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LIMITED LIABILITY COMPANY
OPERATING AGREEMENT
OF
FIBERNET EQUAL ACCESS, L.L.C.
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS.............................1
1.1 Reference to Statute.......................................1
1.2 Majority...................................................1
ARTICLE II
FORMATION..............................1
2.1 Date Filed.................................................1
2.2 Name.......................................................2
2.3 Purpose....................................................2
2.4 Principal Place of Business................................2
2.5 Agents.....................................................2
2.6 Dissolution Date...........................................2
ARTICLE III
MEMBERS / MANAGERS..........................2
3.1 Management Vested in Members...............................2
3.2 Two Classes of Membership Interest.........................2
3.3 Voting In New Members......................................2
3.4 Books and Records..........................................3
3.5 Inspection of Books and Records............................3
3.6 Liability of Members.......................................3
3.7 Sale or Transfer of Assets.................................3
3.8 Election of Managers; Powers and Liabilities...............3
3.9 Right to Transfer Membership Interest......................5
3.10 Notice of Proposed Transfer................................5
3.11 Withdrawal of Member.......................................5
ARTICLE IV
MEETINGS...............................6
4.1 Annual and Special Meetings................................6
4.2 Notice of Meetings.........................................6
4.3 Quorum.....................................................6
4.4 Vote by Proxy..............................................6
4.5 Consents in Writing........................................7
4.6 Effectiveness of Written Consents..........................7
4.7 Voting Trusts..............................................7
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ARTICLE V
MONEY MATTERS............................7
5.1 Capital Contributions......................................7
5.2 Member Capital Accounts....................................7
5.3 Maintenance of Capital Accounts............................8
5.4 Priority of Distributions..................................8
5.5 Unlawful Distributions.....................................8
5.6 Payment of Debts before Distribution.......................9
5.7 Allocation of Profits, Losses, Credits and Distributions...9
5.8 Tax Allocations: Section 704(c) of the Internal Revenue
Code .....................................................10
5.9 No Right to Interest or Return of Capital Contribution....10
5.10 Tax Returns...............................................10
5.11 Internal Revenue Code Elections...........................10
5.12 Prohibition on Subchapter K Exclusion.....................11
5.13 Designation of Tax Matters Partner........................11
ARTICLE VI
DISSOLUTION............................11
6.1 Events Causing Dissolution................................11
6.2 Winding up the Affairs of the Company.....................12
6.3 Distribution of Assets Upon Dissolution...................12
6.4 Filing of Certificate of Dissolution......................12
6.5 Effect on Capital Accounts................................12
6.6 Return of Capital Contribution............................13
ARTICLE VII
GENERAL CONSTRUCTION........................13
7.1 Genders...................................................13
7.2 Waiver of Rights and Remedies.............................13
7.3 Entire Agreement..........................................13
7.4 Notice....................................................13
SCHEDULE A: Membership Interests in FiberNet Equal Access, L.L.C.
SCHEDULE B: Management of FiberNet Equal Access, L.L.C.
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OPERATING AGREEMENT
This Operating Agreement, dated as of December 16, 1996, by and between
the undersigned members, is hereby adopted as the written operating agreement
("Operating Agreement") of FiberNet Equal Access, L.L.C. ("Company").
WHEREAS, this agreement does not contain any provisions inconsistent with
the Articles of Organization of the Company, and
WHEREAS, the members wish to set forth provisions relating to the business
of the Company, the conduct of its affairs and the rights, powers, preferences,
limitations or responsibilities of its members, managers, employees or agents,
as the case may be,
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the undersigned agree as follows:
ARTICLE I
DEFINITIONS
1.1 Reference to Statute. Words and phrases set forth within this
Operating Agreement which relate to the business of the Company or the conduct
of its affairs or the rights, powers, preferences, limitations or
responsibilities of its members, managers, employees or agents, as the case may
be, or to any matter which the Company is required to do or has done under
mandate of law or the fulfillment of this Operating Agreement, which are not
defined in this Operating Agreement, shall be defined as they have been defined
in Section 102 of the New York Limited Liability Company Law ("NYLLC Law") or in
other applicable statutes or rulings.
1.2 Majority means, with respect to a class of Membership Interest, a
majority of the interest in that class. A "Two-Thirds Majority" of a class means
at least two-thirds of the interest in that class.
ARTICLE II
FORMATION
2.1 Date Filed. The undersigned have authorized the formation of the
Company by an organizer who prepared, executed and filed with the New York
Secretary of State, the Articles of Organization pursuant to the NYLLC Law, on
the 16th day of December, 1997.
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2.2 Name. The name of the Company is FiberNet Equal Access, L.L.C.
2.3 Purpose. The Company is formed for the business of conducting and
developing premises telecommunications systems and any other lawful business
purpose and shall have all the powers set forth in Sections 202(a) - 202(q) of
the NYLLC Law.
2.4 Principal Place of Business. The principal place of business of the
Company shall be located in the County of New York, New York.
2.5 Agents. The Secretary of State of New York is designated as agent of
the Company upon whom process against it may be served, and the post office
address to which the Secretary of State shall mail a copy of such process
against the Company served upon the Secretary of State is: Xxxxxxxx X.
Xxxxxxxxxx, Esq., 000 Xxxxxxxx. Xxxxx 000, Xxx Xxxx, Xxx Xxxx 00000.
2.6 Dissolution Date. The Company shall dissolve on December 31, 2016,
unless sooner dissolved pursuant to this Agreement or pursuant to the provisions
of the NYLLC Law.
ARTICLE III
MEMBERS / MANAGERS
3.1 Management Vested in Members. Unless specifically set forth otherwise
in the Articles of Organization or by amendment thereto, management of the
Company shall be vested in the members of the Company ("Members"), who shall be
subject to all of the rights, duties, privileges and liabilities of managers, as
set forth in the NYLLC Law. The names and addresses of such Members and the
interests held by them are set forth in Schedule A to this Operating Agreement.
3.2 One Class of Membership Interest. There shall be one class of interest
in the Company ("Membership Interest").
3.3 Voting In New Members. The vote of a Majority of the Membership
Interest shall be required to admit a person as a new Member and issue such
person a Membership Interest in the Company. Such new Member shall not be
entitled to any retroactive allocation of income or losses, or taxable
deductions heretofore incurred by the Company.
3.4 Books and Records. The Company shall keep books and records pursuant
to Section 1102 of the NYLLC Law, either in written form or in other than
written form if easily converted into such written form within a reasonable
time. Such books and records
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shall be maintained on a cash basis pursuant to this Operating Agreement and the
accounting year of the Company shall end on December 31.
3.5 Inspection of Books and Records. Each Member may inspect and copy, at
his or her own expense, for any purpose reasonably related to such Member's
interest as a Member, the Articles of Organization, the Operating Agreement,
minutes of any meeting of Members and all tax returns or financial statements of
the Company for the three years immediately preceding such inspection, and other
information regarding the affairs of the Company as is just and reasonable.
3.6 Liability of Members. No Member shall be personally liable for any
debts, obligations or liabilities of the Company or of any other Member, solely
by reason of being a Member of the Company, whether such debt arose in contract,
tort or otherwise. However, such Member shall be personally liable for the
payment of his or her capital contribution, as required by Section 5.1, or for
any other matter which may be set forth in this Operating Agreement. A Member
shall have the option to waive such limitation of liability pursuant to Section
609 of the NYLLC Law and may be legally liable pursuant to other applicable law
in his or her capacity as a Member.
3.7 Sale or Transfer of Assets. The vote of a Two-Thirds Majority of the
Membership Interest shall be required to approve the sale, exchange, lease,
mortgage, pledge or other transfer or disposition of all or substantially all of
the assets of the Company.
3.8 Election of Managers; Powers and Liabilities. The management of the
Company shall be vested in one or more Members acting in the capacity of
managers ("Managers"), in accordance with the NYLLC Law, the Articles of
Organization and the Operating Agreement. The initial Managers and the offices
held by them shall be as set forth in Schedule B to this Operating Agreement.
(a) The names and addresses of the Managers are set forth in the
books and records of the Company. The salary of the Managers shall be
fixed by the vote or written consent of a Majority of the Membership
Interest. Such salary as Manager shall be separate and distinct from any
distributions made to the Manager as a Member.
(b) Managers shall be elected by vote or written consent of a
Majority of the Voting Interest. The number of Managers may be amended by
vote or written consent of a Two-Thirds Majority of the Membership
Interest.
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(c) A Manager shall hold office until the next annual meeting of
Members or until his or her earlier resignation or removal. Any Manager
may resign at any time by the giving of written notice thereof to the
Company, provided, however, that there is no violation of any provision of
the Operating Agreement or any provision of a contractual agreement
between the Company and the Manager. The Manager may be removed with or
without cause by a vote of a Majority of the Membership Interest. The
removal or resignation of a Manager who is a Member does not affect in any
way such Manager's rights, duties, privileges and obligations as a Member,
nor does it constitute withdrawal as a Member.
(d) Any vacancy occurring in the number of Managers may be filled by
vote or written consent of a Majority of the Membership Interest. Such
newly elected Manager shall be elected to serve the unexpired term of the
predecessor Manager. If the number of Managers is increased by amendment
to this Operating Agreement, then the additional Managers shall be elected
by vote or written consent of a Majority of the Membership Interest.
(e) The Managers shall have the power and authority on behalf of the
Company to do all things as set forth in Sections 202(a) - 202(q) of the
NYLLC Law.
(f) No Member, by reason of being a Member, is an agent of the
Company for the purpose of its business unless (i) the Member is a Manager
or (ii) authority has been delegated to such Member by the Manager or by
some other provision of this Operating Agreement.
(g) Each Manager shall perform his or her duties as a Manager in
good faith and with that degree of care which a reasonable and prudent
person in a like position would use under similar circumstances. Each
Manager's liability to the Company or to its Members for damages for any
breach of duty in such capacity is eliminated, except if there is a final
judgment or adjudication adverse to the Manager that established that his
or her acts or omissions were in bad faith or involved intentional
misconduct or a knowing violation of law or that the Manager personally
gained in fact a financial profit or other advantage to which he or shewas
not legally entitled or with respect to a distribution subject to Section
508(a) of the NYLLC Law.
(h) No Manager shall be required to manage the Company as his or her
sole business interest but may, without liability to the Company or its
Members, be involved in the management of other entities and activities
which do not adversely
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affect the capacity of the Manager to exercise his or her obligations to
the Company; nor shall the Company or its Members have any right to
participate in such other business interests or in income or profits
therefrom.
3.9 Right to Transfer Membership Interest. Except as set forth in this
Operating Agreement, no Member shall have the unconditional right to give, sell,
assign, pledge, hypothecate, exchange or otherwise transfer ("Transfer") to
another, all or any part of his or her Membership Interest in the Company. Prior
to a Member securing the right to Transfer all or part of the Member's
Membership Interest in the Company to another, such Member must secure the
consent by vote or in writing of a Majority of the Membership Interest. Nothing
herein shall be deemed to prevent a Member from granting to the person receiving
the Transfer the right to become a Member upon condition that Section 604 of the
NYLLC Law is satisfied.
3.10 Notice of Proposed Transfer. The Member who desires to Transfer a
Membership Interest shall give written notification of the proposed Transfer to
the Managers of the Member's intention to sell his or her Membership Interest.
Each other Member shall have the right of first refusal to purchase all of such
Membership Interest upon such terms and conditions as were set forth in the
notification of the proposed Transfer. Nothing herein shall be deemed to prevent
all of the remaining Members, if they so desire, from accepting the terms of the
notification of proposed Transfer, in writing, on behalf of all of such
remaining Members. The failure to respond to the Member seeking to Transfer a
Membership Interest within 30 days shall result in the termination of the right
of first refusal. Should one or more Members desire to exercise the right of
first refusal on the terms set forth in the written notification of Transfer,
then the time, place and date of closing as designated by the Members purchasing
such Membership Interest shall be within 90 days from the date of written
consent to exercise the right of first refusal.
3.11 Withdrawal of Member. A Member may withdraw as a Member of the
Company with the vote or written consent of a Two-Thirds Majority of the
Membership Interest. If such consent is not given, a Member may withdraw upon
not less than six months prior written notice to the Company, provided such
withdrawal does not breach this Operating Agreement, the NYLLC Law or any other
contractual obligation between such proposed withdrawing Member and the Company
or its other Members. Should such breach occur, then the withdrawing Member may
be liable for damages as a result thereof.
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ARTICLE IV
MEETINGS
4.1 Annual and Special Meetings. The Company shall hold its annual meeting
of Members at such time as shall be determined by vote or written consent of a
Majority of the Membership Interest, either within the State of New York or at
such other place as determined by a vote or written consent of a Majority of the
Membership Interest for the purpose of transacting such business as may come
before such meeting. Special Meetings may be called for any purpose by a Manager
or any Member or group of Members holding not less than ten percent of the
Membership Interest.
4.2 Notice of Meetings. Whenever it is anticipated that Members will be
required or permitted to take any action by vote at a meeting, written notice
shall be given stating the place, date and hour of the meeting, the purpose of
such meeting, and under whose direction such meeting has been called. Such
notice of meeting shall be given personally or by first-class mail, not less
than ten nor more than fifty days before the date of the meeting. Such notice of
meeting need not be given to any Member who submits a signed waiver of notice,
in person or by proxy, whether before or after the meeting.
4.3 Quorum. Persons representing a Majority of the Voting Interest,
appearing in person or by proxy, shall constitute a quorum at a meeting of
Members for the transaction of any business. The Members present, despite not
being a quorum, may adjourn the meeting. No notice of adjourned meeting is
necessary if the time and place of the adjourned meeting is announced at the
meeting at which the adjournment is taken. At a meeting in which a quorum is
initially present, such quorum is not broken by the subsequent withdrawal of any
Member, despite the fact that such withdrawal results in less than a quorum
being present and all votes taken are binding upon the Members of the Company.
All acts at a meeting of Members at which a quorum is present, shall be the act
of all the Members and be binding upon them, except when such vote requires a
greater proportion or number of Membership Interests pursuant to the NYLLC Law,
or the Articles of Organization or this Agreement.
4.4 Vote by Proxy. A Member may vote in person by proxy executed in
writing by a Member. Every proxy so executed shall be revocable at the will of
the Member. Such proxy shall automatically be revoked if, prior to its use, the
death or incompetence of the Member occurred, and notice of such death or
adjudication of incompetence is received by the proxy holder. A proxy is
presumed to be revoked, whether or not it is stated to be irrevocable, if the
Member who executed such proxy sells his or her Membership Interest prior to the
date such proxy is scheduled to be exercised.
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4.5 Consents in Writing. Whenever the Members of the Company are required
or permitted to take any action by vote, such action may be taken without a
meeting, without prior notice and without a vote, if a consent or consents in
writing, setting forth the action so taken, shall be signed by Members who hold
the Voting Interest having not less than the minimum number of votes that would
be necessary to authorize or take such action at a meeting at which all of the
Members entitled to vote therein were present and voted and shall be delivered
to the office of the Company, its principal place of business or a Manager,
employee or agent of the Company. Delivery made to the office of the Company
shall be by hand or by certified or registered mail, return receipt requested.
4.6 Effectiveness of Written Consents. Every written consent shall bear
the date of signature of each Member who signs the consent, and no written
consent shall be effective to take the action referred to therein unless, within
60 days of the earliest dated consent delivered in the manner required by this
paragraph to the Company, written consents signed by a sufficient number of
Members to take the action are delivered to the office of the Company, its
principal place of business or a Manager, employee or agent of the Company
having custody of the records of the Company. Delivery made to such office,
principal place of business or Manager, employee or agent shall be by hand or by
certified or registered mail, return receipt requested.
4.7 Voting Trusts. Two or more Members may enter into a binding agreement,
in writing and executed by the Members seeking to be bound, which provides that
the Membership Interests held by them shall be voted in accordance with such
agreement or pursuant to any lawful procedure agreed upon by them.
ARTICLE V
MONEY MATTERS
5.1 Capital Contributions. Each Member of the Company shall contribute the
amount set forth under his or her name as set forth in the books and records of
the Company as the sole capital contribution to be made by such Member. Such
contribution may be in cash, property or services rendered, or a promissory note
or other obligation to contribute cash or property or to render services.
5.2 Member Capital Accounts. An account denominated as a Member Capital
Account shall be maintained for each Member in accordance with the capital
account maintenance rules set forth in Section 1.704-1(b)(2)(iv) of the Treasury
Regulations. Without limiting the generality of the foregoing, (a) each Member
Capital Account shall be increased by the amount of any money contributed by
such Member to the Company, the fair market value of property contributed by
such Member to the Company (net of
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liabilities secured by such contributed property that the Company is considered
to assume or take subject to under Section 752 of the Internal Revenue Code of
1986, as amended (the "Internal Revenue Code")), allocations to such Member of
the net profits and any other allocations to such Member of income pursuant to
the Internal Revenue Code, and (b) each Member Capital Account shall be
decreased by the amount of any money distributed to such Member by the Company,
the fair market value of property distributed to such Member by the Company (net
of liabilities secured by such distributed property that the distributee Member
is considered to assume or take subject to under Section 752 of the Internal
Revenue Code), allocations to such Member of net losses and other allocations to
such Member pursuant to the Internal Revenue Code. Each Member Capital Account
shall be appropriately adjusted for income, gain, loss and deduction as required
by Section 1.704-1(b)(2)(iv)(g) of the Treasury Regulations (relating to
allocations and adjustments resulting from the reflection of property on the
books of the Company at book value, or a revaluation thereof, rather than at
such property's adjusted tax basis). Upon sale or Transfer by a Member of his or
her Membership Interest, such Member's Member Capital Account shall thereupon
become the Member Capital Account of the new Member to whom such Membership
Interest was sold or transferred in accordance with Section 1.704(b)(2)(iv) of
the Treasury Regulations.
5.3 Maintenance of Capital Accounts. No Member shall be responsible or
liable to any other Member for the failure to maintain a positive balance in his
or her Member Capital Account, nor is a Member required to restore all or any
part of a deficit balance in such Member Capital Account. However, the foregoing
provisions and the other provisions of this Operating Agreement relating to the
maintenance of Member Capital Accounts are intended to comply with Section
1.704-1(b) of the Treasury Regulations, and shall be interpreted and applied in
a manner consistent with such Treasury Regulation. In this regard, in the event
that the tax matters partner (as defined in Section 5.13 of this Operating
Agreement) shall determine that it is prudent to modify the manner in which the
Member Capital Accounts, or any debits or credits thereto, are computed in order
to comply with such Treasury Regulations, the tax matters partner may make such
modification in its sole and absolute discretion.
5.4 Priority of Distributions. Each Member shall have equal rights or
obligations, as the case may be, whether for the return of the Capital
Contributions made to this Company, for net profits or net losses, or for any
distribution set forth in law or in the Operating Agreement. However, any loan
or indebtedness owed to a Member by this Company shall have priority in payment
over other distributions.
5.5 Unlawful Distributions. Any Member who has received a distribution
from the Company based upon the value of his or her Capital Contribution and who
had no knowledge that such distribution violated Section 508(a) of the NYLLC Law
shall
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have no liability to the Company or to its creditors for such distribution.
However, if such Member knew or should have known that such distribution was, at
the time of such distribution, contrary to such statute, then such member shall
be liable to the Company for the amount of such distribution.
5.6 Payment of Debts before Distribution. No Member shall receive from the
Company any part or portion of his or her Capital Contribution until all
liabilities and debts of the Company have been paid and there remain sufficient
assets in the Company to pay them, without placing the solvency of the Company
in a reasonably disabling position. A statement from the Company's accountant to
this effect shall be placed in the books and records of the Company.
5.7 Allocation of Profits, Losses, Credits and Distributions. The profits
and losses of the Company and any distributions made by the Company to the
Members in any Fiscal Year shall be allocated among the Members in accordance
with, and in proportion to, the respective number of Membership Interests held
by each Member. All distributions to a Member shall be offset by any amounts
owing to the Company by such Member. No distributions shall be made which render
the Company insolvent.
Except to the extent otherwise provided in Section 1.704-1(b)(4)(ii)
of the Treasury Regulations, (i) any tax credits for any Fiscal Year shall be
allocated among the Members in accordance with, and in proportion to, each
Member's allocable share of taxable net income in the fiscal year such tax
credit arises, and (ii) any tax credit recapture for any Fiscal Year shall be
allocated to those Members who received the tax credits to which such recapture
relates.
Notwithstanding the foregoing, all allocations of income, gain, loss
and deduction are intended to have substantial economic effect within the
meaning of Section 1.704-1(b)(2)(ii)(b)(2) of the Treasury Regulations.
Accordingly, the tax matters partner shall have the authority to cause any item
of income, gain, loss or deduction to be allocated in such a manner as to comply
with the substantial economic effect and capital account maintenance rules set
forth under Section 704 of the Internal Revenue Code and the Treasury
Regulations promulgated thereunder. In this regard, each Member shall be
specially allocated items of Company income and gain in the amounts necessary to
comply with Section 1.704-1(b)(2)(ii)(d) of the Treasury Regulations ("qualified
income offset"), Section 1.704-2(f) of the Treasury Regulations ("minimum gain
chargeback") and Section 1.704-2(i)(4) of the Treasury Regulations ("partner
minimum gain chargeback"). The previous sentence is intended to comply with the
qualified income offset, minimum gain chargeback and partner minimum gain
chargeback requirements in Sections 1.704-1(b)(2)(ii)(d), 1.704-2(f) and
1.704-2(i)(4) of the Treasury Regulations, respectively, and shall be
interpreted consistently therewith.
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5.8 Tax Allocations: Section 704(c) of the Internal Revenue Code. In
accordance with Section 704(c) of the Internal Revenue Code and the Treasury
Regulations thereunder and Section 1.704-1(b)(4)(i) of the Treasury Regulations,
income, gain, loss and deduction (as computed for tax purposes) with respect to
any property contributed to the capital of the Company or otherwise revalued on
the books of the Company shall, solely for tax purposes, be allocated among the
Members to take into account any variation between the adjusted basis of such
property to the Company for Federal income tax purposes and its fair market
value as determined at the time of the contribution or revaluation. In addition,
if any gain (as computed for tax purposes) on the sale or other disposition of
Company property shall constitute recapture of depreciation under Sections 291,
1245 or 1250 of the Internal Revenue Code or any similar provision, such gain
shall (to the extent possible) be divided among the Members in proportion to the
depreciation deductions previously claimed by them (or their predecessor in
interest) giving rise to such recapture (except to the extent otherwise required
under applicable Treasury Regulations); provided, however, that this sentence
shall not affect the amount of gain otherwise allocable to a Member.
Any elections or other decisions relating to such allocations
(including, under Section 1.704-3 of the Treasury Regulations, whether to use
the traditional method, the traditional method with curative allocations or the
remedial method) shall be made by the tax matters partner in any manner that
reasonably reflects the purpose and intention of this Operating Agreement
5.9 No Right to Interest or Return of Capital Contribution. No Member
shall be entitled to interest on his or her Capital Contribution, nor is such
member entitled, as a matter of right, to a return, in part or in whole, of his
or her Capital Contribution, notwithstanding anything to the contrary herein.
5.10 Tax Returns. All necessary federal and state tax returns for the
Company shall be prepared and filed. Each member shall furnish any information
in his or her possession that may be necessary and pertinent to the preparation
of such returns.
5.11 Internal Revenue Code Elections. The Company shall:
(a) Adopt the calendar year as its fiscal year.
(b) Adopt the cash basis as its method of accounting and keep its
books and records on such basis.
(c) Upon the written request of any member, elect to adjust the
basis of the property of the Company pursuant to Section 754 of the
Internal Revenue
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Code if a distribution as described in Section 734 of the Internal Revenue
Code occurs or if a sale or transfer of a Membership Interest described in
Section 743 of the Internal Revenue Code occurs.
(d) To the extent permitted by applicable law, elect to amortize the
organizational expenses of the Company and the start-up costs of the
Company under Sections 709(b) and 195 of the Internal Revenue Code,
respectively, ratably over a period of 60 months.
(e) Make any other election permitted by law that the tax matters
partner deems appropriate and in the best interest of the Members.
5.12 Prohibition on Subchapter K Exclusion. Neither the Company nor any
Member may make an election for the Company to be excluded from the application
of Subchapter K of Chapter 1 of Subtitle A of the Internal Revenue Code or any
similar provisions of applicable state law, and no provisions of this agreement
shall be interpreted to authorize any such election.
5.13 Designation of Tax Matters Partner. One Member or one Manager, as the
case may be, shall be designated as "tax matters partner" of the Company
pursuant to Section 6231(a)(7) of the Internal Revenue Code. Any Member or
Manager so designated shall take all actions as may be necessary to cause each
other Member to become a "notice partner" within the meaning of Section 6223 of
the Internal Revenue Code. The Members hereby designate SMFS, Inc. as the
Company's initial tax matters partner.
ARTICLE VI
DISSOLUTION
6.1 Events Causing Dissolution. The Company shall be dissolved and its
affairs wound up upon the first to occur of the following:
(a) The latest date on which the Company is to dissolve, if any, as
set forth in the Articles of Organization, or by a judicial decree
pursuant to Section 702 of the NYLLC Law.
(b) The vote or written consent of a Two-Thirds Majority of the
Membership Interest.
(c) The bankruptcy, death, dissolution, expulsion, incapacity or
withdrawal of any Member or the occurrence of any other event that
terminates
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the continued membership of any Member, unless, within six months after
such event, the Company is continued either by vote or written consent of
a Majority of the Membership Interest.
6.2 Winding up the Affairs of the Company. Upon dissolution of the
Company, the Members or Managers may, in the name of and on behalf of the
Company, prosecute and defend suits, whether civil, criminal or administrative,
settle and close the Company's business, dispose of and convey the Company's
property, discharge the Company's liabilities and distribute to the Members any
remaining assets, all without affecting the liability of each and every Member.
6.3 Distribution of Assets Upon Dissolution. Upon dissolution, the assets
of the Company shall be distributed as follows:
(a) To creditors, including Members who are creditors, to the extent
permitted by law, in satisfaction of liabilities of the Company, whether
by payment or by establishment of adequate reserves, other than
liabilities for distributions to members under Section 507 or Section 509
of the NYLLC Law.
(b) To Members and former Members in satisfaction of liabilities for
distribution under Section 507 or Section 509 of the NYLLC Law.
(c) To Members in proportion to, and to the extent of, the positive
balance in each Member's Member Capital Account, after giving effect to
all contributions, distributions and allocations for all periods.
Liquidating distributions must be made by the later of (i) the end of the Fiscal
Year in which the liquidation occurs, or (ii) 90 days after the date of
liquidation
6.4 Filing of Certificate of Dissolution. Within 90 days following the
dissolution and the commencement of winding up the affairs of the Company, or at
any other time that there are no Members, Articles of Dissolution shall be filed
with the Secretary of State of New York. Upon such filing of Articles of
Dissolution with the Secretary of State of New York, the Articles of
Organization shall be deemed to be cancelled.
6.5 Effect on Capital Accounts. Upon liquidation of the Company within the
meaning of Section 1.704-1(b)(2)(ii)(g) of the Treasury Regulations, if any
Member has a deficit Member Capital Account (after giving effect to all
contributions, distributions, allocation and other adjustments for all Fiscal
Years, including the Fiscal Year in which such liquidation occurs) the Member
shall have no obligation to make any Capital
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Contribution, and the negative balance of any Member Capital Account shall not
be considered a debt owed by the Member to the Company or to any other person
for any purpose.
6.6 Return of Capital Contribution. If not otherwise provided by this
Agreement and if permitted by applicable law, upon dissolution, each Member
shall receive a return of his or her Capital Contribution solely from the assets
of the Company. If, after payment or discharge of the debts and liabilities of
this Company, such assets are insufficient to return any Capital Contribution of
any Member, such Member shall have no recourse against any other Member.
ARTICLE VII
GENERAL CONSTRUCTION
7.1 Genders. When the masculine and feminine genders are used in this
Agreement and when required by the context, the same shall include the neuter
gender.
7.2 Waiver of Rights and Remedies. No failure of a Member to exercise, and
no delay by a Member in exercising, any right or remedy under this Operating
Agreement shall constitute a waiver of such right or remedy. No waiver by a
Member of any such right or remedy under this Agreement shall be effective
unless made in writing duly executed by all Members and specifically referring
to each such right or remedy being waived.
7.3 Entire Agreement. This Operating Agreement contains the entire
agreement among the Members with respect to the operation of the Company, and
supersedes each and every course of conduct previously pursued or consented to
and each and every oral agreement and representation previously made by the
Members with respect thereto, whether or not relied or acted upon. No amendment
of this Agreement shall be effective unless made in writing duly executed by all
Members and specifically referring to each provision of this Operating Agreement
being amended. No course of conduct or performance subsequently pursued or
acquiesced in, and no oral agreement or representation subsequently made by, the
Members, whether or not relied or acted upon, shall amend this Operating
Agreement or impair or otherwise affect any Member's obligations, rights or
remedies pursuant to this Operating Agreement.
7.4 Notice. Any notice, demand or other communication required or
permitted to be given pursuant to this Operating Agreement or under the NYLLC
Law shall have been sufficiently given for all purposes, if given pursuant to
the provisions of this Operating Agreement or as set forth in the NYLLC Law, as
the case may be.
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IN WITNESS WHEREOF, the persons signing this Operating Agreement below
conclusively evidence their agreement to the terms and conditions of this
Operating Agreement by so signing here.
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SCHEDULE A
Membership Interests in FiberNet Equal Access, L.L.C.
The Members of FiberNet Equal Access L.L.C. as of December 16, 1996
are as follows:
Name Membership Interests
---- --------------------
SMFS, Inc. 65%
Landtel Telecommunications Group, Inc. 35%
LPS, Inc. 5%
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SCHEDULE B
Managers of FiberNet Equal Access L.L.C.
The Managers of FiberNet Equal Access L.L.C. as of December 16, 1996
are as follows:
Xxxxx Xxxxxxxxxx - President
Xxxxxxxx Xxxxx - Vice President
