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XXXX INLET/VOICESTREAM PCS, LLC
LIMITED LIABILITY COMPANY AGREEMENT
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TABLE OF CONTENTS
PAGE
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Article I Definitions...................................................................1
Article II Organization and Purpose......................................................8
2.1 Organization..................................................................8
2.2 Name of the Company...........................................................8
2.3 Purpose.......................................................................8
2.4 Term..........................................................................8
2.5 Principal Office..............................................................8
2.6 Registered Agent..............................................................8
2.7 Members.......................................................................8
2.8 Actions by Company............................................................9
Article III Capital.......................................................................9
3.1 Initial Capital Contributions.................................................9
3.2 Additional Capital Contributions..............................................9
3.3 No Interest on Capital Contributions..........................................9
3.4 Return of Capital Contributions...............................................9
3.5 Form of Return of Capital.....................................................9
3.6 Capital Accounts..............................................................9
4.2 Credits to Capital Accounts...................................................9
4.3 Charges to Capital Accounts..................................................10
4.4 Special Rules for Maintaining Capital Accounts...............................10
Article IV Allocations and Distributions................................................11
4.1 Allocation of Profits and Losses.............................................11
4.2 Distributions................................................................12
4.3 Special Allocations..........................................................12
4.3.1 Minimum Gain..........................................................12
4.3.2 Qualified Income Offset...............................................13
4.3.3 Nonrecourse Deductions................................................13
4.3.4 Member Nonrecourse Deductions.........................................13
4.3.5 Curative Allocation...................................................13
4.3.6 Overriding Allocation.................................................14
4.4 Tax Allocations..............................................................14
4.4.1 Tax Allocations Follow Book Allocations...............................14
4.4.2 Contributed Property and Book-ups.....................................14
4.4.3 Election Under Section 754 of the Code................................14
4.4.4 Guaranteed Payments...................................................15
4.4.5 Recapture.............................................................15
4.5 Withholding Obligations......................................................15
4.6 General......................................................................16
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Article V Management...................................................................16
5.1 Manager......................................................................16
5.1.1 In General............................................................16
5.1.2 Specific Rights and Powers............................................17
5.1.3 Limitation of Authority of Manager....................................18
5.1.4 Affirmative Voting Obligations........................................18
5.1.5 Appointment of Manager................................................20
5.2 Meetings of and Voting by Members............................................20
5.3 Duty of Care, Indemnification................................................21
5.4 Technical Services Agreement.................................................22
5.5 Trademark License Agreement..................................................23
5.6 Time Devoted to Company......................................................23
5.7 Covenant Not to Compete......................................................23
5.8 Fees and Expenses............................................................23
5.9 Contracts With Members or Their Affiliates...................................24
5.10 Annual Budget................................................................25
5.11 Operating Officer............................................................25
5.12 No Participation in Management; No Authority.................................25
Article VI Admissions and Transfers.....................................................25
6.1 Admission of Additional Members..............................................25
6.2 Transfer of Members' Interest................................................26
6.3 Involuntary Transfer.........................................................28
6.4 Admission of Transferees as Members..........................................28
6.5 Tag-Along Rights.............................................................30
6.5.1 Trigger for Tag-Along Rights..........................................30
6.5.2 Tag-Along Notice......................................................30
6.5.3 Identical Terms.......................................................30
6.5.4 Notice of Sale........................................................30
6.5.5 Waiver of Inclusion Election..........................................30
6.5.6 Termination of 90-Day or 30-Day Period................................31
6.5.7 Permitted Transfers; Excluded Transfers...............................31
Article VII Sale of All or Substantially All of the Assets of the Company................31
7.1 Right to Initiate Sale of Assets.............................................31
7.2 Right of First Refusal.......................................................31
7.3 Sale of Assets by Auction....................................................32
7.4 Payment for Assets by VoiceStream............................................33
7.5 Purchase Price; Structure....................................................34
Article VIII Dissolution and Liquidation..................................................34
8.1 Dissolution..................................................................34
8.2 Event of Withdrawal..........................................................35
8.3 Dissolution and Termination..................................................35
8.4 Winding Up and Distribution of Assets........................................36
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Article IX Accounting; Books and Records................................................37
9.1 Books and Records............................................................37
9.2 Manager's Reports to Members.................................................37
9.3 Right to Examine Records.....................................................37
9.4 Tax Matters Member...........................................................37
9.5 Tax Elections................................................................38
Article X Dispute Resolution...........................................................38
10.1 Arbitration of Disputes......................................................38
10.2 Selection of Arbitrators.....................................................38
10.3 Rules of the Arbitration.....................................................39
10.4 Injunctive Relief............................................................39
10.5 No Punitive or Exemplary Damages.............................................39
10.6 Discovery and Conduct of Arbitration.........................................39
10.7 Prehearing Motions...........................................................39
10.8 Costs........................................................................39
10.9 Execution of Judgments.......................................................40
10.10 Waiver as to Jurisdiction....................................................40
Article XI Exchange Rights..............................................................40
11.1 Grant of Exchange Rights.....................................................40
11.2 Exchange Rights..............................................................40
11.3 Increase or Combination of VWC or WWC Common Stock...........................42
11.4 Reorganization, Reclassification, Consolidation, Merger of Sale..............43
11.5 Recapture of Bidding Credits and Acceleration of FCC Obligations.............45
11.6 Representations and Warranties...............................................45
11.7 Restriction on Sale of VWC Securities........................................46
11.8 Inability to Provide an Exchange.............................................46
Article XII General Provisions...........................................................46
12.1 Amendment of Agreement.......................................................46
12.2 Special Power-of-Attorney....................................................47
12.3 Notices......................................................................48
12.4 Agreement Binding Upon Successors and Assigns................................49
12.5 Governing Law................................................................49
12.6 Consents.....................................................................49
12.7 Legends......................................................................49
12.8 Entire Agreement.............................................................49
12.9 Counterparts.................................................................49
12.10 Severability.................................................................49
12.11 Intended Compliance; Savings Clause..........................................49
12.12 Liability of Limited to Assets...............................................50
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LIST OF EXHIBITS
Exhibit A Members of Xxxx Inlet/VoiceStream PCS, LLC, February 11, 1999
Exhibit B Certificate of Formation of Xxxx Inlet/VoiceStream PCS, LLC
Exhibit C Initial Budget
Exhibit D Form of Registration Rights Agreement
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INDEX OF DEFINED TERMS
TERM PAGE DEFINED
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AAA.......................................38
Act........................................1
Action....................................21
Adjusted Capital Account Deficit...........2
Affiliate..................................2
Agreement..................................1
Appraised Value............................2
Approved Acquisitions.....................44
Approved Certified Public Accountant.......3
Asset Registration Statement..............33
Auction.................................1, 3
Bidding Protocol...........................3
BTA........................................1
Capital Account............................3
Capital Contribution.......................3
Cash Available for Distribution............3
Cash Consideration........................43
Cash Election.............................44
Certificate of Formation...................4
Claims....................................21
Class A Member.............................4
Class B Member.............................4
Code.......................................4
Company....................................1
controls...................................2
Xxxx Inlet.................................1
Designated Market.........................23
Exchange...............................4, 40
Exchange Date..............................4
Echange Notice............................41
Echange Period.........................4, 41
Exchange Rights............................4
FCC.....................................1, 4
FCC Rules..................................5
Financing Benefits.........................5
Fiscal Year................................5
Guaranteed Rate...........................43
Historical Financial Statements...........45
Inclusion Election.....................5, 30
Indemnitee................................21
Initial Budget.............................5
Interest...................................5
Interest Holder............................5
Involuntary Withdrawal.....................5
is controlled by...........................2
is under common control with...............2
Issuance Date..............................5
Licenses...................................1
Listed Transactions.......................44
Loss.......................................7
Manager....................................5
Member.....................................5
Member Minimum Gain........................5
Member Nonrecourse Deductions..............5
Members....................................5
Minimum Gain...............................6
Negative Capital Account...................6
New Company...............................41
NMS.......................................33
Non-cash Consideration....................44
Nonrecourse Deductions.....................6
Nonrecourse Liability......................6
NYSE......................................33
Organic Change.............................6
Outside Delivery Date.....................42
PCS........................................1
PCS Systems................................6
Percentage.................................6
Percentages................................6
Person.....................................6
Positive Capital Account...................7
Profit.....................................7
Qualified Appraiser........................7
Regulation.................................7
Regulations................................7
Required Legal Opinion....................26
Rules.....................................39
Secretary..................................7
Securities Act............................33
Selling Member.........................7, 30
Spin-Off..................................46
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Successor..............................7, 28
Successor Entity..........................43
Tag-Along Interests....................7, 30
Tag-Along Notice.......................8, 30
Tax Matters Member........................37
Third Party................................8
Very Small Business........................5
VoiceStream................................1
VWC........................................1
VWC Common Stock...........................8
WWC........................................1
WWC Common Stock...........................8
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XXXX INLET/VOICESTREAM PCS, LLC
LIMITED LIABILITY COMPANY AGREEMENT
THIS LIMITED LIABILITY COMPANY AGREEMENT (this "Agreement") is made as
of the 11th day of February, 1999, by and between XXXX INLET GSM, INC., a
Delaware corporation ("Xxxx Inlet" ), and WESTERN PCS BTA I CORPORATION, a
Delaware corporation ("VoiceStream" ), which is a wholly-owned indirect
subsidiary of VoiceStream Wireless Corporation ("VWC"). Also made parties hereto
for certain purposes are VWC and Western Wireless Corporation, a Washington
Corporation ("WWC").
RECITALS
A. The Federal Communications Commission (the "FCC" ) has announced that
it will conduct a new auction (the "Auction" ) for the issuance by the FCC, in
certain markets, of Personal Communications Services ("PCS" ) licenses (the
"Licenses" ) to provide radio telecommunications services using either 15 MHz or
30 MHz of spectrum in the 30 MHz band of spectrum in the "C" block (1895-1910
MHz/1975-1990 MHz) and the 10 MHz band of spectrum in the "F" block (1890-1895
MHz/1970-1975 MHz) in various Basic Trading Areas, as designated by the FCC
("BTAs").
X. Xxxx Inlet and VoiceStream desire to form a new limited liability
company (the "Company") that will apply to the FCC for the right to participate
in the Auction and, at the election of the Members hereof, in any subsequent
auction or reauction of licenses of "C" block or "F" block spectrum and to bid
for and acquire Licenses. The Company may also, at the election of the Members
hereof, acquire from third parties PCS systems that operate using, and/or
Licenses of, "C" block or "F" block spectrum or such Licenses themselves.
C. The parties desire for the Company to operate all of the PCS systems
acquired from third parties or developed in connection with any acquired
Licenses.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the sufficiency and
receipt of which is hereby acknowledged, the parties, intending legally to be
bound, agree as follows:
ARTICLE I
DEFINITIONS
The following capitalized terms shall have the meaning specified in this
Article I. Other terms are defined in the text of this Agreement, and throughout
this Agreement those terms shall have the meanings respectively ascribed to
them:
"Act" means the Delaware Limited Liability Company Act, as amended from
time to
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time.
"Adjusted Capital Account Deficit" means, with respect to any Interest
Holder, the deficit balance, if any, in the Interest Holder's Capital Account as
of the end of the relevant taxable year, after giving effect to the following
adjustments:
(i) the Capital Account shall be credited with the amounts which the
Interest Holder is deemed obligated to restore pursuant to the penultimate
sentences of Regulation Sections 1.704-2(g)(1) and (i)(5) (i.e., the Interest
Holder's share of Minimum Gain and Member Minimum Gain); and
(ii) the Capital Account shall be debited with the items described in
Regulation Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).
The foregoing definition of Adjusted Capital Account Deficit is intended
to comply with Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted
consistently therewith.
"Affiliate" means, with respect to any Person, any other Person that,
directly or indirectly, alone or through one or more intermediaries, controls,
is controlled by or is under common control with such Person. For purposes of
this definition, the term "controls," "is controlled by," or "is under common
control with" shall mean the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a person or
entity, whether through the control of voting interests, by contract or
otherwise.
"Appraised Value" means, with respect to any assets of the Company or an
Interest, the fair market value of such assets or Interest as determined in
accordance with the appraisal procedures set forth herein, which determination
shall be made as if such assets or Interest are unencumbered by any rights or
obligations of any party hereto or under any of the agreements executed in
connection herewith. Upon the right of, or exercise of an option by, a Person to
purchase Company assets or Interests at Appraised Value, the buyer and seller
thereof shall each appoint a Qualified Appraiser. Within thirty (30) days of
their appointment, the two appraisers shall meet to discuss their preliminary
findings, and, within forty-five (45) days of their appointment, they shall have
made their final valuations. If the higher of the two appraised values is not
more than 110% of the lower of the two appraised values, then Appraised Value
shall equal the average of the two appraised values. If the higher of the two
appraised values is greater than 110% of the lower of the two appraised values,
then the two appraisers shall appoint a third Qualified Appraiser, who shall
make its valuation determination within thirty (30) days of its appointment. In
such a case, Appraised Value shall equal either (a) the valuation as determined
by the third appraiser, but only if such appraised valuation is greater than (i)
the lower of the first two appraisal amounts plus one-third (1/3) of the
difference between the first two appraisal amounts, and is less than (ii) the
higher of the first two appraisal amounts minus one-third (1/3) of the
difference between the first two appraisal amounts, or (b) the average of the
third appraisal amount and the appraisal amount of the first two appraisal
amounts that is the
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closest (higher or lower) to that third appraisal amount, but only if the third
appraisal amount is not within the range set forth in clause (a) above. In
determining appraisal amounts, the Qualified Appraisers shall value the Company
as a going concern, but not less than the fair market value of the Company's
assets reduced by the full amount of its liabilities, and shall consider the
sale prices of comparable businesses, if available. The appraiser shall apply
its standard valuation policies and procedures, but shall take into account all
necessary factors that may affect the value of the Company, including, without
limitation, the following: (i) general economic conditions; (ii) the state of,
and any foreseeable changes in, the telecommunications industry; (iii) the
Company's past performance; and (iv) its current projections. The Company's
appraised value shall not be decreased or discounted for any lack of
marketability of the Interests or, if applicable, that the relevant underlying
Interests of the Company represent a minority interest.
"Approved Certified Public Accountant" means Xxxxxx Xxxxxxxx, L.L.P.,
unless a new firm of certified public accountants is appointed by the Manager;
provided, however, that approved certified public accounting firms are limited
to one of Deloitte & Touche, L.L.P., Xxxxxx Xxxxxxxx, L.L.P.,
PricewaterhouseCoopers, L.L.P., Ernst & Young, L.L.P., or KMPG Peat Marwick,
L.L.P.
"Auction" means the auction conducted by the FCC described in the
Recitals to this Agreement.
"Bidding Protocol" means the initial Bidding Protocol for the Auction as
agreed to by unanimous vote of the Class A Member and Class B Member, as the
same shall be amended from time to time by unanimous vote of the Class A Member
and Class B Member.
"Capital Account" means the account to be maintained by the Company for
each Interest Holder in accordance with the provisions of Article III.
"Capital Contribution" means the total amount of cash and the fair
market value of any other assets contributed to the Company by a Member, net of
liabilities assumed by the Company or to which the assets are subject.
"Cash Available for Distribution" means cash funds of the Company in
excess of amounts reasonably required for the repayment of Company borrowings
(including loans made to the Company by the Members), interest thereon, other
liabilities and expenses, capital expenditures, working capital and the
maintenance or restoration of reserves that the Manager deems reasonably
necessary or advisable for the proper operation of the business of the Company.
Cash Available for Distribution includes the Company's net cash flow,
irrespective of the source of the cash flow, and refers to net cash flow from
operations as well as net cash proceeds of all sales, exchanges, dispositions,
and financings or other extraordinary Company events, but shall exclude capital
contributions.
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"Certificate of Formation" means the certificate of formation of the
Company, as attached hereto as Exhibit B.
"Class A Member" means Xxxx Inlet or its successor or permitted assigns
admitted as Members hereunder.
"Class B Member" means VoiceStream or its successors or permitted
assigns admitted as Members hereunder.
"Code" means the Internal Revenue Code of 1986, as amended, or any
corresponding provision of any succeeding law.
"Exchange" means an exchange of ownership rights and Interest in the
Company for shares of VWC Common Stock, or in certain specified circumstances
WWC Common Stock, pursuant to the Exchange Rights described in Article XI.
"Exchange Date" means the date that is five (5) years from the date on
which the Company is initially granted Licenses that it wins in the Auction, the
winning bids for which equal in the aggregate eighty percent (80%) of the total
dollar value of its winning bids in the Auction; provided, the Exchange Date
will be automatically delayed 180 days if during such 180-day period the five
(5) year anniversary of the initial issuance of any additional Licenses won at
the Auction will take place; provided further that in the event that the FCC
Rules are amended such that License forfeiture and/or violation of the C and F
block eligibility requirements (as defined by the FCC Rules) would not occur as
a result of the Exchange occurring sooner than five (5) years after the date of
the initial License grant, then the Exchange Date shall be advanced to that
earliest date that the Exchange may take place without violation of the FCC
Rules. VoiceStream must provide a legal opinion from outside counsel to
VoiceStream addressed to the Company which counsel and opinion shall be
acceptable to Xxxx Inlet and the Company opining that an Exchange on the earlier
Exchange Date (such new Exchange Date to be set forth in such legal opinion)
would not result in License forfeiture and/or violation of the C and F block
eligibility requirements.
"Exchange Period" shall have the meaning set forth at Section 11.2.3.
"Exchange Rights" means the right to exchange an Interest in the Company
for shares of VWC Common Stock, or in certain specified circumstances WWC Common
Stock, in accordance with the provisions of Article XI.
"FCC" means the Federal Communications Commission or any successor
agency.
"FCC Rules" means the requirements or prohibitions contained at the
relevant time in all applicable laws (including the Communications Act of 1934,
as amended through such time), rules, regulations (including title 47 of the
Code of Federal Regulations), policies and orders of the FCC or any other
relevant governmental agency related to grant of the Licenses and operation
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of the PCS Systems.
"Financing Benefits" means those bidding credits against the cost of the
winning bids available in connection with the FCC's auctioning of the Licenses
to entities qualifying as a "Very Small Business" as such term is defined in the
FCC Rules governing the Licenses.
"Fiscal Year" means the period that commences on the date that the
Certificate of Formation is filed with the Secretary and ends on December 31,
1999, and thereafter the periods commencing on January 1 of each year and ending
on December 31 of that year.
"Inclusion Election" has the meaning set forth at Section 6.5.2.
"Initial Budget" means the initial budget of the Company, as approved by
the Members and attached hereto as Exhibit C.
"Interest" means a Person's share of the profits and losses of, and the
right to receive distributions from, the Company.
"Interest Holder" means any Person who holds an Interest, whether as a
Member or an unadmitted assignee of a Member.
"Issuance Date" means the date that the FCC issues to the Company the
first License awarded to the Company under the Auction.
"Involuntary Withdrawal" of a Member shall mean the death, retirement,
resignation, expulsion or bankruptcy of such Member and any other event which
terminates the continued membership of such Member in the Company.
"Manager" means the Class A Member appointed as such by the Class A
Members holding a majority of the Percentages owned by all Class A Members. The
Manager shall be the "manager" of the Company within the meaning of Section
18-101(10) of the Act. Xxxx Inlet shall be the initial Manager of the Company.
The parties agree that at all times that Xxxx Inlet or an Affiliate thereof is a
Class A Member, Xxxx Inlet or an Affiliate thereof shall be the Manager of the
Company.
"Member" means each Person signing this Agreement, including the
Manager, and any Person who subsequently is admitted as a member of the Company.
"Members" is the plural of Member. Upon execution hereof as of February 11,
1999, the Members are Xxxx Inlet, as the Class A Member, and VoiceStream as the
Class B Member.
"Member Minimum Gain" has the meaning and shall be determined as set
forth in Regulation Section 1.704-2(i) for "partner nonrecourse debt minimum
gain."
"Member Nonrecourse Deductions" has the meaning and shall be
determined as set
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forth in Regulation Section 1.704-2(i) for "partner nonrecourse deductions."
"Minimum Gain" has the meaning and shall be determined as set forth in
Regulation Sections 1.704-2(b)(2) and 1.704-2(d) for "partnership minimum gain."
"Negative Capital Account" means a Capital Account with a balance of
less than zero.
"Nonrecourse Deductions" has the meaning set forth in Regulation Section
1.704-2(b)(1).
"Nonrecourse Liability" has the meaning set forth in Regulation Sections
1.704-2(b)(3) and 1.752-1(a)(2).
"Organic Change" means with respect to a Person, any recapitalization,
reorganization, reclassification, spin-off, split-off, extraordinary dividend or
distribution, consolidation or merger with another Person of such Person, or any
successor(s) thereto, or sale of all or substantially all, in any or a series of
transactions, of the assets or stock of such Person, or any successor(s)
thereto, to another Person, or other transaction involving such Person, or any
successor(s) thereto, which is effected in such a manner that holders of such
Person's common stock, or of stock or other interests in any of the respective
successors to such Person, as the case may be, are entitled to receive (either
directly or upon subsequent liquidation) stock, securities or assets or other
consideration with respect to or in exchange for such stock or interests. In
addition to the foregoing, Organic Change will mean any transaction, or series
of transactions, occurring after the effective date of the Spin-off, the result
of which is (a) with respect to VWC, that the total number of shares of VWC
Common Stock outstanding is less than twenty percent (20%) of the total number
of shares of VWC Common Stock outstanding at the effective date of the Spin-Off,
and (b) with respect to another Person, that the total number of shares of
common stock of such other Person outstanding is less than twenty percent (20%)
of the total number of shares of common stock outstanding prior to the
consummation of such transaction(s).
"PCS Systems" means wireless PCS systems using the "C" block and "F"
block spectrum licensed by the FCC, specifically including the wireless
communications systems developed, purchased or operated by the Company in
connection with any acquired Licenses.
"Percentage" means, as to a Member, the percentage set forth after the
Member's name on Exhibit A, as amended from time to time, and as to an Interest
Holder who is not a Member, the Percentage acquired by such Interest Holder from
a Member or Interest Holder, to the extent the acquiring Interest Holder has
succeeded to that Interest. "Percentages" is the plural of Percentage.
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization or a governmental entity or any
department, agency or political subdivision thereof.
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"Positive Capital Account" means a Capital Account with a balance of
zero or greater.
"Profit" and "Loss" means, for each taxable year of the Company (or
other period for which Profit or Loss must be computed), the Company's taxable
income or loss determined in accordance with Section 703(a) of the Code, with
the following adjustments:
(i) all items of income, gain, loss, deduction, or credit required to be
stated separately pursuant to Section 703(a)(1) of the Code shall be included;
and
(ii) any tax-exempt income of the Company, not otherwise taken into
account in computing Profit or Loss, shall be included; and
(iii) any expenditures of the Company described in Section 705(a)(2)(B)
of the Code (or treated as such pursuant to Regulation Section
1.704-1(b)(2)(iv)(i)) and not otherwise taken into account in computing Profit
or Loss, shall be subtracted; and
(iv) gain or loss resulting from any taxable disposition of Company
property shall be computed by reference to the adjusted book value of the
property disposed of, notwithstanding the fact that the adjusted book value
differs from the adjusted basis of the property for federal income tax purposes;
and
(v) in lieu of the depreciation, amortization, or cost recovery
deductions allowable in computing taxable income or loss, there shall be taken
into account the depreciation or amortization computed for book purposes; and
(vi) notwithstanding any other provision of this definition, any items
which are specially allocated pursuant to Section 4.3 hereof shall not be taken
into account.
"Qualified Appraiser" means a Person who is experienced in making
appraisals of companies in the cellular telecommunications industry and assets
used in the operations thereof.
"Regulation" or "Regulations" means the income tax regulations,
including any temporary regulations, from time to time promulgated under the
Code.
"Secretary" means the Secretary of State of Delaware.
"Selling Member" has the meaning set forth in Section 6.5.1.
"Successor" has the meaning set forth in Section 6.2.7.
"Tag-Along Interests" has the meaning set forth at Section 6.5.2.
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"Tag-Along Notice" has the meaning set forth at Section 6.5.2.
"Third Party" means any Person or Persons not a party to this Agreement.
"VWC Common Stock" means the common stock, $0.001 par value, of VWC.
"WWC Common Stock" means the Class A common stock, no par value, of WWC.
ARTICLE II
ORGANIZATION AND PURPOSE
2.1 Organization. The Members shall organize a limited liability company
pursuant to the Act and the provisions of this Agreement and, for that purpose,
shall cause the Certificate of Formation, in the form attached as Exhibit B, to
be executed and filed for record with the Secretary.
2.2 Name of the Company. The name of the Company shall be "XXXX
INLET/VOICESTREAM PCS, LLC". The Company may do business under that name and
under any other name or names which the Manager selects. If the Company does
business under a name other than that set forth in its Certificate of Formation,
then the Company shall file an assumed business name notice as required by law.
2.3 Purpose. The Company is organized to bid on Licenses at the Auction,
to acquire and own Licenses, to acquire and own PCS Systems, and to develop,
operate and manage the PCS Systems acquired or developed in connection with any
Licenses, and engage in activities incidental thereto. The Company may also
undertake any other lawful activity authorized by the unanimous vote of the
Class A Member and the Class B Member.
2.4 Term. The term of the Company shall begin upon the acceptance of the
Certificate of Formation by the Secretary and shall continue until January 31,
2029, unless its existence is sooner terminated pursuant to Article VIII of this
Agreement or the mandatory provisions of the Act.
2.5 Principal Office. The principal office of the Company shall be in
the state of Alaska and shall be located at 0000 "X" Xxxxxx, Xxxxxxxxx, Xxxxxx
00000, or at any other place that the Manager selects.
2.6 Registered Agent. The name and address of the Company's registered
agent in the state of Delaware is The Corporation Trust Company, 0000 Xxxxxx
Xxxxxx, Xxxxxxxxxx, Xxxxxxxx.
2.7 Members. The name, present mailing address, taxpayer identification
number, and Percentage of each of the Members are set forth on Exhibit A, which
shall be amended from time to time to reflect any changes in the Members or
Percentages of the Members.
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2.8 Actions by Company. The Company may execute, deliver and perform all
contracts, agreements and other undertakings and engage in all activities and
transactions as may be necessary or advisable in the opinion of the Manager to
carry out the foregoing objectives and purposes.
ARTICLE III
CAPITAL
3.1 Initial Capital Contributions. Upon and after the execution of this
Agreement, each Member shall contribute to the Company cash in the amounts set
forth for such Member on Exhibit A.
3.2 Additional Capital Contributions. No Member shall be obligated, nor
shall any Member have a right, to contribute any additional capital to the
Company, other than as specified on Exhibit A, and no Member shall have any
personal liability for any obligation of the Company.
3.3 No Interest on Capital Contributions. Interest Holders shall not be
paid interest on their Capital Contributions.
3.4 Return of Capital Contributions. Except as otherwise provided in
this Agreement or on Exhibit A, no Interest Holder shall have the right to
receive any return of any Capital Contribution.
3.5 Form of Return of Capital. If an Interest Holder is entitled to
receive a return of a Capital Contribution, the Interest Holder shall not have
the right to receive anything but cash in return of the Interest Holder's
Capital Contribution.
3.6 Capital Accounts. The Company shall maintain a Capital Account for
each Member in accordance with the principles set forth in the Treasury
Regulations promulgated under Section 704(b) of the Code. Each Member's Capital
Account shall have an initial balance equal to such Member's initial
contributions to the capital of the Company.
3.7 Credits to Capital Accounts. Each Member's Capital Account shall be
credited with:
3.7.1 the amount of any additional capital contribution made by
such Member;
3.7.2 the amount of any Profits or gain (or items thereof)
allocated to such Member, including items of income or gain specially allocated
pursuant to Article IV;
3.7.3 the amount, if any, of any Company liabilities that are
assumed by such
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Member, other than liabilities that are secured by any Company property
distributed to such Member by the Company, as provided in Treasury Regulation
Section 1.704-1(b)(2)(iv)(c)(1); and
3.7.4..the fair market value of property contributed to the
capital of the Company by such Member (net of liabilities secured by such
contributed property that the Company is considered to assume or take subject to
under Code Section 752).
3.8 Charges to Capital Accounts. Each Member's Capital Account shall be
charged with:
3.8.1 the amount of cash distributed to such Member by the
Company;
3.8.2 the amount of any Losses or deduction (or items thereof)
allocated to such Member, including items of loss or deduction specially
allocated pursuant to Article IV;
3.8.3 the fair market value of the property distributed to such
Member by the Company (net of liabilities secured by such distributed property
that such Member is considered to assume or take subject to under Code Section
752) (in accordance with Regulations Section 1.704-1(b)(2)(iv)(e), immediately
prior to any such distribution, the Capital Accounts of the Members shall first
be adjusted to reflect the manner in which the unrealized income, gain, loss and
deduction inherent in such property (that has not previously been reflected in
the Capital Accounts of the Members) would be allocated among the Members if
there were a taxable disposition of such property for the fair market value of
such property (taking Code Section 7701(g) into account) on the date of
distribution); and
3.8.4 the amount of individual liabilities of such Member that
are assumed by the Company other than liabilities secured by property
contributed by such Member to the Company as provided in Treasury Regulation
Section 1.704-(b)(2)(iv)(c)(2).
3.9 Special Rules for Maintaining Capital Accounts.
3.9.1 Notwithstanding any other provision in this Article III or
elsewhere in this Agreement, each Member's Capital Account shall be maintained
and adjusted in accordance with the Code and the Regulations, including
Regulations Sections 1.704-1(b) and 1.704-2. It is intended that appropriate
adjustments shall thereby be made to Capital Accounts to give effect to any
income, gain, loss or deduction (or items thereof) that is allocated pursuant to
this Agreement. Each Member's Capital Account shall include that of any
predecessor holders of the Company interest of such Member. In the event that
the Manager shall determine that it is prudent to modify the manner in which
Capital Accounts, or any additions or subtractions thereto (including, without
limitation, adjustments relating to liabilities that are secured by contributed
or distributed property or that are assumed by the Company or the Members), are
computed in order to comply with such Regulations, the Manager shall be entitled
to make such modification, provided that it is not likely to have a material
effect on the amounts distributable to any Member
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pursuant to Section 8.4 upon dissolution of the Company. The Manager shall also
make (i) any adjustments that are necessary or appropriate to maintain equality
between the Capital Accounts of the Members and the amount of Company capital
reflected on the Company's balance sheet, as computed for book purposes, in
accordance with Regulations Section 1.704-1(b)(2)(iv)(q), and (ii) any
appropriate modifications in the event that unanticipated events might otherwise
cause this Agreement not to comply with Regulations Section 1.704-1(b) or
Section 1.704-2.
3.9.2 The Manager in its discretion may increase or decrease the
Capital Accounts of the Members to reflect a revaluation of Company property on
the Company's books and records, but only in accordance with the rules set forth
in Regulations Section 1.704-1(b)(2)(iv)(f). Following any such revaluation, the
Members' Capital Accounts shall be adjusted in accordance with Regulations
Section 1.704-1(b)(2)(iv)(g) for allocations of depreciation, depletion,
amortization, and gain or loss as computed for book purposes with respect to
such property.
ARTICLE IV
ALLOCATIONS AND DISTRIBUTIONS
4.1 Allocation of Profits and Losses.
4.1.1 Profits and Losses of the Company shall be determined and
allocated with respect to each Fiscal Year of the Company as of the end of each
such year. Subject to the other provisions of this Agreement, an allocation to
an Interest Holder of a share of Profits or Losses shall be treated as an
allocation of the same share of each item of income, gain, loss or deduction
that is taken into account in computing Profits or Losses.
4.1.2 After giving effect to the special allocations set forth
in Section 4.3, Profits for any Fiscal Year shall be allocated in the following
order and priority:
4.1.2.1 First, one hundred percent (100%) to the Interest
Holders in proportion to and to the extent of the excess, if any, of (x) the
cumulative Losses allocated pursuant to such Interest Holders (or their
predecessors in interest) pursuant to Section 4.1.4 for all prior Fiscal Years,
over (y) the cumulative Profits allocated to such Interests Holders (or their
predecessors in interest) under this Section 4.1.2.1 for all prior Fiscal Years;
4.1.2.2 Second, one hundred percent (100%) to the
Interest Holders, in proportion to and to the extent of the excess, if any, of
(x) the cumulative Losses allocated to such Interest Holders (or their
predecessors in interest) pursuant to Section 4.1.3.2 for all prior Fiscal
Years, over (y) the cumulative Profits allocated to each Interest Holder
pursuant to this Section 4.1.2.2 for all prior Fiscal Years; and
4.1.2.3 The balance, if any, to the Interest Holders in
accordance with each Interest Holder's Percentage.
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4.1.3 After giving effect to the special allocations set forth in
Section 4.3, Losses for any Fiscal Year shall be allocated in the following
order and priority, subject to the limitation in Section 4.1.4:
4.1.3.1 First, one hundred percent (100%) to the Interest
Holders, in proportion to and to the extent of the excess, if any, of (x) the
cumulative Profits allocated to each such Interest Holder (or its predecessor in
interest) pursuant to Section 4.1.2.3 for all prior Fiscal Years, over (y) the
cumulative Losses allocated to each such Interest Holder (or its predecessor in
interest) pursuant to this Section 4.1.3.1 for all prior Fiscal Years;
4.1.3.2 The balance, if any, among the Interest Holders
in accordance with each Interest Holder's Percentage.
4.1.4 The Losses allocated pursuant to Section 4.1.3. shall not
exceed the maximum amount of Losses that can be so allocated without causing any
Interest Holder to have an Adjusted Capital Account Deficit at the end of any
Fiscal Year. In the event some but not all of the Interest Holders would have
Adjusted Capital Account Deficits as a consequence of an allocation of Losses
pursuant to 4.1.3, the limitation set forth in this Section 4.1.4 shall be
applied on an Interest Holder-by-Interest Holder basis so as to allocate the
maximum permissible Losses to each Interest Holder under Regulations Section
1.704-1(b)(2)(ii)(d).
4.2 Distributions.
To the extent that the Company has sufficient Cash Available for
Distribution, is permitted by law, and does not constitute a default or event of
default under any loan or other bank financing to which the Company is a party,
the Manager may distribute, within ninety (90) days of the end of each quarter
of the Fiscal Year, Cash Available for Distribution in an amount equal to at
least the product of (x) the maximum federal tax rate applicable to either
individuals or corporations, whichever is greater, during that Fiscal Year and
(y) the Company's Fiscal Year-to-date federal taxable income, including
separately stated items, less any distributions previously made to the Members
during the Fiscal Year. Subject to Sections 5.1.3 and 5.1.4, the Manager from
time to time may distribute Cash Available for Distribution in excess of the
aforementioned amounts. All distributions of Cash Available for Distribution
shall be made to the Interest Holders in accordance with their Percentages,
except as otherwise provided in Section 8.4.
4.3 Special Allocations.
4.3.1 Minimum Gain.
4.3.1.1 Minimum Gain Chargeback. Except as set forth in
Regulation Section 1.704-2(f), if, during any taxable year, there is a net
decrease in Minimum Gain, each Interest Holder, prior to any other allocation
pursuant to this Article IV, shall be specially allocated items of gross income
and gain for such taxable year (and, if necessary, subsequent
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taxable years) in an amount equal to that Interest Holder's share of the net
decrease of Minimum Gain, computed in accordance with Regulation Section
1.704-2(g). Allocations of items of gross income and gain pursuant to this
Section 4.3.1.1 shall be made as described in Regulation Sections 1.704-2(f) and
(j). This Section 4.3.1.1 is intended to comply with, and shall be interpreted
consistently with, the "minimum gain chargeback" provisions of Regulation
Section 1.704-2(f) and all other Regulation Sections relating thereto.
4.3.1.2 Member Minimum Gain Chargeback. Except as set
forth in Regulation Section 1.704-2(i)(4), if, during any taxable year, there is
a net decrease in Member Minimum Gain, each Interest Holder with a share of that
Member Minimum Gain as of the beginning of such year, prior to any other
allocation pursuant to this Article IV, shall be specially allocated items of
gross income and gain for such taxable year (and, if necessary, subsequent
taxable years) in an amount equal to that Interest Holder's share of the net
decrease of Member Minimum Gain, computed in accordance with Regulation Section
1.704-2(i)(4). Allocations of items of gross income and gain pursuant to this
Section 4.3.1.2 shall be made as described in Regulation Sections 1.704-2(i)(4)
and (j). This Section 4.3.1.2 is intended to comply with, and shall be
interpreted consistently with, the "minimum gain chargeback" provisions of
Regulation Section 1.704-2(i)(4) and all other Regulation Sections relating
thereto.
4.3.2 Qualified Income Offset. If an Interest Holder unexpectedly
receives any adjustments, allocations, or distributions described in Regulation
Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6) which results in or increases an
Adjusted Capital Account Deficit at the end of any taxable year, then all items
of income and gain of the Company for that taxable year shall be allocated to
that Interest Holder, before any other allocation pursuant to this Article IV
(other than those pursuant to Sections 4.3.1.1 and 4.3.1.2), in an amount and
manner sufficient to eliminate such Adjusted Capital Account Deficit as quickly
as possible. This Section 4.3.2 is intended to comply with, and shall be
interpreted consistently with, the "qualified income offset" provisions of the
Regulation Section 1.704-1(b)(2)(ii)(d) and all other Regulation Sections
relating thereto.
4.3.3 Nonrecourse Deductions. Nonrecourse Deductions for a
taxable year or other period shall be specially allocated among the Interest
Holders in proportion to their Percentages.
4.3.4 Member Nonrecourse Deductions. Any Member Nonrecourse
Deduction for any taxable year or other period shall be specially allocated to
the Interest Holder who bears the risk of loss with respect to the liability to
which the Member Nonrecourse Deduction is attributable in accordance with
Regulation Section 1.704-2(i).
4.3.5 Curative Allocation. The allocations set forth in Section
4.3.1 through 4.3.4 (the "Regulatory Allocations") are intended to comply with
certain requirements of Regulations Section 1.704-1(b) and Regulation 1.704-2.
Notwithstanding any other provisions of this Article IV, the Company shall take
the Regulatory Allocations into account in allocating
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other Profits, Losses, and items of income, gain, loss and deduction to the
Interest Holders so that, to the extent possible, the net amount of such
allocations of Profits and Losses and other items shall be equal to the amount
that would have been allocated to each Interest Holder if the Regulatory
Allocations had not occurred.
4.3.6 Overriding Allocation. It is the intent of the Company that
each Member's distributive share of income, gain, loss, deduction or credit (or
item thereof) shall be allocated in accordance with Section 4.1 to the fullest
extent permitted by Section 704(b) of the Code. To preserve and protect the
allocations provided for in Section 4.1, the Manager is authorized and directed
to allocate income, gain, loss, deduction or credit (or item thereof) arising in
any year differently than otherwise provided for in Section 4.1 if, and to the
extent that, the allocations under Section 4.1 would cause the allocations to
violate Section 704(b) of the Code. Any allocation made pursuant to this Section
4.3.6 shall be deemed to be a complete substitute for any allocation otherwise
provided for in Section 4.1 and no amendment of this Agreement or approval of
any Member shall be required.
4.4 Tax Allocations.
4.4.1 Tax Allocations Follow Book Allocations. Except as
otherwise provided herein, and to the extent permitted by Section
1.704-1(b)(4)(i) of the Regulations for federal and state income tax purposes
each item of Company income, gain, loss and deduction shall be allocated to the
Interest Holders in the same manner as its corresponding item of "book" income,
gain, loss or deduction has been allocated under Section 4.1.
4.4.2 Contributed Property and Book-ups. Notwithstanding the
foregoing provisions of this Article IV, income, gain, loss and deduction with
respect to property contributed to the Company by a Member shall be allocated
among the Members, pursuant to Regulations promulgated under Section 704(c) of
the Code, so as to take account of the variation, if any, between the adjusted
basis of such property to the Company and its initial value. The Company shall
account for such variation under any method approved under Section 704(c) of the
Code and the applicable Regulations as chosen by the Manager. In the event the
value of any Company asset is adjusted pursuant to Section 3.9.2, subsequent
allocations of income, gain, loss and deduction with respect to such asset shall
take into account the variation, if any, between the adjusted basis of such
asset for federal income tax purposes and its value in the same manner as under
Section 704(c) of the Code and the applicable Regulations, consistent with the
requirements of Regulations Section 1.704-1(b)(2)(iv)(g), using any method
approved under Section 704(c) of the Code and the applicable Regulations, as
chosen by the Manager. Allocations pursuant to this Section 4.4.2 are solely for
purposes of federal, state and local income taxes and shall not affect, or in
any way be taken into account in computing, any Member's Capital Account or
share of Profits, Losses, other tax items or distributions pursuant to any
provision of this Agreement.
4.4.3 Election Under Section 754 of the Code. To the extent an
adjustment to the
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tax basis of any Company asset pursuant to Section 734(b) or Section 743(b) of
the Code is required, pursuant to Regulation Section 1.704-1(b)(2)(iv)(m), to be
taken into account in determining Capital Accounts, the amount of the adjustment
to the Capital Accounts shall be treated as an item of gain (if the adjustment
increases the basis of the asset) or loss (if the adjustment decreases basis),
and the gain or loss shall be specially allocated to the Interest Holders in a
manner consistent with the manner in which their Capital Accounts are required
to be adjusted pursuant to that Section of the Regulations.
4.4.4 Guaranteed Payments. To the extent any compensation paid to
any Member by the Company is determined by the Internal Revenue Service not to
be a guaranteed payment under Section 707(c) of the Code or is not paid to the
Member other than in the Person's capacity as a Member within the meaning of
Section 707(a) of the Code, the Member shall be specially allocated gross income
of the Company in an amount equal to the amount of that compensation, and the
Member's Capital Account shall be adjusted to treat the payment of that
compensation as a distribution.
4.4.5 Recapture. In making any allocation among the Interest
Holders of income or gain from the sale or other disposition of a Company asset,
the ordinary income portion, if any, of such income and gain resulting from the
recapture of cost recovery or other deductions shall be allocated among those
Interest Holders who were previously allocated (or whose
predecessors-in-interest were previously allocated) the cost recovery deductions
or other deductions resulting in the recapture items, in proportion to the
amount of such cost recovery deductions or other deductions previously allocated
to them.
4.5 Withholding Obligations.
4.5.1 If and to the extent the Company is required by law (as
determined in good faith by the Manager) to make payments ("Tax Payments") with
respect to any Interest Holder in amounts required to discharge any legal
obligation of the Company to make payments to any governmental authority with
respect to any federal, state or local tax liability of such Interest Holder
arising as a result of such Interest Holder's Interest in the Company, then the
amount of any such Tax Payments shall be deemed to be a loan by the Company to
such Interests Holder, which loan shall bear interest at the Prime Rate, and be
payable upon demand.
4.5.2 If and to the extent the Company is required to make any
Tax Payments with respect to any distribution to an Interest Holder, either (a)
such Interest Holder's proportionate share of such distribution shall be reduced
by the amount of such Tax Payments (provided that such Interest Holder's Capital
Account shall be adjusted for such Interest Holder's full proportionate share of
the distribution), or (b) such Interest Holder shall pay to the Company prior to
such distribution an amount of cash equal to such Tax Payments.
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4.6 General.
4.6.1 Except as otherwise provided in this Agreement, the timing
and amount of all distributions shall be determined by the Manager.
4.6.2 If any assets of the Company are distributed in kind to the
Interest Holders, those assets shall be valued on the basis of their fair market
value, as reasonably determined by the Manager, and any Interest Holder entitled
to any interest in those assets shall receive that interest as a
tenant-in-common with all other Interest Holders so entitled. The Profit or Loss
for each unsold asset shall be determined as if the asset had been sold at its
fair market value, as reasonably determined by the Manager, and the Profit or
Loss shall be allocated as provided in Section 4.1 and shall be properly
credited or charged to the Capital Accounts of the Interest Holders prior to the
distribution of the assets in liquidation pursuant to Section 8.4.
4.6.3 All Profit and Loss shall be allocated, and all
distributions shall be made, to the Persons shown on the records of the Company
to have been Interest Holders as of the last day of the taxable year for which
the allocation or distribution is to be made. Notwithstanding the foregoing if
there is a transfer or an Involuntary Withdrawal during the taxable year, the
Profit and Loss shall be allocated between the original Interest Holder and the
successor on any basis selected by the Manager, provided such basis is permitted
by Section 706 of the Code.
4.6.4 The Manager is hereby authorized, upon the advice of the
Company's tax counsel, to amend this Article IV to comply with the Code and the
Regulations promulgated under Section 704(b) of the Code; provided, however,
that no amendment shall materially affect distributions to an Interest Holder
without the Interest Holder's prior written consent.
ARTICLE V
MANAGEMENT
5.1 Manager.
5.1.1 In General. The Manager at all times shall exercise control
over the Company in compliance with FCC Rules. The Manager shall have the
exclusive right and power to manage, operate and control the Company and to make
all decisions necessary or appropriate to carry on the business and affairs of
the Company. In addition to the specific rights and powers herein granted to the
Manager, the Manager shall possess and enjoy and may exercise all the rights and
powers of a manager within the meaning of Section 18-101(10) of the Act, subject
to the limitations of this Agreement, including the full and exclusive power and
authority to act for and to bind the Company. In addition to any other rights
and powers that the Manager may possess, the Manager shall have all specific
rights and powers required or appropriate for the day-to-day management of the
Company's business.
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5.1.2 Specific Rights and Powers. Without limiting the generality
of the foregoing, the Manager shall have the right, power and authority, on
behalf of the Company, to:
5.1.2.1 acquire, by purchase or lease, contract for the
acquisition or construction of, property, including real property, and
improvements thereto, for Company use, hold Company properties in the name of
the Company, and transfer, sell, lease, or assign in the ordinary course of
business any Company property for any Company purpose;
5.1.2.2 borrow money from banks, other lending
institutions, or other sources, including the Manager and its Affiliates, for
Company purposes, issue evidences of indebtedness in connection therewith, and,
in connection therewith, mortgage, pledge or create other security interests in
any or all of the Company's properties and income therefrom to secure or provide
for the repayment of such borrowing;
5.1.2.3 employ and dismiss from employment any and all
employees, agents, independent contractors, attorneys and accountants;
5.1.2.4 operate the Company's businesses and enter into
contracts for the management or operation of such businesses, including
contracts for supplies, materials, labor, manufacture and distribution;
5.1.2.5 enter into license agreements as both licensor and
licensee for the license of technology, patents, trademarks, trade names,
copyrights and other intellectual property;
5.1.2.6 acquire and enter into any contract of insurance
which the Manager deems necessary and proper for the protection of the Company,
its properties and businesses;
5.1.2.7 enter into and carry out contracts and agreements
of all kinds and to execute on behalf of the Company any and all documents or
instruments of any kind which the Manager may deem appropriate for carrying out
the purposes of the Company;
5.1.2.8 make all payments required of the Company pursuant
to this Agreement and for all direct and indirect costs and expenses incurred in
the conduct of its business;
5.1.2.9 supervise the preparation and filing of all
federal, state and local tax and information returns which the Company may be
required to file;
5.1.2.10 institute, prosecute and compromise lawsuits and
proceedings in the name and on behalf of the Company;
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5.1.2.11 apply for and acquire any and all licenses,
permits or the like that are necessary to conduct the business of the Company,
including, without limitation, FCC approvals and licenses, and contest any
determination by any government agency, including, without limitation, those of
the FCC;
5.1.2.12 make temporary investments of the Company's
excess funds on behalf of the Company; and
5.1.2.13 execute, acknowledge and deliver any and all
instruments necessary to effectuate the foregoing.
5.1.3 Limitation of Authority of Manager. Notwithstanding
anything to the contrary in this Agreement, the Manager shall have no authority
to:
5.1.3.1 do any act in contravention of this Agreement or
the Act;
5.1.3.2 do any act which would make it impossible to carry
on the ordinary business of the Company which shall not include acts permitted
or contemplated by this Agreement;
5.1.3.3 possess Company property, or assign its Manager's
rights in specific Company property, for other than a Company purpose;
5.1.3.4 admit a person as a Member otherwise than pursuant
to the provisions of this Agreement; or
5.1.3.5 amend this Agreement or the Certificate of
Formation otherwise than pursuant to Section 12.1.
5.1.4 Affirmative Voting Obligations. Notwithstanding anything to
the contrary in this Agreement, the Company shall not undertake, and the Manager
shall not cause the Company to undertake, any of the following actions without
the approval of the unanimous vote of the Class A Member and the Class B Member:
5.1.4.1 issue Interests in the Company directly from the
Company to any Person and admit any such Person to the Company as a Member;
provided, however, that this provision shall not apply to transfers of existing
Interests in the Company, which shall be governed by Sections 6.2 through 6.5;
5.1.4.2 modify the Bidding Protocol after it has been
adopted by the Members;
5.1.4.3 enter into any agreement that provides for
payments by or to the
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Company in excess of $1,000,000 (or in excess of $200,000 during any period in
which the final award of any Licenses or the Auction is stayed, enjoined or
otherwise prohibited by any court or governmental body of competent
jurisdiction), except as contemplated by the Initial Budget attached hereto as
Exhibit C, or as approved by unanimous vote of the Class A Member and the Class
B Member, the then-current annual budget or any agreement or program properly
authorized by the Manager or previously approved pursuant to this Section 5.1.4,
as the case may be;
5.1.4.4 make any expenditure that would cause expenditures
to exceed those budgeted in the Company's Initial Budget or the then-current
annual budget in force at the time of the expenditure by more than ten percent
(10%), except for expenditures made pursuant to any agreement or program
properly authorized by the Manager or previously approved pursuant to this
Section 5.1.4, and expenditure increases consistent with corresponding increases
in revenues in excess of budgeted amounts;
5.1.4.5 incur any indebtedness in the name of the Company,
modify, extend, renew, refinance or restructure such debt, pledge, assign or
otherwise utilize any assets of the Company as security for any indebtedness
(except for (i) indebtedness arising out of an individual or a related series of
transactions from time to time in the aggregate principal amount of $1,000,000
or less (or in the aggregate principal amount of $200,000 or less during any
period in which the final award of any Licenses or the Auction is stayed,
enjoined or otherwise prohibited by any court or governmental body of competent
jurisdiction) or (ii) any indebtedness approved or authorized in the Initial
Budget, the then-current annual budget and incurred on a wholly non-recourse
basis as to all of the Members), or obligate the Company as a surety, guarantor
or accommodation party to any obligation of any other Person, other than as
contemplated by the Initial Budget or the then-current annual budget;
5.1.4.6 sell, transfer, exchange, lease, mortgage, pledge
or assign, or enter into any agreement for the sale, transfer, exchange, lease,
mortgage, pledge or assignment of, any of the Licenses, or all or substantially
all of the Company's assets, except pursuant to Article VII;
5.1.4.7 remove any Member or reclassify any Interest,
except as expressly contemplated by this Agreement;
5.1.4.8 liquidate or dissolve the Company or consolidate
or merge the Company into or with any other Person, or acquire any interest in
any other Person or, except in the ordinary course of business, any significant
portion of the assets of any other Person, or agree to enter into any
partnership or joint venture;
5.1.4.9 change in the Company's business to extend beyond
the scope of business defined in Section 2.3;
5.1.4.10 make, authorize, or adopt, subject to Section
5.9, any agreement
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between the Company and any Member or any Affiliate of any Member that provides
for payments in excess of $500,000 in the aggregate, or accept any loan from the
Manager or any Affiliate thereof;
5.1.4.11 make any change to the Initial Budget or the
then-current annual budget where such change exceeds $1,000,000 (or of more than
$200,000 during any period in which the final award of any Licenses or the
Auction is stayed, enjoined or otherwise prohibited by any court or governmental
body of competent jurisdiction);
5.1.4.12 modify the policy of the Company with respect to
distribution of cash flows pursuant to Article IV or determine that the Company
should make an extraordinary distribution, defined as a distribution in excess
of five percent (5%) of the fair market value of the Company, as reasonably
determined by the Manager;
5.1.4.13 appoint or terminate an accounting firm for the
Company other than an Approved Certified Public Accountant or select or change
an accounting method or election that may have a material impact on the
Company's Profit and Loss; or
5.1.4.14 pay or incur any costs, fees or expenses
(including without limitation legal fees or expenses) in excess of $600,000 in
the aggregate for or in connection with any action, suit or proceeding relating
to the final award or the validity of any Licenses or the Auction.
5.1.5 Appointment of Manager . So long as Xxxx Inlet holds an
Interest in the Company, Xxxx Inlet shall be the Class A Member and shall serve
as the Manager. In the event that Xxxx Inlet transfers all of its Interest
and/or any other ownership rights or interests in the Company to a party other
than an Affiliate of Xxxx Inlet, then the Class B Member shall have the right to
determine, subject to FCC Rules, the Person to become the Manager upon the
transfer of Xxxx Inlet's Interest, which Manager may or may not be a new or
substitute Class A Member. Pursuant to the foregoing, and in accordance with the
provisions of Section 6.2.3 which prohibits transfers of less than all of a
Member's Interest without unanimous approval of the Members, it is the express
intent of the Members that if at any time Xxxx Inlet transfers all of its
Interest to a party other than an Affiliate of Xxxx Inlet, the Class A Member,
if any, shall thereafter have no right or obligation to serve as Manager unless
specifically agreed to in writing by the Class B Member.
5.2 Meetings of and Voting by Members.
5.2.1 A meeting of the Members may be called at any time by the
Manager or by the Class A Member or the Class B Member. Meetings of Members
shall be held at the Company's principal place of business or at any other
location if agreed to by the Class A Member and the Class B Member. Not less
than ten (10) nor more than sixty (60) days before each meeting, the Person
calling the meeting shall give written notice of the meeting to each
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Member entitled to vote at the meeting. The notice shall state the time, place,
and purpose of the meeting. Notwithstanding the foregoing provisions, each
Member who is entitled to notice waives notice if before or after the meeting
the Member signs a waiver of the notice which is filed with the records of
Members' meetings, or is present at the meeting in person or by proxy. Unless
this Agreement provides otherwise, at a meeting of Members, the presence in
person (or, in the case of a Member other than a Class A Member, in person or by
proxy) of both the Class A Member and the Class B Member constitutes a quorum. A
Member may vote either in person (or by written proxy signed by a Member other
than a Class A Member) or by the Member's duly authorized attorney-in-fact.
5.2.2 In lieu of holding a meeting, the Members may vote or
otherwise take action by a written instrument indicating the consent of the
Members required for such vote or action.
5.3 Duty of Care; Indemnification.
5.3.1 No Member, including the Manager, shall be liable to the
Company or to any of its other Members for any loss or damage occasioned by any
act or omission in the performance of its duties or services, unless such loss
is due to the gross negligence, recklessness or willful misconduct of such
Member, or as otherwise required by law.
5.3.2 The Company shall indemnify and hold harmless each Member
(including the Manager), its Affiliates, and all officers, directors,
shareholders, employees, and agents of the Member and its Affiliates (each,
individually, an "Indemnitee") from and against any and all claims, losses,
demands, costs, damages, liabilities (joint and several), expenses of any nature
(including attorneys' fees and disbursements), judgments, fines, settlements and
other amounts (collectively, "Claims") arising from any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or investigative
(individually, an "Action"; collectively, "Actions"), in which the Indemnitee
may be involved, or threatened to be involved, as a party or otherwise, arising
out of or incidental to the Company's business or operations, a Member's alleged
actions or failures to act in its capacity as a Member of the Company, or the
Manager's alleged actions or failure to act in its capacity as a Manager of the
Company at the time such Claims are paid or incurred, if (i) the Indemnitee
acted in good faith and in a manner that it believed to be in, or not opposed
to, the interests of the Company, and, with respect to any criminal proceeding,
had no reasonable cause to believe that its conduct was unlawful, and (ii) the
Indemnitee's conduct did not constitute actual fraud, gross negligence, breach
of its fiduciary duty as a Member or any transaction in which a Member or such
Indemnitee received a personal benefit in violation or breach of this Agreement.
The termination of any action, suit or proceeding by judgment, order settlement,
conviction, or upon a plea of nolo contendere, or its equivalent, shall not, of
itself, create a presumption that the Member did not act in good faith and in
the manner which the Member believed to be in or not opposed to the interest of
the other Members or, with respect to any criminal action or proceeding, that
the Member had reasonable cause to believe its conduct was unlawful.
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5.3.3 The Company shall pay the expenses incurred by a Member in
defending an Action in advance of the final disposition of such Action upon
receipt of an undertaking by such Member to repay such payment if there shall be
an adjudication or determination that it is not entitled to indemnification as
provided herein. A Member may not satisfy any right of indemnity or
reimbursement granted in this Section 5.3 or to which it may be otherwise
entitled except out of the assets of the Company, and no Member shall be liable
personally with respect to any such claim for indemnity or reimbursement. The
Manager may obtain appropriate insurance on behalf of the Company to secure the
Company's obligations hereunder.
5.3.4 The indemnification provided by this Section 5.3 shall be
in addition to any other rights to which those indemnified may be entitled under
any agreement or vote of the Members, or as a matter of law or equity, or
otherwise, both as to an action in the Indemnitee's capacity as a Member or an
Affiliate thereof, and as to an action in another capacity, and shall continue
as to an Indemnitee who has ceased to serve in such capacity and shall inure to
the benefit of the heirs, successors, assigns and administrators of the
Indemnitee.
5.3.5 The Company may purchase and maintain insurance on behalf
of the Manager, and such other Indemnitees as the Manager may determine, against
any liability that may be asserted against, or expense that may be incurred by,
any such Indemnitee in connection with the Company's business or such
Indemnitee's actions or failures to act on behalf of the Company, regardless of
whether the Company would have the power to indemnify such Indemnitee against
such liability under the provisions of this Agreement.
5.3.6 The provisions of this Section 5.3 are for the benefit of
the Indemnitees and shall inure to the benefit of the heirs, successors, assigns
and administrators of the Indemnitees and shall not be deemed to create any
rights for the benefit of other Persons and shall apply to any Action,
regardless of whether the claim is asserted by or on behalf of the Company. The
doing of any act or the failure to do any act by a Member, the effect of which
may cause loss or damage to the Company, if done pursuant to advice of
independent legal counsel retained by the Company, shall be conclusively
presumed not to constitute intentional misconduct or a knowing violation of law
on the part of such Member, or an intentional breach of the Member's fiduciary
duty, unless such advice was induced by the Member's intentional misconduct,
knowing violation of law or non-disclosure of material facts known to the
Member.
5.3.7 Notwithstanding the foregoing, no Member shall be liable to
the Company, any other Member or any other Person for any amount beyond the
amount of such Member's obligations set forth in this Agreement.
5.4 Technical Services Agreement. The Company may, and the Manager shall
have the authority to enter into an agreement with VWC or an Affiliate of VWC,
subject at all times to the Company's oversight, review and supervision, for the
provision of technical services with respect to the operation of, and the
adoption of specified technology for, the PCS Systems. Any such technical
services agreement shall be materially in the same form and substance as the
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existing Technical Services Agreement executed by and between Xxxx Inlet
Western Wireless PV/SS PCS, L.P. and Western Wireless Corporation and dated
November 5, 1996, as amended.
5.5 Trademark License Agreement. The Company may, and the Manager shall
have the authority to, enter into a trademark license agreement with VWC or an
Affiliate of VWC, for the use of certain specified trademarks of VWC and its
Affiliates, for the use by the Company for certain defined purposes in
connection with its primary brand name for providing PCS in the geographic
territory specified therein.
5.6 Time Devoted to Company. The Manager shall devote so much of its
time to the business of the Company as in its reasonable judgment the conduct of
the Company's business reasonably requires.
5.7 Covenant Not to Compete. The Manager represents, warrants and
covenants that, as of the date of this Agreement until one (1) year from the
earlier of the date that the Company is dissolved or the Manager is no longer a
Member, it has not obtained and will not obtain direct or indirect ownership or
control, or rights to obtain direct or indirect ownership or control, of (a) a
five percent (5%) or greater interest, in the aggregate, in any License for a
Designated Market (as defined below), or (b) any entity, other than VWC, an
Affiliate of VWC or the Company, that has a five percent (5%) or greater
interest, in the aggregate, in any License for a Designated Market. For the
purposes hereof, a "Designated Market" shall mean (i) a market in which, as of
the date of this Agreement, VWC or an Affiliate of VWC operates a cellular
telephone business or a PCS business using spectrum licensed by the FCC through
the A, B, C, D, E or F block PCS auctions, (ii) a market in which, in the
future, VWC or an Affiliate of VWC operates a PCS business using spectrum
licensed by the FCC through the A, B, C, D, E or F block PCS auctions, or (iii)
any market that has been named by Xxxx Inlet as a target market in its filings
with the FCC with respect to the Auctions for Licenses, which causes a
"significant overlap" as defined in FCC Rules provided, however, that nothing
herein shall prevent Xxxx Inlet or its Affiliates from owning an interest in
partnership with Xxxx South Corporation or its Affiliates in any of the states
within Xxxx South Corporation's operating region or in partnership with WWC or
its Affiliates; provided further that nothing in the immediately preceding
proviso shall be deemed to require VWC or any of its Affiliates to dispose of
any FCC license that it holds currently or at any time in the future.
5.8 Fees and Expenses.
(a) For five (5) years during the term of this Agreement
beginning on the Issuance Date, the Company shall pay to the Manager an annual
fee of $250,000, payable in equal biannual installments, for its services to the
Company. Management of the Manager shall not receive compensation from the
Company for their services as employees of the Manager or Company.
(b) All out-of-pocket expenses incurred directly in connection
with transactions effected or positions held for the Company's account
(including, without limitation,
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brokerage commissions, custodial fees, interest and commitment fees on loans
and debit balances and withholding or transfer taxes) shall be borne by the
Company. In addition, the Company, not the Manager, will pay all operating and
overhead costs of the Company.
(c) The Company shall reimburse the Manager for any expenses
incurred by it in the operation and management of the Company; provided,
however, that such expenses are contemplated by the Initial Budget, the
Company's then-effective annual budget or an agreement or program properly
authorized by the Manager or previously approved pursuant to Section 5.1.4. If
the Manager shall incur any expense jointly for the account of the Company and
any other Person, the Manager will allocate such expense among the Company and
each such other Person in proportion to the size of the investment made by each
in the activity or entity to which the expense relates, or in such other manner
as the Manager considers fair and reasonable.
5.9 Contracts With Members or Their Affiliates.
5.9.1 The Manager, on behalf of the Company, may enter into
contracts for goods, services or leases or transfers of property with either a
Member or any of its Affiliates. The validity of any transaction, agreement, or
payment involving the Company and a Member or any of its Affiliates otherwise
permitted by the terms of this Agreement shall not be affected by reason of the
relationship between the Company and a Member or any such Affiliate.
5.9.2 Notwithstanding the foregoing, any agreements, contracts
and arrangements between the Company and a Member or any of its Affiliates
whereby such party shall (i) render any services to the Company, (ii) sell or
lease goods to the Company, (iii) buy or lease any property from the Company, or
(iv) sell or lease any property to the Company, shall be subject to the
following conditions:
5.9.2.1 The compensation, price, lease payment, or fee paid by
or to a Member or any of its Affiliates must be comparable and competitive with
the compensation, price, lease payment, or fee of any other person who is
rendering comparable services, selling or buying comparable property or goods,
or leasing comparable property, as the case may be, which could reasonably be
made available to the Company and shall be on competitive terms, but in no event
greater than the most favorable compensation, prices, lease payments or fees
offered by a Member or any of its Affiliates;
5.9.2.2 All of the terms of such material agreements,
contracts, and arrangements shall be disclosed to the Members;
5.9.2.3 Any such material agreements, contracts and
arrangements shall be embodied in a written contract which describes the subject
matter thereof and all consideration to be paid pursuant thereto; and
5.9.2.4 No rebates or "give-ups" may be received by a Member
or any of its Affiliates, nor may a Member or any of its Affiliates participate
in any reciprocal business
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arrangements which would have the effect of circumventing any of the provisions
of this Agreement.
5.9.3 In no event shall the Manager cause the Company to
commingle the Company's funds with those of any other person or entity.
5.10 Annual Budget. Prior to the beginning of each Fiscal Year, the
Manager, following consultation with the Members, shall create and adopt an
annual budget of revenues, expenses and capital expenditures, which' shall be
distributed to each Member.
5.11 Operating Officer. The Company may employ a President or other
manager or operations officer at the will of the Manager and under such terms as
shall be determined by the Manager subject, with respect to salaries and
benefits, to amounts contemplated by the Initial Budget.
5.12 No Participation in Management; No Authority. No Member, other than
the Manager, shall take any active part in the management or control of the
business of the Company. No Member, other than the Manager, shall have any
authority to act in any way on behalf of, or to bind or obligate the Company.
Subject to the terms of this Agreement, any Member may lend money to the Company
or advance money for it, and as to such loans or advances, such Member shall
have the same rights as other general creditors, subject to the terms of the
documentation governing any such loan or advance.
ARTICLE VI
ADMISSIONS AND TRANSFERS
6.1 Admission of Additional Members.
6.1.1 Subject to the conditions of Sections 5.1.4.1 and 6.1.2,
the Manager may admit any Person as an additional Member. Effective upon such
admission, the Manager shall revise Exhibit A to this Agreement to reflect the
name and the required Capital Contribution of such additional Member.
6.1.2 The admission of an additional party as a Member shall be
conditioned upon:
6.1.2.1 The prior written consent of the Manager;
6.1.2.2 The additional party's written acceptance and
adoption of all of the terms and provisions of this Agreement, and any other
related agreements executed by the Members or the Manager in connection with
this Agreement, as if such additional party were an original signatory to this
Agreement and such other agreements, and grant to the Manager the
power-of-attorney set forth in Section 12.2 of this Agreement;
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6.1.2.3 The additional party executing and acknowledging
such other instrument or instruments as the Manager deems necessary or desirable
to effect such admission;
6.1.2.4 The additional party paying or obligating itself
to pay, as the Manager deems necessary or appropriate, all reasonable expenses
connected with such admission;
6.1.2.5 Compliance with all requirements of the FCC Rules
and the Act;
6.1.2.6 Compliance with all applicable state and federal
securities laws; and
6.1.2.7 The approval of the Members pursuant to Section
5.1.4.1.
6.2 Transfer of Members' Interest.
6.2.1 Subject to Section 6.4 and all applicable FCC Rules, a
Member may transfer all, but not less than all, of its Interest in the Company
to an Affiliate and, in the event of such a transfer, the Affiliate shall
receive and hold such Interest subject to the terms and conditions of this
Agreement.
6.2.2 Except for a transfer permitted under Section 6.2.1, a
Member (other than VoiceStream) may not transfer or encumber, either directly or
indirectly, any of its Interest in the Company without first offering in writing
to sell such Interest to VoiceStream pursuant to this Section 6.2; provided,
however, that such right of VoiceStream shall only exist if such sale to
VoiceStream will be consistent with FCC limitations on transfer of control under
FCC Rules; and further provided that in order for VoiceStream to exercise its
right to purchase Interests pursuant to this Section 6.2:
6.2.2.1 Prior to the Exchange Date, VoiceStream must
provide a legal opinion from outside counsel to VoiceStream addressed to the
Company, which counsel and opinion must be satisfactory to the Member proposing
the transfer and to the Company, opining that the transfer of such Interest to
VoiceStream would not cause the Company to violate the C and F block eligibility
requirements (as defined by the FCC Rules) or any other FCC Rules or to forfeit
the Financing Benefits ("Required Legal Opinion" ). Should VoiceStream be unable
to obtain the Required Legal Opinion within thirty (30) days following receipt
of the notice from the selling Member, VoiceStream shall be deemed to have
waived its rights to purchase such Interest; and
6.2.2.2 From the Exchange Date to the fifth anniversary of
the Exchange Date, either (A) VoiceStream must provide the Required Legal
Opinion, or (B) the Company must elect in writing to forfeit the Financing
Benefits. Should VoiceStream be unable to obtain the Required Legal Opinion or
fail to obtain written election of the Company to forfeit the Financing Benefits
within thirty (30) days following receipt of the notice from the selling
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Member, VoiceStream shall be deemed to have waived its rights to purchase such
Interest.
6.2.3 Except for a transfer pursuant to Section 6.2.1, if at any
time a Member (other than VoiceStream) has received an offer to purchase, and
desires to accept an offer to sell all, but not less than all, of its Interest
in the Company, it shall give a written notice to VoiceStream that sets forth
the name and address of the potential purchaser and the terms of the offer. In
no event shall a Member be entitled to transfer less than all its Interest in
the Company.
6.2.4 VoiceStream shall have the right to purchase all, but not
less than all, of the Interest that is covered by the notice referenced at
Section 6.2.3 at the price and terms set forth in the notice to VoiceStream.
VoiceStream shall exercise its right to purchase the Interest by giving a notice
to the selling Member within thirty (30) days following receipt of the notice
from the selling Member stating that it will purchase such Interest.
6.2.5 Closing on all purchases pursuant to Section 6.2.4 shall
occur within sixty (60) days from the exercise of the option by VoiceStream or
such date as may be agreed upon by the selling Member and VoiceStream; provided,
however, that, if FCC consent is required for the transfer of the Interest, then
provided such consent is promptly requested by VoiceStream, the purchase shall
close within sixty (60) days from receipt of the FCC consent. If FCC consent is
not obtained within twelve (12) months from the date the application for the
consent is filed with the FCC as a result of VoiceStream's failure to qualify or
due to any fault of VoiceStream, then VoiceStream shall lose its rights to
purchase and the selling Member may sell the Interest the subject of the notice
to a Third Party without further compliance with this Section.
6.2.6 If VoiceStream allows to expire, or waives in writing, the
right to purchase the offered Interest or does not elect to purchase all of the
offered Interest pursuant to Section 6.2.3, the selling Member, subject to
Section 6.4, may transfer its Interest to a Third Party; provided, however,
that, if the selling Member does not close the proposed sale or transfer within
sixty (60) days from the later of (a) the expiration or waiver in writing of
VoiceStream's right to purchase or (b) the receipt of required FCC approval, a
sale to a Third Party may not be made without such a transfer again being
subject this Section 6.2.
6.2.7 Any transferee of an Interest of a Member under this
Section 6.2 is a "Successor." In the case of a transfer pursuant to this Section
6.2, and subject to Section 6.4, the Successor shall receive and hold such
Interest subject to the terms of this Agreement and subject to the obligations
of the transferor under this Agreement, and there shall be no further transfer
of such Interest except in accordance with the terms of this Agreement.
6.2.8 Any purported transfer of a Member's Interest in the
Company that is not made in compliance with this Section 6.2 is hereby declared
to be null and void and of no force or effect whatsoever.
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6.3 Involuntary Transfer.
6.3.1 In the event of bankruptcy, death or, in the case of a
Member that is a corporation, trust, partnership, or other entity, dissolution
and termination of a Member, or in any event of attachment of an Interest, sale
of a pledged Interest, or garnishment of an Interest owned by a Member, or in
the event that said Interest is subject to judicial sale under the laws of any
local, state or federal government, or if any of the Interest standing in the
name of a Member or any part thereof is to be transferred out of its name by any
legal action brought by any person, including the spouse or former spouse of
said Member (or spouse of a partner in a Member which is a partnership), or by
reason of the death of said spouse, the Company shall have an option to purchase
any or all of said Interest that is subject to any such transfer or legal action
at the price described in Section 6.3.2. Such option shall be exercised in
writing within a period of thirty (30) days after the Company has received
notice of the transfer or legal action.
6.3.2 Upon exercise of the option granted in Section 6.3.1,
payment shall be made within sixty (60) days after the final determination of
the Appraised Value of the Company's assets and the option price shall be the
Appraised Value of such assets multiplied by the Percentage; provided, however,
that, if FCC consent is required for the transfer of the Interest, then payment
shall be made within sixty (60) days from receipt of the FCC consent.
6.3.3 If the Company's option to purchase any such Member's
Interest is waived in writing or expires, the remaining Members shall have
options to purchase pro rata any or all of such remaining Interest on the same
terms and conditions as those set forth in Section 6.3.2. Such option hereunder
must be exercised in writing within thirty (30) days from the date on which the
Company's option is waived in writing or expires.
6.3.4 If both the Company and the remaining Members allow to
expire, or waive in writing, their respective rights to purchase the offered
Interest then subject to Section 6.4, the involuntary transfer of the Interest
may proceed; provided, however, that any transferee in such involuntary transfer
shall comply with the terms of Section 6.5.
6.3.5 Any transferee of an Interest of a Member under this
Section 6.3 is a "Successor." In the case of a transfer pursuant to this Section
6.3, and subject to Section 6.4, the Successor shall receive and hold such
Interest subject to the terms of this Agreement and subject to the obligations
of the transferor under this Agreement, and there shall be no further transfer
of such Interest except in accordance with the terms of this Agreement.
6.3.6 Any purported transfer of a Member's Interest in the
Company that is not made in compliance with this Section 6.3 is hereby declared
to be null and void and of no force or effect whatsoever.
6.4 Admission of Transferees as Members. The Members, by unanimous
consent, may, but need not, permit an assignee or transferee (whether such
assignee or transferee has
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acquired its Interest by virtue of a voluntary assignment pursuant to Section
6.2, an involuntary transfer pursuant to Section 6.3 or a transfer by operation
of law or otherwise) of a Member's Interest (or a part thereof) to be admitted
as and become a Member in the Company entitled to all the rights and benefits
under this Agreement of the transferor or assignor of such Interest, but no such
assignee or transferee shall be or become a Member without:
6.4.1 The prior written consent of the Manager, which may be
granted or withheld by the Manager in its sole and absolute discretion;
6.4.2 The assignee's written acceptance and adoption of all of
the terms and provisions of this Agreement, as if such additional party were an
original signatory hereto, and such assignee's grant to the Manager the
power-of-attorney set forth in Section 12.2 of this Agreement;
6.4.3 The assignee executing and acknowledging such other
instrument or instruments as the Manager deems necessary or desirable to effect
such admission;
6.4.4 The assignee paying or obligating itself to pay, as the
Manager deems necessary or appropriate, all reasonable expenses connected with
such admission, including but not limited to the cost of preparing and filing an
amendment to the Certificate of Formation to effectuate such admission;
6.4.5 The transferor and transferee providing, if requested by
the Manager, an opinion of counsel (which counsel and opinion shall be
satisfactory to the counsel to the Company) that indicates that, in the opinion
of said counsel, such transfer would not jeopardize the status of the Company as
a limited liability company for federal or state income tax purposes, and would
not violate, or cause the Company to violate, any applicable law or governmental
rule or regulation, including, without limitation, any applicable federal or
state securities law or any applicable laws, rules or regulations of the FCC;
6.4.6 The transferor giving the transferee the right to become a
Member; and
6.4.7 All requirements of the Act regarding the admission of a
transferee member having been complied with by the transferee, the transferor
and the Company.
Until such time, if any, as a transferee of any permitted transfer
pursuant to this Article VI is admitted to the Company as a substitute Member
pursuant to this Section 6.4, (x) such transferee shall be an assignee only, and
only shall receive, to the extent transferred, the distributions and allocations
of income, gain, loss, deduction, credit, or similar item to which the Member
which transferred its Interest in the Company would be entitled, and (y) such
assignee shall not be entitled or enabled to exercise any other rights or powers
of a Member, such other rights remaining with the transferring Member. In such a
case, the transferring Member shall remain a Member even if it has transferred
its entire economic Interest in the Company to one or more assignees. In the
event any assignee desires to make a further assignment of any economic
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Interest in the Company, such assignee shall be subject to all of the provisions
of this Agreement to the same extent and in the same manner as any Member
desiring to make such an assignment.
6.5 Tag-Along Rights.
6.5.1 Trigger for Tag-Along Rights. In the event that a Member
(the "Selling Member" ) shall determine to sell directly, but not indirectly,
any of its Interest to a Third Party, except an Affiliate, in any one
transaction or series of related transactions, in addition to any other
applicable transfer restriction the subject of this Article VI, such sale or
other disposition shall not be permitted unless the Selling Member offers (or
causes the Third Party to offer) to the other Members the right to elect to
include, at the sole option of the other Members, up to a pro rata share of
their Interests in the sale or other disposition to such Third Party (determined
in accordance with the Members' Percentages).
6.5.2 Tag-Along Notice. The Selling Member shall give a notice to
the other Members that describes the transaction(s) (the "Tag-Along Notice" )
and at any time within fifteen (15) days after the giving of the Tag-Along
Notice, a Member may make an election to include up to the pro rata share of its
Interest in such a sale or other disposition (the "Inclusion Election" ) by
giving written notice thereof to the Selling Member and by delivering to the
Selling Member any certificate or certificates that represent the Member's
Interest to be sold (the "Tag-Along Interests" ), together with a limited
power-of-attorney that authorizes the Selling Member to sell or otherwise
dispose of such Tag-Along Interests pursuant to the terms of such Third Party's
offer.
6.5.3 Identical Terms. The purchase of a Member's Interests
pursuant to this Section 6.5 shall be on the same terms and conditions,
including the purchase price and the date of sale or other disposition, as are
received by the Selling Member and stated in the Tag-Along Notice.
6.5.4 Notice of Sale. Promptly (but in no event later than five
(5) business days) after the consummation of the sale or other disposition of
shares to the Third Party pursuant to the Third Party's offer, the Selling
Member shall: (i) notify the participating Members of the completion thereof;
(ii) cause to be remitted to such Members the total sales price attributable to
the Interests that such Members sold or otherwise disposed of pursuant thereto;
and (iii) furnish such other evidence of the completion and time of completion
of such sale or other disposition and the terms thereof as may be reasonably
requested by such Members.
6.5.5 Waiver of Inclusion Election. If within fifteen (15) days
after the Tag-Along Notice is given, any Member has not accepted the offer to
make an Inclusion Election, that Member shall be deemed to have waived any and
all of its rights with respect to the sale or other disposition of the Interests
that are described in the Tag-Along Notice. The Selling Member shall have the
lesser of ninety (90) days after such 15-day period or, if the Selling Member
reasonably believes that FCC consent, provided such consent was promptly
requested, is required, thirty (30) days after the receipt of such FCC consent
in which to sell or otherwise
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dispose of its Interests to the Third Party or any other person at a price and
on terms not more favorable to the Selling Member than were set forth in the
Tag-Along Notice.
6.5.6 Termination of 90-Day or 30-Day Period. If, at the end of
such 90-day or 30-day period, as applicable, the Selling Member shall not have
completed the sale of its Interests in accordance with the terms of the
Tag-Along Notice, each of the restrictions on sale contained in this Section 6.5
with respect to the Selling Member's Interests shall again be in effect (unless
such 90-day or 30-day period, as applicable, is extended with the consent of all
of the Members).
6.5.7 Permitted Transfers; Excluded Transfers. The rights
provided in this Section 6.5 shall not be applicable to or restrict in any way
any transfer of Interests by a Member under Section 6.2.1 of this Agreement, but
any such Interests so transferred by a Member shall thereafter continue to be
subject to the provisions of this Section 6.5. Nothing in this Agreement shall
limit or restrict any transfer, sale, hypothecation, assignment, or pledge by
the owner thereof of the stock or ownership rights of a Member or its parent
corporation.
ARTICLE VII
SALE OF ALL OR SUBSTANTIALLY ALL OF THE ASSETS OF THE COMPANY
7.1 Right to Initiate Sale of Assets. At any time during the thirty (30)
day period that commences on the first, second and third anniversary of the
Exchange Date, the Manager may cause the Company to offer to sell all or
substantially all of the assets of the Company; provided, however, that the
Company must conduct such sale pursuant to the terms and conditions of this
Article 7.
7.2 Right of First Refusal.
7.2.1 The Manager shall not determine to cause the Company to
offer for sale or sell all or substantially all of the assets of the Company
(whether prior or subsequent to the dissolution of the Company) without first
offering in writing to sell such assets to VoiceStream pursuant to this Section
7.2.
7.2.2 If the Company desires to sell all or substantially all of
its assets, it shall give a written notice to VoiceStream that sets forth a
description of the assets that the Company proposes to sell.
7.2.3 VoiceStream shall have the right to purchase the assets
that are covered by the notice to VoiceStream at the Appraised Value of such
assets. VoiceStream shall exercise its right to purchase the assets by giving
notice to the Company within thirty (30) days after the determination of the
Appraised Value of the assets.
7.2.4 Closing on a purchase pursuant to this Section 7.2 shall
occur within sixty (60) days from the exercise of the option by VoiceStream or
such date as may be agreed upon by
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the Manager and VoiceStream; provided, however, that, if, in the reasonable
opinion of either the Company or VoiceStream, FCC consent is required for such a
transfer of the assets, then the purchase shall close within sixty (60) days
from receipt of the FCC consent. If FCC consent is not obtained within twelve
(12) months from the date the application for the consent is filed with the FCC
through no fault of the Company, then VoiceStream shall lose its right of first
refusal and the Company may sell to a Third Party without further compliance
with this Section 7.2.
7.2.5 If VoiceStream allows to expire, or waives in writing, the
right to purchase the assets, the Company may offer and sell pursuant to Section
7.3; provided, however, that, if the Company does not commence an auction for
the assets under Section 7.3 within sixty (60) days from the later of the waiver
in writing or expiration of VoiceStream's right to purchase or the receipt of
required FCC approval, a sale of the assets may not be made without such a
transfer again being subject to this Section 7.2.
7.3 Sale of Assets by Auction.
7.3.1 If VoiceStream allows to expire, or waives in writing, the
right to purchase the Company's assets under Section 7.2, the Company may offer
and sell the assets identified in the notice provided to VoiceStream under
Section 7.2, pursuant to this Section 7.3.
7.3.2 The Company shall offer and sell the assets subject to sale
by means of an auction, to be conducted on the terms and conditions established
by the Manager.
7.3.3 The Company shall give a written notice to VoiceStream of
the bid the Company intends to accept that sets forth the name and address of
the potential purchaser and the terms of the bid.
7.3.4 VoiceStream shall have the right to purchase the assets at
the price and terms set forth in the notice to VoiceStream; provided, however,
that in the event that the price or terms set forth in the notice to VoiceStream
involve the securities of another company or any other consideration that is not
reasonably available to VoiceStream, then VoiceStream shall have the right to
purchase the assets at a cash price equal to the Appraised Value of such
consideration. VoiceStream shall exercise its right to purchase the assets by
giving a notice to the Company within twenty (20) days following receipt of the
notice of a qualifying bid.
7.3.5 Closing on a purchase pursuant to this Section 7.3 shall
occur within sixty (60) days from the exercise of the option by VoiceStream or
such date as may be agreed upon by the Company and VoiceStream; provided,
however, that, if, in the reasonable opinion of either the Company or
VoiceStream, FCC approval is required for such a sale of assets, then the
purchase shall close within sixty (60) days from receipt of the FCC approval. If
FCC consent is not obtained within twelve (12) months from the date the
application for the consent is filed with the FCC through no fault of the
Company, then VoiceStream shall lose its rights to purchase and the Company may
sell to a Third Party without further compliance with this Section 7.3.
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7.3.6 If VoiceStream allows to expire, or waives in writing, the
right to purchase the assets, the Company may sell the assets to a Third Party;
provided, however, that, if the Company does not close the proposed sale or
transfer within sixty (60) days after the later of the waiver in writing or
expiration of VoiceStream's right to purchase or the receipt of required FCC
approval, a sale to a Third Party may not be made without such a transfer again
being subject this Article VII.
7.4 Payment for Assets by VoiceStream. VoiceStream shall pay to the
Company the purchase price for the assets identified in the Manager's notice to
VoiceStream in cash at the closing of such purchase and sale; provided, however,
that, in the event that any class of common stock of VWC is listed on the New
York Stock Exchange ("NYSE") or admitted for quotation on the Nasdaq National
Market System ("NMS"), and the reported average daily trading volume with
respect to such common stock exceeds $5 million, VoiceStream may pay the
purchase price to the Company in that number of shares of such stock of VWC
equal to the purchase price of the assets to be purchased divided by the price
of VWC's Common Stock, calculated as the average high and low trading price of
such common stock as reported by the NYSE Composite Tape or the average bid and
asked price of VWC Common Stock as quoted on NMS, as appropriate, for each of
the ten (10) consecutive trading days ending two (2) trading days before the
closing date of such purchase and sale; and further provided that in the event
that the requirements of the foregoing proviso are not met with respect to VWC
stock, then in the event that any class of common stock of WWC is listed on the
NYSE or NMS and the reported average daily trading volume with respect to such
common stock exceeds $5 million, VoiceStream may pay the purchase price to the
Company in that number of fully-registered shares of such stock of WWC equal to
the purchase price of the assets to be purchased divided by the price of WWC's
Common Stock, calculated as the average high and low trading price of such
common stock as reported by the NYSE Composite Tape or the average bid and asked
price of WWC Common Stock as quoted on NMS, as appropriate, for each of the ten
(10) consecutive trading days ending two (2) trading days before the closing
date of such purchase and sale; provided that at the time of such issuance (i)
such shares must be duly authorized, validly issued, fully paid and
non-assessable and free and clear of all liens, claims and encumbrances or
preemptive or similar rights, (ii) such shares must be delivered in compliance
with Federal and state securities laws, (iii) such shares are subject to an
effective registration statement under the Securities Act of 1933, as amended
(the "Securities Act") covering the offer and sale of such shares by the Company
(the "Asset Registration Statement") from time to time in negotiated
transactions, in market transactions or otherwise and (iv) such shares are
registered or qualified for offer of sale by the Company under the securities or
blue sky laws of such States as the Company shall reasonably request. VWC or
WWC, as appropriate, covenants and agrees that it shall (x) prepare and file
with the Securities and Exchange Commission such amendments as may be necessary
to keep the Asset Registration Statement effective until the earlier of the date
all of such shares have been sold by the Company or the date all of such shares
are freely tradable without registration or restriction (under Rule 144(k)
promulgated under the Securities Act or otherwise), but not before the
expiration of the 90-day period referred to in Section 4(3) of the Securities
Act and Rule 174 promulgated thereunder, (y) cause each such state securities or
blue sky registration or qualification to remain effective during the period the
Asset Registration Statement is required
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to be kept effective hereunder, and (z) cause the shares covered by the Asset
Registration Statement, by the date of the first sale by the Company thereunder,
to be listed or admitted for trading on each securities exchange (or, if
applicable, the NMS) on which VWC Common Stock is then listed or admitted for
trading. In the event that it is not possible for VWC or WWC, as appropriate, to
deliver shares to the Company in accordance with the requirements of this
Section, VWC or WWC, as appropriate, shall enter into a Registration Rights
Agreement in the form and substance of the agreement attached hereto as Exhibit
D, which the parties hereby agree shall be amended to give the Company the
benefit of the terms of any registration rights agreements entered into with
other shareholders of VWC subsequent to the date of this Agreement and prior the
date of the notice as required under Section 7.3.3, provided that no such
amendment shall reduce or diminish any of the rights of the Company as set forth
in the form attached hereto as Exhibit D.
7.5 Purchase Price; Structure. For a purchase and sale of assets
pursuant to Section 7.2, the purchase price shall equal the Appraised Value of
the assets, and, for a purchase and sale pursuant of assets pursuant to Section
7.3, the purchase price shall equal the auction price. VoiceStream, the Company
and the other Members agree to structure, to the extent reasonably possible, any
such purchase for VWC or WWC Common Stock, as applicable, in a way (such as a
stock for stock sale) that is tax free to all Members, provided that in doing so
there are no negative tax or accounting attributes that adversely impact the
other Members or the Company, as applicable, to a greater extent than would be
experienced in a direct exchange for assets (other than the receipt of a
carryover basis due to the tax free nature of the transaction), determined in
utmost good faith by the Manager at its reasonable discretion.
ARTICLE VIII
DISSOLUTION AND LIQUIDATION
8.1 Dissolution. The Company shall be deemed dissolved upon the
happening of any of the following events:
8.1.1 The expiration of the fixed term of the Company as set
forth at Section 2.4;
8.1.2 The giving of notice to the Members by the Manager of its
election finally to dissolve, terminate, and wind up the affairs of the Company;
8.1.3 The filing of a certificate of dissolution or its
equivalent for the Manager;
8.1.4 The sale of all or substantially all of the Company assets
and conversion into cash of any proceeds of sale originally received in any form
other than cash;
8.1.5 The entry by a court of competent jurisdiction of a decree
of judicial dissolution upon a finding that it is not reasonably practicable to
carry on the Company business
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in conformity with this Agreement.
8.1.6 The written consent of both the Class A Member and the
Class B Member to terminate the Company; or
8.1.7 The occurrence of an event of withdrawal set forth at
Section 8.2.
8.2 Event of Withdrawal. The following shall constitute events of
withdrawal:
8.2.1 The Manager withdraws from the Company by giving written
notice to the other Members;
8.2.2 The Manager assigns its entire Interest other than to an
Affiliate;
8.2.3 The Manager resigns as the Manager;
8.2.4 The Manager:
8.2.4.1 Makes an assignment for the benefit of creditors;
8.2.4.2 Is adjudicated bankrupt or insolvent;
8.2.4.3 Files a voluntary petition in bankruptcy;
8.2.4.4 Dissolves or liquidates; or
8.2.4.5 Seeks, consents, or acquiesces in the appointment
of a trustee, receiver, or liquidator of such Manager or of all or any
substantial part of such Manager's properties.
The Members hereby agree that, notwithstanding any provision of the Act,
the Company shall not dissolve prior to the occurrence of a dissolution event
set forth at Section 8.1. Subject to any applicable FCC Rules, upon the
occurrence of any event set forth in Section 8.1 or 8.2, the Company shall not
be dissolved or required to be wound up if (x) at the time of such event there
is at least one remaining Member and that Member carries on the business of the
Company, or (y) within ninety (90) days after such event all remaining Members
agree in writing to continue the business of the Company and, unless the Manager
is continued as the Manager, to the appointment, effective as of the date of
such event, of a new Manager.
8.3 Dissolution and Termination. Upon dissolution for any of the reasons
stated in Section 8.1, the Company shall terminate and be wound up in accordance
with the terms of Section 8.4. Dissolution of the Company shall be effective on
the day on which the event giving rise to the dissolution occurs, but the
Company shall not terminate until the Certificate of Formation shall have been
canceled and the assets of the Company shall have been distributed as
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provided in Section 8.4. Any dissolution shall be in compliance with FCC Rules.
Notwithstanding the dissolution of the Company prior to the termination of the
Company, the business of the Company and the affairs of the Members shall
continue to be governed by this Agreement.
8.4 Winding Up and Distribution of Assets. Upon dissolution and
termination under Section 8.3, the Manager or any other party designated by
written consent of both the Class A Member and the Class B Member, if the
Company is dissolved pursuant to Section 8.2 hereof, shall commence to wind up
the affairs of the Company and to liquidate its assets. The Members shall
continue to share income, gains, expenses, losses and all other items during the
period of liquidation in the same proportion as before the dissolution. The
Manager or such other party shall have the full right and unlimited discretion
to determine the time, manner and terms of any sale or sales of Company property
pursuant to such liquidation. Pending such sales, the Manager or such other
party shall have the right to continue to operate and otherwise deal with the
assets of the Company. A reasonable time shall be allowed for the orderly
winding up of the business of the Company and the liquidation of its assets and
the discharge of its liabilities to creditors so as to enable the Manager or
such other party to minimize the normal losses attendant upon a liquidation,
having due regard to the activity and condition of the relevant markets for the
Company properties and general financial and economic conditions. Any Member may
be a purchaser of any properties of the Company upon liquidation of the
Company's assets, including, without limitation, any liquidation conducted
pursuant to a judicial dissolution or otherwise under judicial supervision;
provided, however, that the purchase price and terms of sale are fair and
reasonable to the Company. The proceeds of such liquidation and any other funds
of the Company shall be applied and distributed in the following order of
priority:
8.4.1 to creditors, including Members who are creditors, to the
extent otherwise permitted by law, in satisfaction of liabilities of the Company
other than liabilities for distributions to Members;
8.4.2 to the setting up of any reserves which the Manager deems
reasonably necessary for any contingent or unforeseen liabilities or obligations
of the Company or of the Manager arising out of or in connection with the
Company; such reserves shall be segregated for the purpose of disbursing such
reserves in payment of any of the aforementioned contingencies and, at the
expiration of such period as the Manager shall deem advisable, for distribution
of the balance thereafter remaining in the manner hereinafter provided;
8.4.3 to the Members in proportion to the positive balances in
the Members' respective Capital Accounts, determined after taking into account
all Capital Account adjustments for the Fiscal Year during which such
liquidation occurs (other than those made as a result of the distributions set
forth in this Section 8.4.3), by the end of the Fiscal Year in which such
liquidation occurs or, if later, within 90 days after the date of the
liquidation.
No Member shall have any right to demand or receive property other than
cash upon dissolution and termination of the Company. Each Member shall look
solely to the assets of the
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Company for all distributions in respect of its Capital Account and its shares
of profits and shall have no recourse therefor against any other Member.
Accordingly, if any Member (including but not limited to the Manager) has a
deficit balance in its Capital Account (after giving effect to all
contributions, distributions and allocations for all taxable years, including
the year during which the liquidation occurs), then such Member shall have no
obligation to make any capital contribution with respect to such deficit, and
such deficit shall not be considered a debt owed to the Company or to any other
person for any purpose whatsoever.
ARTICLE IX
ACCOUNTING; BOOKS AND RECORDS
9.1 Books and Records. The Company shall maintain at such place as the
Manager shall designate proper and complete records and books of account of the
business of the Company. The Company shall adopt for tax accounting purposes the
accrual method of accounting provided by the Code and the applicable regulations
and authorities thereunder as the same may exist from time to time or any other
accounting method which the Manager shall decide in its sole discretion is in
the best interests of the Company. The financial statements of the Company shall
be prepared in accordance with generally accepted accounting principles.
9.2 Manager's Reports to Members. The Manager shall, at the Company's
expense, send to each Member or person who was a Member at any time during the
Fiscal Year, the following:
9.2.1 As early as practicable after the end of each Fiscal Year,
such information as shall be necessary for the preparation by such Member of its
federal and state income tax (if any) returns which shall include a computation
of the distributions to such Member and the allocation to such Member of Profit
and Loss, as the case may be; and
9.2.2 Within one hundred twenty (120) days after the end of each
Fiscal Year, an annual report that shall include a general description of the
activities of the Company during the period covered by the report, and
comparative financial statements for the current and prior Fiscal Year that are
audited by the Approved Certified Public Accountant, and such financial
statements shall include a balance sheet, a statement of income and expenses, a
statement of changes in Members' capital, and a statement of cash flow.
9.3 Right to Examine Records. Any Member shall be entitled, upon
reasonable written notice directed to the Manager and for a proper purpose, to
review the records of the Company at all reasonable times and at the location
where such records are kept by the Company.
9.4 Tax Matters Member. The Manager shall be the Company's tax matters
Member ("Tax Matters Member"). The Tax Matters Member shall have all powers and
responsibilities of a "tax matters partner" as defined in Section 6231 of the
Code. The Tax Matters Member shall keep all Members informed of all notices from
government taxing authorities that may come to
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the attention of the Tax Matters Member. The Company shall pay and be
responsible for all reasonable third-party costs and expenses incurred by the
Tax Matters Member in performing those duties. A Member shall be responsible for
any costs incurred by the Member with respect to any tax audit or tax-related
administrative or judicial proceeding against any Member, even though it relates
to the Company. The Tax Matters Member shall not compromise any dispute with the
Internal Revenue Service without the approval of the Members.
9.5 Tax Elections. The Manager shall have the authority to make and
revoke all Company elections permitted under the Code or state income tax laws,
including, without limitation, elections of methods of depreciation and
elections under Section 754 of the Code. The decision to make or not make an
election shall be at the Manager's sole and absolute discretion. Each of the
Members shall, upon request, supply any information necessary to give proper
effect to such election.
ARTICLE X
DISPUTE RESOLUTION
10.1 Arbitration of Disputes. Except as otherwise provided in this
Article X, any and all disputes arising out of or in connection with the
execution, interpretation, performance or nonperformance of this Agreement shall
be solely and finally settled by arbitration, which shall be conducted in
Washington, DC. The arbitration procedure may be initiated by any party by
written notice to the other parties, and such notice shall specify in reasonable
detail the dispute being submitted to arbitration. Subject to Section 10.4, the
parties hereby renounce all recourse to litigation and agree that the award of
the arbitrators shall be final and subject to no judicial review, except on one
or more of those grounds specified in the Federal Arbitration Act (9 USC Section
1, et seq.), as amended, or any successor provisions thereto.
10.2 Selection of Arbitrators. Each arbitration conducted pursuant to
this Article X shall be conducted before a panel of three (3) arbitrators, each
of whom shall meet the qualifications set forth herein. Each arbitrator shall be
impartial, shall not have been employed by or affiliated with any of the Members
or any of their respective Affiliates, and shall be admitted to the bar of any
state and further shall possess substantial accounting, telecommunications,
business or other professional experience relevant to the issues in dispute in
the arbitration as stated in the notice initiating such proceeding. The party
initiating arbitration pursuant to this Article X shall not later than twenty
(20) days after the delivery of the notice required under Section 10.1 hereof
appoint an arbitrator and notify the other party thereof. Within twenty (20)
days after delivery of the notice referenced in the immediately preceding
sentence, the other party shall appoint an arbitrator. The initiating party
promptly after the date on which the second arbitrator is appointed, if any,
shall ask the office of the American Arbitration Association ("AAA") closest to
Washington, DC, to appoint a third arbitrator who meets the qualifications set
forth herein. Notwithstanding the foregoing, if the second arbitrator is not
appointed within the time period required, the first arbitrator shall proceed to
determine the dispute.
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10.3 Rules of the Arbitration. The arbitrators shall conduct the
proceedings, including arguments and briefs, pursuant to the Rules of the AAA,
as now or hereafter amended (the "Rules" ), provided that the provisions of this
Agreement shall prevail in the event of any conflict between the Rules and the
provisions of this Agreement. The panel of arbitrators shall decide the issues
submitted to them in accordance with the provisions and commercial purposes of
this Agreement, provided that all substantive questions of law shall be
determined under the laws of the State of Delaware (without regard to the
principles of conflicts of laws of such jurisdiction). All questions and issues
in connection with the dispute, including procedural issues, shall be decided by
the concurrence of at least two arbitrators, and all decisions shall be in
writing and submitted to all parties.
10.4 Injunctive Relief. Notwithstanding anything to the contrary set
forth herein, a party without prejudice to the provisions hereof may file a
complaint to seek a preliminary injunction or other provisional judicial relief
if, in such party's sole judgment, such action is necessary to avoid irreparable
damage.
10.5 No Punitive or Exemplary Damages. In no event shall any party be
entitled to receive, and the arbitrators shall not be empowered to award,
punitive or exemplary damages. Each party hereby irrevocably waives any claim or
right for or to punitive or exemplary damages.
10.6 Discovery and Conduct of Arbitration. The parties shall facilitate
the arbitration by: (a) making available to one another and to the arbitrators,
on as expedited a basis as is practicable, for examination, deposition,
inspection and extraction all documents, books, records and personnel under
their control if determined by the arbitrators to be relevant to the dispute
(provided, however, that a party shall not be required to produce privileged
documents or documents otherwise not required to be produced under the Federal
Rules of Civil Procedure); (b) conducting arbitration hearings to the greatest
extent possible on successive days; and (c) observing strictly the time periods
established by the Rules or by the arbitrators for submission of evidence or
briefs.
10.7 Prehearing Motions. In any proceeding conducted under this Article
X the arbitrators shall have the authority to schedule, hear and determine any
and all prehearing motions (including without limitation summary judgment
motions on any or all of the issues in dispute) and shall do so on the motion of
any party.
10.8 Costs. In the final award, the panel of arbitrators shall divide
all costs, other than fees of counsel incurred in conducting the arbitration, in
such manner as the panel deems just and equitable under the circumstances. The
arbitrators shall have no authority to award fees of counsel. Judgment on the
award of the panel of arbitrators may be entered in any court having
jurisdiction over the party against which enforcement of the award is being
sought. Each party hereby irrevocably submits and consents to the jurisdiction
of any such court for the purpose of rendering a judgment on any such award.
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10.9 Execution of Judgments. Each party agrees that any award of the
panel of arbitrators against it and on which judgment is entered as provided in
the preceding Section 10.8 may be executed against the assets of such party in
any jurisdiction. By execution of this Agreement, each party hereby irrevocably
submits to the jurisdiction of any court in any such jurisdiction in any legal
action or proceeding relating to such executions.
10.10 Waiver as to Jurisdiction. Each party hereby irrevocably waives,
to the fullest extent permitted by law, any objection it may now or hereafter
have to any suit, action or proceeding arising out of or relating to this
Agreement that is brought in any of the jurisdictions designated in the
preceding Sections 10.8 and 10.9 for the purposes envisioned by those sections,
and hereby further irrevocably waives any claim that any such suit, action or
proceeding so brought has been brought in an inconvenient forum.
ARTICLE XI
EXCHANGE RIGHTS
11.1 Grant of Exchange Rights. In connection with the transactions
contemplated by this Agreement, VWC and WWC hereby grant to Xxxx Inlet, and Xxxx
Inlet hereby accepts from VWC and WWC, the Exchange Rights. The terms and
conditions of the Exchange Rights are set forth in this Article XI.
11.2 Exchange Rights. The Exchange Rights shall be exercisable (an
"Exchange") only on the following terms and only during the thirty (30) day
Exchange Period described below:
11.2.1 Xxxx Inlet may elect to exchange all, but not less than
all, of Xxxx Inlet's Interest in the Company so that for each $65,000 of cash
invested by Xxxx Inlet in the Company pursuant to Exhibit A on or before the
Exchange Date, Xxxx Inlet shall receive one (1) share of VWC Common Stock,
subject to Sections 11.3 and 11.4. No fractional shares shall be issued upon an
Exchange, and in lieu thereof, Xxxx Inlet shall receive a cash payment equal to
the product of (x) the fraction of a share of VWC Common Stock Xxxx Inlet would
have otherwise been entitled to receive and (y) the average high and low trading
price of VWC Common Stock as reported by the NYSE Composite Tape or the average
bid and asked price of VWC Common Stock as quoted on the NMS, as appropriate,
for each of the ten (10) consecutive trading days ending two (2) trading days
immediately prior to the date on which the Exchange occurs.
11.2.2 In the event that at the Exchange Date WWC directly or
indirectly owns 50.01% or more of the voting securities of VWC or its successor,
and further provided that VWC, or its successor, is unable to deliver, in
accordance with Section 11.2.7 shares of VWC Common Stock prior to the Outside
Delivery Date, then instead of the Exchange set forth in Section 11.2.1, WWC and
VWC jointly and severally agree that Xxxx Inlet may instead elect an Exchange of
all, but not less than all, of Xxxx Inlet's Interest in the Company such that
for each $13.89 of cash invested by Xxxx Inlet in the Company pursuant to
Exhibit A on or before the Exchange
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Date, Xxxx Inlet shall receive one (1) share of WWC Common Stock, subject to
Sections 11.3 and 11.4. No fractional shares shall be issued upon an Exchange,
and, in lieu thereof, Xxxx Inlet shall receive a cash payment equal to the
product of (x) the fraction of a share of WWC Common Stock Xxxx Inlet would have
otherwise been entitled to receive and (y) the average high and low trading
price of WWC Common Stock as reported by the NYSE Composite Tape or the average
bid and asked price of WWC Common Stock as quoted on the NMS, as appropriate,
for each of the ten (10) consecutive trading days ending two (2) trading days
immediately prior to the date on which the Exchange occurs. In the event WWC
Common Stock is delivered to Xxxx Inlet pursuant to this Section 11.2.2, such
shares of WWC Common Stock shall be delivered in accordance with Section 11.2.7
hereof, substituting "WWC Common Stock" for "VWC Common Stock" thereunder.
11.2.3 To cause an Exchange, Xxxx Inlet shall deliver an
irrevocable written notice of the same (an "Exchange Notice") to VWC by 5:00
p.m. Pacific time on the 30th day from the Exchange Date (such thirty (30)-day
period shall be "the Exchange Period"); provided that if as of such time on such
30th day Xxxx Inlet shall not have elected to cause the Exchange then the
Exchange Rights for Xxxx Inlet shall then immediately terminate.
11.2.4 If, immediately prior to an Exchange fewer than all of the
Licenses have passed the period by which, under the FCC Rules, the Licenses may
be held by a Person other than a Designated Entity, the Members shall form a new
company (the "New Company" ), under the terms and conditions described below,
and shall transfer, subject to the consent of the FCC, to the New Company all of
the Licenses (and all corresponding assets, liabilities, capital accounts, and
rights) other than the Licenses for which such period has run.
11.2.5 The New Company shall be a limited liability company
organized under the Act and shall be governed by a limited liability company
agreement that is identical to this Agreement, except that the agreement shall
provide that, in the event of any bona fide offer from a Third Party to purchase
all or substantially all of the assets of the New Company or to purchase the
interests in the New Company of any member of the New Company, VoiceStream shall
have a right of first refusal to purchase, at eighty-five percent (85%) of the
offer price included in the bona fide offer, such assets or interest. The New
Company shall have materially the same contract rights as the Company.
11.2.6 VWC, WWC and Xxxx Inlet agree to structure, to the extent
reasonably possible, the Exchange in a way that is tax free to Xxxx Inlet,
VoiceStream, VWC, and, if applicable, WWC. Such structure may include a stock
exchange that includes the stock of a special purpose corporation holding the
Interest of Xxxx Inlet; provided, however, that in doing so there are no
negative tax or accounting attributes of such an Exchange that adversely impact
VoiceStream, VWC, or WWC to a greater extent than would be experienced in a
direct exchange for an Interest (other than the receipt of a carry over basis
due to the tax free nature of the transaction), as determined in utmost good
faith by VWC and WWC in their reasonable discretion.
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11.2.7 Upon receipt of an Exchange Notice during the Exchange
Period, and if VWC Common Stock is listed or admitted for quotation on the NMS
or the NYSE, then WWC and VWC agree that VWC shall issue to Xxxx Inlet, as soon
as reasonably practicable but in any event no later than sixty (60) days
following delivery of the Exchange Notice (the "Outside Delivery Date") the
shares of VWC Common Stock issuable pursuant to Section 11.2.1, subject to
Sections 11.3 and 11.4, provided that at the time of such issuance (i) such
shares must be duly authorized, validly issued, fully paid and non-assessable
and free and clear of all liens, claims and encumbrances or preemptive or
similar rights, (ii) such shares must be delivered in compliance with Federal
and state securities laws, (iii) such shares are subject to an effective
registration statement under the Securities Act of 1933, as amended (the
"Securities Act") covering the offer and sale of such shares by Xxxx Inlet (the
"Registration Statement") from time to time in negotiated transactions, in
market transactions or otherwise and (iv) such shares are registered or
qualified for offer of sale by Xxxx Inlet under the securities or blue sky laws
of such States as Xxxx Inlet shall reasonably request. VWC covenants and agrees
that it shall (x) prepare and file with the Securities and Exchange Commission
such amendments as may be necessary to keep the Registration Statement effective
until the earlier of the date all of such shares have been sold by Xxxx Inlet or
the date all of such shares are freely tradable without registration or
restriction (under Rule 144(k) promulgated under the Securities Act or
otherwise), but not before the expiration of the 90-day period referred to in
Section 4(3) of the Securities Act and Rule 174 promulgated thereunder, (y)
cause each such state securities or blue sky registration or qualification to
remain effective during the period the Registration Statement is required to be
kept effective hereunder, and (z) cause the shares covered by the Registration
Statement, by the date of the first sale by Xxxx Inlet thereunder, to be listed
or admitted for trading on each securities exchange (or, if applicable, the NMS)
on which VWC Common Stock is then listed or admitted for trading. In the event
that it is not possible for VWC to deliver shares to Xxxx Inlet in accordance
with the requirements of this Section 11.2.7, VWC shall enter into a
Registration Rights Agreement in the form and substance of the agreement
attached hereto as Exhibit D, which the parties hereby agree shall be amended to
give Xxxx Inlet the benefit of the terms of any registration rights agreements
entered into with other shareholders of VWC subsequent to the date of this
Agreement and prior the date of the Exchange Notice, provided that no such
amendment shall reduce or diminish any of the rights of Xxxx Inlet as set forth
in the form attached hereto as Exhibit D.
11.3 Increase or Combination of VWC or WWC Common Stock. If at any time
VWC or WWC (a) pays a dividend or makes a distribution in shares of its capital
stock or securities convertible or exchangeable for shares of its capital stock,
(b) issues by reclassification, or (c) subdivides (by any stock split,
recapitalization or otherwise) one or more classes of its outstanding shares of
VWC Common Stock or WWC Common Stock, into a greater number of shares, the
exchange ratio in effect immediately prior to such increase shall be adjusted
proportionately, and if VWC or WWC, as applicable, at any time combines (by
reverse stock split or otherwise) one or more classes of its outstanding shares
of common stock into a smaller number of shares, the exchange ratio in effect
immediately prior to such combination shall be
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adjusted proportionately, in each case, to allow Xxxx Inlet the full benefit and
effect of the increase or combination as if the Interest of Xxxx Inlet had been
exchanged for VWC Common Stock or WWC Common Stock immediately prior to the
increase or combination, as the case may be.
11.4 Reorganization, Reclassification, Consolidation, Merger or Sale.
VWC and WWC will not effect any Organic Change unless prior to the consummation
thereof, the successor entity (the "Successor Entity") (if other than VWC or
WWC) resulting from the Organic Change assumes by written instrument (in form
and substance reasonably satisfactory to Xxxx Inlet) the obligation to deliver
to Xxxx Inlet such cash, shares of stock, securities or assets or other
consideration of Xxxx Inlet may be entitled to acquire hereunder. In addition,
prior to such Organic Change, VWC or WWC, as the case may be, shall make
appropriate provisions (in form and substance reasonably satisfactory to Xxxx
Inlet) to insure that Xxxx Inlet continues to have the benefit of Sections 11.3
and 11.4 hereunder with respect to increases or combinations of the Successor
Entity's securities or Organic Changes of such Successor Entity. In particular,
VWC and WWC shall insure that at the Exchange Date Xxxx Inlet shall have the
right to exchange its Interest for securities, assets or other consideration
comparable to that which Xxxx Inlet would have received if Xxxx Inlet had
effected the Exchange immediately prior to such Organic Change in accordance
with the following:
11.4.1 In the event that through the Organic Change the Successor
Entity provides VWC or WWC shareholders with cash consideration, then the
Successor Entity shall, upon a subsequent Exchange, pay to Xxxx Inlet that
amount of cash Xxxx Inlet would have received if it had been a holder of VWC or
WWC Common Stock, as the case may be, at the time of the Organic Change (the
"Cash Consideration"), plus such amount of cash as is necessary to insure that
Xxxx Inlet receives, upon such Exchange, interest on such amount at an annual
rate equal to the yield, as of the date of the Organic Change, on the U.S.
Treasury security with a maturity date as close as practicable to the Exchange
Date plus 500 basis points (the "Guaranteed Rate") from the date of the Organic
Change to the date of the Exchange; provided, that the Successor Entity shall
establish and maintain, at its sole cost and expense, a letter of credit from a
reputable financial institution on terms, each reasonably satisfactory to Xxxx
Inlet (including without limitation Xxxx Inlet's ability to draw on such letter
of credit upon delivery of appropriate notice to such financial institution) to
secure the Successor Entity's obligation under this Section 11.4.1 to Xxxx Inlet
upon any such Exchange, which letter of credit shall remain outstanding from the
date of such Organic Change through the close of the Exchange Period. For
example, if in the event of a VWC Organic Change, the Successor Entity provides
VWC shareholders with XX Dollars of cash for every one (1) share of VWC Common
Stock, then for each $65,000 of cash invested by Xxxx Inlet in the Company
pursuant to Exhibit A on or before the Exchange Date, Xxxx Inlet shall receive
XX Dollars upon an Exchange, plus interest accumulated on XX Dollars at the
Guaranteed Rate from the date of the Organic Change to the Exchange Date.
11.4.2 In the event that through the Organic Change the Successor
Entity
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provides VWC or WWC shareholders with shares of stock, securities, assets or
other non-cash consideration ("Non-cash Consideration") then the Successor
Entity shall reserve for Xxxx Inlet such Non-cash Consideration in the amount
that Xxxx Inlet would have received if it had been a holder of VWC or WWC Common
Stock, as the case may be, at the time of the Organic Change. During the six
(6)-month period following the date of the Organic Change and during the thirty
(30)-day period beginning on the date that is two (2) years prior to the
Exchange Date, Xxxx Inlet may elect (a "Cash Election") to cause Successor
Entity, in lieu of reserving such Non-cash Consideration, to pay to Xxxx Inlet,
upon a subsequent Exchange, an amount of cash equal to the fair market value of
such Non-cash Consideration as of the date of the Cash Election, plus such
amount of cash as is necessary to insure that Xxxx Inlet receives, on the date
of such an Exchange, interest on such amount at the Guaranteed Rate from the
date of the Cash Election to the date of such Exchange; provided, that the
Successor shall establish and maintain, at its sole cost and expense, a letter
of credit from a reputable financial institution on terms, each reasonably
satisfactory to Xxxx Inlet (including without limitation Xxxx Inlet's ability to
draw on such letter of credit upon delivery of appropriate notice to such
financial institution) to secure the Successor Entity's obligation under this
Section 11.4.2, which letter of credit shall remain outstanding from the date of
such Organic Change through the close of the Exchange Period. For example, if in
the event of a VWC Organic Change the Successor Entity provides VWC shareholders
with two (2) shares of Successor Entity stock for every one (1) share of VWC
stock, then for each $65,000 of cash invested by Xxxx Inlet in the Company
pursuant to Exhibit A on or before the Exchange Date, Xxxx Inlet shall have the
right to receive two (2) shares of Successor Entity stock upon an Exchange with
the option of requiring the Successor Entity to establish a letter of credit in
accordance with the provisions hereof. Notwithstanding the foregoing, Xxxx Inlet
shall not have a Cash Election with respect to Non-Cash Consideration received
in certain Organic Changes described in a letter agreement between Xxxx Inlet
and VWC dated as of this Agreement (the "Listed Transactions") and, in addition,
with respect to the other Organic Changes specified in such letter agreement
(the "Approved Acquisitions"), provided that with respect to the Approved
Acquisitions, following such an Organic Change and for a period of one (1) year
thereafter (a) a majority of the Board of Directors of the Successor Entity is
comprised of individuals who were directors of VWC prior to such Organic Change
or are otherwise reasonably acceptable to Xxxx Inlet, and (b) Xxxx Xxxxxxx is
the Chairman of the Board of Directors of the Successor Entity.
11.4.3 In the event that through the Organic Change the Successor
Entity provides VWC or WWC shareholders with a combination of Non-cash
Consideration and Non-cash Consideration, Section 11.4.1 shall apply to that
portion of consideration that is Cash Consideration, and Section 11.4.2 shall
apply to that portion of consideration that is Non-cash Consideration.
11.4.4 In the event the Successor Entity is a Designated Entity
(as defined by the FCC Rules) then the Exchange Date, and Xxxx Inlet's Exchange
Rights pursuant thereto under this Agreement and in particular this Article 11,
shall be accelerated to the later of (i) that date on which the Organic Change
becomes effective and (ii) five (5) business days following the date
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VWC has provided to Xxxx Inlet (a) notice that the Exchange Date is to be
accelerated in accordance with this provision and (b) an opinion of counsel,
which counsel and opinion shall be satisfactory to Xxxx Inlet, opining that the
Successor Entity is a Designated Entity under the FCC Rules.
11.5 Recapture of Bidding Credits and Acceleration of FCC Obligations.
In the event that an Exchange results in either (a) the recapture by the FCC of
any bidding credits or other discounts received by the Company with respect to
the award of Licenses in connection with the Auction, or (b) the acceleration of
any obligation or debt owed to the FCC in connection with the Auction, the
Company solely shall be liable to the FCC for such amounts.
11.6 Representations and Warranties. WWC and VWC jointly and severally
represent and warrants to and covenant with Xxxx Inlet as follows:
11.6.1 VWC is a corporation duly organized, validly existing and
in good standing under the laws of Delaware. VWC has all requisite corporate
power and authority and any necessary governmental approval to own, lease and
operate its properties and to carry on its business as now being conducted or as
proposed to be conducted following the Spin-Off (as defined in Section 11.6.4
below). VWC is duly qualified or licensed and in good standing to do business in
each jurisdiction in which the character of the property owned, leased or
operated by it or the nature of the business conducted by it makes such
qualification or licensing necessary. VWC has provided to Xxxx Inlet accurate
and complete copies of its Certificate of Incorporation and Bylaws as currently
in effect.
11.6.2 As of the date hereof and at the date of the Spin-Off, the
authorized capital stock of VWC consists of 50,000 shares of VWC Common Stock,
$0.001 par value, of which 12,484 shares are currently issued and outstanding,
and 10,000 shares of VoiceStream Preferred Stock, $0.001 par value, of which
none is currently issued and outstanding. WWC owns 10,000 shares of VWC Common
Stock and Xxxxxxxxxx Telecommunications PCS (USA) Limited owns 2,484 shares of
VWC Common Stock. No other capital stock of VWC Common Stock are duly
authorized, validly issued, fully paid and non-assessable and free of preemptive
or similar rights. As of the date hereof and at the date of the Spin-Off, there
are no outstanding rights, subscriptions, warrants, puts, calls, unsatisfied
preemptive rights, options or other agreements of any kind relating to any of
the VWC Common Stock, and there is no authorized or outstanding security of any
kind convertible into or exchangeable for any such VWC Common Stock.
11.6.3 VWC has made available to Xxxx Inlet true and complete
copies of its most recent audited financial statements and unaudited interim
financial statements (the "Historical Financial Statements"), copies of which
are attached hereto as Exhibit A. The Historical Financial Statements have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis (except as may be indicated therein or in the notes thereto)
and present fairly, in all material respects, the consolidated financial
position of VWC as at the dates thereof and the results of its operations and
cash flows for the periods then
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ended subject, in the case of unaudited interim financial statements, to normal
year-end audit adjustments. Except as disclosed in writing to Xxxx Inlet, since
December 31, 1997, VWC has conducted and will conduct its business only in the
ordinary course and in a manner consistent with past practice and since such
date, there has not been (i) any material adverse effect on the business,
assets, financial condition, liabilities or results of operations of VWC, (ii)
any material damage or loss to any material asset or property not covered by
insurance, (iii) any change in accounting principles or practices, (iv) any
revaluation of any material assets or liabilities other than in the ordinary
course of business or (v) any entry by VWC into any commitment or transactions
material to VWC (other than commitments or transactions entered into in the
ordinary course of business).
11.6.4 WWC currently intends to make a distribution of all of the
shares of VWC stock owned by it to the holders of its Class A Common Stock and
Class B Common Stock (the "Spin-Off"), subject to approval of the Board of
Directors of WWC and other applicable approvals. VWC currently owns, and at the
time of the Spin-Off will own, materially all of the assets, contracts, licenses
and rights relating to the PCS business owned by WWC and its subsidiaries and
affiliates.
11.7 Restriction on Sale of VWC Securities. At any time prior to the
Spin-Off, VWC may not issue to its existing shareholders or its or their
Affiliates any shares of its capital stock or securities convertible or
exchangeable for shares of its capital stock for less than $100,000 per share,
in the case of VWC Common Stock, or for less than fair market value (measured
taking into account a value of $100,000 per share for VWC Common Stock) for such
other capital stock or securities.
11.8 Inability to Provide an Exchange. Provided that Xxxx Inlet has
performed all of its obligations under this Article and this Agreement, it shall
be a breach of this Agreement by VoiceStream, VWC and, only to the extent
Section 11.2.2 is applicable, WWC, if Xxxx Inlet is unable to effect an
Exchange, in accordance with the terms and conditions of this Article 11 and
this Agreement. None of VoiceStream, VWC or WWC shall take any action or engage
in any transaction that might reasonably be deemed to have the effect of
frustrating Xxxx Inlet's right to consummate the Exchange upon the terms set
forth in this Article XI.
ARTICLE XII
GENERAL PROVISIONS
12.1 Amendment of Agreement.
12.1.1 Except as otherwise provided in this Section 12.1, this
Agreement may be amended, in whole or in part, only with the unanimous written
consent of the Class A Member and the Class B Member.
12.1.2 The written consent of each Member adversely affected
thereby shall be
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required for any amendment which would:
12.1.2.1 increase the obligation of such Member to make
any contribution to the capital of the Company,
12.1.2.2 reduce the Capital Account of such Member other
than in accordance with Article IV,
12.1.2.3 change the provisions of Articles III, IV, or
XIII to alter any such Member's rights with respect to allocation of Profit and
Loss or with respect to distributions.
12.1.3 The unanimous written consent of all of the Members shall
be required for any amendment that would cause the Company to cease to be a
limited liability company under and pursuant to the Act or that would amend the
provisions of this Section 12.1 for amending this Agreement.
12.1.4 The Manager may without the consent of any other Members:
12.1.4.1 amend Exhibit A to reflect any change required to
be made therein pursuant to this Agreement;
12.1.4.2 restate this Agreement together with any
amendments hereto which have been duly adopted in accordance herewith, to
incorporate such amendments in a single, integrated document;
12.1.4.3 amend this Agreement (other than with respect to
the matters set forth in Sections 12.1.2 and 12.1.3) to effect compliance with
any applicable law or regulation;
12.1.4.4 amend this Agreement to increase the
representations, duties or obligations of the Manager or to surrender any right
or power granted to the Manager herein; and
12.1.4.5 amend this Agreement to correct any printing,
stenographic or clerical errors or omissions, in order that this Agreement shall
accurately reflect the agreement among the Members hereto.
12.1.5 The Manager shall give prior written notice of any
proposed amendment to this Agreement to all of the Members, which notice shall
set forth the text of the proposed amendment.
12.2 Special Power-of-Attorney.
12.2.1 Each Member hereby irrevocably makes, constitutes and
appoints the Manager, acting singly, with full power of substitution, the true
and lawful representative and attorney-in-fact of, and in the name, place and
stead of such Member, with the power from time
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to time to make, execute, sign, acknowledge, swear to, verify, deliver, record,
file and or publish:
12.2.1.1 any amendment to this Agreement which complies
with the provisions of this Agreement (including the provisions of Section
12.1);
12.2.1.2 the Certificate of Formation and any amendment
thereof required because this Agreement is amended, including, without
limitation, an amendment to effectuate any change in the membership of the
Company or in the Capital Contributions of the Members; and
12.2.1.3 all such other instruments, documents and
certificates which, in the opinion of legal counsel to the Company, may from
time to time be required by the laws of the United States of America, the state
of Delaware, or any other jurisdiction in which the Company shall determine to
do business, or any political subdivision or agency thereof, or which such legal
counsel may deem necessary or appropriate to effectuate, implement and continue
the valid and subsisting existence and business of the Company as a limited
liability company.
12.2.2 Each Member is aware that the terms of this Agreement
permit certain amendments to this Agreement to be effected and certain other
actions to be taken or omitted by or with respect to the Company without its
consent. If an amendment of the Certificate of Formation or this Agreement or
any action by or with respect to the Company is taken by the Manager in the
manner contemplated by this Agreement, each Member agrees that, notwithstanding
any objection that such Member may assert with respect to such action, the
Manager is authorized and empowered, with full power of substitution, to
exercise the authority granted above in any manner which may be necessary or
appropriate to permit such amendment to be made or action lawfully taken or
omitted. Each Member is fully aware that each Member will rely on the
effectiveness of this special power-of-attorney with a view to the orderly
administration of the affairs of the Company. This power-of-attorney is a
special power-of-attorney and is coupled with an interest in favor of the
Manager and as such:
12.2.2.1 shall be irrevocable and continue in full force
and effect notwithstanding the subsequent death or incapacity of any party
granting this power-of-attorney, regardless of whether the Company or the
Manager shall have had notice thereof; and
12.2.2.2 shall survive the delivery of an assignment by a
Member of the whole or any portion of its Interest in the Company, except that
where the assignee thereof has been approved by the Manager for admission to the
Company as a substituted Member pursuant to Article VI, this power-of-attorney
given by the assignor shall survive the delivery of such assignment for the sole
purpose of enabling the Manager to execute, acknowledge and file any instrument
necessary to effect such substitution.
12.3 Notices. Notices which may or are required to be given under this
Agreement by any party to another shall be given by hand delivery, or by
registered or certified mail, return receipt requested by reputable overnight
delivery service or by facsimile. Notices shall be
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addressed to the respective parties hereto at their addresses as set forth on
Exhibit A or to such other addresses as may be designated by any party hereto by
notice addressed to the other parties. Notices shall be deemed to have been
given when delivered by hand, on the date indicated as the date of receipt on
the return receipt, two (2) business days after being sent by reputable
overnight delivery service, and when acknowledged if sent by facsimile.
12.4 Agreement Binding Upon Successors and Assigns. This Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors, but the rights and obligations of the Manager hereunder
shall not be assignable, transferable or delegable except as provided in Section
5.1.5 and Article VI, and any attempted assignment, transfer or delegation
thereof which is not made pursuant to the terms of Section 5.1.5 and Article VI
shall be void.
12.5 Governing Law. This Agreement, and the rights of the Members
hereunder, shall be governed by and construed in accordance with the laws of the
state of Delaware, without regard to the conflict of laws rule thereof.
12.6 Consents. Any and all consents, agreements or approvals provided
for or permitted by this Agreement shall be in writing and a signed copy thereof
shall be filed and kept with the books of the Company.
12.7 Legends. If certificates for any Interest or Interests of the
Company are issued that evidence an Interest in the Company, each such
certificate shall bear such legends as may be required by applicable federal and
state laws, or as may be deemed necessary or appropriate by the Manager to
reflect restrictions upon transfer contemplated herein.
12.8 Entire Agreement. This Agreement represents the entire agreement
among the parties with respect to the transactions contemplated herein and
supersedes all prior agreements, written or oral, with respect thereto. This
Agreement may be amended only in accordance with Section 12.1. The captions are
for convenience only and shall not be considered a part of or affect the
construction or interpretation of any provision of this Agreement.
12.9 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original hereof.
12.10 Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement; provided that the parties shall, in good faith, negotiate
fair market-based compensation to any party which loses rights hereunder
pursuant to such interpretation.
12.11 Intended Compliance; Savings Clause. Notwithstanding anything in
this Agreement to the contrary, if the possession or exercise of any right of
the parties set forth in this
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Agreement would cause the Company to violate any applicable laws, including,
without limitation, any FCC Rules, as in effect from time to time, or result in
an adverse regulatory action or ruling by the FCC, such right shall be deemed
not to exist; provided that the Members shall, in good faith, negotiate fair
market-based compensation to any party which loses any right hereunder pursuant
to such right being deemed not to exist.
12.12 Liability of Manager Limited to Assets. Under no circumstances
will any director, officer, shareholder, member, manager, partner, employee,
agent or Affiliate of the Manager have any personal responsibility for any
liability or obligation of the Manager (whether on a theory of alter ego,
piercing the corporate veil, or otherwise), and any recourse permitted under
this Agreement or otherwise of the Members, any former Member or the Company
against a Manager will be limited to the assets of the Manager as they may exist
from time to time.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
XXXX INLET GSM, INC.
--------------------------------------
By:
WESTERN PCS BTA I CORPORATION
--------------------------------------
By:
VOICESTREAM WIRELESS CORPORATION
--------------------------------------
By:
WESTERN WIRELESS CORPORATION
--------------------------------------
By:
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EXHIBIT A
MEMBERS
OF
XXXX INLET/VOICESTREAM PCS, LLC
FEBRUARY 11, 1999
MAXIMUM REQUIRED
MEMBER/ADDRESS CAPITAL CONTRIBUTION AMOUNT PERCENTAGE
-------------- --------------------------- ----------
CLASS A MEMBER
XXXX INLET
GSM, INC. $35,000,000* 50.1%
0000 "X" Xxxxxx
Xxxxxxxxx, Xxxxxx 00000
Attn: Vice President
Telephone: (000) 000-0000
Fax: (000) 000-0000
Taxpayer ID Number:
CLASS B MEMBER
WESTERN PCS BTA I
CORPORATION $50,000,000* 49.9%
0000 000xx Xxxxxx XX
Xxxxxxxx, XX 00000
Attention: General Counsel
Telephone: (000) 000-0000
Fax: (000) 000-0000
Taxpayer ID Number:
* Capital Contributions shall be made in accordance with the following:
1. The first capital call shall be for $50,000,000, and each Member shall
make a $25,000,000 capital contribution in response to such capital
call.
2. If the Company determines that a second capital call is required, the
second capital call shall be for $20,000,000, and each Member shall make
a $10,000,000 capital contribution in response to such capital call.
3. If the Company determines that a third capital call is required, the
Class B Member shall
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make a capital contribution in the amount of not more than $15,000,000
in response to such capital call.
4. In the event that capital contributions made by the Members exceed 110%
of the cost of the acquired Licenses, the Manager shall return to the
Members such capital contributions in excess of 110% of the cost of the
acquired Licenses. The return of capital as provided in the foregoing
sentence shall be made to each Member as follows:
(a) in the event that total capital calls have exceeded $70,000,000, the
Manager shall return capital to the Class B Member until the total of
all remaining capital contributed equals $70,000,000
(b) for the remainder of any capital to be returned to the Members, the
Manager shall return capital to each Member in the same proportion as
each Member contributed to the total capital contributions.
Any return of capital to the Members pursuant to this paragraph shall
not be considered a distribution in accordance with Article IV of the
Agreement.
5. The amount of the initial contribution, or so much thereof as is made
from time to time, of each Member shall be recorded by the Manager as a
contribution to the capital of the Company at the time the same is made,
but no capital contribution shall in any way affect the Member's
Interest.
6. Each Member shall contribute capital to the Company at the times and in
such amounts as may be called for by the Manager (subject to the
provisions of this Exhibit A). In no event shall the Manager give less
than three (3) business days' notice of a capital call.
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EXHIBIT B
CERTIFICATE OF FORMATION
OF
XXXX INLET/VOICESTREAM PCS, LLC
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EXHIBIT C
INITIAL BUDGET
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EXHIBIT D
FORM OF REGISTRATION RIGHTS AGREEMENT
