such meeting. Notwithstanding the foregoing, in case of
exigency, special voting meetings may be called on such shorter notice, given as
aforesaid or by telephone, as the Executive Committee members may agree upon.
(f) Each Executive Committee member and their respective
Affiliates may have other business interests and may engage in other activities
in addition to those relating to the Company. Such Persons may make direct or
indirect investments in Systems or entities offering telecommunications
services, provided that if such investment is not a passive one and requires
management by such Person (if such Person is other than a commercial or
invetment bank or other financial institution), such Person shall first offer to
the Company the opportunity to make the investment. The Company shall have
thirty days in which to determine whether to make such investment and if it so
determines, the Company shall proceed diligently to prepare a contract of
purchase and sale customary for transactions of the type contemplated and to
consummate the transaction. In the event such transaction is consummated, the
Person, if other than the Managing Member or an Affiliate of the Managing
Member, making the offer shall be reimbursed for its expenses incurred. Each
Executive Committee member shall incur no liability to the Company or any Member
as a result of engaging in such other business interests or activities.
Section 4.4 Actions Requiring Executive Committee Approval. (a) Each
member of the Executive Committee shall have one vote. The following matters
shall require approval of a majority of the members of the Executive Committee
and such action shall not be taken by the Company on its own behalf or on behalf
of any Subsidiary, as the case may be, without such approval:
(i) engaging or permitting any Restricted Subsidiary (as
such term is defined in the Indenture) to, directly or indirectly, engage in any
transaction (or series of related transactions) involving in the aggregate $5.0
million or more with any Affiliate, in which case Executive Committee approval
pursuant to an Executive Committee resolution rendered in good faith by the
Executive Committee, or, if applicable, a committee comprising the disinterested
members of the Executive Committee, must be to the effect that such transaction
(or series of related transactions) is (x) in the best interest of the Company
or such Restricted Subsidiary and (y) upon terms that would be obtainable by the
Company or such Restricted Subsidiary in a comparable arm's-length transaction
with a Person that is not an Affiliate. The foregoing shall not apply in the
case of any of the following transactions ("Specified Affiliate Transactions"):
(1) the making of any Restricted Payment (as defined in
the Indenture);
-11-
(2) any transaction or series of transactions between the
Company and one or more Restricted Subsidiaries or between two or more
Restricted Subsidiaries;
(3) the payment of compensation (including, without
limitation, amounts paid pursuant to employee benefit plans) for the personal
services of, and indemnity provided on behalf of, officers, members, directors,
and employees of the Company or any Restricted Subsidiary, and management,
consulting, or advisory fees and reimbursements of expenses and indemnity in
each case so long as the Executive Committee in good faith shall have approved
the terms thereof and deemed the services theretofore or thereafter to be
performed for such compensation or fees to be fair consideration therefor;
(4) any payments for goods or services purchased in the
ordinary course of business, upon terms that would be obtainable by the Company
or a Restricted Subsidiary in a comparable arm's-length transaction with a
Person that is not an Affiliate;
(5) any transaction pursuant to any agreement with any
Affiliate in effect on the date hereof (including, but not limited to, this
Agreement and other agreements relating to the payment of management fees,
acquisition fees, and expense reimbursements), including any amendments thereto
entered into after the date hereof, provided, that the terms of any such
amendment are not less favorable to the Company than the terms of the relevant
agreement in effect prior to any such amendment, as determined in good faith by
the Executive Committee; and
(6) any transaction or series of transactions between the
Company or any of its Restricted Subsidiaries, on the one hand, and the Managing
Member or any of its Subsidiaries, on the other hand, that relate to (a) the
sharing of centralized services, personnel, facilities, headends and plant, (b)
the joint procurement of goods and services, (c) the allocation of costs and
expenses (other than taxes based on income) and (d) matters reasonably related
to any of the foregoing, in each case, that are undertaken pursuant to an
established plan of the Managing Member the primary purpose of which is to
result in cost savings and related synergies for the Company, its Restricted
Subsidiaries, the Managing Member and each of the Managing Member's other
Subsidiaries involved in such transaction or series of transactions; provided
that, in the case of this clause (e), such plan shall have been approved
pursuant to an Executive Committee resolution, rendered in good faith by the
Executive Committee, which approval in each case shall be conclusive, to the
effect that such plan is in the best interest of the Company or such Restricted
Subsidiary; and provided, further, that such transaction or series of related
transactions is fair and reasonable to the Company or such Restricted
Subsidiary, on the one hand, and to the Managing Member and each such other
Subsidiary of the Managing Member, on the other hand;
(ii) except in the case of a Specified Affiliate Transaction,
engaging or permitting any Restricted Subsidiary to, directly or indirectly,
engage in any transaction (or series of related transactions) involving in the
aggregate (x) $25.0 million or more in all instances except in the case of Asset
Sales or Asset Swaps (as defined in the Indenture) and (y) $50.0
-12-
million or more in the case of any Asset Sale or Asset Swap, in each case, with
any Affiliate, in which case such transaction (or series of related
transactions) shall be approved by the Executive Committee pursuant to an
Executive Committee resolution rendered in good faith or, if applicable, by a
committee comprising the disinterested members of the Executive Committee, to
the effect that such transaction (or series of related transactions) is (x) in
the best interest of the Company or such Restricted Subsidiary and (y) upon
terms that would be obtainable by the Company or such Restricted Subsidiary in a
comparable arm's-length transaction with a Person that is not an Affiliate;
(iii) payments of compensation to officers, directors, and employees of
the Company or any Restricted Subsidiary; and
(iv) any other matter expressly stated in this Agreement or the
Indenture to be subject to approval of the Executive Committee.
(b) An Executive Committee member shall not be obligated to abstain from
voting on any matter (or vote in any particular manner) because of any interest
(or conflict of interest) in such matter; provided, however, that (i) the
interest (or conflict of interest) is disclosed to the other members prior to
any vote; and (ii) the monetary or business consideration arising in connection
with the proposed transaction would be comparable and substantially as
advantageous to the Company as in a comparable transaction with a Person not an
Affiliate. Such matter shall not be approved by the Executive Committee without
the affirmative vote of at least 50% of the Executive Committee members not
having any interest (or conflict of interest) in such matter.
Section 4.5 Compensation. The Managing Member shall serve in such capacity
without compensation; it being understood, however, that the Managing Member
shall be entitled to reimbursement from the Company for all costs and expenses
incurred by the Managing Member in performing its duties hereunder. Executive
Committee members shall serve in such capacity without compensation, but they
are entitled to reimbursement for travel expenses.
Section 4.6 Reliance By Third Parties. Third parties dealing with the
Company may rely conclusively upon any certificate of the Managing Member to the
effect that it is acting on behalf of the Company. The signature of the Managing
Member shall be sufficient to bind the Company in every manner to any and all
Contracts, instruments and other documents drawn or entered into in connection
with the Business or purposes of the Company.
Section 4.7 Delegation of Duties. The Managing Member may delegate to any
Person any of the duties, powers and authority vested in it hereunder on such
terms and conditions as the Managing Member may consider appropriate. Any Person
so appointed shall be subject to removal at any time at the discretion of the
Managing Member, and shall report to and consult with the Managing Member at
such times and in such manner as the Managing Member may direct.
Section 4.8 Contracts With Affiliates. The Managing Member is authorized
to cause the Company and any of its Subsidiaries to enter into Contracts with
Affiliates of the Company
-13-
or the Managing Member in respect of property, services, or credit in the
ordinary course of business, but only if the terms thereof are economically
comparable to, and no less advantageous to the Company than, terms available
from a Person not an Affiliate with respect to a comparable transaction. Without
limiting the generality of the foregoing, the Managing Member is authorized to
cause the Company and any of its Subsidiaries to enter into one or more
Contracts with the Managing Member pursuant to which the Managing Member will
render management services to the Company or any of its Subsidiaries, as the
case may be.
ARTICLE V
ALLOCATIONS AND DISTRIBUTIONS
-----------------------------
Section 5.1 Allocation of Net Profits or Net Losses.
(a) Except as otherwise expressly provided in this Article V, and subject
to the provisions of Section 704(c) of the Code, Net Profits or Net Losses of
the Company shall be allocated to the Members pro rata in accordance with their
respective Membership Interests.
(b) No allocation of Net Losses or other item of loss or deduction shall
be made to a Member if it is determined that such allocation will cause the
Member's Capital Account to have a deficit balance in excess of any amount such
Member is obligated to restore within the meaning of Treasury Regulations
Sections 1.704-l(b) and 1.704-2, after taking into account the adjustments
described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).
Section 5.2 Distributions. Subject to any Debt Covenant(s) to which the
Company at the time may be bound, the Company shall distribute to all of the
Members, in proportion to their respective Membership Interests, all or any
portion of its Available Cash at such times and in such amounts as shall be
determined by the Managing Member.
ARTICLE VI
ACCOUNTING AND RECORDS
----------------------
Section 6.1 Records and Accounting; Fiscal Year. The books and records of
the Company shall be kept, and the financial position and the results of its
operations recorded, in accordance with Generally Accepted Accounting
Principles, consistently applied. The books and records of the Company shall
reflect all Company transactions and shall be appropriate and adequate for the
Company's business. The fiscal year of the Company for financial reporting and
for federal income tax purposes shall be the calendar year.
Section 6.2 Access to Records. All books and records of the Company shall
be maintained at the Principal Office of the Company and each Member, and its
duly authorized representative, shall have access to such records at such office
and the right to inspect and copy them at reasonable times.
-14-
Section 6.3 Accounting Decisions. Except as otherwise specifically set
forth herein, all decisions concerning accounting matters relating to the
Company shall be made by the Managing Member. The Managing Member may rely upon
the advice of the Company's accountants in making such decisions.
Section 6.4 Tax Decisions. Except as otherwise specifically set forth
herein, all decisions concerning tax elections and other tax matters relating to
the Company shall be made by the Managing Member. The Managing Member may rely
upon the advice of the Company's accountants and other tax advisors in making
such decisions.
ARTICLE VII
DISSOLUTION
-----------
Section 7.1 Dissolution. The Company shall be dissolved upon the happening
of any of the following events (each, a "Dissolution Event"):
(a) the expiration of the period fixed for the duration of the
Company in its Certificate of Formation;
(b) the Consent of the Members;
(c) the occurrence of an event described in the Act regarding
bankruptcy or insolvency of any Member; or
(d) the entry of a decree of judicial dissolution under the Act.
Section 7.2 Voluntary Withdrawal. Except as expressly permitted in this
Agreement, no Member shall voluntarily withdraw or take any other voluntary
action which, directly or indirectly, would cause a Dissolution Event.
Section 7.3 Effect of Dissolution. Except as permitted by the Act, upon
dissolution the Company shall cease to carry on its business, shall wind-up its
affairs and shall terminate its existence as provided in this Agreement and the
Act.
Section 7.4 Winding Up; Liquidation. Upon dissolution, an accounting shall
be made by the Company's independent accountants of the accounts of the Company
and of the Company's assets, liabilities and operations, from the date of the
previous accounting until the date of the Dissolution Event, and the Managing
Member shall appoint a liquidator (the "Liquidator") to liquidate and wind up
the affairs of the Company. The Liquidator shall sell or otherwise liquidate all
of the Company's assets as promptly as practicable and allocate any profit or
loss resulting from sales of Company assets to the Members in accordance with
this Agreement.
Section 7.5 Distribution of Assets. The Liquidator shall distribute all
proceeds from liquidation in the following order of priority:
-15-
(a) first, to the payment of all expenses of liquidation and
all debts and liabilities of the Company (including liabilities to Members who
are creditors of the Company to the extent permitted by law);
(b) second, to the setting up of such reserves as the
Liquidator may deem reasonably necessary for any contingent liabilities of the
Company; and
(c) third, pro rata to the Members in accordance with the
--- ----
positive balances in their Capital Accounts (as determined after taking into
account adjustments required under Treasury Regulation Section 1.704-1
(b)(2)(ii)(b)(2)).
Section 7.6 Deficit Capital Accounts. Notwithstanding anything to the
contrary in this Agreement, upon a liquidation within the meaning of Treasury
Regulation Section 1.704-1(b)(2)(ii)(g), if any Member has a deficit Capital
Account (after giving effect to all contributions, distributions, allocations
and other Capital Account adjustments for all Fiscal Years, including the year
in which the liquidation occurs), such Member shall have no obligation to make
any contribution to the capital of the Company, and the negative balance of such
Member's Capital Account shall not be considered a debt owed by such Member to
the Company or to any other Person for any purpose whatsoever.
Section 7.7 Termination. Upon completion of the winding up, liquidation
and distribution of assets, the Company shall be deemed terminated and the
Liquidator shall file a Certificate of Cancellation with the Secretary of State
and take such other actions as may be necessary to terminate the Company.
ARTICLE VIII
INDEMNIFICATION
---------------
Section 8.1 Exculpatory Provisions. No Indemnified Person shall be
liable, directly or indirectly, to the Company or to any other Member for any
act or omission in relation to the Company or this Agreement taken or omitted by
such Indemnified Person in good faith, provided that such act or omission does
not constitute gross negligence, fraud or willful violation of the law or this
Agreement.
Section 8.2 Indemnification of Members. The Company shall, to the fullest
extent permitted by the Act, indemnify and hold harmless each Indemnified Person
against all claims, liabilities and expenses of whatsoever nature ("Claims")
------
relating to activities undertaken in connection with the Company, including but
not limited to, amounts paid in satisfaction of judgments, in compromise or as
fines and penalties, and counsel, accountants' and experts' and other fees,
costs and expenses reasonably incurred in connection with the investigation,
defense or disposition (including by settlement) of any action, suit or other
proceeding, whether civil or criminal, before any court or administrative body
in which such Indemnified Person may be or may have been involved, as a party or
otherwise, or with which such Indemnified Person may be or may have been
threatened, while acting as such Indemnified Person, provided that no
--------
-16-
indemnity shall be payable hereunder against any liability incurred by such
Indemnified Person by reason of such Indemnified Person's gross negligence,
fraud or willful violation of law or this Agreement or with respect to any
matter as to which such Indemnified Person shall have been adjudicated not to
have acted in good faith.
Section 8.3 Advance of Expenses. Expenses incurred by an Indemnified
Person in defense or settlement of any Claim that may be subject to a right of
indemnification hereunder may be advanced by the Company prior to the final
disposition thereof upon receipt of an undertaking by or on behalf of the
Indemnified Person to repay such amount if it shall ultimately be determined
that the Indemnified Person is not entitled to be indemnified by the Company.
Section 8.4 Control of Claim. The Company shall have the right to select
counsel (provided such counsel is reasonably satisfactory to the Indemnified
Person) and to control the defense of any action giving rise to a Claim,
provided that an Indemnified Person may nevertheless employ counsel to represent
--------
and defend it, but the Company will not be required to pay the fees and
disbursements of more than one counsel in any jurisdiction in any proceeding
(unless by reason of potential conflicts of interest, representation by more
than one counsel is necessary). The right of the Company to control the defense
of any action shall not include the right to enter into a settlement with
respect to such action, unless such settlement is for money damages only (and
the Company first posts a bond or other security satisfactory to the Indemnified
Person sufficient to cover the full amount of the proposed settlement).
Section 8.5 Non-Exclusivity. The right of any Indemnified Person to the
indemnification provided herein shall be cumulative of, and in addition to, any
and all rights to which such Indemnified Person may otherwise be entitled by
contract or as a matter of law or equity and shall extend to such Indemnified
Person's successors, assigns and legal representatives.
Section 8.6 Satisfaction from Company Assets. All judgments against the
Company or an Indemnified Person, in respect of which such Indemnified Person is
entitled to indemnification, shall first be satisfied from Company assets before
the Indemnified Person is responsible therefor.
Section 8.7 Notices of Claims. Promptly after receipt by an Indemnified
Person of notice of the commencement of any action or proceeding or threatened
action or proceeding involving a Claim, such Indemnified Person shall, if a
claim for indemnification in respect thereof is to be made against the Company,
give written notice to the Company and each other Member of the commencement of
such action, provided that the failure of any Indemnified Person to give notice
--------
as provided herein shall not relieve the Company of its obligations under this
Article except to the extent that the Company is actually prejudiced by such
failure to give notice. Each such Indemnified Person shall keep the Company and
each other Member apprised of the progress of any such proceeding.
-17-
ARTICLE IX
MISCELLANEOUS
-------------
Section 9.1 Notices. Any notice to be given or to be served upon the
Company or any Member in connection with this Agreement must be in writing and
will be deemed to have been given and received when delivered to the Principal
Office, in the case of notice to the Company, or to the last known address of
the Member as reflected in the records of the Company. Any Member or the Company
may, at any time by giving five (5) days' prior written notice to the other
Members and the Company, designate any other address in substitution of the
foregoing address to which such notice will be given.
Section 9.2 Complete Agreement. This Agreement, the Certificate of
Formation and the Act constitute the complete and exclusive statement of
agreement among the Members with respect to the subject matter hereof. This
Agreement and the Certificate of Formation supersede any and all prior written
and oral statements, agreements and understandings between the Members
concerning the subject matter of this agreement, including, without limitation,
all of the terms contained in the Fourth Amended and Restated Operating
Agreement, and no term, statement, agreement or understanding not contained in
this Agreement shall be binding on any Member or the Company or have any force
or effect whatsoever.
Section 9.3 Amendments. This Agreement may be amended only by written
Consent of the Members.
Section 9.4 Binding Effect. This Agreement will be binding upon and inure
to the benefit of the Members and the Company, and their respective successors
and assigns.
Section 9.5 No Third Party Beneficiary. This Agreement is made solely and
specifically among and for the benefit of the Members and the Managing Member
and their respective successors and assigns, and no other person will have any
right, interest, or claim hereunder or be entitled to any benefits under or on
account of this Agreement as a third party beneficiary or otherwise.
Section 9.6 Severability. If any provision of this Agreement is held to be
illegal, invalid, or unenforceable under the present or future laws effective
during the term of this Agreement, such provision shall be fully severable, this
Agreement will be construed and enforced as if such illegal, invalid, or
unenforceable provision had never comprised a part of this Agreement, and the
remaining provisions of this Agreement shall remain in full force and effect and
will not be affected by the illegal, invalid, or unenforceable provision or by
its severance from this Agreement.
Section 9.7 Multiple Counterparts. This Agreement may be executed in
several counterparts, each of which will be deemed an original but all of which
will constitute one and the same instrument.
-18-
Section 9.8 Additional Documents and Acts. Each Member agrees to execute
and deliver such additional documents and instruments and to perform such
additional acts as may be necessary or appropriate to effectuate, carry out and
perform all of the terms, provisions. and conditions of this Agreement and the
transactions contemplated hereby.
Section 9.9 Headings. All headings herein are inserted only for
convenience and ease of reference and are not to be considered in the
construction or interpretation of any provision of this Agreement.
Section 9.10 Governing Law. This Agreement and the rights and obligations
of the parties hereunder shall be governed by, interpreted, and enforced in
accordance with the laws of the State of Delaware without giving effect to
principles of conflicts of laws.
-19-
IN WITNESS WHEREOF, the sole Member and Managing Member of Mediacom
Broadband LLC has executed this Agreement effective as of the date set forth
above.
Sole Member and Managing Member
MEDIACOM COMMUNICATIONS CORPORATION
(a Delaware corporation)
By: /s/ Xxxx X. Xxxxxxx
------------------------------------
Xxxx X. Xxxxxxx
Senior Vice-President and Chief Financial Officer
-20-
