Exhibit 10.2

 

 

 

FORM OF

 

SECOND AMENDED AND RESTATED

 

LIMITED LIABILITY COMPANY AGREEMENT

 

OF

 

HELIO LLC

 

by and among

 

EARTHLINK, INC.;

 

SK TELECOM USA HOLDINGS, INC.;

 

HELIO, INC.

 

and

 

HELIO LLC

 

Dated as of                    , 2007

 

 

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

 

 

 

 

 

Page

 

 

 

ARTICLE 1 DEFINITIONS

 

1

1.1.

 

Certain Definitions

 

1

 

 

 

 

 

ARTICLE 2 THE OPERATING COMPANY AND ITS BUSINESS

 

9

2.1.

 

Formation; Effectiveness

 

9

2.2.

 

Name

 

9

2.3.

 

Term

 

9

2.4.

 

Filing of Certificate and Amendments

 

9

2.5.

 

Purpose and Powers

 

9

2.6.

 

Principal Office: Registered Agent

 

10

2.7.

 

Names and Addresses of Members

 

10

2.8.

 

Partnership Treatment

 

10

 

 

 

 

 

ARTICLE 3 REPRESENTATIONS AND WARRANTIES

 

10

3.1.

 

Representations of the Members

 

10

 

 

 

 

 

ARTICLE 4 TRANSFER RESTRICTIONS

 

11

4.1.

 

Transfer Restrictions

 

11

4.2.

 

[Reserved]

 

12

4.3.

 

Right of First Refusal

 

12

4.4.

 

Tag-along Right

 

13

4.5.

 

Limitation on the Right of First Refusal and Tag-along Right

 

13

4.6.

 

Drag-along Right

 

13

4.7.

 

Sale of Operating Company

 

15

 

 

 

 

 

ARTICLE 5 RESTRICTED SERVICES

 

15

5.1.

 

Restricted Services

 

15

5.2.

 

Products and Services Outside the Business Plan

 

16

5.3.

 

Wimax Enabled Devices

 

16

5.4.

 

[Reserved]

 

16

5.5.

 

ASP

 

16

5.6.

 

Future Services

 

16

5.7.

 

Exclusivity

 

16

5.8.

 

[Reserved]

 

17

5.9.

 

Availability of Injunctive Relief

 

17

 

 

 

 

 

ARTICLE 6 MANAGEMENT OF THE OPERATING COMPANY

 

17

6.1.

 

Management of the Operating Company

 

17

6.2.

 

Compensation

 

18

6.3.

 

Issuances of Membership Units

 

19

6.4.

 

Officers

 

19

 

i

--------------------------------------------------------------------------------

 

ARTICLE 7 MEMBERSHIP UNITS AND MEMBERS

 

19

7.1.

 

Membership Units

 

19

7.2.

 

Powers of Members

 

20

7.3.

 

Partition

 

20

7.4.

 

Place of Members’ Meetings

 

20

7.5.

 

Meetings

 

20

7.6.

 

Telephonic Meetings

 

20

7.7.

 

Notice of Meetings

 

20

7.8.

 

Waivers

 

20

7.9.

 

Quorum

 

20

7.10.

 

Proxies

 

21

7.11.

 

Voting Power

 

21

7.12.

 

Written Consent

 

21

7.13.

 

Liability

 

21

7.14.

 

Designation of Tax Matters Member: Tax Matters

 

21

 

 

 

 

 

ARTICLE 8 ADMISSION OF ADDITIONAL MEMBERS

 

22

8.1.

 

Admission Upon Transfer

 

22

8.2.

 

Admission Upon Contribution

 

22

8.3.

 

Joinder

 

22

8.4.

 

Acceptance of Prior Acts

 

22

 

 

 

 

 

ARTICLE 9 CAPITAL CONTRIBUTIONS AND CAPITAL ACCOUNTS

 

23

9.1.

 

Capital Contributions

 

23

9.2.

 

Membership Units; Capital Contributions

 

25

9.3.

 

Capital Accounts

 

25

 

 

 

 

 

ARTICLE 10 TAX ALLOCATIONS

 

26

10.1.

 

Allocation of Profits

 

26

10.2.

 

Allocation of Losses

 

27

10.3.

 

Special Allocations

 

28

10.4.

 

Other Allocation Rules

 

29

 

 

 

 

 

ARTICLE 11 DISTRIBUTIONS

 

30

11.1.

 

Distributions

 

30

11.2.

 

Distribution of the Proceeds upon Dissolution

 

31

11.3.

 

No Withdrawal

 

31

11.4.

 

Mandatory Tax Distribution

 

31

11.5.

 

Special Distribution to Management Company

 

31

11.6.

 

Limitations on Distributions

 

32

 

 

 

 

 

ARTICLE 12 ANCILLARY AGREEMENTS; OPERATING BUDGETS; FINANCIAL REPORTS

 

33

12.1.

 

Ancillary Agreements

 

33

12.2.

 

Operating Budgets

 

33

 

ii

--------------------------------------------------------------------------------

 

12.3.

 

Financial Reports

 

33

12.4.

 

Books and Records

 

34

 

 

 

 

 

ARTICLE 13 TERMINATION OF THE OPERATING COMPANY; LIQUIDATION AND DISTRIBUTION OF
ASSETS

 

34

13.1.

 

No Dissolution

 

34

13.2.

 

Events Causing Dissolution

 

34

13.3.

 

Survival

 

34

13.4.

 

Winding Up

 

34

13.5.

 

Filing of Certificate of Cancellation

 

35

13.6.

 

Material Breach

 

35

13.7.

 

Claims of the Members

 

35

 

 

 

 

 

ARTICLE 14 WITHDRAWAL OF A MEMBER

 

35

14.1.

 

Withdrawal of a Member

 

35

14.2.

 

Effect of Withdrawal

 

35

 

 

 

 

 

ARTICLE 15 EXCHANGE

 

35

15.1.

 

Exchange of Membership Units

 

35

15.2.

 

Public Offering of Class A Common Stock

 

36

15.3.

 

Issuance and Conversion of Preferred Stock

 

36

15.4.

 

Equity Plan Compensation

 

37

15.5.

 

Availability of Authorized and Unissued Class A Common Stock

 

37

 

 

 

 

 

ARTICLE 16 ADDITIONAL AGREEMENTS

 

38

16.1.

 

Maintenance of Parent Entity as a Party

 

38

16.2.

 

Certificates

 

38

16.3.

 

Security

 

39

16.4.

 

Lost or Destroyed Certificates

 

39

16.5.

 

Most Favored Company

 

39

16.6.

 

Most Favored Pricing

 

39

16.7.

 

Change of Control

 

39

16.8.

 

Standstill

 

40

16.9.

 

Non-Hire and Non-Solicitation of Employees

 

40

16.10.

 

Members’ Expenses

 

40

16.11.

 

Insurance

 

40

16.12.

 

Freedom of Action

 

41

16.13.

 

Indemnification

 

41

 

 

 

 

 

ARTICLE 17 DISPUTE RESOLUTION

 

41

17.1.

 

Dispute Resolution

 

41

17.2.

 

Right to Injunctive Relief Before Appointment of Arbitrators

 

43

 

 

 

 

 

ARTICLE 18 MISCELLANEOUS

 

43

18.1.

 

Governing Law

 

43

 

iii

--------------------------------------------------------------------------------

 

18.2.

 

Notices

 

43

18.3.

 

Compliance with Applicable Laws

 

45

18.4.

 

Severability

 

45

18.5.

 

Counterparts

 

45

18.6.

 

Headings

 

45

18.7.

 

Successors and Assigns

 

45

18.8.

 

Entire Agreement; Amendment; Waiver

 

46

18.9.

 

No Relief of Liabilities

 

46

18.10.

 

Further Assurances

 

46

18.11.

 

Third Party Beneficiaries

 

46

 

 

 

 

 

 

 

 

 

 

 

 

Schedules

 

 

 

 

 

 

 

Schedule 9.1.1

 

Capital Contributions

 

 

Schedule 9.1.2

 

SKT Contributions

 

 

 

 

 

 

 

 

 

Exhibits

 

 

 

 

 

 

 

Exhibit A

 

Joinder

 

 

 

iv

--------------------------------------------------------------------------------

 

THIS SECOND AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (the
“Agreement”) of HELIO LLC, a Delaware limited liability company (the “Operating
Company”), is made and entered into as of                       , 2007, by and
among SK Telecom USA Holdings, Inc., a Delaware corporation (“SKT Holdings”),
EarthLink, Inc., a Delaware corporation (“EarthLink”), the Management Company
(as defined in Section 1.1) and the Operating Company.

 

WHEREAS, the Operating Company is a joint venture established by EarthLink and
SK Telecom Co., Ltd., a corporation with limited liability organized under the
laws of The Republic of Korea (“SKT”), for the purpose of developing and
marketing branded wireless telecommunications services, including, without
limitation, handsets, voice services, data services (including CDMA laptop cards
and related software), stand-alone and other wireless services within the United
States;

 

WHEREAS, the Members entered into the Limited Liability Company Agreement dated
March 24, 2005, as amended and restated by the Amended and Restated Limited
Liability Company Agreement dated October 25, 2005, as amended by the First
Amendment to the Amended and Restated Limited Liability Company Agreement dated
April 16, 2007 (as amended, the “Original Agreement”); and

 

WHEREAS, the Members desire to amend and restate the Original Agreement as set
forth herein.

 

NOW, THEREFORE, in consideration of the premises, mutual promises set forth
herein and other good and valuable consideration, the receipt and sufficiency of
which is acknowledged, the Parties agree as follows:

 

ARTICLE 1
DEFINITIONS

 

1.1.                            Certain Definitions.  For the purposes of this
Agreement, the following terms shall have the meanings set forth beside them in
this Section 1.1.

 

“Act” shall mean the Delaware Limited Liability Company Act, as amended.

 

“Additional Capital” shall have the meaning set forth in Section 9.1.3.

 

“Additional Member” shall have the meaning set forth in Section 8.1.

 

“Adjusted Capital Account Deficit” shall have the meaning set forth in Section
10.2.4.

 

“Affiliate” shall mean with respect to any Person, any Person directly or
indirectly Controlling, Controlled by, or under common Control with such other
Person at any time during the period for which the determination of affiliation
is being made.

 

“Agreement” shall have the meaning set forth in the introductory paragraph.

 

--------------------------------------------------------------------------------

 

“Ancillary Agreements” shall mean, collectively, the Stockholders’ Agreement,
the Contribution and Formation Agreement, the SKT Contribution Agreement and the
Registration Rights Agreement.

 

“Beneficial Owner” shall mean a Person deemed to have “Beneficial Ownership” of
any securities pursuant to Rule 13d-3 and 13d-5 of the Exchange Act, as such
rules are in effect on the date of this Agreement, as well as any securities as
to which such Person has the right to become Beneficial Owner (whether such
right is exercisable immediately or only after the passage of time or the
occurrence of conditions) pursuant to any agreement, arrangement or
understanding (other than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering of
securities), or upon the exercise of conversion rights, exchange rights, rights,
warrants or options, or otherwise; provided, however, that no Initial Member
shall be deemed the “Beneficial Owner” or to have “Beneficial Ownership” of, or
to “Beneficially Own,” any Membership Units or Shares owned by the other Initial
Member solely by virtue of the rights set forth in this Agreement.

 

“Board of Directors” shall mean the Board of Directors of the Management
Company.

 

“Business Plan” shall mean the set of detailed one-year and more general
five-year plans and projections with respect to the Operating Company. Each
Business Plan shall contemplate, among other matters:  (a) the markets to be
covered by the Operating Company Business; (b) the activities of the Operating
Company; (c) amounts that must be invested or otherwise contributed to the
Operating Company by its Members, whether as capital contributions or loans,
during the calendar year following that of the approval of the Business Plan, as
well as the estimate for the four years immediately following; and (d) the rates
of return and profitability that are expected to be obtained by the Operating
Company. The Business Plan shall include, among other matters:  (i) market and
feasibility studies; (ii) financial and market projections and schedules; (iii)
projected balance sheets and financial statements; (iv) projected cash flow; (v)
human resources plan; (vi) projected rates of return; (vii) timetables of
additional investments and other contributions and (viii) an annual budget
including, among other things, anticipated revenues, expenditures (capital and
operating) and cash requirements of the Operating Company for the following year
(the “Operating Budget”).

 

“Capital Account” when used with respect to any Member shall mean the capital
account maintained for such Member in accordance with Section 9.3, as said
capital account may be increased or decreased from time to time pursuant to the
terms of Sections 9.3.1 and 9.3.2.

 

“Capital Contribution” when used with respect to any Member, shall mean the
amount of capital contributed by such Member to the Operating Company in
accordance with the Contribution and Formation Agreement or in accordance with
this Agreement, including without limitation Additional Capital.

 

“CEO” shall have the meaning set forth in Section 6.4.

 

“Certificate of Formation” shall mean the Certificate of Formation of the
Operating Company filed with the Delaware Secretary of State, as amended from
time to time.

 

2

--------------------------------------------------------------------------------

 

“Change of Control” shall mean the transfer of Control, or sale of all or
substantially all of the assets (in one or more related transactions), of a
holder of Class B Common Stock, from the Person that holds such Control or
assets, to another Person, but shall not include a transfer of Control, or such
sale of assets, to an Affiliate of such holder of Class B Common Stock.

 

“Class A Common Stock” shall mean the Class A Common Stock, par value $0.01 per
share, of the Management Company.

 

“Class A Options” shall have the meaning set forth in Article 5.5 of the
Management Company Certificate.

 

“Class B Common Stock” shall mean the Class B Common Stock, par value $0.01 per
share, of the Management Company.

 

“Class B Members” shall mean EarthLink, SKT Holdings and any permitted
successors or assigns; provided that such Person or a Subsidiary or Parent
Entity of such Person owns a share of Class B Common Stock.

 

“Code” shall mean the Internal Revenue Code of 1986, as amended.

 

“Common Member” shall mean a Member holding Common Membership Units.

 

“Common Membership Units” shall mean a Membership Unit that entitles the holder
of such Membership Unit to the rights and interests as described in this
Agreement.

 

“Common Stock” shall mean the Class A Common Stock and the Class B Common Stock
of the Management Company.

 

“Confidentiality Agreement” shall mean the confidentiality agreement entered
into by and among EarthLink, SKT, SKT Holdings, the Management Company and the
Operating Company as of March 24, 2005.

 

“Contracts” shall mean all agreements, contracts, leases and subleases, purchase
orders, arrangements, commitments, non-governmental licenses, notes, mortgages,
indentures or other obligations.

 

“Contribution and Formation Agreement” shall mean the Contribution and Formation
Agreement, entered into by and among SKT, SKTI and EarthLink, as such agreement
may be amended from time to time. On March 24, 2005, SKTI assigned its rights,
liabilities and obligations under the Contribution and Formation Agreement to
SKT Holdings.

 

“Contribution Breach” shall mean a failure by SKT to make a scheduled cash
contribution to the Operating Company in accordance with the SKT Commitment.

 

“Contribution Closing” shall mean the “Closing” as defined in the Contribution
and Formation Agreement.

 

3

--------------------------------------------------------------------------------

 

“Control” as used with respect to any Entity, shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of
management policies of such Entity through the ownership of voting securities or
by contract.

 

“CPR” shall have the meaning set forth in Section 17.1.2.

 

“EarthLink” shall have the meaning set forth in the introductory paragraph.

 

“Entity” shall mean any corporation, firm, unincorporated organization,
association, partnership, limited partnership, limited liability company,
limited liability partnership, business trust, joint stock company, joint
venture organization, Entity or business.

 

“Equivalent Amount” shall have the meaning set forth in Section 15.4.

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

 

“First Party” shall have the meaning set forth in Section 4.3.

 

“Fiscal Year” shall mean the Fiscal Year of the Operating Company, which shall
be the period commencing on January 1 in any year and ending on December 31 in
such year, or such other Fiscal Year that the Management Company shall
determine.

 

“GAAP” shall mean United States generally accepted accounting principles.

 

“Governmental Entity” shall mean any governmental or regulatory authority,
court, agency, commission, body or other similar Entity.

 

“ICC” shall have the meaning set forth in Section 17.1.3.

 

“Initial Capital Contribution” shall have the meaning set forth in Section
9.1.1.

 

“Initial Member” shall mean SKT Holdings, EarthLink and the Management Company
and any of their permitted successors or assigns.

 

“JV Securities” shall mean the Membership Units and the Shares.

 

“Litigation” shall mean any pending or threatened action, arbitration,
complaint, criminal prosecution, breach, violation, claim, demand or demand
letter, notice of non-compliance, default or breach, governmental or other
examination or investigation, hearing, inquiry, administrative or other
proceeding relating to or affecting the Operating Company, its business or its
assets.

 

“Lock-in Period” shall have the meaning set forth in Section 4.1.1.

 

“Losses” shall mean all losses, liabilities, damages, claims, demands,
judgments, fines, penalties, interest or settlements of any nature or kind,
whether absolute or contingent, matured or unmatured, liquidated or
unliquidated, accrued or unaccrued, known or unknown, including all reasonable
costs and expenses (legal, accounting or otherwise as such costs are incurred)
relating thereto, suffered by any Person, but excluding lost profits, exemplary,
indirect, special,

 

4

--------------------------------------------------------------------------------

 

incidental, punitive or consequential damages (except for any such otherwise
excluded damages payable to a Third Party by the Member or the Operating
Company).

 

“Management Company” shall mean HELIO, Inc., a Delaware corporation, and shall
include any other successor Management Company selected in accordance with the
terms hereof. Management Company shall be a “manager” of the Operating Company
within the meaning of Section 18-101(10) of the Act.

 

“Management Company Certificate” shall mean the Certificate of Incorporation of
Management Company, as in effect from time to time.

 

“Material Adverse Effect” shall have the meaning set forth in the Contribution
and Formation Agreement.

 

“Material Breach” shall mean a material breach of this Agreement or the
Ancillary Agreements that remains uncured for a period of ninety (90) days
following receipt of notice of such breach; provided, that the cure period may
be extended for an additional thirty (30) days if the breaching party is
actively and diligently exerting good faith efforts to cure the breach.

 

“Member” shall initially mean and refer to SKT Holdings, EarthLink and the
Management Company, and shall thereafter refer to their respective successors
and permitted assigns, and any other members admitted to the Operating Company
in accordance with Section 8.1.

 

“Members’ Meeting” shall have the meaning set forth in Section 7.4.

 

“Membership Interest” shall mean a Member’s entire equity ownership interest in
the Operating Company at any particular time, including such Member’s share of
the profits and losses of the Operating Company and right to receive
distributions of the Operating Company’s assets, and all other benefits to which
a Member may be entitled, all in accordance with the provisions of this
Agreement and the Act, together with the obligations of such Member to comply
with all the terms and provisions of this Agreement. The Membership Interests
constitute one class of limited liability company interest in the Operating
Company.

 

“Membership Unit” shall mean a unit of ownership of the Operating Company which
entitles the holder of such Membership Unit to a fractional, undivided share of
the Membership Interests of all Members. The Membership Units shall consist of
the Common Membership Units and the Preferred Membership Units.

 

“Membership Unit Exchange Rate” shall have the meaning set forth in Section
15.1.

 

“MVNO Services” shall have the meaning set forth in Section 5.7.2.

 

“New Member” shall have the meaning set forth in Section 8.2.

 

“Officers” shall mean the Chief Executive Officer and Chief Financial Officer of
the Operating Company and such other officers of the Operating Company as shall
from time to time

 

5

--------------------------------------------------------------------------------

 

be appointed by the Management Company until such time as any such officer is
removed in accordance with the terms of his or her appointment.

 

“Operating Budget” shall have the meaning set forth in the definition of the
Business Plan.

 

“Operating Company” shall have the meaning set forth in the introductory
paragraph.

 

“Operating Company Business” shall mean the business transacted by the Operating
Company and shall include the development and marketing of branded wireless
telecommunications services, including, without limitation, handsets, voice
services, data services (including CDMA laptop cards and related software),
stand-alone and other wireless services in the United States.

 

“Operating Company Option” shall mean the non-compensatory option granted to the
Management Company in connection with and corresponding to the grant by the
Management Company of a Class A Option. The expiration date and exercise price
of an Operating Company Option shall equal the exercise price of the
corresponding Class A Option. Upon exercise of an Operating Company Option, the
Management Company will be entitled to the rights and interests as described in
Section 15.4. Termination of the corresponding Class A Option shall result in
termination of the Operating Company Option granted to the Management Company in
connection therewith.

 

“Operating Company Products and Services” shall mean the products and services
which are offered and sold by the Operating Company or a Subsidiary thereof.

 

“Original Agreement” shall have the meaning set forth in the Recitals.

 

“Parent Entity” shall mean, with respect to any Entity that is a Subsidiary of a
Person, the Person that, directly or indirectly, Beneficially Owns at least
fifty percent (50%) of the equity of such Subsidiary and is not a Subsidiary of
any Person.

 

“Parties” shall initially mean SKT Holdings, EarthLink and the Management
Company and shall thereafter include any other Person executing a counterpart of
this Agreement.

 

“Percentage Interest” shall mean a Member’s percentage interest in the total
number of outstanding Membership Units as determined by dividing the number of
Membership Units owned by such Member or any Subsidiary or Parent Entity of such
Member by the total number of outstanding Membership Units then owned by all
Members (including all Subsidiaries or Parent Entities of such Members). The
Percentage Interests owned by the Class B Members as of the Contribution Closing
are set forth on Schedule 9.1.1.

 

“Permitted Transfers” shall have the meaning set forth in Section 4.1.2.

 

“Person” shall mean any natural person or Entity.

 

“Preferred Member” shall mean a Member holding Preferred Membership Units.

 

6

--------------------------------------------------------------------------------

 

“Preferred Membership Unit” shall mean a Membership Unit that entitles the
holder of such Membership Unit to the rights and interests as described in this
Agreement.

 

“Preferred Stock” shall mean the preferred stock of the Management Company.

 

“Provider” shall have the meaning set forth in Section 5.5.

 

“Public Common Stock” shall mean the Class A Common Stock that has been
registered with the Securities and Exchange Commission for sale to the public.

 

“Public Offering” shall mean a sale of Public Common Stock to underwriters in a
bona fide, firm commitment underwriting pursuant to a registration statement on
Form S-1, SB-2 or S-3 (or a successor form) under the Securities Act.

 

“Recommended Transaction” shall have the meaning set forth in Section 4.6.

 

“Registration Rights Agreement” shall mean the Registration Rights Agreement
dated as of March 24, 2005, entered into by and among SKT, EarthLink and the
Management Company.

 

“Regulations” shall mean the regulations promulgated under the Code from time to
time.

 

“Restricted Services” shall have the meaning set forth in Section 5.1.

 

“Right of First Refusal” shall have the meaning set forth in Section 4.3.

 

“ROFR Percentage Interest” shall mean the percentage as determined by dividing
the number of Total Outstanding Shares owned by SKT or any Subsidiary or Parent
Entity of SKT by the number of Total Outstanding Shares then owned by all
holders of Class B Common Stock and Subsidiaries and Parent Entities of holders
of Class B Common Stock, but excluding the Shares owned by the First Party.

 

“ROFR Termination Date” shall have the meaning set forth in Section 4.3.

 

“Second Party” shall have the meaning set forth in Section 4.4.

 

“Securities Act” shall mean the Securities Act of 1933, as amended.

 

“Shares” shall mean the issued and outstanding Common Stock and the Preferred
Stock.

 

“SKT” shall have the meaning set forth in the Recitals.

 

“SKT Commitment” shall have the meaning set forth in Section 9.1.2.

 

“SKT Contribution Agreement” means the Contribution Agreement dated November 7,
2007 among EarthLink, SKT Holdings and the Operating Company.

 

“SKT Contribution Right” shall have the meaning set forth in Section 9.1.2.

 

7

--------------------------------------------------------------------------------

 

“SKT Holdings” shall have the meaning set forth in the introductory paragraph.

 

“SKT Required Contribution” shall have the meaning set forth in Section 9.1.2.

 

“SKT Triggering Contribution” shall have the meaning set forth in Section 9.1.2.

 

“SKTI” shall mean SK Telecom International, Inc., a Delaware corporation.

 

“Stockholders’ Agreement” shall mean and refer to the Stockholders’ Agreement,
entered into by and among SKT, EarthLink and the Management Company, as such
agreement may be amended from time to time.

 

“Subject Interest” shall have the meaning set forth in Section 4.3.

 

“Subject Members” shall have the meaning set forth in Section 4.6.

 

“Subsidiary” shall mean, as to any Person, any Entity (i) of which such Person,
directly or indirectly, owns securities or other equity interests representing
fifty percent (50%) or more of the aggregate voting power or (ii) of which such
Person possesses the right to elect fifty percent (50%) or more of the directors
or Persons holding similar positions. The Operating Company shall be deemed to
be a Subsidiary of the Management Company. The Operating Company shall not be
deemed to be a Subsidiary of any Member other than the Management Company. The
Management Company shall not be deemed to be a Subsidiary of any Member.

 

“Tag-along Election Notice” shall have the meaning set forth in Section 4.4.

 

“Tag-along Right” shall have the meaning set forth in Section 4.4.

 

“Tag-along Transfer Notice” shall have the meaning set forth in Section 4.4.

 

“Tax Matters Member” shall have the meaning set forth in Section 7.14.

 

“Third Party” shall mean any Person other than EarthLink, SKT Holdings, SKT, the
Operating Company, the Management Company or any Affiliate of the foregoing.

 

“Total Outstanding Shares” shall mean, from time to time, the sum of (a) the
number of shares of Class A Common Stock issued and outstanding and (b) the
number of shares of Class A Common Stock obtained if all issued and outstanding
shares of Class B Common Stock, Membership Units and shares of convertible
Preferred Stock were then converted into shares of Class A Common Stock in
accordance with Articles 5.1, 5.2 and 5.4, respectively, of the Management
Company Certificate.

 

“Transfer” shall mean any direct or indirect sale, transfer, assignment, pledge,
hypothecation, mortgage or other disposition or encumbrance, of any beneficial
or economic interest in any JV Securities, including those by operation or
succession of law, merger or otherwise. A Transfer of JV Securities shall be
deemed to have occurred upon any transfer of the stock of a Subsidiary holding
the JV Securities that results in such Entity no longer being a

 

8

--------------------------------------------------------------------------------

 

Subsidiary of a Class B Member. However, a Change of Control of a holder of
Class B Common Stock shall not be deemed to be a Transfer.

 

“Transfer Notice” shall have the meaning set forth in Section 4.3.

 

“VOIP” shall mean voice over Internet protocol.

 

“VoWiFi” shall mean voice over WiFi.

 

“Wimax Enabled Devices” shall have the meaning set forth in Section 5.3.

 

“Withdrawal Event” shall have the meaning set forth in Section 14.1.

 

ARTICLE 2
THE OPERATING COMPANY AND ITS BUSINESS

 

2.1.                            Formation; Effectiveness. The Operating Company
has been formed as a Delaware limited liability company pursuant to Section
18-201(d) of the Act. The Original Agreement became effective on March 24, 2005.

 

2.2.                            Name. The name of the Operating Company shall be
HELIO LLC.

 

2.3.                            Term. The Operating Company shall continue in
full force and effect until it is dissolved, wound up and terminated as
hereinafter provided. The Operating Company shall exist as a separate legal
Entity until the cancellation of the Certificate of Formation in accordance with
the Act.

 

2.4.                            Filing of Certificate and Amendments. Subject to
the restrictions set forth in the Management Company Certificate, the Management
Company shall have the power and authority to execute and file or cause to be
executed and filed any required amendments to the Certificate of Formation and
do all other acts required to form the Operating Company as a limited liability
company under the laws of the State of Delaware and to qualify the Operating
Company to conduct business in each applicable jurisdiction.

 

2.5.                            Purpose and Powers.

 

2.5.1                     OPERATING COMPANY PURPOSE. THE PURPOSES OF THE
OPERATING COMPANY ARE TO (I) OPERATE THE OPERATING COMPANY BUSINESS, (II) MAKE
SUCH ADDITIONAL INVESTMENTS AND ENGAGE IN SUCH ADDITIONAL ACTIVITIES AS THE
MANAGEMENT COMPANY MAY APPROVE AND (III) ENGAGE IN ANY AND ALL ACTIVITIES AND
EXERCISE ANY POWER PERMITTED TO LIMITED LIABILITY COMPANIES UNDER THE LAWS OF
THE STATE OF DELAWARE.

 

2.5.2                     OPERATING COMPANY POWERS. THE OPERATING COMPANY SHALL
HAVE THE POWER AND AUTHORITY TO DO ANY AND ALL ACTS NECESSARY, APPROPRIATE,
PROPER, ADVISABLE, INCIDENTAL OR CONVENIENT TO OR IN FURTHERANCE OF THE PURPOSES
OF THE OPERATING COMPANY SET FORTH IN THIS SECTION 2.5 AND TO CONDUCT ANY OTHER
LAWFUL ACTIVITY NOT SPECIFICALLY PROHIBITED TO LIMITED LIABILITY COMPANIES UNDER
THE LAWS OF THE STATE OF DELAWARE.

 

9

--------------------------------------------------------------------------------

 

2.6.                            Principal Office:  Registered Agent. The
principal office of the Operating Company is located in Los Angeles, California
and may be changed from time to time at the discretion of the Management
Company. The mailing address of the Operating Company shall be such address as
may be selected from time to time by the Management Company. The registered
agent of the Operating Company shall be The Corporation Trust Company and its
registered office shall be Corporation Trust Center, 1209 Orange Street,
Wilmington, New Castle County, Delaware 19801.

 

2.7.                            Names and Addresses of Members. The names and
addresses of the Initial Members are as follows:

 

SK Telecom USA Holdings, Inc.

c/o SK Telecom Co., Ltd.

11, Euljiro2-ga, Jung-gu

Seoul, 100-999, Korea

Attention:  Jin Woo So, President

 

EarthLink, Inc.

1375 Peachtree Street, N.E.

Atlanta, Georgia  30309

Attention:  Chief Executive Officer

 

HELIO, Inc.

10960 Wilshire Blvd., Ste. 700,

Los Angeles, CA 90024

Attention:  Chief Executive Officer

 

2.8.                            Partnership Treatment.  It is intended that the
Operating Company will be treated as a partnership solely for United States
federal and, to the extent permitted by applicable law, state and local income
tax purposes. The Members agree to take any action reasonably requested by the
Operating Company that may be desirable to ensure that the Operating Company is
so treated. No Member shall take any action that is inconsistent with such
treatment.

 

ARTICLE 3
REPRESENTATIONS AND WARRANTIES

 

3.1.                            Representations of the Members.

 

As of the date hereof, each of the Members, severally and not jointly,
represents and warrants to the others as set forth below.

 

3.1.1                     POWER AND AUTHORITY. IT HAS ALL REQUISITE CORPORATE
POWER AND AUTHORITY AND HAS TAKEN ALL CORPORATE ACTION NECESSARY IN ORDER TO
EXECUTE AND DELIVER THIS AGREEMENT AND TO PERFORM FULLY ITS OBLIGATIONS
HEREUNDER.

 

3.1.2                     BINDING AGREEMENT. THIS AGREEMENT HAS BEEN DULY
EXECUTED AND DELIVERED BY IT AND IS A VALID AND BINDING AGREEMENT OF IT
ENFORCEABLE AGAINST IT IN ACCORDANCE WITH ITS TERMS, SUBJECT TO BANKRUPTCY,
INSOLVENCY, FRAUDULENT TRANSFER, REORGANIZATION, MORATORIUM

 

10

--------------------------------------------------------------------------------

 

AND SIMILAR LAWS OF GENERAL APPLICABILITY RELATING TO OR AFFECTING CREDITORS’
RIGHTS AND TO GENERAL EQUITY PRINCIPLES.

 

3.1.3                     NOTICES, REPORTS AND FILINGS. NO NOTICES, REPORTS OR
OTHER FILINGS ARE REQUIRED TO BE MADE BY IT WITH, NOR ARE ANY CONSENTS,
REGISTRATIONS, APPROVALS, PERMITS OR AUTHORIZATIONS REQUIRED TO BE OBTAINED BY
IT FROM, ANY GOVERNMENTAL ENTITY, IN CONNECTION WITH ITS EXECUTION AND DELIVERY
OF THIS AGREEMENT, EXCEPT THOSE THAT HAVE BEEN MADE OR OBTAINED OR THAT THE
FAILURE TO MAKE OR OBTAIN ARE NOT, INDIVIDUALLY OR IN THE AGGREGATE, REASONABLY
LIKELY TO RESULT IN A MATERIAL ADVERSE EFFECT ON THE OPERATING COMPANY.

 

3.1.4                     NON-CONTRAVENTION. THE EXECUTION, DELIVERY AND
PERFORMANCE OF THIS AGREEMENT BY IT DOES NOT, AND THE CONSUMMATION BY IT OF THE
TRANSACTIONS CONTEMPLATED HEREBY WILL NOT, CONSTITUTE OR RESULT IN (A) A BREACH
OR VIOLATION OF, OR A DEFAULT UNDER, ITS ORGANIZATIONAL DOCUMENTS, (B) A BREACH
OF OR VIOLATION OF OR A DEFAULT UNDER, OR THE ACCELERATION OF ANY OBLIGATIONS OF
OR THE CREATION OF A LIEN OR ENCUMBRANCE ON ITS ASSETS (WITH OR WITHOUT NOTICE,
LAPSE OF TIME OR BOTH) PURSUANT TO ANY CONTRACTS BINDING UPON IT OR ANY LAW,
STATUTE OR REGULATION OR GOVERNMENTAL OR NON-GOVERNMENTAL PERMIT OR LICENSE TO
WHICH IT IS SUBJECT OR (C) ANY CHANGE IN THE RIGHTS OR OBLIGATIONS OF ANY PARTY
UNDER ANY OF SUCH CONTRACTS TO WHICH IT IS A PARTY, EXCEPT, IN THE CASE OF
CLAUSE (B) OR (C) ABOVE, FOR ANY BREACH, VIOLATION, DEFAULT, ACCELERATION,
CREATION OR CHANGE THAT, INDIVIDUALLY OR IN THE AGGREGATE, IS NOT REASONABLY
LIKELY TO RESULT IN A MATERIAL ADVERSE EFFECT ON THE OPERATING COMPANY.

 

ARTICLE 4
TRANSFER RESTRICTIONS

 

4.1.                            Transfer Restrictions. Until such time as a
Triggering Event (as defined in Article 5 of the Management Company Certificate)
shall occur, each Member agrees that it and its Subsidiaries and Parent Entities
shall not Transfer or permit any Transfer, in any single transaction or series
of related transactions, any JV Securities that are, directly or indirectly,
Beneficially Owned by it, except in accordance with the terms of this Agreement
and the Stockholders’ Agreement. Any Transfer of any JV Securities other than in
accordance with this Agreement and the Stockholders’ Agreement shall be null and
void.

 

4.1.1                     LOCK-IN PERIOD. UNTIL MARCH 24, 2008 (THE “LOCK-IN
PERIOD”), THE MEMBERS AND THEIR SUBSIDIARIES AND PARENT ENTITIES SHALL NOT
TRANSFER OR SOLICIT ANY TRANSFER OF ANY JV SECURITIES WITHOUT THE PRIOR WRITTEN
CONSENT OF THE NON-TRANSFERRING CLASS B MEMBERS, WHICH CANNOT BE UNREASONABLY
WITHHELD. AFTER THE EXPIRATION OF THE LOCK-IN PERIOD, THE MEMBERS AND THEIR
SUBSIDIARIES MAY, SUBJECT TO THE RESTRICTIONS ON TRANSFER CONTAINED IN THIS
ARTICLE 4, TRANSFER ALL OR ANY PORTION OF THEIR JV SECURITIES TO A THIRD PARTY
WITHOUT THE NECESSITY OF OBTAINING THE PRIOR WRITTEN CONSENT OF EACH OF THE
CLASS B MEMBER(S).

 

4.1.2                     PERMITTED TRANSFERS. NOTWITHSTANDING ANYTHING IN
SECTION 4.1.1 TO THE CONTRARY, THE FOLLOWING TRANSFERS OF JV SECURITIES WILL BE
PERMITTED (THE “PERMITTED TRANSFERS”) WITHOUT THE NECESSITY OF OBTAINING THE
WRITTEN CONSENT OF THE CLASS B MEMBERS:

 

(A)                                  A TRANSFER TO A PARENT ENTITY (TO WHICH THE
MEMBER IS A WHOLLY-OWNED SUBSIDIARY) OR A WHOLLY-OWNED SUBSIDIARY OF THE MEMBER;

 

11

--------------------------------------------------------------------------------

 

(B)                                 A TRANSFER IN CONNECTION WITH A PUBLIC
OFFERING AS A SELLING STOCKHOLDER;

 

(C)                                  A TRANSFER TO THE OPERATING COMPANY OR THE
MANAGEMENT COMPANY; AND

 

(D)                                 A PLEDGE TO A FINANCIAL INSTITUTION OF A
MEMBER’S JV SECURITIES IN CONNECTION WITH A BORROWING SECURED BY A MEMBER’S JV
SECURITIES TOGETHER WITH SUBSTANTIALLY ALL OF THAT MEMBER’S OTHER ASSETS.

 

4.1.3                     AGREEMENT TO BE BOUND. IN ALL CIRCUMSTANCES OTHER THAN
THOSE DESCRIBED IN SECTION 4.1.2(B), A TRANSFER OF JV SECURITIES SHALL BE GIVEN
EFFECT BY THE OPERATING COMPANY OR MANAGEMENT COMPANY ONLY UPON RECEIPT OF THE
WRITTEN AGREEMENT OF THE RECIPIENT OF THE TRANSFERRED JV SECURITIES AGREEING TO
BE BOUND BY THE TERMS AND CONDITIONS OF THIS AGREEMENT OR THE STOCKHOLDERS’
AGREEMENT, AS THE CASE MAY BE, AND THE CONFIDENTIALITY AGREEMENT.

 

4.1.4                     EFFECT OF TRANSFER. UPON ANY TRANSFER OF ALL OF A
MEMBER’S JV SECURITIES, THE TRANSFERRING MEMBER WILL HAVE NO CONTINUING RIGHTS
OR OBLIGATION UNDER THIS AGREEMENT OR THE STOCKHOLDERS’ AGREEMENT BUT SHALL
CONTINUE TO BE BOUND BY ANY ANCILLARY AGREEMENTS TO WHICH IT IS A PARTY, IN
ACCORDANCE WITH THEIR TERMS.

 

4.2.                            [Reserved]

 

4.3.                            Right of First Refusal.  Subject to Section 4.5,
if a Member (the “First Party”) receives a bona-fide written offer by a Third
Party to purchase all or a portion of the First Party’s Membership Units (the
“Subject Interest”) that the First Party desires to accept, the First Party
shall promptly after receipt of the offer deliver notice (the “Transfer Notice”)
to the Operating Company and SKT stating that the First Party proposes to
Transfer the Subject Interest. The Transfer Notice shall (i) specify the
purchase price and other material terms of the Transfer of the Subject Interest,
(ii) identify the proposed purchaser, (iii) specify the date scheduled for the
Transfer (which date shall not be less than ninety (90) days after the date the
Transfer Notice is delivered) and (iv) have attached thereto a copy of the bona
fide offer and any ancillary agreements containing terms and conditions of the
sale of the Subject Interest. Within sixty (60) days after receipt of a Transfer
Notice, SKT shall have the right to elect to purchase a portion of the Subject
Interest being sold equal to their respective ROFR Percentage Interests (a
“Right of First Refusal”), on terms and conditions no less favorable to the
First Party than those set forth in the Transfer Notice; provided, that if such
terms and conditions include non-cash assets or non-financial requirements that
would be impracticable to satisfy, then SKT shall not be required to satisfy
such terms, conditions and requirements, and the purchase price for the Subject
Interest will include an amount equal to the fair market value of such non-cash
assets. If SKT elects to purchase the Subject Interest, the First Party and SKT
shall use reasonable efforts to consummate the closing of the purchase of the
Subject Interest as soon as reasonably practicable and in any event within one
hundred twenty (120) calendar days after receipt of the Transfer Notice (the
“ROFR Termination Date”), provided, that if the closing does not occur by then
due to the failure to receive any required regulatory approvals or consents, the
ROFR Termination Date may be extended by either the First Party or SKT until
such approvals are received, but in no event for a period of more than one
hundred eighty (180) calendar days after receipt of the

 

12

--------------------------------------------------------------------------------

 

Transfer Notice. If the Right of First Refusal is not exercised by SKT as to the
entire Subject Interest within sixty (60) days of receipt of the Transfer Notice
or the entire Subject Interest is not purchased from the First Party prior to
the ROFR Termination Date, as adjusted for any extension thereto, then the First
Party may sell the Subject Interest to the proposed purchaser identified in the
Transfer Notice on the terms set forth therein, subject to the Tag-along Right
of SKT provided in Section 4.4, below. If SKT agrees to purchase any portion of
the Subject Interest in accordance with the foregoing and fails to complete the
purchase of such portion of the Subject Interest prior to the ROFR Termination
Date, other than as a result of a denial of any required regulatory approvals or
consents, then SKT shall be deemed to have breached this Agreement and, in
addition to any other right or remedy available to the First Party or the
Management Company, shall be deemed to have forfeited its Tag-along Right under
Section 4.4 in connection with the First Party’s right to sell the Subject
Interest to the Third Party named in the Transfer Notice. The above Right of
First Refusal shall not apply to a transaction which constitutes a Change of
Control of a Class B Member.

 

4.4.                            Tag-along Right. If (i) the Right of First
Refusal is not exercised by SKT as to the entire Subject Interest within sixty
(60) days of receipt of the Transfer Notice or the entire Subject Interest is
not purchased from the First Party on or before the ROFR Termination Date, as it
may have been extended or (ii) SKT receives a bona-fide written offer by a Third
Party to purchase SKT’s Subject Interest that SKT desires to accept, then the
First Party or SKT, as applicable, shall promptly deliver written notice thereof
(“Tag-along Transfer Notice”) to any non-transferring Class B Stockholder (each
non-transferring Class B Stockholder a “Second Party” and collectively, the
“Second Parties”) and each Second Party will have the right to sell to the
Third-Party purchaser identified in the Tag-along Transfer Notice a portion of
the Subject Interest, from such Second Party’s Membership Units, equal to the
Subject Interest multiplied by such Second Party’s Percentage Interest
(“Tag-along Right”); provided that no Second Party that has breached its
obligations under Section 4.3 with respect to any Subject Interest may exercise
any Tag-along Right with respect to such Subject Interest. A Second Party
electing to exercise its Tag-along Right shall provide to the Operating Company
and the First Party written notice of such election (the “Tag-along Election
Notice”) within such sixty (60) day period. The Tag-along Election Notice shall
specify the number of Membership Units to be included in the sale to the
Third-Party purchaser. The consideration payable per Membership Unit to any
Second Party electing to exercise its Tag-along Rights shall be equitably
adjusted to give effect to the difference the Members would be entitled to
receive with respect to such Membership Units if there were a dissolution of the
Operating Company. Any sale pursuant to this Section 4.4 shall be consummated
not later than sixty (60) days following delivery of the Tag-along Election
Notice.

 

4.5.                            Limitation on the Right of First Refusal and
Tag-along Right. The Right of First Refusal and Tag-along Right described in
Sections 4.3 and 4.4, above, shall not apply to Permitted Transfers (as defined
in Section 4.1.2). The Right of First Refusal and the Tag-along Right shall
terminate upon a Public Offering of the Class A Common Stock and the
availability of Rule 144 promulgated under the Securities Act, to Members for
the Transfer of their Membership Units.

 

4.6.                            Drag-along Right. Notwithstanding anything
herein to the contrary, in the event of a bona fide arm’s length sale (including
a binding commitment to sell) to an unaffiliated Third

 

13

--------------------------------------------------------------------------------

 

Party by SKT, in a single transaction or a series of related transactions
(whether by sale of units, merger, amalgamation, consolidation, sale of assets
or similar transaction), of not less than a majority of the Total Outstanding
Shares then owned by SKT (a “Recommended Transaction”), each of the other
Members (collectively, the “Subject Members”) will be obliged to sell if
required by SKT, in the same transaction or transactions, the same proportion of
the Total Outstanding Shares held by such Subject Member as being sold by SKT,
and each Subject Member further agrees (if it is required to participate in the
sale) to vote, or grant proxies to vote, the proportion of such Subject Member’s
Total Outstanding Shares subject to the Recommended Transaction in favor of the
Recommended Transaction and to take such other votes or actions as may be
reasonably necessary to facilitate the Recommended Transaction. The obligations
of the Subject Members pursuant to this Section 4.6 are subject to the
satisfaction of the following conditions:

 

4.6.1                     UPON THE CONSUMMATION OF THE RECOMMENDED TRANSACTION,
ALL OF THE SUBJECT MEMBERS SHALL RECEIVE THE SAME PROPORTION OF THE AGGREGATE
CONSIDERATION FROM SUCH RECOMMENDED TRANSACTION THAT SUCH MEMBER WOULD HAVE
RECEIVED IF SUCH AGGREGATE CONSIDERATION HAD BEEN DISTRIBUTED BY THE OPERATING
COMPANY IN COMPLETE LIQUIDATION PURSUANT TO THE RIGHTS AND PREFERENCES SET FORTH
HEREIN. SKT UNCONDITIONALLY AGREES THAT NO CONSIDERATION IN CONNECTION WITH THE
RECOMMENDED TRANSACTION WILL BE DIVERTED AWAY FROM THE SUBJECT MEMBERS THROUGH
VALUE-ADDED PARTNERSHIP OR COMMERCIAL AGREEMENTS ENTERED INTO IN CONNECTION WITH
SUCH RECOMMENDED TRANSACTION.

 

4.6.2                     IF ANY SUBJECT MEMBER IS GIVEN AN OPTION AS TO THE
FORM AND AMOUNT OF CONSIDERATION TO BE RECEIVED, ALL SUBJECT MEMBERS WILL BE
GIVEN THE SAME OPTION.

 

4.6.3                     NO SUBJECT MEMBERS SHALL BE OBLIGATED TO MAKE ANY
OUT-OF-POCKET EXPENDITURE PRIOR TO THE CONSUMMATION OF THE RECOMMENDED
TRANSACTION AND NO SUBJECT MEMBER SHALL BE OBLIGATED TO PAY MORE THAN ITS PRO
RATA SHARE (BASED UPON THE AMOUNT OF CONSIDERATION RECEIVED) OF REASONABLE
EXPENSES INCURRED IN CONNECTION WITH A CONSUMMATED RECOMMENDED TRANSACTION TO
THE EXTENT SUCH COSTS ARE INCURRED FOR THE BENEFIT OF SKT AND ALL SUBJECT
MEMBERS AND ARE NOT OTHERWISE PAID BY THE OPERATING COMPANY OR THE MANAGEMENT
COMPANY OR THE ACQUIRING PARTY (COSTS INCURRED BY OR ON BEHALF OF SKT OR A
SUBJECT MEMBER FOR ITS SOLE BENEFIT WILL NOT BE CONSIDERED COSTS OF THE
TRANSACTION HEREUNDER); PROVIDED THAT SKT AND A SUBJECT MEMBER’S LIABILITY FOR
SUCH EXPENSES SHALL BE SHARED PRO RATA BASED ON SKT AND EACH SUBJECT MEMBER’S
PERCENTAGE INTEREST.

 

4.6.4                     IN THE EVENT THAT SKT AND ALL THE SUBJECT MEMBERS ARE
REQUIRED TO PROVIDE ANY REPRESENTATIONS OR INDEMNITIES IN CONNECTION WITH THE
RECOMMENDED TRANSACTION (OTHER THAN REPRESENTATIONS AND INDEMNITIES CONCERNING
(I) EACH SUBJECT MEMBER’S VALID OWNERSHIP OF ITS MEMBERSHIP UNITS, FREE OF ALL
LIENS AND ENCUMBRANCES (OTHER THAN THOSE ARISING UNDER APPLICABLE SECURITIES
LAWS), AND (II) EACH SUBJECT MEMBER’S AUTHORITY, POWER, AND RIGHT TO ENTER INTO
AND CONSUMMATE SUCH PURCHASE OR MERGER (AMALGAMATION) AGREEMENT WITHOUT
VIOLATING ANY OTHER AGREEMENT), THEN EACH SUBJECT MEMBER SHALL NOT BE LIABLE FOR
MORE THAN ITS PRO RATA SHARE (BASED UPON THE AMOUNT OF CONSIDERATION ACTUALLY
RECEIVED) OF ANY LIABILITY FOR MISREPRESENTATION OR INDEMNITY AND SUCH LIABILITY
SHALL NOT EXCEED THE TOTAL PURCHASE PRICE RECEIVED BY SUCH SUBJECT MEMBER FOR
ITS MEMBERSHIP UNITS.

 

14

--------------------------------------------------------------------------------

 

4.6.5                     NO SUBJECT MEMBER SHALL BE OBLIGATED TO ENTER INTO ANY
NON-COMPETITION OR OTHER RESTRICTIVE COVENANT IN CONNECTION WITH THE RECOMMENDED
TRANSACTION UNLESS (I) SUCH RESTRICTIVE COVENANT ONLY PROHIBITS THE SUBJECT
MEMBER FROM PROVIDING MVNO SERVICES (AS DEFINED IN SECTION 5.7.2) IN THE UNITED
STATES FOR A PERIOD OF TWO (2) YEARS, AND (II) SKT AND EACH OTHER SUBJECT MEMBER
AGREE TO SUCH RESTRICTIVE COVENANT IN CONNECTION WITH THE RECOMMENDED
TRANSACTION.

 

4.7.                            Sale of Operating Company.  Upon a sale of the
Operating Company (whether by merger, unit sale, asset sale or otherwise), each
Member shall receive the same proportion of the aggregate consideration from
such sale that the Member would receive if there were a dissolution of the
Operating Company pursuant to the terms of this Agreement.

 

ARTICLE 5
RESTRICTED SERVICES

 

5.1.                            Restricted Services.  For the periods specified
below, the Operating Company and its Subsidiaries shall not provide the services
set forth in this Section 5.1 (the “Restricted Services”), except as provided in
Section 5.1.3 or pursuant to a written agreement with the party benefiting from
such restrictions.

 

5.1.1                     EARTHLINK SERVICES. FOR SO LONG AS EARTHLINK OR A
SUBSIDIARY OF EARTHLINK OWNS A SHARE OF CLASS B COMMON STOCK, THE OPERATING
COMPANY AND ITS SUBSIDIARIES SHALL NOT PROVIDE THE FOLLOWING RESTRICTED SERVICES
THAT THE PARTIES DEEM TO COMPETE WITH AND OVERLAP THE PRODUCTS AND SERVICES
PROVIDED BY EARTHLINK AND ITS AFFILIATES: (A) BROADBAND INTERNET ACCESS,
INCLUDING CABLE, DSL, PC-BASED SATELLITE AND FIXED WIRELESS; (B) DIAL-UP
INTERNET ACCESS; (C) WEB HOSTING SERVICES; (D) VOIP OR VOWIFI SERVICES OVER
BROADBAND; (E) PC-BASED WIRELESS WIDE AREA NETWORK OR LOCAL AREA NETWORK
INTERNET ACCESS SERVICES (E.G. HOME NETWORKING) AND (F) INTERNET PORTAL SERVICE
FOR THIRD PARTIES THAT ARE NOT CUSTOMERS OF THE OPERATING COMPANY OR A
SUBSIDIARY THEREOF, EXCEPT AS NEEDED FOR CUSTOMER ACQUISITION SERVICES AND
MAINTENANCE PURPOSES.

 

5.1.2                     SKT HOLDINGS SERVICES. FOR SO LONG AS SKT OR A
SUBSIDIARY OF SKT OWNS A SHARE OF CLASS B COMMON STOCK, THE OPERATING COMPANY
AND ITS SUBSIDIARIES SHALL NOT PROVIDE THE FOLLOWING RESTRICTED SERVICES THAT
THE PARTIES DEEM TO COMPETE WITH AND OVERLAP THE PRODUCTS AND SERVICES PROVIDED
BY SKT HOLDINGS AND ITS AFFILIATES: (A) MOBILE VIRTUAL NETWORK ENABLER, WIRELESS
APPLICATION SERVICE PROVIDER AND MANAGED SERVICES FOR WIRELESS TELECOM SERVICE
PROVIDERS AND (B) DEVELOPMENT AND MANUFACTURE OF WIRELESS DEVICES WITH THE
INTENT TO SELL SUCH DEVICES TO WIRELESS TELECOM SERVICE PROVIDERS, PROVIDED,
THAT THE OPERATING COMPANY AND ITS SUBSIDIARIES ARE PERMITTED TO PURCHASE AND
DISTRIBUTE SUCH DEVICES THAT ARE MANUFACTURED BY THIRD-PARTY MANUFACTURERS.

 

5.1.3                     SALES TO COMMERCIAL PARTNERS. NOTWITHSTANDING THE
ABOVE RESTRICTIONS, THE OPERATING COMPANY AND ITS SUBSIDIARIES MAY OFFER THE
OPERATING COMPANY PRODUCTS AND SERVICES TO COMMERCIAL PARTNERS WHO BUNDLE AND
SELL THE OPERATING COMPANY PRODUCTS AND SERVICES WITH PRODUCTS AND SERVICES
WHICH CONSTITUTE OR ARE SIMILAR TO THE RESTRICTED SERVICES.

 

15

--------------------------------------------------------------------------------

 

5.2.                            PRODUCTS AND SERVICES OUTSIDE THE BUSINESS PLAN.
THE OPERATING COMPANY AND ITS SUBSIDIARIES SHALL NOT ENGAGE IN THE DEVELOPMENT
OF NEW PRODUCTS AND SERVICES THAT ARE OUTSIDE OF THE APPROVED BUSINESS PLAN.

 

5.3.                            WIMAX ENABLED DEVICES. THE OPERATING COMPANY AND
ITS SUBSIDIARIES, MAY DISTRIBUTE HANDSET DEVICES THAT CONTAIN THE HARDWARE AND
SOFTWARE COMPONENTS NECESSARY TO PERMIT WIMAX ACCESS (“WIMAX ENABLED DEVICES”)
AND RELATED HANDSET ONLY WIMAX ACCESS SERVICES, BUT, FOR SO LONG AS EARTHLINK OR
A SUBSIDIARY OF EARTHLINK OWNS A SHARE OF CLASS B COMMON STOCK, MAY NOT SELL
PC-BASED WIMAX SERVICES OTHER THAN THOSE OF EARTHLINK. THE OPERATING COMPANY AND
ITS SUBSIDIARIES MAY DISTRIBUTE WIMAX ENABLED DEVICES TO THIRD PARTIES WHO
BUNDLE AND RESELL THE WIMAX ENABLED DEVICES WITH THE WIMAX HANDSET ONLY ACCESS
SERVICES OF SUCH THIRD PARTY. THE OPERATING COMPANY MAY ONLY OFFER EARTHLINK’S
PC-BASED WIMAX DEVICES AND SERVICES, WHICH EARTHLINK SHALL MAKE AVAILABLE TO THE
OPERATING COMPANY ON PRICES, TERMS AND CONDITIONS THAT ARE AT LEAST AS
FAVORABLE, FROM A FINANCIAL PERSPECTIVE, TO THE OPERATING COMPANY AS THE PRICES,
TERMS AND CONDITIONS OF SUBSTANTIALLY SIMILAR PRODUCTS AND SERVICES PROVIDED BY
EARTHLINK TO A THIRD PARTY NOT AFFILIATED WITH EARTHLINK. DISTRIBUTION OF ANY
OTHER WIMAX CONVERGENT DEVICES, BETWEEN PC AND HANDSET DEVICES, MUST BE APPROVED
BY (I) A MAJORITY OF CLASS B DIRECTORS, AND (II) A MAJORITY VOTE OF ALL
DIRECTORS.

 

5.4.                            [RESERVED].

 

5.5.                            ASP. FOR SO LONG AS EARTHLINK OR A SUBSIDIARY OF
EARTHLINK OWNS A SHARE OF CLASS B COMMON STOCK, EACH MEMBER AND EACH SUBSIDIARY
OF A MEMBER THAT ACTS AS AN ASP IN THE UNITED STATES (EACH, A “PROVIDER”) SHALL,
IF REQUESTED BY THE OPERATING COMPANY, PROVIDE ASP SOLUTIONS, APPLICATIONS AND
PLATFORMS (INCLUDING A LICENSE OR PROFESSIONAL SERVICE WITH RESPECT THERETO, BUT
EXCLUDING COLORING SERVICE, TO THE OPERATING COMPANY ON TERMS NO LESS FAVORABLE
THAN THOSE OFFERED BY THE PROVIDER TO THIRD PARTY PURCHASERS IN THE UNITED
STATES FOR SUBSTANTIALLY SIMILAR VOLUMES OF SUBSTANTIALLY SIMILAR PRODUCTS AND
SERVICES.

 

5.6.                            FUTURE SERVICES. EARTHLINK AND SKT HOLDINGS
ACKNOWLEDGE THAT THE LIST OF RESTRICTED SERVICES IS COMPLETE AS OF THE DATE
FIRST ABOVE WRITTEN. IF EARTHLINK OR SKT PROVIDES, ANY FUTURE PRODUCTS OR
SERVICES WITHIN THE UNITED STATES, SUCH AS WIRED-WIRELESS INTEGRATED SERVICE OR
SATELLITE/TERRESTRIAL DIGITAL BROADCASTING SERVICES, THAT ARE EXCLUDED FROM THE
THEN-CURRENT SCOPE OF RESTRICTED SERVICES, THEN, FOR SO LONG AS SUCH MEMBER OR A
SUBSIDIARY OF SUCH MEMBER OWNS A SHARE OF CLASS B COMMON STOCK, EARTHLINK AND
SKT SHALL NEGOTIATE IN GOOD FAITH WHETHER OR NOT TO INCLUDE SUCH SERVICES AS
PART OF THE RESTRICTED SERVICES.

 

5.7.                            EXCLUSIVITY.

 

5.7.1                     FROM THE DATE HEREOF UNTIL THE EARLIER OF (A) THE DATE
OF THE SKT TRIGGERING CONTRIBUTION OR (B) TWO (2) YEARS FROM THE FIRST DATE ON
WHICH EITHER CLASS B STOCKHOLDER’S OWNERSHIP OF THE TOTAL OUTSTANDING SHARES
FALLS BELOW TEN PERCENT (10%), EARTHLINK AND SKT AND THEIR SUBSIDIARIES SHALL
NOT PROVIDE MOBILE WIRELESS VOICE OR DATA SERVICES OVER HANDSETS IN THE UNITED
STATES; PROVIDED, HOWEVER, IN THE EVENT OF A CONTRIBUTION BREACH, SKT SHALL NOT
PROVIDE MOBILE WIRELESS VOICE OR DATA SERVICES OVER HANDSETS IN THE UNITED
STATES FROM THE DATE OF THE CONTRIBUTION BREACH UNTIL TWO (2) YEARS FROM THE
FIRST DATE ON WHICH EITHER CLASS B STOCKHOLDER’S OWNERSHIP OF THE TOTAL
OUTSTANDING SHARES FALLS BELOW TEN PERCENT (10%). IN THE

 

16

--------------------------------------------------------------------------------

 

EVENT THAT SKT PROVIDES MOBILE WIRELESS VOICE OR DATA SERVICES OVER HANDSETS IN
THE UNITED STATES IN THE PERIOD BETWEEN THE DATE OF THE SKT TRIGGERING
CONTRIBUTION AND A CONTRIBUTION BREACH, UPON A CONTRIBUTION BREACH (I) SKT MUST
IMMEDIATELY CEASE PROVIDING ALL SUCH SERVICES (OTHER THAN THROUGH THE MANAGEMENT
COMPANY OR THE OPERATING COMPANY), (II) ANY AGREEMENTS ENTERED INTO BY SKT
(OTHER THAN THROUGH THE MANAGEMENT COMPANY OR THE OPERATING COMPANY) RELATED TO
PROVIDING SUCH SERVICES WILL BE VOID AS OF THE DATE OF THE CONTRIBUTION BREACH
AND (III) ANY ENTITY (WHICH SHALL NOT INCLUDE THE MANAGEMENT COMPANY OR THE
OPERATING COMPANY) CREATED BY SKT TO PROVIDE SUCH SERVICES MUST BE DISSOLVED. IT
IS UNDERSTOOD AND AGREED THAT MONEY DAMAGES WOULD NOT FULLY COMPENSATE EARTHLINK
AS A REMEDY FOR A CONTRIBUTION BREACH BY SKT AND, WITHOUT PREJUDICE TO ANY OTHER
RIGHTS AND REMEDIES OTHERWISE AVAILABLE TO EARTHLINK, EARTHLINK SHALL BE
ENTITLED TO EQUITABLE RELIEF BY WAY OF INJUNCTION, SPECIFIC PERFORMANCE OR
OTHERWISE WITH RESPECT TO THIS SECTION 5.7 IN THE EVENT OF A CONTRIBUTION
BREACH.

 

5.7.2                     OTHER THAN THROUGH THE OPERATING COMPANY, EARTHLINK
AND SKT AND THEIR SUBSIDIARIES SHALL NOT PROVIDE MVNO SERVICES IN THE UNITED
STATES. THE RESTRICTIONS SET FORTH IN THIS SECTION 5.7.2 SHALL TERMINATE ON THE
DATE THAT IS TWO (2) YEARS FROM THE FIRST DATE ON WHICH EITHER CLASS B
STOCKHOLDER’S OWNERSHIP OF THE TOTAL OUTSTANDING SHARES FALLS BELOW TEN PERCENT
(10%). FOR PURPOSES OF THIS SECTION 5.7.2, “MVNO SERVICES” MEANS PROVIDING
MOBILE VOICE AND DATA SERVICES ON MOBILE HANDSETS WITHOUT OWNING ANY MATERIAL
PART OF A MOBILE NETWORK OR FREQUENCY PERTAINING TO SUCH SAID MOBILE SERVICES,
BUT INSTEAD BY LEASING ALL OR SUBSTANTIALLY ALL OF THE MOBILE NETWORK AND
FREQUENCY FROM MOBILE NETWORK OPERATORS.

 

5.7.3                     NEITHER EARTHLINK NOR SKT NOR THEIR RESPECTIVE
SUBSIDIARIES SHALL ASSIST ANY PARENT ENTITY OR ANY SUBSIDIARY OF A PARENT ENTITY
IN ANY ACTIVITY THAT WOULD CONSTITUTE A VIOLATION OF THE EXCLUSIVITY PROVISIONS
SET FORTH IN THIS SECTION 5.7 IF IT WERE PERFORMED BY SUCH PARTY OR ITS
SUBSIDIARY DIRECTLY. EXCEPT AS PROVIDED IN THIS AGREEMENT, NOTHING SHALL
PROHIBIT EARTHLINK AND SKT OR THEIR RESPECTIVE SUBSIDIARIES FROM COMPETING WITH
EACH OTHER OR THE OPERATING COMPANY, ITS PARENT ENTITY OR ANY OF ITS
SUBSIDIARIES.

 

5.8.                            [RESERVED.]

 

5.9.                            AVAILABILITY OF INJUNCTIVE RELIEF. THE PARTIES
ACKNOWLEDGE THAT EACH MAY SEEK INJUNCTIVE RELIEF UNDER SECTION 17.2 TO SATISFY
THE REQUIREMENT OF THIS ARTICLE 5 AS WELL AS FOR ANY OTHER BREACH OF THIS
AGREEMENT.

 

ARTICLE 6
MANAGEMENT OF THE OPERATING COMPANY

 

6.1.                            MANAGEMENT OF THE OPERATING COMPANY.

 

6.1.1                     MANAGEMENT. THE MANAGEMENT OF THE OPERATING COMPANY
SHALL BE VESTED EXCLUSIVELY IN THE MANAGEMENT COMPANY ACTING THROUGH ITS BOARD
OF DIRECTORS OR, IF DELEGATED BY THE BOARD OF DIRECTORS OF THE MANAGEMENT
COMPANY, AN OFFICER OF THE MANAGEMENT COMPANY. THE MANAGEMENT COMPANY
ACKNOWLEDGES THAT ITS POWERS ARE SUBJECT TO THE TERMS OF THE MANAGEMENT COMPANY
CERTIFICATE AND AGREES AT ALL TIMES TO ABIDE BY THE TERMS AND CONDITIONS SET
FORTH THEREIN. ALL STRATEGIC DECISIONS AND DEADLOCK MATTERS (EACH AS DEFINED IN

 

17

--------------------------------------------------------------------------------

 

ARTICLE 8 OF THE STOCKHOLDERS’ AGREEMENT) SHALL BE MADE AND RESOLVED AS PROVIDED
IN THE STOCKHOLDERS’ AGREEMENT. THE MANAGEMENT COMPANY SHALL SERVE UNTIL THE
MEMBERS SHALL DETERMINE BY A UNANIMOUS VOTE OF THE MEMBERSHIP UNITS, EXCLUDING
MEMBERSHIP UNITS HELD BY THE MANAGEMENT COMPANY, TO REMOVE THE MANAGEMENT
COMPANY. AT SUCH TIME, THE MEMBERS SHALL ELECT A NEW MANAGEMENT COMPANY BY A
UNANIMOUS VOTE OF THE MEMBERSHIP UNITS, EXCLUDING MEMBERSHIP UNITS HELD BY THE
MANAGEMENT COMPANY. IF THE MANAGEMENT COMPANY IS THE SOLE MEMBER OF THE
OPERATING COMPANY, THEN THE MANAGEMENT COMPANY SHALL BE ENTITLED TO ELECT ANY
SUCCESSOR TO MANAGE THE OPERATING COMPANY. THE MANAGEMENT COMPANY SHALL HAVE THE
POWER ON BEHALF AND IN THE NAME OF THE OPERATING COMPANY TO CARRY OUT ANY AND
ALL OF THE OBJECTS AND PURPOSES OF THE OPERATING COMPANY AND TO PERFORM OR
AUTHORIZE ALL ACTS WHICH IT MAY DEEM NECESSARY OR ADVISABLE IN CONNECTION
THEREWITH. THE MEMBERS AGREE THAT ALL DETERMINATIONS, DECISIONS AND ACTIONS MADE
OR TAKEN BY THE MANAGEMENT COMPANY IN ACCORDANCE WITH THIS AGREEMENT AND THE
MANAGEMENT COMPANY CERTIFICATE SHALL BE CONCLUSIVE AND ABSOLUTELY BINDING UPON
THE OPERATING COMPANY, THE MEMBERS AND THEIR RESPECTIVE SUCCESSORS, ASSIGNS AND
REPRESENTATIVES. WITHOUT LIMITING THE FOREGOING, THE BOARD OF DIRECTORS OF THE
MANAGEMENT COMPANY SHALL DELEGATE, SUBJECT TO RESCISSION AND TO THE APPROVAL
RIGHTS OF THE BOARD OF DIRECTORS SET FORTH IN SECTION 8.1 OF THE STOCKHOLDERS’
AGREEMENT, TO ITS OFFICERS THE POWERS AND RESPONSIBILITIES SET FORTH BELOW IN
THIS SECTION 6.1.1.:

 

(A)                                  THE POWER TO DEVELOP AND PREPARE THE
BUSINESS PLAN AND OPERATING BUDGET OF THE OPERATING COMPANY EACH YEAR FOR
APPROVAL BY THE MANAGEMENT COMPANY’S BOARD OF DIRECTORS, IN ACCORDANCE WITH THE
MANAGEMENT COMPANY CERTIFICATE;

 

(B)                                 THE POWER TO EXECUTE AND DELIVER CONTRACTS
AND OTHER DOCUMENTS IN THE ORDINARY COURSE OF THE OPERATING COMPANY’S BUSINESS;

 

(C)                                  THE POWER TO EMPLOY, RETAIN, CONSULT WITH
AND DISMISS PERSONNEL;

 

(D)                                 THE POWER TO ESTABLISH AND ENFORCE CORPORATE
GOVERNANCE AND FINANCIAL POLICIES INCLUDING, WITHOUT LIMITATION, LIMITS OF
AUTHORITY AND INTERNAL CONTROLS WITH RESPECT TO ALL PERSONNEL AND FUNCTIONS;

 

(E)                                  THE POWER TO ENGAGE ATTORNEYS, CONSULTANTS,
ACCOUNTANTS AND OTHER AGENTS AND REPRESENTATIVES OF THE OPERATING COMPANY;

 

(F)                                    THE POWER TO DEVELOP OR CAUSE TO BE
DEVELOPED ACCOUNTING PROCEDURES FOR THE MAINTENANCE OF THE OPERATING COMPANY’S
BOOKS OF ACCOUNT AND THE SELECTION OF APPROPRIATE FINANCIAL SYSTEMS AND
CONTROLS; AND

 

(G)                                 THE POWER TO MAKE ALL TAX ELECTIONS
PERMITTED TO BE MADE BY PARTNERSHIPS EXCEPT AS OTHERWISE PROVIDED IN SECTION 8.1
OF THE STOCKHOLDERS’ AGREEMENT.

 

6.1.2                     OTHER POWERS. THE BOARD OF DIRECTORS OF THE MANAGEMENT
COMPANY SHALL MAINTAIN ALL OTHER POWERS AND RESPONSIBILITIES TO MANAGE THE
OPERATING COMPANY.

 

6.2.                            COMPENSATION. THE MANAGEMENT COMPANY SHALL NOT
BE ENTITLED TO COMPENSATION FOR SERVICES RENDERED TO THE OPERATING COMPANY IN
ITS CAPACITY AS THE MANAGEMENT COMPANY, BUT SHALL BE ENTITLED TO RECEIVE FROM
THE OPERATING COMPANY REIMBURSEMENT OF ALL OF

 

18

--------------------------------------------------------------------------------

 

ITS OUT OF POCKET COSTS AND EXPENSES (A) REQUIRED IN CONNECTION WITH MANAGING
THE BUSINESS OF THE OPERATING COMPANY BUSINESS, AND (B) INCURRED IN CONNECTION
WITH MAKING FILINGS AND REPORTS UNDER THE SECURITIES ACT AND THE EXCHANGE ACT
(INCLUDING REGISTRATION STATEMENTS).

 

6.3.                            ISSUANCES OF MEMBERSHIP UNITS. THE OPERATING
COMPANY ISSUED MEMBERSHIP UNITS TO THE INITIAL MEMBERS IN CONNECTION WITH THE
INITIAL CONTRIBUTION CLOSING IN THE AMOUNTS SET FORTH ON SCHEDULE 9.1.1, AND IS
AUTHORIZED TO ISSUE ADDITIONAL MEMBERSHIP UNITS UPON APPROVAL OF THE BOARD OF
DIRECTORS OF THE MANAGEMENT COMPANY AND IN ACCORDANCE WITH TERMS OF THIS
AGREEMENT. THE MANAGEMENT COMPANY HEREBY AUTHORIZES THE OPERATING COMPANY TO
ISSUE MEMBERSHIP UNITS TO SKT IN CONNECTION WITH THE SKT REQUIRED CONTRIBUTION,
THE SKT TRIGGERING CONTRIBUTION AND OTHER ADDITIONAL CAPITAL CONTRIBUTED BY SKT
AS SET FORTH ON SCHEDULE 9.1.2.

 

6.4.                            OFFICERS. THE BOARD OF DIRECTORS OF THE
MANAGEMENT COMPANY WILL SELECT THE CHIEF EXECUTIVE OFFICER OF THE OPERATING
COMPANY (THE “CEO”). THE CEO WILL BE AN EMPLOYEE OF THE OPERATING COMPANY AND
WILL REPORT TO THE BOARD OF DIRECTORS OF THE MANAGEMENT COMPANY. THE CEO,
TOGETHER WITH THE BOARD OF DIRECTORS OF THE MANAGEMENT COMPANY, WILL SELECT THE
OTHER OFFICERS, DEFINE THEIR ROLES AND RESPONSIBILITIES AND DETERMINE THEIR
COMPENSATION AND OTHER TERMS OF EMPLOYMENT. IN THE ABSENCE OF A CEO, THE BOARD
OF DIRECTORS OF THE MANAGEMENT COMPANY MAY APPOINT SUCH OTHER OFFICERS TO
PERFORM THE FUNCTIONS AND DUTIES OF THE CEO UNTIL A NEW CEO IS SELECTED BY THE
BOARD OF DIRECTORS OF THE MANAGEMENT COMPANY. NO OFFICER SHALL, WITHOUT THE
PRIOR APPROVAL OF THE BOARD OF DIRECTORS OF THE MANAGEMENT COMPANY, TAKE OR
PERMIT TO BE TAKEN ANY ACTION ON BEHALF OF OR IN THE NAME OF THE OPERATING
COMPANY OR ENTER INTO ANY COMMITMENT OR OBLIGATION BINDING UPON THE OPERATING
COMPANY, EXCEPT FOR (I) ACTIONS AUTHORIZED IN ACCORDANCE WITH THE TERMS AND
CONDITIONS OF THIS AGREEMENT AND (II) ACTIONS AUTHORIZED BY THE BOARD OF
DIRECTORS OF THE MANAGEMENT COMPANY IN THE MANNER SET FORTH HEREIN. THE
MANAGEMENT COMPANY SHALL HAVE THE FULL AND EXCLUSIVE RIGHT, POWER AND AUTHORITY
TO ACT ON BEHALF OF THE OPERATING COMPANY EXCEPT TO THE EXTENT THAT THE
MANAGEMENT COMPANY PERMITS THE OFFICERS OR ANY ONE OF THEM TO EXERCISE SUCH
POWER ON BEHALF OF THE MANAGEMENT COMPANY.

 

ARTICLE 7
MEMBERSHIP UNITS AND MEMBERS

 

7.1.                            MEMBERSHIP UNITS. THE OWNERSHIP OF THE OPERATING
COMPANY SHALL BE REPRESENTED BY MEMBERSHIP UNITS WHICH MAY BE ISSUED BY THE
OPERATING COMPANY IN THE FORM OF EITHER COMMON MEMBERSHIP UNITS OR PREFERRED
MEMBERSHIP UNITS. EXCEPT AS PROVIDED IN THIS AGREEMENT, THE COMMON MEMBERSHIP
UNITS AND PREFERRED MEMBERSHIP UNITS SHALL BE IDENTICAL IN ALL RESPECTS AND
SHALL ENTITLE THE HOLDERS THEREOF TO THE SAME RIGHTS AND PRIVILEGES, AND SHALL
BE SUBJECT TO THE SAME QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS THEREOF.

 

7.1.1                     NO IMPAIRMENT OF MEMBERSHIP UNITS. THE OPERATING
COMPANY MAY NOT, WITHOUT FIRST OBTAINING THE APPROVAL OF THE BOARD OF DIRECTORS
OF THE MANAGEMENT COMPANY AND IN ACCORDANCE WITH THE STOCKHOLDERS’ AGREEMENT (A)
AUTHORIZE OR ISSUE, OR ISSUE, OR OBLIGATE ITSELF TO ISSUE, ANY OTHER MEMBERSHIP
INTEREST HAVING A PREFERENCE OVER THE MEMBERSHIP UNITS HELD BY THE HOLDERS OF
CLASS B COMMON STOCK WITH RESPECT TO VOTING, DIVIDENDS, CONVERSION OR
LIQUIDATION RIGHTS OR (B) TAKE ANY ACTION, WHETHER BY MERGER, CONSOLIDATION OR
OTHERWISE, THAT

 

19

--------------------------------------------------------------------------------

 

ALTERS OR CHANGES THE POWERS PREFERENCES, PRIVILEGES OR SPECIAL RIGHTS OF THE
MEMBERSHIP UNITS HELD BY THE HOLDERS OF CLASS B COMMON STOCK IF SUCH ALTERATION
OR CHANGE WOULD ADVERSELY AFFECT THE HOLDERS OF THE MEMBERSHIP UNITS HELD BY THE
HOLDERS OF CLASS B COMMON STOCK.

 

7.2.                            POWERS OF MEMBERS. MEMBERS SHALL HAVE ONLY SUCH
RIGHTS AND POWERS AS ARE GRANTED TO MEMBERS PURSUANT TO THE EXPRESS TERMS OF
THIS AGREEMENT AND THE ACT. EXCEPT AS OTHERWISE EXPRESSLY AND SPECIFICALLY
PROVIDED IN THIS AGREEMENT, NO MEMBER, IN SUCH CAPACITY, SHALL HAVE ANY
AUTHORITY TO BIND, TO ACT FOR, TO SIGN FOR OR TO ASSUME ANY OBLIGATION OR
RESPONSIBILITY ON BEHALF OF, ANY OTHER MEMBER OR THE OPERATING COMPANY. EXCEPT
AS EXPRESSLY SET FORTH IN THE FOURTH SENTENCE OF SECTION 6.1.1, SECTION 7.14.3
AND SECTION 13.2.1 OF THIS AGREEMENT, NO ACTION BY THE OPERATING COMPANY SHALL
REQUIRE THE VOTE OR APPROVAL OF ANY MEMBER IN ITS CAPACITY AS A MEMBER.

 

7.3.                            PARTITION. EACH MEMBER WAIVES ANY AND ALL RIGHTS
THAT IT MAY HAVE TO MAINTAIN AN ACTION FOR PARTITION OF THE OPERATING COMPANY’S
PROPERTY.

 

7.4.                            PLACE OF MEMBERS’ MEETINGS. MEETINGS OF MEMBERS
(EACH, A “MEMBERS’ MEETING”) SHALL BE HELD AT THE PRINCIPAL OFFICE OF THE
OPERATING COMPANY, OR AT SUCH OTHER PLACE AS MEMBERS SHALL UNANIMOUSLY AGREE.

 

7.5.                            MEETINGS. A MEMBERS’ MEETING MAY BE CALLED BY
ANY MEMBER FOR ANY MATTER WHICH IS APPROPRIATE FOR CONSIDERATION THEREAT.
MEMBERS’ MEETINGS SHALL BE HELD FROM TIME TO TIME, BUT NO FEWER THAN ONCE IN
EACH CALENDAR YEAR. MEETINGS SHALL BE CHAIRED BY THE CHAIRMAN OF THE MANAGEMENT
COMPANY, AND THE SECRETARY OF THE MEETING SHALL BE APPOINTED BY THE CHAIRMAN OF
THE MANAGEMENT COMPANY.

 

7.6.                            TELEPHONIC MEETINGS. MEMBERS’ MEETINGS MAY BE
HELD THROUGH THE USE OF CONFERENCE TELEPHONE OR SIMILAR COMMUNICATIONS EQUIPMENT
SO LONG AS ALL PERSONS PARTICIPATING IN SUCH MEMBERS’ MEETINGS CAN HEAR ONE
ANOTHER AT THE TIME OF SUCH MEMBERS’ MEETING. PARTICIPATION IN A MEMBERS’
MEETING VIA CONFERENCE TELEPHONE OR SIMILAR COMMUNICATIONS EQUIPMENT IN
ACCORDANCE WITH THE PRECEDING SENTENCE CONSTITUTES PRESENCE IN PERSON AT THE
MEMBERS’ MEETING.

 

7.7.                            NOTICE OF MEETINGS. WRITTEN NOTICE OF A MEMBERS’
MEETING SHALL STATE THE PLACE, DATE AND HOUR OF SUCH MEMBERS’ MEETING, AND THE
GENERAL NATURE OF THE BUSINESS TO BE TRANSACTED. NOTICE SHALL BE GIVEN IN THE
MANNER PRESCRIBED IN SECTION 18.2 NOT FEWER THAN TEN (10) DAYS NOR MORE THAN
SIXTY (60) DAYS BEFORE THE DATE THEREOF.

 

7.8.                            WAIVERS. NOTICE OF A MEMBERS’ MEETING NEED NOT
BE GIVEN TO ANY MEMBER WHO SIGNS A WAIVER OF NOTICE, IN PERSON OR BY PROXY,
WHETHER BEFORE OR AFTER THE MEMBERS’ MEETING. THE ATTENDANCE OF ANY MEMBER AT A
MEMBERS’ MEETING, IN PERSON OR BY PROXY, WITHOUT PROTESTING, PRIOR TO THE
CONCLUSION OF SUCH MEMBERS’ MEETING, THE LACK OF NOTICE OF SUCH MEMBERS’
MEETING, SHALL CONSTITUTE A WAIVER OF NOTICE BY SUCH MEMBER, PROVIDED, THAT SUCH
MEMBER HAS BEEN GIVEN AN ADEQUATE OPPORTUNITY AT THE MEETING TO PROTEST SUCH
LACK OF NOTICE.

 

7.9.                            QUORUM. THE ATTENDANCE OF AN AUTHORIZED
REPRESENTATIVE OF EACH CLASS B MEMBER, EACH WITH THE RIGHT TO VOTE THEIR
MEMBERSHIP UNITS, SHALL CONSTITUTE A QUORUM AT A MEMBERS’ MEETING FOR THE
TRANSACTION OF ANY BUSINESS. IF THERE ARE NO CLASS B MEMBERS, THE

 

20

--------------------------------------------------------------------------------

 

ATTENDANCE OF AN AUTHORIZED REPRESENTATIVE OF MEMBERS HOLDING NO LESS THAN TWO
THIRDS OF THE ISSUED AND OUTSTANDING MEMBERSHIP UNITS SHALL CONSTITUTE A QUORUM.
IF NO QUORUM IS PRESENT, HOLDERS OF A MAJORITY OF MEMBERSHIP UNITS PRESENT IN
PERSON OR BY PROXY MAY ADJOURN THE MEMBERS’ MEETING. IF A QUORUM IS PRESENT, THE
AFFIRMATIVE VOTE OF HOLDERS OF AT LEAST TWO-THIRDS OF THE MEMBERSHIP UNITS
PRESENT IN PERSON OR BY PROXY SHALL CONSTITUTE THE ACTION OF THE MEMBERS. NOTICE
OF THE ADJOURNMENT (WITH THE NEW DATE, TIME AND PLACE) SHALL BE GIVEN TO ALL
MEMBERS WHO WERE ABSENT AT THE TIME OF THE ADJOURNMENT AND, UNLESS SUCH DATE,
HOUR AND PLACE ARE ANNOUNCED AT THE MEMBERS’ MEETING, TO THE OTHER MEMBERS.

 

7.10.                     PROXIES. EVERY MEMBER ENTITLED TO VOTE AT A MEMBERS’
MEETING MAY AUTHORIZE ANOTHER PERSON OR PERSONS TO ACT FOR IT BY PROXY. EVERY
PROXY MUST BE SIGNED BY THE MEMBER OR HIS ATTORNEY-IN-FACT. EVERY PROXY SHALL BE
REVOCABLE IN WRITING AT THE SOLE AND ABSOLUTE DISCRETION OF THE MEMBER EXECUTING
IT.

 

7.11.                     VOTING POWER. EACH MEMBERSHIP UNIT SHALL BE ENTITLED
TO ONE (1) VOTE ON ALL MATTERS TO BE VOTED ON BY THE MEMBERS.

 

7.12.                     WRITTEN CONSENT. ANY ACTION REQUIRED OR PERMITTED TO
BE TAKEN AT ANY MEMBERS’ MEETING MAY BE TAKEN WITHOUT A MEETING IF ALL MEMBERS
CONSENT THERETO IN WRITING. ANY SUCH WRITTEN CONSENTS SHALL BE FILED WITH THE
MINUTES OF THE PROCEEDINGS.

 

7.13.                     LIABILITY. EXCEPT AS OTHERWISE PROVIDED BY THE ACT,
THE DEBTS, OBLIGATIONS AND LIABILITIES OF THE OPERATING COMPANY, WHETHER ARISING
IN CONTRACT, TORT OR OTHERWISE, SHALL BE SOLELY THE DEBTS, OBLIGATIONS AND
LIABILITIES OF THE OPERATING COMPANY, AND THE MEMBERS SHALL NOT BE OBLIGATED
PERSONALLY FOR ANY SUCH DEBT, OBLIGATION OR LIABILITY OF THE OPERATING COMPANY
SOLELY BY REASON OF BEING A MEMBER.

 

7.14.                     DESIGNATION OF TAX MATTERS MEMBER:  TAX MATTERS. THE
MANAGEMENT COMPANY SHALL ACT AS THE “TAX MATTERS PARTNER” OF THE OPERATING
COMPANY, AS PROVIDED IN THE REGULATIONS PURSUANT TO SECTION 6231 OF THE CODE
(THE “TAX MATTERS MEMBER”). TO THE EXTENT AND IN THE MANNER PROVIDED BY
APPLICABLE CODE SECTIONS AND REGULATIONS THEREUNDER, THE TAX MATTERS MEMBER (A)
SHALL FURNISH THE NAME, ADDRESS, PROFITS INTEREST AND TAXPAYER IDENTIFICATION
NUMBER OF EACH MEMBER TO THE IRS AND (B) SHALL INFORM EACH MEMBER OF
ADMINISTRATIVE OR JUDICIAL PROCEEDINGS FOR THE ADJUSTMENT OF THE OPERATING
COMPANY ITEMS REQUIRED TO BE TAKEN INTO ACCOUNT BY A MEMBER FOR INCOME TAX
PURPOSES. THE TAX MATTERS MEMBER SHALL NOT ENTER INTO AN AGREEMENT WITH THE IRS
OR ANY OTHER TAXING AUTHORITY TO EXTEND THE LIMITATION PERIOD FOR ASSESSMENT OF
ANY FEDERAL, STATE OR LOCAL INCOME, FRANCHISE OR UNINCORPORATED BUSINESS TAX OF
ANY MEMBER OR OWNER THEREOF NOR SETTLE WITH THE IRS OR ANY OTHER TAXING
AUTHORITY TO DISALLOW DEDUCTIONS OR INCREASE INCOME FROM THE OPERATING COMPANY
WITH RESPECT TO ANY MEMBER, UNLESS ALL OF THE MEMBERS SHALL HAVE AGREED THERETO.
EACH MEMBER HEREBY RESERVES ALL RIGHTS UNDER APPLICABLE LAW, INCLUDING THE RIGHT
TO RETAIN INDEPENDENT COUNSEL OF ITS CHOICE AT ITS EXPENSE (WHICH COUNSEL SHALL
RECEIVE THE FULL COOPERATION OF THE MANAGEMENT COMPANY AND SHALL BE ENTITLED TO
PRIOR REVIEW OF ALL SUBMISSIONS BY THE OPERATING COMPANY IN RESPECT OF ANY
DISPUTE WITH THE RELEVANT TAXING AUTHORITY).

 

7.14.1              AUDIT. NOTWITHSTANDING THE FOREGOING, EACH INITIAL MEMBER
SHALL RETAIN THE RIGHT TO CONTROL THE PORTION OF ANY AUDIT RELATING TO
DEPRECIATION OR GAIN OR LOSS WITH RESPECT TO

 

21

--------------------------------------------------------------------------------

 

ANY OF THE ASSETS CONTRIBUTED AT THE CONTRIBUTION CLOSING BY OR ON BEHALF OF
AFFILIATES OF SUCH INITIAL MEMBER, RESPECTIVELY, FOR ANY TAXABLE YEAR.

 

7.14.2              TAX FILINGS. ON OR BEFORE MAY 1 OF EACH YEAR, THE OPERATING
COMPANY SHALL PROVIDE TO EACH MEMBER (I) A DRAFT INTERNAL REVENUE SERVICE
SCHEDULE K-1 AND FORM 1065, (II) INFORMATION REQUIRED BY SUCH MEMBER TO ALLOCATE
AND APPORTION INCOME FOR STATE INCOME TAX PURPOSES AND (III) SUCH OTHER
INFORMATION CONCERNING THE OPERATING COMPANY REASONABLY REQUESTED BY ANY MEMBER.
EACH MEMBER SHALL HAVE THE RIGHT TO OBJECT TO ANY AMOUNT OR INFORMATION REPORTED
ON SUCH DRAFT SCHEDULE OR FORM ON OR BEFORE MAY 15 OF ANY GIVEN YEAR. IF THE
MEMBERS CANNOT AGREE ABOUT THE CONTENTS OF SUCH DRAFT SCHEDULE OR FORM, THE TAX
DIRECTOR OF THE MANAGEMENT COMPANY SHALL RESOLVE THE DISPUTE IN SUCH A MANNER
THAT MAXIMIZES OR ACCELERATES TAX DEDUCTIONS OR MINIMIZES OR DEFERS TAXABLE
INCOME.

 

ARTICLE 8
ADMISSION OF ADDITIONAL MEMBERS

 

8.1.                            ADMISSION UPON TRANSFER. UPON A TRANSFER OF
MEMBERSHIP UNITS (OTHER THAN A PLEDGE PERMITTED UNDER SECTION 4.1.2 OF ALL OR
ANY OF A MEMBER’S MEMBERSHIP UNITS), THE OPERATING COMPANY IS AUTHORIZED TO
ADMIT ANY PERSON WHO IS A TRANSFEREE OF SUCH MEMBERSHIP UNITS AS AN ADDITIONAL
MEMBER OF THE OPERATING COMPANY (EACH, AN “ADDITIONAL MEMBER” AND COLLECTIVELY,
THE “ADDITIONAL MEMBERS”); PROVIDED, THAT NO SUCH PERSON SHALL BE ENTITLED TO
ANY RIGHTS HEREUNDER EXCEPT PURSUANT TO A TRANSFER IN ACCORDANCE WITH THIS
AGREEMENT. EACH SUCH PERSON SHALL BE ADMITTED AS AN ADDITIONAL MEMBER AT THE
TIME SUCH PERSON EXECUTES A JOINDER TO THIS AGREEMENT AS PROVIDED IN SECTION 8.3
AND THE CONFIDENTIALITY AGREEMENT AND SUCH TRANSFER IS GIVEN EFFECT UNDER
ARTICLE 4.

 

8.2.                            ADMISSION UPON CONTRIBUTION. UPON A CONTRIBUTION
BY AN UNAFFILIATED THIRD PARTY APPROVED BY THE BOARD OF DIRECTORS OF THE
MANAGEMENT COMPANY OR AN ASSIGNEE OF ALL OR PART OF THE SKT CONTRIBUTION RIGHT
FOR AMOUNTS IN EXCESS OF THE SKT TRIGGERING CONTRIBUTION (EACH, A “NEW MEMBER”),
THE OPERATING COMPANY IS AUTHORIZED TO (I) ISSUE SUCH NUMBER OF MEMBERSHIP UNITS
AS DETERMINED BY THE BOARD OF DIRECTORS OF THE MANAGEMENT COMPANY, AND (II)
ADMIT SUCH PERSON AS A NEW MEMBER OF THE OPERATING COMPANY. EACH SUCH PERSON
SHALL BE ADMITTED AS A NEW MEMBER AT THE TIME SUCH PERSON EXECUTES A JOINDER TO
THIS AGREEMENT AS PROVIDED IN SECTION 8.3, AND EXECUTES A COUNTERPART TO THE
CONFIDENTIALITY AGREEMENT.

 

8.3.                            JOINDER. ANY PERSON THAT IS BEING ADMITTED AS AN
ADDITIONAL MEMBER OR A NEW MEMBER PURSUANT TO THIS ARTICLE 8 SHALL, WITHOUT THE
NEED FOR APPROVAL BY ANY OTHER PARTY TO THIS AGREEMENT, BECOME A PARTY TO THIS
AGREEMENT BY EXECUTING AND DELIVERING A JOINDER SIGNATURE PAGE HERETO IN THE
FORM OF EXHIBIT A HERETO WHEREUPON SUCH PERSON SHALL BE DEEMED A “MEMBER” FOR
ALL PURPOSES OF THIS AGREEMENT AND SHALL AUTOMATICALLY BE ADDED TO SCHEDULE
9.1.1 HERETO.

 

8.4.                            ACCEPTANCE OF PRIOR ACTS. ANY PERSON WHO BECOMES
AN ADDITIONAL MEMBER OR A NEW MEMBER, ACCEPTS, RATIFIES AND AGREES TO BE BOUND
BY ALL ACTIONS DULY TAKEN PURSUANT TO THE TERMS AND PROVISIONS OF THIS AGREEMENT
BY THE OPERATING COMPANY PRIOR TO THE DATE IT BECAME AN ADDITIONAL MEMBER OR A
NEW MEMBER AND, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, SPECIFICALLY
RATIFIES AND APPROVES ALL AGREEMENTS AND OTHER INSTRUMENTS AS MAY HAVE BEEN

 

22

--------------------------------------------------------------------------------

 

EXECUTED AND DELIVERED ON BEHALF OF THE OPERATING COMPANY PRIOR TO SAID DATE AND
WHICH ARE IN FORCE AND EFFECT ON SAID DATE.

 

ARTICLE 9
CAPITAL CONTRIBUTIONS AND
CAPITAL ACCOUNTS

 

9.1.                            CAPITAL CONTRIBUTIONS.

 

9.1.1                     INITIAL CAPITAL CONTRIBUTIONS. AT THE CONTRIBUTION
CLOSING, THE INITIAL MEMBERS CONTRIBUTED CAPITAL, OR MADE A COMMITMENT TO
CONTRIBUTE CAPITAL, TO THE OPERATING COMPANY IN THE FORM AND AMOUNT REQUIRED
UNDER THE CONTRIBUTION AND FORMATION AGREEMENT. IN EXCHANGE FOR SUCH CAPITAL
CONTRIBUTIONS AND THE COMMITMENT OF EACH INITIAL MEMBER TO MAKE ALL FUTURE
CAPITAL CONTRIBUTIONS REQUIRED UNDER THE CONTRIBUTION AND FORMATION AGREEMENT
(EACH AN “INITIAL CAPITAL CONTRIBUTION”), THE OPERATING COMPANY ISSUED
MEMBERSHIP UNITS TO THE INITIAL MEMBERS AT THE CONTRIBUTION CLOSING IN THE
AMOUNTS SET FORTH ON SCHEDULE 9.1.1, HEREOF. ADDITIONAL INITIAL CAPITAL
CONTRIBUTIONS BY AN INITIAL MEMBER IN ACCORDANCE WITH THE CONTRIBUTION AND
FORMATION AGREEMENT SHALL NOT RESULT IN THE ISSUANCE OF ANY ADDITIONAL
MEMBERSHIP UNITS OR ANY MODIFICATION TO THE PERCENTAGE INTEREST OF EACH INITIAL
MEMBER SET FORTH ON SCHEDULE 9.1.1, PROVIDED, HOWEVER, THE CONTRIBUTING INITIAL
MEMBER’S BASIS IN THE MEMBERSHIP UNITS ISSUED TO SUCH INITIAL MEMBER AT THE
INITIAL CONTRIBUTION CLOSING SHALL BE INCREASED BY THE VALUE OF SUCH FUTURE
INITIAL CAPITAL CONTRIBUTIONS. THE MEMBERS SHALL ADOPT A REVISED SCHEDULE 9.1.1
REFLECTING THE THEN CURRENT PERCENTAGE INTERESTS OF THE MEMBERS UPON THE
OCCURRENCE OF EITHER OF THE FOLLOWING: (A) THE ADMISSION OF AN ADDITIONAL MEMBER
PURSUANT TO SECTION 8.1; (B) THE ADMISSION OF A NEW MEMBER PURSUANT TO SECTION
8.2; OR (C) CONTRIBUTION OF ADDITIONAL CAPITAL PURSUANT TO SECTION 9.1.2 OR
9.1.3.

 

9.1.2                     REQUIRED ADDITIONAL CAPITAL CONTRIBUTIONS. AS OF THE
DATE HEREOF, SKT HOLDINGS SHALL CONTRIBUTE TO THE OPERATING COMPANY AN AGGREGATE
AMOUNT OF SEVENTY MILLION DOLLARS ($70,000,000) (THE “SKT REQUIRED
CONTRIBUTION”). IN EXCHANGE FOR THE SKT REQUIRED CONTRIBUTION, THE OPERATING
COMPANY WILL ISSUE PREFERRED MEMBERSHIP UNITS TO SKT HOLDINGS IN THE AMOUNTS SET
FORTH ON SCHEDULE 9.1.2. PRIOR TO DECEMBER 31, 2009, SKT HOLDINGS MAY ALSO
CONTRIBUTE UP TO AN ADDITIONAL TWO HUNDRED MILLION DOLLARS ($200,000,000) (THE
“SKT CONTRIBUTION RIGHT”) ON THE TERMS SET FORTH ON SCHEDULE 9.1.2. THE PAYMENT
OF THE SKT REQUIRED CONTRIBUTION AND A WRITTEN COMMITMENT MADE BY SKT TO THE
OPERATING COMPANY AND EARTHLINK ON OR BEFORE DECEMBER 31, 2007 TO CONTRIBUTE AN
ADDITIONAL EIGHTY MILLION DOLLARS ($80,000,000) ON THE TERMS SET FORTH ON
SCHEDULE 9.1.2 PRIOR TO JUNE 30, 2008 (THE “SKT COMMITMENT”) WILL CONSTITUTE AN
“SKT TRIGGERING CONTRIBUTION”. EARTHLINK IS NOT REQUIRED TO CONTRIBUTE ANY
ADDITIONAL CAPITAL (AS DEFINED IN SECTION 9.1.3). THE OPERATING COMPANY MAY NOT
ISSUE MEMBERSHIP UNITS TO SKT AT A PRICE PER UNIT LESS THAN $3.00 UNLESS (I) IN
CONNECTION WITH A CONTRIBUTION BEING MADE BY AN UNAFFILIATED THIRD PARTY
TOGETHER WITH SKT IN WHICH SUCH UNAFFILIATED THIRD PARTY IS INVESTING FIFTY
PERCENT (50%) OR MORE OF THE AGGREGATE CONTRIBUTION, (II) SKT AND EARTHLINK
AGREE IN WRITING, OR (III) AN INDEPENDENT VALUATION CONSULTANT HAS DETERMINED
THAT THE “FAIR MARKET VALUE” OF THE MEMBERSHIP UNITS IS LESS THAN $3.00 PER
UNIT; PROVIDED, HOWEVER, THIS RESTRICTION DOES NOT APPLY TO ISSUANCES TO THE
MANAGEMENT COMPANY IN CONNECTION WITH THE EXERCISE, CONVERSION OR EXCHANGE OF
EQUITY RIGHTS (A) EXISTING PRIOR TO THE DATE HEREOF OR RESERVED FOR ISSUANCE
PRIOR TO THE DATE HEREOF, OR (B) OTHERWISE APPROVED BY THE

 

23

--------------------------------------------------------------------------------

 

AFFIRMATIVE VOTE OF A MAJORITY OF CLASS B DIRECTORS(INCLUDING AT LEAST ONE (1)
CLASS B DIRECTOR APPOINTED BY EACH MEMBER ENTITLED TO APPOINT A CLASS B
DIRECTOR). NOTWITHSTANDING THE FOREGOING, THE SKT TRIGGERING CONTRIBUTION MUST
BE MADE ON THE TERMS SET FORTH ON SCHEDULE 9.1.2. ANY INDEPENDENT VALUATION
CONSULTANT ENGAGED PURSUANT TO THIS SECTION 9.1.2 SHALL BE SELECTED BY THE
MUTUAL AGREEMENT OF EARTHLINK AND SKT AND ALL EXPENSES RELATED TO THE VALUATION
SHALL BE PAID BY THE OPERATING COMPANY OR THE MANAGEMENT COMPANY.

 

9.1.3                     ADDITIONAL CAPITAL CONTRIBUTIONS. IN CONNECTION WITH
(A) AMOUNTS CONTRIBUTED PURSUANT TO SECTION 9.1.2, AND (B) A DETERMINATION BY
THE BOARD OF DIRECTORS OF THE MANAGEMENT COMPANY THAT THE OPERATING COMPANY
REQUIRES ADDITIONAL CAPITAL OR PROPOSES TO ISSUE SECURITIES CONVERTIBLE INTO OR
EXCHANGEABLE FOR MEMBERSHIP UNITS (OTHER THAN SECURITIES ISSUABLE TO THE
MANAGEMENT COMPANY IN CONNECTION WITH THE EXERCISE, CONVERSION OR EXCHANGE OF
STOCK OPTIONS, WARRANT OR EQUITY RIGHTS (I) EXISTING PRIOR TO THE DATE HEREOF OR
RESERVED FOR ISSUANCE PRIOR TO THE DATE HEREOF, OR (II) OTHERWISE APPROVED BY
THE AFFIRMATIVE VOTE OF A MAJORITY OF CLASS B DIRECTORS (INCLUDING AT LEAST ONE
(1) CLASS B DIRECTOR APPOINTED BY EACH MEMBER ENTITLED TO APPOINT A CLASS B
DIRECTOR) (COLLECTIVELY, “ADDITIONAL CAPITAL”), EACH MEMBER SHALL HAVE THE RIGHT
(BUT NOT THE OBLIGATION, OTHER THAN OBLIGATIONS SET FORTH IN SECTION 9.1.2) TO
CONTRIBUTE ITS SHARE OF SUCH ADDITIONAL CAPITAL. FOR SUCH PURPOSES, EACH
MEMBER’S SHARE OF ADDITIONAL CAPITAL SHALL EQUAL THE PERCENTAGE DETERMINED BY
DIVIDING THE MEMBER’S CAPITAL CONTRIBUTIONS BY THE TOTAL CAPITAL CONTRIBUTIONS
OF ALL THE MEMBERS AS OF SUCH TIME. IF, WITHIN FIFTEEN (15) DAYS FOLLOWING
RECEIPT FROM THE MANAGEMENT COMPANY OF A NOTICE SPECIFYING THE AMOUNT OF
ADDITIONAL CAPITAL SO REQUIRED, A MEMBER FAILS TO CONTRIBUTE ITS SHARE OF SUCH
ADDITIONAL CAPITAL, THEN THE OTHER MEMBERS SHALL HAVE THE RIGHT TO CONTRIBUTE
THEIR PORTION OF THE UNCONTRIBUTED ADDITIONAL CAPITAL AS MEASURED BY THE RATIO
OF EACH MEMBER’S SHARE OF THE ADDITIONAL CAPITAL, EXCLUDING THE SHARE OF
ADDITIONAL CAPITAL FOR THE NON-CONTRIBUTING MEMBER. IF, WITHIN FIFTEEN (15) DAYS
FOLLOWING RECEIPT FROM THE MANAGEMENT COMPANY OF A NOTICE OF SUCH MEMBER’S RIGHT
TO CONTRIBUTE ITS PORTION OF UNCONTRIBUTED ADDITIONAL CAPITAL, THE MEMBERS HAVE
FAILED TO CONTRIBUTE ALL OF SUCH ADDITIONAL CAPITAL, THE OPERATING COMPANY MAY
ISSUE MEMBERSHIP UNITS IN EXCHANGE FOR THE CONTRIBUTION OF THE UNCONTRIBUTED
ADDITIONAL CAPITAL, ON SUBSTANTIALLY THE SAME TERMS AS OFFERED TO THE MEMBERS,
TO ANY PERSON, WHO SHALL BECOME A NEW MEMBER PURSUANT TO SECTION 8.2. THE
OPERATING COMPANY SHALL ISSUE MEMBERSHIP UNITS FOR SUCH ADDITIONAL CAPITAL. ALL
CASH CONTRIBUTED BY THE MEMBERS (INCLUDING THE NEW MEMBERS) AND ALL CASH AND
INVESTMENT ACCOUNTS SHALL BE HELD IN FINANCIAL INSTITUTIONS ORGANIZED UNDER THE
LAWS OF THE UNITED STATES OF AMERICA AND DEPOSITED IN ACCOUNTS DENOMINATED IN
UNITED STATES DOLLARS.

 

9.1.4                     CANCELLATION OF CERTAIN INITIAL CAPITAL CONTRIBUTIONS.
AS OF THE DATE OF THE SKT TRIGGERING CONTRIBUTION, MEMBERSHIP UNITS ISSUED TO
EARTHLINK IN EXCHANGE FOR $40,000,000 OF NON-CASH ASSETS CONTRIBUTED BY
EARTHLINK AS PART OF THE INITIAL CAPITAL CONTRIBUTION WILL BE CANCELLED AND THE
PERCENTAGE INTEREST OF THE MEMBERS SHALL BE RE-CALCULATED TAKING INTO ACCOUNT
SUCH CANCELLATION. IN THE EVENT THAT THE MEMBERSHIP UNITS SUBJECT TO THIS
SECTION 9.1.4 ARE CANCELLED UPON THE SKT COMMITMENT AND THE $150,000,000 PAYABLE
UPON THE SKT TRIGGERING CONTRIBUTION IS NOT PAID IN FULL BY JUNE 30, 2008, SUCH
CANCELLED MEMBERSHIP UNITS WILL BE REISSUED TO EARTHLINK AT NO COST AND THE
PERCENTAGE INTEREST OF THE MEMBERS SHALL BE RECALCULATED TAKING INTO ACCOUNT
SUCH ISSUANCE.

 

24

--------------------------------------------------------------------------------

 

9.2.                            MEMBERSHIP UNITS; CAPITAL CONTRIBUTIONS. THE
MEMBERSHIP UNITS SHALL BE CONSIDERED PERSONAL PROPERTY OF THE MEMBER. EXCEPT AS
PROVIDED IN THIS AGREEMENT, NO MEMBER SHALL BE ENTITLED TO THE RETURN OF ITS
CAPITAL CONTRIBUTION OR TO RECEIVE A DISTRIBUTION OTHER THAN AS PROVIDED IN THIS
AGREEMENT. NO RETURN OF A MEMBER’S CAPITAL CONTRIBUTIONS SHALL BE MADE HEREUNDER
IF SUCH DISTRIBUTION WOULD VIOLATE APPLICABLE STATE LAW. UNDER CIRCUMSTANCES
REQUIRING A RETURN OF ANY CAPITAL CONTRIBUTION, NO MEMBER SHALL HAVE THE RIGHT
TO DEMAND OR RECEIVE PROPERTY OTHER THAN CASH, EXCEPT AS MAY BE SPECIFICALLY
PROVIDED IN THIS AGREEMENT.

 

9.3.                            CAPITAL ACCOUNTS. AN INDIVIDUAL CAPITAL ACCOUNT
SHALL BE ESTABLISHED AND MAINTAINED FOR EACH MEMBER IN ACCORDANCE WITH FEDERAL
INCOME TAX ACCOUNTING PRINCIPLES. THE CAPITAL ACCOUNT OF EACH MEMBER SHALL BE
MAINTAINED IN ACCORDANCE WITH THE PROVISIONS OF THIS SECTION 9.3.

 

9.3.1                     CAPITAL ACCOUNT INCREASES. THE CAPITAL ACCOUNT OF EACH
MEMBER SHALL BE INCREASED BY (A) THE AMOUNT OF ANY CASH AND THE AGREED NET FAIR
MARKET VALUE (AS USED HEREIN, “AGREED NET FAIR MARKET VALUE” OF PROPERTY SHALL
MEAN THE GROSS FAIR MARKET VALUE OF THE PROPERTY REDUCED BY ALL LIABILITIES
ENCUMBERING THE PROPERTY, AS DETERMINED BY THE BOARD OF DIRECTORS OF THE
MANAGEMENT COMPANY AS OF THE DATE OF CONTRIBUTION) OF ANY PROPERTY CONTRIBUTED
AS A CAPITAL CONTRIBUTION TO THE CAPITAL OF THE OPERATING COMPANY BY SUCH
MEMBER, (B) THE AMOUNT OF ANY PROFITS ALLOCATED TO SUCH MEMBER, (C) AMOUNTS OF
GAIN ALLOCATED PURSUANT TO SECTION 10.3.4 AND (D) AMOUNTS OF GAIN ALLOCATED
PURSUANT TO SECTION 10.3.7.

 

9.3.2                     CAPITAL ACCOUNT DECREASES. THE CAPITAL ACCOUNT OF EACH
MEMBER SHALL BE DECREASED BY (A) THE AMOUNT OF ANY LOSSES ALLOCATED TO SUCH
MEMBER, (B) THE AMOUNT OF ANY CASH AND THE AGREED NET FAIR MARKET VALUE AS OF
THE DATE OF DISTRIBUTION OF ANY PROPERTY DISTRIBUTED TO SUCH MEMBER, (C) AMOUNTS
OF LOSS ALLOCATED PURSUANT TO SECTION 10.3.4 AND (D) AMOUNTS OF LOSS ALLOCATED
PURSUANT TO SECTION 10.3.7.

 

9.3.3                     TRANSFEREE CAPITAL ACCOUNTS. A TRANSFEREE OF A
MEMBERSHIP UNIT SHALL SUCCEED TO THE CAPITAL ACCOUNT (OR PORTION OF THE CAPITAL
ACCOUNT) ATTRIBUTABLE TO SUCH TRANSFERRED MEMBERSHIP UNIT OF THE TRANSFERRING
MEMBER.

 

9.3.4                     OPERATING COMPANY OPTIONS. THE OPERATING COMPANY SHALL
MAKE APPROPRIATE ADJUSTMENTS TO CAPITAL ACCOUNTS IN CONNECTION WITH THE EXERCISE
OF AN OPERATING COMPANY OPTION. FOR THIS PURPOSE, THE CAPITAL ACCOUNT
ATTRIBUTABLE TO A COMMON MEMBERSHIP UNIT ISSUED UPON EXERCISE OF AN OPERATING
COMPANY OPTION SHALL INCLUDE ITS SHARE OF UNREALIZED INCOME, GAIN, LOSS OR
DEDUCTION THAT IS INHERENT IN THE OPERATING COMPANY’S PROPERTY CALCULATED AND
ALLOCATED CONSISTENT WITH ARTICLE 10 OF THIS AGREEMENT AND TAKING INTO ACCOUNT
ALL SUCH UNREALIZED INCOME, GAIN, LOSS OR DEDUCTION EVEN IF REFLECTED IN ALL
OTHER MEMBERS’ CAPITAL ACCOUNTS PREVIOUSLY (OTHER THAN UNREALIZED INCOME, GAIN,
LOSS OR DEDUCTION ATTRIBUTABLE TO MEMBER CONTRIBUTED PROPERTY AND SPECIALLY
ALLOCABLE TO SUCH MEMBER). THE OPERATING COMPANY WILL REVALUE ITS PROPERTY
IMMEDIATELY AFTER THE EXERCISE OF THE OPERATING COMPANY OPTION. FOR THIS
PURPOSE, THE FAIR MARKET VALUE ASSIGNED TO ANY PROPERTY REVALUED BY THE
OPERATING COMPANY WILL BE REGARDED AS CORRECT, PROVIDED THAT (I) THE VALUE IS
REASONABLY AGREED TO BY THE MEMBERS IN ARM’S-LENGTH NEGOTIATIONS AND (II) THE
MEMBERS HAVE SUFFICIENTLY ADVERSE INTERESTS. SUCH REVALUATION SHALL BE ON A
PROPERTY-BY-PROPERTY BASIS, EXCEPT AS OTHERWISE ALLOWED. IN DETERMINING THE
CAPITAL ACCOUNTS OF THE MEMBERS (INCLUDING THE MANAGEMENT COMPANY), THE

 

25

--------------------------------------------------------------------------------

 

OPERATING COMPANY FIRST WILL ALLOCATE ANY UNREALIZED INCOME, GAIN, LOSS OR
DEDUCTION IN OPERATING COMPANY PROPERTY (THAT HAS NOT BEEN REFLECTED IN THE
CAPITAL ACCOUNTS PREVIOUSLY) TO THE MANAGEMENT COMPANY TO THE EXTENT NECESSARY
TO REFLECT THE MANAGEMENT COMPANY’S RIGHT TO SHARE IN THE OPERATING COMPANY
CAPITAL UNDER THIS AGREEMENT, AND THEN ALLOCATE ANY REMAINING UNREALIZED INCOME,
GAIN, LOSS OR DEDUCTION (THAT HAS NOT BEEN REFLECTED IN THE CAPITAL ACCOUNTS
PREVIOUSLY) TO THE EXISTING MEMBERS (INCLUDING THE MANAGEMENT COMPANY), TO
REFLECT THE MANNER IN WHICH THE UNREALIZED INCOME, GAIN, LOSS OR DEDUCTION IN
OPERATING COMPANY PROPERTY WILL BE ALLOCATED AMONG THOSE MEMBERS IF THERE WERE A
TAXABLE DISPOSITION OF SUCH PROPERTY FOR ITS FAIR MARKET VALUE ON THAT DATE
CALCULATED CONSISTENT WITH ARTICLE 10 OF THIS AGREEMENT. IF, AFTER MAKING THE
ALLOCATIONS DESCRIBED IN THE PRECEDING SENTENCE, THE MANAGEMENT COMPANY’S
CAPITAL ACCOUNT STILL DOES NOT REFLECT THE MANAGEMENT COMPANY’S RIGHT TO SHARE
IN OPERATING COMPANY CAPITAL UNDER THIS AGREEMENT, THEN THE OPERATING COMPANY
WILL REALLOCATE OPERATING COMPANY CAPITAL BETWEEN THE EXISTING MEMBERS AND THE
MANAGEMENT COMPANY SO THAT THE MANAGEMENT COMPANY’S CAPITAL ACCOUNT WILL REFLECT
THE MANAGEMENT COMPANY’S RIGHT TO SHARE IN OPERATING COMPANY CAPITAL UNDER THIS
AGREEMENT. ANY INCREASE OR REDUCTION IN THE CAPITAL ACCOUNTS OF EXISTING MEMBERS
THAT OCCURS AS A RESULT OF A CAPITAL ACCOUNT REALLOCATION WILL HAVE TO BE
ALLOCATED AMONG THE EXISTING MEMBERS IN ACCORDANCE WITH THESE RULES. THIS
AGREEMENT REQUIRES CORRECTIVE ALLOCATIONS TO TAKE INTO ACCOUNT ALL CAPITAL
ACCOUNT REALLOCATIONS ACCORDING TO THE PRECEDING SENTENCE, WHICH CORRECTIVE
ALLOCATIONS WILL BE MADE UNTIL THE CAPITAL ACCOUNT REALLOCATIONS ARE ELIMINATED.
IN CONNECTION WITH THE FOREGOING ADJUSTMENTS, THE FAIR MARKET VALUE OF OPERATING
COMPANY PROPERTY WILL BE REDUCED BY THE FAIR MARKET VALUE OF OUTSTANDING
OPERATING COMPANY OPTIONS AS OF THE DATE OF ADJUSTMENT TO THE EXTENT OF THE
UNREALIZED INCOME OR GAIN IN OPERATING COMPANY PROPERTY (ALLOCATED IN PROPORTION
TO THEIR RESPECTIVE AMOUNTS OF UNREALIZED APPRECIATION).

 

9.3.5                     MAINTENANCE OF CAPITAL ACCOUNTS. NOTWITHSTANDING ANY
OTHER PROVISION OF THIS AGREEMENT, ALL CAPITAL ACCOUNTS OF THE MEMBERS SHALL BE
DETERMINED AND MAINTAINED IN ACCORDANCE WITH THE CAPITAL ACCOUNTING RULES OF
SECTION 1.704-1(B)(2)(IV) OF THE REGULATIONS.

 

ARTICLE 10
TAX ALLOCATIONS

 

10.1.                     ALLOCATION OF PROFITS. AFTER GIVING EFFECT TO THE
SPECIAL ALLOCATIONS SET FORTH IN SECTIONS 10.3 AND 10.4, PROFITS FOR ANY FISCAL
YEAR SHALL BE ALLOCATED AS FOLLOWS:

 

10.1.1              PRIOR PREFERRED MEMBER LOSSES ALLOCATED. FIRST, PROFITS FOR
ANY FISCAL YEAR SHALL BE ALLOCATED TO THOSE PREFERRED MEMBERS WHO ARE ALLOCATED
LOSSES PURSUANT TO SECTIONS 10.2.3 AND 10.2.4 IN PROPORTION TO AND IN AN AMOUNT
EQUAL TO ANY SUCH LOSSES ALLOCATED TO SUCH PREFERRED MEMBERS PURSUANT TO
SECTIONS 10.2.3 AND 10.2.4 BELOW TO RESTORE THE LOSSES ALLOCATED TO SUCH
PREFERRED MEMBERS WITH RESPECT TO THEIR PREFERRED MEMBERSHIP UNITS.

 

10.1.2              PRIOR COMMON MEMBER LOSSES ALLOCATED. SECOND, PROFITS FOR
ANY FISCAL YEAR SHALL BE ALLOCATED TO THOSE COMMON MEMBERS WHO ARE ALLOCATED
LOSSES PURSUANT TO SECTIONS 10.2.2 AND 10.2.4 IN PROPORTION TO AND IN AN AMOUNT
EQUAL TO ANY SUCH LOSSES ALLOCATED TO SUCH COMMON MEMBERS PURSUANT TO SECTIONS
10.2.2 AND 10.2.4 BELOW TO RESTORE THE LOSSES ALLOCATED TO SUCH COMMON MEMBERS
WITH RESPECT TO THEIR COMMON MEMBERSHIP UNITS.

 

26

--------------------------------------------------------------------------------

 

10.1.3              SPECIAL ALLOCATION TO COMMON MEMBERS. THIRD, PROFITS FOR ANY
FISCAL YEAR SHALL BE ALLOCATED TO THE COMMON MEMBERS IN PROPORTION TO THEIR
RESPECTIVE PERCENTAGE INTERESTS IN SUCH AMOUNTS AS ARE NECESSARY TO CAUSE THE
BALANCES OF THE CAPITAL ACCOUNTS OF SUCH COMMON MEMBERS, WHEN DIVIDED BY TOTAL
CAPITAL ACCOUNTS, TO EQUAL THEIR RESPECTIVE PERCENTAGE INTERESTS.

 

10.1.4              PERCENTAGE INTERESTS. FOURTH, PROFITS FOR ANY FISCAL YEAR
SHALL BE ALLOCATED AMONG THE MEMBERS IN PROPORTION TO THEIR RESPECTIVE
PERCENTAGE INTERESTS.

 

10.2.                     ALLOCATION OF LOSSES. AFTER GIVING EFFECT TO THE
SPECIAL ALLOCATIONS SET FORTH IN SECTIONS 10.3 AND 10.4, LOSSES FOR ANY FISCAL
YEAR SHALL BE ALLOCATED AS FOLLOWS:

 

10.2.1              PRIOR MEMBER PROFITS ALLOCATED. FIRST, LOSSES FOR ANY FISCAL
YEAR SHALL BE ALLOCATED (I) AMONG THE MEMBERS WHO ARE ALLOCATED PROFITS PURSUANT
TO SECTION 10.1.4 IN PROPORTION TO AND IN AMOUNTS EQUAL TO ANY SUCH PROFITS
ALLOCATED TO SUCH MEMBERS PURSUANT TO SECTION 10.1.4 TO OFFSET THE PROFITS
ALLOCATED TO SUCH MEMBERS WITH RESPECT TO THEIR MEMBERSHIP UNITS, AND THEN (II)
AMONG THE COMMON MEMBERS WHO ARE ALLOCATED PROFITS PURSUANT TO SECTION 10.1.3 IN
PROPORTION TO AND IN AMOUNTS EQUAL TO ANY SUCH PROFITS ALLOCATED TO SUCH COMMON
MEMBERS PURSUANT TO SECTION 10.1.3 TO OFFSET THE PROFITS ALLOCATED TO SUCH
COMMON MEMBERS WITH RESPECT TO THEIR COMMON MEMBERSHIP UNITS.

 

10.2.2              COMMON MEMBERS. SECOND, LOSSES FOR ANY FISCAL YEAR SHALL BE
ALLOCATED AMONG THE COMMON MEMBERS IN PROPORTION TO THEIR RESPECTIVE PERCENTAGE
INTERESTS, SUBJECT TO THE LIMITATION IN SECTION 10.2.4 BELOW.

 

10.2.3              PREFERRED MEMBERS. THIRD, LOSSES FOR ANY FISCAL YEAR SHALL
BE ALLOCATED AMONG THE PREFERRED MEMBERS IN PROPORTION TO THEIR RESPECTIVE
PERCENTAGE INTERESTS, SUBJECT TO THE LIMITATION IN SECTION 10.2.4 BELOW.

 

10.2.4              LIMITATION ON ALLOCATION OF LOSSES. LOSSES ALLOCATED
PURSUANT TO SECTIONS 10.2.1, 10.2.2 AND 10.2.3 SHALL NOT EXCEED THE MAXIMUM
AMOUNT OF LOSSES THAT CAN BE ALLOCATED WITHOUT CAUSING ANY MEMBER TO HAVE AN
ADJUSTED CAPITAL ACCOUNT DEFICIT AT THE END OF ANY FISCAL YEAR. IN THE EVENT
SOME, BUT NOT ALL, OF THE MEMBERS WOULD HAVE AN ADJUSTED CAPITAL ACCOUNT DEFICIT
AS A CONSEQUENCE OF AN ALLOCATION OF LOSSES PURSUANT TO SECTIONS 10.2.1, 10.2.2
AND 10.2.3 THE LIMITATIONS SET FORTH IN THIS SECTION 10.2.4 SHALL BE APPLIED ON
A MEMBER BY MEMBER BASIS SO AS TO ALLOCATE THE MAXIMUM PERMISSIBLE LOSSES TO
EACH MEMBER UNDER SECTION 1.704-1(B)(2)(II)(D) OF THE REGULATIONS. “ADJUSTED
CAPITAL ACCOUNT DEFICIT” MEANS, WITH RESPECT TO ANY MEMBER, THE DEFICIT BALANCE,
IF ANY, IN SUCH MEMBER’S CAPITAL ACCOUNT AS OF THE END OF THE RELEVANT FISCAL
YEAR, AFTER GIVING EFFECT TO THE FOLLOWING ADJUSTMENTS:  ADD TO SUCH CAPITAL
ACCOUNT ANY AMOUNT WHICH SUCH MEMBER IS TREATED AS OBLIGATED TO RESTORE PURSUANT
TO REGULATIONS SECTION 1.704-1(B)(2)(II)(C) BY VIRTUE OF SUCH MEMBER’S GUARANTEE
OR INDEMNITY AGREEMENT WITH RESPECT TO ANY COMPANY DEBT OR IS DEEMED OBLIGATED
TO RESTORE PURSUANT TO THE PENULTIMATE SENTENCES OF SECTIONS 1.704-2(G)(1) AND
1.704-2(I)(5) OF THE REGULATIONS; AND SUBTRACT FROM SUCH CAPITAL ACCOUNT THE
ITEMS DESCRIBED IN SECTIONS 1.704-1(B)(2)(II)(D)(4), 1.704-1(B)(2)(II)(D)(5) AND
1.704-1(B)(2)(II)(D)(6) OF THE REGULATIONS. THE FOREGOING DEFINITION OF ADJUSTED
CAPITAL ACCOUNT DEFICIT IS INTENDED TO COMPLY WITH THE PROVISIONS OF SECTION
1.704-1(B)(2)(II)(D) OF THE REGULATIONS AND SHALL BE INTERPRETED CONSISTENTLY
THEREWITH.

 

27

--------------------------------------------------------------------------------

 

10.3.                     SPECIAL ALLOCATIONS. THE FOLLOWING SPECIAL ALLOCATIONS
SHALL BE MADE IN THE FOLLOWING ORDER:

 

10.3.1              MINIMUM GAIN CHARGEBACK. NOTWITHSTANDING ANY OTHER PROVISION
OF THIS AGREEMENT, (A) NONRECOURSE DEDUCTIONS OF THE OPERATING COMPANY WITHIN
THE MEANING OF SECTION 1.704-2 OF THE REGULATIONS, OTHER THAN PARTNER
NONRECOURSE DEDUCTIONS WITHIN THE MEANING OF SECTION 1.704-2(I), OF THE
REGULATIONS, SHALL BE ALLOCATED AMONG THE MEMBERS IN ACCORDANCE WITH THEIR
RESPECTIVE PERCENTAGE INTERESTS, (B) ANY PARTNER NONRECOURSE DEDUCTIONS WITHIN
THE MEANING OF SECTION 1.704-2(I) OF THE REGULATIONS, SHALL BE ALLOCATED IN
ACCORDANCE WITH SECTIONS 1.704-2(I) AND 1.704-2(K) OF THE REGULATIONS, AND (C)
IF THERE IS A NET DECREASE IN “MINIMUM GAIN” WITHIN THE MEANING OF SECTIONS
1.704-2(D) AND 1.704-2(I)(3) OF THE REGULATIONS FOR ANY FISCAL YEAR OF THE
OPERATING COMPANY, ITEMS OF GAIN AND INCOME SHALL BE ALLOCATED AMONG THE MEMBERS
IN ACCORDANCE WITH THE “MINIMUM GAIN CHARGEBACK” RULES CONTAINED IN SECTIONS
1.704-2(F) AND (G) AND 1.704-2(I)(4) OF THE REGULATIONS. THE MEMBERS’ RESPECTIVE
INTERESTS IN THE OPERATING COMPANY PROFITS FOR PURPOSES OF ALLOCATING EXCESS
NONRECOURSE LIABILITIES OF THE OPERATING COMPANY WITHIN THE MEANING OF SECTION
1.752-3(A)(3) OF THE REGULATIONS SHALL BE EQUAL TO THEIR RESPECTIVE PERCENTAGE
INTERESTS.

 

10.3.2              QUALIFIED INCOME OFFSET. IN THE EVENT ANY MEMBER
UNEXPECTEDLY RECEIVES ANY ADJUSTMENTS, ALLOCATIONS OR DISTRIBUTIONS DESCRIBED IN
SECTIONS 1.704-1(B)(2)(II)(D)(4), (5) OR (6) OF THE REGULATIONS, ITEMS OF
OPERATING COMPANY INCOME AND GAIN (CONSISTING OF A PRO RATA PORTION OF EACH ITEM
OF THE OPERATING COMPANY INCOME, INCLUDING GROSS INCOME AND GAIN FOR SUCH FISCAL
YEAR) SHALL BE SPECIALLY ALLOCATED TO SUCH MEMBER IN AN AMOUNT AND MANNER
SUFFICIENT TO ELIMINATE, TO THE EXTENT REQUIRED BY THE REGULATIONS, SUCH DEFICIT
IN THE CAPITAL ACCOUNT OF SUCH MEMBER AS QUICKLY AS POSSIBLE. THIS PROVISION IS
INTENDED TO COMPLY WITH THE “QUALIFIED INCOME OFFSET” REQUIREMENTS OF SECTION
1.704-1(B)(2)(II)(D) OF THE REGULATIONS, AND THIS PROVISION SHALL BE INTERPRETED
IN ACCORDANCE WITH THOSE REQUIREMENTS.

 

10.3.3              ELIMINATION OF CAPITAL ACCOUNT DEFICITS. IN THE EVENT ANY
MEMBER HAS A DEFICIT CAPITAL ACCOUNT AT THE END OF ANY FISCAL YEAR WHICH IS IN
EXCESS OF THE SUM OF (I) THE AMOUNT SUCH MEMBER IS TREATED AS OBLIGATED TO
RESTORE PURSUANT TO SECTION 1.704-1(B)(2)(II)(C) OF THE REGULATIONS BY VIRTUE OF
SUCH MEMBER’S GUARANTEE OR INDEMNITY WITH RESPECT TO OPERATING COMPANY DEBT AND
(II) THE AMOUNT SUCH MEMBER IS DEEMED TO BE OBLIGATED TO RESTORE PURSUANT TO THE
PENULTIMATE SENTENCES OF SECTIONS 1.704-2(G)(1) AND 1.704-2(I)(5) OF THE
REGULATIONS, EACH SUCH MEMBER SHALL BE SPECIALLY ALLOCATED ITEMS OF OPERATING
COMPANY INCOME AND GAIN IN THE AMOUNT OF SUCH EXCESS AS QUICKLY AS POSSIBLE,
PROVIDED THAT AN ALLOCATION PURSUANT TO THIS SECTION 10.3.3 SHALL BE MADE ONLY
IF AND TO THE EXTENT THAT SUCH MEMBER WOULD HAVE A DEFICIT CAPITAL ACCOUNT IN
EXCESS OF SUCH SUM AFTER ALL OTHER ALLOCATIONS PROVIDED FOR IN THIS AGREEMENT
HAVE BEEN MADE AS IF THIS SECTION 10.3.3 WERE NOT IN THIS AGREEMENT.

 

10.3.4              ADJUSTMENTS TO CAPITAL ACCOUNTS. IF THE VALUE FOR CAPITAL
ACCOUNT PURPOSES OF ANY OPERATING COMPANY PROPERTY IS ADJUSTED PURSUANT TO
SECTION 9.3 OR SECTION 10.3.7 HEREOF, SUBSEQUENT ALLOCATIONS OF INCOME, GAIN,
LOSS, AND DEDUCTION WITH RESPECT TO SUCH ASSET SHALL TAKE ACCOUNT OF ANY
VARIATION BETWEEN THE ADJUSTED BASIS OF SUCH ASSET FOR FEDERAL INCOME TAX
PURPOSES AND ITS ADJUSTED VALUE IN THE SAME MANNER AS UNDER SECTION 704(C) OF
THE CODE AND THE REGULATIONS THEREUNDER.

 

28

--------------------------------------------------------------------------------

 

10.3.5              CORRECTIVE ALLOCATIONS. CORRECTIVE ALLOCATIONS (CONSISTING
OF A PRO RATA PORTION OF EACH ITEM) OF ITEMS OF GROSS INCOME AND GAIN, OR GROSS
LOSS AND DEDUCTION, SHALL BE SPECIALLY ALLOCATED TO TAKE INTO ACCOUNT THE
DIFFERENCES IN THE OPERATING COMPANY’S CORRESPONDING BOOK ITEMS AS A RESULT OF
SECTION 9.3.4.

 

10.3.6              ALLOCATION OF CLASS A OPTION AND OTHER COMPENSATION
DEDUCTIONS. ANY DEDUCTIONS FOR COMPENSATION ASSOCIATED WITH THE GRANT OR
EXERCISE OF A CLASS A OPTION, OR THE PAYMENTS UNDER SECTION 15.4, SHALL BE
ALLOCATED SOLELY TO THE MANAGEMENT COMPANY AND WITHOUT REGARD TO THE PROVISIONS
OF SECTIONS 10.1 AND 10.2 HEREOF.

 

10.3.7              REVALUATION UPON ADDITIONAL CONTRIBUTIONS. AS OF THE DATE
HEREOF AND AS OF THE DATE OF PAYMENT OF THE SKT COMMITMENT, THE OPERATING
COMPANY SHALL REVALUE ITS PROPERTIES. IF SUCH REVALUATION RESULTS IN A NET BOOK
LOSS, SUCH LOSS SHALL BE ALLOCATED (I) FIRST, TO THE COMMON MEMBERS IN THE RATIO
OF THEIR CAPITAL ACCOUNT BALANCES UNTIL SUCH BALANCES ARE EQUAL TO ZERO; AND
(II) SECOND, TO THE PREFERRED MEMBERS SO THAT THE RATIO OF THE CAPITAL ACCOUNT
BALANCES OF SUCH MEMBERS EQUAL, AS NEARLY AS POSSIBLE, THE RATIO OF THEIR
PERCENTAGE INTERESTS, AFTER TAKING INTO ACCOUNT ANY ADJUSTMENT TO SUCH
PERCENTAGE INTERESTS PURSUANT TO SECTION 9.1.4. IF SUCH REVALUATION RESULTS IN A
NET BOOK GAIN, SUCH GAIN SHALL BE ALLOCATED TO THE PREFERRED MEMBERS SO THAT THE
RATIO OF THE CAPITAL ACCOUNT BALANCES OF SUCH MEMBERS EQUAL, AS NEARLY AS
POSSIBLE, THE RATIO OF THEIR PERCENTAGE INTERESTS, AFTER TAKING INTO ACCOUNT ANY
ADJUSTMENT TO SUCH PERCENTAGE INTERESTS PURSUANT TO SECTION 9.1.4.

 

10.4.                     OTHER ALLOCATION RULES.

 

10.4.1              CALCULATION OF PROFITS AND LOSSES. EXCEPT AS OTHERWISE SET
FORTH IN THIS AGREEMENT, PROFITS AND LOSSES OF THE OPERATING COMPANY SHALL BE
DETERMINED FOR EACH FISCAL YEAR IN ACCORDANCE WITH THE METHOD OF ACCOUNTING
FOLLOWED BY THE OPERATING COMPANY FOR FEDERAL INCOME TAX PURPOSES AND OTHERWISE
IN ACCORDANCE WITH GAAP, AS MODIFIED BY SECTION 1.704-1(B)(2)(IV) OF THE
REGULATIONS. EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT, WHENEVER A
PROPORTIONATE PART OF THE OPERATING COMPANY PROFIT OR LOSS IS ALLOCATED TO A
MEMBER, EVERY ITEM OF INCOME, GAIN, LOSS OR DEDUCTION ENTERING INTO THE
COMPUTATION OF SUCH PROFIT AND LOSS SHALL BE CONSIDERED ALLOCATED AND EVERY ITEM
OF CREDIT OR TAX PREFERENCE APPLICABLE TO THE PERIOD DURING WHICH SUCH PROFIT OR
LOSS WAS REALIZED SHALL BE CONSIDERED ALLOCATED TO SUCH MEMBER IN THE SAME
PROPORTION. ALL ALLOCATIONS OF SUCH ITEMS FOR FEDERAL INCOME TAX PURPOSES SHALL
BE IDENTICAL TO THE ALLOCATIONS SET FORTH IN THIS ARTICLE 10, EXCEPT AS
OTHERWISE REQUIRED BY SECTION 704(C) OF THE CODE AND SECTION 1.704-1(B)(4) OF
THE REGULATIONS.

 

10.4.2              SUBSTANTIAL ECONOMIC EFFECT. THE MEMBERS INTEND THAT THE
ALLOCATIONS OF PROFITS AND LOSSES UNDER THIS AGREEMENT SHALL HAVE SUBSTANTIAL
ECONOMIC EFFECT (OR BE CONSISTENT WITH THE MEMBERS’ INTERESTS IN THE OPERATING
COMPANY IN THE CASE OF ALLOCATION OF LOSSES ATTRIBUTABLE TO NONRECOURSE DEBT)
WITHIN THE MEANING OF SECTION 704(B) OF THE CODE AS INTERPRETED BY THE
REGULATIONS PROMULGATED PURSUANT THERETO. ACCORDINGLY, THE PROVISIONS OF
ARTICLE 10 HEREOF AND THE OTHER RELEVANT PROVISIONS OF THIS AGREEMENT SHALL BE
INTERPRETED IN A MANNER CONSISTENT WITH SUCH INTENT. IT IS THE MEMBERS’
INTENTION THAT THE OPERATING COMPANY COMPLY WITH THE PROVISIONS OF SECTION
1.704-1(B) OF THE REGULATIONS. HOWEVER, SHOULD SUCH SECTION BE MODIFIED IN A
MANNER THAT, IN THE EVENT THE OPERATING COMPANY WERE TO COMPLY WITH

 

29

--------------------------------------------------------------------------------

 

SUCH SECTION AS MODIFIED, THE ECONOMIC INTENTIONS OF THE MEMBERS WOULD BE
DISTORTED, THE ECONOMIC INTENTIONS OF THE MEMBERS SHALL GOVERN.

 

10.4.3              CLOSING OF THE BOOKS METHOD. IF A MEMBER TRANSFERS ITS
INTEREST IN THE OPERATING COMPANY, THE DISTRIBUTIVE SHARES OF THE VARIOUS ITEMS
ALLOCABLE AMONG THE MEMBERS DURING SUCH FISCAL YEAR OF THE OPERATING COMPANY
SHALL BE ALLOCATED BETWEEN THE TRANSFEROR AND THE TRANSFEREE BASED ON THE
CLOSING-OF-THE-BOOKS METHOD, WHICH WILL RESULT IN THE ALLOCATION OF ITEMS
BETWEEN THE TRANSFEROR AND THE TRANSFEREE BASED ON THE RESPECTIVE PORTIONS OF
SUCH FISCAL YEAR IN WHICH EACH WAS A MEMBER. HOWEVER, IF BOTH THE TRANSFEROR AND
THE TRANSFEREE CONSENT, THE DISTRIBUTIVE SHARES OF THE VARIOUS ITEMS ALLOCABLE
AMONG THE MEMBERS MAY BE ALLOCATED BETWEEN THE TRANSFEROR AND THE TRANSFEREE ON
THE BASIS OF THE NUMBER OF DAYS IN SUCH FISCAL YEAR PRECEDING AND FOLLOWING THE
EFFECTIVE DATE OF THE TRANSFER. MOREOVER, THE DISTRIBUTIVE SHARE OF THE VARIOUS
ITEMS ALLOCABLE AMONG THE MEMBERS AS A RESULT OF (I) THE EXERCISE OF AN
OPERATING COMPANY OPTION IN CONNECTION WITH THE EXERCISE OF A CLASS A OPTION OR
WARRANT TO PURCHASE CLASS A COMMON STOCK OR (II) THE MANAGEMENT COMPANY ISSUING
ANY ADDITIONAL CLASS A COMMON STOCK TO THIRD PARTIES, SHALL BE ALLOCATED BETWEEN
THE TRANSFEROR AND TRANSFEREE ON THE BASIS OF THE NUMBER OF DAYS IN SUCH FISCAL
YEAR PRECEDING AND FOLLOWING THE EFFECTIVE DATE OF THE TRANSFER.

 

10.4.4              BUILT-IN GAIN OR LOSS. IN ACCORDANCE WITH SECTION 704(C) OF
THE CODE AND THE REGULATIONS THEREUNDER, INCOME, GAIN, LOSS, AND DEDUCTION WITH
RESPECT TO ANY PROPERTY CONTRIBUTED TO THE OPERATING COMPANY SHALL, SOLELY FOR
FEDERAL INCOME TAX PURPOSES, BE ALLOCATED AMONG THE MEMBERS SO AS TO TAKE
ACCOUNT OF ANY VARIATION BETWEEN THE TAX BASES OF SUCH PROPERTY AND SUCH
PROPERTY’S FAIR MARKET VALUE AS OF THE TIME OF CONTRIBUTION TO THE OPERATING
COMPANY. UNLESS OTHERWISE DETERMINED BY THE MANAGEMENT COMPANY, SUCH ALLOCATIONS
SHALL BE MADE PURSUANT TO THE “TRADITIONAL METHOD,” AS SET FORTH IN SECTION
1.704-3(F) OF THE REGULATIONS WITHOUT CURATIVE OR REMEDIAL ALLOCATIONS.

 

10.4.5              INCOME TAX EFFECTS. THE MEMBERS ARE AWARE OF THE INCOME TAX
CONSEQUENCES OF THE ALLOCATIONS MADE IN THIS ARTICLE 10 AND HEREBY AGREE TO BE
BOUND BY THE PROVISIONS OF THIS ARTICLE 10 IN REPORTING THEIR SHARES OF
OPERATING COMPANY INCOME AND LOSS FOR INCOME TAX PURPOSES, EXCEPT TO THE EXTENT
OTHERWISE REQUIRED BY LAW.

 

ARTICLE 11
DISTRIBUTIONS

 

11.1.                     DISTRIBUTIONS. EXCEPT AS OTHERWISE PROVIDED IN
SECTIONS 11.2, 11.4, 11.5 AND 11.6 BELOW, ALL DISTRIBUTIONS TO MEMBERS WITH
RESPECT TO EACH FISCAL YEAR SHALL BE MADE, AT SUCH TIME AND IN SUCH AMOUNTS, IF
ANY, AS THE MANAGEMENT COMPANY SHALL DETERMINE, AS FOLLOWS:

 

11.1.1              PREFERRED MEMBERS. FIRST, DISTRIBUTIONS FOR ANY FISCAL YEAR
SHALL BE MADE TO THE PREFERRED MEMBERS IN ACCORDANCE WITH THEIR PERCENTAGE
INTERESTS UNTIL THE BALANCES OF THE CAPITAL ACCOUNTS OF THE COMMON MEMBERS, WHEN
DIVIDED BY TOTAL CAPITAL ACCOUNTS, EQUAL THEIR RESPECTIVE PERCENTAGE INTERESTS.

 

30

--------------------------------------------------------------------------------

 

11.1.2              POSITIVE CAPITAL ACCOUNTS. SECOND, DISTRIBUTIONS FOR ANY
FISCAL YEAR SHALL BE MADE TO THE MEMBERS IN ACCORDANCE WITH THE MEMBERS’
RESPECTIVE POSITIVE CAPITAL ACCOUNT BALANCES UNTIL SUCH CAPITAL ACCOUNTS ARE
EQUAL TO ZERO.

 

11.1.3              PERCENTAGE INTERESTS. THIRD, DISTRIBUTIONS FOR ANY FISCAL
YEAR SHALL BE MADE AMONG THE MEMBERS IN ACCORDANCE WITH THEIR RESPECTIVE
PERCENTAGE INTERESTS.

 

11.2.                     DISTRIBUTION OF THE PROCEEDS UPON DISSOLUTION. UPON A
DISSOLUTION OF THE OPERATING COMPANY, EXCEPT AS OTHERWISE PROVIDED IN SECTION
11.4 BELOW, THE NET PROCEEDS OF DISSOLUTION SHALL BE APPLIED AND DISTRIBUTED IN
THE ORDER OF PRIORITY SET FORTH BELOW.

 

11.2.1              OPERATING COMPANY OBLIGATIONS. FIRST, TOWARDS THE
SATISFACTION OF ALL OUTSTANDING DEBTS AND OTHER OBLIGATIONS OF THE OPERATING
COMPANY, INCLUDING EXPENSES OF DISSOLUTION AND THE ESTABLISHMENT OF ANY RESERVES
DEEMED NECESSARY BY THE MANAGEMENT COMPANY FOR ANY CONTINGENT OR UNFORESEEN
LIABILITIES OR OBLIGATIONS OF THE OPERATING COMPANY.

 

11.2.2              MEMBER LOANS. SECOND, TOWARDS REPAYMENT OF OUTSTANDING
LOANS, IF ANY, MADE BY MEMBERS TO THE OPERATING COMPANY, PROVIDED, HOWEVER, ANY
AMOUNTS OWED TO EARTHLINK OR SKT HOLDINGS IN CONNECTION WITH THE NOTE PURCHASE
AND SECURITY AGREEMENT AND GUARANTY, DATED JULY 23, 2007, BETWEEN THE OPERATING
COMPANY, THE MANAGEMENT COMPANY, EARTHLINK AND SKT HOLDINGS WILL BE PARI PASU
WITH OBLIGATIONS SET FORTH IN SECTION 11.2.1.

 

11.2.3              CAPITAL ACCOUNTS. THIRD, PROCEEDS WILL BE DISTRIBUTED TO THE
MEMBERS IN ACCORDANCE WITH THE POSITIVE BALANCES OF THEIR CAPITAL ACCOUNTS UNTIL
SUCH CAPITAL ACCOUNT BALANCES ARE EQUAL TO ZERO.

 

11.2.4              PERCENTAGE INTERESTS. FOURTH, TO THE MEMBERS IN ACCORDANCE
WITH THEIR RESPECTIVE PERCENTAGE INTERESTS.

 

11.3.                     NO WITHDRAWAL. NO MEMBER MAY WITHDRAW ANY AMOUNT FROM
ITS CAPITAL ACCOUNT EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT.

 

11.4.                     MANDATORY TAX DISTRIBUTION. THE OPERATING COMPANY
SHALL, TO THE EXTENT THAT SUFFICIENT FREE CASH FLOW IS AVAILABLE, DISTRIBUTE TO
EACH MEMBER ON A QUARTERLY BASIS THE PRODUCT OF (I) SUCH MEMBER’S SHARE OF THE
OPERATING COMPANY’S QUARTERLY PROFITS, AND (II) THE HIGHEST MARGINAL FEDERAL
INCOME TAX RATE PLUS FIVE PERCENT (5%). IN THE EVENT THE OPERATING COMPANY’S
FREE CASH FLOW IS INSUFFICIENT TO FUND SUCH DISTRIBUTIONS, THE OPERATING COMPANY
SHALL MAKE DISTRIBUTIONS OF THE FREE CASH FLOW IT HAS, IN PROPORTION TO AMOUNTS
THAT WOULD OTHERWISE BE PAYABLE. NOTWITHSTANDING THE FOREGOING, ANY DISTRIBUTION
TO A COMMON MEMBER PURSUANT TO THIS SECTION 11.4 SHALL BE TREATED AS A
NON-INTEREST BEARING ADVANCE OF ANY DISTRIBUTION TO WHICH SUCH COMMON MEMBER
MIGHT BE ENTITLED TO RECEIVE PURSUANT TO SECTIONS 11.1 OR 11.2 OF THIS
AGREEMENT, WHICH MUST BE REPAID TO THE EXTENT SUCH COMMON MEMBERS ARE NOT
SUBSEQUENTLY ENTITLED TO RECEIVE SUCH DISTRIBUTIONS UNDER SECTIONS 11.1 OR 11.2
OF THIS AGREEMENT. ANY DISTRIBUTIONS TO WHICH COMMON MEMBERS BECOME ENTITLED TO
RECEIVE PURSUANT TO SECTIONS 11.1 OR 11.2 ABOVE SHALL BE WITHHELD TO REPAY ANY
OF THE ADVANCES MADE PURSUANT TO THIS SECTION 11.4.

 

11.5.                     SPECIAL DISTRIBUTION TO MANAGEMENT COMPANY. WHENEVER
ANY DISTRIBUTIONS ARE TO BE MADE TO THE MEMBERS WITH RESPECT TO A FISCAL YEAR
PURSUANT TO SECTION 11.1 ABOVE (BUT

 

31

--------------------------------------------------------------------------------

 

NOT SECTIONS 11.2 OR 11.4), THE OPERATING COMPANY SHALL DISTRIBUTE TO THE
MANAGEMENT COMPANY, FOR (I) EACH HOLDER (WHO IS NOT THEN AN EMPLOYEE OF THE
OPERATING COMPANY) OF UNEXERCISED CLASS A OPTIONS WHICH ARE VESTED AT THAT TIME
AND/OR (II) EACH HOLDER OF CLASS A COMMON STOCK WHO IS NOT THEN AN EMPLOYEE OF
THE OPERATING COMPANY OR A MEMBER, AN AGGREGATE AMOUNT OF CASH THAT EQUALS THE
“EQUIVALENT AMOUNT” WITH RESPECT TO EACH SUCH HOLDER. SUCH DISTRIBUTION SHALL
(I) BE A SPECIAL DISTRIBUTION TO THE MANAGEMENT COMPANY, (II) BE MADE REGARDLESS
OF WHETHER THE MANAGEMENT COMPANY OTHERWISE IS ENTITLED TO ANY SUCH DISTRIBUTION
PURSUANT TO SECTION 11.1 AND IN ADDITION TO ANY SUCH DISTRIBUTION THAT THE
MANAGEMENT COMPANY IS ENTITLED TO RECEIVE (DETERMINED AFTER TAKING INTO ACCOUNT
THE REDUCTION IN THE MANAGEMENT COMPANY’S CAPITAL ACCOUNT RESULTING FROM THE
SPECIAL DISTRIBUTION DESCRIBED IN THIS SECTION 11.5), (III) REDUCE THE THEN
AGGREGATE DISTRIBUTION THAT OTHERWISE WOULD BE MADE ABSENT THIS SECTION 11.5 AND
(IV) THEN BE PAID BY THE MANAGEMENT COMPANY WITH EACH HOLDER (WHO IS NOT THEN AN
EMPLOYEE OF THE OPERATING COMPANY) OF UNEXERCISED CLASS A OPTIONS WHICH ARE
VESTED AT THAT TIME AND/OR EACH HOLDER OF CLASS A COMMON STOCK WHO IS NOT THEN
AN EMPLOYEE OF THE OPERATING COMPANY OR A MEMBER ENTITLED TO RECEIVE SUCH
HOLDER’S RESPECTIVE “EQUIVALENT AMOUNT.”  NO DISTRIBUTION UNDER THIS SECTION
11.5 SHALL BE MADE TO THE MANAGEMENT COMPANY WITH RESPECT TO ANY SUCH CLASS A
OPTIONS THAT ARE NOT VESTED AT THE TIME OF DISTRIBUTION. NO DISTRIBUTIONS SHALL
BE MADE HEREUNDER AFTER ALL OF THE MEMBERSHIP UNITS (OTHER THAN THOSE HELD BY
THE MANAGEMENT COMPANY) ARE EXCHANGED FOR SHARES OF CLASS A COMMON STOCK
PURSUANT TO THE TERMS OF ARTICLE 15 OR AFTER A PUBLIC OFFERING. ALL
DISTRIBUTIONS TO BE MADE HEREUNDER SHALL BE MADE CONTEMPORANEOUSLY WITH THE
DISTRIBUTION TO THE MEMBERS PURSUANT TO SECTION 11.1, EXCEPT THAT, IN THE EVENT
ANY PORTION OF THIS SPECIAL DISTRIBUTION WOULD RESULT IN INCOME TO THE
MANAGEMENT COMPANY, SUCH AS WHERE THE MANAGEMENT COMPANY DOES NOT HAVE
SUFFICIENT TAX BASIS IN ITS MEMBERSHIP UNITS TO OFFSET THE DISTRIBUTION OR
SUFFICIENT LOSSES, INCLUDING NET OPERATING LOSS CARRYBACKS AND CARRYOVERS, TO
OFFSET THE RESULTING INCOME, SUCH PORTION OF THE DISTRIBUTION SHALL NOT BE MADE
TO THE MANAGEMENT COMPANY (NOR SHALL ANY SUCH RELATED AMOUNTS BE PAID BY THE
MANAGEMENT COMPANY TO ANY HOLDER (WHO IS NOT THEN AN EMPLOYEE OF THE OPERATING
COMPANY) OF UNEXERCISED CLASS A OPTIONS AND/OR ANY HOLDER OF CLASS A COMMON
STOCK WHO IS NOT THEN AN EMPLOYEE OF THE OPERATING COMPANY OR A MEMBER). SUCH
EXCESS PORTION INSTEAD SHALL BE AN ADDITIONAL COMPENSATORY PAYMENT TO BE MADE
UNDER SECTION 15.4 TO EACH HOLDER ENTITLED TO RECEIVE AN AMOUNT THEREUNDER. IN
THAT CASE, EACH SUCH HOLDER THEN ENTITLED TO RECEIVE AN AMOUNT UNDER SECTION
15.4 SHALL BE ENTITLED TO RECEIVE A PERCENTAGE OF THE ABOVE EXCESS PORTION EQUAL
TO (I) THE AGGREGATE EXCESS PORTION MULTIPLIED BY (II) A PERCENTAGE, THE
NUMERATOR OF WHICH IS THE AMOUNT THE HOLDER IS THEN ENTITLED TO RECEIVE UNDER
SECTION 15.4 AND THE DENOMINATOR OF WHICH IS THE AGGREGATE AMOUNTS THAT ALL
HOLDERS ARE THEN ENTITLED TO RECEIVE UNDER SECTION 15.4. ALL ADDITIONAL
COMPENSATORY PAYMENTS TO BE MADE HEREUNDER SHALL BE PAID, LESS APPLICABLE TAX
WITHHOLDINGS, CONTEMPORANEOUSLY WITH THE DISTRIBUTION TO THE MEMBERS PURSUANT TO
SECTION 11.1. FOR PURPOSES OF DETERMINING THE EXCESS PORTION OF THE SPECIAL
DISTRIBUTION TO BE PAID AS COMPENSATION UNDER SECTION 15.4, ANY LOSSES THAT
WOULD BE ALLOCATED TO THE MANAGEMENT COMPANY RESULTING FROM THE COMPENSATION TO
BE PAID UNDER THIS SECTION 11.5 SHALL NOT BE COUNTED.

 

11.6.                     LIMITATIONS ON DISTRIBUTIONS. NO DISTRIBUTION SHALL BE
MADE IF PROHIBITED BY SECTION 18-607 OF THE ACT.

 

32

--------------------------------------------------------------------------------

 

ARTICLE 12
ANCILLARY AGREEMENTS; OPERATING BUDGETS; FINANCIAL REPORTS

 

12.1.                     ANCILLARY AGREEMENTS. THE ANCILLARY AGREEMENTS WERE
ENTERED INTO BY THE MEMBERS, AS APPLICABLE, IN CONSIDERATION OF THE TRANSACTIONS
CONTEMPLATED HEREIN, IN THE CONTRIBUTION AND FORMATION AGREEMENT, AND THE SKT
CONTRIBUTION AGREEMENT. THE ANCILLARY AGREEMENTS SHALL BE APPLICABLE TO
TRANSFEREES OF THE INITIAL MEMBERS TO THE EXTENT SPECIFICALLY PROVIDED THEREIN.

 

12.2.                     OPERATING BUDGETS. NOT LATER THAN OCTOBER 1ST OF EACH
YEAR, THE CEO OF THE OPERATING COMPANY SHALL SUBMIT TO THE MANAGEMENT COMPANY
THE BUSINESS PLAN.

 

12.3.                     FINANCIAL REPORTS.

 

12.3.1              ANNUAL STATEMENTS. AS SOON AS PRACTICABLE FOLLOWING THE END
OF EACH FISCAL YEAR, BUT IN NO EVENT MORE THAN THIRTY (30) DAYS BEYOND THE END
OF THE OPERATING COMPANY’S FISCAL YEAR, THE OPERATING COMPANY SHALL CAUSE TO BE
PREPARED AND DELIVERED TO EACH CLASS B MEMBER THE AUDITED STATEMENT OF INCOME
AND STATEMENT OF CASH FLOWS FOR SUCH FISCAL YEAR, AUDITED BALANCE SHEET AS OF
THE END OF SUCH FISCAL YEAR, AND ACCOMPANYING NOTES TO FINANCIAL STATEMENTS FOR
THE OPERATING COMPANY, ON A CONSOLIDATED BASIS, PREPARED IN ACCORDANCE WITH GAAP
AND THE OPERATING COMPANY ACCOUNTING PRACTICES.

 

12.3.2              QUARTERLY STATEMENTS. AS SOON AS PRACTICABLE FOLLOWING THE
END OF EACH FISCAL QUARTER, BUT IN ANY EVENT WITHIN SEVEN (7) DAYS AFTER THE END
OF SUCH QUARTER, THE OPERATING COMPANY SHALL CAUSE TO BE PREPARED AND DELIVERED
TO EACH CLASS B MEMBER AN UNAUDITED STATEMENT OF INCOME (INCLUDING TAXABLE
INCOME) AND STATEMENT OF CASH FLOWS FOR SUCH QUARTER AND AN UNAUDITED BALANCE
SHEET AS OF THE END OF SUCH QUARTER ON A CONSOLIDATED BASIS, PREPARED IN
ACCORDANCE WITH GAAP AND THE OPERATING COMPANY ACCOUNTING AND TAX PRACTICES.

 

12.3.3              MONTHLY STATEMENTS. EACH MONTH, THE OPERATING COMPANY SHALL
PROVIDE THE CLASS B MEMBERS PRELIMINARY NET INCOME (LOSS) FOR THE JUST COMPLETED
MONTH BY THE END OF THE THIRD (3RD) BUSINESS DAY FOLLOWING THE END OF SUCH
MONTH. IN ADDITION, AS SOON AS POSSIBLE FOLLOWING THE END OF EACH CALENDAR MONTH
IN EACH FISCAL YEAR, BUT IN ANY EVENT WITHIN SEVEN (7) DAYS AFTER THE END OF
SUCH MONTH, THE OPERATING COMPANY SHALL CAUSE TO BE PREPARED AND DELIVERED TO
THE CLASS B  MEMBER AN UNAUDITED STATEMENT OF INCOME (INCLUDING TAXABLE INCOME)
AND STATEMENT OF CASH FLOWS FOR SUCH MONTH AND AN UNAUDITED BALANCE SHEET AS OF
THE END OF SUCH MONTH ON A CONSOLIDATED BASIS, PREPARED IN ACCORDANCE WITH GAAP
AND THE OPERATING COMPANY ACCOUNTING AND TAX PRACTICES. THE OPERATING COMPANY
SHALL PROVIDE THE CLASS B MEMBERS WITH A MONTHLY REPORT OF SIGNIFICANT OPERATING
AND FINANCIAL STATISTICS INCLUDING NUMBER OF SUBSCRIBERS, SUBSCRIBER CHURN
STATISTICS, MINUTES OF USE, AVERAGE REVENUES PER SUBSCRIBER, ACQUISITION COSTS
AND CAPITAL EXPENDITURE EFFICIENCY STATISTICS AND SUCH ADDITIONAL STATISTICS AND
INFORMATION AS MAY BE APPROVED FROM TIME TO TIME BY THE MANAGEMENT COMPANY FOR
INTERNAL USE BY THE OPERATING COMPANY.

 

12.3.4              ADDITIONAL INFORMATION. THE OPERATING COMPANY SHALL, UPON
REASONABLE NOTICE, GIVE EACH OF THE CLASS B MEMBERS, FOR SO LONG AS IT
BENEFICIALLY OWNS MEMBERSHIP UNITS, DURING REGULAR BUSINESS HOURS, REASONABLE
ACCESS TO THE PROPERTIES, DOCUMENTS

 

33

--------------------------------------------------------------------------------

 

AND RECORDS, FINANCIAL AND OTHERWISE, OF THE OPERATING COMPANY, AND SHALL
PROVIDE COPIES OR EXTRACTS OF THE OPERATING COMPANY’S DOCUMENTS AND RECORDS AS
THE CLASS B MEMBERS MAY REASONABLY REQUEST.

 

12.4.                     BOOKS AND RECORDS. THE MANAGEMENT COMPANY SHALL
PREPARE AND FILE, OR CAUSE TO BE PREPARED AND FILED, ALL APPLICABLE FEDERAL,
STATE AND LOCAL TAX RETURNS. SUCH BOOKS OF ACCOUNT AND TAX RETURNS, TOGETHER
WITH A COPY OF THIS AGREEMENT, SHALL AT ALL TIMES BE MAINTAINED AT THE PRINCIPAL
PLACE OF BUSINESS OF THE OPERATING COMPANY AND SHALL BE OPEN TO INSPECTION AND
EXAMINATION AT REASONABLE TIMES BY EACH MEMBER AND ITS DULY AUTHORIZED
REPRESENTATIVE FOR ANY PURPOSE REASONABLY RELATED TO SUCH MEMBER’S INTEREST IN
THE OPERATING COMPANY. THE OPERATING COMPANY SHALL (A) RETAIN SUCH BOOKS OF
ACCOUNT AND TAX RETURNS UNTIL THE EXPIRATION OF THE APPLICABLE STATUTE OF
LIMITATIONS OF THE OPERATING COMPANY AND EACH MEMBER (AND, TO THE EXTENT A
MEMBER NOTIFIES THE OPERATING COMPANY, ANY EXTENSIONS THEREOF), AND (B) GIVE
EACH MEMBER REASONABLE WRITTEN NOTICE PRIOR TO TRANSFERRING, DESTROYING OR
DISCARDING ANY SUCH BOOKS OF ACCOUNT OR TAX RETURNS AND, IF THE MEMBER SO
REQUESTS, ALLOW SUCH MEMBER TO TAKE POSSESSION OF SUCH BOOKS OF ACCOUNT OR TAX
RETURNS.

 

ARTICLE 13
TERMINATION OF THE OPERATING COMPANY; LIQUIDATION
AND DISTRIBUTION OF ASSETS

 

13.1.                     NO DISSOLUTION. THE OPERATING COMPANY SHALL NOT BE
DISSOLVED BY THE ADMISSION OF ADDITIONAL MEMBERS OR NEW MEMBERS IN ACCORDANCE
WITH THE TERMS OF THIS AGREEMENT.

 

13.2.                     EVENTS CAUSING DISSOLUTION. THE OPERATING COMPANY
SHALL BE DISSOLVED AND ITS AFFAIRS SHALL BE WOUND UP UPON THE FIRST TO OCCUR OF
THE EVENTS SET FORTH IN THIS SECTION 13.2:

 

13.2.1              WRITTEN CONSENT. THE WRITTEN CONSENT OF ALL CLASS B MEMBERS
OR, IF THERE ARE NO CLASS B MEMBERS, A MAJORITY OF ALL MEMBERS.

 

13.2.2              UNLAWFUL TO CONTINUE. THE OCCURRENCE OF ANY EVENT WHICH
MAKES IT UNLAWFUL FOR THE OPERATING COMPANY TO BE CONTINUED.

 

13.2.3              ORDER OF DISSOLUTION. THE ISSUANCE OF A DECREE BY ANY COURT
OF COMPETENT JURISDICTION THAT THE OPERATING COMPANY BE DISSOLVED AND
LIQUIDATED.

 

13.3.                     SURVIVAL. IN THE EVENT OF A DISSOLUTION, THIS
AGREEMENT AND THE PROVISIONS SET FORTH HEREIN SHALL TERMINATE, EXCEPT ARTICLES
1, 13, 17 AND 18 AND SECTION 16.8, WHICH SHALL SURVIVE FOR THE APPLICABLE
PERIODS SET FORTH THEREIN OR, IF NONE STATED, INDEFINITELY.

 

13.4.                     WINDING UP. IN THE EVENT OF THE DISSOLUTION OF THE
OPERATING COMPANY FOR ANY REASON, THE MANAGEMENT COMPANY SHALL PROCEED PROMPTLY
TO WIND UP THE AFFAIRS AND LIQUIDATE THE ASSETS OF THE OPERATING COMPANY. EXCEPT
AS OTHERWISE PROVIDED IN THIS AGREEMENT, THE MEMBERS SHALL CONTINUE TO SHARE
DISTRIBUTIONS AND ALLOCATIONS DURING THE PERIOD OF LIQUIDATION IN THE SAME
MANNER AS BEFORE DISSOLUTION. THE MANAGEMENT COMPANY SHALL HAVE COMPLETE
DISCRETION TO DETERMINE THE TIME, MANNER AND TERMS OF ANY SALE OF THE OPERATING
COMPANY PROPERTY PURSUANT TO SUCH LIQUIDATION.

 

34

--------------------------------------------------------------------------------

 

13.5.       FILING OF CERTIFICATE OF CANCELLATION. UPON THE COMPLETION OF THE
WINDING UP OF THE OPERATING COMPANY, THE MANAGEMENT COMPANY SHALL FILE A
CERTIFICATE OF CANCELLATION WITH THE SECRETARY OF STATE OF THE STATE OF DELAWARE
AS PROVIDED IN SECTION 18-203 OF THE ACT.

 

13.6.       MATERIAL BREACH. A MATERIAL BREACH SHALL NOT AUTOMATICALLY RESULT IN
THE TERMINATION OF THIS AGREEMENT. HOWEVER, UPON THE OCCURRENCE OF A MATERIAL
BREACH, THE NON-BREACHING PARTY MAY, IN ADDITION TO ITS RIGHTS UNDER SECTION 4.6
OF THIS AGREEMENT, MAKE A CLAIM AGAINST THE BREACHING PARTY IN ITS OWN NAME AND
IN THE NAME OF THE OPERATING COMPANY FOR DAMAGES CAUSED BY THE MATERIAL BREACH
IN ACCORDANCE WITH ARTICLE 17.

 

13.7.       CLAIMS OF THE MEMBERS. THE MEMBERS AND FORMER MEMBERS SHALL LOOK
SOLELY TO THE OPERATING COMPANY’S ASSETS FOR THE RETURN OF THEIR CAPITAL
CONTRIBUTIONS, AND IF THE ASSETS OF THE OPERATING COMPANY REMAINING AFTER
PAYMENT OF OR DUE PROVISION FOR ALL DEBTS, LIABILITIES AND OBLIGATIONS OF THE
OPERATING COMPANY ARE INSUFFICIENT TO RETURN SUCH CAPITAL CONTRIBUTIONS, THE
MEMBERS AND FORMER MEMBERS SHALL HAVE NO RECOURSE AGAINST THE OPERATING COMPANY,
THE MANAGEMENT COMPANY OR ANY OTHER MEMBER.

 

ARTICLE 14
WITHDRAWAL OF A MEMBER

 

14.1.       WITHDRAWAL OF A MEMBER. A MEMBER SHALL CEASE TO BE A MEMBER IF IT NO
LONGER BENEFICIALLY OWNS ANY MEMBERSHIP UNITS (A “WITHDRAWAL EVENT”).
IMMEDIATELY AFTER A WITHDRAWAL EVENT, THE WITHDRAWN MEMBER AND ITS AFFILIATES
SHALL HAVE NO CONTINUING RIGHTS OR OBLIGATIONS UNDER THIS AGREEMENT BUT WILL
REMAIN SUBJECT TO THE TERMS OF ANCILLARY AGREEMENTS TO THE EXTENT PROVIDED BY,
AND IN ACCORDANCE WITH, THE EXPRESS TERMS THEREOF. SUBJECT TO COMPLIANCE WITH
ARTICLE 4 HEREOF, A MEMBER MAY VOLUNTARILY CAUSE A WITHDRAWAL EVENT AND SUCH
ACTION SHALL NOT BE A BREACH OF THIS AGREEMENT.

 

14.2.       EFFECT OF WITHDRAWAL. THIS AGREEMENT SHALL CONTINUE NOTWITHSTANDING
ANY WITHDRAWAL BY A MEMBER AND ALL GOVERNANCE RIGHTS SET FORTH HEREIN WITH
RESPECT TO SUCH MEMBER SHALL BE EXERCISED BY THE REMAINING MEMBER. NO WITHDRAWAL
SHALL RELIEVE A MEMBER OF LIABILITY FOR ANY PRIOR BREACH OF THIS AGREEMENT.

 

ARTICLE 15
EXCHANGE

 

15.1.       EXCHANGE OF MEMBERSHIP UNITS. EXCLUDING THE MANAGEMENT COMPANY, A
HOLDER OF MEMBERSHIP UNITS MAY, AT ITS OPTION, EXCHANGE, AT ANY TIME AND FROM
TIME TO TIME, ANY OR ALL OF ITS MEMBERSHIP UNITS FOR VALIDLY ISSUED, FULLY PAID
AND NON-ASSESSABLE SHARES OF CLASS A COMMON STOCK PURSUANT TO THE TERMS OF THIS
ARTICLE 15 AND THE MANAGEMENT COMPANY CERTIFICATE. THE NUMBER OF SHARES OF
CLASS A COMMON STOCK OBTAINED FROM THE EXCHANGE OF THE MEMBERSHIP UNITS SHALL BE
DETERMINED BY MULTIPLYING THE NUMBER OF MEMBERSHIP UNITS TO BE EXCHANGED BY THE
MEMBERSHIP UNIT EXCHANGE RATE THEN IN EFFECT. SUCH RIGHT SHALL BE EXERCISED BY
THE HOLDER OF THE MEMBERSHIP UNITS TO BE EXCHANGED BY SURRENDERING THE
CERTIFICATE(S) REPRESENTING THE MEMBERSHIP UNITS TO BE EXCHANGED TO THE
MANAGEMENT COMPANY, DURING NORMAL BUSINESS HOURS AT THE PRINCIPAL OFFICES OF THE
MANAGEMENT COMPANY, ACCOMPANIED BY A WRITTEN NOTICE FROM THE HOLDER STATING THAT
THE MEMBERSHIP UNITS ARE BEING PRESENTED FOR

 

 

35

--------------------------------------------------------------------------------

 

EXCHANGE. UPON EXERCISE OF SUCH EXCHANGE RIGHT, THE MANAGEMENT COMPANY SHALL
ISSUE THE APPROPRIATE NUMBER OF SHARES OF CLASS A COMMON STOCK TO THE HOLDER OF
THE MEMBERSHIP UNITS BEING EXCHANGED AND, SHALL BE NAMED AS THE RECORD HOLDER OF
THE MEMBERSHIP UNITS EXCHANGED ON THE BOOKS OF THE OPERATING COMPANY.
NOTWITHSTANDING THE FOREGOING, IF PREFERRED MEMBERSHIP UNITS ARE EXCHANGED FOR
SHARES OF CLASS A COMMON STOCK, THE PREFERRED MEMBERSHIP UNITS BEING EXCHANGED
SHALL AUTOMATICALLY CONVERT INTO AN EQUAL NUMBER OF COMMON MEMBERSHIP UNITS
IMMEDIATELY PRIOR TO THE EXCHANGE. AS A RESULT, THE MANAGEMENT COMPANY SHALL BE
NAMED AS THE RECORD HOLDER OF THE COMMON MEMBERSHIP UNITS RESULTING FROM THE
CONVERSION OF THE PREFERRED MEMBERSHIP UNITS ON THE BOOKS OF THE OPERATING
COMPANY. THE “MEMBERSHIP UNIT EXCHANGE RATE” SHALL BE INITIALLY SET AT ONE (1).
IN THE EVENT THERE IS ANY STOCK SPLIT, DISTRIBUTION, DIVIDEND, COMBINATION (AS
SET FORTH IN ARTICLES 5.13 AND 5.14 OF THE MANAGEMENT COMPANY CERTIFICATE) OR
SIMILAR TRANSACTION RELATED TO THE CLASS A COMMON STOCK IN WHICH THERE IS NOT AN
IDENTICAL COMBINATION OR SPLIT OR SIMILAR TRANSACTION RELATED TO THE MEMBERSHIP
UNITS, THE MEMBERSHIP UNIT EXCHANGE RATE IN EFFECT IMMEDIATELY AFTER SUCH EVENT
SHALL BE EQUAL TO THE MEMBERSHIP UNIT EXCHANGE RATE IN EFFECT IMMEDIATELY BEFORE
SUCH EVENT MULTIPLIED BY (A) THE NUMBER OF SHARES OF CLASS A COMMON STOCK
OUTSTANDING IMMEDIATELY AFTER SUCH EVENT, AND DIVIDED BY (B) THE NUMBER OF
SHARES OF CLASS A COMMON STOCK OUTSTANDING IMMEDIATELY BEFORE SUCH EVENT. IN THE
EVENT THERE IS ANY SPLIT, COMBINATION OR OTHER SIMILAR TRANSACTION RELATED TO
THE MEMBERSHIP UNITS IN WHICH THERE IS NOT AN IDENTICAL STOCK SPLIT,
DISTRIBUTION, DIVIDEND, COMBINATION OR SIMILAR TRANSACTION RELATED TO THE
CLASS A COMMON STOCK, THE MEMBERSHIP UNIT EXCHANGE RATE IN EFFECT IMMEDIATELY
AFTER SUCH EVENT SHALL BE EQUAL TO THE MEMBERSHIP UNIT EXCHANGE RATE IN EFFECT
BEFORE SUCH EVENT MULTIPLIED BY (A) THE NUMBER OF MEMBERSHIP UNITS OUTSTANDING
IMMEDIATELY BEFORE SUCH EVENT, AND DIVIDED BY (B) THE NUMBER OF MEMBERSHIP UNITS
OUTSTANDING IMMEDIATELY AFTER SUCH EVENT. THE MANAGEMENT COMPANY AGREES THAT
UPON ANY SUCH SURRENDER, THE MANAGEMENT COMPANY SHALL ISSUE THE APPROPRIATE
NUMBER OF SHARES OF CLASS A COMMON STOCK TO THE MEMBER. NO EXCHANGE OF
MEMBERSHIP UNITS SHALL BE EFFECTIVE UNTIL SUCH TIME AS THE APPROPRIATE NUMBER OF
FULLY PAID NON-ASSESSABLE SHARES OF CLASS A COMMON STOCK SHALL HAVE BEEN DULY
ISSUED IN EXCHANGE THEREFOR.

 

15.2.       PUBLIC OFFERING OF CLASS A COMMON STOCK. UPON COMPLETION OF A PUBLIC
OFFERING BY THE MANAGEMENT COMPANY AND CONTRIBUTION OF THE NET PROCEEDS FROM
SUCH PUBLIC OFFERING TO THE OPERATING COMPANY, THE OPERATING COMPANY SHALL ISSUE
TO THE MANAGEMENT COMPANY A NUMBER OF COMMON MEMBERSHIP UNITS DETERMINED BY
DIVIDING SUCH NET PROCEEDS BY THE THEN AVERAGE FAIR MARKET VALUE OF A PREFERRED
MEMBERSHIP UNIT, WHICH IS THE AMOUNT THAT WOULD BE RECEIVED FOR SUCH PREFERRED
MEMBERSHIP UNIT UPON A HYPOTHETICAL DISSOLUTION OF THE OPERATING COMPANY
IMMEDIATELY PRIOR TO THE CONTRIBUTION OF THE NET PROCEEDS FROM SUCH PUBLIC
OFFERING.

 

15.3.       ISSUANCE AND CONVERSION OF PREFERRED STOCK. UPON THE MANAGEMENT
COMPANY’S ISSUANCE OF SHARES OF PREFERRED STOCK THAT ARE CONVERTIBLE TO SHARES
OF CLASS A COMMON STOCK AND CONTRIBUTION OF THE NET PROCEEDS FROM SUCH ISSUANCE
TO THE OPERATING COMPANY, THE OPERATING COMPANY SHALL ISSUE TO THE MANAGEMENT
COMPANY A NUMBER OF COMMON MEMBERSHIP UNITS DETERMINED BY DIVIDING SUCH NET
PROCEEDS BY THE THEN AVERAGE FAIR MARKET VALUE OF A PREFERRED MEMBERSHIP UNIT
WHICH IS THE AMOUNT THAT WOULD BE RECEIVED FOR SUCH PREFERRED MEMBERSHIP UNIT
UPON A HYPOTHETICAL DISSOLUTION OF THE OPERATING COMPANY IMMEDIATELY PRIOR TO
THE CONTRIBUTION OF THE NET PROCEEDS FROM THE ISSUANCE OF SUCH SHARES OF
PREFERRED STOCK. THE HOLDER OF ANY SHARES OF CONVERTIBLE PREFERRED STOCK MAY
EXERCISE ITS RIGHT

 

36

--------------------------------------------------------------------------------

 

TO CONVERT THE SHARES TO SHARES OF CLASS A COMMON STOCK IN ACCORDANCE WITH THE
TERMS OF THE PREFERRED STOCK.

 

15.4.       EQUITY PLAN COMPENSATION. UPON THE MANAGEMENT COMPANY’S ISSUANCE OF
A CLASS A OPTION, THE MANAGEMENT COMPANY SHALL BE GRANTED A CORRESPONDING
OPERATING COMPANY OPTION. UPON THE MANAGEMENT COMPANY’S ISSUANCE OF SHARES OF
CLASS A COMMON STOCK IN CONNECTION WITH THE EXERCISE OF A CLASS A OPTION, THE
MANAGEMENT COMPANY SHALL BE DEEMED TO EXERCISE THE CORRESPONDING OPERATING
COMPANY OPTION AND THE MANAGEMENT COMPANY WILL CONTRIBUTE THE EXERCISE PRICE OF
THE CORRESPONDING CLASS A OPTION TO THE OPERATING COMPANY. THE MANAGEMENT
COMPANY SHALL BE ENTITLED TO RECEIVE ONE COMMON MEMBERSHIP UNIT UPON EXERCISE OF
AN OPERATING COMPANY OPTION IN EXCHANGE FOR THE REMITTED EXERCISE PRICE OF THE
CORRESPONDING CLASS A OPTION. IN THE EVENT THERE IS ANY STOCK SPLIT,
DISTRIBUTION, DIVIDEND, COMBINATION (AS SET FORTH IN ARTICLES 5.13 AND 5.14 OF
THE MANAGEMENT COMPANY CERTIFICATE) OR SIMILAR TRANSACTION RELATED TO THE CLASS
A COMMON STOCK IN WHICH THERE IS NOT AN IDENTICAL COMBINATION OR SPLIT OR
SIMILAR TRANSACTION RELATED TO THE MEMBERSHIP UNITS, THE NUMBER OF COMMON
MEMBERSHIP UNITS THAT THE MANAGEMENT COMPANY WILL BE ENTITLED TO RECEIVE IN
CONNECTION WITH THE EXERCISE OF A CLASS A OPTION SHALL BE ADJUSTED AS EQUITABLY
REQUIRED SO AS TO NOT ENLARGE OR DILUTE THE PURPOSES OF THIS PROVISION. WHENEVER
ANY DISTRIBUTIONS ARE TO BE MADE TO MEMBERS WITH RESPECT TO A FISCAL YEAR
PURSUANT TO SECTION 11.1 ABOVE (BUT NOT SECTIONS 11.2 OR 11.4), THE OPERATING
COMPANY SHALL MAKE A PAYMENT TO (I) EACH HOLDER (WHO IS THEN AN EMPLOYEE OF THE
OPERATING COMPANY) OF UNEXERCISED CLASS A OPTIONS WHICH ARE VESTED AT THAT TIME
AND/OR (II) EACH HOLDER OF CLASS A COMMON STOCK WHO IS THEN AN EMPLOYEE OF THE
OPERATING COMPANY AN AMOUNT OF CASH THAT EQUALS THE “EQUIVALENT AMOUNT” WITH
RESPECT TO EACH SUCH HOLDER, LESS ANY APPLICABLE TAX WITHHOLDINGS. THE
EQUIVALENT AMOUNT SHALL BE THAT AMOUNT WHICH EQUALS THE PRODUCT OF (I) THE
AGGREGATE DISTRIBUTION THAT THE MANAGEMENT COMPANY PROPOSES TO MAKE TO THE
MEMBERS PURSUANT TO SECTION 11.1 ABOVE (BEFORE PAYMENTS PURSUANT TO THIS SECTION
15.4 AND DISTRIBUTIONS PURSUANT TO SECTION 11.5) MULTIPLIED BY (II) THE
PERCENTAGE DETERMINED BY DIVIDING (X) THE NUMBER OF SHARES OF CLASS A COMMON
STOCK THAT SUCH HOLDER OWNS OR COULD ACQUIRE PURSUANT TO THE EXERCISE OF THE
HOLDER’S VESTED CLASS A OPTIONS BY (Y) THE SUM OF THE TOTAL OUTSTANDING SHARES
PLUS THE NUMBER OF SHARES OF CLASS A COMMON STOCK THAT WOULD BE ISSUED IF ALL
VESTED AND UNEXERCISED CLASS A OPTIONS WERE THEN EXERCISED. SUCH PAYMENT SHALL
BE (I) ADDITIONAL COMPENSATION TO SUCH HOLDERS AND (II) SHALL REDUCE THE
AGGREGATE DISTRIBUTION THAT OTHERWISE WOULD BE MADE UNDER SECTION 11.1 ABSENT
THIS SECTION 15.4. NO PAYMENTS UNDER THIS SECTION 15.4 SHALL BE MADE TO ANY
HOLDER OF A CLASS A OPTION WITH RESPECT TO ANY SUCH CLASS A OPTION THAT IS NOT
VESTED AT THE TIME OF THE DISTRIBUTION. ADDITIONALLY, NO PAYMENTS SHALL BE MADE
HEREUNDER AFTER ALL OF THE MEMBERSHIP UNITS (OTHER THAN THOSE HELD BY THE
MANAGEMENT COMPANY) ARE EXCHANGED FOR SHARES OF CLASS A COMMON STOCK PURSUANT TO
THE TERMS OF ARTICLE 15 OR AFTER A PUBLIC OFFERING. ALL PAYMENTS TO BE MADE
HEREUNDER SHALL BE MADE CONTEMPORANEOUSLY WITH THE DISTRIBUTION TO THE MEMBERS
PURSUANT TO SECTION 11.1.

 

15.5.       AVAILABILITY OF AUTHORIZED AND UNISSUED CLASS A COMMON STOCK. THE
MANAGEMENT COMPANY WILL AT ALL TIMES RESERVE AND KEEP AVAILABLE A SUFFICIENT
NUMBER OF AUTHORIZED BUT UNISSUED SHARES OF CLASS A COMMON STOCK TO PERMIT THE
CONVERSION OF THE OUTSTANDING SHARES OF CLASS B COMMON STOCK, MEMBERSHIP UNITS,
AND SHARES OF CONVERTIBLE PREFERRED STOCK AND THE EXERCISE OF ANY OUTSTANDING
CLASS A OPTIONS. THE MANAGEMENT COMPANY COVENANTS THAT IF ANY SHARES OF CLASS A
COMMON STOCK REQUIRE REGISTRATION WITH OR APPROVAL OF ANY GOVERNMENTAL AUTHORITY
UNDER ANY FOREIGN, FEDERAL OR STATE LAW BEFORE SUCH

 

37

--------------------------------------------------------------------------------

 

SHARES OF CLASS A COMMON STOCK MAY BE ISSUED UPON SUCH CONVERSION OR EXCHANGE,
THE MANAGEMENT COMPANY WILL PROMPTLY CAUSE SUCH SHARES TO BE SO REGISTERED OR
APPROVED, AS THE CASE MAY BE. THE MANAGEMENT COMPANY WILL USE ITS REASONABLE
BEST EFFORTS TO LIST THE SHARES OF CLASS A COMMON STOCK REQUIRED TO BE DELIVERED
BY THE OPERATING COMPANY UPON SUCH CONVERSION OR EXCHANGE PRIOR TO SUCH DELIVERY
UPON EACH NATIONAL SECURITIES EXCHANGE OR OTHER RECOGNIZED TRADING MARKET UPON
WHICH THE OUTSTANDING CLASS A COMMON STOCK IS LISTED AT THE TIME OF SUCH
DELIVERY. THE MANAGEMENT COMPANY COVENANTS THAT ALL SHARES OF CLASS A COMMON
STOCK THAT ARE ISSUED, CONVERTED OR EXCHANGED AS PROVIDED IN THIS ARTICLE 15
SHALL, UPON ISSUANCE, BE VALIDLY ISSUED, FULLY PAID AND NON-ASSESSABLE.

 

ARTICLE 16
ADDITIONAL AGREEMENTS

 

16.1.       MAINTENANCE OF PARENT ENTITY AS A PARTY. EACH INITIAL MEMBER
COVENANTS AND AGREES THAT THE PARENT ENTITY OF SUCH INITIAL MEMBER SHALL EXECUTE
A COUNTERPART OF THIS AGREEMENT AND SHALL GUARANTEE ALL OBLIGATIONS OF SUCH
INITIAL MEMBER HEREUNDER. THIS SECTION SHALL SIMILARLY APPLY TO ANY SUBSEQUENT
PARENT ENTITY.

 

16.2.       CERTIFICATES. MEMBERSHIP UNITS SHALL BE REPRESENTED BY A CERTIFICATE
OR CERTIFICATES, SETTING FORTH UPON THE FACE THEREOF THAT THE OPERATING COMPANY
IS A LIMITED LIABILITY COMPANY FORMED UNDER THE LAWS OF THE STATE OF DELAWARE,
THE NAME OF THE PERSON TO WHICH IT IS ISSUED, THE TYPE OF MEMBERSHIP UNIT
REPRESENTED (E.G., COMMON MEMBERSHIP UNITS OR PREFERRED MEMBERSHIP UNITS) AND
THE NUMBER OF MEMBERSHIP UNITS REPRESENTED. SUCH CERTIFICATES SHALL BE ENTERED
IN THE BOOKS OF THE OPERATING COMPANY AS THEY ARE ISSUED, AND SHALL BE SIGNED BY
THE CEO OF THE OPERATING COMPANY. UPON ANY TRANSFER OF MEMBERSHIP UNITS
PERMITTED UNDER THIS AGREEMENT (OTHER THAN A PLEDGE PERMITTED UNDER SECTION
4.1.2), THE TRANSFERRING MEMBER SHALL REQUEST THE OPERATING COMPANY TO (I) ISSUE
TO THE TRANSFEREE A CERTIFICATE REPRESENTING THE NUMBER OF MEMBERSHIP UNITS SO
TRANSFERRED AND (II) SURRENDER TO THE OPERATING COMPANY THE EXISTING CERTIFICATE
AND THE OPERATING COMPANY SHALL ISSUE TO THE TRANSFERRING MEMBER CERTIFICATES
REPRESENTING THE REMAINING MEMBERSHIP UNITS, IF ANY, HELD BY SUCH TRANSFERRING
MEMBER AFTER TAKING INTO ACCOUNT SUCH TRANSFER. ALL CERTIFICATES REPRESENTING
MEMBERSHIP UNITS (UNLESS REGISTERED UNDER THE SECURITIES ACT), SHALL BEAR THE
FOLLOWING LEGEND:

 

THE LIMITED LIABILITY COMPANY INTERESTS REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE, AND MAY NOT BE
OFFERED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED, EXCEPT
IN A TRANSACTION WHICH IS REGISTERED UNDER, EXEMPT FROM, OR OTHERWISE IN
COMPLIANCE WITH THE FEDERAL AND STATE SECURITIES LAWS, AS TO WHICH THE COMPANY
HAS RECEIVED SUCH ASSURANCES AS THE COMPANY MAY REQUEST, WHICH MAY INCLUDE, A
SATISFACTORY OPINION OF COUNSEL.

 

ANY SALE, ASSIGNMENT, TRANSFER, PLEDGE OR OTHER DISPOSITION OF THE LIMITED
LIABILITY COMPANY INTERESTS

 

38

--------------------------------------------------------------------------------

 

REPRESENTED BY THIS CERTIFICATE IS RESTRICTED BY, AND SUBJECT TO, THE TERMS AND
PROVISIONS OF AN AMENDED AND RESTATED STOCKHOLDERS’ AGREEMENT BETWEEN HELIO,
INC. AND THE STOCKHOLDERS SET FORTH THEREIN AND A SECOND AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT BETWEEN HELIO LLC AND THE MEMBERS NAMED
THEREIN, EACH DATED THE         DAY OF              , 2007. A COPY OF THE
AMENDED AND RESTATED STOCKHOLDERS’ AGREEMENT AND THE SECOND AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT IS ON FILE WITH THE SECRETARY OF THE
COMPANY. BY ACCEPTANCE OF THIS CERTIFICATE, THE HOLDER HEREOF AGREES TO BECOME
BOUND BY THE AMENDED AND RESTATED STOCKHOLDERS’ AGREEMENT AND THE SECOND AMENDED
AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT.

 

16.3.       SECURITY. EACH MEMBERSHIP INTEREST SHALL CONSTITUTE A “SECURITY”
WITHIN THE MEANING OF (A) ARTICLE 8 OF THE UNIFORM COMMERCIAL CODE (INCLUDING
SECTION 8-L02(A)(15) THEREOF) AS IN EFFECT FROM TIME TO TIME IN THE STATES OF
DELAWARE AND NEW YORK AND (B) THE UNIFORM COMMERCIAL CODE OF ANY OTHER
APPLICABLE JURISDICTION THAT NOW OR HEREAFTER SUBSTANTIALLY INCLUDES THE 1994
REVISIONS TO ARTICLE 8 THEREOF AS ADOPTED BY THE AMERICAN LAW INSTITUTE AND THE
NATIONAL CONFERENCE OF COMMISSIONERS ON UNIFORM STATE LAWS AND APPROVED BY THE
AMERICAN BAR ASSOCIATION ON FEBRUARY 14, 1995.

 

16.4.       LOST OR DESTROYED CERTIFICATES. THE OPERATING COMPANY MAY ISSUE A
NEW CERTIFICATE FOR MEMBERSHIP UNITS IN PLACE OF ANY CERTIFICATE OR CERTIFICATES
THERETOFORE ISSUED BY IT, ALLEGED TO HAVE BEEN LOST OR DESTROYED, UPON THE
MAKING OF AN AFFIDAVIT OF THAT FACT, AND PROVIDING AN INDEMNITY IN FORM AND
SUBJECT REASONABLY SATISFACTORY TO THE MANAGEMENT COMPANY BY THE PERSON CLAIMING
THE CERTIFICATE TO BE LOST OR DESTROYED.

 

16.5.       MOST FAVORED COMPANY. EACH OF SKT HOLDINGS AND EARTHLINK SHALL USE
ITS REASONABLE BEST EFFORTS TO MAKE AVAILABLE TO THE OPERATING COMPANY AND ITS
SUBSIDIARIES THE BENEFITS OF ITS AGREEMENTS WITH VENDORS ON TERMS NO LESS
FAVORABLE THAN THOSE GENERALLY AVAILABLE TO IT OR ITS AFFILIATES.

 

16.6.       MOST FAVORED PRICING. EACH OF SKT HOLDINGS AND EARTHLINK SHALL USE
ITS REASONABLE BEST EFFORTS TO OFFER ITS PRODUCTS AND SERVICES TO THE OPERATING
COMPANY ON MOST FAVORED CUSTOMER PRICING TERMS FOR SUBSTANTIALLY SIMILAR VOLUMES
OF SUBSTANTIALLY SIMILAR PRODUCTS AND SERVICES THAT ARE GENERALLY OFFERED IN THE
UNITED STATES. IF THE OPERATING COMPANY AGREES TO SUCH PRICING, THE OPERATING
COMPANY AND EARTHLINK OR SKT, AS APPLICABLE, SHALL ENTER INTO COMMERCIALLY
REASONABLE AGREEMENTS CONTAINING SUCH PRICING AND OTHER COMMERCIALLY STANDARD
TERMS.

 

16.7.       CHANGE OF CONTROL. IF THERE IS A CHANGE OF CONTROL, THE OPERATING
COMPANY HAS NO OBLIGATION TO MAKE A DISPOSITION OF ANY OF ITS PROPERTIES OR TO
TAKE ANY OTHER ACTION TO ELIMINATE ANY RESULTING PRODUCT OR SERVICE OVERLAPS
WITH SKT HOLDINGS OR EARTHLINK, AS THE CASE MAY BE, OR REGULATORY CONFLICTS.

 

39

--------------------------------------------------------------------------------

 

16.8.       STANDSTILL. NO CLASS B MEMBER SHALL, AND EACH CLASS B MEMBER SHALL
CAUSE ITS SUBSIDIARIES TO NOT, TAKE ANY OF THE FOLLOWING ACTIONS WITHOUT THE
PRIOR WRITTEN CONSENT OF THE OTHER CLASS B MEMBERS, OR THE BOARD OF DIRECTORS OF
THE MANAGEMENT COMPANY, AS APPROPRIATE:

 

(A)                                  ACQUIRE OR SEEK TO ACQUIRE BENEFICIAL
OWNERSHIP OF ANY SECURITIES, INCLUDING RIGHTS OR OPTIONS, OF ANOTHER CLASS B
MEMBER OR THE OPERATING COMPANY (OTHER THAN, WITH RESPECT TO THE OPERATING
COMPANY, AS PERMITTED BY THIS AGREEMENT, THE MANAGEMENT COMPANY CERTIFICATE OR
ANY OTHER ANCILLARY AGREEMENT);

 

(B)                                 PROPOSE TO ENTER INTO ANY MERGER, PURCHASE
OF SUBSTANTIALLY ALL THE ASSETS OR ANY OTHER BUSINESS COMBINATION INVOLVING
ANOTHER CLASS B MEMBER;

 

(C)                                  PARTICIPATE IN ANY SOLICITATION OF PROXIES
TO VOTE, OR SEEK TO ADVISE ANY PERSON WITH RESPECT TO THE VOTING OF, ANY
SECURITIES OF ANOTHER CLASS B MEMBER; PROPOSE ANY STOCKHOLDER PROPOSALS FOR
SUBMISSION TO A VOTE OF STOCKHOLDERS OF ANOTHER CLASS B MEMBER, OR PROPOSE ANY
PERSON FOR ELECTION TO, OR THE REMOVAL OF ANY MEMBER FROM, THE BOARD OF
DIRECTORS OF ANOTHER CLASS B MEMBER; OR IN ANY WAY SEEK TO INFLUENCE THE
MANAGEMENT OR POLICIES OF ANOTHER CLASS B MEMBER; OR

 

(D)                                 ENTER INTO ANY DISCUSSIONS OR UNDERSTANDINGS
WITH ANY THIRD PARTY WHICH WOULD RESULT IN A VIOLATION OF THE FOREGOING.

 

The foregoing obligations of the Class B Members shall terminate upon one (1)
year after:  (a) the dissolution of the Operating Company; or (b) the transfer
or conversion by either Class B Member of the Class B Common Stock of the
Management Company Beneficially Owned, directly or indirectly, by the Member or
its Subsidiaries.

 

16.9.       NON-HIRE AND NON-SOLICITATION OF EMPLOYEES. A CLASS B MEMBER SHALL
NOT HIRE OR ATTEMPT TO HIRE ANY EXECUTIVE OFFICERS OF THE OPERATING COMPANY
WHILE IT OR A SUBSIDIARY OWNS A SHARE OF CLASS B COMMON STOCK WITHOUT THE
CONSENT OF THE CLASS B DIRECTORS; PROVIDED, HOWEVER, THAT NOTHING HEREIN SHALL
BE DEEMED TO PROHIBIT (I) SKT FROM HIRING ANY FORMER SKT EMPLOYEES; PROVIDED
THAT SUCH EMPLOYEES TERMINATE THEIR EMPLOYMENT RELATIONSHIP WITH THE OPERATING
COMPANY, WHICH TERMINATION WAS NOT INDUCED BY SKT OR AFFILIATES OF SKT, OR (II)
A CLASS B MEMBER FROM CONDUCTING SOLICITATIONS OF THE GENERAL PUBLIC FOR
EMPLOYMENT BY SUCH CLASS B MEMBER.

 

16.10.     MEMBERS’ EXPENSES. EACH PARTY SHALL PAY FOR THE EXPENSES INCURRED IN
CONNECTION WITH ITS DIRECTORS AND EMPLOYEES ATTENDING MEETINGS. THE MANAGEMENT
COMPANY SHALL DEVELOP A PLAN FOR COMPENSATING OUTSIDE DIRECTORS.

 

16.11.     INSURANCE. THE OPERATING COMPANY SHALL PURCHASE AND MAINTAIN
INSURANCE COVERAGE ADEQUATE TO COVER RISKS OF SUCH TYPES AND IN SUCH AMOUNTS AS
ARE CUSTOMARY FOR COMPANIES OF SIMILAR SIZE ENGAGED IN SIMILAR LINES OF
BUSINESS, INCLUDING, WITHOUT LIMITATION, LIABILITY INSURANCE FOR THE BENEFIT OF
ITS EMPLOYEES AND OFFICERS WITH RESPECT TO CLAIMS AGAINST

 

40

--------------------------------------------------------------------------------

 

SUCH EMPLOYEES AND OFFICERS IN THEIR CAPACITY AS EMPLOYEES AND OFFICERS IN SUCH
AMOUNTS AS THE MANAGEMENT COMPANY SHALL DETERMINE ARE ADEQUATE.

 

16.12.     FREEDOM OF ACTION. NO MEMBER SHALL BE LIABLE FOR BREACH OF ANY
FIDUCIARY DUTY TO THE OPERATING COMPANY. IN THE EVENT THAT A MEMBER ACQUIRES
KNOWLEDGE OF A POTENTIAL TRANSACTION, AGREEMENT, ARRANGEMENT OR OTHER MATTER
WHICH MAY BE A CORPORATE OPPORTUNITY FOR BOTH SUCH MEMBER AND THE OPERATING
COMPANY, SUCH MEMBER SHALL NOT HAVE ANY DUTY TO COMMUNICATE OR OFFER SUCH
CORPORATE OPPORTUNITY TO THE OPERATING COMPANY AND SUCH MEMBER SHALL NOT BE
LIABLE TO THE OPERATING COMPANY FOR BREACH OF ANY FIDUCIARY OR OTHER DUTY BY
REASON OF THE FACT THAT SUCH MEMBER PURSUES OR ACQUIRES SUCH CORPORATE
OPPORTUNITY FOR ITSELF, DIRECTS SUCH CORPORATE OPPORTUNITY TO ANOTHER PERSON OR
ENTITY OR DOES NOT COMMUNICATE SUCH CORPORATE OPPORTUNITY TO THE OPERATING
COMPANY. THE MEMBERS ACKNOWLEDGE AND AGREE THAT THE TERMS OF THIS SECTION 16.12
SHALL IN NO WAY RESTRICT OR EXPAND THAT RIGHTS AND OBLIGATIONS OF THE MEMBERS
SET FORTH IN ARTICLE 5.

 

16.13.     INDEMNIFICATION. THE OPERATING COMPANY SHALL, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW AS IT PRESENTLY EXISTS OR MAY HEREAFTER BE AMENDED,
INDEMNIFY ANY PERSON WHO IS A PARTY, OR IS THREATENED TO BE MADE A PARTY, TO ANY
LITIGATION BY REASON OF THE FACT THAT SUCH PERSON IS OR WAS A MEMBER, AN OFFICER
OF THE OPERATING COMPANY OR OF A MEMBER, OR A MEMBER OF THE BOARD OF DIRECTORS
OF A MEMBER OR IS OR WAS A MEMBER, A MEMBER OF THE BOARD OF DIRECTORS OR AN
OFFICER, DIRECTOR, EMPLOYEE OR AGENT OF ANOTHER PERSON AT THE REQUEST OF THE
OPERATING COMPANY, FOR ANY LOSSES SUFFERED OR INCURRED IN CONNECTION WITH SUCH
LITIGATION, UNLESS SUCH PERSON ACTED FRAUDULENTLY OR WITH WILLFUL MISCONDUCT. NO
AMENDMENT OF THIS SECTION 16.13 SHALL AFFECT THE RIGHTS OF THE PARTIES
INDEMNIFIED HEREUNDER WHICH EXIST AS OF THE DATE OF SUCH AMENDMENT.

 

ARTICLE 17
DISPUTE RESOLUTION

 

17.1.       DISPUTE RESOLUTION. ANY DISPUTE ARISING OUT OF OR RELATING TO THIS
AGREEMENT SHALL BE RESOLVED IN ACCORDANCE WITH THE PROCEDURES SPECIFIED IN THIS
SECTION 17.1, WHICH SHALL BE THE SOLE AND EXCLUSIVE PROCEDURE FOR THE RESOLUTION
OF ANY SUCH DISPUTE.

 

17.1.1     NEGOTIATION BETWEEN EXECUTIVES. THE MEMBERS SHALL ATTEMPT IN GOOD
FAITH TO RESOLVE ANY DISPUTE ARISING OUT OF OR RELATING TO THIS AGREEMENT
PROMPTLY BY DIRECT NEGOTIATION BETWEEN EXECUTIVES WHO HAVE AUTHORITY TO SETTLE
THE CONTROVERSY AND WHO ARE AT A HIGHER LEVEL OF MANAGEMENT THAN THE PERSONS
WITH DIRECT RESPONSIBILITY FOR ADMINISTRATION OF THIS AGREEMENT, UNLESS THERE IS
NO EXECUTIVE OF A HIGHER LEVEL. ANY PARTY MAY GIVE THE OTHER PARTY WRITTEN
NOTICE OF ANY DISPUTE NOT RESOLVED IN THE NORMAL COURSE OF BUSINESS. WITHIN
FIFTEEN (15) DAYS AFTER DELIVERY OF THE NOTICE, THE RECEIVING PARTY SHALL SUBMIT
TO THE OTHER A WRITTEN RESPONSE. THE NOTICE AND THE RESPONSE SHALL INCLUDE: 
(A) A STATEMENT OF EACH PARTY’S POSITION AND A SUMMARY OF ARGUMENTS SUPPORTING
THAT POSITION; AND, (B) THE NAME AND TITLE OF THE EXECUTIVE WHO WILL REPRESENT
THAT PARTY AND OF ANY OTHER PERSON WHO WILL ACCOMPANY THE EXECUTIVE. WITHIN
THIRTY (30) DAYS AFTER DELIVERY OF THE DISPUTING PARTY’S NOTICE, THE EXECUTIVES
OF EACH MEMBER SHALL MEET AT A MUTUALLY ACCEPTABLE TIME AND PLACE, AND
THEREAFTER AS OFTEN AS THEY REASONABLY DEEM NECESSARY, TO ATTEMPT TO RESOLVE THE
DISPUTE. ALL REASONABLE REQUESTS FOR INFORMATION MADE BY ONE PARTY TO THE OTHER
WILL BE HONORED. ALL NEGOTIATIONS PURSUANT TO THIS CLAUSE ARE

 

41

--------------------------------------------------------------------------------

 

CONFIDENTIAL AND SHALL BE TREATED AS COMPROMISE AND SETTLEMENT NEGOTIATIONS FOR
PURPOSES OF APPLICABLE RULES OF EVIDENCE.

 

17.1.2     MEDIATION WITH MUTUALLY AGREED-UPON NEUTRAL. IF THE DISPUTE HAS NOT
BEEN RESOLVED BY NEGOTIATION WITHIN FORTY-FIVE (45) DAYS OF THE DISPUTING
PARTY’S NOTICE, OR IF THE MEMBERS FAIL TO MEET WITHIN TWENTY (20) DAYS, THE
MEMBERS SHALL SUBMIT THE DISPUTE TO NON-BINDING MEDIATION UNDER THE THEN-CURRENT
CPR INSTITUTE FOR DISPUTE RESOLUTION’S (“CPR”) MODEL MEDIATION PROCEDURE FOR
BUSINESS DISPUTES, AND ENDEAVOR (BUT NOT BE OBLIGATED) TO SETTLE THE DISPUTE IN
SUCH MEDIATION. CPR’S ADDRESS AT THE TIME OF THIS AGREEMENT IS 366 MADISON
AVENUE, 14TH FLOOR, NEW YORK, NEW YORK 10017 (212-949-6490) AND ITS WEBSITE IS
“WWW.CPRADR.ORG.”  THE MEMBERS AGREE TO USE THEIR REASONABLE BEST EFFORTS AND
GOOD FAITH TO AGREE MUTUALLY ON A MEDIATOR, TO BE SELECTED FROM THE CPR
TECHNOLOGY PANEL OF NEUTRALS. IF THE MEMBERS FAIL TO SELECT A MUTUALLY
ACCEPTABLE MEDIATOR WITHIN THIRTY (30) DAYS AFTER EITHER PARTY’S NOTICE TO THE
OTHER PARTY THAT THEY REQUEST NON-BINDING MEDIATION PURSUANT TO THIS SUBSECTION,
CPR WILL APPOINT A MEDIATOR FROM THE TECHNOLOGY PANEL.

 

17.1.3     ARBITRATION. ALL DISPUTES ARISING OUT OF OR RELATING TO THIS
AGREEMENT NOT RESOLVED PURSUANT TO NON-BINDING MEDIATION WITHIN THIRTY (30) DAYS
OR AS THIS TIME PERIOD MAY BE EXTENDED BY WRITTEN AGREEMENT OF THE MEMBERS SHALL
BE SETTLED FINALLY IN AN ARBITRATION CONDUCTED UNDER THE RULES OF ARBITRATION OF
THE INTERNATIONAL CHAMBER OF COMMERCE (“ICC”) AND AS PROVIDED IN THIS SECTION
17.1.3.

 

(A)                                  THE ARBITRATION PROCEEDINGS SHALL BE
CONDUCTED IN NEW YORK, NEW YORK, U.S.A.

 

(B)                                 THE ARBITRATION PROCEEDINGS SHALL BE
GOVERNED BY THE LAWS OF NEW YORK.

 

(C)                                  THE LANGUAGE OF THE ARBITRATION PROCEEDINGS
SHALL BE ENGLISH.

 

(D)                                 THE ARBITRAL TRIBUNAL SHALL CONSIST OF THREE
(3) ARBITRATORS, ONE (1) OF WHICH SHALL BE SELECTED BY SKT HOLDINGS AND ONE (1)
OF WHICH SHALL BE SELECTED BY EARTHLINK. THE THIRD ARBITRATOR SHALL BE SELECTED
BY THE TWO (2) ARBITRATORS APPOINTED BY SKT HOLDINGS AND EARTHLINK.

 

(E)                                  THE INTERNATIONAL BAR ASSOCIATION’S RULES
ON THE TAKING OF EVIDENCE IN INTERNATIONAL COMMERCIAL ARBITRATION SHALL APPLY
TOGETHER WITH THE ICC RULES GOVERNING ANY SUBMISSION TO ARBITRATION INCORPORATED
IN THIS AGREEMENT.

 

(F)                                    EVERY AWARD SHALL BE BINDING ON THE
MEMBERS. BY SUBMITTING THE DISPUTE TO ARBITRATION UNDER THE ICC RULES, THE
MEMBERS UNDERTAKE TO CARRY OUT ANY AWARD WITHOUT DELAY AND SHALL BE DEEMED TO
HAVE WAIVED THEIR RIGHT TO ANY FORM OF RECOURSE INSOFAR AS SUCH WAIVER CAN
VALIDLY BE MADE.

 

42

--------------------------------------------------------------------------------

 

(G)                                 THIS AGREEMENT TO ARBITRATE SHALL BE BINDING
ON THE MEMBERS AND THEIR RESPECTIVE SUCCESSORS, ASSIGNS AND AFFILIATES.

 

(H)                                 THE PREVAILING PARTY IN ANY ARBITRATION
PROCEEDING CONDUCTED PURSUANT TO THIS AGREEMENT MAY RECOVER ITS REASONABLE FEES
BOTH FOR LEGAL REPRESENTATION AND RELATED COSTS IN ANY ACTION TO ENFORCE THIS
AGREEMENT IN ANY JUDICIAL OR ARBITRATION PROCEEDING.

 

(I)                                     THE MEMBERS WAIVE ANY RIGHT OR CLAIM TO
PUNITIVE OR EXEMPLARY DAMAGES AND AGREE THAT PUNITIVE OR EXEMPLARY DAMAGES ARE
NOT WITHIN THE CONTEMPLATION OF THIS AGREEMENT. NO ARBITRAL TRIBUNAL MAY ORDER
AN AWARD CONSISTING IN WHOLE OR IN PART OF PUNITIVE OR EXEMPLARY DAMAGES.

 

17.1.4     TOLLING OF STATUTES OF LIMITATION. ALL APPLICABLE STATUTES OF
LIMITATION AND DEFENSES BASED ON THE PASSAGE OF TIME SHALL BE TOLLED WHILE THE
PROCEDURES SPECIFIED IN SECTION 17.1.2 AND SECTION 17.1.3 ARE PENDING. THE
MEMBERS WILL TAKE SUCH ACTION, IF ANY, REQUIRED TO EFFECTUATE SUCH TOLLING.

 

17.2.       RIGHT TO INJUNCTIVE RELIEF BEFORE APPOINTMENT OF ARBITRATORS. WITH
RESPECT TO ANY VIOLATIONS OF THIS AGREEMENT WHICH WOULD CAUSE OR MIGHT CAUSE
IRREPARABLE INJURY TO ANY ONE OF THE PARTIES TO THIS AGREEMENT, ANY PARTY MAY,
IN ADDITION TO ANY OTHER RIGHTS UNDER THIS AGREEMENT AND NOTWITHSTANDING THE
DISPUTE RESOLUTION PROCEDURES INCLUDING, PARTICULARLY, THE ARBITRATION AGREEMENT
CONTAINED IN THIS SECTION 17.2, SEEK SPECIFIC PERFORMANCE OF THIS AGREEMENT AND
INJUNCTIVE RELIEF IN ANY COURT OF COMPETENT JURISDICTION AGAINST ANY ONGOING
VIOLATION OF THIS AGREEMENT. PRIOR TO THE APPOINTMENT OF THE ARBITRATORS
PURSUANT TO THE ARBITRATION AGREEMENT, ANY PARTY HERETO MAY SEEK PROVISIONAL OR
INTERIM MEASURES FROM ANY COURT OF COMPETENT JURISDICTION. AFTER THE APPOINTMENT
OF THE ARBITRATORS, THE ARBITRATORS SHALL HAVE EXCLUSIVE POWER TO CONSIDER AND
GRANT REQUESTS FOR PROVISIONAL OR INTERIM MEASURES.

 

ARTICLE 18
MISCELLANEOUS

 

18.1.       GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
MEMBERS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH AND SUBJECT TO THE
LAWS OF THE STATE OF DELAWARE.

 

18.2.       NOTICES. ALL NOTICES, REQUESTS, CLAIMS, DEMANDS AND OTHER
COMMUNICATIONS HEREUNDER SHALL BE IN WRITING AND SHALL BE DEEMED GIVEN (I) ON
THE FIRST CALENDAR DAY FOLLOWING THE DATE OF DELIVERY IN PERSON OR BY TELECOPY
(IN EACH CASE WITH TELEPHONIC CONFIRMATION OF RECEIPT BY THE ADDRESSEE), (II) ON
THE FIRST CALENDAR DAY FOLLOWING TIMELY DEPOSIT WITH AN OVERNIGHT COURIER
SERVICE, IF SENT BY OVERNIGHT COURIER SPECIFYING NEXT DAY DELIVERY OR (III) ON
THE FIRST CALENDAR DAY THAT IS AT LEAST FIVE (5) DAYS FOLLOWING DEPOSIT IN THE
MAILS, IF SENT BY FIRST CLASS MAIL, TO THE PARTIES AT THE FOLLOWING ADDRESSES
(OR AT SUCH OTHER ADDRESS FOR A PARTY AS SHALL BE SPECIFIED BY LIKE NOTICE):

 

43

--------------------------------------------------------------------------------

 

If to SKT Holdings:

 

SK Telecom USA Holdings, Inc.

c/o SK Telecom Co., Ltd.

11, Euljiro2-ga, Jung-gu

Seoul, 100-999, Korea

Attention:  Jin Woo So, President

Facsimile:  (822) 6100-7966

 

with a copy to:

 

SK Telecom Co., Ltd.

11, Euljiro2-ga, Jung-gu

Seoul, 100-999, Korea

Attention:  Mr. Seung – Kook Synn

Facsimile:  (822) 6100-7966

 

with a copy to:

 

Baker & McKenzie

14th Floor, Hutchinson House, 10 Harcourt

Hong Kong, SAR

Attention:  Mr. Won Lee

Facsimile:  (852) 2845-0476

 

If to EarthLink:

 

EarthLink, Inc.

1375 Peachtree Street, N.E.

Atlanta, Georgia  30309

Attention:  Rolla P. Huff, Chief Executive Officer

Facsimile:  (404) 892-7616

Copy to:  General Counsel

 

with a copy to:

 

Troutman Sanders LLP

600 Peachtree Street, N.E., Suite 5200

Atlanta, Georgia 30308

Attention:  David M. Carter

 

Facsimile:  (404) 962-6598

 

If to the Operating Company:

 

HELIO LLC

10960 Wilshire Blvd., Suite 700

Los Angeles, California 90024

 

44

--------------------------------------------------------------------------------

 

Attention:  Sky D. Dayton, Chief Executive Officer

Facsimile:  (310) 996-1368

 

with a copy to:

 

HELIO, Inc.

10960 Wilshire Blvd., Suite 700

Los Angeles, California 90024

Attention:  Legal Department

Facsimile:  (310) 312-8889

 

With a copy to:

 

Kirkpatrick & Lockhart Preston Gates Ellis LLP

10100 Santa Monica Blvd, Seventh Floor

Los Angeles, California 90067

Attn:  Thomas J. Poletti

Facsimile:  (310) 552-5001

 

18.3.       COMPLIANCE WITH APPLICABLE LAWS. THE OPERATING COMPANY SHALL PROVIDE
EACH CLASS B MEMBER WITH ACCESS TO ALL OF THE BOOKS, RECORDS AND OTHER
INFORMATION OF THE OPERATING COMPANY NECESSARY TO PERMIT EACH SUCH CLASS B
MEMBER TO SATISFY ITS COMPLIANCE OBLIGATIONS UNDER THE SARBANES-OXLEY ACT OF
2002 AND UNDER ALL OTHER APPLICABLE STATE, FEDERAL AND FOREIGN LAWS.

 

18.4.       SEVERABILITY. THE PROVISIONS OF THIS AGREEMENT SHALL BE DEEMED
SEVERABLE AND THE INVALIDITY OR UNENFORCEABILITY OF ANY PROVISION SHALL NOT
AFFECT THE VALIDITY OR ENFORCEABILITY OF THE OTHER PROVISIONS HEREOF. IF ANY
PROVISION OF THIS AGREEMENT, OR THE APPLICATION THEREOF TO ANY PERSON OR ANY
CIRCUMSTANCE, IS INVALID OR UNENFORCEABLE, (I) A SUITABLE AND EQUITABLE
PROVISION SHALL BE SUBSTITUTED THEREFOR IN ORDER TO CARRY OUT, SO FAR AS MAY BE
VALID AND ENFORCEABLE, THE INTENT AND PURPOSE OF SUCH INVALID OR UNENFORCEABLE
PROVISION AND (II) THE REMAINDER OF THIS AGREEMENT AND THE APPLICATION OF SUCH
PROVISION TO OTHER PERSONS OR CIRCUMSTANCES SHALL NOT BE AFFECTED BY SUCH
INVALIDITY OR UNENFORCEABILITY, NOR SHALL SUCH INVALIDITY OR UNENFORCEABILITY
AFFECT THE VALIDITY OR ENFORCEABILITY OF SUCH PROVISION, OR THE APPLICATION
THEREOF, IN ANY OTHER JURISDICTION.

 

18.5.       COUNTERPARTS. FOR THE CONVENIENCE OF THE PARTIES HERETO, THIS
AGREEMENT MAY BE EXECUTED IN ANY NUMBER OF COUNTERPARTS, EACH OF WHICH SHALL BE
DEEMED TO BE AN ORIGINAL AND ALL OF WHICH SHALL TOGETHER CONSTITUTE THE SAME
AGREEMENT.

 

18.6.       HEADINGS. ALL SECTION HEADINGS ARE FOR CONVENIENCE OF REFERENCE ONLY
AND ARE NOT PART OF THIS AGREEMENT, AND NO CONSTRUCTION OR REFERENCE SHALL BE
DERIVED THEREFROM.

 

18.7.       SUCCESSORS AND ASSIGNS. THIS AGREEMENT SHALL BE BINDING UPON AND
INURE TO THE BENEFIT OF THE MEMBERS AND THEIR RESPECTIVE SUCCESSORS AND
PERMITTED ASSIGNS AND SHALL NOT BE ASSIGNABLE EXCEPT TO THE EXTENT EXPRESSLY
PERMITTED HEREBY AND ANY PURPORTED ASSIGNMENT OF THIS AGREEMENT OR OF ANY
MEMBERSHIP UNITS IN VIOLATION OF THIS AGREEMENT SHALL BE NULL AND VOID AND

 

45

--------------------------------------------------------------------------------

 

OF NO FORCE OR EFFECT. THE RIGHTS AND OBLIGATIONS UNDER THIS AGREEMENT SHALL BE
ASSIGNED BY A MEMBER TO A TRANSFEREE IN CONNECTION WITH THE TRANSFER TO SUCH
TRANSFEREE PURSUANT TO SECTION 4. OTHER THAN AMOUNTS WITH RESPECT TO THE SKT
TRIGGERING CONTRIBUTION, SKT MAY ASSIGN THE SKT CONTRIBUTION RIGHT, IN WHOLE OR
IN PART, TO ANY PERSON.

 

18.8.       ENTIRE AGREEMENT; AMENDMENT; WAIVER. THIS AGREEMENT (INCLUDING ANY
EXHIBITS AND SCHEDULES HERETO) AND THE ANCILLARY AGREEMENTS (INCLUDING ANY
EXHIBITS AND SCHEDULES THERETO), SUPERSEDE ALL PRIOR AGREEMENTS, WRITTEN OR
ORAL, AMONG THE MEMBERS WITH RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF
AND CONTAIN THE ENTIRE AGREEMENT AMONG THE MEMBERS WITH RESPECT TO THE SUBJECT
MATTER HEREOF AND THEREOF. EXCEPT AS SET FORTH IN THE STOCKHOLDERS’ AGREEMENT,
THIS AGREEMENT MAY NOT BE AMENDED, SUPPLEMENTED OR MODIFIED, AND NO PROVISIONS
HEREOF MAY BE MODIFIED OR WAIVED, EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY
THE MANAGEMENT COMPANY AND EACH MEMBER OWNING MORE THAN TEN PERCENT (10%) OF THE
TOTAL OUTSTANDING SHARES. NO WAIVER OF ANY PROVISIONS HEREOF BY ANY MEMBER SHALL
BE DEEMED A WAIVER OF ANY OTHER PROVISIONS HEREOF BY ANY SUCH MEMBER, NOR SHALL
ANY SUCH WAIVER BE DEEMED A CONTINUING WAIVER OF ANY PROVISION HEREOF BY SUCH
MEMBER.

 

18.9.       NO RELIEF OF LIABILITIES. NO TRANSFER BY A MEMBER OF BENEFICIAL
OWNERSHIP OF ANY JV SECURITIES SHALL RELIEVE SUCH MEMBER OF ANY LIABILITIES OR
OBLIGATIONS TO THE OPERATING COMPANY OR THE OTHER MEMBER, THAT AROSE OR ACCRUED
PRIOR TO THE DATE OF SUCH TRANSFER.

 

18.10.     FURTHER ASSURANCES. THE PARTIES HERETO SHALL AT ANY TIME, AND FROM
TIME TO TIME EXECUTE AND DELIVER SUCH ADDITIONAL INSTRUMENTS AND OTHER DOCUMENTS
AND SHALL AT ANY TIME, AND FROM TIME TO TIME TAKE SUCH FURTHER ACTIONS AS MAY BE
NECESSARY OR APPROPRIATE TO EFFECTUATE, CARRY OUT AND COMPLY WITH ALL OF THE
TERMS OF THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY.

 

18.11.     THIRD PARTY BENEFICIARIES. NOTHING IN THIS AGREEMENT, EXPRESS OR
IMPLIED, IS INTENDED TO CONFER UPON ANY THIRD PARTY ANY RIGHTS OR REMEDIES OF
ANY NATURE WHATSOEVER UNDER OR BY REASON OF THIS AGREEMENT AND THE MANAGEMENT
COMPANY SHALL HAVE NO DUTY OR OBLIGATION TO ANY CREDITOR OF THE OPERATING
COMPANY TO REQUEST AND THE MEMBERS SHALL HAVE NO OBLIGATION TO ANY CREDITOR TO
MAKE SCHEDULED OR ADDITIONAL CONTRIBUTIONS TO THE CAPITAL OF THE OPERATING
COMPANY.

 

[Signatures on following page]

 

46

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the Initial Members have executed this Agreement as of the
date first above written.

 

 

 

EARTHLINK, INC.

 

 

 

 

 

Name:

 

Title:

 

 

 

 

 

SK TELECOM USA HOLDINGS, INC.

 

 

 

 

 

Jin Woo So, President

 

 

 

 

 

HELIO, INC.

 

 

 

 

 

Sky D. Dayton, Chief Executive Officer

 

 

 

 

 

HELIO LLC

 

 

 

By:

HELIO, INC.

 

Its:

Manager

 

 

 

 

 

Sky D. Dayton, Chief Executive Officer

 

 

[Signature Page to Operating Agreement]

 

--------------------------------------------------------------------------------

 

Schedule 9.1.1

 

Initial Capital Contribution

 

Member

 

Percentage
Interest

 

Initial Cash
Contributions

 

Non-Cash
Contributions

 

Membership
Units

 

Type of
Membership
Unit

 

SKT Holdings

 

50.00000

%*

$

220,000,000

 

$

0

 

50,000,000

 

Preferred Membership Units

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EarthLink

 

50.00000

%*

$

180,000,000

 

$

40,000,000

 

50,000,000

 

Preferred Membership Units

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Management Company

 

0.00000

%*

$

8.80

 

$

0

 

2

 

Common Membership Units

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL

 

100.00

%

$

400,000,008.80

 

$

40,000,000

 

100,000,002

 

 

 

 

--------------------------------------------------------------------------------

* The Members shall revise Schedule 9.1.1 from time to time to reflect the then
current Percentage Interests of the Members upon the occurrence of any of the
following: (a) the admission of an Additional Member pursuant to Section 8.1,
(b) the admission of a New Member pursuant to Section 8.2, (c) the contribution
of Additional Capital pursuant to Section 9.1.2 or 9.1.3, or (d) the exercise of
the Operating Company Option pursuant to Section 15.4. As of October 29, 2007,
the revised Schedule 9.1.1 shall be in the form attached hereto as Addendum 1.

 

--------------------------------------------------------------------------------

 

Addendum 1 to

 

Schedule 9.1.1

 

Capital Contribution as of October 29, 2007

 

Member

 

Percentage
Interest

 

Cash
Contributions

 

Non-Cash
Contributions

 

Membership
Units

 

Type of
Membership
Unit

 

SKT Holdings

 

47.36695

%*

$

220,000,000

 

$

0

 

50,000,000

 

Preferred Membership Units

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EarthLink

 

47.36695

%*

$

180,000,000

 

$

40,000,000

 

50,000,000

 

Preferred Membership Units

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Management Company

 

5.26609

%*

$

8,147,218.80

 

$

1,374,262.50

 

5,558,827

 

Common Membership Units

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL

 

100.00

%

$

408,147,218.80

 

$

41,374,262.50

 

105,558,827

 

 

 

 

--------------------------------------------------------------------------------

* The Members shall revise Schedule 9.1.1 from time to time to reflect the then
current Percentage Interests of the Members upon the occurrence of any of the
following: (a) the admission of an Additional Member pursuant to Section 8.1,
(b) the admission of a New Member pursuant to Section 8.2, (c) the contribution
of Additional Capital pursuant to Section 9.1.2 or 9.1.3, or (d) the exercise of
the Operating Company Option pursuant to Section 15.4.

 

--------------------------------------------------------------------------------

 

Schedule 9.1.2

 

SKT Contributions

 

SKT
Contributions

 

Date of
Contribution

 

Amount of
Contribution

 

Price Per
Unit

 

Number of
Membership
Units

 

Type of
Membership Unit

SKT Required Contribution

 

              , 2007

 

$

70,000,000*

 

$

3.00

 

23,333,333*

 

Preferred Membership Units

 

 

 

 

 

 

 

 

 

 

 

SKT Triggering Contribution

 

Prior to June 30, 2008

 

$

80,000,000

 

$

3.00

 

26,666,666

 

Preferred Membership Units

 

 

 

 

 

 

 

 

 

 

 

SKT Additional Capital

 

Prior to December 31, 2009

 

$

120,000,000

 

To be determined

 

To be determined

 

Preferred Membership Units

 

 

 

 

 

 

 

 

 

 

 

TOTAL

 

 

 

Up to $270,000,000

 

N/A

 

To be determined

 

Preferred Membership Units

--------------------------------------------------------------------------------

* The contribution amount and number of Membership Units is based on the
principal under the exchangeable promissory notes being exchanged with respect
to the SKT Required Contribution. Such numbers will be increased to reflect the
amount of interest accrued under such notes on the date of the closing of such
contribution.

 

--------------------------------------------------------------------------------