EXECUTION COPY
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ONEPOINT SERVICES, L.L.C.
A Delaware Limited Liability Company
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LIMITED LIABILITY COMPANY AGREEMENT
Dated as of November 23, 1999
THE MEMBERSHIP INTERESTS REPRESENTED BY THIS LIMITED LIABILITY COMPANY AGREEMENT
HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 OR UNDER
ANY OTHER APPLICABLE SECURITIES LAWS. SUCH INTERESTS MAY NOT BE SOLD, ASSIGNED,
PLEDGED OR OTHERWISE DISPOSED OF AT ANY TIME WITHOUT EFFECTIVE REGISTRATION
UNDER SUCH ACT AND LAWS OR EXEMPTION THEREFROM, AND COMPLIANCE WITH THE OTHER
RESTRICTIONS ON TRANSFERABILITY SET FORTH HEREIN.
TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS............................................................................. 1
Section 1.1 Definitions................................................................... 1
Section 1.2 Other Definitions............................................................. 4
ARTICLE II GENERAL PROVISIONS; CAPITAL CONTRIBUTIONS............................................. 4
Section 2.1 Formation..................................................................... 4
Section 2.2 Name.......................................................................... 5
Section 2.3 Purpose....................................................................... 5
Section 2.4 Registered Office; Registered Agent; Place of Business........................ 5
Section 2.5 Capital Contributions......................................................... 5
Section 2.6 Term.......................................................................... 6
Section 2.7 No State-Law Partnership...................................................... 6
ARTICLE III CAPITAL ACCOUNTS...................................................................... 6
Section 3.1 Capital Accounts.............................................................. 6
Section 3.2 Computation of Amounts........................................................ 6
Section 3.3 Distribution in Kind.......................................................... 7
Section 3.4 Certain Terms of Preferred Units.............................................. 7
Section 3.5 Certain Terms of Common Units................................................. 9
ARTICLE IV DISTRIBUTIONS; AND ALLOCATIONS......................................................... 10
Section 4.1 Distributions................................................................. 10
Section 4.2 Allocations................................................................... 12
Section 4.3 Special Allocations........................................................... 12
Section 4.4 Tax Allocations............................................................... 13
Section 4.5 Indemnification and Reimbursement for Payments on Behalf of a Unitholder...... 13
ARTICLE V MANAGEMENT AND MEMBER RIGHTS............................................................ 14
Section 5.1 Management Authority.......................................................... 14
Section 5.2 Indemnification............................................................... 15
Section 5.3 Transfer of Company Interest.................................................. 15
Section 5.4 Member Rights; Meetings....................................................... 16
Section 5.5 Additional Members............................................................ 17
Section 5.6 Preemptive Rights............................................................. 17
Section 5.7 Outside Businesses............................................................ 17
Section 5.8 Member Representations and Warranties......................................... 18
ARTICLE VI DURATION............................................................................... 18
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Section 6.1 Duration................................................................. 18
Section 6.2 Winding Up............................................................... 18
Section 6.3 Termination.............................................................. 19
ARTICLE VII VALUATION........................................................................ 19
Section 7.1 Valuation................................................................ 19
ARTICLE VIII CERTIFICATION OF MEMBERSHIP INTERESTS........................................... 19
Section 8.1 Membership Interests..................................................... 19
ARTICLE IX BOOKS OF ACCOUNT; MEETINGS........................................................ 19
Section 9.1 Books.................................................................... 19
Section 9.2 Fiscal Year.............................................................. 19
Section 9.3 Taxes.................................................................... 20
ARTICLE X MISCELLANEOUS...................................................................... 20
Section 10.1 Amendments............................................................... 20
Section 10.2 Successors............................................................... 20
Section 10.3 Governing Law; Severability.............................................. 21
Section 10.4 Notices.................................................................. 21
Section 10.5 Complete Agreement; Headings, Counterparts............................... 21
Section 10.6 Partition................................................................ 21
Section 10.7 No Strict Construction................................................... 21
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LIMITED LIABILITY COMPANY AGREEMENT OF
ONEPOINT SERVICES, L.L.C.
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THIS LIMITED LIABILITY COMPANY AGREEMENT, of OnePoint Services, L.L.C.
(the "Company") dated and effective as of November 23, 1999 (this "Agreement"),
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is adopted by, executed and agreed to, for good and valuable consideration, by
OnePoint Communications Corp. (the "Investor"), Xx Xxxxxxxx and Xxx Xxxxxxxxx
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(together the "Executives" and individually an "Executive"), Xxxxx Xxxxxx, Xx.
and Xxxxx Xxxxx (together the "RCP Executives" and individually an "RCP
Executive"), the other individuals (together the "Additional Members" and
individually an "Additional Member") listed on Schedule A hereto, as such
schedule may be amended from time to time. Certain terms used herein are
defined in Article I.
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WHEREAS, the Company has been formed as a limited liability company
pursuant to the Act by the filing of a Certificate of Formation of the Company
(the "Certificate") with the Secretary of the State of Delaware;
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WHEREAS, the Investor, Executives, RCP Executives, and the Additional
Members desire to be admitted as Members;
WHEREAS, the Members desire to designate the Investor as the Managing
Member with the rights and obligations set forth herein; and
WHEREAS, the Members desire to enter into this Agreement to set forth,
inter alia, their respective rights and obligations as Members.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other goods and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto; intending to be legally
bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
Section I.1 Definitions. For purposes of this Agreement:
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"Act" means the Delaware Limited Company Act, 6 Del. C. (S) 18-101,
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et.seq., as amended from time to time.
"Additional Member" means a Person admitted to the Company as a Member
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pursuant to the Agreement.
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"Authorized Units" means the aggregate of all Units (the "Total
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Authorized Units") or any unit thereof (an "Authorized Unit") authorized as part
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of the capital structure of the Company by this Agreement or amendment thereto,
as shown on Schedule A.
"Book Value" means, with respect to any Company property, Company's
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adjusted basis for federal income tax purposes, adjusted from time to time to
reflect the adjustments required or permitted by Treasury Regulations.
"Capital Contributions" means any cash, cash equivalents, promissory
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obligations, or the fair market value of other property which a Unitholder
contributes or is deemed to have contributed to the Company with respect to any
Unit pursuant to Sections 2.5, 3.4(a) and 3.5.
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"Code" means the Internal Revenue Code of 1986, as amended from time
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to time, and the regulations promulgated thereunder.
"Common Unit" means a Unit representing a fractional part of the
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interests in the Company held by the Common Unitholders and Restricted
Unitholders and having the right and obligations specified with respect to
Common Units in this Agreement.
"Common Unitholder" means a holder of Common Units.
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"Company" means OnePoint Services, L.L.C.
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"Executives" means Xx Xxxxxxxx and Xxx Xxxxxxxxx.
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"Fully Diluted Units" means, at any time, the number of Common Units
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outstanding at such time, plus the number of Common Units issuable upon
conversion of the Preferred Units outstanding at such time.
"Indemnified Party" means any Person who is or has been a Manager,
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Member or officer of the Company or of the Manager, or who is serving or has
served at the request of the Company or the Manager as a director, officer,
manager, member, partner, employee or agent of another limited liability company
or a corporation, partnership, joint venture, trust or other enterprise, whether
or not such Person continues to be such at the time the loss, liability or
expense in question is paid or incurred.
"Investor" means OnePoint Communications Corp.
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"Losses" for any period means all items of Company loss, deduction and
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expense for such period determined according to Section 3.2.
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"Majority in Interest" means the Member(s) holding Units representing
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a majority of the Fully Diluted Units that are eligible to vote.
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"Manager" means the Investor or its successor as provided for in
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Section 5.1(d) below. There shall be only one Manager.
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"Member" means any of the parties identified on Schedule A as a Member
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or admitted as a member after the date of this Agreement in accordance with the
terms hereof, in each case for so long as such Person continues to be a member
hereunder.
"Minimum Gain" means the partnership minimum gain determined pursuant
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to Treasury Regulation Section 1.704-2(d).
"Percentage Interest" means, in respect of each Unitholder, (i) if no
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Preferred Units are issued, such Unitholders's interest in the income, gains,
losses, deductions and expenses of the Company as a percentage equal to all
Common Units held by such Unitholders divided by all Common Units issued; or
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(ii) if Preferred Units are issued, such Unitholder's interest in the income,
gains, losses, deductions and expenses of the Company computed as a percentage
equal to all Fully Diluted Units held by the Unitholder divided by all Fully
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Diluted Units issued.
"Person" means an individual, a partnership, a corporation, a limited
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liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Preferred Unit" means a Unit representing a fractional part of the
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interests of the Preferred Unitholders and having the rights and obligations
specified with respect to Preferred Units in this Agreement.
"Preferred Unitholder" means a holder of a Preferred Unit.
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"Profits" for any period means all items of Company income and gain
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for such period determined according to Section 3.2.
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"RCP Acquisition" means the proposed stock purchase acquisition of RCP
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Communications, Inc. by the Company.
"RCP Employees" means the employees of RCP Communications, Inc. on the
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closing date of the RCP Acquisition.
"RCP Executive" means Xxxxx Xxxxxx, Xx. or Xxxxx X. Xxxxx.
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"Restricted Common Unit" means a Common Unit that is subject to
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vesting, divestiture, or other restrictions as specified in a Unitholder
Agreement between the Company and the Restricted Unitholder.
"Restricted Unitholder" means any owner of one or more Restricted
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Common Units as reflected on the Company's books and records.
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"Treasury Regulations" means the income tax regulations promulgated
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under the Code and effective as of the date hereof. Such term shall be deemed
to include any future amendments to such regulations and any corresponding
provisions of succeeding regulations to the extent the Manager determines that
any such amendments and succeeding regulations do not adversely affect the
economic interests of the Members hereunder.
"Uncommitted Unit" means any Authorized Unit which is not yet issued
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to any Member or is reserved for issuance upon the conversion in a Preferred
Unit.
"Unit" means an interest in the Company representing a fractional part
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of the interests of all Members and Assignees and shall include Common Units,
Restricted Common Units and Preferred Units; provided that any class or group of
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Units issued shall have relative rights, powers, and duties set forth in this
Agreement and the interest in the Company represented by such class or group of
Units shall be determined in accordance with such relative rights, powers, and
duties set forth in this Agreement.
"Unitholder" means any owner of one of more Units as reflected on the
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Company's books and records.
Section I.2 Other Definitions. Each of the following defined terms
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has the meaning given such term in the Section set forth opposite such defined
term:
Term Section
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Agreement Preamble
Capital Account Section 3.1
Certificate Section 2.1
Conversion Ratio Section 3.4(c)
Liquidation Value Section 3.4(d)
Transfer Section 5.2
ARTICLE II
GENERAL PROVISIONS; CAPITAL CONTRIBUTIONS
Section II.1 Formation. The formation of the Company pursuant to and
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in accordance with the Delaware Limited Liability Company Act, 6 Del. C. (S)18-
101, et seq., as amended from time to time (the "Act"), occurred on August 25,
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1999. An authorized person, within the meaning of the Act, has executed,
delivered and filed the certificate of formation of the Company (the
"Certificate"). Upon the Investor's (a) execution of this Agreement or a
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counterpart hereof and (b) the making of the capital contribution required by
Section 2.5, the Investor shall be admitted to the Company as its initial
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Member.
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Section II.2 Name. The name of the Company will be "OnePoint
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Services," or such other name or names as the Manager may from time to time
designate.
Section II.3 Purpose. The Company's purpose shall be to carry on any
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activities which may be lawfully be carried on by a limited liability company
organized pursuant to the Act.
Section II.4 Registered Office; Registered Agent; Place of Business.
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The registered office of the Company required by the Act to be maintained in the
State of Delaware shall be the office of the initial registered agent named in
the Certificate or such other office (which need not be a place of business of
the Company) as the Manager may designate from time to time in the manner
provided by law. The registered agent of the Company in the State of Delaware
shall be the initial registered agent named in the Certificate or such other
Person or Persons as the Manager may designate from time to time in the manner
provided by law. The Company will maintain an office and principal place of
business at such place or places inside or outside the State of Delaware as the
Manager may designate from time to time.
Section II.5 Capital Contributions.
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(a) The Investor shall, promptly following the execution of this
Agreement, contribute to the capital of the Company the amount set forth on
Schedule B. All future capital contributions made by any Member shall be
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reflected on the Company's books and records. Persons hereafter admitted as
Members of the Company shall make such contributions of cash (or promissory
obligations), property or services to the Company as shall be determined by the
Manager and the Member making the contribution in their sole discretion at the
time of each such admission.
(b) No Member shall have any responsibility to restore any negative
balance in his, her or its Capital Account or to contribute to or in respect of
liabilities or obligations of the Company, whether arising in tort, contract or
otherwise, or return distributions made by the Company except as required by the
Act or other applicable law. The failure of the Company to observe any
formalities or requirements relating to the exercise of its powers or management
of its business or affairs under this Agreement or the Act shall not be grounds
for imposing personal liability on the Member(s) for liabilities of the Company.
(c) No interest shall be paid by the Company on capital contributions
or on balances in Capital Accounts.
(d) A Member shall not be entitled to withdraw any part of its
Capital Account or to receive any distributions from the Company except as
provided in Articles IV and VI; nor shall a Member be entitled to make any
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capital contribution to the Company other than as expressly provided herein. Any
Member may, with the approval of the Manager, make loans to the Company, and any
loan by a Member to the Company shall not be considered to be a capital
contribution for any purpose and shall not result in an increase in the amount
of the Capital Account of such Member.
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Section II.6 Term. The Company shall continue until dissolved and
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terminated in accordance with Article VI of this Agreement.
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Section II.7 No State-Law Partnership. The Member(s) intend that the
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Company not be a partnership (including, without limitation, a limited
partnership) or joint venture, and that no Member be a partner or joint venturer
of any other Member, for any purposes and neither this Agreement nor any other
document entered into by the Company or any Member shall be construed to suggest
otherwise.
ARTICLE III
CAPITAL ACCOUNTS
Section III.1 Capital Accounts. A capital account (a "Capital
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Account") shall be established for each Member and shall be maintained in
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accordance with Treasury Regulation Section 1.704-1(b)(2)(iv). The Capital
Account of each Member shall consist of his or its initial Capital Contribution
and shall be (a) increased by any additional Capital Contributions made by such
Member pursuant to the terms of this Agreement and such Member's share of items
of income and gain allocated to such Member pursuant to Article IV and (b)
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decreased by such Member's share of items of loss, deduction and expense
allocated to such Member pursuant to Article IV and any distributions to such
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Member of cash or the fair market value of any other property (net of
liabilities assumed by such Member and liabilities to which such property is
subject) distributed to such Member. Any references in this Agreement to the
Capital Account of a Member shall be deemed to refer to such Capital Account as
the same may be increased or decreased from time to time as set forth above.
Section III.2 Computation of Amounts. For purposes of computing the
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amount of any item of income, gain, loss, deduction or expense to be reflected
in Capital Accounts, the determination, recognition and classification of each
such item shall be the same as its determination, recognition and classification
for federal income tax purposes, provided that:
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(i) The computation of all items of income, gain, loss and
deduction shall include those items described in Code Section 705(a)(l)(B) or
Code Section 705(a)(2)(B) and Treasury Regulation Section 1.704-1(b)(2)(iv)(i),
without regard to the fact that such items are not includable in gross income or
are not deductible for federal income tax purposes.
(ii) If the Book Value of any Company property is adjusted
pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(f), the amount of such
adjustment shall be taken into account as gain or loss from the disposition of
such property.
(iii) Items of income, gain, loss or deduction attributable to
the disposition of Company property having a Book Value that differs from its
adjusted basis for tax purposes shall be computed by reference to the Book Value
of such property.
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(iv) Items of depreciation, amortization and other cost recovery
deductions with respect to Company property having a Book Value that differs
from its adjusted basis for tax purposes shall be computed by reference to the
property's Book Value in accordance with Treasury Regulation Section 1.704-
1(b)(2)(iv)(g).
(v) To the extent an adjustment to the adjusted tax basis of any
Company asset pursuant to Code Sections 732(d), 734(b) or 743(b) is required,
pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into
account in determining Capital Accounts, the amount of such adjustment to the
Capital Accounts shall be treated as an item of gain (if the adjustment
increases the basis of the asset) or loss (if the adjustment decreases such
basis).
Section III.3 Distribution in Kind. If securities or other property
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are to be distributed in kind to the Member(s) pursuant to this Agreement, (i)
such securities or other property shall first be written up or down pursuant to
Section 3.2 to their value (as determined pursuant to Article VII as of the date
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of such distribution), (ii) the Capital Accounts of the Member(s) shall be
adjusted immediately prior to the distribution as if such securities or other
property were sold at their value (as so determined pursuant to Article VII) and
(iii) the value of such securities or other property (as so determined pursuant
to Article VII) received by each Member shall be debited against his, her or its
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respective Capital Account at the time of distribution.
Section III.4 Certain Terms of Preferred Units.
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(a) Authorization and Issuance of Preferred Units. The Company shall
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be authorized to issue up to 1,629,300 Preferred Units. Except as approved by
the Manager, only the Investor shall have the right to acquire Preferred Units.
The Investor shall acquire all 1,629,300 of the Uncommitted Preferred Units for
an aggregate Capital Contribution of $3,400,000, such Capital Contribution to be
paid at Closing in the amount of $2,900,000 and $500,000 to be paid upon
notification of the Manager to make such payment.
(b) Conversion and Conversion Procedure of Preferred Units.
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(i) At any time and from time to time, any holder of Preferred
Units may convert all or any portion of the Preferred Units (including any
fractional Unit) held by such holder into a number of Common Units computed by
multiplying the number of Preferred Units to be converted by the Conversion
Ratio (as defined in Section 3.4(c) below) then in effect.
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(ii) Except as otherwise provided herein, each conversion of a
Preferred Unit shall be deemed to have been effected as of the close of business
on the date that the Company records the conversion in its record books. At the
time any such conversion has been effected, the rights of the former holder of
the Preferred Units so converted, as a holder of such Preferred Units, shall
cease and the Person or Persons whose name or names appear on the Company's
record books as the record owner of Common Units to be issued upon such
conversion shall be deemed to have become the holder or holders of record of the
Common Units represented therein.
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(iii) Notwithstanding any other provision hereof, if a conversion
of Preferred Units is to be made in connection with a public offering, liquidity
event or other transaction affecting the Company, the conversion of any
Preferred Units may, at the election of the holder thereof, be conditioned upon
the consummation of such transaction, in which case such conversion shall not be
deemed to be effective until such transaction has been consummated.
(iv) As soon as possible after a conversion has been effected
(but in any event within five business days), the Company shall deliver to the
converting holder:
(A) confirmation that the Company has recorded on its record
books a number of Common Units issuable by reason of such conversion in
such name or names and such denomination or denominations as the converting
holder has specified;
(B) written confirmation that any Preferred Units which have
not been converted have been recorded on the Company's record books as
being held by the appropriate Member.
(v) The recordation of a holder's Common Units upon conversion
of Preferred Units, shall be made without charge to the holders of such
Preferred Units for any issuance tax in respect thereof or other cost incurred
by the Company in connection with such conversion and the related issuance of
Common Units. Upon conversion of each Preferred Unit, the Company shall take all
such actions as are necessary in order to insure that the Common Units issuable
with respect to such conversion shall be validly issued, fully paid, and
nonassessable, free and clear of all taxes, liens, charges, and encumbrances
with respect to the issuance thereof.
(vi) The Company shall not close its books against the transfer
of Preferred Units or of Common Units issued or issuable upon conversion of
Preferred Units in any manner which interferes with the timely conversion of
Preferred Units. The Company shall (at its expense) assist and cooperate with
any holder of Units required to make any governmental filings or obtain any
governmental approval before or in connection with any conversion of Units
hereunder (including making any filings required to be made by the Company).
(c) Conversion Ratio of Preferred Units.
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(i) The initial conversion ratio for Preferred Units shall be a
conversion to Common Units at a one-to-one (1:1) ratio (the "Conversion Ratio").
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The Conversion Ratio shall be subject to adjustment from time to time pursuant
to this Section 3.4(c).
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(ii) Subdivision; Combination. If the Company at any time
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subdivides (by any unit split, unit dividend, recapitalization, or otherwise)
its Common Units into a greater number of Units, the Conversion Ratio in effect
immediately before such subdivision shall be proportionately increased, and if
the Company at any time combines (by reverse stock split or otherwise) its
Common Units into a smaller number of Units, then the Conversion Ratio in effect
immediately before such combination shall be proportionately decreased.
Appropriate adjustments
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shall also be made to the number of Common Units reserved for issuance upon
conversion of the Preferred Units.
(iii) Record Notice. The Company shall give written notice to all
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holders of Preferred Units at least 10 days before the date on which the Company
closes its books or takes a record (i) with respect to any dividend or
distribution upon Common Units, (ii) with respect to any pro rata subscription
offer to holders of Common Units, or (iii) for determining rights to vote (if
any) with respect to Common Units.
(d) Liquidation Value of the Preferred. The initial Liquidation Value
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of each Preferred Unit shall be $2.09 (the "Liquidation Value").
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Section III.5 Certain Terms of Common Units.
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(a) Authorization and Issuance of Common Units. The Company shall be
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authorized to issue up to an aggregate total of all classes of Common Units of
8,420,000 Fully Diluted Common Units. Common Units may be issued to any Member
or Additional Member in accordance with the terms of this Agreement.
(b) Initial Issuance of Common Units. The initial issuance of Common
--------------------------------
Units shall be as shown on Schedule A and as set forth below:
(i) Investor: Investor shall receive 4,370,700 Common Units
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without payment of a Capital Contribution.
(ii) Executives. If and only if the RCP Acquisition is closed,
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the Executives and Xxxxx Xxxxxxxxxx shall receive upon payment of a Capital
Contribution in the amount of $0.005 per Unit an aggregate of 705,000 Restricted
Common Units.
(iii) RCP Executives. If and only if the RCP Acquisition is
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closed, the RCP Executives shall receive as part of the purchase price for their
stock in the RCP Acquisition an aggregate of 1,425,000 Restricted Common Units.
(c) Restricted Common Units. Restricted Common Units shall be subject
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to such restrictions or provisions as are stipulated in a Unitholder's Agreement
signed by the Member and the Manager, and may include without limitation,
vesting, divestiture and transfer provisions. Such restrictions shall be
recorded on the books of the Company, and such Common Units shall be designated
as "Restricted" on Schedule A, attached hereto, as it may be amended from time
to time. Restricted Common Units shall not have voting rights and shall not be
entitled to distributions or allocations. Restricted Common Units may be
converted to Common Units upon (i) expiration of all restrictions set forth in
the Unitholder Agreement, other than transfer restrictions unless specifically
stated otherwise in the Unitholder Agreement, (ii) written notification by the
Unitholder to the Manager, and (iii) amendment of Schedule A attached hereto in
accordance with the written notification and provisions of this Section 3.5(c).
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(d) Reserved Common Units. An aggregate of 1,629,300 Common Units
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shall be reserved for issuance upon conversion of the Preferred Units.
(e) Uncommitted Common Units. The 290,000 Uncommitted Common Units
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shall be reserved by Company and may be issued to Members or Additional Members
in accordance with this Agreement, or in accordance with an option plan to be
established and maintained at the discretion of the Manager, which option plan
shall include 100,000 Common Units for potential issuance to RCP Employees.
(f) Restrictions on Transfer. The written approval of the Manager
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shall be required prior to effecting any transfer of the Common Units.
Restricted Common Units may not be transferred, except pursuant to a repurchase
by, or a forfeiture to, the Company, or as otherwise set forth in a Unitholders
Agreement signed by the Member and the Manager. The Common Units shall be
subject to the restrictions on transfer set forth in this Agreement, as amended
from time to time.
(g) Additional Restrictions on Transfer. No holder of Common Units
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may sell, transfer, or dispose of any such Common Units (except to the Company
or pursuant to an effective registration statement under the 1933 Act) without
first delivering to the Company and the Manager an opinion (reasonably
acceptable in form and substance to the Company and Manager) of counsel
experienced in securities law matters that neither registration nor
qualification under the 1933 Act and applicable state securities laws is
required in connection with such transfer.
ARTICLE IV
DISTRIBUTIONS; AND ALLOCATIONS
Section IV.1 Distributions.
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(a) Non-Liquidating Distributions. Except as otherwise set forth in
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this Section 4.1 or 3.5(c) above, the Manager may in its sole discretion make
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Distributions at any time or from time to time, except that the Manager shall
make an annual cash distribution to each Member in an amount equal to thirty-
eight percent (38%) of the income, net of loss, deduction, or expense, allocated
to each Member pursuant to Section 4.2 below. Except as otherwise set forth in
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this Section 4.1 or 3.5(c) above, each Distribution shall be made to the
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Unitholders (ratably among such Unitholders based upon the number of outstanding
Units held by each such Unitholder immediately prior to such Distribution,
assuming that each Preferred Unitholder had converted all of his, her or its
Preferred Units into Common Units immediately prior to such Distribution and
Restricted Common Units were not authorized and outstanding; i.e., the Preferred
units shall be included on an as-if-converted basis for the purposes of all
calculations, and Restricted Common Units will not be included in the
calculations of allocations and distributions with respect to Common Units).
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No Distribution shall be made under this Section 4.1(a) until the allocation of
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the Distributions to each Unitholder in accordance with this Section 4.1(a) is
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determined and agreed to by the holders of a majority of the Preferred Units.
(b) Liquidating Distributions. Upon the occurrence of any
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transaction involving the sale or other disposition of all or substantially all
of the assets of the Company and its Subsidiaries in one transaction or series
of related transaction or a merger or consolidation or other transaction which
accomplishes the foregoing (a "Liquidating Transaction"), and after the payment
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or set aside by the Manager for the amounts described in Sections 6.2(a) and
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(b), Distributions shall be made in the following order and priority:
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(i) First, if any of the Preferred Units are then outstanding,
to the Preferred Unitholders in an amount equal to the greater of (x) the
aggregate Liquidation Value with respect to such Preferred Unitholders'
outstanding Preferred Units or (y) the amount that such Preferred Unitholders
would receive if all of their outstanding Preferred Units were converted into
Common Units immediately prior to such Distribution (in each case in the
proportion that each Unitholder's share of aggregate Liquidation Value bears to
the aggregate Liquidation Value with respect to all Preferred Units outstanding
immediately prior to such Distribution) until all such Preferred Unitholders
have received Distributions under this clause (i) in respect of such
Unitholder's Preferred Units in an aggregate amount equal to the greater of the
amount referred to in clauses (x) and (y), and no Distribution or any portion
thereof may be made under any of the other paragraphs below until such entire
amount on the outstanding Preferred Units immediately prior to the time of such
Distribution has been paid in full; and
(ii) Second, with respect to the then outstanding Common Units,
an amount equal to the amount of such Distribution that has not been distributed
pursuant to paragraph (i) of this Section 4.1(b) above (ratably among such
--------------
Unitholders based upon the number of outstanding Common Units held by each such
Unitholder immediately prior to such Distribution).
No Distribution shall be made under this Section 4.1(b) until the allocation of
--------------
the Distributions to each Unitholder in accordance with this Section 4.1(b) is
--------------
determined and agreed to by the holders of a majority of the Preferred Units;
unless no Preferred Units are outstanding, in which case a majority of the
Common Units shall be required.
(c) Persons Receiving Distributions. Each Distribution shall be made
-------------------------------
to the Persons shown on the Company's books and records as Unitholders as of the
date of such Distribution, except as provided in Section 3.5(c).
--------------
Section IV.2 Allocations. Except as otherwise provided in Section
----------- -------
4.3 or 3.5(c), Profits and Losses for any fiscal year or portion thereof shall
--- ------
be allocated among the Members in such a manner that, as of the end of such
fiscal year, the sum of (i) the Capital Account of each Member, (ii) such
Member's share of Minimum Gain (as determined according to Treasury Regulation
Section 1.704-2(g)) and (iii) such Member's partner nonrecourse debt minimum
gain (as defined in Treasury Regulation Section 1.704-2(i)(3)) shall be equal to
the respective net amounts,
-11-
positive or negative, which would be distributed to them or for which they would
be liable to the Company under the Delaware Act, determined as if the Company
were to (i) liquidate the assets of the Company for an amount equal to their
Book Value and (ii) distribute the proceeds of liquidation pursuant to Section
-------
6.2 below.
---
Section IV.3 Special Allocations.
-------------------
(a) Losses attributable to partner nonrecourse debt (as defined in
Treasury Regulation Section 1.704-2(b)(4)) shall be allocated in the manner
required by Treasury Regulation Section 1.704-2(i). If there is a net decrease
during a Taxable Year in partner nonrecourse debt minimum gain (as defined in
Treasury Regulation Section 1.704-2(i)(3)), Profits for such Taxable Year (and,
if necessary, for subsequent Taxable Years) shall be allocated to the Members in
the amounts and of such character as determined according to Treasury Regulation
Section 1.704-2(i)(4).
(b) Nonrecourse deductions (as determined according to Treasury
Regulation Section 1.704-2(b)(1)) for any Taxable Year shall be allocated to the
Members, ratably based upon the number of outstanding Units held by each such
Member immediately prior to such allocation. Except as otherwise provided in
Section 4.3(a), if there is a net decrease in the Minimum Gain during any
--------------
Taxable Year, each Member shall be allocated Profits for such Taxable Year (and,
if necessary, for subsequent Taxable Years) in the amounts and of such character
as determined according to Treasury Regulation Section 1.704-2(f). This Section
-------
4.3(b) is intended to be a minimum gain chargeback provision that complies with
------
the requirements of Treasury Regulation Section 1.704-2(f), and shall be
interpreted in a manner consistent therewith.
(c) If any Member that unexpectedly receives an adjustment,
allocation or distribution described in Treasury Regulation Section 1.704-
1(b)(2)(ii)(d)(4), (5) and (6) has an adjusted capital account deficit (as
determined according to Treasury Regulation Section 1.704-1(b)(2)(ii)(d)) as of
the end of any Taxable Year, computed after the application of Sections 4.3(a)
---------------
and 4.3(b) but before the application of any other provision of this Article IV,
------ ----------
then Profits for such Taxable Year shall be allocated to such Member in
proportion to, and to the extent of, such Adjusted Capital Account Deficit.
This Section 4.3(c) is intended to be a qualified income offset provision as
--------------
described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and shall be
interpreted in a manner consistent therewith.
(d) Profits and Losses described in Section 4.1(v) shall be allocated
--------------
in a manner consistent with the manner that the adjustments to the Capital
Accounts are required to be made pursuant to Treasury Regulation Section 1.704-
1(b)(2)(iv)(j), (k) and (m).
(e) If, and to the extent that, any Member is deemed to recognize any
item of income, gain, loss, deduction or credit as a result of any transaction
between such Member and the Company pursuant to Code Sections 1272-1274, 7872,
483, 482 or any similar provision now or hereafter in effect, and the Manager
determines that any corresponding Profit or Loss of the Company should be
allocated to the Member who recognized such item in order to reflect the
Member's economic interests in the Company, then the Manager may so allocate
such Profit or Loss.
-12-
Section IV.4 Tax Allocations.
---------------
(a) The income, gains, losses, deductions, and credits of the Company
will be allocated, for federal, state, and local income tax purposes, among the
Unitholders in accordance with the allocation of such income, gains, losses,
deductions, and credits among the Unitholders for computing their Capital
Accounts; except that, if any such allocation is not permitted by the Code or
other applicable law, then the Company's subsequent income, gains, losses,
deductions, and credits will be allocated among the Unitholders so as to reflect
as nearly as possible the allocation set forth herein in computing their Capital
Accounts.
(b) Items of Company taxable income, gain, loss and deduction with
respect to any property contributed to the capital of the Company shall be
allocated among the Members in accordance with Code Section 704(c) so as to take
account of any variation between the adjusted basis of such property to the
Company for federal income tax purposes and its Book Value.
(c) If the Book Value of any Company asset is adjusted pursuant to
the requirements of Treasury Regulation Section 1.704-1(b)(2)(iv)(e) or (f),
subsequent allocations of items of taxable income, gain, loss and deduction with
respect to such asset shall take account of any variation between the adjusted
basis of such asset for federal income tax purposes and its Book Value in the
same manner as under Code Section 704 (c).
(d) Allocations of tax credits, tax credit recapture, and any items
related thereto shall be allocated to the Members according to their interests
in such items as determined by the Manager taking into account the principles of
Treasury Regulation Section 1.704-1(b)(4)(ii).
(e) Allocations pursuant to this Section 4.4 are solely for purposes
-----------
of federal, state and local taxes and shall not affect, or in any way be taken
into account in computing, any Member's Capital Account or share of Profits,
Losses, Distributions or other Company items pursuant to any provision of this
Agreement.
Section IV.5 Indemnification and Reimbursement for Payments on Behalf
--------------------------------------------------------
of a Unitholder. If the Company is required by law to make any payment that is
---------------
specifically attributable to a Unitholder or a Unitholder's status as such
(including federal withholding taxes, state personal property taxes, and state
unincorporated business taxes), then such Unitholder shall indemnify the Company
in full for the entire amount paid (including interest, penalties and related
expenses). The Company may pursue and enforce all rights and remedies it may
have against each Unitholder under this Section 4.5, including instituting a
-----------
lawsuit to collect such indemnification and contribution with interest
calculated at a rate equal to 8% per annum, compounded as of the last day of
each year (but not in excess of the highest rate per annum permitted by law).
-13-
ARTICLE V
MANAGEMENT AND MEMBER RIGHTS
Section V.1 Management Authority.
--------------------
(a) The Manager shall have the sole right to manage the business of
the Company and shall have all powers and rights necessary, appropriate or
advisable to effectuate and carry out the purposes and business of the Company,
and, no Member (other than the Manager) shall have any authority to act for or
bind the Company but shall have only the right to vote on or approve the actions
herein specified to be voted on or approved by the Member(s).
(b) The Manager may appoint such officers to such terms and to
perform such functions as the Manager shall determine in its sole discretion.
The Manager may appoint, employ or otherwise contract with such other Persons
for the transaction of the business of the Company or the performance of
services for or on behalf of the Company as it shall determine in its sole
discretion. The Manager may delegate to any such officer or Person such
authority to act on behalf of the Company as the Manager may from time to time
deem appropriate in its sole discretion.
(c) When the taking of such action has been authorized by the
Manager, any officer of the Company or any other Person specifically authorized
by the Manager may execute any contract or other agreement or document on behalf
of the Company and may execute and file on behalf of the Company with the
Secretary of State of the State of Delaware any certificates of amendment to the
Company's certificate of formation, one or more restated certificates of
formation and certificates of merger or consolidation and, upon the dissolution
and completion of winding up of the Company, at any time when there are no
Members, or as otherwise provided in the Act, a certificate of cancellation
canceling the Company's certificate of formation.
(d) The Manager may be removed, with cause, by the affirmative vote
of a Majority in Interest of the Member(s). Upon such removal, a Majority in
Interest of the Member(s) shall appoint a successor Manager. The Manager may
resign at any time upon ten days' prior notice to the Member(s). Upon such
resignation, the Manager may appoint a successor Manager; provided that such
successor Manager must be approved by the affirmative vote of a Majority in
Interest of the Member(s).
(e) All decisions regarding the management and affairs of the Company
shall be made by the Manager.
Section V.2 Indemnification. Except as limited by law and subject to
---------------
the provisions of this Section 5.2, each Indemnified Party shall be entitled to
-----------
be indemnified and held harmless on an as incurred basis by the Company (but
only after first making a claim for indemnification available from any other
source and only to the extent indemnification is not provided by that source) to
the fullest extent permitted under the Act (including indemnification for
negligence and breach of fiduciary duty to the extent so authorized but,
excluding gross negligence
-14-
or willful misconduct) as amended from time to time (but, in the case of any
such amendment, only to the extent that such amendment permits the Company to
provide broader indemnification rights than such law permitted the Company to
provide prior to such amendment) against all losses, liabilities and expenses,
including attorneys' fees and expenses, arising from claims, actions and
proceedings in which such Person may be involved, as a party or otherwise, by
reason of his being an Indemnified Party (including any action taken or not
taken by such Person in such capacity). The rights of indemnification provided
in this Section 5.2 will be in addition to any rights to which such Indemnified
-----------
Party may otherwise be entitled by contract or as a matter of law and shall
extend to his successors and assigns. In particular, and without limitation of
the foregoing, such Indemnified Party shall be entitled to indemnification by
the Company against expenses (as incurred), including attorneys' fees and
expenses, incurred by such Indemnified Party upon the delivery by such
Indemnified Party to the Company of a written undertaking (reasonably acceptable
to the Manager). The Company may, to the extent authorized from time to time by
the Manager, grant rights to indemnification and to advancement of expenses to
any employee or agent of the Company who is not an Indemnified Party to the
fullest extent of the provisions of this Section 5.2 as if such Person were an
-----------
Indemnified Party for purposes hereof.
Section V.3 Transfer of Company Interest.
----------------------------
(a) No Member shall sell, assign, transfer or otherwise dispose of,
whether voluntarily or involuntarily or by operation of law (a "Transfer"), all
--------
or any portion of his, her or its interest in the Company without the prior
written consent of the Manager, which consent may be given or withheld in its
sole discretion. No Member shall pledge or otherwise encumber all or any
portion of his, her or its interest in the Company, without the prior written
consent of the Manager, which consent may be given or withheld in its sole
discretion.
(b) Notwithstanding any other provision of this Agreement, any
Transfer by the Member(s) in contravention of any of the provisions of this
Section 5.3 shall be void and ineffective, and shall not bind or be recognized
-----------
by the Company.
(c) If and to the extent any Transfer of an interest in the Company
is permitted hereunder, this Agreement (including the schedules hereto) shall be
amended by the Manager to reflect the Transfer of the Company interest to the
transferee, to admit the transferee as a Member and to reflect the elimination
of the transferring Member (or the reduction of such transferring Member's
interest in the Company) and (if and to the extent then required by the Act) a
certificate of amendment to the Certificate reflecting such admission and
elimination (or reduction) shall be filed in accordance with the Act. The
effectiveness of the Transfer of an interest in the Company permitted hereunder
and the admission of any substitute Member pursuant to this Section 5.3 shall be
-----------
deemed effective immediately prior to the Transfer of an interest in the Company
to such Member or, if later, on the first date that the Manager receives
evidence of such Transfer, including the terms thereof. If the transferring
Member has Transferred all or any of its interest in the Company pursuant to
this Section 5.3, then, immediately following such Transfer or, if later, on the
-----------
first date that the Manager receives evidence of such Transfer, including the
terms thereof, the transferring Member shall cease to be a Member with respect
to such interest.
-15-
(d) Any Person who acquires in any manner whatsoever any interest in
the Company, irrespective of whether such Person has accepted and adopted in
writing the terms and provisions of this Agreement, shall be deemed by the
acceptance of the benefits of the acquisition thereof to have (i) made all of
the capital contributions made by, (ii) received all of the distributions
received by, and (iii) agreed to be subject to and bound by all the terms and
conditions of this Agreement that, any predecessor in such interest in the
Company made, received and was subject to or bound by.
(e) Member's Obligation to Sell Common Units. Notwithstanding any
----------------------------------------
other provisions of this Agreement, upon the written demand of the Manager,
Member and his or her Permitted Transferees shall sell all or any portion of his
or her Common Units to such purchaser or purchasers and upon such terms
(including purchase price) as may be determined by the Manager in its sole
discretion; provided, however, that the obligation of each Member and his or her
Permitted Transferees to so sell Common Units hereunder shall not arise unless
the holders of a Majority in Interest of the Fully Diluted Units of the Company
have agreed to sell, and shall sell such Common Units for the same purchase
price per Common Units and concurrently with the sale of the other Common Units
subject to such purchase. Upon such sale, the transferred Common Units shall no
longer be subject to the terms hereof.
Section V.4 Member Rights; Meetings.
-----------------------
(a) Member Rights. No Member, unless such Member is also the Manager,
-------------
shall have any right, power or duty, including the right to approve or vote on
any matter, except as expressly required by the Act or other applicable law or
as expressly provided for hereunder.
(b) Required Vote. Unless a greater vote is required by the Act or as
-------------
expressly provided for hereunder, the affirmative vote of a Majority in Interest
of the Member(s) entitled to vote shall be required to approve any proposed
action.
(c) Meetings. Meetings of the Member(s) for the transaction of such
--------
business as may properly come before such Member(s) shall be held at such place,
on such date and at such time as the Manager shall determine. Special meetings
of Member(s) for any proper purpose or purposes may be called at any time by the
Manager or the Member(s) holding a Majority in Interest. The Company shall
deliver oral or written notice (written notice may be delivered by mail) stating
the date, time, place and purposes of any meeting to each Member entitled to
vote at the meeting. Such notice shall be given not less than four (4) and no
more than sixty (60) days before the date of the meeting.
(d) Written Consent. Any action required or permitted to be taken at
---------------
an annual or special meeting of the Member(s) may be taken without a meeting,
without prior notice, and without a vote, provided that written consents,
setting forth all proposed actions to be taken at such meeting, are signed by
the Member(s) holding at least the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all Member(s)
entitled to vote on such action were present and voted. Every written consent
shall bear the date and signature of each
-16-
Member who signs such consent. Notice of the taking of action without a meeting
by less than unanimous written consent shall be given to each Executive or RCP
Executive who has not consented in writing to such action.
Section V.5 Additional Members. The Manager shall have the sole right
------------------
to admit additional Members upon such terms and conditions and at such time or
times as the Manager shall in its sole discretion determine subject only to the
provisions of Section 5.6 below and any plan duly adopted by the Company and
approved by the Manger pursuant to Section 3.5(c) above. In connection with any
--------------
such admission, this Agreement (including the schedules hereto) shall be amended
by the Manager to reflect the name, address and capital contribution of the
additional Member and the new Percentage Interests of all Members, and (if and
to the extent then required by the Act) a certificate of amendment to the
Certificate reflecting such admission shall be filed in accordance with the Act.
Section V.6 Preemptive Rights. In the event of an increase to the
-----------------
number of Common Units authorized pursuant to Section 3.5(a) each member shall
--------------
have a preemptive right to acquire an aggregate number of the new Common Units
sufficient to maintain such Member's percentage ownership of the Company at the
same level as it existed prior to such authorization of new Common Units.
Section V.7 Outside Businesses. Subject to any restrictions
------------------
contained in any employment agreements with the Company, any Member may engage
in or possess an interest in other business ventures of any nature or
description, independently or with others, similar or dissimilar to the business
of the Company, and the Company and the Member(s) shall have no rights by virtue
of this Agreement in and to such independent ventures or the income or gains
derived therefrom, and the pursuit of any such venture, even if competitive with
the business of the Company, shall not be deemed wrongful or improper. No
Member shall be obligated by virtue of this Agreement or by reason of being a
Member to present any particular investment opportunity to the Company even if
such opportunity is of a character that, if presented to the Company, could be
taken by the Company, and any Member shall have the right to take for his, her
or its own account (individually or as a partner or fiduciary) or to recommend
to others any such particular investment opportunity.
Section V.8 Member Representations and Warranties. Each Member
-------------------------------------
hereby represents and warrants to the Company and acknowledges that: (i) such
Member has such knowledge and experience in financial and business matters and
is capable of evaluating the merits and risks of an investment in the Company
and making an informed investment decision with respect thereto; (ii) such
Member is able to bear the economic and financial risk of an investment in the
Company for an indefinite period of time; (iii) such Member is acquiring
interests in the Company for investment only and not with a view to, or for
resale in connection with, any distribution to the public or public offering
thereof; (iv) the interests in the Company have not been registered under the
securities laws of any jurisdiction and cannot be disposed of unless they are
subsequently registered and/or qualified under applicable securities laws and
the provisions of this Agreement have been complied with; (v) the execution,
delivery and performance of this Agreement have been
-17-
duly authorized by such Member and do not require such Member to obtain any
consent or approval that has not been obtained and do not contravene or result
in a default under any provision of any law or regulation applicable to such
Member or other governing documents or any agreement or instrument to which such
Member is a party or by which such Member is bound, (vi) the determination of
such Member to purchase interests in the Company has been made by such Member
independent of any other Member and independent of any statements or opinions as
to the advisability of such purchase or as to the properties, business,
prospects or condition (financial or otherwise) of the Company and its
Subsidiaries which may have been made or given by any other Member or by any
agent or employee of any other Member and (vii) this Agreement is valid, binding
and enforceable against such Member in accordance with its terms.
ARTICLE VI
DURATION
Section VI.1 Duration. The Company shall be dissolved and its
--------
affairs wound up and terminated upon the first to occur of the following:
--------------
(a) The vote of the Member(s) holding a Majority in Interest; or
(b) The entry of a decree of judicial dissolution under Section 18-
802 of the Act.
Except as otherwise set forth in this Article VI, the Member(s) intend for the
----------
Company to have perpetual existence.
Section VI.2 Winding Up.
----------
Upon dissolution of the Company, the Company shall be liquidated in an
orderly manner. The Manager shall be the liquidator pursuant to this Agreement
and shall proceed diligently to wind up the affairs of the Company and make
final distributions as provided herein and in the Act. The costs of liquidation
shall be borne as a Company expense. The steps to be accomplished by the
liquidator are as follows:
(a) First, the liquidator shall satisfy all of the Company's debts
and liabilities to creditors other than the Member(s) (whether by payment or the
reasonable provision for payment thereof);
(b) Second, the liquidator shall satisfy all of the Company's debts
and liabilities to the Member(s) (whether by payment or the reasonable provision
for payment thereof); and
(c) Third, all remaining assets shall be distributed to the Member(s)
in accordance with Section 4.1(b).
--------------
-18-
Section VI.3 Termination. The Company shall terminate when all of
-----------
the assets of the Company, after payment of or due provision for all debts,
liabilities and obligations of the Company, shall have been distributed to the
Member(s) in the manner provided for in this Article VI, and the certificate of
----------
formation of the Company shall have been canceled in the manner required by the
Act.
ARTICLE VII
VALUATION
Section VII.1 Valuation. For purposes of this Agreement, the value
---------
of any property contributed by or distributed to any Member shall be valued as
determined by the Manager.
ARTICLE VIII
CERTIFICATION OF MEMBERSHIP INTERESTS
Section VIII.1 Membership Interests. The Company may in its
--------------------
discretion issue certificates to the Member(s) representing the membership
interests in the Company held by each Member.
ARTICLE IX
BOOKS OF ACCOUNT; MEETINGS
Section IX.1 Books. The Manager will maintain, on behalf of the
-----
Company, complete and accurate books of account of the Company's affairs, which
books will be open to inspection by any Member (or his authorized
representative) at any time during ordinary business hours and shall be
maintained in accordance with the Act.
Section IX.2 Fiscal Year. The fiscal year of the Company shall end
-----------
on December 31 of each year or such other year end as the Manager may determine
in its sole discretion.
Section IX.3 Taxes.
-----
(a) Tax Returns. The Company shall cause to be prepared and filed all
-----------
necessary federal and state income tax returns for the Company and, subject to
Section 9.3(b), shall make any elections the Manager may in its sole discretion
--------------
deem appropriate and in the best interests of the Member(s). Each Member shall
furnish to the Company all pertinent information in its possession relating to
Company operations that is necessary to enable the Company's income tax returns
to be prepared and filed any information necessary to give proper effect to such
election. The Taxable Year shall be the Fiscal Year set forth in Section 9.2,
-----------
unless the Manager shall determine otherwise in its sole discretion and in
compliance with applicable laws.
-19-
(b) Tax Controversies. The Manager is hereby designated the Tax
-----------------
Matters Partner (as defined in Section 6231 of the Code) and is authorized and
required to represent the Company (at the Company's expense) in connection with
all examinations of the Company's affairs by tax authorities, including
resulting administrative and judicial proceedings, and to expend Company funds
for professional services and reasonably incurred in connection therewith. Each
Member agrees to cooperate with the Company and to do or refrain from doing any
or all things reasonably requested by the Company with respect to the conduct of
such proceedings. The Tax Matters Partner shall keep all Members reasonably
informed of the progress of any examinations, audits or other proceedings.
(c) Election to be Taxed as a Partnership. The Company shall elect to
-------------------------------------
be taxed as a partnership for federal and state income tax purposes, effective
not later than the date on which the Initial Member makes the capital
contribution required by Section 2.5. At the request of the Manager, each
-----------
Member shall cooperate with the Company in the filing of any election,
certificate, form or other document intended to secure partnership tax status
for the Company (including, without limitation, Form 8832 pursuant to Treasury
Regulation 301.7701-3(c) and any corresponding state form, if required),
including the execution by such Person of any such document.
ARTICLE X
MISCELLANEOUS
Section X.1 Amendments. This Agreement, including the Schedules A
----------
and B hereto, may be amended or modified and any provision hereof may be waived
only by a Majority in Interest of the Members; provided, however, that any
amendment or modification reducing disproportionately a Member's interest in the
Company or other interest in the profits or losses or in distributions or
increasing such Member's capital contribution shall be effective only with that
Member's consent.
Section X.2 Successors. Except as otherwise provided herein, this
----------
Agreement will inure to the benefit of and be binding upon the Member(s) and
their respective legal representatives, heirs, successors and permitted assigns.
Section X.3 Governing Law; Severability. This Agreement will be
---------------------------
construed in accordance with the laws of the State of Delaware and, to the
maximum extent possible, in such manner as to comply with an the terms and
conditions of the Act. If it is determined by a court of competent jurisdiction
that any provision of this Agreement is invalid under applicable law, such
provision will be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of this Agreement.
Section X.4 Notices. All notices, demands and other communications
-------
to be given and delivered under or by reason of provisions under this Agreement
shall be in writing and shall be deemed to have been given when personally
delivered, mailed by first class mail (postage prepaid and return receipt
requested), sent by telecopy or sent by reputable overnight courier service
(charges
-20-
prepaid) to the addresses or telecopy numbers set forth in Schedule A hereto or
----------
to such other addresses or telecopy numbers as have been supplied in writing to
the Company.
Section X.5 Complete Agreement; Headings, Counterparts. This
------------------------------------------
Agreement terminates and supersedes all other agreements concerning the subject
matter hereof previously entered into among any of the parties. Descriptive
headings are for convenience only and will not control or affect the meaning or
construction of any provision of this Agreement. Wherever from the context it
appears appropriate, each term stated in either the singular or the plural shall
include both the singular and the plural, and pronouns stated in either the
masculine, feminine or the neuter gender shall include the masculine, the
feminine and the neuter. This Agreement may be executed in any number of
counterparts, none of which need contain the signatures of more than one party,
but all such counterparts together will constitute one agreement.
Section X.6 Partition. Each Member waives, until termination of the
---------
Company, any and all rights that it may have to maintain an action for partition
of the Company's property.
Section X.7 No Strict Construction. The parties hereto have
----------------------
participated jointly in the negotiation and drafting of this Agreement. In the
event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties hereto, and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any of the provisions of this Agreement.
* * * * * * * * *
-21-
IN WITNESS WHEREOF, the parties hereto have caused this Limited
Liability Company Agreement to be signed as of the date first above written.
ONEPOINT COMMUNICATIONS CORP.
By:____________________________ ___________________________________
Xx Xxxxxxxx
Its:___________________________
___________________________________
Xxx Xxxxxxxxx
___________________________________
Xxxxx Xxxxxx, Xx.
___________________________________
Xxxxx X. Xxxxx
___________________________________
Xxxxx Xxxxxxxxxx
-22-
SCHEDULE A
Dated November 23, 1999
----------------------------------------------------------------------------------------------------------
FULLY
UNITHOLDER/MEMBER NUMBER OF UNIT CLASS DILUTED
UNITS PERCENTAGE
INTEREST
----------------------------------------------------------------------------------------------------------
OnePoint Communications Corp. 4,370,700 Common 51.9%
0000 Xxxxxxxx Xxxx, Xxxxx 0000 1,629,300 Preferred 19.4%
Total ------
Bannockburn, Illinois 60015 71.3%
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxx Xxxxxx
With Copy which shall not constitute
notice to:
XXXXXXXX & XXXXX
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, P.C.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
----------------------------------------------------------------------------------------------------------
Xx Xxxxxxxx 534,000 Restricted 6.34%
Common
----------------------------------------------------------------------------------------------------------
Xxx Xxxxxxxxx 169,500 Restricted 2.01%
Common
----------------------------------------------------------------------------------------------------------
Xxxxx Xxxxxx, Xx. 712,500 Restricted 8.46%
Common
----------------------------------------------------------------------------------------------------------
Xxxxx X. Xxxxx 712,500 Restricted 8.46%
Common
----------------------------------------------------------------------------------------------------------
Xxxxx Xxxxxxxxxx 1,500 Restricted 0.0002%
Common
----------------------------------------------------------------------------------------------------------
Uncommitted Units 290,000 Common 3.44%
(Reserved
for Employee
----------------------------------------------------------------------------------------------------------
-23-
----------------------------------------------------------------------------------------------------------
FULLY
UNITHOLDER/MEMBER NUMBER OF UNIT CLASS DILUTED
UNITS PERCENTAGE
INTEREST
----------------------------------------------------------------------------------------------------------
Incentive Plan and
Additional Members)
1,629,300 Common
(Reserved 19.4%
for Conversion of
Preferred)
----------------------------------------------------------------------------------------------------------
Total Fully Diluted Units 8,420,000 All Classes 100.0%
----------------------------------------------------------------------------------------------------------
-24-
SCHEDULE B
Dated November 23, 1999
----------------------------------------------------------------------
UNITHOLDER/MEMBER CAPITAL
CONTRIBUTION
----------------------------------------------------------------------
OnePoint Communications Corp. $3,400,000.00
0000 Xxxxxxxx Xxxx, Xxxxx 0000
Xxxxxxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxx Xxxxxx
With Copy which shall not constitute notice to:
XXXXXXXX & XXXXX
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, P.C.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
----------------------------------------------------------------------
Xx Xxxxxxxx $ 2,670.00
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Xxx Xxxxxxxxx $ 847.50
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Xxxxx Xxxxxx, Xx. $ 3,562.50
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Xxxxx. X. Xxxxx $ 3,562.50
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Xxxxx Xxxxxxxxxx $ 7.50
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Total Capital Contributions $3,410,650.00
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-25-
ADDITIONAL MEMBER ACCEPTANCE
Pursuant to the requirements in Section 5.5 of the Limited Liability
Company Agreement of OnePoint Services, L.L.C., dated as of November ___, 1999
(the "Agreement"), [Additional Member] and [Additional Member] seek to be
admitted as Additional Members and hereby are admitted as Additional Members
having satisfied the terms and conditions specified by, and such admission
having been approved by, the Manager. All capitalized terms used herein shall
have the meaning given in the Agreement.
The First Amended Schedules A and B to the Agreement are deleted in their
entirely and replaced by the attached Second Amended Schedules A and B, dated
November ___, 1999.
IN WITNESS WHEREOF, the parties have caused this Additional Member
Acceptance to be signed as of the date first written above as evidence of their
agreement to become Additional Members and to be bound by the terms of the
Agreement.
__________________________________
[Additional Member]
__________________________________
[Additional Member]
ONEPOINT COMMUNICATIONS, INC.
By:_______________________________
Its:______________________________
-26-
