Exhibit 99.3
CROWN ATLANTIC HOLDING COMPANY LLC
OPERATING AGREEMENT
THIS OPERATING AGREEMENT (this "Operating Agreement") is made and
entered into as of March 31, 1999 (the "Effective Date") by and between
Cellco Partnership, a Delaware general partnership doing business as Xxxx
Atlantic Mobile ("BAM"), and CCA Investment Corp., a Delaware corporation
("CCIC Member") and a wholly-owned indirect subsidiary of Crown Castle
International Corp., a Delaware corporation ("CCIC"). BAM and CCIC Member
(and such other persons who shall be admitted in the future in accordance
with the terms hereof and shall have agreed to be bound hereby), being
hereinafter sometimes referred to individually as a "Member" and
collectively as the "Members."
WHEREAS, BAM, CCIC, CCIC Member and certain transferring
partnerships (the "Transferring Partnerships") have entered into a
Formation Agreement dated as of December 8, 1998, as amended by Amendment
Number One to such Formation Agreement dated as of March 31, 1999 and as
further amended by the Schedule updates contemplated by Sections 6.1.2 and
6.2.1 of such Formation Agreement (as so amended, the "Formation
Agreement"), pursuant to which, among other things, BAM and the
Transferring Partnerships will (i) contribute the BAM Contributed Assets
and the BAM Assumed Liabilities (both as defined in the Formation
Agreement) to Crown Atlantic Company LLC, a Delaware limited liability
company ("OpCo"), in exchange for membership interests in OpCo; (ii)
thereafter, contribute their membership interests in OpCo (other than the
BAM Retained Interest (as hereinafter defined)) to Crown Atlantic Holding
Sub LLC, a Delaware limited liability company ("HoldCo Sub") in exchange
for membership interests in HoldCo Sub; and (iii) thereafter, contribute
their membership interests in HoldCo Sub to Crown Atlantic Holding Company
LLC, a Delaware limited liability company ("HoldCo" or the "Company"), and,
in addition, CCIC Member will contribute the CCIC Contributed Shares (as
defined below) to the Company, in exchange for membership interests in the
Company;
WHEREAS, in exchange for certain consideration, each Transferring
Partnership will transfer its respective interest in the Company to BAM
immediately following the formation of the Company;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
GENERAL PROVISIONS
Section 1.1 Certain Definitions. As used in this Agreement, the
following terms have the respective meanings assigned to them below:
"Affiliates" means, with respect to any Person, any Persons
controlling, controlled by or under common control with that Person, as
well as any executive officers, directors and majority-owned entities of
that Person or its other Affiliates.
"Allocated Share" shall mean, except as otherwise provided in
Section 9.5(b), (i) fourteen percent (14.0%) of the Fair Market Value (as
defined in Section 9.5(b)), if the BAM HoldCo Interest as set forth on
Exhibit A is 37.7%, or (ii) if the BAM HoldCo Interest as set forth on
Exhibit A is other than 37.7%, the fraction, expressed as a percentage, the
numerator of which is the difference between (V) $650,000,000, increased by
any Additional Consideration (as defined in Section 3.8 of the Formation
Agreement) or decreased by any Amount of Decrease in Consideration (as
defined in Section 3.8 of the Formation Agreement) (the "Adjusted Total
Consideration") and the sum of (W) the BAM Capital Distribution (as defined
in Section 3.4 of the Formation Agreement and (X) the Adjusted Aggregate
Share Value (as defined in Section 3.8 of the Formation Agreement), and the
denominator of which is the difference between the sum of (Y) the Adjusted
Total Consideration and the Bidder Contributed Cash (as defined in the
Formation Agreement) minus (Z) the BAM Capital Distribution (as defined in
Section 3.4 of the Formation Agreement).
"Anticipated Financing" shall mean the proposed financing by
HoldCo Sub contemplated by Section 3.6 of the Formation Agreement of an
amount equal to not less than One Hundred Eighty Million Dollars
($180,000,000.00) (the "Closing Financing Amount"), except as adjusted
pursuant to its terms and conditions.
"BAM" is defined in the Preamble.
"BAM HoldCo Interest" is defined in Section 8.2.
"BAM HoldCo Interest Purchaser" is defined in Section 8.5.
"BAM Offer" is defined in Section 8.4.
"BAM Retained Interest" shall mean the .001 Percentage Interest
in OpCo held by BAM.
"Bidder Services Agreement" shall mean the Services Agreement
among CCIC, OpCo and HoldCo Sub, in form and substance reasonably
acceptable to BAM and CCIC and consistent with the terms set forth in the
letter agreement between BAM and CCIC set forth as Exhibit 2.7 to the
Formation Agreement, pursuant to which CCIC shall offer to OpCo and HoldCo
Sub certain services with respect to the tower structures owned by OpCo and
HoldCo Sub on the terms and conditions described therein.
"Build-to-Suit Agreement" shall mean the Build-to- Suit Agreement
among OpCo, HoldCo Sub and BAM (for itself and on behalf of the
Transferring Partnerships) pursuant to which BAM and the Transferring
Partnerships shall offer to OpCo and HoldCo Sub from time to time the right
to build tower structures on the terms and conditions described therein.
"Business Plan" is defined in Section 10.3.
"CCIC" is defined in the Preamble.
"CCIC Common Stock" shall mean the common stock, $.01 par value
of CCIC.
"CCIC Contributed Shares" shall mean those shares of CCIC Common
Stock contributed to the Company by CCIC Member pursuant to Section 3.5 of
the Formation Agreement.
"CCIC HoldCo Interest" is defined in Section 8.1.
"CCIC HoldCo Interest Purchaser" is defined in Section 8.5.
"CCIC Member" is defined in the Preamble.
"CCIC Offer" is defined in Section 8.3.
"CPI" means the Consumer Price Index for All Urban Consumers,
U.S. City Average, for All Items (1982-1984 = 100), as published by the
Bureau of Labor Statistics of the U.S. Department of Labor, and any
successor index. If the CPI is discontinued and there is no successor
index, BAM shall in good faith select a comparable index to replace the CPI
and the index selected by BAM shall be subject to CCIC Member's approval,
which approval shall not be unreasonably withheld or delayed.
"Effective Date" is defined in the Preamble.
"Exchange Act" is defined in Section 10.4(a).
"Fair Market Value" is defined in Section 9.5(b).
"Formation Agreement" is defined in the Preamble. All terms not
defined herein shall have the meaning given to them in the Formation
Agreement.
"GAAP" is defined in Section 3.8(e).
"Global Lease" shall mean the Global Lease Agreement among OpCo
and BAM (for itself and on behalf of the Transferring Partnerships)
pursuant to which OpCo shall lease to BAM and the Transferring Partnerships
space on certain communications towers.
"Governmental Authority" means any federal, state, territorial,
county, municipal, local or other government or governmental agency or body
or any other type of regulatory body, whether domestic or foreign,
including without limitation the Federal Communications Commission, or any
successor Governmental Authority and the Federal Aviation Administration,
or any successor Governmental Authority.
"HoldCo" is defined in the Preamble.
"HoldCo Sub" is defined in the Preamble.
"HoldCo Sub Operating Agreement" shall mean the Operating
Agreement of HoldCo Sub entered into as of March 31, 1999 by HoldCo.
"Lender" shall mean Key Corporate Capital Inc.
"Management Agreement" shall mean the Management Agreement
between HoldCo Sub and OpCo, in form and substance reasonably acceptable to
BAM and CCIC and consistent with the terms set forth in the letter
agreement between BAM and CCIC as set forth on Exhibit 2.7 to the Formation
Agreement, pursuant to which HoldCo Sub shall manage and lease OpCo's
assets.
"Managers" is defined in Section 1.2.
"Members" is defined in the Preamble.
"OpCo" is defined in the Preamble.
"OpCo Towers" is defined in Section 10.3.
"Person" means any natural person or entity.
"Solvent" is defined in Section 3.8(c).
"Taxes" means all taxes, duties, charges, fees, levies or other
assessments imposed by any taxing authority, whether domestic or foreign,
including, without limitation, income (net, gross or other including
recapture of any tax items such as investment tax credits), alternative or
add-on minimum tax, capital gains, gross receipts, value-added, excise,
withholding, personal property, real estate, sale, use, ad valorem,
license, lease, service, severance, stamp, transfer, payroll, employment,
customs, duties, alternative, add-on minimum,
estimated and franchise taxes (including any interest, levies, charges,
penalties or additions attributable to or imposed on or with respect to any
such assessment).
"Transaction Documents" means, collectively, the Formation
Agreement, the Global Lease, the Build-to-Suit Agreement, the Bidder
Services Agreement, the Management Agreement and each of the other
documents and agreements listed in Section 4.2 of the Formation Agreement.
"Transferring Partnership" is defined in the Preamble.
Section 1.2 Formation. Upon the filing of the Certificate of
Formation (the "Certificate") with the Secretary of State of the State of
Delaware, the Members and the Transferring Partnerships have formed Crown
Atlantic Holding Company LLC, a limited liability company, pursuant to the
Delaware Limited Liability Company Act of 1992, as amended from time to
time (the "Act"), for the purposes hereinafter set forth. The Transferring
Partnerships, after the filing of the Certificate and prior to the
execution and delivery of this Agreement, transferred all of their
respective interests in the Company to BAM. The Company was formed as a
limited liability company managed by its managers (the "Managers") under
the supervision of the Board of Representatives (as defined in Section
1.10) and the laws of the State of Delaware, upon the terms and conditions
hereinafter set forth. The Members intend that the Company shall be taxed
as a partnership. Promptly following the execution hereof, the Members
shall execute or cause to be executed all other necessary certificates and
documents, and shall make all other such filings and recordings, and shall
do all other acts as may be necessary or appropriate from time to time to
comply with all requirements for the formation, continued existence and
operation of a limited liability company in the State of Delaware. This
Operating Agreement is intended to serve as a "limited liability company
agreement" as such term is defined in ss. 18-101(7) of the Act.
Section 1.3 Company Name and Address. The Company shall do
business under the name Crown Atlantic Holding Company LLC or such other
name as the Board of Representatives may determine from time to time. The
Board of Representatives shall promptly notify the Members of any change of
name of the Company. The initial registered agent for the Company shall be
CT Corporation System. The initial registered office of the Company in the
State of Delaware shall be 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000.
The registered office and the registered agent may be changed from time to
time by action of the Board of Representatives by filing notice of such
change with the Secretary of State of the State of Delaware. The Board of
Representatives will promptly notify the Members of any change of the
registered office or registered agent. The Company may also have offices at
such other places within or outside of the State of Delaware as the Board
of Representatives may from time to time determine.
Section 1.4 Term. The Company shall commence operating as of the
date the Certificate is filed with the Secretary of the State of Delaware,
and shall have perpetual existence unless terminated or dissolved pursuant
to Section 9.1 of this Operating Agreement.
Section 1.5 Business of the Company. The purpose of the Company
is to own (i) one hundred percent (100%) of the percentage interests in
HoldCo Sub and (ii) the CCIC Contributed Shares. The Company shall not
engage in any line of business except for (i) the ownership of the
membership interests in, and operation and management of, HoldCo Sub and
any and all activities ancillary or related thereto and (ii) the ownership
of the CCIC Contributed Shares. The Company shall possess and may exercise
all the powers and privileges granted by the Act or by any other law,
together with any powers incidental thereto, so far as such powers and
privileges are necessary or convenient to the conduct, promotion or
attainment of the business, purposes or activities of the Company.
Section 1.6 Names and Addresses of the Members. The names and
addresses of the Members are set forth in Schedule A.
Section 1.7 Partition. No Member, nor any successor-in-interest
to any Member, shall have the right, while this Operating Agreement remains
in effect, to have the property of the Company partitioned, or to file a
complaint or institute any proceeding at law or in equity to have the
property of the Company partitioned, and each of the Members, on behalf of
itself and its successors, representatives and assigns, hereby irrevocably
waives any such right.
Section 1.8 Fiscal Year. The fiscal year of the Company shall
begin on January 1 and end on December 31 of each calendar year.
Section 1.9 Title to Company Property. All property owned by the
Company, whether real or personal, tangible or intangible, shall be deemed
to be owned by the Company, and no Member individually shall have any
interest in such property. Title to all such property may be held in the
name of the Company or a designee, which designee may be a Member or an
entity affiliated with a Member.
Section 1.10 Board of Representatives.
(a) General. A Board of Representatives (the "Board of
Representatives") shall be established to oversee the Managers and review
the Business Plan (as defined in Section 10.3). There shall be no less than
five (5) Representatives, nor more than fifteen (15) Representatives, as
may be determined from time to time by the Board of Representatives.
Initially, there shall be six (6) Representatives. Each Member shall
designate that number of Representatives determined by multiplying the
total number of Representatives by that Member's Percentage Interest in the
Company and rounding to the nearest whole number. If such calculation shall
result in a greater number of Representatives than the total to be
designated, then the Board of Representatives shall be expanded to the
extent permitted by the
second sentence of this Section 1.10(a) or if, despite such expansion,
there would still be a greater number of Representatives than the total to
be designated, the Members shall by vote determine a proportionate
readjustment with each Member entitled to a number of votes equal to its
Percentage Interest. Notwithstanding the foregoing, for so long as BAM
maintains ownership of at least a five percent (5%) Percentage Interest in
the Company, BAM shall have the right to designate from time to time a
number of Representatives that is equal to the greater of (i) one (1)
Representative or (ii) the number of Representatives (rounded to the
nearest whole number) which is equal to the same percentage of all
Representatives as the Percentage Interest in the Company held by BAM.
Initially, BAM shall designate two (2) Representatives and CCIC Member
shall designate four (4) Representatives.
(b) Representatives and Alternates. Each Member shall also
be entitled to designate one (1) alternate to each such Representative
(each an "Alternate"). In the event a Representative is unable to attend a
meeting of the Board of Representatives or otherwise participate in any
action to be taken by the Board of Representatives, the Alternate
associated with such Representative shall take such Representative's place
for all purposes on the Board of Representatives. Each Member shall
designate its Representatives and the associated Alternates by written
notice to the Company and each other Member. The initial Representatives
and Alternates of each Member are set forth on Schedule B. The
Representatives and Alternates shall at all times be executive officers or
other full-time employees of either such Member or any affiliate of such
Member. For so long as BAM has the right to designate at least one (1)
Representative of the Company, the Representatives and Alternates of the
Company shall also serve as the Representatives and Alternates of HoldCo
Sub and OpCo.
(c) Resignation. A Representative or Alternate of the
Company may resign at any time by giving written notice to the Company or
to the Member who designated such Representative or Alternate.
(d) Removal. Each Member may, at any time, replace any of
its Representatives or Alternates with a new Representative or Alternate
and, upon such change or upon the death or resignation of any
Representative or Alternate, a successor shall be designated in writing by
the Member that appointed the Representative or Alternate being replaced.
(e) Vacancies. Any vacancy with respect to any
Representative or Alternate occurring for any reason may be filled by the
Member who designated the Representative or Alternate who vacated or was
removed from his or her position.
(f) Compensation. Without the approval of the Members, the
Representatives or Alternates will not be entitled to compensation for
their services as Representatives or Alternates. The Company shall,
however, reimburse the Representatives and Alternates for their reasonable
expenses incurred in connection with their services to the Company.
Section 1.11 Membership Interests Uncertificated. The interests
of the Members in the Company shall not be certificated.
ARTICLE II
MEETINGS GENERALLY
Section 2.1 Manner of Giving Notice.
(a) A notice of meeting shall specify the place, day and
hour of the meeting and any other information required by any provision of
the Act, the Certificate or this Operating Agreement.
(b) When a meeting at which there is a duly constituted
quorum is adjourned, it shall not be necessary to give any notice of the
adjourned meeting or of the business to be transacted at an adjourned
meeting, other than by announcement at the meeting at which the adjournment
is taken, unless the adjournment is for more than sixty (60) days in which
event notice shall be given in accordance with Section 2.2 or Section 2.3,
as applicable.
Section 2.2 Notice of Meetings of the Board of Representatives.
Notice of every meeting of the Board of Representatives shall be given to
each Representative by telephone or in writing at least 24 hours (in the
case of notice by telephone, telex or facsimile transmission) or 48 hours
(in the case of notice by telegraph, courier service or express mail) or
five (5) days (in the case of notice by first class mail) before the time
at which the meeting is to be held. Every such notice shall state the time
and place of the meeting. Subject to the provisions of Sections 3.3 and
4.5, neither the business to be transacted at, nor the purpose of, any
meeting of the Board of Representatives need be specified in a notice of
the meeting.
Section 2.3 Notice of Meetings of Members. Written notice of
every meeting of the Members shall be given to each Member of record
entitled to vote at the meeting at least five (5) days prior to the day
named for the meeting. If the Managers neglect or refuse to give notice of
a meeting, the person or persons calling the meeting may do so.
Section 2.4 Waiver of Notice.
(a) Whenever any written notice is required to be given
under the provisions of the Act, the Certificate or this Operating
Agreement, a waiver thereof in writing, signed by the person or persons
entitled to the notice, whether before or after the time stated therein,
shall be deemed equivalent to the giving of the notice. Neither the
business to be transacted at, nor the purpose of, a meeting need be
specified in the waiver of notice of the meeting.
(b) Attendance of a person at any meeting shall constitute a
waiver of notice of the meeting except where a person attends a meeting for
the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting was not lawfully called or
convened.
Section 2.5 Use of Conference Telephone and Similar Equipment.
Any Representative may participate in any meeting of the Board of
Representatives, and any Member may participate in any meeting of the
Members, by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can
hear each other. Participation in a meeting pursuant to this Section shall
constitute presence in person at the meeting.
Section 2.6 Consent in Lieu of Meeting. Any action required or
permitted to be taken at a meeting of the Board of Representatives or
Members may be taken without a meeting if, prior or subsequent to the
action, written consents describing the action to be taken are signed by
the minimum number of Representatives or Members that would be necessary to
authorize the action at a meeting at which all Representatives or Members
entitled to vote thereon were present and voting; provided that, prior to
any such written consent becoming effective, such written consent has been
provided to all Representatives or Members entitled to vote, and the
Representatives or Members shall have ten (10) days to review such consent
prior to such written consent becoming effective (unless otherwise agreed
to by all Representatives or their respective Alternates or each Member,
respectively). The consents shall be filed with the Managers. Prompt notice
of the taking of Company action without a meeting by less than unanimous
written consent shall be given to those Members who have not consented in
writing.
ARTICLE III
MANAGEMENT
Section 3.1 Management of the Company Generally. The business and
affairs of the Company shall be managed by its Managers under the
supervision of the Board of Representatives (a) in accordance with the
provisions of this Operating Agreement and the Business Plans and the other
resolutions and directives of the Board of Representatives adopted by the
Board of Representatives and in effect from time to time, and (b) subject
to the provisions of the Act, the Certificate and this Operating Agreement
including, without limitation, the provisions of Section 3.8 hereof. Unless
authorized to do so by this Operating Agreement or by the Board of
Representatives or the Managers of the Company (provided that the Managers
are authorized to grant such authority), no attorney-in-fact, employee,
officer or agent of the Company other than the Managers shall have any
power or authority to bind the Company in any way, to pledge its credit or
to render it liable pecuniarily for any purpose. No Member shall have any
power or authority to bind the Company unless the Member has been expressly
authorized by the Board of Representatives to act as an agent of the
Company. All Managers of the
Company, as between themselves and the Company, shall have such authority
and perform such duties in the management of the Company as may be provided
by or pursuant to resolutions or orders of the Board of Representatives or
in the Business Plan, or, in the absence of controlling provisions in the
resolutions or orders of the Board of Representatives, as may be determined
by or pursuant to this Operating Agreement. The Board of Representatives
may confer upon any Manager such titles as the Board deems appropriate,
including, but not limited to, President, Vice President, Secretary or
Treasurer, and subject to the limitations set forth in Section 3.8 of this
Operating Agreement, delegate specifically defined duties to the Managers.
Notwithstanding the foregoing or any other provision of this Operating
Agreement or of the Act to the contrary, no Manager of the Company shall
have the power or authority to do or perform any act with respect to any of
the matters set forth in Section 3.8 of this Operating Agreement unless
such matter has been approved by the mutual consent of BAM and CCIC Member
in accordance with the provisions of this Operating Agreement.
Section 3.2 Meetings of the Board of Representatives. Meetings
of the Board of Representatives shall be held at such time and place within
or without the State of Delaware as shall be designated from time to time
by resolution of the Board of Representatives or by written notice of any
Manager or by written notice of any Member; provided that meetings of the
Board of Representatives shall be held no less than quarterly, on a date to
be determined by the mutual consent of BAM and CCIC Member. At each meeting
of the Board of Representatives, the Managers shall (i) provide the Board
of Representatives with a report on the financial condition and operations
of the Company, including, without limitation, a report on the results of
operations compared to the then applicable Business Plan, (ii) disclose to
the Board of Representatives any material event or contingency occurring
since the previous meeting and (iii) disclose to the Board of
Representatives all matters which would require disclosure to, or the
approval of, the board of directors of a Delaware corporation. For so long
as BAM is entitled to designate at least one (1) Representative to the
Board of Representatives of the Company, any meeting of the Board of
Representatives of the Company shall also be deemed to be a meeting of the
Boards of Representatives of HoldCo Sub and OpCo.
Section 3.3 Quorum. The presence of at least one of the
Representatives or Alternates designated by each of BAM and CCIC Member
shall be necessary to constitute a quorum for the transaction of business
at a meeting of the Board of Representatives and the acts of a majority of
the Representatives or Alternates present and voting at a meeting at which
a quorum is present shall be the acts of the Representatives or Alternates;
provided, however, that if notice of a meeting is provided to the
Representatives and Alternates, and such notice describes the business to
be considered, the actions to be taken and the matters to be voted on at
the meeting in reasonable detail, and insufficient Representatives or
Alternates attend the meeting to constitute a quorum, the meeting may be
adjourned by those Representatives or Alternates attending such meeting for
a period not to exceed twenty (20) days. Such meeting may be reconvened by
providing notice of the reconvened meeting to the Representatives and
Alternates no less than ten (10) days prior to the date of the meeting
specifying that the business to be considered, the actions to be taken and
the matters to be voted upon are those set forth in
the notice of the original adjourned meeting. If, at the reconvened
meeting, a quorum of Representatives or Alternates is not present, a
majority of the Representatives and Alternates present and voting will
constitute a quorum for purposes of the reconvened meeting; provided,
however that such Representatives and Alternates may only consider the
business, take the actions or vote upon the matters set forth in the notice
of the original meeting.
Notwithstanding the foregoing or any other provision in this Operating
Agreement, no Representative, Alternate or Manager shall have any power or
authority to do or perform any act with respect to any of the matters set
forth in Section 3.8 of this Operating Agreement unless such matter has
been approved by the mutual consent of BAM and CCIC Member in accordance
with the provisions of this Operating Agreement.
Section 3.4 Manner of Acting. Other than any action contemplated
by Section 3.8, which shall require the mutual consent of CCIC Member and
BAM, whenever any Company action is to be taken by a vote of the Board of
Representatives, it shall be authorized upon receiving the affirmative vote
of a majority of the Representatives and Alternates present and voting at a
duly constituted meeting at which a quorum is present.
Section 3.5 Designation of Managers. CCIC Member shall designate
all Managers. The initial Managers are set forth on Schedule C. CCIC Member
shall promptly give each Member notice of the designation of any new
Manager.
Section 3.6 Qualifications. Each Manager of the Company shall be
a natural person of full age who need not be a resident of the State of
Delaware.
Section 3.7 Number, Selection and Term of Office.
(a) There shall be no less than 2 Managers, nor more than
10, as may be determined from time to time by the Board of Representatives.
Initially, there shall be 5 Managers.
(b) Each Manager shall hold office until a successor has
been selected and qualified or until his or her earlier death, resignation
or removal.
Section 3.8 Approval of Certain Matters by the Members.
Notwithstanding any provision of this Operating Agreement or the Act to the
contrary, the following matters require the mutual consent of BAM and CCIC
Member, given by their respective Representatives (acting as a group) at a
meeting of the Board of Representatives or by written consent, or if BAM
has no Representatives, such consent shall be given by BAM in its capacity
as a Member, and the Managers shall have no power or authority to do or
perform any act with respect to any of the following matters without the
mutual consent of BAM and CCIC Member, given in accordance with the
provisions of this Operating Agreement:
(a) Certain Contracts. The entering into any contract,
agreement or arrangement (whether written or oral) by the Company, other
than agreements and contracts in force as of the date hereof and renewals
thereof, which (i) contains provisions restricting HoldCo or HoldCo Sub or
any member thereof from competing in any business activity in any
geographic area, (ii) contains provisions requiring HoldCo or HoldCo Sub or
any member thereof to deal exclusively with any third party with respect to
providing any goods, services or rights to or acquiring any goods or
services or rights from such third party, (iii) contains provisions which
are inconsistent with the obligations of HoldCo or HoldCo Sub under any of
the Transaction Documents, or (iv) provides for the purchase or sale of
goods, services or rights involving an amount in excess of $10,000,000 per
year in any transaction or series of similar transactions.
(b) Conduct of Business. The engagement by the Company in
any line of business other than (i) the ownership of the membership
interests in HoldCo Sub and (ii) the ownership of the CCIC Contributed
Shares. The engagement by HoldCo Sub in any line of business other than the
business of acquiring or constructing, owning or leasing, and maintaining
and operating communications towers in the United States and performing its
obligations under the Management Agreement and performing all business
activities related thereto. The making by HoldCo Sub of any investment in,
or the acquisition by HoldCo Sub of any equity securities of, any Person
other than OpCo.
(c) Solvency. The voluntary taking of any action by the
Company or HoldCo Sub that would cause the Company or HoldCo Sub to cease
to be Solvent. As used herein, the term "Solvent" means that the aggregate
present fair saleable value of the Company's (or HoldCo Sub's, as
applicable) assets is in excess of the total cost of its probable liability
on its existing debts to third parties as they become absolute and matured,
the Company (or HoldCo Sub, as applicable) has not incurred debts beyond
its foreseeable ability to pay such debts as they mature, and the Company
(or HoldCo Sub, as applicable) has capital adequate to conduct the business
in which it is presently employed.
(d) Bankruptcy. The voluntary dissolution or liquidation of
the Company or HoldCo Sub, the making by the Company or HoldCo Sub of a
voluntary assignment for the benefit of creditors, the filing of a petition
in bankruptcy by the Company or HoldCo Sub, the Company or HoldCo Sub
petitioning or applying to any tribunal for any receiver or trustee, the
Company or HoldCo Sub commencing any proceeding relating to itself under
any bankruptcy, reorganization, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction, the Company or HoldCo Sub
indicating its consent to, approval of or acquiescence in any such
proceeding and failing to use its respective best efforts to have
discharged the appointment of any receiver of or trustee for the Company or
HoldCo Sub or any substantial part of their respective properties.
(e) Indebtedness. The direct or indirect modification,
amendment or prepayment of the Anticipated Financing under the Formation
Agreement by the Company or
HoldCo Sub prior to the seventh (7th) anniversary of the closing of the
transactions contemplated by the Formation Agreement. The Company directly
or indirectly, creating, incurring, assuming, guaranteeing, or otherwise
becoming or remaining directly or indirectly liable with respect to any
Indebtedness. As used herein, "Indebtedness" means, at any time, (i)
liabilities for borrowed money, (ii) liabilities for the deferred purchase
price of property acquired by the Company (excluding accounts payable
arising in the ordinary course of business but including all liabilities
created or arising under any conditional sale or other title retention
agreement with respect to any such property); (iii) all liabilities
appearing on its balance sheet in accordance with generally accepted
accounting principles consistently applied throughout the periods involved
("GAAP") in respect of capital leases; (iv) all liabilities for borrowed
money secured by any Encumbrance with respect to any property owned by the
Company (whether or not it has assumed or otherwise become liable for such
liabilities); (v) all liabilities in respect of letters of credit or
instruments serving a similar function issued or accepted for its account
by banks and other financial institutions (whether or not representing
obligations for borrowed money); and (vi) any guaranty of the Company with
respect to liabilities of a type described in any of clauses (i) through
(v) hereof.
(f) Liens. The Company, directly or indirectly, maintaining,
creating, incurring, assuming or permitting to exist any Encumbrance (other
than Encumbrances on the membership interests in HoldCo Sub granted to the
Lender to secure the Anticipated Financing) on or with respect to any
property or asset (including any document or instrument in respect of goods
or accounts receivable) of the Company, whether now owned or hereafter
acquired, or any income or profits therefrom.
(g) Issuance of Interests. Except pursuant to a transfer
permitted by Section 8.1 or Section 8.2, the authorization or issuance of
any interests in, or the admission of any members to, the Company or HoldCo
Sub, other than BAM and CCIC Member, including, without limitation, the
authorization or issuance of any additional interests in the Company to BAM
or CCIC Member beyond those interests authorized and issued in connection
with the formation of the Company.
(h) Contingent Obligations. The Company, directly or
indirectly, creating or becoming or being liable with respect to any
Contingent Obligation.
As used herein, the term "Contingent Obligations" means any direct or
indirect liability, contingent or otherwise (i) with respect to any
indebtedness, lease, dividend or other obligation of another if the primary
purpose or intent thereof is to provide assurance to the obligee of such
obligation of another that such obligation of another will be paid or
discharged, or that any agreements relating thereto will be complied with,
or that the holders of such obligations will be protected (in whole or in
part) against loss in respect thereof and (ii) with respect to any letter
of credit. Contingent Obligations shall include with respect to the
Company, without limitation, the direct or indirect guaranty, endorsement
(otherwise than for the collection or deposit in the ordinary course of
business), co-making, discounting with recourse or sale with recourse by
the
Company, the obligation to make take-or-pay or similar payments if required
regardless of non-performance by any other party or parties to an
agreement, and any liability of the Company for the obligations of another
through any agreement (contingent or otherwise) (x) to purchase, repurchase
or otherwise acquire such obligation or any security therefor, or to
provide funds for the payment or discharge of such obligation (whether in
the form of loans, advances, stock purchases, capital contributions or
otherwise), and (y) to maintain the solvency or any balance sheet item,
level of income or financial condition of another, if in the case of any
agreement described under subclause (x) or (y) of this sentence, the
primary purpose or intent thereof is as described in the preceding
sentence.
(i) Preservation of Existence. Any action contrary to the
preservation and maintenance of the Company's and HoldCo Sub's existence,
rights, franchises and privileges as a limited liability company under the
laws of the State of Delaware. Any action which would prevent the Company
or HoldCo Sub from qualifying and remaining qualified as a foreign limited
liability company in each jurisdiction in which such qualification is
necessary or desirable in view of its business and operations or the
ownership or lease of its properties.
(j) Merger or Sale of Assets. Any merger or consolidation by
the Company or HoldCo Sub with any Person. Any sale, assignment, lease or
other disposition by the Company or HoldCo Sub of (whether in one
transaction or in a series of transactions), or any voluntarily parting
with the control of (whether in one transaction or in a series of
transactions), a material portion of the Company's or HoldCo Sub's assets
(whether now owned or hereinafter acquired), except in accordance with the
provisions of any of the Transaction Documents, and except for sales or
other dispositions of assets in the ordinary course of business. Any sale,
assignment or other disposition of (whether in one transaction or in a
series of transactions) any of the Company's or HoldCo Sub's accounts
receivable (whether now in existence or hereinafter created) at a discount
or with recourse, to any Person, except for sales or other dispositions of
assets in the ordinary course of business.
(k) Dealings with Affiliates. Except pursuant to the
Transaction Documents, the entering into by the Company or HoldCo Sub of
any transaction, including, without limitation, any loans or extensions of
credit or royalty agreements with any Representative, Manager, officer or
member of the Company or HoldCo Sub or any officer, director of CCIC or
CCIC Member or holder of more than five percent (5%) of the outstanding
CCIC Common Stock, or any member of their respective immediate families or
any corporation or other entity directly or indirectly controlled by one or
more of such officers, directors or stockholders or members of their
immediate families except in the ordinary course of business and on terms
not less favorable to the Company or HoldCo Sub than it would reasonably
expect to obtain in a transaction between unrelated parties.
(l) Dividends; Distributions. The declaration or payment by
the Company or HoldCo Sub of any dividend, or making by the Company or
HoldCo Sub of any distribution or return of capital, or the redemption by
the Company or HoldCo Sub of any equity
interest, or the making by the Company or HoldCo Sub of any similar
payments or transfer of property to its Members (excluding payments for
goods or services).
(m) Method of Certain Calculations. The determination of any
method to be used in calculating any of the payments to be made under the
Management Agreement or the Bidder Services Agreement.
(n) Business Plan. The approval of the Business Plan as set
forth in Section 10.3.
(o) Actions as Member of HoldCo Sub. The Company giving any
consent, in its capacity as a member of HoldCo Sub, under Section 3.8 of
the HoldCo Sub Operating Agreement.
(p) Voting of CCIC Contributed Shares held by the Company.
The Company exercising any voting rights with respect to the CCIC
Contributed Shares held by the Company, and in the absence of the mutual
agreement of BAM and CCIC Member as to the exercise of such voting rights,
the CCIC Contributed Shares shall be voted on each matter submitted to a
vote of the stockholders of CCIC for and against such matter in the same
proportion as the vote of all other shares entitled to vote thereon are
voted (whether by proxy or otherwise) for and against such matter.
Whenever the mutual consent of BAM and CCIC Member is required under either
this Operating Agreement, the HoldCo Sub Operating Agreement or the OpCo
Operating Agreement, the Managers shall only take action, vote the
membership interests in HoldCo Sub or authorize the Managers of HoldCo Sub
to vote the membership interest in OpCo in accordance with the direction of
BAM and CCIC Member as provided for in this Section 3.8.
Section 3.9 Exculpation. No Member, Manager, Representative,
Alternate or officer shall be liable to the Company or to any Member for
any losses, claims, damages or liabilities arising from, related to, or in
connection with, this Operating Agreement or the business or affairs of the
Company, except for any losses, claims, damages or liabilities as are
determined by final judgment of a court of competent jurisdiction to have
resulted from such Member, Manager, Representative, Alternate or officer's
gross negligence or willful misconduct. To the extent that, at law or in
equity, any Member, Manager, Representative, Alternate or officer has
duties (including fiduciary duties) and liabilities relating thereto to the
Company or to any Member, such Member, Manager, Representative, Alternate
or officer acting in connection with this Operating Agreement or the
business or affairs of the Company shall not be liable to the Company or to
any Member, Manager, Representative, Alternate or officer for its good
faith conduct in accordance with the provisions of this Agreement or any
approval or authorization granted by the Company or any Member, Manager,
Representative, Alternate or officer. The provisions of this Operating
Agreement, to the extent that they restrict the duties and liabilities of
any Member, Manager, Representative, Alternate or officer otherwise
existing at law or in
equity, are agreed by the Members to replace such other duties and
liabilities of such Member, Manager, Representative, Alternate or officer.
Section 3.10 Reliance on Reports and Information by Member,
Representative, Alternate or Manager. A Member, Representative, Alternate
or Manager of the Company shall be fully protected in relying in good faith
upon the records of the Company and upon such information, opinions,
reports or statements presented to the Company by any of its other
Managers, Members, Representatives, Alternates, officers, employees or
committees of the Company, or by any other person, as to matters the
Member, Representative, Alternate or Manager reasonably believes are within
such other person's professional or expert competence and who has been
selected with reasonable care by or on behalf of the Company, including
information, opinions, reports or statements as to the value and amount of
the assets, liabilities, profits or losses of the Company or any other
facts pertinent to the existence and amount of assets from which
distributions to Members might properly be paid.
Section 3.11 Bank Accounts. The Managers may from time to time
open bank accounts in the name of the Company, and the Managers, or any of
them, shall be the sole signatory or signatories thereon, unless the
Managers determine otherwise.
Section 3.12 Resignation. A Manager of the Company may resign at
any time by giving written notice to the Company. The resignation of a
Manager shall be effective upon receipt of such notice or at such later
time as shall be specified in the notice. Unless otherwise specified in the
notice, the acceptance of the resignation shall not be necessary to make
such resignation effective.
Section 3.13 Removal. Any individual Manager may be removed from
office at any time, without assigning any cause, by CCIC Member.
Section 3.14 Vacancies. Any vacancy with respect to a Manager
occurring for any reason may be filled by CCIC Member.
Section 3.15 Salaries. The salaries of the Managers shall be
fixed from time to time by the Board of Representatives in accordance with
the Business Plan or by such Manager as may be designated by resolution of
the Board of Representatives. The salaries or other compensation of any
other employees and other agents shall be fixed from time to time by the
Board of Representatives or by such Manager as may be designated by
resolution of the Board of Representatives.
ARTICLE IV
MEMBERS
Section 4.1 Admission of Members.
(a) A person acquiring an interest in the Company in
connection with its formation shall be admitted as a Member of the Company
upon the later to occur of the formation of the Company or when the
admission of the person is reflected in the records of the Company.
(b) After the formation of the Company, a person acquiring
an interest in the Company from the Company, is admitted as a Member upon
the satisfaction of all requirements in Article VIII of this Operating
Agreement.
Section 4.2 Meetings. Meetings of the Members, for any purpose
or purposes, unless otherwise prescribed by statute, may be called by any
Manager or by any Member.
Section 4.3 Place of Meeting. The Managers or Members calling a
meeting pursuant to Section 4.2 may designate any place as the place for
any meeting of the Members. If no designation is made, the place of meeting
shall be the principal office of the Company.
Section 4.4 Record Date. For the purpose of determining Members
entitled to notice of, or to vote at, any meeting of Members or any
adjournment of the meeting, or Members entitled to receive payment of any
distribution, or to make a determination of Members for any other purpose,
the date on which notice of the meeting is mailed or the date on which the
resolution declaring the distribution or relating to such other purpose is
adopted, as the case may be, shall be the record date for the determination
of Members. Only Members of record on the date fixed shall be so entitled
notwithstanding any permitted transfer of a Member's Membership Interest
after any record date fixed as provided in this Section. When a
determination of Members entitled to vote at any meeting of Members has
been made as provided in this section, the determination shall apply to any
adjournment of the meeting.
Section 4.5 Quorum. A meeting of Members of the Company duly
called shall not be organized for the transaction of business unless a
quorum is present. The presence of each Member, represented in person or by
proxy, shall constitute a quorum at any meeting of Members, provided,
however, that if notice of a meeting is provided to the Members, and such
notice describes the business to be considered, the actions to be taken and
the matters to be voted on at the meeting in reasonable detail, and
insufficient Members attend the meeting to constitute a quorum, the meeting
may be adjourned by those Members attending such meeting for a period not
to exceed twenty (20) days. Such meeting may be reconvened by providing
notice of the reconvened meeting to the Members no less than ten (10) days
prior to the date of the meeting specifying that the business to be
considered, the actions to be taken and the matters to be voted
upon are those set forth in the notice of the original adjourned meeting.
If, at the reconvened meeting, a quorum of Members is not present, a
majority of the Members present and voting will constitute a quorum for
purposes of the reconvened meeting; provided, however that such Members may
only consider the business, take the actions or vote upon the matters set
forth in the notice of the original meeting. At an adjourned meeting at
which a quorum shall be present or represented, any business may be
transacted which might have been transacted at the meeting as originally
noticed. The Members present at a duly organized meeting may continue to
transact business until adjournment, notwithstanding the withdrawal during
the meeting of Members whose absence would cause less than a quorum.
Notwithstanding the foregoing or any other provision in this Agreement, no
Member shall have any power or authority to do or perform any act with
respect to any of the matters set forth in Section 3.8 of this Operating
Agreement unless such matter has been approved by the mutual consent of BAM
and CCIC Member in accordance with the provisions of this Operating
Agreement.
Section 4.6 Manner of Acting. Except as otherwise provided in
the Act or the Certificate or this Operating Agreement, including, without
limitation, Section 3.8 hereof, whenever any Company action is to be taken
by vote of the Members of the Company, it shall be authorized upon
receiving the affirmative vote of Members entitled to vote who own a
majority of the Percentage Interests (as defined in Section 6.1) then held
by Members.
Section 4.7 Voting Rights of Members. Unless otherwise provided
in the Certificate, every Member of the Company shall be entitled to a
percentage of the total votes equal to that Member's then current
Percentage Interest.
Section 4.8 Relationship of Members. Except as otherwise
expressly and specifically provided in or as authorized pursuant to the
Certificate or this Operating Agreement, (a) in the event that any Member
(or any of such Member's shareholders, partners, members, owners, or
Affiliates (collectively, the "Liable Member")) has incurred any
indebtedness or obligation prior to the date of this Agreement that relates
to or otherwise affects the Company, neither the Company nor any other
Member shall have any liability or responsibility for or with respect to
such indebtedness or obligation unless such indebtedness or obligation is
assumed by the Company pursuant to this Operating Agreement, the Formation
Agreement or any of the other Transaction Documents, or a written
instrument signed by all Members; (b) neither the Company nor any Member
pursuant to this Agreement shall be responsible or liable for any
indebtedness or obligation that is incurred after the date of this
Agreement by any Liable Member, and in the event that a Liable Member,
whether prior to or after the date hereof, incurs (or has incurred) any
debt or obligation that neither the Company nor any of the other Members is
to have any responsibility or liability for, the Liable Member shall
indemnify and hold harmless the Company and the other Members from any
liability or obligation they may incur in respect thereof; (c) nothing
contained herein shall render any Member personally liable for any debts,
obligations or liabilities incurred by the other Members or the Company
whether arising in
contract, tort or otherwise or for the acts or omissions of any other
Member, Manager, agent or employee of the Company; (d) no Member shall be
constituted an agent of the other Members or the Company; (e) nothing
contained herein shall create any interest on the part of any Member in the
business or other assets of the other Members; (f) nothing contained herein
shall be deemed to restrict or limit in any way the carrying on (directly
or indirectly) of separate businesses or activities by any Member now or in
the future, even if such businesses or activities are competitive with the
Company; and (g) no Member shall have any authority to act for, or to
assume any obligation on behalf of, the other Members or the Company. No
Member or any of its affiliates or any of their respective officers,
directors, employees or former employees shall have any obligation, or be
liable, to the Company or any other Member pursuant to this Agreement for
or arising out of the conduct described in the preceding clause (f), for
exercising, performing or observing or failing to exercise, perform or
observe, any of its rights or obligations under the Formation Agreement or
any other Transaction Document, for exercising or failing to exercise its
rights as a Member or, solely by reason of such conduct, for breach of any
fiduciary or other duty to the Company or any Member. In the event that a
Member, any of its Affiliates or any of their respective officers,
directors, employees or former employees acquires knowledge of a potential
transaction, agreement, arrangement or other matter which may be a
corporate opportunity for both the Member and the Company, neither the
Member nor such Affiliate, officers, directors, employees or former
employees shall have any duty to communicate or offer such corporate
opportunity to the Company, and neither the Member nor such Affiliate,
officers, directors, employees or former employees shall be liable to the
Company for breach of any fiduciary or other duty, as a member or
otherwise, by reason of the fact that the Member or such Affiliate,
officers, directors, employees or former employees pursue or acquire such
corporate opportunity for the Member, direct such corporate opportunity to
another person or entity or fail to communicate such corporate opportunity
or information regarding such corporate opportunity to the Company.
Section 4.9 Business Transactions of Member, Representative
or Alternate with the Company. A Member, Representative or Alternate may
lend money to, borrow money from, act as a surety, guarantor or endorser
for, guarantee or assume one or more obligations of, provide collateral
for, and transact any and all other business with the Company and, subject
to other applicable law, has the same rights and obligations with respect
to any such matter as a person who is not a Member, Representative or
Alternate.
ARTICLE V
INDEMNIFICATION
Section 5.1 Indemnification by the Company.
(a) The Company shall indemnify an indemnified
representative against any liability incurred in connection with any
proceeding in which the indemnified representative
may be involved as a party or otherwise, as and when incurred, by reason of
the fact that such person is or was serving in an indemnified capacity,
including, without limitation, liabilities resulting from any actual or
alleged breach or neglect of duty, error, misstatement or misleading
statement, negligence, gross negligence or act giving rise to liability,
except:
(1) where such indemnification is expressly prohibited
by applicable law;
(2) where the conduct of the indemnified representative
has been finally determined:
(i) to constitute willful misconduct or
recklessness sufficient in the circumstances to bar
indemnification against liabilities arising from the
conduct; or
(ii) to be based upon or attributable to the
receipt by the indemnified representative from the
Company of a personal benefit to which the indemnified
representative is not legally entitled; or
(3) to the extent such indemnification has been finally
determined in a final adjudication to be otherwise unlawful.
(b) If an indemnified representative is entitled to
indemnification in respect of a portion, but not all, of any liabilities to
which such person may be subject, the Company shall indemnify such
indemnified representative to the maximum extent for such portion of the
liabilities.
(c) The termination of a proceeding by judgment, order,
settlement or conviction or upon a plea of nolo contendere or its
equivalent shall not of itself create a presumption that the indemnified
representative is not entitled to indemnification.
(d) Definitions. For purposes of this Article:
(1) "indemnified capacity" means any and all past,
present and future service by an indemnified representative
in one or more capacities as a Member, Manager,
Representative, Alternate or authorized agent of the
Company;
(2) "indemnified representative" means any and all
Members, Managers, Representatives, Alternates and
authorized agents of the Company and any other person
designated as an indemnified representative by the mutual
consent of BAM and CCIC Member, given in accordance with the
provisions of this Operating Agreement;
(3) "liability" means any damage, judgment, amount paid
in settlement, fine, penalty, punitive damages, excise tax
assessed with respect to an employee benefit plan, or cost
or expense of any nature (including, without limitation,
attorneys' fees and disbursements); and
(4) "proceeding" means any threatened, pending or
completed action, suit, appeal or other proceeding of any
nature, whether civil, criminal, administrative or
investigative, whether formal or informal, and whether
brought by or in the right of the Company, a class of its
Members or security holders or otherwise.
Section 5.2 Proceedings Initiated by Indemnified Representatives.
Notwithstanding any other provision of this Article, the Company shall not
indemnify under this Article an indemnified representative for any
liability incurred in a proceeding initiated (which shall not be deemed to
include counterclaims or affirmative defenses) or participated in as an
intervenor or amicus curiae by the person seeking indemnification unless
such initiation of or participation in the proceeding is authorized, either
before or after its commencement, by the unanimous consent of the Board of
Representatives. This Section does not apply to reimbursement of expenses
incurred in successfully prosecuting or defending the rights of an
indemnified representative granted by or pursuant to this Article.
Section 5.3 Advancing Expenses. The Company shall pay the
expenses (including attorneys' fees and disbursements) incurred in good
faith by an indemnified representative in advance of the final disposition
of a proceeding described in Section 5.1 or the initiation of or
participation in which is authorized pursuant to Section 5.2 upon receipt
of an undertaking by or on behalf of the indemnified representative to
repay the amount if it is ultimately determined that such person is not
entitled to be indemnified by the Company pursuant to this Article. The
financial ability of an indemnified representative to repay an advance
shall not be a prerequisite to the making of such advance.
Section 5.4 Payment of Indemnification. An indemnified
representative shall be entitled to indemnification within thirty (30) days
after a written request for indemnification has been delivered to the
secretary of the Company.
Section 5.5 Arbitration.
(a) Any dispute related to the right to indemnification,
contribution or advancement of expenses as provided under this Article,
except with respect to indemnification for liabilities arising under the
Securities Act of 1933, as amended, that the Company has undertaken to
submit to a court for adjudication, shall be decided only by arbitration in
the metropolitan area in which the principal executive offices of the
Company are located at the time, in accordance with the commercial
arbitration rules then in effect of the American Arbitration Association
("AAA"), before a panel of three arbitrators, one of whom shall be
selected by the Company, the second of whom shall be selected by the
Indemnified Representative and the third of whom shall be selected by the
other two arbitrators. In the absence of the AAA, or if for any reason
arbitration under the arbitration rules of the AAA cannot be initiated, and
if one of the parties fails or refuses to select an arbitrator or the
arbitrators selected by the Company and the Indemnified Representative
cannot agree on the selection of the third arbitrator within thirty (30)
days after such time as the Company and the Indemnified Representative have
each been notified of the selection of the other's arbitrator, the
necessary arbitrator or arbitrators shall be selected by the presiding
judge of the court of general jurisdiction in such metropolitan area.
(b) Each arbitrator selected as provided in this Section is
required to be or have been a manager, director or executive officer of a
limited liability company, corporation or other entity whose equity
securities were listed during at least one (1) year of such service on the
New York Stock Exchange or the American Stock Exchange or quoted on the
National Association of Securities Dealers Automated Quotations System.
(c) The party or parties challenging the right of an
Indemnified Representative to the benefits of this Article shall have the
burden of proof.
(d) The Company shall reimburse an Indemnified
Representative for the expenses (including attorneys' fees and
disbursements) incurred in successfully prosecuting or defending such
arbitration.
(e) Any award entered by the arbitrators shall be final,
binding and nonappealable and judgment may be entered thereon by any party
in accordance with applicable law in any court of competent jurisdiction,
except that the Company shall be entitled to interpose as a defense in any
such judicial enforcement proceeding any prior final judicial determination
adverse to the indemnified representative under Section 5.1 in a proceeding
not directly involving indemnification under this Article. This arbitration
provision shall be specifically enforceable.
Section 5.6 Contribution. If the indemnification provided for in
this Article or otherwise is unavailable for any reason in respect of any
liability or portion thereof, the Company shall contribute to the
liabilities to which the indemnified representative may be subject in such
proportion as is appropriate to reflect the intent of this Article or
otherwise.
Section 5.7 Mandatory Indemnification of Members and Managers.
To the extent that an indemnified representative of the Company has been
successful on the merits or otherwise in defense of any proceeding or in
defense of any claim, issue or matter therein, such person shall be
indemnified against expenses (including attorneys' fees and disbursements)
actually and reasonably incurred by such person in connection therewith.
Section 5.8 Contract Rights; Amendment or Repeal. All rights
under this Article shall be deemed a contract between the Company and the
indemnified representative pursuant to which the Company and each
indemnified representative intend to be legally bound. Any repeal,
amendment or modification hereof shall be prospective only and shall not
affect any rights or obligations then existing.
Section 5.9 Scope of Article. The rights granted by this Article
shall not be deemed exclusive of any other rights to which those seeking
indemnification, contribution or advancement of expenses may be entitled
under any statute, agreement, vote of disinterested Members or
disinterested Representatives, Alternates, Managers or otherwise, both as
to action in an indemnified capacity and as to action in any other
capacity. The indemnification, contribution and advancement of expenses
provided by or granted pursuant to this Article shall continue as to a
person who has ceased to be an indemnified representative in respect of
matters arising prior to such time, and shall inure to the benefit of the
heirs, executors, administrators, personal representatives, successors and
permitted assigns of such a person.
Section 5.10 Reliance on Provisions. Each person who shall act
as an indemnified representative of the Company shall be deemed to be doing
so in reliance upon the rights of indemnification, contribution and
advancement of expenses provided by this Article.
ARTICLE VI
CAPITAL ACCOUNTS
Section 6.1 Definitions. For the purposes of this Operating
Agreement, unless the context otherwise requires:
(a) "Adjusted Capital Account" shall mean, for any Member,
its Capital Account balance maintained and adjusted as required by Treasury
Regulation Section 1.704-1(b)(2)(iv).
(b) "Capital Account" shall mean, with respect to a Member,
such Member's capital account established and maintained in accordance with
the provisions of Section 6.5.
(c) "Capital Contribution" means any contribution to the
capital of the Company in cash, property or expertise by a Member whenever
made. A loan by a Member of the Company shall not be considered a Capital
Contribution.
(d) "IRC" shall mean the Internal Revenue Code of 1986, as
amended.
(e) "Membership Interest" means a Member's interest in the
Company.
(f) "Percentage Interest" means, with respect to any
Member, the Percentage Interest set forth opposite such Member's name on
Schedule A attached hereto, as amended from time to time to reflect
transfers of Membership Interests in accordance with this Operating
Agreement.
(g) "Profits" and "Losses" mean, for each fiscal year,
an amount equal to the Company's taxable income or loss for such fiscal
year, determined in accordance with IRC ss. 703(a). For the purpose of this
definition, all items of income, gain, loss or deduction required to be
stated separately pursuant to IRC ss. 703(a)(1) shall be included in
taxable income or loss with the following adjustments:
(1) Any income of the Company that is exempt from
federal income tax and not otherwise taken into account
in computing Profits or Losses pursuant to this Section
shall be added to such taxable income or loss;
(2) Any expenditures of the Company described in
IRC ss. 705(a)(2)(B) or treated as IRC ss. 705(a)(2)(B)
expenditures pursuant to Treasury Regulation ss.
1.704-1(b)(2)(iv)(i), and not otherwise taken into
account in computing Profits or Losses pursuant to this
Section shall be subtracted from such taxable income or
loss.
(h) "Treasury Regulations" include proposed, temporary and
final regulations promulgated under the IRC in effect as of the date of
this Operating Agreement and the corresponding sections of any regulations
subsequently issued that amend or supersede such regulations.
Section 6.2 Determination of Tax Book Value of Company Assets.
(a) Except as set forth below, the "Tax Book Value" of any
Company asset is its adjusted basis for federal income tax purposes.
(b) The initial Tax Book Value of any assets contributed by
a Member to the Company shall be the agreed fair market value of such
assets, increased by the amount of liabilities of the contributing Member
assumed by the Company in connection with the contribution of such assets
plus the amount of any other liabilities to which such assets are subject.
(c) The Tax Book Values of all Company assets may be
adjusted by the Managers to equal their respective gross fair market values
as of the following times: (i) the admission of an additional Member to the
Company or the acquisition by an existing Member of an additional
Membership Interest; (ii) the distribution by the Company of money or
property to a withdrawing, retiring or continuing Member in consideration
for the retirement of all or a
portion of such Member's Membership Interest; and (iii) the termination of
the Company for Federal income tax purposes pursuant to Section
708(b)(1)(B) of the IRC.
Section 6.3 Capital Contributions.
(a) The initial capital contributions to be made by the
Members shall be contributed in cash, property, services rendered, as a
credit for expenses incurred by such Member for the benefit of the Company
or a promissory note or other obligation to contribute cash or property or
perform services. The initial capital contribution of each Member will be
reflected in the books and records of the Company.
(b) No Member shall be obligated to make any capital
contributions to the Company in excess of its initial capital contribution.
(c) No Member shall be permitted to make any capital
contributions to the Company unless mutually agreed by BAM and CCIC Member.
Section 6.4 Liability for Contribution.
(a) A Member of the Company is obligated to the Company to
perform any promise to contribute cash or property or to perform services,
even if the Member is unable to perform because of death, disability or any
other reason. If a Member does not make the required contribution of
property or services, the Member is obligated at the option of the Company
to contribute cash equal to that portion of the agreed value (as stated in
the records of the Company) of the contribution that has not been made. The
foregoing option shall be in addition to, and not in lieu of, any other
rights, including the right to specific performance, that the Company may
have against such Member under applicable law.
(b) The obligation of a Member of the Company to make a
contribution or return money or other property paid or distributed in
violation of the Act may be compromised only by consent of all the Members.
Notwithstanding the compromise, a creditor of the Company who extends
credit, after entering into this Operating Agreement or an amendment hereof
which, in either case, reflects the obligation, and before the amendment
hereof to reflect the compromise, may enforce the original obligation to
the extent that, in extending credit, the creditor reasonably relied on the
obligation of a Member to make a contribution or return. A conditional
obligation of a Member to make a contribution or return money or other
property to the Company may not be enforced unless the conditions of the
obligation have been satisfied or waived as to or by such Member.
Conditional obligations include contributions payable upon a discretionary
call of the Company prior to the time the call occurs.
Section 6.5 Capital Accounts. A separate Capital Account will be
maintained for each Member. The initial Capital Accounts shall consist
solely of the initial capital contributed by the Members pursuant to
Section 6.3. BAM's Capital Account will be reduced immediately
after the BAM Capital Distribution by the amount distributed to BAM (and
the Transferring Partnerships). BAM's Capital Account balance after the BAM
Capital Distribution will be reflected on the books and records of the
Company. Notwithstanding any other provision hereof, the Company shall
determine and adjust the Capital Accounts in accordance with the rules of
Treasury Regulation Section 1.704-1(b)(2)(iv). Except as otherwise required
in the Act, no Member shall have any liability to restore all or any
portion of a deficit balance in the Member's Capital Account.
Section 6.6 No Interest on or Return of Capital. No Member shall
be entitled to interest on any Capital Contribution or Capital Account. No
Member shall have the right to demand or receive the return of all or any
part of any Capital Contribution or Capital Account except as may be
expressly provided herein, and no Member shall be personally liable for the
return of the Capital Contributions of any other Member.
Section 6.7 Percentage Interest. The Percentage Interests of the
Members are as set forth on Schedule A. The Percentage Interests shall be
updated by the Managers to reflect any transfers of Membership Interests,
set forth on a revised Schedule A and filed with the records of the
Company. The sum of the Percentage Interests for all Members shall equal
100 percent.
Section 6.8 Allocations of Profits and Losses Generally. After
the allocations in Section 6.9, at the end of each year (or shorter period
if necessary or longer period if agreed by all of the Partners), Profits
and Losses shall be allocated as follows:
(a) Profits. Profits shall be allocated to the Members in
proportion to their respective Percentage Interests.
(b) Losses. Losses shall be allocated to the Members in
proportion to their respective Percentage Interests.
Section 6.9 Allocations Under Regulations.
(a) Company Nonrecourse Deductions. Loss attributable (under
Treasury Regulation Section 1.704-2(c)) to "partnership nonrecourse
liabilities" (within the meaning of Treasury Regulation Section
1.704-2(b)(1)) shall be allocated among the Members in the same proportion
as their respective Percentage Interests.
(b) Member Nonrecourse Deductions. Loss attributable (under
Treasury Regulation Section 1.704-2(i)(2)) to "partner nonrecourse debt"
(within the meaning of Treasury Regulation Section 1.704-2(b)(4)) shall be
allocated, in accordance with Treasury Regulation Section 1.704- 2(i)(1),
to the Member who bears the economic risk of loss with respect to the debt
to which the Loss is attributable. The Members acknowledge that the
Anticipated Financing shall be treated as "partner nonrecourse debt."
(c) Minimum Gain Chargeback. Each Member will be allocated
Profits at such times and in such amounts as necessary to satisfy the
minimum gain chargeback requirements of Treasury Regulation Sections
1.704-2(f) and 1.704-2(i)(4).
(d) Qualified Income Offset. Losses and items of income and
gain shall be specially allocated when and to the extent required to
satisfy the "qualified income offset" requirement within the meaning of
Treasury Regulation Section 1.704-1(b)(2)(ii)(d).
Section 6.10 Other Allocations.
(a) Allocations when Tax Book Value Differs from Tax Basis.
When the Tax Book Value of a Company asset is different from its adjusted
tax basis for income tax purposes, then, solely for federal, state and
local income tax purposes and not for purposes of computing Capital
Accounts, income, gain, loss, deduction and credit with respect to such
assets ("Section 704(c) Assets") shall be allocated among the Members to
take this difference into account in accordance with the principles of IRC
Section 704(c), as set forth herein and in the Treasury Regulations
thereunder and under IRC Section 704(b). Except to the extent otherwise
required by final Treasury Regulations, the calculation and allocations
eliminating the differences between Tax Book Value and adjusted tax basis
of the Section 704(c) Assets shall be made on an asset-by-asset basis
without curative or remedial allocations to overcome the "ceiling rule" of
Treasury Regulation Section l.704-1(c)(2) and Treasury Regulation Section
1.704-3(b)(1).
(b) Change in Member's Interest.
(1) If during any fiscal year of the Company there is a
change in any Member's Membership Interest, then for
purposes of complying with IRC Section 706(d), the
determination of Company items allocable to any period shall
be made by using any method permissible under IRC Section
706(d) and the Regulations thereunder as may be determined
by the Managers.
(2) The Members agree to be bound by the provisions of
this Section 6.10(b) in reporting their shares of Company
income, gain, loss, and deduction for tax purposes.
(c) Allocations on Liquidation. Notwithstanding any other
provision of this Article VI to the contrary, in the taxable year in which
there is a liquidation of the Company, after the allocations in Sections
6.8 and 6.9 hereof, the Capital Accounts of the Members will, to the extent
possible, be brought to the amount of the liquidating distributions to be
made to them under Section 9.5 hereof by allocations of items of profit and
loss and, if necessary, by guaranteed payments (within the meaning of Code
Section 707(c)) credited to the Capital Account of a Member whose Capital
Account is less than the amount to be distributed to it and
debited from the Capital Account of the Member whose Capital Account is
greater than the amount to be distributed to it.
Section 6.11 Limitations Upon Liability of Members. Except as
otherwise expressly and specifically provided in or required by the
Certificate or this Operating Agreement, the personal liability of each
Member to the Company, to the other Members, to the creditors of the
Company or any third party for the losses, debts or liabilities of the
Company shall be limited to the amount of its Capital Contribution which
has not theretofore been returned to it as a distribution (including a
distribution upon liquidation). For purposes of the foregoing sentence,
distributions to a Member shall first be deemed a return of its Capital
Contribution. No Member shall at any time be liable or held accountable to
the Company, to the other Members, to the creditors of the Company or to
any other third party for or on account of any negative balance in its
Capital Account.
ARTICLE VII
DISTRIBUTIONS
Section 7.1 Net Cash From Operations and Distributions.
(a) Except as otherwise provided in this Operating Agreement
including, without limitation, in Section 3.8 hereof, and subject to any
restrictions contained in any credit or other agreements to which the
Company is a party, Net Cash From Operations, if any, shall be determined
annually by the Managers and distributed for each fiscal year to the
Members in accordance with their Percentage Interests.
(b) For purposes of this Operating Agreement, "Net Cash From
Operations" means the gross cash proceeds from Company operations less the
portion thereof used to, or expected to be used to, pay expenses, debt
payments, capital improvements, replacements and increases to reserves
therefor. "Net Cash From Operations" shall not be reduced by depreciation,
amortization, cost recovery deductions or similar allowances, but shall be
increased by any reductions to reserves previously established.
Section 7.2 Limitations on Distributions.
(a) The Company shall not make a distribution to a Member to
the extent that at the time of the distribution, after giving effect to the
distribution, all liabilities of the Company, other than liabilities to
Members on account of their interests in the Company and liabilities for
which the recourse of creditors is limited to specified property of the
Company, exceed the fair value of the assets of the Company, except that
the fair value of property that is subject to a liability for which the
recourse of creditors is limited shall be included in the assets of the
Company only to the extent that the fair value of that property exceeds
that liability.
(b) A Member who receives a distribution in violation of
subsection (a), and who knew at the time of the distribution that the
distribution violated this section, shall be liable to the Company for the
amount of the distribution. A Member who receives a distribution in
violation of this section, and who did not know at the time of the
distribution that the distribution violated this section, shall not be
liable for the amount of the distribution. Subject to subsection (c), this
subsection shall not affect any obligation or liability of a Member under
other applicable law for the amount of a distribution.
(c) A Member who receives a distribution from the Company
shall have no liability under this Section, the Act or other applicable law
for the amount of the distribution after the expiration of three (3) years
from the date of the distribution unless an action to recover the
distribution from such Member is commenced prior to the expiration of the
said three (3)-year period and an adjudication of liability against such
Member is made in the action.
Section 7.3 Amounts of Tax Paid or Withheld. All amounts paid or
withheld pursuant to the IRC or any provision of any state or local tax law
with respect to any Member shall be treated as amounts distributed to the
Member pursuant to this Article for all purposes under this Operating
Agreement.
Section 7.4 Distribution in Kind. The Company shall not
distribute any assets in kind, except pursuant to a dissolution in
accordance with Article IX.
ARTICLE VIII
TRANSFERABILITY
Section 8.1 Restriction on Transfers by CCIC Member. Without the
prior written consent of BAM, CCIC Member shall not have the right,
directly or indirectly, to sell, assign, transfer, pledge, hypothecate,
mortgage or dispose of, by gift or otherwise, or in any way encumber, any
interest in the Company held by CCIC Member (the "CCIC HoldCo Interest")
unless either (a) the transfer is made to an entity of which CCIC or CCIC
Member owns directly or indirectly all of the voting power of the
outstanding capital stock (provided that (x) such entity executes an
instrument reasonably satisfactory in form and substance to BAM pursuant to
which it agrees to be bound hereby and (y) CCIC (or its successor by
merger) shall not thereafter at any time cease to own directly or
indirectly less than all of the voting power of the outstanding capital
stock of such entity), or (b) CCIC Member has complied with the procedures
described in this Article VIII and (i) the transfer is made subject to the
right of first refusal described in Section 8.3 hereof, and (ii) to the
extent BAM does not exercise its right of first refusal described in
Section 8.3 hereof, the transfer is made subject to the right of
participation in sales described in Section 8.5(a) hereof. For purposes of
the foregoing, CCIC Member shall not be deemed to have indirectly
transferred any of the CCIC HoldCo Interest if CCIC or any other parent
corporation of CCIC Member is a party to any merger or consolidation
transaction, whether or
not such parent corporation is the surviving entity in such merger. Any
purported transfer of the CCIC HoldCo Interest in violation of this
Section 8.1 shall be void.
Section 8.2 Restriction on Transfers by BAM. Without the prior
written consent of CCIC Member, BAM shall not have the right, directly or
indirectly, to sell, assign, transfer, pledge, hypothecate, mortgage or
dispose of, by gift or otherwise, or in any way encumber, any of the
interest in the Company held by BAM (the "BAM HoldCo Interest") unless
either (a) the transfer is made to any entity of which either Xxxx Atlantic
Corporation or BAM owns directly or indirectly all of the voting power of
the outstanding capital stock (provided that (x) such entity executes an
instrument reasonably satisfactory in form and substance to CCIC Member
pursuant to which it agrees to be bound hereby and (y) Xxxx Atlantic
Corporation or BAM (or the successor by merger to either) shall not
thereafter at any time cease to own directly or indirectly less than all of
the voting power of the outstanding capital stock of such entity), or (b)
BAM has complied with the procedures described in this Article VIII and (i)
the transfer is made subject to the right of first refusal described in
Section 8.4 hereof or (ii) to the extent CCIC Member does not exercise its
right of first refusal described in Section 8.4 hereof, the transfer is
made subject to the right of participation in sales described in Section
8.5(b) hereof. For purposes of the foregoing, BAM shall not be deemed to
have indirectly transferred any of the BAM HoldCo Interest if Xxxx Atlantic
Corporation or any other parent corporation of BAM is a party to any merger
or consolidation transaction, whether or not such parent corporation is the
surviving entity in such merger. Any purported transfer of the BAM HoldCo
Interest in violation of this Section 8.2 shall be void.
Section 8.3 BAM Right of First Refusal of Transfer.
(a) If at any time CCIC Member wishes to sell all or any
part of the CCIC HoldCo Interest, CCIC Member shall submit a written offer
to sell such CCIC HoldCo Interest to BAM on terms and conditions, including
price, not less favorable to BAM than those on which CCIC Member proposes
to sell the CCIC HoldCo Interest to any other purchaser (the "CCIC Offer").
The CCIC Offer shall disclose the identity of the proposed purchaser or
transferee, the percentage of the CCIC HoldCo Interest to be sold, the
terms of the sale, any amounts owed to CCIC Member with respect to the CCIC
HoldCo Interest and any other material facts relating to the sale. BAM
shall respond to the CCIC Offer as soon as practicable after receipt
thereof, and in all events within thirty (30) days after receipt thereof.
The CCIC Offer may be revoked at any time. BAM shall have the right to
accept the CCIC Offer as to all (but not less than all) of the CCIC HoldCo
Interest offered thereby. In the event that BAM shall elect on a timely
basis to purchase all (but not less than all) of the CCIC HoldCo Interest
covered by the CCIC Offer, BAM shall communicate in writing such election
to purchase to CCIC Member, which communication shall be delivered by hand
or mailed to CCIC Member at the address set forth in Schedule A hereto and
shall, when taken in conjunction with the CCIC Offer, be deemed to
constitute a valid, legally binding and enforceable agreement for the sale
and purchase of the CCIC HoldCo Interest covered thereby; provided,
however, that CCIC Member may elect in its sole discretion to terminate
such agreement at any time prior to the closing of such sale and
purchase, in which case such CCIC HoldCo Interest shall again become
subject to the requirements of a prior offer pursuant to this Section. In
the event CCIC Member terminates any such agreement prior to closing, CCIC
Member shall be prohibited from consummating a transaction for the sale and
purchase of the CCIC HoldCo Interest with the proposed purchaser or
transferee for two (2) years from the date of such termination, and shall
be prohibited from consummating a transaction for the sale and purchase of
the CCIC HoldCo Interest with any other party for six (6) months from the
date of such termination. In the event that any CCIC Offer includes any
non-cash consideration, BAM may in its sole discretion elect to pay a cash
amount equal to the fair market value of such non-cash consideration in
lieu of such non-cash consideration. The closing of the sale and purchase
contemplated by any agreement for the sale and purchase of any portion of
the CCIC HoldCo Interest entered into between BAM and CCIC Member pursuant
to this Section 8.3 shall be consummated within sixty (60) days after the
date that such agreement becomes valid, legally binding and enforceable as
aforesaid, subject to extension to the extent necessary to secure required
approvals or consents from Governmental Authorities. Each of BAM and CCIC
Member hereby agrees to use its reasonable best efforts to obtain such
required approvals or consents from Governmental Authorities.
(b) In the event that BAM does not purchase the CCIC HoldCo
Interest offered by CCIC Member pursuant to the CCIC Offer, such CCIC
HoldCo Interest not so purchased may be sold by CCIC Member at any time
within ninety (90) days after the expiration of the CCIC Offer, subject to
the provisions of Section 8.5 below. Any such sale shall be to the same
proposed purchaser or transferee, at not less than the price and upon other
terms and conditions, if any, not more favorable to the purchaser than
those specified in the CCIC Offer. If such CCIC HoldCo Interest is not sold
within such ninety (90)-day period, it shall again become subject to the
requirements of a prior offer pursuant to this Section 8.3. In the event
that such CCIC HoldCo Interest is sold pursuant to this Section 8.3 to any
purchaser other than BAM, such CCIC HoldCo Interest shall continue to be
subject to the restrictions imposed by this Operating Agreement and Section
9.3 of the Formation Agreement with the same effect as though such
purchaser were CCIC Member for purposes of this Section.
Section 8.4 CCIC Member's Right of First Refusal of Transfer.
(a) If at any time BAM wishes to sell all or any part of the
BAM HoldCo Interest, BAM shall submit a written offer to sell such BAM
HoldCo Interest to CCIC Member on terms and conditions, including price,
not less favorable to CCIC Member than those on which BAM proposes to sell
the BAM HoldCo Interest to any other purchaser (the "BAM Offer"). The BAM
Offer shall disclose the identity of the proposed purchaser or transferee,
the percentage of the BAM HoldCo Interest to be sold, the terms of the
sale, any amounts owed to BAM with respect to the BAM HoldCo Interest and
any other material facts relating to the sale. CCIC Member shall respond to
the BAM Offer as soon as practicable after receipt thereof, and in all
events within thirty (30) days after receipt thereof. The BAM Offer may be
revoked at any time. CCIC Member shall have the right to accept the BAM
Offer as to all (but not less than all) of the BAM HoldCo Interest offered
thereby. In the event that CCIC Member elects on a timely basis to purchase
all (but not less than all) of the BAM HoldCo Interest covered by the BAM
Offer, CCIC Member shall communicate in writing such election to purchase
to BAM, which communication shall be delivered by hand or mailed to BAM at
the address set forth in Schedule A hereto and shall, when taken in
conjunction with the BAM Offer, be deemed to constitute a valid, legally
binding and enforceable agreement for the sale and purchase of the BAM
HoldCo Interest covered thereby; provided, however, that BAM may elect in
its sole discretion to terminate such agreement at any time prior to the
closing of such sale and purchase, in which case such BAM HoldCo Interest
shall again become subject to the requirements of a prior offer pursuant to
this Section. In the event BAM terminates any such agreement prior to
closing, BAM shall be prohibited from consummating a transaction for the
sale and purchase of the BAM HoldCo Interest with the proposed purchaser or
transferee for two (2) years from the date of such termination, and shall
be prohibited from consummating a transaction for the sale and purchase of
the BAM HoldCo Interest with any other party for six (6) months from the
date of such termination. In the event that any BAM Offer includes any
non-cash consideration, CCIC Member may in its sole discretion elect to pay
a cash amount equal to the fair market value of such non-cash consideration
in lieu of such non-cash consideration. The closing of the sale and
purchase contemplated by any agreement for the sale and purchase of any
portion of the BAM HoldCo Interest entered into between BAM and CCIC Member
pursuant to this Section 8.4 shall be consummated within sixty (60) days
after the date that such agreement becomes valid, legally binding and
enforceable as aforesaid, subject to extension to the extent necessary to
secure required approvals or consents from Governmental Authorities. Each
of BAM and CCIC Member hereby agrees to use its reasonable best efforts to
obtain such required approvals or consents from Governmental Authorities.
(b) In the event that CCIC Member does not purchase the BAM
HoldCo Interest offered by BAM pursuant to the BAM Offer, such BAM HoldCo
Interest not so purchased may be sold by BAM at any time within ninety (90)
days after the expiration of the BAM Offer, subject to the provisions of
Section 8.5 below. Any such sale shall be to the same proposed purchaser or
transferee, at not less than the price and upon other terms and conditions,
if any, not more favorable to the purchaser than those specified in the BAM
Offer. If such BAM
HoldCo Interest is not sold within such ninety (90)-day period, such BAM
HoldCo Interest shall continue to be subject to the requirements of a prior
offer pursuant to this Section. In the event that such BAM HoldCo Interest
is sold pursuant to this Section to any purchaser other than CCIC Member,
such portion of the BAM HoldCo Interest shall continue to be subject to the
restrictions imposed by this Operating Agreement and Section 9.4 of the
Formation Agreement with the same effect as though such purchaser were BAM
for purposes of such Section.
Section 8.5 Right of Participation in Sales.
(a) If at any time CCIC Member wishes to sell all or any
portion of the CCIC HoldCo Interest to any person or entity other than BAM
or any Affiliate of CCIC Member (the "CCIC HoldCo Interest Purchaser"), BAM
shall have the right to offer for sale to the CCIC HoldCo Interest
Purchaser, as a condition of such sale by CCIC Member, at the same price
and on the same terms and conditions as involved in such sale by CCIC
Member, the same proportion of the BAM HoldCo Interest as the proposed sale
represents with respect to the CCIC HoldCo Interest. BAM shall notify CCIC
Member of such intention as soon as practicable after receipt of the CCIC
Offer made pursuant to Section 8.3, and in all events within thirty (30)
days after receipt thereof. In the event that BAM elects to participate in
such sale by CCIC Member, BAM shall communicate such election to CCIC
Member, which communication shall be delivered in accordance with Section
11.5. CCIC Member and BAM shall sell to the CCIC HoldCo Interest Purchaser
the CCIC HoldCo Interest proposed to be sold by CCIC Member and the BAM
HoldCo Interest proposed to be sold by BAM, at not less than the price and
upon other terms and conditions, if any, not more favorable to the CCIC
HoldCo Interest Purchaser than those in the CCIC Offer provided by CCIC
Member under Section 8.3 above; provided, however, that any purchase of
less than all of the CCIC HoldCo Interest and the BAM HoldCo Interest by
the CCIC HoldCo Interest Purchaser shall be made from CCIC Member and BAM
pro rata based upon the amount offered to be sold by each. Any portion of
the CCIC HoldCo Interest and the BAM HoldCo Interest sold pursuant to this
Section 8.5(a) shall no longer be subject to the restrictions imposed by
Sections 8.3 or 8.4 of this Operating Agreement or entitled to the benefit
of this Section 8.5(a).
(b) If at any time BAM wishes to sell all or any portion of
the BAM HoldCo Interest to any person or entity other than CCIC Member or
Xxxx Atlantic Corporation or any other Affiliate of BAM (the "BAM HoldCo
Interest Purchaser"), CCIC Member shall have the right to offer for sale to
the BAM HoldCo Interest Purchaser, as a condition of such sale by BAM, at
the same price and on the same terms and conditions as involved in such
sale by BAM, the same proportion of the CCIC HoldCo Interest as the
proposed sale represents with respect to the BAM HoldCo Interest. CCIC
Member shall notify BAM of such intention as soon as practicable after
receipt of the BAM Offer made pursuant to Section 8.4, and in all events
within thirty (30) days after receipt thereof. In the event that CCIC
Member elects to participate in such sale by BAM, CCIC Member shall
communicate such election to BAM, which communication shall be delivered in
accordance with Section 11.5. BAM and CCIC Member shall sell to the BAM
HoldCo Interest Purchaser the BAM HoldCo Interest proposed to be sold by
BAM and the
CCIC HoldCo Interest proposed to be sold by CCIC Member, at not less than
the price and upon other terms and conditions, if any, not more favorable
to the BAM HoldCo Interest Purchaser than those in the BAM Offer provided
by BAM under Section 8.4 above; provided, however, that any purchase of
less than all of the BAM HoldCo Interest and the CCIC HoldCo Interest by
the BAM HoldCo Interest Purchaser shall be made from BAM and CCIC Member
pro rata based upon the amount offered to be sold by each. Any portion of
the BAM HoldCo Interest and the CCIC HoldCo Interest sold pursuant to this
Section 8.5(b) shall no longer be subject to the restrictions imposed by
Sections 8.3 or 8.4 or entitled to the benefit of this Section 8.5(b).
Section 8.6 Effect of Transfer.
(a) In addition to satisfaction of Section 4.1 and the above
provisions of this Article VIII, no assignee or transferee of all or part
of a Membership Interest in the Company shall have the right to become
admitted as a Member, unless and until:
(1) the assignee or transferee has executed an
instrument reasonably satisfactory to the Managers accepting
and adopting the provisions of this Operating Agreement;
(2) the assignee or transferee has paid all reasonable
expenses of the Company requested to be paid by the Managers
in connection with the admission of such assignee or
transferee as a Member; and
(3) such assignment or transfer shall be reflected in a
revised Schedule A to this Operating Agreement.
(b) A person who is a permitted assignee of an interest in
the Company transferred in compliance with the provisions of this Article
VIII shall be admitted to the Company as a Member and shall receive an
interest in the Company without making a contribution or being obligated to
make a contribution to the Company.
Section 8.7 No Resignation of Members. A Member may not withdraw
or resign from the Company prior to dissolution or winding up of the
Company. If a Member is a corporation, trust or other entity and is
dissolved or terminated, the powers of that Member may be exercised by its
legal representative or successor.
ARTICLE IX
DISSOLUTION AND TERMINATION
Section 9.1 Dissolution. The Company shall be dissolved upon the
occurrence of any of the following events:
(a) By the written consent of both BAM and CCIC Member;
(b) Upon the entry of a decree of judicial dissolution under
ss. 18-802 of the Act;
(c) Upon the unilateral election by BAM, exercisable at any
time after the third anniversary of the Effective Date of this Agreement by
BAM giving written notice thereof to CCIC Member; or
(d) Upon the unilateral election by CCIC Member, exercisable
at any time after the fourth anniversary of the Effective Date of this
Agreement by CCIC Member giving written notice thereof to BAM.
Section 9.2 Events of Bankruptcy of Member. The occurrence of any
of the events set forth in this Section 9.2, with respect to any Member,
shall not result in the dissolution of the Company. Such Member shall cease
to be a Member of the Company, but shall, however, retain its interest in
allocations and distributions, upon the happening of any of the following
bankruptcy events:
(a) A Member takes any of the following actions:
(1) Makes an assignment for the benefit of creditors.
(2) Files a voluntary petition in bankruptcy.
(3) Is adjudged a bankrupt or insolvent, or has entered
against the Member an order for relief, in any bankruptcy or
insolvency proceeding.
(4) Files a petition or answer seeking for the Member
any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any
statute, law or regulation.
(5) Files an answer or other pleading admitting or
failing to contest the material allegations of a petition
filed against the Member in any proceeding of this nature.
(6) Seeks, consents to or acquiesces in the appointment
of a trustee, receiver or liquidator of the Member or of all
or any substantial part of the properties of the Member.
(b) one hundred twenty (120) days after the commencement of
any proceeding against the Member seeking reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under
any statute, law or regulation, if the proceeding has
not been dismissed, or if within ninety (90) days after the appointment
without the consent or acquiescence of the Member, of a trustee, receiver
or liquidator of the Member or of all or any substantial part of the
properties of the Member, the appointment is not vacated or stayed, or
within ninety (90) days after the expiration of any such stay, the
appointment is not vacated.
Section 9.3 Judicial Dissolution. On application by or for a
Member or a Manager, a court may decree dissolution of the Company whenever
it is not reasonably practicable to carry on the business in conformity
with this Operating Agreement.
Section 9.4 Winding Up.
(a) The Managers shall wind up the affairs of the Company or
may appoint any person or entity, including a Member, who has not
wrongfully dissolved the Company, to do so (the "Liquidating Trustee").
(b) Upon dissolution of the Company and until the filing of
a certificate of cancellation as provided in Section 9.6, the persons
winding up the affairs of the Company may, in the name of, and for and on
behalf of, the Company, prosecute and defend suits, whether civil, criminal
or administrative, gradually settle and close the business of the Company,
dispose of and convey the property of the Company, discharge or make
reasonable provision for the liabilities of the Company, and distribute to
the Members any remaining assets of the Company, all without affecting the
liability of Members and Managers and without imposing liability on a
Liquidating Trustee.
Section 9.5 Distribution of Assets.
(a) In the event of any dissolution of the Company, upon the
winding up of the Company, its assets shall be distributed as follows:
(1) First, to creditors, including Members and Managers
who are creditors, to the extent otherwise permitted by law,
in satisfaction of liabilities of the Company (whether by
payment or the making of reasonable provision for payment
thereof) other than liabilities for which reasonable
provision for payment has been made;
(2) Next, (i) the CCIC Contributed Shares, including
all changes in the CCIC Contributed Shares by reason of
dividends payable in stock of CCIC, distributions, issuance
of stock, stock splits, recapitalizations, reorganizations,
mergers, consolidations, combinations, exchanges or other
similar changes with regard to CCIC Common Stock occurring
following the Effective Date, and together with all cash,
securities (and rights and interests therein) and other
property received or receivable with respect to the CCIC
Contributed Shares shall be distributed to BAM and (ii)
subject to the
condition that CCIC Member makes the payment required under
the following subsection (b), the one hundred percent (100%)
percentage membership interest in HoldCo Sub held by the
Company shall be distributed to CCIC Member; provided,
however, (iii) that in the event that (x) the value of the
CCIC Contributed Shares at the date of dissolution of the
Company exceeds (y) the value of the CCIC Contributed Shares
on the Closing Date compounded to the date of dissolution of
the Company at twenty percent (20%) per annum (the excess of
(x) over (y) is referred to as the "Excess Return" herein),
then at CCIC Member's election, CCIC Member shall be
entitled to ten percent (10%) of the Excess Return, to be
provided to CCIC Member as a cash distribution of the net
proceeds of the sale of a number of the CCIC Contributed
Shares equal in value to ten percent (10%) of the Excess
Return; with such election to be made as part of CCIC
Member's election pursuant to Section 9.1(d) or within ten
(10) days of receipt of BAM's election pursuant to Section
9.1(c); and
(3) Then, to the Members in proportion to their
Percentage Interests.
(b) In consideration of the distribution to CCIC Member of
the HoldCo Sub membership interest, CCIC Member shall make a payment to BAM
in an amount equal to the Allocated Share of the Fair Market Value of such
membership interest in HoldCo Sub, which reflects the underlying value of
the assets held by each of HoldCo and OpCo; provided, however, that in the
event that CCIC Member makes the election set forth in Section
9.5(a)(2)(iii), then (x) "nineteen percent (19.0%)" shall be substituted
for "fourteen percent (14.0%)" in subsection (i) of the definition of
"Allocated Share" in Section 1.1; and (y) the determination of "Allocated
Share" pursuant to subsection (ii) of such definition shall be performed
appropriately taking into account the substitution described in (x) above.
At the option of CCIC Member, such payment shall be made either (i) in cash
or (ii) in shares of CCIC Common Stock, with the number of shares of CCIC
Common Stock determined by dividing the Allocated Share by the average
trading price of CCIC Common Stock in the sixty (60) trading days preceding
payment. For purposes of this Section, "Fair Market Value" of the HoldCo
Sub membership interest shall be calculated as follows: (i) BAM and CCIC
Member shall negotiate in good faith to determine Fair Market Value and
(ii) if BAM and CCIC Member fail to agree on Fair Market Value within
thirty (30) days after such trigger event, the Fair Market Value of the
HoldCo Sub membership interest shall be determined pursuant to the
appraisal process described below:
(1) Not later than five (5) days after the expiration
of the period during which BAM and CCIC Member are to negotiate in good
faith to determine the Fair Market Value, BAM and CCIC Member shall each
select an appraiser (which may or may not be a Qualified Investment Banking
Firm (as hereinafter defined)) and shall give the other party notice of
such selection. Each of such appraisers (the "Original Appraisers") shall
determine the fair market value of the HoldCo Sub membership interest at
the time such appraiser renders its written appraisal.
(2) Each Original Appraiser shall deliver its written
appraisal to the party retaining such Original Appraiser within twenty (20)
days following the date of the selection of both Original Appraisers. Such
written appraisals shall be exchanged by BAM and CCIC Member at the offices
of Xxxxxx, Xxxxx & Xxxxxxx LLP, or such other place as the parties shall
designate, at 10:00 a.m. local time on the twenty-first (21st) day
following the date of the selection of both Original Appraisers. In the
event that the Original Appraisers agree on the fair market value, the Fair
Market Value shall be such agreed-upon amount. In the event that the
Original Appraisers do not agree on the fair market value, (i) if the
higher of the two valuations is not more than one hundred ten percent
(110%) of the lower valuation of the Original Appraisers, the Fair Market
Value shall be the mean of the two valuations, and (ii) if the higher of
the two valuations is greater than one hundred ten percent (110%) of the
lower valuation, the Original Appraisers shall elect a Qualified Investment
Banking Firm which shall independently calculate the fair market value
within fifteen (15) days of such election. If the Original Appraisers
cannot agree upon a third appraiser within five (5) days following the end
of the twenty (20) day period referred to above, then the third appraiser
shall be a Qualified Investment Banking Firm appointed by the AAA. Neither
BAM nor CCIC Member nor either of the Original Appraisers shall provide the
third appraiser, directly or indirectly, with a copy of the written
appraisal of either of the Original Appraisers, an oral or written summary
thereof, or the valuation determined by either of the Original Appraisers,
either orally or in writing. The valuation of the third appraiser will be
compared with the two valuations of the Original Appraisers, and the
valuation farthest from the third valuation will be disregarded. The Fair
Market Value shall be the mean of the two remaining valuations.
(3) BAM and CCIC Member shall give to the Original
Appraisers and the third appraiser, and shall cause HoldCo Sub and OpCo to
give to the appraisers, free and full access to and the right to inspect,
during normal business hours, all of the premises, properties, assets,
records, contracts and other documents relating to HoldCo Sub and OpCo and
shall permit them and cause HoldCo Sub and OpCo to permit them to consult
with the officers, employees, accountants, counsel and agents of HoldCo
Sub, OpCo, BAM and CCIC Member for the purpose of making such investigation
of HoldCo Sub and OpCo as they shall desire to make. Furthermore, BAM and
CCIC Member shall furnish to the Original Appraisers and the third
appraiser, and shall cause HoldCo Sub and OpCo to furnish to such
appraisers, all such documents and copies of documents and records and
information with respect to the affairs of HoldCo Sub and OpCo and copies
of any working papers relating thereto as they shall from time to time
reasonably request.
(4) "Qualified Investment Banking Firm" means any firm
engaged in providing corporate finance, merger and acquisition, and
business valuation services and deriving revenues therefrom (excluding any
revenues derived from merchant banking activities) of at least $25 million
during its last completed fiscal year, but excluding, however, any firms
which received more than $250,000 in fees during the preceding twenty-four
(24) calendar months from BAM or CCIC Member or their respective affiliates
and any firms selected by BAM or CCIC Member as an Original Appraiser.
(c) The Company following dissolution shall pay or make
reasonable provision to pay all claims and obligations, including all
contingent, conditional or unmatured claims and obligations, known to the
Company and all claims and obligations which are known to the Company but
for which the identity of the claimant is unknown. If there are sufficient
assets, such claims and obligations shall be paid in full and any such
provision for payment made shall be made in full. If there are insufficient
assets, such claims and obligations shall be paid or provided for according
to their priority and, among claims and obligations of equal priority,
ratably to the extent of assets available therefor. Any remaining assets
shall be distributed as provided in subsection (a). Any Liquidating Trustee
winding up the affairs of the Company who has complied with this Section
shall not be personally liable to the claimants of the dissolved Company by
reason of such person's actions in winding up the Company.
Section 9.6 Cancellation of Certificate. The Certificate
of the Company shall be canceled upon the dissolution and the completion of
winding up of the Company.
ARTICLE X
BOOKS; REPORTS TO MEMBERS; TAX ELECTIONS
Section 10.1 Books and Records.
(a) The Managers shall maintain separate books of account
for the Company which shall show a true and accurate record of all costs
and expenses incurred, all charges made, all credits made and received and
all income derived in connection with the conduct of the Company and the
operation of its business, and, to the extent inconsistent therewith, in
accordance with this Operating Agreement.
(b) Except as and until otherwise required by the IRC, the
books of the Company shall be kept in accordance with the accrual method of
accounting.
(c) Each Member of the Company has the right to obtain from
the Company from time to time upon demand for any purpose reasonably
related to the Member's interest as a Member of the Company:
(1) True and full information regarding the status of
the business and financial condition of the Company.
(2) Promptly after they become available, a copy of the
federal, state and local income tax returns for each year of
the Company.
(3) A current list of the name and last known business,
residence or mailing address of each Member and Manager.
(4) A copy of this Operating Agreement, the Certificate
and all amendments thereto.
(5) Any information or report deemed necessary by
either BAM or CCIC Member in order to prepare Securities and
Exchange Commission filing documents, financial statements
or tax returns.
(6) Other information regarding the affairs of the
Company as is just and reasonable.
(d) Each Manager shall have the right to examine all of the
information described in subsection (c) of this Section for a purpose
reasonably related to its position as a Manager.
Section 10.2 Tax Information. Within ninety (90) days
after the end of each fiscal year, the Company shall supply to each Member
all information necessary and appropriate to be included in each Member's
income tax returns for that year.
Section 10.3 Business Plans. On or before November 30 of
each year, the Managers of the Company shall, in consultation with BAM,
develop a business plan and budget for the Company (including HoldCo Sub
and OpCo) (the "Business Plan") for the following calendar year of HoldCo
(and HoldCo Sub and OpCo). The Business Plan for the period between the
Effective Date and December 31, 1999 is attached hereto as Schedule D. Each
subsequent Business Plan shall be submitted to the Members for review and,
subject to the second following sentence, comment, and shall be adopted
only with the mutual consent of BAM and CCIC Member. The Company shall use
commercially reasonable efforts to, and cause each of HoldCo Sub and OpCo
to, conduct their respective businesses in accordance with the then current
Business Plan.
If by the first date of any year the proposed Business Plan for that year
has not been adopted, the Business Plan for such year shall be deemed to be
the expense portion of the Business Plan in effect for the preceding year
increased, at the discretion of CCIC Member, to an amount not to exceed the
sum of:
(a) the average operating cost per communications tower
owned by OpCo (or of which it has the economic benefit) (the
"OpCo Towers") based on the most recent quarterly financial
statements available as of the first day of the current year
multiplied by fifty percent (50%) of the sum of (i) the aggregate
number of OpCo Towers constructed, completed or otherwise
acquired in the course of the prior year and (ii) the aggregate
number of OpCo Towers projected to be constructed, completed or
otherwise acquired in the current year in the Business Plan for
the prior year; and
(b) the sum of (x) with respect to all contractual price
increases with respect to contracts and agreements to which OpCo
is a party and all increases in Taxes with respect to OpCo
Towers, the amount of such increase and (y) with respect to all
other expense items in the previous year's budget, (A) the amount
of such expenses multiplied by (B) the sum of one (1) plus an
amount equal to the percentage increase in the CPI during the
previous year.
If BAM and CCIC Member are unable to mutually agree on the Business Plan
for the year commencing January 1, 2000, the Business Plan for such year
shall be deemed to be the quotient of (a) the expense portion of the
initial Business Plan for the period ending December 31, 1999, increased as
contemplated by the foregoing sentence, multiplied by three hundred
sixty-five (365) (b) divided by the number of days elapsed between the
Effective Date and December 31, 1999 (including both the Effective Date and
December 31, 1999).
Notwithstanding the foregoing, each Business Plan that is implemented
pursuant to the foregoing two paragraphs of this Section 10.3 because BAM
and CCIC Member are unable to mutually agree on the Business Plan must
provide for the payment by OpCo, prior to the allocation of revenues
pursuant to such two paragraphs, of: (i) any and all costs, expenses or
payments reasonably necessary to fulfill OpCo's obligations under the
Global Lease; (ii) any and all costs, expenses or payments reasonably
necessary to fulfill OpCo's obligations under the Build-to-Suit Agreement;
(iii) any and all taxes of any kind due and owing by OpCo; (iv) any
payments or expenditures required under any lease of real estate, grant of
easement, right of way or similar agreement to which OpCo is a party; (v)
any and all costs, expenses or payments reasonably necessary to fulfill
OpCo's obligations under any lease or sublease of tower space or real
estate to any third party; (vi) insurance premiums (including without
limitation, any payments pursuant to premium financing) and/or deductibles
of OpCo; (vii) payments to third parties for equipment or any other goods
and services required to perform OpCo's obligations under existing
agreements including, without limitation, payments required to satisfy any
mechanics's liens; (viii) salaries, commissions, compensation, benefits,
and payments or obligations of a similar nature; and (ix) any and all
costs, expenses and payments required to comply with, or payable pursuant
to any applicable laws, rule, regulations, ordinances, permits or licenses.
Further, any such Business Plan may have the effect of reducing amounts
payable under the Management Agreement so long as the Anticipated Financing
remains outstanding.
Section 10.4 Reports. The Company shall cause to be prepared, and
each Member furnished with, financial statements accompanied by a report
thereon of the Company's accountants stating that such statements are
prepared and fairly stated in all material respects in accordance with
generally accepted accounting principles, and, to the extent inconsistent
therewith, in accordance with this Operating Agreement, including the
following:
(a) within thirty (30) days of the end of each month, the
Company shall deliver to BAM and CCIC Member an unaudited income statement
and schedule as to the sources and application of funds for such month and
an unaudited balance sheet of the Company as of the end of such month, in
reasonable detail and prepared in accordance with GAAP (except as permitted
by Form 10-Q under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")), together with an analysis by management of the Company's
financial condition and results of operations during such period and
explanation by management of any differences between such condition or
results and the budget and business plan for such period;
(b) as soon as practicable, but in any event within ninety
(90) days after the end of each fiscal year of the Company, a consolidated
income statement for such fiscal year, a consolidated balance sheet of the
Company as of the end of such year, a schedule as to the cash flow and a
statement of the Members' Capital Accounts, changes thereto for such fiscal
year and Percentage Interests at the end of such year, such year-end
financial reports to be in reasonable detail, prepared in accordance with
GAAP and audited and certified by the Company's independent public
accountants;
(c) as soon as practicable, but in any event within thirty
(30) days after the end of each of the first three (3) quarters of each
fiscal year of the Company, an unaudited consolidated profit or loss
statement and schedule as to consolidated cash flow for such fiscal quarter
and an unaudited consolidated balance sheet of the Company as of the end of
such fiscal quarter, in reasonable detail and prepared in accordance with
GAAP (except as permitted by Form 10-Q under the Exchange Act); and
(d) such other information relating to the financial
condition, business, prospects or limited liability company affairs of the
Company as any Member may from time to time reasonably request.
Section 10.5 Tax Matters Partner.
(a) BAM is hereby appointed and shall serve as the tax
matters partner of the Company (the "Tax Matters Partner") within the
meaning of IRC ss. 6231(a)(7) for so long as it is not the subject of a
bankruptcy event as defined in Section 9.2 and otherwise is entitled to act
as the Tax Matters Partner. The Tax Matters Partner may file a designation
of itself as such with the Internal Revenue Service. The Tax Matters
Partner shall (i) furnish to each Member affected by an audit of the
Company income tax returns a copy of each notice or
other communication received from the IRS or applicable state authority,
(ii) keep such Member informed of any administrative or judicial
proceeding, as required by Section 6223(g) of the Code, and (iii) allow
such Member an opportunity to participate in all such administrative and
judicial proceedings. The Tax Matters Partner shall take such action as may
be reasonably necessary to constitute the other Member a "notice partner"
within the meaning of Section 6231(a)(8) of the Code, provided that the
other Member provides the Tax Matters Partner with the information that is
necessary to take such action; and
(b) The Company shall not be obligated to pay any fees or
other compensation to the Tax Matters Partner in its capacity as such.
However, the Company shall reimburse the expenses (including reasonable
attorneys' and other professional fees) incurred by the Tax Matters Partner
in such capacity. Each Member who elects to participate in Company
administrative tax proceedings shall be responsible for its own expenses
incurred in connection with such participation. In addition, the cost of
any adjustments to a Member and the cost of any resulting audits or
adjustments of a Member's tax return shall be borne solely by the affected
Member; and
(c) The Company shall indemnify and hold harmless the Tax
Matters Partner from and against any loss, liability, damage, cost or
expense (including reasonable attorneys' fees) sustained or incurred as a
result of any act or decision concerning Company tax matters and within the
scope of such Member's responsibilities as Tax Matters Partner, so long as
such act or decision was not the result of gross negligence, fraud, bad
faith or willful misconduct by the Tax Matters Partner. The Tax Matters
Partner shall be entitled to rely on the advice of legal counsel as to the
nature and scope of its responsibilities and authority as Tax Matters
Partner, and any act or omission of the Tax Matters Partner pursuant to
such advice shall in no event subject the Tax Matters Partner to liability
to the Company or any Member.
Section 10.6 Tax Audits/Special Assessments. If the federal tax
return of either the Company or an individual Member with respect to an
item or items of Company income, loss, deduction, etc., potentially
affecting the tax liability of the Members generally is subject to an audit
by the Internal Revenue Service, the Managers may, in the exercise of their
business judgment, determine that it is necessary to contest proposed
adjustments to such return or items. If such a determination is made, the
Managers will finance the contest of the proposed adjustments out of the
Net Cash From Operations.
Section 10.7 Tax Elections. The Company will elect to amortize
organizational costs. Upon the death of a Member, or in the event of the
distribution of property, the Company may file an election, in accordance
with applicable Treasury Regulations, to cause the basis of the Company's
property to be adjusted for federal income tax purposes as provided by IRC
ss. 000, XXX ss. 743 and IRC ss. 754. The determination whether to make and
file any such election shall be made by the Managers in their sole
discretion.
ARTICLE XI
MISCELLANEOUS
Section 11.1 Binding Effect. This Operating Agreement shall be
binding upon BAM and CCIC Member and any permitted transferee or permitted
assignee of an interest in the Company.
Section 11.2 Entire Agreement. This Operating Agreement, the
Certificate, the Formation Agreement and the other Transaction Documents
contain the entire agreement of the parties hereto with respect to the
subject matter hereof and supersede all prior understandings and agreements
of the parties with respect thereto.
Section 11.3 Amendments. The Certificate and this Operating
Agreement may not be amended except by the written agreement of all of the
Members.
Section 11.4 Choice of Law. Notwithstanding the place where this
Operating Agreement may be executed by any of the parties hereto, the
parties expressly agree that all the terms and provisions hereof shall be
construed under the laws of Delaware (without regard to any conflicts of
law principles).
Section 11.5 Notices. Except as otherwise provided in this
Operating Agreement, any notice, demand or communication required or
permitted to be given by any provision of this Operating Agreement shall be
deemed to have been sufficiently given or served for all purposes if
delivered personally or sent by facsimile transmission or overnight express
to the party or to an executive officer of the party to whom the same is
directed or, if sent by registered or certified mail, postage and charges
prepaid, addressed to the Member's or Company's address, as appropriate,
which is set forth in this Operating Agreement or Schedule A hereto.
Section 11.6 Headings. The titles of the Articles and the
headings of the Sections of this Operating Agreement are for convenience of
reference only and are not to be considered in construing the terms and
provisions of this Operating Agreement.
Section 11.7 Pronouns. All pronouns shall be deemed to refer to
the masculine, feminine, neuter, singular or plural, as the identity of the
person or persons, firm or corporation may require in the context thereof.
Section 11.8 Waivers. The failure of any party to seek redress
for violation of or to insist upon the strict performance of any covenant
or condition of this Operating Agreement shall not prevent a subsequent
act, that would have originally constituted a violation, from having the
effect of an original violation.
Section 11.9 Severability. If any provision of this Operating
Agreement or its application to any person or circumstance shall be
invalid, illegal or unenforceable to any extent, the remainder of this
Operating Agreement and its application shall not be affected and shall be
enforceable to the fullest extent permitted by law.
Section 11.10 No Third Party Beneficiaries. None of the
provisions of this Operating Agreement shall be for the benefit of or
enforceable by any person other than the parties to this Agreement and
their respective permitted successors and permitted transferees and
assigns.
Section 11.11 Interpretation. It is the intention of the Members
that, during the term of this Operating Agreement, the rights of the
Members and their successors-in-interest shall be governed by the terms of
this Agreement, and that the right of any Member or successor-in-interest
to assign, transfer, sell or otherwise dispose of any interest in the
Company shall be subject to limitations and restrictions of this Operating
Agreement.
Section 11.12 Further Assurances. Each Member shall execute all
such certificates and other documents and shall do all such other acts as
the Managers deem appropriate to comply with the requirements of law for
the formation of the Company and to comply with any laws, rules,
regulations and third-party requests relating to the acquisition, operation
or holding of the property of the Company.
Section 11.13 Counterparts. This Operating Agreement may be
executed in counterparts, each of which shall be deemed an original, but
all of which taken together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned Members, intending to be
legally bound, have executed this Operating Agreement as of the date first
above written.
CELLCO PARTNERSHIP
By XXXX ATLANTIC MOBILE INC., its managing
general partner
By: /s/ X.X. Xxxxxx
-------------------------------
Name: X.X. Xxxxxx
Title: Vice President
Network Planning and Administration
CCA INVESTMENT CORP.
By: /s/ Xxxxx X. Xxx
-------------------------------
Name: Xxxxx X. Xxx
Title: President
