20100623Application.pdf

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ANDREW O. ISAR
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4423 POINT FOSDICK DRIVE. NW
SUITE 306
GIG HARBOR. WA 98335
TELEPHONE: [phone]
FACSIMILE: 866.474.3630
WW.MILLRISA.COM
IDAHO
UTILITIES
Via Overnight Delivery L B -r-i- 10- 0 \
June 22, 2010
Ms. Jean Jewell
Commssion Secreta
Idao Public Utilties Commssion
472 West Washigton Street
Boise, Idao 83702
Dear Ms. Jewell:
Enclosed for filing with the Public Utilities Commssion of Idao ("Commssion") are an original and
thee (3) copies of Libert-Bell Telecom, LLC's ("LBT") Application for Certifcation and Notie
("Application") and ilustrative tarff. With this Application, LBT seeks authority to provide facilities-
based local exchange and switched exchange access in local exchanges served by Qwest Corporation, and
non-facilities-based interexchange telecommuncations servces throughout the State ofIdaho.
LBT maitains that its enclosed financial statements filed at Exhibit E contain, confidential, proprieta,
and trade secret information, and/or are otherise exempt from disclosure puruant to IDAP A Rules
31.01.067,31.01.01.233, and 31.02.01.005.05, Idaho Code Sections 9-340C and -340D, and Idaho Code
Section 48-801 et seq. LBT respectfully requests that the documents be protected from inspection,
examation or copyig by any person other than the Commissioners and Commssion Staff. Applican's
financial statements are submitted on yellow paper under seal, accordingly.
Than you for your attention to this matter. Questions regardig this filing may be directed to the
undersigned.
Sincerely,
MILLER ISAR, INC.~o7
Enclosures
Regulatory Consultats to
Liberty-Bell Telecom, LLC
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
In the Matter of the Notice )of Libery-Bell Telecom, LLC )
for Certficate of Public Convenience and )
Necessity to Provide Competitive Local Exchange )
And Interexchange Telecommunications Serices )in the State of Idaho. )
Case No. L8,-I-iO-öL
APPLICATION FOR CERTIFICATION AND NOTICE
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Liberty-Bell Telecom, LLC ("LBT" or "Applicant"), a privately-held corporation
organized under the laws of the State of Colorado, pursuant to Idaho Code § § 61-526 through
528, IDAPA 31.01.01.111 ("Rule 111 "), Procedural Order 26665, i and Idaho Code § 62-604 and
IDAP A 31.42.01 Rule 202 ("Rule 202"), Information to be Included in Notice to Commission,
hereby submits this Application for Certifcation and Notice ("Application") to the Idaho Public
Utilities Commission ("Commission"). By this Application, LBT respectfully requests authority
to provide competitive, facilities-based local exchange and switched exchange access in Qwest
local service terrtory, and non-facilities-based intrastate interexchange telecommunications
services between and among locations within the State of Idaho. In support of its Application,
LBT states as follows?
i See, In the Matter of Procedural Requirements for Approval of Certifcates of Public Convenience and Necessity
for Telecommunications Providers Desiring to Provide Local Service in Idaho, Procedural Order 26665, Case No.
GNR-T-96-4 (November 1996)("Order"J.2 Pargraph headings adopt the Commission's Application for Certification requirements as appear at the
Commission's web site, htt://www.puc.idaho.gov/intemet/telcom/cert.htm and the Order, uness otherwise noted.
Rule 202 citations apply to the Commission's interexchange carer Notice requirements.
I. Proposed Services.
A narrative description of the telecommunication servces provided by the
Applicant and the geographic area and market to be served by the company. Other
items of interest are whether the company is a facilties-based provider or a reseller,
or some combination thereof; what general plans the company has to build facilties
in the future; to which markets the provider wil appeal; how the provider wil
market its products; whether the company currently provides or has a history of
providig other servces in Idaho; how the corporate famiy is structured. (Rule 202
(2)(d))
Applicant proposes to offer competitive local exchange services initially including, basic
local exchange services and custom callng features for residential and commercial subscribers.
Applicant also proposes to offer switched and dedicated access local exchange and interexchange
telecommunications serices. Applicant subsequently proposes to offer exchange access
services to interconnecting carrers. Applicant's proposed serices are set fort in its ilustrative
tarff attached hereto as Exhibit A.
Applicant's local exchange and exchange access serices wil be provided on a facilities-
based basis, and consist of leased underlying carrer unbundled network elements. Applicant
wil also rely on the switching capabilities of its underlying carers. Applicant does not
otherse propose to constrct facilities. Applicant's interexchange serces will be offered
exclusively on a resold, non-facilities-based basis. Applicant wil market its serice exclusively
though its trained, professional sales staff and online marketing.
Applicant has not heretofore provided telecommunications servces in the State of Idaho.
Applicant now seeks authority to provide its services in Idaho and in other states where local
serice is provided by the dominant incumbent local exchange carer, Qwest Corporation.
Applicant is a subsidiar of Liberty-Bell, LLC, a non-regulated parent corporation.
2
II. Form of Business
1. Name, Address and Form of Business; If the applicant is a corporation, (1) a
short statement of the character of public servce in which it may engage, (2) the
name of the state in which it is incorporated, (3) its principal business address and
its principal business address within Idaho, (4) a certified copy of its articles of
incorporation, (5) if not incorporated in Idaho, a certificate of good standing issued
by the Idaho Secretary of State of Idaho, and (6) name and address of registere
agent for service in Idaho. (and Rule 202 (2)(a), (b), (cl)
Applicant's name, address, and contact information are:
Libert-Bell Telecom, LLC
2460 West 26th Avenue
Suite #380-C
Denver, CO 80211
Telephone: [phone]
Facsimile: 303.831.1988
Applicant is a limited liability corporation organized under the laws of the State of
Colorado on September 4, 2002. A copy of Applicant's Certificate of Organization is attached
hereto at Exhibit B. Applicant wil provide service under its legal name, Liberty-Bell Telecom,
LLC, and wil not assume a fictitious name. Applicant does not propose to maintain a physica
presence in the State of Idaho. A copy of Applicant's Idaho Certificate of Authority to transa
business is attached hereto at Exhibit C. Applicant's registered agent for process of serice in
the State of Idaho is:
CT Corporation System
1111 West Jefferson
Suite 530
Boise, ID 83702
2. If a corporation, the names and addresses of the ten common stockholders of
applicant owng the greatest number of shares of common stock and the number of
such shares owned by each.
Applicant is a wholly owned subsidiar of Libery Bell, LLC. Please refer item 4, infra.
3
3. N ames and addresses of the officers and directors of applicant.
Applicant's offcers and directors are as follows. Applicant's offcers and directors are
located at Applicant's principal offces:
Nigel Alexander -
Chrstina Neher
Jay Weber
Managing Member;
Chief Operating Officer;
Executive Vice President;
2460 W. 26th Avenue
Suite #380-C
Denver, CO 80211
4. Name and address of any corporation, association, or simiar organiation
holdig a 5% or greater ownership or a management interest in the applicant. As to
ownership, the amount and character of the interest must be indicated. A copy of
any management agreement must be attached.
Applicant is a wholly owned subsidiar of Liberty Bell, LLC. Those maintainig an
ownership interest of five percent or more in Applicant's parent corporation are as follows.
Individual Shares Percentage of Percentage of
And Address Owned Shares Issued Voting Control
Nigel Alexander 596.000 48.57%48.57%
2460 W. 26th Avenue, Suite #380-C
Denver, CO 80211
Thomas G. Marino 135,000 11.0%11.0%
2460 W. 26th Avenue, Suite #380-C
Denver, CO 80211
Robert S. Unger 117,000 9.54%9.54%
2460 W. 26th Avenue, Suite #380-C
Denver, CO 80211
George Caulkins 96,727 7.88%7.88%
2460 W. 26th Avenue, Suite #380-C
Denver, CO 80211
A copy of Applicant's Third Amended and Restated Operating Agreement, is attached
hereto at Exhibit D.
4
5. N ames and addresses of subsidiaries owned or controlled by applicant.
Applicant neither owns, nor has a controllng interest in any subsidiar entity.
III. Telecommunication Servce
1. The date on which applicant proposes to begin construction or anticipates it
wil begin to provide servce.
Applicant is prepared to initiate serice upon the grant of the instat Application.
Applicant wil not constrct facilities or otherwise deploy equipment in Idaho.
2. A written description of customer classes and customer service(s) that the
applicant proposes to offer to the public.
Applicant proposes to serve both commercial and residential subscrbers. Applicant
proposes to provide competitive basic local exchange serice, custom callng featues as well as
dedicated, non-switched private line serices to its local exchange subscribers, and non-facilties-
based interexchange services to interexchange subscribers.
IV. Servce Territory
1. A description sufficient for determiing whether servce is to be offered in a
partcular location; and the names of all incumbent local exchange corporations
with whom the proposed utity is liely to compete.
Applicant proposes to provide service within the local exchange serice terrtory of
Qwest Corporation, its sole incumbent local exchange carer competitor. Although Applicant
initially anticipates providing services primarly in major metropolitan areas served by Qwest
Corporation, Applicant wil have the ability to provide service in any Qwest Corporation
exchange, as set forth in the Company's Exchange and Network Services Catalog No.3, Section
5 for nortern Idaho, and Exchange and Network Servces Catalog No.1, Section 5 for southern
Idaho.
5
2. Written description of the intended manner of service, for example, resold
services or facilties based. A general description of the property owned or
controlled by. applicant.
Applicant proposes to provide local exchange servces on a facilities-based basis utilzing
leased Qwest unbundled network elements and on a non-facilities-based basis for interexchange
serces through the resale of underlying carer interexchange serces. Applicant does not
anticipate owning or controllng equipment in the State of Idaho.
3. A statement describing with whom the applicant is likely to compete.
Applicant wil compete with Qwest Corporation and other local exchange carers as set
fort in the Commission's listing of local exchange carrers,3 and interexchange serice
providers whose identity is a matter of record with the Commission.
4. A description of the property owned by the applicant clarifes the applicant's
proposed services and operation.
Please refer to item IV, 2. Supra.
V. Financial Information
1. Current detailed balance sheets, includig a detailed income and profit and
loss statements of applicant reflectig current and prior year balances for the twelve
. months ended as of the date of the balance sheet, or if not readily available, for the
period since the close of the preceding calendar year.
A copy of Applicant's most current income statement and balance sheet for the twelve
month period ending December 31, 2009, are attached hereto at Confidential Exhibit E.
Pursuant to IDAP A Rules 31.01.067, 31.01.01.233, and 31.02.01.005.05, Idaho Code Sections 9-
340C and -340D, and Idaho Code Section 48-801 et seq. Applicant maintains that the enclosed
financial statements are, and contain, confidential, proprietary, and trade secret information,
3 See, htt://www.puc.state.id.us/internet/IS-.ublic_clec.html
6
and/or are otherwise exempt from disclosure under Idaho law. Applicant respectfully requests
that the documents be protected from inspection, examination or copying by any person other
than the Commissioners and Commission Staff
Applicant has profitably managed its current operations, and maintains that it has the
financial ability to provide reliable and responsible telecommunications services in Idaho.
2. If a balance sheet and income statement are not available, the applicant must
submit fmaIÌcial data suffcient to establish that it possesses adequate financial
resources to provide the proposed services.
Please refer to item V.I., supra.
VI. "ilustrative" Tariff Filgs
Proposed initial tariff and price sheets settg forth rates, rues, terms, and
regulations applicable to the contemplated service.
A copy of Applicant's ilustrative combined local exchange and interexchange tarff and
price sheets setting fort rates, rules, terms, and regulations applicable to the contemplated
serice are attached hereto at Exhibit A.
VII. Customer contacts
1. Contact information for the Applicant.
a) The name, address, and telephone number and electronic mailg
addresses (if available) of the person(s) responsible for consumer inquiries
and complaints from the public.
The name, address, and telephone number and electronic mailng addresses (if available)
of the person(s) responsible for consumer inquiries and complaints from the public is:
Chrstina Neher
Chief Operating Offcer
Libery-Bell Telecom, LLC
7
2460 West 26th Avenue
Suite #380-C
Denver, CO 80211
Telephone: [phone]
Facsimile: 303.831.1988
Electronic Mail: cneher (at) liberbelltelecom (dot) com
b) A toll-free number for customer inquiries and complaints. (Rule 202~
Applicant's Toll Free number for customer inquiries and complaints is
866.664.2355.
c) The name, number and electronic mailng addresses (if available) of the
person(s) designated as a contact for the Commission Staff for resolving
complaints, inquiries and matters concerning rates and price lists or tariffs.
(Rule 202 (2)00)
The name, number and electronic mailing addresses of the person(s) designated as a
contact for the Commission Staff for resolving complaints, inquiries and matters concering
rates and price lists or tarffs are:
Chrstina Neher - Chief Operating Officer
Liberty-Bell Telecom, LLC
2460 West 26th Avenue, Suite #380-C
Denver, CO 80211
Telephone: [phone]
Facsimile: 303.831.1988
Electronic Mail: cneher (at) libertybelltelecom (dot) com
VIII. Interconnection Agreements
1. Statements of whether the applicant has initiated interconnection
negotiations and, if so, when and with whom.
Applicant will be negotiating an interconnection agreement with Qwest Corporation
following the grant of the instant Application.
8
ix. Compliance with Commission Rules
A written statement that the applicant has reviewed all of the Commission rules and
agrees to comply with them, or a request for waiver of those rules believed to be
inapplicable.
Applicant hereby avers that it has reviewed all of the Commission rules and agrees to
comply with such rules. Should Applicant maintain that the rules are inapplicable, Applicable
wil request a waiver of such rules following confirmation of the need to request such waiver
with the Commission.
X. Escrow Account or Security Bond
1. If a company requires advance deposits by its customers, the company must
submit a signed copy of an escrow account with a bonded escrow agent or a security
bond. The escrow or bond shall be suffcient to meet customer deposit refunds in
case of company default.
2. At the Commission's discretion, an additional deposit may be required to
keep customers whole in case of company default.
3. The Commission wil review the individual requirement of establishing an
escrow or security account by the Company upon good showing by the Company for
a period of two years.
Applicant does not require advanced deposits. Applicant requests that the requirement
for escrow account or security bond be waived, accordingly.
Xi. Conclusion
The information contained in this Application and in the attached exhibits identifies
Company, descrbes the Company's proposed Idaho operations, and its ability to responsibly
serve the public in Idaho with viable and economic telecommunications serice alternatives.
9
WHEREFORE, Liberty-Bell Telecm, LLC respectfully Applies to the .Public Utilities
Commssion for a Certficate of Public Convenience and Necessity to providc compctitive,
fucilties-based local exchange and switched exchange acces in Qwest local serce terrtory,
and non-facilities-based intrastate iiiterexchange telecommunications serices betwee and
among locations with the State of Idaho.
Resecfully submitted this 18th day of June, 2010.
B .
Ja
Exec . e Vice President
2460 West 26th Avenue
Suite #380-C
Denver, CO 80211
Telephone: [phone]
Andrew O. lsar
Miler Tsar. Inc.
4423 Point Fosdick Drive NW
Suite 306
Gig Harbor, WA98335
Telephone: [phone]
Facsimle: 253.851.6474
Regulatory Consultants to
Liber-Bell Telecom, LLC
10
VERIFICATION OF APPLICANT
STATE OF COLORADO )
) ss.
)County of DENVER
I, Jay Weber, being duly sworn, hereby state that I am Executive Vice President of Liberty
Bell Telecom, LLC, an Applicant for Certificate of Public Convenience and Necessity to Provide
Competitive Local Exchange And Interexchange Telecommunications Services in the State of
Idaho, that I have examined and reviewed the foregoing Application and exhibits attached thereto,
and that to the best of my knowledge, information, and belief, all statements of fact contained in
said application are tre, and the said Application is correct and accurate in respect to each and
every matter set forth therein.
Respectfully submitted this ~ day of June, 2010.
By:
Ja
Execu' Vice President
2460 West 26th Avenue
Suite #380-C
Denver, CO 80211
Telephone: [phone]
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
In the Matter of the Notice )
of Libery-Bell Telecom, LLC )
for Cerificate of Public Convenience and )
Necessity to Provide Competitive Local Exchange )
And Interexchange Telecommunications Serces )in the State of Idaho. )
Case No. LßT-T-ID-O I
LIST OF EXHIBITS
EXHIBIT A ILLUSTRATIVE TARIFF
EXHIBITB ARTICLES OF ORGANIZATION
EXHIBITC CERTIFICATE OF AUTHORITY TO TRANSACT
BUSINESS
EXHIBITD OPERATING AGREEMENT
EXHIBITE CONFIDENTIAL FINANCIAL STATEMENT AND
REQUEST FOR CONFIDENTIALITY
EXHIBITB
ARTICLES OF ORGANIZATION
(Attached)
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EXHIBITC
CERTIFICATE OF AUTHORITY TO TRASACT BUSINESS
(Attached)
. '.',.,
253
~ APPL/CA TlON FOR CERTIFICATE l01t ~S . PH 3: 40
OF AUTHORITY FOR FOREIGN .SECR£TAf(Y _ ,__ .,
LIMITED LIABiLITY COMPANY . STA-TftJF Or ~.rAr£. IDAHO
(Instructions on back of application)
1. The name of the limited liabilty company is: .#i
Liberty Bell Telecom, lLC
2. If the name of the limited liabilty company is not permissible or is not available in Idaho, the
name the foreign limited liabilty company wiJ use in Idaho is:
3. The jurisdiction under whose laws the limited Iiabilty company is formed is: Colorado
4. The name and complete street address of the registered agent in Idaho is:
CT Corporation System 1111 West Jefferson, Suite 530, Boise, ID 83702
5. The street and mailng address of the limited liabilty company's principal offce is:
2460 West 26th Avenue, Suite 380-C, Denver, CO 80211
Street Address
Mailing AddrÐS8. if diferent
6. The stret and mailng address of the limited liabilty company's office in the jurisdiction
under whose laws it is organized is:
2460 West 26th Avenue, Suite 38Q.C, Denver, CO 80211
Stl'I Address
MalUng Addrss. if different
7. The name and mailng address of at least one member or manager:
Nigel Alexander 2460 West 26th Avenue, Suite 380-C, Denver, CO 80211
8. The mailng address for future correspondence:
2460 West 26th Avenue, Suite 380-C, Denver. CO 80211
9.
Aulh9ríed Signature
Nigel Alexande
Typ Nam.
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IDA SECRARY OF STATE. 03/05/2010 05: 00
CK: 183& CT: 211&8 BH: 1211195
1 tl 11&. II = lt1. tI REGFORlC II 2
1 tl 21.1& = 21.1& EXPEITE C I 3
ival;;O/
Secrar of State use only
"
450 N 4th Steet
PO Box 83720
Boise 10 83720-0080
Phone: [phone]
Fax: [phone]Ben Ysursa
Secretary of Stte
sosinfo~sos.¡daho.gov
ww.sos.idaho.gov
STATE OF IDAHO
SECRETARY OF STATE,
ANNUAL REPORTING REQUIREMENTS
Each corporation, limited liabilty company, limited partership and iimited liabilty partnership authonzed to
transact business in this state must deliver to the secretary of state for filing an annual report on a form provided by
this offce.
If an annual report is not received on or before the due date, the following wil occur:
1) Domestic corporations and limited liabilty companies wil be subject to administrative dissolution;
2) Foreign corporations wil be subject to revocation of its authority to do business in Idaho;
3) Foreign limited liabilty companies wil be subject to administrative 'cancellation;
4) Limited partnerships wil be subject to administrative cancellation I termination.
S) Limited liabilty parterships wil lose their limited liabilty status and revert to general partnerships:
The form must be executed by a person authorized by the company, indicating such capacity, setting forth the
name of the company, the state or country under whose law it is incorprated/organized, along with the names
and addresses of its current registered agent and offcers.
The first, and all subsequent annual report shall be delivered to the secretary of state. each year before the
end of the month during which a corporation or limited liabilty company was initially authonzed to transact
business. (Please note: the first annual report is not due unti 1 year after the initial filing date.)
A post card wil be sent to notify you that your annual report is due. There is no filing fee if the annual report is
received in this offce by the date it is due. A post mark date is not suffcient.
A sample of the post card and a generated annual report is included on the back of this letter.
File your annual report electronically via our website: ww.sos.idaho.gov or request a mail in report form. Please
follow the instrctions carefully when entenng the data. The annual report wil only be available for filing 60 daysprior to the due date. .
If you have any questions or need further assistance, please do not hesitte to contact this offce at (208) 334
2301.
Very truly yours,
COMMERCIAL DIVISION
IDAHO SECRETARY OF STATE'S OFFICE
Enclosures: cited
OFFICE OF TH SECRETARY OF STATE
OF TH STATE OF COLORAO
CERTIFICATE
I, Berne Buescher, as the Secreta of State of the State of Colorado, hereby certfy that, according to the
records of this offce,
LIBERTY BELL TELECOM, LLC
is a Limited Liabilty Company formed or registered on 02/27/2003 under the law of Colorado, has
complied with all applicable requirements of this offce, and is in good stadig with this offce. This
entity has been assigned entity identification number 20031065277.
This certficate reflect facts established or disclosed by documents delivered to this offce on paper
though 02/25/2010 that have been posted, and by documents delivered to this offce electronically
though 03/04/2010 ~ 13: 15 :07.
I have affxed hereto the Great Seal of the State of Colorado and duly generated, executed, authenticated,
issued, delivered and communicated this offcial certficate at Denver, Colorado on 03/04/2010 ~
13:15:07 puruat to and in accordance with applicable law. This certificate is assigned Confirmation
Number 7591148.
~ ~J~r-
Secreta of State of the State of Colorado
** ******* ** ** ** ********** **** ** **************End of C~ificate****** * * **** *** ** * *** ******* ** * *** ***** ** ***
Notice: A cetiat issu electronicaliy "om the Colorado Secretar of State 's Web site is fuly and immediatiY valid and effctiv. How.as an option, th issuance an validity of a certificate obtaid electronically ma be established by visitig th Certificate C07rmation Page of
the Secrtary of State's Web site, htt¡://www.sos.state.co.usizCertifìateSeqrcCriteria.do entring th certifcate's confirmtion nunr
displa on the certifcate, and following the instrctions displayd Confirmng the issuance of a certificate is mereiY optional an Ì8 not
necessar to the valid and effctie issuce ofa certificate. For more information, visit our Web site, htt://www.sos.state.co.usclick Bus
Center an select "Frequently Asked Qustions. "
CERT_GSJ) Revised 0810100
EXHIBITD
OPERATING AGREEMENT
(Attached)
THIRD AMENDED AND RESTATED OPERATING AGREEMENT OF
LIBERTY-BELL, LLC
~Ëß!X::BELL
THIRD AMENDED AND RESTATED OPERATING AGREEMENT OF
LIBERTY-BELL, LLC
This Third Amended and Restated Operating Agreement (this IIAgreement") of liberty-Bell, LLC
(the IICompany"), effective as of the close of business on September 8, 2009, is made and entered into
by and among the Company, Nigel Alexander, Thomas G. Martino, Robert S. Unger, Jay Weber,
Rainmaker Investments, LLC, Steven i. Levey, Christina M. Neher, Shawn Stickle and George Caulkins,
each individually, a IIMember" and, together with any other Person that is hereafter admitted as a
Member in accordance with the terms and provisions hereof, but excluding any Person that ceases to be
a Member pursuant to the provisions of this Agreement, the "Membersll).
RECITALS
A. The Company was formed by the filing of Articles of Organizàtion with the
Colorado Secretary of State's office on September 4, 2002 (the IIArticlesll).
B. The Company and Alexander are parties to that certain Operating Agreement
dated as of September 4, 2002 (the "Original Agreement").
C. The Company and certain Members are parties to that certain Second Amended
and Restated Operating Agreement effective as of November 30, 2008 (the IISecond Amended
Agreement").
D. The Members now desire to amend and restate the Second Amended
Agreement in its entirety as set forth below.
AGREEMENT
The Members hereby (i) ratify and in all respects confirm the formation of the Company
under the laws of the State of Colorado pursuant to the Articles, and (ii) amend and restate the Second
Amended Agreement in its entirety as follows:
1. Name. The name of the limited liability company is Libert-Bell, LLC.
2. Purpose; Powers. The Company was formed for the object and purpose of, and the
nature of the business to be conducted and promoted by the Company is, engaging in any lawful act or
activity for which limited liability companies may be formed under the Colorado limited liability
Company Act, C.R.S. Sections 7-8-101, et seq., as amended (the "Act"). In furtherance of its purposes,
but subject to all of the provisions of this Agreement, the Company shall have the power and is hereby
authorized to do such things and engage in such activities related to the foregoing as may be necessary,
convenient or incidental to the conduct of the business of the Company, and have and exercise all of the
powers and rights conferred upon limited liabilty companies formed pursuant to the Act.
3. Principal Office. The address of the principal office of the Company is 2460 West 26th
Avenue, Suite 380-C, Denver, Colorado 80211.
2
l(2!.X:BELL
4. Registered Agent and Registered Office. The Company shall at all times maintain a
registered agent and a registered office in the State of Colorado as provided in the Act. Until changed by
the Members in accordance with this Agreement and the Act, the registered agent of the Company shall
be Nigel Alexander.
5. Members. A list of Members of the Company shall be maintained and recorded in the
books and records of the Company, and available to any Member upon written request to the Company.
The list of Members shall be updated by the Manager from time to time to reflect the admission of
additional or substitute Members. No additional or substitute Members shall be admitted to the
Company, except (i) pursuant to the issuance of Units or securities in accordance with Section 7, or (ii)
pursuant to a Transfer of Units in accordance with Section 23(c). In order to obtain the rights of a
Member under this Agreement, the holder of any Units must execute a counterpart to this Agreement,
or a Joinder Agreement in the form attached as Exhibit A hereto.
6. Limited Liabilty. Except as otherwise provided by the Act, the debts, obligations and
liabilities of the Company, whether arising in contract, tort or otherwise, shall be solely the debts,
obligations and liabilities of the Company, and the Members shall not be obligated personally for any
such debt, obligation or liability of the Company solely by reason of being a Member of the Company.
7. Capital Structure; Voting Rights.
(a) All interests in the Company shall be evidenced by units ("Units"), with each Unit
evidencing a proportional part of the membership/ownership interests in the Company during its
existence except as otherwise expressly provided herein. The ownership of Units shall be maintained
and recorded in the books and records of the Company, and available to any Member upon written
request to the Company. The list of unitholders shall be updated from time to time to reflect the
admission of additional or substitute unitholders. The schedule of ownership of Units shall be amended
from time to time by the Manager without the consent of the Members to reflect the issuance of
additional Units or transfer of outstanding Units. The authorized capital of the Company shall consist of
such number of Units as may be issued from time to time by the Company as designated by the
Manager at the time of the issuance of such Units, subject to the provisions of Section 16(b). Each
holder of Units shall be entitled to one vote per Unit held of record on the Company's books as to all
matters that come before the Members for a vote. The holders of Units shall be entitled to distributions
of available cash of the Company, when, as and if declared out of funds legally available therefore,
subject to the provisions of Section 14. Upon any liquidation, dissolution or winding up of the Company,
any of the Company's net assets available for distribution shall be distributed to the holders of the Units
in accordance with the provisions of Section 26.
(b) Subject to the provisions of Section 16(b), the Manager is authorized to cause the
issuance of any other type of security of the Company from time to time to Members or other Persons
on terms and conditions established by the Manager. Such securities may include unsecured and
secured debt obligations of the Company, debt obligations of the Company convertible into Units, and
options, rights or warrants to purchase any such Units.
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8. Capital Contributions. As of the date hereof, the Members have made contributions to
capital as set forth in the books and records of the Company (a "Capital Contribution"). The Manager
shall determine the required Capital Contribution upon issuance of any additional Units. Subsequent to
issuance of any Units, no Member shall be required to make additional Capital Contributions to the
Company.
9. No Interest. Except as otherwise expressly provided in this Agreement, no interest shall
be paid by the Company on capital contributions, balances in any Member's Capital Accounts or any
other funds contributed to the Company or distributed or distributable by the Company under this
Agreement.
10. No Withdrawal; Return of Contribution. No Member shall have the right to withdraw
any portion of such Member's Capital Account without the consent of Members owning no less than
seventy five percent (75%) of the outstanding Units (a "Required Interest"). Except as required by the
Act, no Member shall be personally liable to any other Member for the return of any capital
contributions (or any additions thereto), it being agreed that any return of capital as may be made from
time to time shall be made solely from the assets of the Company and only in accordance with the terms
hereof.
11. Transactions with Members. Subject to the provisions of Section 16(b), a Member may
lend money to, borrow money from, act as surety, guarantor or endorser for, guarantee or assume one
or more specific obligations of, provide collateral for, and transact other business with the Company
and, subject to other applicable law, shall have the same rights and obligations with respect to any such
matter as a Person who is not a Member.
12. Capital Accounts. The Company shall maintain for each Member a separate capital
account ("Capital Account") in accordance with the rules prescribed pursuant to Sections 704(b) and (c)
of the Internal Revenue Code of 1986, as amended (the "Code"), and the Treasury Regulations (the
"Treasury Regulations") promulgated thereunder, including but not limited to Treasury Regulations
Section 1.704-1(b)(2)(iv). The Capital Account of each Member shall be valued pursuant to Treasury
Regulations Section 1.704-1(b)(2)(v)(f).
13. Allocations of Profits and Losses.
(a) After giving effect to the provisions of Sections 13(b) through (h), all profits and losses of
the Company (as determined under the capital accounting rules of Treasury Regulation Section 1.704-
1(b)(2)(iv) for purposes of adjusting the Capital Accounts of the Members, including the provisions of
paragraphs (b), (f) and (g) of those regulations relating to the computation of items of income, gain,
deduction and loss) shall be allocated among the Members in proportion to their respective Units.
(b) In accordance with Section 704(c) of the Code and the applicable Treasury Regulations
thereunder, income, gain, loss, deduction and tax depreciation with respect to any property which has a
Book Basis different from its adjusted basis as determined for Federal income tax purposes shall, solely
for income tax purposes (and without adjusting any Member's Capital Account therefor), be allocated
among the Members so as to take into account any variation between the adjusted tax basis of such
property to the Company and the Book Basis of such property. For this purpose, the "Book Basis" of an
asset of the Company shall mean the assets adjusted tax basis, as determined for Federal income tax
purposes; provided, however, that (i) if property is contributed to the capital of the Company, the initial
Book Basis of such property shall be its fair market value on the date of contribution, as determined in
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good faith by the Members; (ii) if the Capital Accounts of the Company are a9justed (at the discretion of
the Manager pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(f) to reflect the fair market
value of the Company's assets), the Book Basis of each such asset shall be adjusted to equal its fair
market value, as determined in good faith by the Members as of the time of such adjustment in
accordance with such regulation; and (iii) the Book Basis of all assets shall be adjusted thereafter by
depreciation and amortization as provided in Treasury Regulations Section 1.704-1 (b)(2)(iv)(g).
(c) Any income, gain, loss or deduction realized as a direct or indirect result of the issuance
of Units by the Company to a Member (the "Issuance Items") shall be allocated among the Members so
that, to the extent possible, the net amount of such Issuance Items, together with all other allocations
under this Agreement to each Member, shall be equal to the net amount that would have been
allocated to each such Member if the Issuance Items had not been realized.
(d) In the case of any promissory note to or from a Member, to the extent the Company has
taxable interest income or interest expense with respect to such promissory note pursuant to Section
483, Sections 1271 through 1288, or Section 7872 of the Code, such interest income or interest expense
shall be specially allocated to the Member to whom such promissory note relates.
(e) The following special allocations shall, except as otherwise provided, be made in the
following order:
(i) Except as otherwise provided in Treasury Regulations Section 1.704-2(f),
notwithstanding any other provision of this Section 13, if there is a net decrease in partnership
minimum gain or partner nonrecourse debt minimum gain (within the meaning of Treasury Regulations
Section 1.704-2) during any taxable period, items of income and gain for such taxable period (and, if
necessary, subsequent taxable periods) shall be allocated among the Members in accordance with
Treasury Regulations Section 1.704-2(d), 1.704-2(f), 1.704-2(g) and 1.704-2(i). The items to be so
allocated, and the order in which such items must be allocated, shall be determined in accordance with
Treasury Regulations Section 1.704-2(j)(2). This Section 13(e)(i) is intended to comply with the minimum
gain chargeback requirements set forth in Treasury Regulations Section 1.704-2 and shall be interpreted
consistently therewith.
(ii) If any Member unexpectedly receives an adjustment, allocation, or distribution
described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6), then items of income and
gain shall be specifically allocated to such Member in accordance with the requirements of Treasury
Regulations Section 1.704-1(b)(2)(ii)(d). This Section 13(e)(ii) is intended to comply with the "qualified
income offset" provision of the regulation last cited and shall be interpreted consistently therewith.
(ii) Nonrecourse deductions (within the meaning of Treasury Regulations Section
1.704-2(b)(1)) for any fiscal year or other period shall be allocated among the Members under Treasury
Regulations Section 1.704-2(e) in accordance with their respective Units.
(iv) Any partner nonrecourse deduction (within the meaning of Treasury
Regulations Section 1.704-2(i)) for any period shall be allocated to the Member that potentially bears an
economic risk of loss with respect to the partner nonrecourse debt (within the meaning of Treasury
Regulations Section 1.704-2(b)(4)) to which such partner nonrecourse deductions are attributable, all in
accordance with the principles ofTreasury Regulations Section 1.704-2(i)(1) and (2).
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(v) It is the intent of the parties to this Agreement that the allocation in this Section
13(e) (the "Regulatory Allocations") satisfy the requirements of certain Treasury Regulations under
Section 704(b) of the Code. It is further intended that the allocations under this Section 13 shall effect
an allocation for Federal income tax purposes in a manner consistent with Section 704(b) of the Code
and comply with any limitations or restrictions therein and, to the extent possible, that any Regulatory
Allocations shall be offset with other special allocations of income, gain, loss or deduction in whatever
manner the Manager reasonably and in good faith determines so that, after such offsetting allocations
are made, each Member's Capital Account balance is (to the extent possible) equal to the Capital
Account balance such Member would have had if the Regulatory Allocations were not part of this
Agreement and all items of income, gain, loss and deduction were allocated pursuant to Section 13(a).
In exercising its discretion with respect to the Regulatory Allocations, the Manager shall take into
account future Regulatory Allocations that, although not yet made, are likely to offset other Regulatory
Allocations previously made. If for any reason the allocations contained in this Agreement conflict with
the Treasury Regulations promulgated under Section 704 of the Code, the Members acknowledge that
such Treasury Regulations shall control.
(f) Any "excess nonrecourse liabilties" (as defined in Treasury Regulations Section 1.752-
3(a)(3)) shall be allocated among the Members in accordance with their respective Units.
(g) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to
Code Section 734(b) or 743(b) is required, pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(m),
to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital
Accounts shall be treated as an item of gain or loss and such gain or loss shall be specially allocated to
the Members in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(m).
(h) If any interest in the Company is transferred, or upon the admission or withdrawal of a
Member in accordance with the provisions of this Agreement, the income or loss attributable to such
interest in the Company for such calendar year shall be divided and allocated between the Members on
such basis as shall be determined by the Manager.
14. Distributions.
(a) Except as otherwise provided in Section 14(b), and Section 26 pursuant to a
dissolution of the Company, the available cash of the Company shall be distributed to the holders of
Units at the times and in the aggregate amounts determined by the Manager, and shall be allocated
among the Members in proportion to their respective Units.
(b) On or before March 31 of each year, commencing March 31, 2010, the Company
shall distribute to each Member cash in an amount equal to the positive difference, if any, between (i)
30% of the Company's taxable income for the prior calendar year allocated to such Member, and (ii)
distributions paid to such Member during the prior calendar year; provided, however, the Company
shall not make distributions to the Members under this Section 14(b) if such distribution would be
prohibited by, or cause a default under, any loan or other agreement to which the Company is a party.
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15. Designation of Manager.
(a) The Manager of the Company as of the date hereof, as such term is used in Section
7-80-102(8) of the Act, is Nigel Alexander (the "Manager").
(b) The Manager shall serve indefinitely but may be removed at any time, with or without
cause, by a Required Interest.
(c) Upon the removal, death, retirement, resignation, bankruptcy, court declaration of
incompetence or dissolution of a Manager, the Members shall appoint a new Manager to serve in such
capacity by vote of a Required Interest.
16. Management.
(a) Subject to the provisions of Sections 16(b) and 16(c), the business and affairs of the
Company shall be directed and managed by the Manager, and the Manager shall have full power and
discretion to make any and all decisions with respect thereto. Without limiting the foregoing, the
Manager shall have the authority, power and discretion to do the following:
(i) to manage, maintain, control and otherwise provide for the day-to-day
operation of the property of the Company;
(ii) to manage, control, invest, reinvest, acquire or purchase, lease or otherwise sell,
contract to purchase or sell, grant, obtain, or exercise options to purchase, options to sell or conversion
rights, assign, transfer, convey, deliver, endorse, exchange, pledge, mortgage, abandon, improve, repair,
maintain, insure, lease for any term and otherwise deal with any and all property of whatsoever kind
and nature, and wheresoever situated, in furtherance of the purposes of the Company;
(ii) to employ, engage or contract with or dismiss from employment or engagement
persons to the extent deemed necessary by the Manager for the operation and management of the
Company's business, including but not limited to service personnel, advertisers, marketers, contractors,
subcontractors, engineers, architects, surveyors, mechanics, consultants, accountants, attorneys,
insurance brokers, real estate brokers and others;
(iv) to enter into contracts on behalf of the Company and to perform or cause to be
performed by power of attorney or otherwise all of the Company's obligations;
(v) to borrow money, procure loans and advances from any person for Company
purposes, and to apply for and secure, from any person, credit for accommodations; to contract
liabilities and obligations, direct or contingent and of every kind and nature with or without security;
and to repay, discharge, settle, adjust, compromise, or liquidate any such loan, advance, credit,
obligation or liability;
(vi) to pledge, hypothecate, mortgage, assign, deposit, deliver, enter into sale and
leaseback arrangement or otherwise give as security or as additional or substitute security, or for sale or
other disposition any and all Company property, tangible or intangible and to make substitutions
thereof, and to receive any proceeds thereof upon the release or surrender thereof; to sign, execute and
deliver and receive written agreements, undertakings and instruments of every kind and nature; to give
oral instructions and make oral agreements; and generally to do any and all other acts and things
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incidental to any of the foregoing or with reference to any dealings or transactions which any attorney
may deem necessary, proper or advisable;
(vii) to acquire and enter into any contract of insurance which the Manager deems
necessary or appropriate for the protection of the Company, for the conservation of the Company's
assets or for any purpose convenient or beneficial to the Company;
(viii) to conduct any and all banking transactions on behalf of the Company; to adjust
and settle checking, savings, and other accounts which such institutions as the Manager shall deem
appropriate; to draw, sign, execute, accept, endorse, guarantee, deliver, receive and pay any checks,
drafts, bils of exchange, acceptances, notes, obligations, undertakings and other instruments for or
relating to the payment, of money in, into, or from any account in the Company's name; to execute,
procure, consent to and authorize extensions and renewals of the same; to make deposits and withdraw
the same and to negotiate or discount commercial paper, acceptances, negotiable instruments, bils of
exchange and dollar drafts;
(ix) to demand, sue for, receive, and otherwise take steps to collect or recover all
debt, rents, proceeds, interests, dividends, goods, chattels, income from property, damages and all
other property, to which the Company may be entitled or which are or may become due the Company
from any person; to commence, prosecute or enforce, or to defend, answer or oppose, contest and
abandon all legal proceedings in which the Company is or may hereafter be interested; and to settle,
compromise or submit to arbitration any accounts, debts, claims, disputes and matters which may arise
between the Company and any other person and to grant an extension of time for the payment or
satisfaction thereof on any terms, with or without security;
(x) to make arrangements for financing, including the taking of all actions deemed
necessary or appropriate by the Manager to cause any approved loans to be closed;
(xi) to take all reasonable m.easures necessary to insure compliance by the Company
with applicable arrangements, and other contractual obligations and arrangements entered into by the
Company from time to time in accordance with the provisions of this Agreement, including periodic
reports as required to lenders and using all due dilgence to insure that the Company is in compliance
with its contractual obligations;
(xii) to maintain the Company's books of account and records; and
(xii) to prepare and deliver, or cause to be prepared and delivered by the Company's
accountants, all financial and other reports with respect to the operations of the Company, and
preparation and filng of all federal and state tax returns and reports.
(b) Notwithstanding the provisions of Section 16(a) and subject to the provisions of Section
16(c), the Manager shall have no power or authority on behalf of the Company to take any of the
following actions without the consent of a Required Interest (as defined in Section 10 above):
(i) Issuing any Units (or obligations of the Company convertible into such
Units);
(ii) authorizing or approving any transactions or payments between the
Company and any Manager;
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(ii) authorizing the incurrence of any financial indebtedness by the
Company in any amount exceeding $250,000 in one transaction or series of related transactions;
(iv) filng of a voluntary petition for bankruptcy;
(v) effecting the redemption, acquisition or other retirement of any Units
then outstanding for a price in excess of $100,000;
(vi) authorizing a guaranty by the Company of any indebtedness or
performance of any obligation of any person other than the Company in amount exceeding
$250,000;
(vii) authorizing the sale, lease, exchange or other disposition of all or
substantially all of the assets, properties or business of the Company;
(viii) authorizing or effecting any amendment to this Agreement;
(ix) effecting the voluntary liquidation, dissolution or winding up of the
Company; or
(x) effecting the merger or consolidation of the Company with or into any
other entity.
If any Member has not delivered in writing to the Company his non-consent to a request
for consent under this Section 16(b) within 10 days after a written request for a consent is delivered to
such Member, such Member shall be deemed to have consented to the proposed action.
(c) The Company shall organize and maintain an Executive Committee comprised of no less
than three members. One member shall be the Manager then serving and the remaining members shall
be Members (but not executives of the Company) appointed by the vote or consent of Members (other
than the Manager) holding more than 50% of the outstanding Units (excluding Units owned by the
Manager or his Affiliates). The initial Executive Committee shall be comprised of the Manager, Thomas
G. Martino, Robert S. Unger and George Caulkins. Members of the Executive Committee shall serve for
terms of one year or until death, resignation or removal by vote of the Members (voting as provided
above regarding appointment of members of the Executive Committee). The Executive Committee shall
serve primarily in an advisory capacity except that it shall have authority to approve any proposed
increase in compensation, bonuses and benefits payable to the Manager, above the current levels. The
Executive Committee shall meet quarterly with senior management of the Company at such time and
place as approved by a majority of the members of the Executive Committee. In its advisory capacity,
the Executive Committee shall review and advise with respect to the follow matters:
(i) the operating results of the Company
(ii) the strategic plans of the Company;
(ii) any proposed distribution of cash to Members, and
(iv) such other matters as determined appropriate.
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The Executive Committee (excluding the Manager) shall be paid 2,000 Membership Units upon
reelection at each annual Membets Meeting, and $500 per formal Executive Committee meeting
attended. Informal communications between Committee Members in the ordinary course are covered
by the Unit allocation. Members of the Executive Committee who fail to attend 75% of the Meetings in
any year shall be subject to cancellation of units issued hereunder.
(d) No Member shall have the power to act for or bind the Company as all such power is
vested exclusively in the Manager. Except as otherwise provided herein, to the extent the duties of the
Manager require expenditures of funds to be paid to third parties, the Manager shall not have any
obligations hereunder except to the extent that Company funds are reasonably available to them for the
performance of such duties, and nothing herein contained shall be deemed to require the Manager, in
their capacity as such, to expend individual funds for payment to third parties or to undertake any
individual liability or obligation on behalf of the Company.
(e) Any action that otherwise may be taken by the Manager may be taken by an officer of
the Company to the extent authority for such action has been delegated to such officer by the Manager
(either specifically or under a general delegation of authority).
(f) The Manager shall keep at the office of the Company's registered agent the books and
records of the Company, including:
(i) a current list of the full name and last known business, residence or mailing
address of Members and the Manager, both past and present;
(ii) a copy of the Articles of Organization and all amendments thereto, together
with executed copies of any powers of attorney pursuant to which any certificate or amendment has
been executed;
(ii) copies of all tax information relating to federal and state income tax, if
applicable, for the three most recent accounting years;
(iv) copies of this Agreement and any amendments thereto;
(v) the accounting books and records, and copies of the financial statement of the
Company, for the three most recent accounting years;
(vi) minutes of every annual, special and court-ordered meeting of the Manager,
Executive Committee and Members;
(vii)
without a meeting;
any written consents obtained from Members for actions taken by Members
(vii) all documents and records pertaining to the Company, its assets and other
aspects of the Company business; and
(ix) all other records required to be maintained under the Act.
i 7. Officers. Officers of the Company may be appointed from time to time by the Manager.
No officer need be a Member. Any officers so designated shall have such authority and perform such
duties as the Manager may, from time to time, delegate to them. The Manager may assign titles to
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particular officers and, unless the Manager decides otherwise, if the title is one commonly used for
officers of a Colorado corporation, the assignment of such title shall constitute the delegation to such
officer of the authority and duties that are normally associated with that office, subject to any specific
delegation of authority and duties made to such officer by the Manager and subject to all standards of
care and restrictions applicable tq the officers of a Colorado corporation under applicable law. Each
offcer shall hold office until his successor is duly designated and qualified or ùntil his death or until he
resigns or is removed by the Manager with or without cause. Any number of offices may be held by the
same person. The Manager shall determine the salary or other compensation paid to each officer (other
than the Manager if serving as an officer).
18. Expenses. Upon proper written substantiation and verification, the Manager (or any
Member) shall be entitled to receive, out of Company funds available therefor, reimbursement of all
amounts reasonably expended by it out of its own funds in payment of properly incurred Company
obligations. ReÎmbursements pursuant to this Section 18 shall not be duplicative of payments under any
other provision of this Agreement or any other agreement.
19. Company Meetings.
(a) An annual meeting of the Members shall be held in the month of April each
year. The date of the annual meeting shall be selected by the Manager. Special meetings of the
Members may be called from time to time by the Manager or any Member(s) owning ten percent (10%)
or more of the Units, to be held at the principal place of business of the Company. A notice with respect
to each such meeting containing the place and date thereof and a proposed agenda therefor shall be
given to each Member no earlier than 30 days and no later than 5 days prior to the scheduled date of
such meeting (although each Member shall be entitled to waive such notice and raise issues at such
meeting relating to the business and operations of the Company, even if such issues are not set forth in
the agenda). The presence of a Member at a meeting shall constitute waiver of any notice required to
have been given unless such Member objects at the beginning of the meeting to the failure to give
proper notice. Members may participate in a meeting of the Company by means of a conference
telephone or similar communications equipment permitting all persons participating in such meeting to
hear each other at the same time. Participation in a meeting by such means shall constitute presence in
person at such meeting.
(b) The Members holding a majority of the outstanding Units entitled to vote present in
person or by proxy shall constitute a quorum for the transaction of business at all meetings of the
Members. At any meeting of the Members at which a quorum is present, a majority of votes properly
cast by the Members (or their duly authorized proxies) upon any question shall decide the question,
except in any case where the consent of a Required Interest is required pursuant to the terms of Section
16(b) hereof.
(c) Any action required or permitted to be taken at any meeting of the Members may be
taken without a meeting, without prior notice, and without a vote, if a consent or consents in writing,
setting forth the action so taken, shall be signed by the holder or holders of not less than the minimum
Units that would be necessary to take such action at a meeting at which the holders of all Units entitled
to vote on the action were present and voted. Every written consent shall bear the date of signature of
each Member who signs the consent. A photographic, photostatic, facsimile, or similar reproduction of
a writing actually signed and delivered by a Member shall be regarded as signed by the Member for
purposes of this Section 19. Prompt notice of the taking of any action by Members without a meeting
by less than unanimous written consent shall be given by the Company to those Members who did not
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consent in writing to the action; provided, however, that the Company shall not be prohibited from
taking the action so approved pending or following the delivery of such notice.
20. Other Business. The Manager (so long as not a material distraction to the Manager's
responsibilties hereunder) and Members and any Affiliate thereof may engage in or possess an interest
in other business ventures not directly competitive to the business of the Company of every kind and
description, independently or with others. None of the Company or the other Members shall have any
rights in or to such noncompetitive ventures or the income or profits therefrom by virtue of this
Agreement. For purposes of this Agreement, the term "Affiliate" means (i) in the case of an individual,
such individual's spouse and lineal descendants (whether natural or adopted) and any trust formed and
maintained solely for the benefit of such individual, such individual's spouse and/or such individual's
lineal descendants, and (ii) in the case of an entity, any other Person directly or indirectly controllng,
controlled by or under common control with such entity, whether by ownership of voting securities, by
contract or otherwise. The Manager and any officers of the Company shall each be deemed an Affilate
of the Company. For purposes of this Agreement, a "Person" means an individual or an entity, such as,
but not limited to, a corporation, general partnership, joint venture, limited partnership, limited liabilty
company, trust or business association.
21. Standards of Care; Limitation of Liability. In performing his duties hereunder, the
Manager shall discharge his duties in good faith, with the care an ordinarily prudent person would
exercise under similar circumstances and in a manner he reasonably believes to be in the best interests
of the Company. A Manager shall be entitled to rely on information, opinions, reports, or statements of
the following persons or groups unless he has knowledge concerning the matter in question that would
cause such reliance to be unwarranted:
(a) one or more employees or other agents of the Company whom the Manager reasonably
believes to be reliable and competent in the matters presented; and
(b) any attorney, public accountant or other person as to matters which the Manager
reasonably believes to be within such person's professional or expert competence.
22. Exculpation and Indemnification. No Member, Manager or officer shall be liable to the
Company, any other Members or any other person or entity who has an interest in the Company for any
loss, damage or claim incurred by reason of any act or omission performed or omitted by such Member,
Manager or officer in good faith on behalf of the Company and in a manner reasonably believed to be
within the scope of the authority conferred on such Member, Manager or officer by this Agreement,
except that a Member, Manager or officer shall be liable for any such loss, damage or claim incurred by
reason of such person's gross negligence or willful misconduct. To the full extent permitted by
applicable law, a Member, Manager or officer shall be entitled to indemnification from the Company for
any loss, damage or claim incurred by such Member, Manager or officer in good faith on behalf of the
Company and in a manner reasonably believed to be within the scope of the authority conferred on
such person by this Agreement, except that no Member, Manager or officer shall be entitled to be
indemnified in respect of any loss, damage or claim incurred by such Member, Manager or officer by
reason of gross negligence or willful misconduct with respect to such acts or omissions; provided,
however, that any indemnity under this Section 22 shall be provided out of and to the extent of
Company assets only, and no Member shall have personal liabilty on account thereof.
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23. Transfer of Units.
(a) A holder of Units may not Transfer, or permit to be Transferred, its Units or any part
thereof, except in compliance with the conditions set forth in Section 23(b). For purposes of this
Agreement, "Transfer" shall mean the sale, assignment, transfer, exchange, distribution, devise, gift,
granting of a lien, encumbrance or other disposition of such Unit, in whole or in part, in either case
whether pursuant to a sale, merger, combination, consolidation, reclassification or otherwise, and
whether voluntarily or by operation of law.
(b) No holder of Units may Transfer all or any portion of its Units unless each of the
conditions set forth below are satisfied:
(i) the holder desiring to consummate such Transfer and the prospective
transferee each execute and deliver to the Manager such instruments of transfer and assignment with
respect to such Transfer and such other instruments, including an agreement to be bound by the
provisions of this Agreement, as are reasonably satisfactory to the Manager; and
(ii) such Transfer shall not cause:
(A) a violation of the Securities Act of 1933, as amended, or any other
applicable Federal or state securities laws;
(B) a breach or violation of or an event of default under, or give rise to a
right to accelerate any obligation of the Company;
(C) the Company, directly or indirectly to be classified as a Person other
than a partnership for purposes of the Code or to be treated as a "publicly traded partnership" within
the meaning of Section 7704 of the Code; or
(0) the application of the rules of Sections 168(g)(1)(B) and 168(h) of the
Code or similar rules to apply to the Company; and
(ii) There shall have been delivered to the Company (at the transferring holder's
cost and expense) an opinion of reputable counsel, satisfactory to the Manager, as to the matters set
forth in Section 23(b)(ii)(A), unless this requirement is waived in writing by the Manager.
(c) Any transferee of Units shall be admitted to the Company as a substitute Member only
upon the consent of the Manager; provided, however, that the consent of the Manager shall not be
required for a transferee to be admitted as a substitute Member (and such transferee shall be admitted
as a substitute Member) if all of the conditions in Section 23(b) have been satisfied. Any transferee who
is not admitted as a substitute Member shall only have the rights of an unadmitted assignee under the
Act as to this Units then held. A holder of Units who is not admitted as a Member shall be entitled only
to allocation and distributions in accordance with this Agreement with respect to the Units held by such
holder, and shall have no right to any information or accounting of the affairs of the Company, shall not
be entitled to inspect the books and records of the Company, and shall not have any of the rights of a
Member under the Act or this Agreement.
24. Third Party Transfers/Right of First RefusaL. If at any time any Member receives a Purchase
Offer from a prospective purchaser for all or any part of his Units, which Purchase Offer such Member
desires to accept, no attempted acceptance shall be valid or effective unless such Member complies
13
1(!ß!X:BELL
with the provisions of this Section 24. For purposes of this Section 24, "Purchase Offer" shall mean an
offer to purchase all or a specific number of Units which is in writing, proposes to pay the purchase price
all in cash and is not conditional on or coupled with any other transaction between the prospective
purchaser and such Member.
(a) Upon receipt of a Purchase Offer, such Member shall give written notice to the
Company, setting out the price and terms of the Purchase Offer arid the name of the prospective
purchaser (including the beneficial ownership of any corporation or entity) and shall provide a copy of
the signed Purchase Offer. For a period of 10 days after receipt of such written notice, the Company
shall have the right (but not the obligation) to agree to purchase all (but not less than all) of the Units
covered by the Purchase Offer on the same price and terms as set forth in the Purchase Offer. After the
Company gives notice of its intention to purchase such units, the Company shall have 30 days to
complete such purchase, or this right of first refusal will lapse.
(b) If the Company declines to agree to purchase such units within 10 days, or provides
earlier written notice that it declines to purchase such units, or fails to complete such purchase as
provided for in (a) above, the Member may sell such Units within 90 days to the proposed purchaser for
the price and terms specified, provided that a sale at a later date, or to a different purchaser, or for a
different price, or on different terms shall not be made and, if attempted, shall be void unless an offer to
sell is again first made to the Company as provided herein, and all the provisions of this Section 24 are
complied with.
25. Resignation. A Member may not resign or retire as a Member of the Company without
the written consent of a Required Interest. A Member which resigns or retires in contravention of this
Agreement shall be liable to the Company for any damages occasioned by such resignation or
retirement and, in addition to any remedies the Company may have at law or in equity, the Company
may offset against any amounts it may owe to such resigning or retiring Member (in connection with a
distribution or otherwise) any such damages occasioned by such resignation or retirement.
26. Dissolution. The Company shall dissolve and its affairs shall be wound up upon the
earliest to occur of the following:
(a)the written consent of a Required Interest;
(b)the sale of all or substantially all of the assets of the Company; or
(c)
the Act.
the entry of a decree of judicial dissolution of the Company under Section 7-80-802 of
27.Liquidation and Dissolution.
(a) Upon the dissolution of the Company, sole and plenary authority to effectuate the
liquidation of the assets of the Company shall be vested in the Manager and, in the event of the
resignation, dissolution, liquidation or bankruptcy of the Manager, in a liquidator to be appointed upon
the written consent of the Members holding a majority of the Units (the "Liquidator"). The Liquidator
shall have full power and authority to sell, assign and encumber any and all ofthe Company's assets and
to wind up and liquidate the affairs of the Company in an orderly and business-like manner.
14
lLl-BERTY-BELL
\. Alwys On For You
(b) The Liquidator shall determine, in its sole discretion, the fair market value of all assets of
the Company as at the date of distribution of such assets and the profits and losses resulting from such
distribution shall be allocated in accordance with Section 13.
(c) The proceeds of liquidation of the assets of the Company distributable upon a
dissolution and winding up ofthe Company shall be applied in the following order of priority:
(i) First, to the creditors of the Company, including creditors who are Members, in
the order of priority provided by law, in satisfaction of all liabilities and obligations of the Company (of
any nature whatsoever, including, without limitation, fixed or contingent, matured or unmatured, legal
or equitable, secured or unsecured), whether by payment or the making of reasonable provision for
payment thereof;
(ii) Then, to the Members in proportion to their Units.
28. Tax Matters.
(a) The Manager shall, on behalf of the Company, arrange, supervise and oversee the
preparation and timely filing, and prior review by independent certified public accountants, of all returns
of Company income, gain, deductions, losses, credits and other items necessary for federal, state, local
and foreign income tax purposes and shall use all reasonable efforts to furnish to the Members, within
90 days after the close of the taxable year, the tax information reasonably required for federal, state,
local and foreign income tax reporting purposes. The taxable year of the Company shall be the calendar
year unless another year is required by the Code (the "Company Year").
(b) The Manager shall make all tax elections on behalf of the Company; provided, however,
that if a distribution of Company property as described in Section 734 of the Code occurs or if a transfer
of Units or an interest in the Company as described in Section 743 occurs, on the written request of any
Member, the Company shall make an election pursuant to Section 754 of the Code to adjust the basis of
Company properties.
(c) Nigel Alexander shall be the "Tax Matters Partner," as such term is defined in
Section 6231(a)(7) of the Code. In the event of an income tax audit of any tax return of the Company,
the filng of any amended return or claim for refund in connection with any item of income, gain, loss,
deduction or credit reflected on any tax return of the Company, or any administrative or judicial
proceedings arising out of or in connection with any such audit, amended return, claim for refund or
denial of such claim, (i) the Tax Matters Partner shall be authorized to act for, and its decision shall be
final and binding upon, the Company and all the Members, (ii) all expenses incurred by the Tax Matters
Partner in connection therewith (including, without limitation, attorneys', accountants' and other
experts' fees and disbursements) shall be expenses of the Company and (ii) no other Member shall have
the right to (A) participate in the audit of any Company tax return, (B) file any amended return or claim
for refund in connection with any item of income, gain, loss, deduction or credit reflected on any tax
return of the Company, (C) participate in any administrative or judicial proceedings arising out of or in
connection with any such audit, amended return, claim for refund or denial of such claim, or (0) appeal,
challenge or otherwise protest any adverse findings in any such audit or with respect to any such
amended return or claim for refund or in any such administrative or judicial proceedings. Each Member
agrees to indemnify and hold harmless the Company and all other Members from and against any and
all liabilties, obligations, damages, deficiencies and expenses resulting from (y) any tax liabilty incurred
by the Company attributable to such Member, including, without limitation, any liabilty incurred by the
15
I£I-BERTY-BELL
\. Alys On For You
Company for failure to withhold taxes on distributions to such Member or (z) any breach or violation by
such Members of the provisions of this Section 27(c), and from all actions, suits, proceedings, demands,
assessments, judgments, costs and expenses, including reasonable attorneys' fees and disbursements,
incident to any such liability, breach or violation.
29. Miscellaneous.
(a) Each provision of this Agreement shall be considered separable and if for any reason any
provision or provisions herein are determined to be invalid, unenforceable or illegal under any existing
or future law, such invalidity, unenforceabilty or illegality shall not impair the operation of or affect
those portions of this Agreement which are valid, enforceable and legaL.
(b) This Agreement may be executed in any number of counterparts, each of which shall be
deemed an original of this Agreement.
(c) This Agreement constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof, and supersedes all prior understandings or agreements between
the parties.
(d) This Agreement and all rights and remedies hereunder shall be governed by, and
construed under, the laws of the State of Colorado, without regard to the conflicts of law principles
thereof.
(e) This Agreement may not be modified, altered, supplemented or amended except
pursuant to a written agreement approved by a Required Interest.
(f) Each Member shall be entitled to receive telecommunication services from the
Company to their home without charge up to a retail value of $100 per month.
(g) Any notice, request, instruction, waiver or other communication to be given hereunder
by any party shall be in writing and shall be considered duly delivered when received if personally
delivered, facsimile (with machine generated proof of transmission), mailed by certified mail (return
receipt requested) with postage prepaid, sent by reputable overnight courier service which confirms
delivery (such as Federal Express) or delivered by electronic mail to the addresses, facsimile or electronic
mail addresses of the parties as set forth in the books and records of the Company.
16
IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, have
duly executed this Agreement as of the date and year first above written.
MEMBERS:
THE COMPANY:
¡signed
Thomas G. Martino
Liberty-Bell, LLC
¡signed
Robert S. Unger
/signed
Nigel Alexander, Manager
¡signed
George Caulkins
By:
¡signed
Nigel Alexander
¡signed
Jay Weber
¡signed
Christina M. Neher
¡signed
Shawn Stickle
Exhibit A
LIBERTY-BELL, LLC
OPERATING AGREEMENT JOINDER AGREEMENT
By his, her or its signature below, the undersigned hereby consents to and agrees to be
bound by the terms and provisions of that certain Third Amended and Restated Operating Agreement,
effective as of September 15, 2009 among Liberty-Bell, LLC, a Colorado limited liability company (the
"Company"), and its Members (as amended from time to time, the "Operating Agreement"), a current
copy of which has been obtained by the undersigned from the Company. The undersigned hereby
acknowledges that the undersigned has received and reviewed the Operating Agreement. The
undersigned hereby further acknowledges and agrees that the undersigned shall have all of the rights
and obligations under the Operating Agreement as a "Member" as defined and used therein. The
undersigned's execution of this Operating Agreement Joinder Agreement constitutes the undersigned's
execution of the Operating Agreement, and this Operating Agreement Joinder Agreement shall
constitute an executed counterpart to the Operating Agreement.
IN WITNESS WHEREOF, this Operating Agreement Joinder Agreement has been
executed by the undersigned as of the day of / 20_.
EXHIBIT ONLY - NOT FOR EXECUTION
Signature
Name (please print)
Accepted:
Liberty-Bell, LLC
EXHIBIT ONLY - NOT FOR EXECUTION
By:
Manager
Exhibit A
ItÉß!X..:BELL
LIBERTY-BELL, LLC
OPERATING AGREEMENT JOINDER AGREEMENT
By his, her or its signature below, the undersigned hereby consents to and agrees to be
bound by the terms and provisions of that certain Third Amended and Restated Operating Agreement,
effective as of September 8th, 2009 among liberty-Bell, LLC, a Colorado limited liability company (the
"CompanyJl), and its Members (as amended from time to time, the "Operating Agreement"), a current
copy of which has been obtained by the undersigned from the Company. The undersigned hereby
acknowledges that the undersigned has received and reviewed the Operating Agreement. The
undersigned hereby further acknowledges and agrees that the undersigned shall have all of the rights
and obligations under the Operating Agreement as a "Member" as defined and used therein. The
undersigned's execution of this Operating Agreement Joinder Agreement constitutes the undersigned's
execution of the Operating Agreement, and this Operating Agreement Joinder Agreement shall
constitute an executed counterpart to the Operating Agreement.
IN WITNESS WHEREOF, this Operating Agreement Joinder Agreement has been
executed by the undersigned as of the 30th day of September, 2009.
Signature
Name
Accepted:
liberty-Bell, LLC
By:
Nigel Alexander, Manager
THIS PAGE FOR EXECUTION BY NEW MEMBERS AND THE COMPANY
19
2460, West 26th Avenue, Suite 380-C, Denver, CO 80211
Tel: [phone]
~!8!X:BELL
Fax: [phone] www.libertybelltelecom.com
20
EXHIBITE
CONFIDENTIAL FINANCIAL STATEMENTS
(Attached)
Pursuant to IDAPA Rules 31.01.067, 31.01.01.233, and 31.02.01.005.05, Idaho Code Sections 9-
340C and -340D, and Idaho Code Section 48-801 et seq. Applicant maintains that the enclosed
financial statements are, and contain, confidential, proprietar, and trade secret information, and/or
are otherwise exempt from disclosure under Idaho law. Applicant respectfully requests that the
documents be protected from inspection, examination or copying by any person other than the
Commissioners and Commission Staff. Applicant's financial statements are submitted on yellow
paper under seal, accordingly.