EXHIBIT 10.18
COMMUNICATION SYSTEMS DEVELOPMENT, LLC
AGREEMENT OF LIMITED LIABILITY COMPANY
Dated as of May 30, 1997
COMMUNICATION SYSTEMS DEVELOPMENT, LLC
AGREEMENT OF LIMITED LIABILITY COMPANY
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS.....................................................................................1
ARTICLE 2 FORMATION OF LIMITED LIABILITY COMPANY..........................................................1
2.1 Formation. ...........................................................................1
2.2 Company Name...........................................................................1
2.3 The Certificate, Etc...................................................................2
2.4 Principal Business Office, Registered Office and Registered Agent......................2
2.5 Term of the Company....................................................................2
2.6 Purposes...............................................................................2
2.7 Powers.................................................................................2
ARTICLE 3 CAPITALIZATION..................................................................................3
3.1 Initial Capital Contributions..........................................................3
3.2 ATS Construction Funding...............................................................3
3.3 Other Required Funds...................................................................4
3.4 Capital Accounts. .....................................................................5
3.5 Transfer of Capital Accounts...........................................................6
3.6 Deficit Capital Accounts...............................................................6
3.7 Additional Equity......................................................................6
ARTICLE 4 BOOKS; ACCOUNTING; TAX ELECTIONS; REPORTS ......................................................6
4.1 Fiscal Year............................................................................6
4.2 Method of Accounting and Taxation......................................................6
4.3 Books and Records and Inspection.......................................................6
4.4 Reports................................................................................7
4.5 Filing of Returns and Other Writings; Tax Matters Member. ............................8
ARTICLE 5 ALLOCATIONS.....................................................................................8
5.1 Allocations of Profit and Loss.........................................................8
5.2 Section 754 Election...................................................................9
5.3 Allocations for Tax and Book Purposes..................................................9
5.4 Certain Accounting Matters.............................................................9
5.5 Tax Allocations; Code Section 704(c)...................................................9
5.6 Compliance With Section 704(b).........................................................9
5.7 Curative Allocations..................................................................10
ARTICLE 6 DISTRIBUTIONS..................................................................................11
6.1 Distributions Other Than Proceeds of Any Liquidating Transaction......................11
6.2 Proceeds of Any Liquidating Transaction...............................................11
6.3 Liquidation of Member's Interest......................................................11
ARTICLE 7 RIGHTS AND OBLIGATIONS OF MEMBERS..............................................................12
7.1 Limited Liability.....................................................................12
7.2 Management and Control, Etc...........................................................12
7.3 Evidence of Authority, Etc............................................................13
7.4 Other Business, Etc...................................................................14
7.5 Indemnification.......................................................................14
7.6 Agreements with Affiliates............................................................15
7.7 Payment of Expenses; Compensation.....................................................15
ARTICLE 8 TRANSFERS OF INTERESTS, ETC....................................................................15
8.1 Consent Required......................................................................15
8.2 Right of First Refusal................................................................16
8.3 Buy/Sell..............................................................................16
8.4 CSD Right/Obligation of Exchange. ...................................................18
8.5 Obligations and Rights of Transferees and Assignees...................................19
8.6 Non-Recognition of Certain Transfers..................................................19
8.7 Required Amendments; Continuation.....................................................19
8.8 Resignation...........................................................................19
ARTICLE 9 TERMINATION....................................................................................20
9.1 Events of Dissolution.................................................................20
9.2 Application of Assets.................................................................20
9.3 Distributions in Liquidation..........................................................20
ARTICLE 10 MISCELLANEOUS..................................................................................20
10.1 Notices...............................................................................20
10.2 Specific Performance; Other Rights and Remedies.......................................21
10.3 Severability..........................................................................21
10.4 Counterparts..........................................................................21
10.5 Section Headings......................................................................21
10.6 Title to Company Property.............................................................21
10.7 Governing Law.........................................................................22
10.8 Further Acts..........................................................................22
10.9 Entire Agreement......................................................................22
10.10 Assignment............................................................................22
10.11 Parties in Interest...................................................................22
10.12 Mutual Drafting.......................................................................22
10.13 Amendments; Waivers...................................................................22
10.14 Schedule..............................................................................23
Member Schedule - Initial Capital Contributions of the Members
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COMMUNICATION SYSTEMS DEVELOPMENT, LLC
AGREEMENT OF LIMITED LIABILITY COMPANY
THIS AGREEMENT OF LIMITED LIABILITY COMPANY of Communication Systems
Development, LLC, dated as of May 30, 1997, is entered into by and among
American Tower Systems, Inc., a Delaware corporation ("ATS"), and Communication
Development Corporation, Inc., a California corporation ("CSD").
WITNESSETH THAT:
WHEREAS, the undersigned desire, by execution of this Agreement, to
form a limited liability company pursuant to the Delaware Limited Liability
Company Act, 6 Del. C. ss.18-101 et seq. (as from time to time amended and
including any successor statute of similar import, the "Act");
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties hereto do hereby agree as follows:
ARTICLE 1
DEFINITIONS
As used herein, unless the context otherwise requires, the terms
defined in Appendix A shall have the respective meanings set forth therein.
Terms defined in the singular shall have a comparable meaning when used in the
plural, and vice versa, and the reference to any gender shall be deemed to
include all genders. Unless otherwise defined or the context otherwise clearly
requires, terms for which meanings are provided in this Agreement shall have
such meanings when used in each document executed or required to be executed
pursuant hereto or thereto or otherwise delivered, from time to time, pursuant
hereto or thereto. The words such as "herein", "hereinafter", "hereof" and
"hereunder" refer to this Agreement as a whole and not merely to a subdivision
in which such words appear unless the context otherwise requires. The singular
shall include the plural and the masculine gender shall include the feminine and
neuter, and vice versa, unless the context otherwise requires.
ARTICLE 2
FORMATION OF LIMITED LIABILITY COMPANY
2.1 Formation. The parties, by execution of this Agreement, hereby
enter into and join together in, and do hereby form, the Company as a limited
liability company under and pursuant to the Act. Each party hereto represents
and warrants that it is duly authorized to join in this Agreement and that the
Person executing this Agreement on its behalf is duly authorized to do so.
2.2 Company Name. The name of the Company shall be Communication
Systems Development, LLC. The business of the Company shall be conducted under
such name or such other names as may from time be established by a Determination
of the Members.
2.3 The Certificate, Etc. One or more of the Members, as authorized
persons shall execute and file the Certificate, together with a duplicate copy
thereof, with the Secretary of State of the State of Delaware, and upon receipt
from the Secretary of State of the duplicate copy (and any certificates of
amendment thereto that may subsequently be filed) marked "Filed", the Members
executing the Certificate shall promptly deliver or mail, or caused to be
delivered or mailed, a copy of the Certificate (or any such certificate of
amendment) to any Member not so executing the Certificate (or certificate of
amendment). The Members hereby agree (or to cause one or more of the individuals
designated as managers under Section 7.2 hereof) to execute, file and record
such other certificates and documents, including amendments to the Certificate,
and to do such other acts as may be appropriate to comply with all requirements
for the formation, continuation and operation of a limited liability company,
the ownership of property, and the conduct of business under the laws of the
State of Delaware and any other jurisdiction in which the Company may own
property or conduct business.
2.4 Principal Business Office, Registered Office and Registered Agent.
The principal business office of the Company shall be located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇-▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or at such other location as may
hereafter be designated by a Determination of the Members. The registered office
of the Company shall be c/o Corporation Service Company, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. The registered agent for service
of process on the Company shall be Corporation Service Company, whose address is
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. The principal
business office, the registered office and the registered agent of the Company
may be changed from time to time upon a Determination of the Members and in
accordance with the then applicable provisions of the Act and any other
applicable laws. The Members shall be promptly notified in writing of any change
in such principal office, registered office or registered agent for service of
process.
2.5 Term of the Company. The term of the Company shall commence on the
date of the initial filing of the Certificate with the office of the Secretary
of State of the State of Delaware (the "Effective Date"), and shall continue
until December 31, 2047 unless it is sooner dissolved pursuant to the provisions
of Section 9.1.
2.6 Purposes. The purpose of the Company is to engage, whether directly
or indirectly, in the development, ownership, operation, management and
disposition of communication towers and communication tower sites and to engage
in all actions necessary, convenient or incidental to the foregoing. The Company
shall not engage in any other business or activity without a Determination of
the Members.
2.7 Powers. In furtherance of its purposes, but subject to all of the
provisions of this Agreement, the Company shall have the power and is hereby
authorized to:
(a) acquire by purchase, lease, contribution of property or
otherwise and own, hold, sell, convey, transfer or dispose of real or
personal property which may be necessary, convenient or incidental to
the accomplishment of the purposes of the Company;
(b) act as a general or limited partner of any general or
limited partnership of which the Company may be a partner and to
exercise all of the powers, duties, rights and responsibilities
associated therewith;
(c) take any and all actions necessary, convenient or
appropriate as the holder of partnership interests, including the
granting or approval of waivers, consents or amendments of rights or
powers relating thereto and the execution of appropriate documents to
evidence such waivers, consents or amendments;
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(d) operate, purchase, maintain, finance, improve, own, sell,
convey, assign, mortgage, lease or demolish or otherwise dispose of any
real or personal property which may be necessary, convenient or
incidental to the accomplishment of the purposes of the Company;
(e) borrow money and issue evidences of indebtedness in
furtherance of any or all of the purposes of the Company, and secure
the same by mortgage, pledge or other lien on the assets of the
Company;
(f) invest any funds of the Company pending distribution or
payment of the same pursuant to the provisions of this Agreement;
(g) prepay in whole or in part, refinance, recast, increase,
modify or extend any indebtedness of the Company and, in connection
therewith, execute any extensions, renewals or modifications of any
mortgage or security agreement securing such indebtedness;
(h) enter into, perform and carry out contracts of any kind,
including, without limitation, contracts with any Affiliate of a
Member, necessary to, in connection with, or incidental to the
accomplishment of the purposes of the Company;
(i) establish reserves for capital expenditures, working
capital, debt service, taxes, assessments, insurance premiums, repairs,
improvements, depreciation, depletion, obsolescence, and general
maintenance of buildings and other property out of the rents, profits,
or other income received;
(j) employ or otherwise engage employees, managers, directors,
contractors, advisors and consultants (including without limitation any
Member) and pay reasonable compensation for such services;
(k) enter into partnerships or other ventures with other
Persons (including without limitation any Affiliate of any Member) in
furtherance of the purposes of the Company; and
(l) do such other things and engage in such other activities
related to the foregoing as may be necessary, convenient or advisable
with respect to the conduct of the business of the Company, and have
and exercise all of the powers and rights conferred upon limited
liability companies formed pursuant to the Act.
ARTICLE 3
CAPITALIZATION
3.1 Initial Capital Contributions. Each of the Members shall contribute
or cause to be contributed to the Company, on the Effective Date, as its Initial
Capital Contribution, the cash and other property set forth on the Member
Schedule.
3.2 ATS Construction Funding. ATS agrees to make, from time to time,
Additional Capital Contributions for the purposes of constructing communication
towers and other improvements on the sites to be acquired by the Company
pursuant to the consummation of the transactions contemplated by the
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Acquisition Agreement and, in addition from time to time, for acquiring
additional sites and constructing communication towers and other improvements
thereon, subject to the following conditions:
(i) ATS shall have approved the acquisition of any such
additional site for which the Additional Capital Contribution is to be
used, such approval not to be unreasonably withheld; and
(ii) CSD shall have prepared in good faith, based on the
results of comparable sites and towers owned by the Company or any
Affiliates of any of the Members, and furnished to ATS not less than
thirty (30) days prior to the proposed acquisition of the site a
financial analysis of the costs associated with such acquisition, the
construction of the communication tower or towers thereon, the
estimated revenue to be obtained and expenses to be incurred in the
operation and maintenance of such tower or towers.
Upon receipt of such financial analysis, and such other information as
it shall have reasonably requested, ATS shall determine, in good faith, whether
it reasonably believes that the proposed project is in the best interests of the
Company. In the event it agrees that they will or is, as the case may be, it
shall be obligated to make the Additional Capital Contribution referred to in
such financial analysis in a timely manner in order to facilitate the
acquisition of the site and the construction of the communication tower or
towers. Any Additional Capital Contribution made by ATS pursuant to the
provisions of this Section will not in any way result in a change or
modification as to any Member's Company Interest as initially set forth in the
Member Schedule, but shall only be reflected as an increase in ATS' Capital
Account. In the event ATS shall not have given written notice to CSD of its
objection (an "Objection Notice") to the acquisition within ten (10) days of the
receipt of such financial analysis (and any other information with respect
thereto which it has reasonably requested), it shall be deemed to have approved
such acquisition and shall be obligated to make such Additional Capital
Contribution. In the event ATS shall have given an Objection Notice (which shall
specify in reasonable detail the basis thereof), CSD and ATS shall negotiate in
good faith in an effort to resolve their differences to the end that ATS would
be willing to make the Additional Capital Contribution. In the event ATS and CSD
are unable to resolve their differences within twenty (20) days, CSD shall have
the right, in its sole and absolute discretion, to (x) make the Additional
Capital Contribution on the same terms and conditions as ATS would otherwise
have made such Additional Capital Contribution, (ii) to advance the required
funds in the form of a Member Loan, (iii) to obtain such funds as a loan from an
Unaffiliated Person in accordance with the provisions of Section 3.3 (in which
event no Determination of the Members will be required), or (iv) to acquire such
site and construct such tower or towers for its own account or for the account
of any Affiliate of CSD.
Anything in this Section or elsewhere in this Agreement to the contrary
notwithstanding, ATS shall advance all funds to finance the construction of
communication towers on the initial sixty (60) sites acquired by the Company
upon its formation and the consummation of the transactions contemplated by the
Acquisition Agreement in the form of Additional Capital Contributions and not in
the form of Member Loans or loans from one or more Unaffiliated Persons.
3.3 Other Required Funds. In the event that in the judgment of Members
representing a Determination of the Members additional funds are required by the
Company for any Company purpose which ATS is not obligated to fund pursuant to
the provisions of Section 3.2, the Members may elect, upon a Determination of
the Members, but subject in any event to the provisions of Section 7.2, to
obtain such funds as a loan from any Unaffiliated Person upon such terms and
conditions as the Members, by Determination of the Members, deem appropriate or,
in the alternative, the Members may elect, by Unanimous Determination of the
Members, to cause each Member to advance, as an Additional Capital Contribution,
its proportionate share, based upon the Company Interests of all Members, or in
such other proportion as shall be fixed by a Unanimous Determination of the
Members, of the total amount so required,
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it being expressly understood that no Member may be required to make an
Additional Capital Contribution and no such Additional Capital Contribution
shall be made by any Member, unless the same shall have been approved by
Unanimous Determination of the Members. CSD shall also have the right, pursuant
to the provisions of Section 3.2, to obtain funds as a loan from any
Unaffiliated Person.
In the event that additional funds are required for any Company purpose
which ATS is not obligated to fund pursuant to the provisions of Section 3.2,
and provided that the Members are unable to obtain, or agree upon terms with
respect to, a loan from an Unaffiliated Person of such funds or if the Members
fail to agree, by Unanimous Determination of the Members, to advance the same as
Additional Capital Contributions, then any Member may, by written notice to each
Member, propose that the same be advanced as loans from the Members. Any such
loan (each a "Member Loan") shall bear interest at an annual rate of interest,
compounded quarterly, equal to the Prime Rate plus two (2) percentage points and
shall be payable, on a priority basis, out of Cash Flow and at liquidation of
the Company, all as further provided in Article 6. Any such Member Loan may be
advanced by all of the Members, pro rata in proportion to Company Interests, or,
in the event that any Member declines to participate in any such Member Loan by
advancing its share thereof within ten (10) days after receipt of a written
proposal with respect to such loan, by any Member or Members who determine to
participate therein, it being expressly understood and agreed that no Member
shall have any obligation to participate in any Member Loan so proposed. To the
extent that any Member declines to participate in any Member Loan so proposed,
that Member's portion of the Member Loan so proposed shall be allocated to the
Member or Members who elect to participate therein in such proportions as such
other Members may agree or, in the absence of such agreement, pro rata among all
Members electing to participate therein in proportion to their respective
Company Interests.
3.4 Capital Accounts. A separate capital account (a "Capital Account")
shall be established and maintained for each Member in accordance with the
following provisions:
(a) To each Member's Capital Account there shall be credited
the amount of cash and fair market value of the property actually
contributed to the Company pursuant to Sections 3.1, 3.2 and 3.3, such
Member's allocable share of Profit and the amount of any Company
liabilities that are assumed by such Member or that are secured by any
Company property distributed to such Member.
(b) To each Member's Capital Account there shall be debited
the amount of cash and the fair market value of any Company property
distributed to such Member pursuant to any provision of this Agreement,
such Member's allocable share of Loss and the amount of any liabilities
of such Member that are assumed by the Company or that are secured by
any property contributed by such Member to the Company.
(c) The provisions of this Agreement relating to the
maintenance of Capital Accounts are intended to comply with Section
1.704-1(b)(2)(iv) of the Treasury Regulations, and shall be interpreted
and applied in a manner consistent with such Treasury Regulations.
(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 Article 6; nor shall a Member be entitled to make any
loan or Capital Contribution to the Company other than as expressly
provided herein. No loan made to the Company by any Member shall
constitute a Capital Contribution to the Company for any purpose.
(e) Except as required by the Act, no Member shall have any
liability for the return of the Capital Contribution of any other
Member. A Member who has more than one interest in the
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Company shall have a single Capital Account that reflects all such
interests, regardless of the class of interest owned and regardless of
the time or manner in which the interests were acquired.
3.5 Transfer of Capital Accounts. The original Capital Account
established for each substituted Member shall be in the same amount as the
Capital Account of the Member which such substituted Member succeeds, at the
time such substituted Member is admitted to the Company. The Capital Account of
any Member whose interest in the Company shall be increased by means of the
transfer to it of all or part of the interest in the Company of another Member
shall be appropriately adjusted to reflect such transfer. Any reference in this
Agreement to a Capital Contribution of or distribution to a then Member shall
include a Capital Contribution or distribution previously made by or to any
prior Member on account of the Company interest of such then Member.
3.6 Deficit Capital Accounts. No Member with a deficit in his Capital
Account shall be obligated to restore such deficit balance or make a Capital
Contribution to the Company solely by reason of such deficit.
3.7 Additional Equity. If the Members, by a Unanimous Determination of
the Members, conclude that an additional equity investment in the Company is
necessary and desirable, the Board shall determine the value of the outstanding
equity of the Company, and based on such value, shall determine the price for
the additional equity to be issued. Each Member shall be entitled to subscribe
for such Member's proportionate share (based on its Company Interest) of such
additional equity. If any Member shall subscribe for less than its proportionate
share, the excess shall then be offered to the fully-subscribing Members. Any
portion not subscribed for by Members may then be offered to Persons who are not
Members. If it is necessary to offer such equity to Persons who are not Members
on terms more favorable than the terms originally accepted by Members, all of
the equity originally subscribed for by the Members shall be issued on the terms
the equity was offered to Persons who are not Members. The Board shall establish
procedures for each equity issuance that will assure that each Member has an
equitable and fair opportunity to subscribe for such equity, exercise its right
to preserve its relative Company Interest and exercise its right of first
refusal before any equity is offered to Persons who are not Members.
3.8 Additional Members. No additional Members may be admitted to the
Company without a Unanimous Determination of the Members, other than pursuant to
the provisions of Section 3.6 or Article 8.
ARTICLE 4
BOOKS; ACCOUNTING; TAX ELECTIONS; REPORTS
4.1 Fiscal Year. The fiscal year of the Company shall be the calendar
year (the "Year"), or such other year as shall be required under the Code.
4.2 Method of Accounting and Taxation. The books of account of the
Company (other than books required to maintain Capital Accounts) shall be
maintained on an accrual basis and otherwise in accordance with GAAP. It is the
intention of the Members that the Company be taxed as a partnership for Federal
income tax purposes and the Members shall take all action and make all elections
necessary to ensure that the Company is so taxed.
4.3 Books and Records and Inspection.
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(a) Books of Account and Records. Proper and complete records
and books of account of the Company's business, including all such
transactions and other matters as are usually entered into records and
books of account maintained by Persons engaged in businesses of like
character or as are required by law, shall be kept by the Company at
the Company's principal office and place of business. To the extent
required by law, the Company shall also keep, at its principal office
and place of business, all records, required by the Act.
(b) Inspection. Each Member shall have the right, at all
reasonable times and upon reasonable notice during usual business
hours, to audit, examine and make copies of or extracts from the books
of account of the Company for any purpose reasonably related to such
Member's interest as a member of the Company. Such right may be
exercised through any agent or employee of such Member designated by it
or by a certified public accountant designated by such Member. A Member
shall bear all expenses incurred in any examination made for such
Member's account.
4.4 Reports.
(a) Monthly Reports. The Company shall prepare and deliver or
cause to be delivered to each Member, within thirty (30) days after the
end of each calendar month:
(i) a management-prepared balance sheet, income
statement and cash flow statement for the Company with respect
to such calendar month just ending and the fiscal year to
date;
(ii) a management-prepared statement of income for
the Company comparing the actual results for the month and the
fiscal year to date with budgeted amounts as set forth in the
most recently approved Annual Budget; and
(iii) (A) a narrative report concerning the
operations of the Company, including the matters set forth in
the profit and loss and cash flow statements and the variance
report described above; and (B) as of the end of each calendar
quarter, the balance of each Member's Capital Account.
The monthly financial statements and other reports and
information shall be certified as accurate in all material respects by
an officer of the Company to his best knowledge and belief.
(b) Annual Report. The Company shall prepare and deliver or
cause to be delivered to each Member, within eighty (80) days after the
end of each fiscal year, an annual report for the Company containing
the following:
(i) a balance sheet for the Company as of the end of
such Year, and statements of income, Members' capital and
statement of cash flows for the Company for such year;
(ii) a general description of the activities of the
Company during the period covered by the report; and
(iii) a report of any transactions between the
Company and any Member or Affiliates with respect thereto,
including fees or compensation paid by the Company and the
services performed by the Members or any Affiliates thereof
for such fees or compensation.
The annual financial statements of the Company shall be
audited (which audit shall be conducted in accordance with GAAP) and
certified by the Accountants.
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(c) Other Information. Forthwith upon request of any Member,
the Company shall, at the cost and expense of the Company, furnish (or
cause to be furnished) to each Member such information bearing on the
financial condition and operations of the Company as any such Member
may from time to time reasonably request. Upon obtaining knowledge
thereof, the Company shall furnish to each Member prompt written notice
of any events or occurrences not otherwise provided for in this Section
4.4 which may materially and adversely affect the Company.
4.5 Filing of Returns and Other Writings; Tax Matters Member.
(a) The Tax Matters Member shall cause the preparation and
timely filing of all Company tax returns and shall, on behalf of the
Company, timely file all other writings required by any governmental
authority having jurisdiction to require such filing.
(b) Unless and until the Members shall otherwise direct by
Determination of the Members, ATS will serve as the "tax matters
partner" (as such term is defined in Section 6231(a)(7) of the Code,
the "Tax Matters Member") for purposes of Section 6231 of the Code.
(c) The Company shall, to the fullest extent permitted by law,
reimburse and indemnify the Tax Matters Member for all reasonable
expenses, including reasonable legal and accounting fees, claims,
liabilities, losses and damages incurred by the Tax Matters Member in
connection with any administrative or judicial proceeding with respect
to the tax liability of the Members.
(d) The provisions of this Section shall survive the
termination of the Company or the termination of any Member's interest
in the Company and shall remain binding on the Members for as long a
period of time as is necessary to resolve with the Internal Revenue
Service any and all matters regarding the Federal income taxation of
the Company or the Members.
(e) The Members agree to file all tax returns in a manner
consistent with all Company tax returns.
ARTICLE 5
ALLOCATIONS
5.1 Allocations of Profit and Loss.
(a) Profit. After giving effect to the special allocations set
forth in Section 5.6 and taking into account any curative allocations
in Section 5.7, Profit of the Company for each fiscal year or other
period shall be allocated among the Members as follows:
(i) first, to the Members in the amounts and proportions
necessary to reverse, on a cumulative basis and
without duplication, all allocations of Loss to the
Members pursuant to Section 5.1(b)(iii) over the life
of the Company;
(ii) second, to the Members in the amounts and proportions
necessary to reverse, on a cumulative basis and
without duplication, all allocations of Loss to the
Members pursuant to Section 5.1(b)(ii) over the life
of the Company; and
(iii) the balance, to the Members in accordance with their
Company Interests.
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(b) Loss. After giving effect to the special allocations set
forth in Section 5.6 and taking into account any curative allocations
in Section 5.7, Loss of the Company for each fiscal year or other
period shall be allocated among the Members as follows:
(i) first, to the Members in the amounts and proportions
necessary to reverse, on a cumulative basis and
without duplication, all allocations of Profit to the
Members pursuant to Section 5.1(a)(iii) over the life
of the Company;
(ii) second, to the Members with positive balances in
their Capital Accounts, in accordance with their
Company Interests until the Capital Accounts of all
Members are reduced to zero; and
(iii) the balance, to the Members in accordance with their
Company Interests.
5.2 Section 754 Election. Upon the request of any Member, the Company
shall elect, pursuant to Section 754 of the Code, to adjust the basis of Company
property as permitted and provided in Sections 734 and 743 of the Code. Such
election shall be effective solely for Federal (and, if applicable, state and
local) income tax purposes and shall not result in any adjustment to the Book
Value of any Company asset or to the Members' Capital Accounts (except as
provided in Treasury Regulations Section 1.704-1(b)(2)(iv)(m)) or in the
determination or allocation of Profit or Loss for purposes other than such tax
purposes.
5.3 Allocations for Tax and Book Purposes. Except as otherwise provided
herein, any allocation to a Member for a fiscal year or other period of a
portion of the Profit or Loss, or of a specially allocated item, shall be
determined to be an allocation to that Member of the same proportionate part of
each item of income, gain, loss, deduction or credit, as the case may be, as is
earned, realized or available by or to the Company for Federal tax purposes.
5.4 Certain Accounting Matters. For purposes of determining Profit,
Loss or any other items allocable to any period, Profit, Loss and any such other
items shall be determined on a daily, monthly or other basis, as determined by
the Managers using any permissible method under Section 706 of the Code and the
Treasury Regulations promulgated thereunder.
5.5 Tax Allocations; Code Section 704(c). In accordance with Section
704(c) of the Code and the Treasury Regulations promulgated thereunder, income,
gain, loss, and deduction with respect to any property contributed to the
capital of the Company shall, solely for income tax purposes, be allocated among
the Members 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 fair market
value at the time of contribution. In the event that the Book Value of any
Company asset is subsequently adjusted in accordance with the last sentence of
the definition of Book Value, any allocation of income, gain, loss and deduction
with respect to such asset shall thereafter take account of any variation
between the adjusted tax basis of the asset to the Company and its Book Value in
the same manner as under Section 704(c) of the Code and any Treasury Regulations
promulgated thereunder. Any elections or other decisions relating to such
allocations shall be made by the Managers in a manner that reasonably reflects
the purpose and intention of this Agreement. Allocations pursuant to this
section 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 Members' Capital
Account or share of Profit, Loss or distributions pursuant to any provision of
this Agreement.
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5.6 Compliance With Section 704(b).
(a) Qualified Income Offset. If any Member unexpectedly
receives an adjustment, allocation or distribution described in
Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6) that causes the
Member to have, or increases the amount of a Member's, deficit Adjusted
Capital Account Balance, items of Company income and gain shall be
specially allocated to such Member in accordance with the requirements
of Regulations Section 1.704-1(b)(2)(ii)(d). This Section 5.6(a) is
intended to comply with the qualified income offset provision of such
Regulations Section, and shall be interpreted consistently therewith.
(b) Gross Income Allocation. If any Member would otherwise
have a deficit Adjusted Capital Account Balance as of the last day of
any fiscal year or other period, items of income and gain of the
Company shall be specially allocated to such Member (in the manner
specified in Section 5.6(a) hereof) so as to eliminate such deficit
Adjusted Capital Account Balance as quickly as possible, provided that
an allocation pursuant to this Section 5.6(b) shall be made only if and
to the extent that such Member would have a deficit Adjusted Capital
Account Balance after all other allocations provided for in this
Agreement have been tentatively made as if this Section 5.6(b) were not
in this Agreement.
(c) Limitation on Loss Allocations. No item of deduction or
loss of the Company shall be allocated to a Member if such allocation
would cause or increase a deficit Adjusted Capital Account Balance. In
the event that some but not all of the Members would have deficit
Adjusted Capital Account Balances as a result of an allocation of Loss
pursuant to this Article 5, the limitation set forth in this Section
5.6(c) shall be applied on a Member by Member basis so as to allocate
the maximum permissible Loss to each Member under Regulations Section
1.704-1(b)(2)(ii)(d).
(d) Minimum Gain Chargeback. Notwithstanding any other
provision of this Article 5, if there is a net decrease in "partnership
minimum gain" or "partner nonrecourse debt minimum gain" of the Company
(as such terms are defined in Regulations Section 1.704-2) during any
fiscal year or other period, prior to any other allocation pursuant
hereto, items of Company income and gain for such fiscal year or other
period (and, if necessary, for subsequent fiscal years or periods)
shall be specially allocated among the Members in accordance with
Regulations Sections 1.704-2(f) and (i). The items to be so allocated
shall be determined in accordance with Regulations Sections 1.704-
2(f)(6) and (j)(2).
(e) Allocation of "Partner Nonrecourse Deductions". "Partner
nonrecourse deductions" as defined in Section 1.704-2(i)(1) of the
Treasury Regulations for any fiscal year or other period shall be
specially allocated to the Members who bear the economic risk of loss
for the "partner nonrecourse debt" to which such "partner nonrecourse
deductions" are attributable, as provided in Section 1.704-2(i)(1) of
the Treasury Regulations.
(f) Allocation of "Nonrecourse Deductions". "Nonrecourse
deductions" as such term is defined in Section 1.704-2(b)(1) of the
Treasury Regulations for any fiscal year or other period shall be
allocated to the Members in accordance with their respective Company
Interests.
5.7 Curative Allocations. The allocations set forth in Section 5.6 (the
"Regulatory Allocations") are intended to comply with certain requirements of
Sections 1.704-1(b) and 1.704-2 of the Treasury Regulations. The Regulatory
Allocations may not be consistent with the manner in which the Members intend to
divide Company Profits, Losses and similar items. Accordingly, Profits, Losses
and other items will be reallocated among the Members (in the same year, and to
the extent necessary, in subsequent years) in a
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manner consistent with Treasury Regulation section 1.704-1(b) and 1.704-2 so as
to prevent the Regulatory Allocations from distorting the manner in which
Company Profits, Losses and other items are intended to be allocated among the
Members pursuant to this Article 5.
ARTICLE 6
DISTRIBUTIONS
6.1 Distributions Other Than Proceeds of Any Liquidating Transaction.
Subject to Section 18-607 of the Act, the Company shall distribute Cash Flow to
each Member, on a monthly basis, in the following manner:
(a) first, up to thirty percent (30%) of Cash Flow to the
Members in payment of any Member Loans in proportion to the outstanding
balances of such Member Loans held by each Member (amounts so paid to
be applied first to interest accrued and unpaid, and then to
outstanding principal); and
(b) the balance, to the Members in accordance with their
respective Company Interests at the time of distribution.
6.2 Proceeds of Any Liquidating Transaction. Upon the occurrence of any
transaction (a "Liquidating Transaction") involving the sale or other
disposition of all or substantially all of the assets of the Company, all
proceeds resulting therefrom (and all cash available from any other source
during the period of winding up of the Company) shall be applied as follows:
(a) first, to the payment of, or of the making of reasonable
provisions for payment of, any debts or liabilities of the Company to
creditors (other than Members as holders of Member Loans);
(b) second, to the Members in payment of any Member Loans in
proportion to the outstanding balances of such Member Loans held by
each Member (with amounts so paid to be applied first to interest and
then to principal); and,
(c) the balance, to the Members in proportion to and to the
extent of the positive balances of the Capital Accounts of the Members
(after reflecting in such Capital Accounts all adjustments thereto
necessitated by (i) all other Company transactions for the Fiscal Year
of the Company in which such Liquidating Transaction occurs prior to or
simultaneously with such Liquidating Transaction and (ii) such
Liquidating Transaction).
It is understood and agreed that all payments under this Section shall
be made as soon as reasonably practicable and in any event by the end of the
Fiscal Year in which such Liquidating Transaction occurs or, if later, within
ninety (90) days after the date of such Liquidating Transaction.
6.3 Liquidation of Member's Interest. Upon liquidation of a Member's
interest in the Company, other than in connection with a Liquidating
Transaction, liquidating distributions to such Member shall be made in
accordance with Section 1.704-1(b)(2)(ii)(b)(2) of the Treasury Regulations.
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ARTICLE 7
RIGHTS AND OBLIGATIONS OF MEMBERS
7.1 Limited Liability. Except as otherwise provided by the Act, the
debts, obligations and liabilities of the Company, whether arising in contract,
tort or otherwise, shall be solely the debts, obligations and liabilities of the
Company, and the Members shall not be obligated personally for any such debt,
obligation or liability of the Company solely by reason of being a member of the
Company. The Members shall not be required to lend any funds to the Company.
Each of the Members shall only be liable to make payment of its respective
contributions as and when due hereunder and other payments as expressly provided
in this Agreement. If and to the extent a Member's contribution shall be fully
paid, such Member shall not, except as required by the express provisions of the
Act regarding repayment of sums wrongfully distributed to Members, be required
to make any further contributions.
To the extent that, at law or in equity, any Affiliate of a Member or
any manager, officer, stockholder, employee, agent or representative of a Member
or such Affiliate has duties (including fiduciary duties) and liabilities to the
Company or to the Members, no such Person shall be liable to the Company or to
any Member for its good faith reliance on the provisions of this Agreement,
including without limitation Section 7.4, which, in the event of any conflict
with any such duties, shall govern.
7.2 Management and Control, Etc. Management and control of the Company
shall be vested in the Members and all material decisions with respect to
management, control, operation and disposition of the business and assets of the
Company shall, except as otherwise specifically provided in this Agreement, be
made by Determination of the Members.
There shall be established by the Members a Board of Managers of the
Company (the "Board"), composed of five managers, designated as hereinafter set
forth. The Board shall meet on a regular basis, not less frequently than
quarterly, to review the operations of the Company, and any Determination of the
Members, required or permitted to be taken under this Agreement may be
accomplished by action of a majority of the managers (or, in the case of any
Unanimous Determination of the Members, by action of all of the managers),
either at a meeting of the Board or by written consent. The Board may also
appoint a Chairman, President, one or more Vice Presidents, a Treasurer and a
Secretary and such other officers as the Board shall deem appropriate, each of
which officers may, to the extent provided by the Board, have the powers
attendant to a similar officer of a Delaware corporation.
Each of ATS and CSD shall have the right, from time to time, to
designate three managers and two managers, respectively, to the Board. Any
manager may be removed, with or without cause, and a successor appointed at any
time by the Member or Members responsible for designation of such manager and
any Member entitled to do so may also designate one or more alternates to serve
in the place of any manager designated by such Member who may temporarily be
unavailable to act with respect to Company matters. In the event of any transfer
by any Member or by any of its successors and assigns, of any interest in the
Company in accordance with Article 8, (a) the assigning Member shall be deemed
to have assigned its right to designate a manager or managers under this Section
to its assignee in the event that such assignment is of the assignor's then
entire interest as a Member of the Company and the assignee is admitted as a
Member in accordance with Article 8, and (b) the assigning Member shall have the
right to transfer its right to designate a manager, by express statement of
exercise of such right in the applicable instrument of assignment; provided,
however, that the assignee of such right is, or will be upon completion of such
transfer, the holder of not less than ten percent (10%) of the Company Interests
and the assignee is admitted as a Member in accordance with Article 8.
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The Company shall pay the reasonable out-of-pocket expenses, including
travel and lodging, of each manager (including any manager-alternate) acting in
connection with the business of the Company.
From time to time upon request, the Company will furnish to each Member
such information regarding the business, properties, financial condition and
results of operation of the Company in such detail as may reasonably be
requested; and the Company covenants and agrees that any authorized
representative of any such Member shall have the right, reasonably exercisable,
to visit and inspect any of the properties of the Company during normal business
hours and in a manner so as to not interfere with the operations and business of
the Company, to examine and to discuss their affairs, finances and accounts
with, and be advised as to the same by, their officers, all at such reasonable
times and intervals as such Member may reasonably request.
Notwithstanding anything to the contrary in this Agreement, the Company
shall not take any of the following actions without first obtaining the
Unanimous Determination of the Members, which approval shall be given or
withheld at the absolute discretion of the Members:
(a) sell or exchange all or substantially all of the assets of the
Company;
(b) issue any additional Company Interests, or admit the
transferee of a Member's Company Interest as a substitute
Member under Section 8.2 hereof;
(c) dissolve the Company, or continue the Company after its
dissolution due to the withdrawal of a Member (or if there are
none, of any Member) as provided in Section 9.1 hereof;
(d) merge or consolidate the Company with another business entity
under the Act, unless the Members of the Company immediately
prior to such merger or consolidation own not less than a
majority of the voting interests in the survivor, whether or
not the Company, of such merger or consolidation;
(e) file any voluntary petitions for the Company under Title XI of
the United States Code, the Bankruptcy Act, or consent to the
filing of any involuntary petition for the Company thereunder,
or seek the protection of any other federal, state, bankruptcy
or insolvency law or debtor relief statutes;
(f) borrow any funds other than in the ordinary course of business
or if, as a result thereof, the aggregate principal amount of
indebtedness of the Company outstanding would exceed seventy-
five percent (75%) of the fair market value of the assets of
the Company; or
(g) establish any extraordinary reserves (i.e., reserves other
than those in the ordinary course of business which shall
include, without limitation, those with respect to capital
expenditures).
7.3 Evidence of Authority, Etc. Any Person dealing with the Company may
rely on a certificate signed by any Member:
(a) as to who are the Members or managers, officers, employees
or agents of the Company;
(b) as to the existence or nonexistence of any fact or facts
which constitute conditions precedent to acts by the Members or any
such manager, officer, employee or agent or in any other manner germane
to the affairs of the Company;
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(c) as to who is authorized to execute and deliver any
instrument or document on behalf of the Company;
(d) as to the authenticity of any copy of this Agreement and
amendments hereto;
(e) as to any act or failure to act by the Company or as to
any other matter whatsoever involving the Company, any Member or any
manager, officer, employee or agent; or
(f) as to the authority of any Member or any manager,
officer, employee or agent or other Person to act on behalf of the
Company.
7.4 Other Business, Etc. Except as hereinafter set forth in this
Section (or in any separate agreement between the Company and any such Person),
any Member and any Affiliate of a Member may engage in or possess an interest in
other business ventures (unconnected with the Company) of every kind and
description, independently or with others and none of the Company or the other
Members shall have any rights in or to such independent ventures or the income
or profits therefrom by virtue of this Agreement.
To the extent that, at law or in equity, any Affiliate of a Member or
any director, officer, stockholder, employee, agent or representative of a
Member or such Affiliate has duties (including fiduciary duties) and liabilities
to the Company or to the Members, no such Person shall be liable to the Company
or to any Member for its good faith reliance on the provisions of this
Agreement. The provisions of this Agreement, to the extent that they expand or
restrict the duties and liabilities of any such Person otherwise existing at law
or in equity, are agreed by the Members to replace such other duties and
liabilities of such Person.
Anything in this Section or elsewhere in this Agreement to the contrary
notwithstanding, it is the intent and understanding of the Members, and each of
ATS and CSD covenant and agree as follows:
(a) except as set forth in the Exceptions Schedule, all future
acquisition of sites, whether in fee ownership, pursuant to a leasehold
interest, or otherwise, for the construction of communication towers, and all
future construction of communication towers, by CSD or any of its Affiliates
will be offered to the Company and neither CSD nor any of its Affiliates will,
directly or indirectly (as a stockholder, member, partner, trustee or otherwise)
own, construct, operate, manage, finance or otherwise be involved with any
communication towers, unless ATS shall have failed to approve the acquisition of
site pursuant to the provisions of Section 3.2; and
(b) the Company will enter into a Management Agreement with ATS.
7.5 Indemnification. No Member, manager or officer of the Company
shall be liable to any other Member or any other Person who has an interest in
the Company for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Member, manager of officer in good faith
on behalf of the Company and in a manner reasonably believed to be within the
scope of the authority conferred on such Member, manager or officer by this
Agreement, except that a Member, manager of officer of the Company shall be
liable for any such loss, damage or claim incurred by reason of such Person's
gross negligence or willful misconduct. To the full extent permitted by
applicable law, a Member, manager or officer of the Company shall be entitled to
indemnification from the Company for any loss, damage or claim by reason of any
act or omission performed or omitted by such Person in good faith on behalf of
the Company and in a manner reasonably believed to be within the scope of the
authority conferred on it by this Agreement, except that no Member, manager or
officer shall be entitled to be indemnified in respect of any loss, damage or
claim incurred by it by reason of the Person's gross negligence or willful
misconduct with respect to such
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acts or omissions; provided, however, that any indemnity under this Section
shall be provided out of and to the extent of Company assets only, and no Member
shall have personal liability on account thereof.
7.6 Agreements with Affiliates. The Company may enter into agreements
with any Member or Affiliate of a Member for the acquisition of property or
rendition of services, provided that the acquisition of such property from, or
the rendition of such services by, such Member or Affiliate has previously been
approved by a Unanimous Determination of the Members. The affected Member shall
in each case disclose in advance the existence of any such affiliation to the
other Members.
7.7 Payment of Expenses; Compensation. Promptly following the
Effective Date, or as the Members may, by Determination of the Members,
otherwise agree, the Company shall reimburse each Member for such reasonable
fees and costs incurred and reasonable out-of-pocket expenditures relating to
the formation of the Company and the preparation of the associated documentation
as may have been approved by a Determination of the Members. Except as expressly
set forth in this Agreement, or as otherwise approved by a Determination of the
Members, no Member or manager shall receive any compensation for performing its
duties hereunder.
ARTICLE 8
TRANSFERS OF INTERESTS, ETC.
8.1 Consent Required. Except as otherwise contemplated by Section 8.2
or as permitted by the succeeding paragraphs of this Section, no Member shall
suffer or permit any transfer, whether direct or indirect, voluntary or
involuntary, of all or any portion of such Member's Company Interest without an
approval given by Determination of the Members representing a majority of the
Company Interests held by the non-transferring Members, which approval may be
given or withheld by the non-transferring Members in their sole and absolute
discretion. Notwithstanding the foregoing, a Member may, without the approval of
the other Members, transfer an economic Company Interest pursuant to a Permitted
Transfer, in which event the assignee shall be entitled to the share of Profit
or Loss and any distribution or return of Capital Contributions and any credit
or other item properly allocable to the Company Interest to be transferred.
However, unless and until any such transfer of an economic interest shall have
been approved by a Determination of the Members representing a majority in
interest of the Company Interests held by the non- transferring Members, which
approval may be given or withheld by the non-transferring Members in their sole
and absolute discretion, the assignee shall not be entitled to be admitted as a
Member of the Company and the assignor shall continue as a Member of the Company
for all other purposes of this Agreement. In addition, any assignee of an
economic Company Interest pursuant to the foregoing provisions of this paragraph
who has not been admitted as a Member may further assign such interest provided
that such assignment is carried out in accordance with and subject to the
provisions of this Article, in all respects as if or with the same effect as if
such assignee were a Member.
The foregoing provisions of this Section shall not be deemed to
restrict any transfer of an interest in ATS or CSD, except as otherwise
specifically provided.
Anything in this Section 8.1 or elsewhere in this Agreement to the
contrary notwithstanding, ATS may, without the approval of the other Members,
pledge all or any portion of its interests to one or more banks or other
financial institutions pursuant to any bona fide borrowing arrangements, which,
upon foreclosure, shall succeed to the interest of ATS and may become a Member
without the consent of any other Member being required.
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8.2 Right of First Refusal.
(a) If any Member (the "Offeror") desires, at any time, to transfer
all or any part of its Company Interest other than as permitted by Section 8.1
or other than pursuant to a Permitted Transfer, it shall submit to the other
Members (the "Offerees") a true copy of an offer to purchase such Company
Interest (the "Offer"), which shall in any event disclose the price and terms of
such proposed sale and the name and address of the proposed purchaser. The
Offerees shall have the absolute right to purchase such Company Interest upon
the terms and conditions as set forth in the Offer. Each Offeree shall, within
thirty (30) days of such receipt, specify in a notice to the Offeror whether or
not it desires to accept the Offer, and upon acceptance of the Offer, the same
shall constitute a binding agreement of purchase and sale between the parties.
Failure to send such notification within thirty (30) days shall constitute an
election to reject the Offer. The Offeror may sell its Company Interest, to the
extent the Offer was not so accepted, to the proposed purchaser whose name and
address were disclosed in the Offer, but only upon the same terms and conditions
set forth therein and within sixty (60) days after the expiration of said thirty
(30) day period during which the Offeree had the right to accept the Offer;
otherwise, any such sale shall be null and void and of no force or effect
whatever.
(b) In the event that two or more of the Offerees desire to accept any
Offer, and if such Offerees are unable to agree among themselves as to the
apportionment thereof, each accepting Offeree shall be entitled to acquire a
portion of the offered Company Interest based upon the ratio which the Company
Interest of each such accepting Offeree bears to the aggregate Company Interests
of all such accepting Offerees.
(c) No Offeree shall have any obligation, by reason of acceptance or
rejection of any Offer pursuant to this Section to compensate any broker
retained by any Offeror or third party with respect to any proposed transfer of
an Company Interest.
(d) Each Member shall use reasonable efforts to keep the other Members
apprised with respect to any inquiries or proposals regarding the sale of such
Member's Company Interest.
8.3 Buy/Sell. A Member (for purposes of this Section the "Initiating
Member") may (a) in the event that there shall be a transfer of majority
ownership or control of CSD to any Person in competition with the Company, at
any time within ninety (90) days after receipt of notice of such transfer of
ownership or control (in which event only another Member may be the Initiating
Member), or (b) in the event an Act of Bankruptcy occurs with respect to a
Member (in which event only another Member may be the Initiating Member), by
notice to the other Members (for purposes of this Section, "Other Members")
require the Other Members to elect either to sell their respective entire
Company Interests and any Member Loans to the Initiating Member or to purchase
the entire interest of the Initiating Member in the Company and any Member Loans
for a price computed by reference to an amount stated in the Initiating Member's
notice (the "Stated Amount"). The purchase price shall equal the amount such
Member would receive as a distribution from the Company in respect of such
Member's Company Interest and in repayment of any Member Loans if (i) all of the
assets of the Company were sold on the closing date under this Section for the
Stated Amount, (ii) the Company were dissolved in accordance with Section 9.1,
and (iii) the proceeds of sale were applied in accordance with Section 9.3, it
being understood that the applicable purchase price for such Company Interest
and Member Loans shall be determined by the affected Members if they can agree
upon the same within ten (10) days prior to the closing date and otherwise the
same shall be determined on such date by the Accountants (with any such
determination by the Accountants to be binding upon all Members in the absence
of manifest error). Each of the Other Members shall have thirty (30) after
receipt of the Initiating Member's notice within which to elect whether he shall
buy the Initiating Member's Company Interest and Member Loans or sell his
Company Interest and Member Loans based upon the Stated Amount. If any of the
Other
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Members fails to make an election within such period, he shall be deemed to have
elected to sell his Company Interest and Member Loans to the Initiating Member.
The closing pursuant to this Section shall occur on the sixtieth (60th)
day after the election (or deemed election) to purchase or sell has been made,
or at such earlier date as the purchasing Member(s) may specify on ten (10) days
prior written notice; provided, however, that each of the following (unless and
except to the extent waived by the purchasing Member(s)) shall be a condition of
the obligation of the purchasing Member(s) to proceed with any such purchase:
(a) that the Company shall have continued to be operated in accordance with this
Agreement in all material respects through the date of sale, (b) that the
purchasing Member(s) shall have obtained all lender and other third-party
consents, if any, required in connection with such sale, and (c) that there
shall be no suit, action or proceeding pending on the date of sale before or by
any court or governmental body seeking to restrain or prohibit, or material
damages or other relief in connection with, the sale; provided further, however,
the Company shall agree to indemnify and hold harmless the seller(s) with
respect to all Company obligations, whether arising before or after the date of
such sale (other than any such obligations resulting from any breach of this
Agreement by a selling Member).
The Company Interest and any applicable Member Loans shall be purchased
and the purchase price shall be paid at a closing to be held at the principal
business office of the Company. At the closing the Company Interest and Member
Loans shall be duly conveyed, free of all liens and encumbrances on the same and
the purchase price shall be paid by wire transfer of immediately available
Federal funds. At the election of the purchasing Member(s), the Company Interest
and the Member Loans to be purchased may be acquired in the name of one or more
nominees (whether or not any such nominee is an Affiliate of a purchasing
Member), provided, however, that any such nominee is designated by written
notice given at least five (5) days prior to the date of Closing.
Anything in this Section or elsewhere in this Agreement to the contrary
notwithstanding, (a) in the event one, but not all, of the Other Members shall
elect to purchase the Initiating Member's Company Interest and Member Loans,
such election shall take precedence over any election to sell Company Interests
and Member Loans to the Initiating Member and any such elections to sell shall
be deemed to be an election to sell such Company Interests and Member Loans to
the Other Members who have elected to purchase the Company Interests and Member
Loans of the Initiating Member, (b), such purchasing Other Members shall have
the right but not the obligation to purchase the Company Interests and Member
Loans of the non- purchasing Other Members and, after the closing under this
Section, the purchasing Other Members and, in the event the purchasing Other
Members do not elect to purchase all of the Company Interests and member Loans
of the nonpurchasing Other Members, the non-purchasing Other Members shall
continue the Company in accordance with this Agreement, and (c) if one or more
of the Other Members elect to purchase the Company Interest and Member Loans of
the Initiating Member and are unable to agree among themselves as to
apportionment thereof, each Other Member shall be entitled to acquire a portion
of the Initiating Member's Company Interest and Member Loans based upon the
ratio which the Company Interest of each such Other Member bears to the
aggregate Company Interests of all of the purchasing Other Members. In no event
shall the purchasing Other Members be entitled to purchase less than all of the
Company Interest and Member Loans of any nonpurchasing Other Member unless such
nonpurchasing Other Member so agree in writing, it being understood, however,
that the purchasing Other Members may elect to purchase Company Interests and
Member Loans from some but not all of the nonpurchasing Other Members.
In the event of the failure of a selling Member to proceed with the
sale of its Company Interest and Member Loans at the closing as herein provided
(other than any failure by reason of the non-occurrence of any condition to such
sale herein provided), the same shall constitute a default by such Member under
this Agreement and any purchasing Member shall be entitled to pursue any and all
remedies available under this Agreement or at law or equity, including specific
performance. In the event of the failure of a purchasing
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Member (or its nominee) to proceed with the purchase of a Company Interest and
Member Loans at the closing as herein provided (other than because a condition
to such Member's obligation to make such purchase has not been satisfied), each
selling Member may elect, by written notice given to the purchasing Member
within thirty (30) days after the date of such failure, either (a) to cause the
purchasing Member to sell its Company Interest and Member Loans to such selling
Member (or its nominee) at a purchase price for such Company Interest which is
ten percent (10%) less than the price which the defaulting purchasing Member
would have received if it had initially agreed to sell its Company Interest at a
price determined by reference to the Stated Amount or (b) to pursue any and all
remedies available under this Agreement or at law or in equity, including
specific performance. If a selling Member elects within the aforesaid thirty
(30) day period to cause such defaulting purchasing Member to sell the Company
Interest and Member Loans, the closing shall occur on the sixtieth (60th) day
after the election to purchase has been given, or at such earlier date as the
electing Member may specify on ten (10) days prior written notice; provided,
however, that it shall be a condition of the electing Member's obligation to
proceed, in the case of the electing Member as buyer, that the conditions set
forth in the second paragraph of this Section are satisfied and, in the case of
the former purchasing Member as seller, that the conditions set forth in the
immediately preceding paragraph are satisfied.
8.4 CSD Right/Obligation of Exchange. In conjunction with the initial
public offering of the common stock of ATS (the "ATS IPO") (including an initial
public offering which takes the form of a merger with an existing publicly
traded company), CSD shall have the right, and ATS shall have the right to
require CSD, to exchange all but not less than all of CSD's Company Interest for
shares of common stock of ATS (of the class which is the subject of the ATS IPO,
the "ATS Common Stock") on the terms and subject to the conditions of this
Section. ATS agrees that it shall give prompt written notice (which notice shall
include the estimate initial public offering price or the range thereof and
whether ATS has elected to require CSD to exchange its Company Interest for
shares of ATS Common Stock pursuant to the provisions of this Section) to CSD of
its determination to proceed with the ATS IPO. In the event ATS shall not have
elected to require CSD to exchange its Company Interest for shares of ATS Common
Stock pursuant to the provisions of this Section, CSD shall have the right,
exercisable within twenty (20) days of receipt of such notice, to elect to
exchange all but not less than all of its Company Interest for shares of ATS
Common Stock. Failure of CSD to deliver a timely notice of election to so
exchange its Company Interest shall be deemed to be an election not to exchange
its Company Interest.
In the event CSD elects to exchange its Company Interest, ATS and CSD
shall attempt in good faith to agree upon a fair market value for CSD's Company
Interest. In the event ATS and CSD are unable to agree upon such value within
ten (10) days, CSD shall have the right, but not the obligation, to submit such
matter to appraisal in accordance with the provisions of this Section. In the
event ATS and CSD agree on such fair market value or CSD elects to submit such
matter to appraisal, ATS and CSD shall be obligated to effect the exchange and
shall be conclusively bound to effect such exchange based on the results of the
appraisal. In the event CSD shall have elected not to submit, or shall have
failed within such ten (10)-day period to have submitted, such matter to binding
appraisal in accordance with the provisions of the preceding sentence, it shall
not have any further right to exchange its Company Interest for shares of common
stock of ATS, except as otherwise provided in the last paragraph of this
Section. Any appraisal of the fair market value of the Company Interest of CSD
shall be made by the managing underwriter of the ATS IPO (or, in the event the
ATS IPO shall be pursuant to a merger, by an investment banker knowledgeable in
the communications tower business mutually reasonably acceptable to ATS and CSD
or, in the absence of such agreement, by Credit Suisse First Boston). The number
of shares of ATS Common Stock to be issued in exchange for the Company Interest
of ATS shall be determined by dividing the fair market value of CSD's Company
Interest (as agreed upon by ATS and CSD or as determined by appraisal) by the
amount paid by the underwriters to ATS (or the selling stockholders in the event
ATS does not sell any shares pursuant
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thereto) in the ATS IPO (or the closing price of the common stock of the party
to the merger agreement on the date the merger agreement is executed).
To the extent permitted by the Code, ATS will use its reasonable
business efforts to effect the exchange of CSD's Company Interest for shares of
ATS Common Stock pursuant to a tax-free reorganization under the Code so long as
doing so does not subject ATS or its subsidiaries or stockholders to any risk of
tax in connection with the exchange or any related transactions.
CSD hereby appoints ATS as its agent and attorney-in-fact, which
appointment is coupled with an interest, and is irrevocable, for purposes of
executing and delivering all such agreements, instruments and documents
necessary or desirable in order to effectuate the provisions of this Section,
including without limitation the right and power to transfer the Company
Interest of CSD to ATS in accordance with the provisions of this Section, all in
the event CSD has elected to proceed with the exchange of its Company Interest
for shares of ATS Common Stock pursuant to the provisions of this Section.
In the event CSD shall have elected or been deemed to have elected not
to exchange its Company Interest for shares of ATS Common Stock pursuant to the
ATS IPO and ATS subsequently determines not to proceed with such ATS IPO or such
ATS IPO is withdrawn or is otherwise not consummated, CSD shall have the rights
set forth in this Section upon any subsequent determination of ATS to proceed
with the ATS IPO.
8.5 Obligations and Rights of Transferees and Assignees. Any Person
who acquires in any manner whatsoever the interest (or any part thereof) of any
Member in the Company, irrespective of whether such Person has accepted and
assumed in writing the terms and provisions of this Agreement, shall be deemed,
by acceptance of the benefit of the acquisition thereof, to have requested and
agreed to be subject to and bound by all of the obligations of this Agreement,
with the same force and effect as any predecessor in Company Interest, shall
have only such rights as are provided in this Agreement, and, without limiting
the generality of the foregoing, such Person shall not have the value of his
interest ascertained or receive the value of such interest, or, in lieu thereof,
profits attributable to any right in the Company, except as set forth in this
Agreement.
8.6 Non-Recognition of Certain Transfers. Notwithstanding any other
provision of this Agreement, any transfer, sale, alienation, assignment,
encumbrance or other disposition in contravention of any of the provisions of
this Article shall be void and ineffective, and shall not bind, or be recognized
by, the Company.
8.7 Required Amendments; Continuation. If and to the extent any
transfer of a Company Interest is permitted hereunder and the transferee is
admitted as a Member, this Agreement shall be amended to reflect such admission
or transfer and the elimination of the transferor Member and (if and to the
extent then required by the Act) a certificate of amendment to the Certificate
reflecting such admission and elimination shall be filed in accordance with the
Act. The admission of any substitute Member pursuant to this Article shall be
deemed effective immediately prior to the transfer of a Company Interest to such
substitute Member. If the transferor Member has transferred all of its Company
Interest pursuant to this Article, then, immediately following such transfer,
the transferor Member shall cease to be a member of the Company.
8.8 Resignation. No Member shall have the right to resign from the
Company without the prior written consent of the other Members.
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ARTICLE 9
TERMINATION
9.1 Events of Dissolution.
(a) In accordance with Section 18-801 of the Act, the Company shall be
dissolved and the affairs of the Company wound up upon the occurrence of any of
the following events:
(i) a Unanimous Determination of the Members to dissolve
the Company; or
(ii) death, retirement, resignation, expulsion, bankruptcy
or dissolution of a Member or the occurrence of any other event which,
pursuant to the Act, terminates the continued existence of a Member in
the Company, unless, if there is more than one Member remaining, the
business of the Company is continued by the consent of all the
remaining Members within ninety (90) days following the occurrence of
any such event; or
(iii) the sale, transfer or other disposition of all or
substantially all of the business and assets of the Company; or
(iv) in any event, at 12:00 midnight on December 31, 2047.
(b) Dissolution of the Company shall be effective on the day on which
the event occurs giving rise to the dissolution, but the Company shall not
terminate until the assets of the Company shall have been distributed as
provided herein and a certificate of cancellation of the Company has been filed
with the Secretary of State of the State of Delaware.
(c) If as a result of the occurrence of any event described in Section
9.1(a)(ii), a Member is the only remaining member of the Company, to the fullest
extent permitted by the Act, such Member shall have the right to admit a Person
as a new member of the Company, effective as of the date of the occurrence of
the event set forth in Section 9.1(a) (ii), on terms satisfactory to such
remaining Member. Upon such admission, the Members are hereby authorized to, and
shall, continue the business of the Company without dissolution.
9.2 Application of Assets. In the event of dissolution, the Company
shall conduct only such activities as are necessary to wind up its affairs
(including the sale of the business and assets of the Company in an orderly
manner), and the assets of the Company shall be applied in the manner, and in
the order of priority, set forth in Section 6.2.
9.3 Distributions in Liquidation. No Member shall have the right to
request or require the distribution of the assets of the Company in kind upon
the liquidation of the Company.
ARTICLE 10
MISCELLANEOUS
10.1 Notices. All notices and other communications which by any
provision of this Agreement are required or permitted to be given shall be given
in writing and shall be (a) mailed by first-class or express mail, or by
recognized courier service, postage prepaid, (b) sent by telex, telegram,
telecopy or other form
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of rapid transmission, confirmed by mailing (by first class or express mail, or
by recognized courier service, postage prepaid) written confirmation at
substantially the same time as such rapid transmission, or (c) personally
delivered to the receiving party (which if other than an individual shall be an
officer or other responsible party of the receiving party). All such notices and
communications shall be mailed, sent or delivered as set forth on the Member
Schedule (including any copies shown thereon) or to such other address (within
the United States of America) as any party may have designated for itself by
written notice to the others in the manner herein prescribed, except that
notices of change of address shall be effective only upon receipt. All notices,
demands, and requests to be sent hereunder shall be deemed to have been given
for all purposes of this Agreement upon the date of receipt or refusal.
10.2 Specific Performance; Other Rights and Remedies. Each party
recognizes and agrees that in the event the other party should refuse to perform
any of its obligations under this Agreement, the remedy at law would be
inadequate and agrees that for breach of such provisions, each party shall, in
addition to such other remedies as may be available to it at law or in equity or
as provided in Article 7, be entitled to injunctive relief and to enforce its
rights by an action for specific performance to the extent permitted by
Applicable Law. Each party hereby waives any requirement for security or the
posting of any bond or other surety in connection with any temporary or
permanent award of injunctive, mandatory or other equitable relief. Nothing
herein contained shall be construed as prohibiting each party from pursuing any
other remedies available to it pursuant to the provisions of, and subject to the
limitations contained in, this Agreement for such breach or threatened breach.
10.3 Severability. If any term or provision of this Agreement shall be
held or deemed to be, or shall in fact be, invalid, inoperative, illegal or
unenforceable as applied to any particular case in any jurisdiction or
jurisdictions, or in all jurisdictions or in all cases, because of the
conflicting of any provision with any constitution or statute or rule of public
policy or for any other reason, such circumstance shall not have the effect of
rendering the provision or provisions in question invalid, inoperative, illegal
or unenforceable in any other jurisdiction or in any other case or circumstance
or of rendering any other provision or provisions herein contained invalid,
inoperative, illegal or unenforceable to the extent that such other provisions
are not themselves actually in conflict with such constitution, statute or rule
of public policy, but this Agreement shall be reformed and construed in any such
jurisdiction or case as if such invalid, inoperative, illegal or unenforceable
provision had never been contained herein and such provision reformed so that it
would be valid, operative and enforceable to the maximum extent permitted in
such jurisdiction or in such case. Notwithstanding the foregoing, in the event
of any such determination the effect of which is to affect materially and
adversely any Member, the Members shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the Members as closely as
possible to the fullest extent permitted by Applicable Law in an acceptable
manner to the end that such intent is fulfilled to the maximum extent possible.
10.4 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, binding upon all of the
Members. In pleading or proving any provision of this Agreement, it shall not be
necessary to produce more than one of such counterparts.
10.5 Section Headings. The headings contained in this Agreement are
for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
10.6 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 as an entity, and no Member, individually, shall have any ownership
of such property. The Company may hold any of its assets in its own
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name or in the name of its nominee, which nominee may be one or more
individuals, partnerships, trusts or other entities.
10.7 Governing Law. In the event of a conflict between any provision
of this Agreement and any non-mandatory provision of the Act, the provision of
this Agreement shall control and take precedence. The validity, interpretation,
construction and performance of this Agreement shall be governed by, and
construed in accordance with, the applicable laws of the United States of
America and the laws of the State of Delaware applicable to contracts made and
performed in such State and, in any event, without giving effect to any choice
or conflict of laws provision or rule that would cause the application of
domestic substantive laws of any other jurisdiction. Anything in this Agreement
to the contrary notwithstanding, in the event of any dispute between the parties
which results in a Legal Action, the prevailing party shall be entitled to
receive from the non-prevailing party reimbursement for reasonable legal fees
and expenses incurred by such prevailing party in such Legal Action.
10.8 Further Acts. Each party agrees that at any time, and from time
to time, before and after the consummation of the transactions contemplated by
this Agreement, it will do all such things and execute and deliver all such
documents and other assurances, as any other party or its counsel reasonably
deems necessary or desirable in order to carry out the terms and conditions of
this Agreement and the transactions contemplated hereby or to facilitate the
enjoyment of any of the rights created hereby or to be created hereunder.
10.9 Entire Agreement. This Agreement (together with the Member
Schedule) constitutes the entire agreement of the parties and supersedes all
prior agreements and undertakings, both written and oral, between the parties,
with respect to the subject matter hereof.
10.10 Assignment. This Agreement shall not be assignable by any Member,
except as otherwise provided in Section 8.1, and any such assignment shall be
null and void, except that it shall inure to the benefit of and by binding upon
any successor to any party by operation of law, including by way of merger,
consolidation or sale of all or substantially all of its assets, and ATS may
assign its rights and remedies hereunder to any bank or other financial
institution which has loaned funds or otherwise extended credit to it.
10.11 Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any Person any right,
benefit or remedy of any nature whatsoever under or by reason of this Agreement,
except as otherwise provided in Section 10.10.
10.12 Mutual Drafting. This Agreement is the result of the joint
efforts of CSD and ATS, and each provision hereof has been subject to the mutual
consultation, negotiation and agreement of the parties and there shall be no
construction against either party based on any presumption of that party's
involvement in the drafting thereof.
10.13 Amendments; Waivers.. This Agreement may be amended from time to
time with written approval of all Members. At any time or from time to time,
except to the extent not permitted by Applicable Law, the Members may extend the
time for the performance of any of the obligations or other acts of any Member,
and waive compliance by the other with any of the agreements, covenants or
conditions contained herein. Any such extension or waiver shall be valid only if
set forth in an instrument in writing signed by all Members.
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10.14 Schedule. The Member Schedule attached hereto shall be
incorporated into and shall be deemed a part of this Agreement. If the Member
Schedule shall not be attached hereto at the time of execution of this
Agreement, or if it shall be incomplete, it may be later attached or completed
in accordance with the provisions of this Agreement and the Member Schedule
shall, as later attached or completed, for all purposes be deemed a part of this
Agreement as if attached hereto or completed at the time of the execution
hereof. Without limiting the generality of the foregoing, the Member Schedule
shall be amended from time to time to reflect the admission of Members or the
transfer of interests of Members and the Company shall, from time to time, so
cause the Member Schedule to be amended and shall promptly notify the Members in
writing of any change in the Member Schedule.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement under seal as of the day and year first above written.
American Tower Systems, Inc.
By:
-----------------------------
Name:
Title:
Communication Systems Development, Inc.
By:
-----------------------------
Name:
Title:
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APPENDIX A
"Accountant(s)" shall mean such firm of independent certified public
accountants as may be engaged from time to time by the Company, upon a
Determination of the Members, for purposes of reviewing or auditing the
financial statements of the Company and performing such other duties as are
imposed upon the Accountants by the express provisions of this Agreement.
"Act" shall have the meaning set forth in the recitals to this
Agreement.
"Act of Bankruptcy" shall mean, when used with reference to any Person,
any of the following events or occurrences:
(a) its admitting in writing its inability, or being unable
under applicable law, or its failing generally, to pay its debts
generally as they become due, or
(b) its filing a petition, answer or consent seeking relief as
a debtor or otherwise commencing a voluntary case under the Bankruptcy
Code as from time to time in effect, or its authorizing, by appropriate
proceedings of its board of directors or other governing body, any such
petition, answer, consent or commencement of such a voluntary case; or
(c) the filing against it or all or any substantial part of
its property of a petition commencing an involuntary case under the
Bankruptcy Code which shall remain undismissed for a period of more
than thirty (30) days or which is consented to by such Person or any
order or decree approving relief adverse to such Person thereunder
shall remain unstayed and in effect for more than forty five (45) days;
or
(d) its commencement of proceedings or filing a petition,
answer or consent seeking relief as a debtor under any Applicable Law,
other than the Bankruptcy Code, of any jurisdiction relating to the
liquidation or reorganization of debtors or to the modification or
alteration of the rights of creditors, or its consenting to or
acquiescing in such relief or its admitting or acquiescing in or
failing promptly and in any event within thirty (30) days of the filing
thereof, in an appropriate manner, to deny the material allegations of
any petition seeking such relief, any such involuntary petition
remaining undismissed for more than thirty (30) days or an order in any
involuntary proceeding adverse to such Person remaining unstayed and in
effect for more than forty-five (45) days; or
(e) the entry of an order or decree (whether or not final) by
a court of competent jurisdiction (i) finding it to be bankrupt or
insolvent, (ii) ordering or approving its liquidation, dissolution or
winding up, or reorganization or any modification or alteration of the
rights of its creditors, or any composition or readjustment of debts,
(iii) assuming custody of, or appointing a receiver, trustee,
sequestrator, conservator, assignee, custodian, liquidator, fiscal
agent or similar official for, such Person or all or a substantial part
of its property and any such order or decree shall continue unstayed
and in effect for a period of forty-five (45) days; or
(f) its convening a meeting of creditors for the purpose of
consummating an out-of-court arrangement, or making an assignment for
the benefit of, or entering into a composition, extension or similar
arrangement with, its creditors in respect of all or a substantial
portion of its debt; or
(g) its seeking or consenting to or acquiescing in the
appointment of a receiver, trustee, sequestrator, conservator,
liquidator, fiscal agent or other custodian of itself or of all or any
substantial part of its property; or
(h) its winding-up, liquidation or dissolution; or
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(i) its authorization, by appropriate action of its board of
directors or other governing body, of any of the foregoing.
"Additional Capital Contribution" shall mean any Capital Contribution
made in accordance with Section 3.2 or 3.3.
"Adjusted Capital Account Balance" shall mean, with respect to any
Member, the balance in such Member's Capital Account after giving effect to the
following adjustments:
(a) credits to such Capital Account of such Member's share of
"partnership minimum gain" or a "partner nonrecourse debt minimum gain"
or any amount which such Member would be required to restore under this
Agreement or otherwise; and
(b) debits to such Capital Account of the items described in
Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6) of the Treasury
Regulations.
The foregoing definition of Adjusted Capital Account Balance is
intended to comply with the provisions of Section 1.704-1(b)(2)(ii)(d) of the
Treasury Regulations and shall be interpreted consistently therewith.
"Affiliate" shall mean, with respect to any Person, (i) in the case of
any such Person which is a Company, any Member in such Company, (ii) any other
Person which is a Parent, a Subsidiary, or a Subsidiary of a Parent with respect
to such Person or to one or more of the Persons referred to in the preceding
clause (i), (iii) any other Person who is an officer, director, trustee or
employee of, or Member in, such Person or any Person referred to in the
preceding clauses (i) and (ii), and (iv) any other Person who is a member of the
Immediate Family of such Person or of any Person referred to in the preceding
clauses (i) through (iii); provided, however, that such term shall not include
within its meaning the Company itself or a Subsidiary of the Company.
"Agreement" shall mean this Agreement of Limited Liability Company, as
it may be amended, restated or supplemented from time to time as herein
provided.
"Annual Budget" shall mean the detailed annual budget of all
anticipated revenues and other cash receipts and expenses and capital
expenditures associated with ownership and operation of the Company as
heretofore furnished to each of the Members, as amended and updated from time to
time as provided herein.
"Applicable Law" shall mean any Law of any Authority, whether domestic
or foreign, including without limitation the FCA and all federal and state
securities and Environmental Laws, to which a Person is subject or by which it
or any of its business or operations is subject or any of its property or assets
is bound.
"ATS" shall have the meaning given to such term in the Preamble.
"ATS Common Stock" shall have the meaning given such term in Section
8.4.
"ATS IPO" shall have the meaning given such term in Section 8.4.
"Authority" shall mean any governmental or quasi-governmental
authority, whether administrative, executive, judicial, legislative or other, or
any combination thereof, including without limitation any federal, state,
territorial, county, municipal or other government or governmental or quasi-
governmental agency,
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arbitrator, authority, board, body, branch, bureau, central bank or comparable
agency or Entity, commission, corporation, court, department, instrumentality,
master, mediator, panel, referee, system or other political unit or subdivision
or other Entity of any of the foregoing, whether domestic or foreign.
"Bankruptcy Code" shall mean 11 U.S.C. ss. 101 et seq., as from time to
time in effect, and any successor law, and any reference to any statutory
provision shall be deemed to be a reference to any successor statutory
provision.
"Board" shall have the meaning given such term in Section 7.2.
"Book Gain" or "Book Loss" shall mean the gain or loss recognized by
the Company for book purposes in any Fiscal Year by reason of any sale or
disposition with respect to any of the assets of the Company. Such Book Gain or
Book Loss shall be computed by reference to the Book Value of such property or
assets as of the date of such sale or disposition, rather than by reference to
the tax basis of such property or assets as of such date, and each and every
reference herein to "gain" or "loss" shall be deemed to refer to Book Gain or
Book Loss, rather than to tax gain or tax loss, unless the context manifestly
otherwise requires.
"Book Value" of an asset shall mean, as of any particular date, the
value at which the asset is properly reflected on the books and records of the
Company as of such date in accordance with Section 1.704-1(b)(2)(iv) of the
Treasury Regulations. The initial Book Value of each asset shall be its cost,
unless such asset was contributed to the Company by a Member, in which case the
initial Book Value shall be the amount stated as the fair market value for such
asset on the Member Schedule (or, if no such value is stated, as reasonably
established by a Determination of the Member), and, in each case, such Book
Value shall thereafter be adjusted for Depreciation with respect to such asset
rather than for the cost recovery deductions to which the Company is entitled
for Federal income tax purposes with respect thereto. The Book Values of all
Company assets shall be adjusted to equal their respective fair market values,
as determined by the Board in its reasonably business judgment as of the
following times: (a) the acquisition of an additional Company Interest by any
new or existing Member in exchange for more than a de minimis Additional Capital
Contribution; (b) the distribution by the Company to a Member of more than a de
minimis amount of Company assets, including money, if, as a result of such
distribution, such Member's Company Interest is reduced; and (c) the termination
of the Company for Federal income tax purposes pursuant to Section 708(b)(1)(B)
of the Code.
"Capital Account" shall have the meaning set forth in Section 3.4.
"Capital Contributions" shall mean the total amount of cash and other
property contributed to the Company by the Members, whether as Initial Capital
Contributions or Additional Capital Contributions.
"Cash Flow" shall mean, for any period, the amount, computed on a cash
basis, of:
(i) the sum of:
(A) all gross receipts, all investment income
of the Company, and all cash received from
other sources, and
(B) any amounts released from reserves as
provided in the Annual Budget, reduced by:
(ii) the sum of:
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(A) disbursements of the Company for operating
expenses, principal payments on debt (other
than Member Loans), interest (other than on
Member Loans) and other expenses,
(B) capital expenditures reasonably determined
to be necessary or appropriate by the Board,
(C) any increase in reserves as provided in the
Annual Budget, and
(D) an additional amount necessary to ensure
that the Company has funds necessary to meet
the cash requirements of the Company for the
period prior to the date on which the
Company is next anticipated to receive
income as set forth in the applicable Annual
Budget or such other date thereafter (to the
extent no such date is specified in the
Annual Budget) as determined by the Board.
"Certificate" shall mean the Certificate of Formation of Limited
Liability Company of the Company as provided for pursuant to the Act, as
originally filed with the office of the Secretary of State of the State of
Delaware, as amended and restated from time to time as herein provided.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and any subsequent Federal law of similar import, and, to the
extent applicable, any Treasury Regulations promulgated thereunder.
"Company" shall mean the limited liability company hereby established
in accordance with this Agreement by the parties hereto, as such limited
liability company may from time to time be constituted.
"Company Interest" shall mean, with respect to each Member, its
interest in the Company as set forth in the Member Schedule, subject in each
instance to adjustment from time to time pursuant to the applicable provisions
of this Agreement.
"Control" shall mean, when used with respect to any Person, the power
to direct the management and policies of such Person, directly or indirectly,
whether as an officer or manager, through the ownership of voting securities, by
contract or otherwise, and the terms "controlling" and "controlled" shall have
meanings correlative to the foregoing.
"Controlling Interest" shall mean, with respect to any Person, the
power to control such Person.
"CSD" shall have the meaning given such term in the Preamble.
"Depreciation" shall mean, for each fiscal year or other period, an
amount equal to the depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such year or other period; provided,
however, that if the Book Value of an asset differs from its adjusted basis for
Federal income tax purposes at the beginning of any such year or other period,
Depreciation shall be an amount that bears the same relationship to the Book
Value of such asset as the depreciation, amortization, or other cost recovery
deduction computed for tax purposes with respect to such asset for the
applicable period bears to the adjusted tax basis of such asset at the beginning
of such period, or if such asset has a zero adjusted tax basis, Depreciation
shall be an amount determined under any reasonable method selected by a
Determination of the Members.
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"Determination of the Members" shall mean the affirmative vote or
approval of Members holding at least fifty and one-tenth percent (50.1%) of the
Company Interests (or such greater or lesser percentage of Company Interests as
may otherwise in this Agreement be expressly provided). "Unanimous Determination
of the Members" shall mean the affirmative vote or approval of Members holding
one hundred percent (100%) of the Company Interests.
"Effective Date" shall have the meaning set forth in Section 2.5.
"Entity" shall mean any general partnership, limited partnership,
corporation, joint venture, trust, limited liability company, business trust,
cooperative or association.
"Exceptions Schedule" shall mean the schedule attached hereto and made
a part hereof which sets forth, as of the date hereof, existing sites and
communication towers owned, leased, operated or managed by CSD or any Affiliate
thereof and which are exceptions to the provisions of Section 7.4. The
Exceptions Schedule may be amended, from time to time, with the prior written
approval of ATS in its sole and absolute discretion.
"Fiscal year" shall mean the fiscal year of the Company and shall be
the same as its taxable year, which shall be the calendar year unless otherwise
required by the Code. Each fiscal year shall commence on the day immediately
following the last day of the immediately preceding fiscal year.
"GAAP" shall mean means, except to the extent that a deviation
therefrom is expressly required by this Agreement, such principles applied on a
consistent basis, (i) as set forth in Opinions of the Accounting Principles
Board of the American Institute of Certified Public Accountants ("AICPA") and/or
in statements of the Financial Accounting Standards Board that are applicable in
the circumstances as of the date in question, (ii) when not inconsistent with
such opinions and statements, as set forth in other AICPA publications and
guidelines and/or (iii) that otherwise arise by custom for the particular
industry, all as the same shall exist on the date of this Agreement.
"Immediate Family" shall mean, with respect to any Person, his spouse,
parents, brothers, sisters, children (natural or adopted), stepchildren,
grandchildren, grandparents, parents-in-law, brothers-in-law, sisters-in-law,
nephews and nieces.
"Initial Capital Contribution" shall mean any Capital Contribution made
in accordance with Section 3.1.
"Initial Investment" shall mean the aggregate amount proposed to be
invested in the project or site, including for all tower and other improvements
during the initial phase of construction.
"Initiating Member" shall have the meaning set forth in Section 8.3.
"Law" shall mean any (a) administrative, judicial, legislative or other
action, code, consent decree, constitution, decree, directive, enactment,
finding, guideline, law, injunction, interpretation, judgment, order, ordinance,
policy statement, proclamation, promulgation, regulation, requirement, rule,
rule of law, rule of public policy, settlement agreement, statute, or writ of
any Authority, domestic or foreign; (b) the common law, or other legal or quasi-
legal precedent; or (c) arbitrator's, mediator's or referee's award, decision,
finding or recommendation; including, in each such case or instance, any
interpretation, directive, guideline or request, whether or not having the force
of law including, in all cases, without limitation any particular section, part
or provision thereof.
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"Liquidating Transaction" shall have the meaning set forth in Section
6.2.
"Management Agreement" shall mean the agreement, dated as of the date
hereof, between ATS and the Company, relating to the marketing and management by
ATS on behalf of the Company of all communication towers now or hereafter owned,
leased, operated or managed by the Company.
"Member" shall mean each of the undersigned, together with any Person
who becomes a substituted or additional Member as herein provided and who is
listed as a member of the Company in the books and records of the Company, in
such Person's capacity as a member of the Company.
"Member Loan" shall have the meaning set forth in Section 3.2.
"Member Schedule" shall have the meaning set forth in Section 3.1, as
amended from time to time pursuant to the provisions of this Agreement.
"Objection Notice" shall have the meaning set forth in Section 3.2.
"Offer" shall have the meaning set forth in Section 8.2.
"Offeror" shall have the meaning set forth in Section 8.2.
"Other Member" shall have the meaning set forth in Section 8.3.
"Parent" shall mean, with respect to any Person, any Person which owns
directly, or indirectly through one or more Subsidiaries, twenty percent (20%)
or more of the voting or beneficial interest in, or otherwise has the right or
power (whether by contract, through ownership of securities or otherwise) to
control, such Person.
"Permitted Transfer" shall mean any sale, transfer, assignment or other
disposition of a Company Interest by any Member to a Permitted Transferee.
"Permitted Transferee" shall mean any of the following:
(a) any member of the Immediate Family or the estate, executors or
legal representatives of any transferor,
(b) the trustees of an inter vivos or testamentary trust for the
benefit of any transferor or any member of his Immediate
Family, or
(c) any Affiliate of the transferor effecting such transactions.
"Person" shall mean any individual or Entity, and the heirs, executors,
administrators, legal representatives, successors and assigns of such Person
where the context so admits.
"Prime Rate" shall mean the annual floating rate of interest,
determined daily and expressed as a percentage, from time to time announced by
Toronto-Dominion (Texas), Inc. as its "prime" or "base" rate, so-called, or if
at any time such bank ceases to announce such a rate, as announced by the
largest national or state-chartered banking institution then having its
principal office in the New York City and announcing such a rate. If at any time
neither Toronto-Dominion (Texas), Inc nor any of the five largest other national
or state-chartered banking institutions having their principal offices in the
New York City is announcing such a floating rate, "Prime Rate" shall mean a rate
of interest, determined daily, which is two (2) percentage points above the 14-
day moving average closing trading price of 90-day Treasury Bills.
"Profit" and "Loss" shall mean, for each Fiscal Year or other period,
an amount equal to the Company's taxable income or loss for such year or period,
determined in accordance with Section 703(a) of the Code (provided that for this
purpose, all items of income, gain, loss, or deduction required to be stated
separately pursuant to Section 703(a)(1) of the Code shall be included in
taxable income or loss), with the following adjustments:
(a) Any income of the Company that is exempt from Federal income
tax and not otherwise taken into account in computing Profit
or Loss pursuant to this provision shall be added to such
taxable income or loss;
(b) Any expenditures of the Company described in Section
705(a)(2)(B) of the Code or treated as Code Section
705(a)(2)(B) expenditures pursuant to Section 1.704-
1(b)(2)(iv)(i) of the Treasury Regulations, and not otherwise
taken into account in computing Profit or Loss pursuant to
this provision, shall be subtracted from such taxable income
or loss;
(c) Book Gain or Book Loss shall be taken into account in lieu of
any tax gain or tax loss recognized by the Company by reason
of any sale or disposition of an asset of the Company; and
(d) In lieu of the depreciation, amortization and other cost
recovery deductions taken into account in computing such
taxable income or loss, there shall be taken into account
Depreciation for such Fiscal Year, computed as provided in
this Agreement.
If the Company's taxable income or loss for such Fiscal Year, as
adjusted in the manner provided above, is a positive amount, such amount shall
be the Company's Profit for such Fiscal Year; and if a negative amount, such
amount shall be the Company's Loss for such Fiscal Year.
If the Book Value of the Company assets is adjusted pursuant to the
last sentence of the definition of Book Value, the amount of such adjustment
shall be included in computing Profit or Loss. If any Company asset is
distributed in kind (whether in connection with the liquidation of the Company
or otherwise), the Company shall be deemed to have realized Profit or Loss
thereon in the same manner as if the Company had sold such asset for an amount
equal to its fair market value on the date of distribution, as determined in
good faith by a Determination of the Members.
"Regulatory Allocations" shall have the meaning given such term in
Section 5.7.
"Stated Amount" shall have the meaning given such term in Section 8.3.
"Subsidiary" shall mean, with respect to any Person, any Entity (i) in
which such Person owns directly, or indirectly through one or more Subsidiaries,
twenty percent (20%) or more of the voting or beneficial interest or (ii) which
such Person otherwise has the right or power to control (whether by contract,
through ownership of securities or otherwise).
"Tax Matters Member" shall have the meaning given such term in Section
4.5(b).
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"Transfer" shall mean, in the context of a Transfer of a Membership
Interest, the sale, assignment, pledge, hypothecation, transfer or other
voluntary disposition (by gift or otherwise, and whether as security or
otherwise) by a Member of all or a portion of its Interest. For purposes of this
definition, "Transfer" of a Company Interest includes (i) the sale, assignment,
pledge, hypothecation, transfer or other voluntary disposition (by gift or
otherwise, and whether as security or otherwise) of an equity interest in any
Person substantially all of the assets of which consist, directly or indirectly,
of a Company Interest, or (ii) the merger or consolidation of a Member, or of
any Person referred to in clause (i), with another Person.
"Treasury Regulations" shall mean the Federal income tax regulations,
including any temporary or proposed regulations, promulgated under the Code, as
such Treasury Regulations may be amended from time to time (it being understood
that all references herein to specific sections of the Treasury Regulations
shall be deemed also to refer to any corresponding provisions of succeeding
Treasury Regulations).
"Unaffiliated Person" shall mean, with respect to any Person, a Person
who is not an Affiliate as to such Person.
A-7
MEMBER SCHEDULE
Initial Capital Contributions of the Members
Member and Address Contribution
American Tower Systems, Inc.
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Attention: Chief Operating Officer and
Chief Financial Officer
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Communication Systems Development, Inc.
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Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇, Chief Executive Officer
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