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HomeMy WebLinkAbout06-93 P. • Resolution No. 06-93 RESOLUTION CONSENTING TO THE CHANGE OF CONTROL OF THE CABLE FRANCHISEE FROM WIDEOPENWEST HOLDINGS,LLC TO RACECAR ACQUISITION,LLC WHEREAS,WideOpenWest Illinois,LLC(the"Franchisee") is the holder of a franchise to provide cable service in the City of Elgin(the"Franchise"),subject to the provisions of a franchise agreement between the Municipality and the Franchisee dated May 28, 1997 (together with any amendments, the "Franchise Agreement") and subject to Resolution No. 97-123 of the City(the "Cable Resolution"). The Franchise Agreement and the Cable Resolution are collectively referred to as the"Franchise Documents;" and WHEREAS,WideOpenWest Holdings,LLC("WOW"),the Franchisee's ultimate corporate parent, and Racecar Acquisition, LLC ("Racecar") jointly submitted to the City of Elgin their application on Federal Communications Commission("FCC")Form 394,dated December 23,2005 (the "Application"), requesting that the Municipality approve the Change of Control of the Franchisee from WOW to Racecar as more fully described therein(the"Change of Control"); and WHEREAS, pursuant to the information requests of the City of Elgin, the Franchisee supplemented the Application with additional documents and information; and WHEREAS, the Franchisee has made various representations in the Application and supplemental information thereto; and WHEREAS, the City of Elgin and the Franchisee have negotiated an agreement regarding certain conditions of this consent(the"Change of Control Agreement"),a copy of which is attached as Exhibit A and is incorporated by reference. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS, as follows: Section 1. In reliance upon the representations and information submitted in the Application and supplemental information thereto and subject to the conditions set forth in the Change of Control Agreement, the City of Elgin hereby consents to the Change of Control of the Franchisee from WOW to Racecar as described in the Application and supplemental information thereto; and Section 2. The City of Elgin's consent is subject to the Franchisee executing and delivering to the City of Elgin a Change of Control Agreement in the form of the attached Exhibit A by no later than 30 days from the date the City of Elgin sends a certified copy of this consent Resolution to the Franchisee; and Section 3. By this consent, the City of Elgin does not agree to any renewal or extension of the Franchise. Any pending or future renewal or extension of the Franchise shall be subject to applicable federal, state and local laws, and the Franchise Documents; and r` Section 4.The Mayor is hereby authorized and directed to execute and deliver the Change of Control Agreement in substantially the form of the attached Exhibit A. Section 5. If any portion of this Resolution or application thereof is found to be unenforceable such provision shall not effect any other application thereof or the enforceability of the remaining provisions herein to the extent permitted by law. Section 6. This Resolution shall be effective upon passage, adoption and approval by the City Council. s/Ed Schock Ed Schock, Mayor Presented: April 26, 2006 Adopted: April 26, 2006 Omnibus Vote: Yeas: 7 Nays: 0 Attest: s/Dolonna Mecum Dolonna Mecum, City Clerk CHANGE OF CONTROL AGREEMENT Agreement among the City of Elgin, Illinois (the "Municipality") and WideOpenWest Illinois, LLC (the "Franchisee"). A. The Franchisee is the holder of a franchise to provide cable service in the Municipality(the"Franchise"), subject to the provisions of a franchise agreement between the Municipality and the Franchisee dated May 28, 1997(together with any amendments,the "Franchise Agreement") and subject to Resolution No. 97-123 of the Municipality (the "Cable Ordinance"). The Franchise Agreement and the Cable Ordinance are collectively referred to as the"Franchise Documents." B. WideOpenWest Holdings, LLC,the Franchisees ultimate corporate parent, and Racecar Acquisition, LLC jointly submitted to the Municipality their application on Federal Communications Commission("FCC") Form 394, dated December 23, 2005, (the "Application") requesting that the Municipality approve the change of control of the Franchisee from WideOpenWest Holdings, LLC ("WOW") to Racecar Acquisition, LLC ("Racecar")(the"Change of Control"). The Franchisee desires that the Municipality grant that approval. C. Pursuant to the request of the Municipality, the Franchisee has provided supplemental information in support of the Application,including representations that,as a result of the Transaction, the Change of Control is not expected to result in an increase in cable television subscriber rates in the Municipality or reduce the quality of customer service or cable service in the Municipality. D. Pursuant to the proposed Change of Control,as described in the Application and the supplemental information thereto,the ultimate parent company of the Franchisee will change from WOW to Racecar,but Franchisee will remain the holder of the Franchise upon consummation of the Change of Control. E. The Municipality has enacted or will enact an ordinance granting its approval of the Change of Control subject to the condition that the parties enter into this Change of Control Agreement. F. The Municipality has determined that, in light of the facts available to it, it would not be appropriate to approve the Change of Control absent certain agreements by the Franchisee, including certain promises to ensure compliance with the provisions of the Franchise Documents. NOW THEREFORE, the Municipality and the Franchisee agree as follows: ARTICLE I. INCORPORATION OF RECITALS. The above Recitals are incorporated into and constitute a part of this Change of Control Agreement. ARTICLE II. AFFIRMATION OF FRANCHISE OBLIGATIONS. The Franchisee acknowledges and agrees that: (a)after the Change of Control,the Franchisee will continue to be bound by all of its commitments, duties and obligations under the Franchise Documents; and (b) neither the Change of Control nor the Municipality's approval of the • Change of Control shall in any respect relieve the Franchisee of any responsibility it may have for past acts or omissions,whether known or unknown,relating to the Franchise. The Franchisee hereby reaffirms that it will be liable for, and accept the consequences of, any responsibility it may have for such acts and omissions, including for any accrued but unfulfilled obligation to the Municipality under the Franchise Documents and applicable law,to the same extent as if the Change of Control had not taken place. ARTICLE III. ADDITIONAL AGREEMENTS OF THE PARTIES. 3.1 Municipalities Reliance on Representations. The Franchisee acknowledges the Municipality's representation that its consent to the Change of Control is made in reliance on the information provided by the Franchisee, WOW and Racecar in connection with the Application and supplemental information thereto, including, but not limited to, Avista Capital Partners("Avista")owning a controlling stake in Racecar Holdings LLC as of the date of closing of the transfer of control transaction. As evidence of compliance with this representation, WOW and Racecar shall file with the Municipality the final operating agreement for Racecar Holdings LLC wherein it describes Avista's percentage ownership interest as of the date of closing of the transfer of control transaction. 3.2 Compliance with Franchise. The Franchisee agrees that it will continue to be bound by the lawful obligations of this Change of Control Agreement and the Franchise Documents. 3.3 No Waiver. The Franchisee agrees that by its consent to the Change of Control and execution of this Change of Control Agreement,the Municipality is not waiving any of its rights or prospective rights with respect to the enforcement or obtaining redress with respect to Franchisee's compliance with the terms, conditions, requirements and obligations set forth in the Franchise Documents, including without limitation: (a) Renewal of Franchise. The Franchisee acknowledges and agrees that the Municipality has made no agreement hereby that the Franchise will be renewed or extended; any renewal or extension of the Franchise shall be pursuant to applicable federal, state and local laws, and the Franchise Documents. The Franchisee may take no inferences from this consent towards its eligibility to have the franchise renewed. (b) Qualifications. The Municipality's consent to the Change of Control is made without prejudice to, or waiver of, any right of the Municipality to fully investigate and consider Franchisee's then current financial, technical and legal qualifications and any other lawful considerations during any pending or future franchise renewal or transfer process. (c) Future Transfers/Assignments. The Franchisee acknowledges and agrees that, by its consent to this Change of Control, the Municipality does not approve of or consent to: (1) any other transfer or change of control of the Franchisee,(2)any pending or future transfer of the Franchise,or(3)any pending or future assignment or delegation of any of the Franchisee's rights or duties under the 2 Franchise,to the extent that any such transfer,assignment or change of control would be subject to the consent of the Municipality pursuant to applicable federal,state,or local law, including the Franchise Documents. (d) Past Defaults. The Franchisee shall not contend that the Municipality is barred, by reason of its consent to the Change of Control, from considering or raising any claim based on the Franchisee's past or present failure to comply with any term or condition of the Franchise Documents or any other agreements between the Franchisee and the Municipality or any of its departments or applicable law, including, without limitation: any unpaid franchise fees due the Municipality from the Franchisee, any unpaid support for public, educational, or governmental access channels, any known and unresolved consumer complaints, any construction, security or facility requirements of the Franchise Documents that are unsatisfied,and any unpaid pole rental fees or charges due Municipality or any of its departments. (e) Franchisee's Compliance. The Municipality's consent to the Change of Control shall in no way be deemed a representation by the Municipality that the Franchisee is in compliance or not in compliance with its obligations under the Franchise Documents or any other agreements between the Franchisee and the Municipality or any depat lments thereof. The Municipality makes no representation concerning the Franchisee's status of compliance. (1) Defenses. Except as otherwise provided for herein, this section is without prejudice to Racecar's and Franchisee's rights to defend any claim of default or non-compliance with the Franchise Documents on the basis that such default or non-compliance has been cured or from raising any other defense. ARTICLE IV. MISCELLANEOUS. 4.1 Binding Agreement. This Change of Control Agreement shall be binding upon and inure to the benefit of the parties and their anticipated and permitted successors and assigns. 4.2 Assignment. The rights and obligations of any party under this Change of Control Agreement may not be assigned or delegated without the prior written approval of the other party, except as otherwise specifically provided for herein. 4.3 Waiver. No waiver of any provision of this Change of Control Agreement shall be deemed to be a waiver of any other provision of this Change of Control Agreement nor shall any waiver be deemed to be a continuing waiver except as otherwise expressly stated in writing by the waiving party. 3 4.4 Severability. If any provision of this Change of Control Agreement or any application thereof shall be held to be unenforceable,the Change of Control Agreement shall be construed to excise the unenforceable provision and remain enforceable for all other applications thereof, and the rights and obligations of the parties shall be construed and enforced accordingly. 4.5 Governing Law. This Change of Control Agreement shall be governed by the laws (without reference to conflict of laws) of the State of Illinois. 4.6 Drafting. This Change of Control Agreement is a product of common negotiation among the parties and shall not be construed against any party on grounds relating to drafting, revision, review or recommendation by any agent or representative of such party. 4.7 Time of the Essence. Time is of the essence to this Change of Control Agreement. 4.8 Authority. Each signatory to this Change of Control Agreement represents that he or she has the authority to enter into this Change of Control Agreement. 4.9 Effective Date. This Change of Control Agreement may be executed in multiple counterparts and shall be deemed effective as of the closing of the Change of Control transaction. Each counterpart shall be deemed an original, but all separate counterparts shall constitute the same agreement. 4 • Date: ( 'fit .2 14,, c.;,0 4 City of Elgin By• (Name) Its: Al A © T R_- (Title) Date: / ////66 FRANCHISEE By: #,)---- --- (Name) Its: ,J v0 (Title) 5 1 E L 'gym. G April 21, 2006 I -- .`.. N TO: Mayor and Members of the City Council REr REATIO NAI LEISURE AND C UL:fU LL .PPCMi UNI(II.S i'<>Li ALL CITIZENS FROM: Olufemi Folarin, City Manager Sean R. Stegall, Assistant City Manager SUBJECT: Assignment of a Cable Television Franchise- Ameritech New Media, Inc. to WideOpenWest, LLC PURPOSE The purpose of this memorandum is to provide information to the Mayor and members of the City Council to consider providing consent to Ameritech New Media, Inc. in order to assign its cable television franchise to WideOpenWest. RECOMMENDATION It is recommended that the Mayor and members of City Council approve the proposed transfer agreement with WideOpen West. BACKGROUND Ameritech New Media, Inc., d/b/a Americast, is seeking to transfer its cable television franchise agreement with the City to WideOpenWest Holdings,LLC(WOW). The City and Americast entered into a franchise agreement on May 28, 1997. WOW entered into an agreement to purchase Americast's assets on May 23, 2001. Founded in 1999, WOW seeks to provide quality cable television programming and broadband communications to the City of Elgin. The Company's mission is to build, acquire and operate new high-capacity fiber optic networks primarily in high-density residential areas of major United States markets and to compete aggressively with incumbent cable operators, such as AT&T Broadband. According to the company,this will be accomplished through superior product offerings,attractive packaging and world-class customer service. The opportunities that WOW brings to the City of Elgin will fill a major void. Due to great delays by the incumbent providers in rolling out their high-speed internet connections,many businesses and individuals are having to go without a product which is in high-demand. WOW considers itself to be a leading edge provider of broadband services. Background research indicates that this is in fact the case. If the City Council approves Americast's transfer, the new franchisee (WOW) may change its ,Assignment of Cable Television Franchise April 21, 2006 Page 2 programming and product offerings or realign its customer service, administrative, or billing operations provided that such changes conform with federal laws and the provisions of the existing franchise agreement. However,WOW will still be subject to various customer service standards as outlined in the current agreement with Americast. The Staff feels confident that WOW will continue to provide a high level of customer service as is the case with Americast. The City does not have a significant level of contact with the current Americast representatives due to the fact that the franchise is operated so well. In addition,WOW has an excellent track record in the other municipalities it serves due in large part to its experienced management team. COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED Technology Action Team FINANCIAL IMPACT Under the terms and conditions of the agreement with Americast, which WOW must assume, the City is entitled to 5%of the annual gross revenues derived from the operation of the cable system. Approximately$200,000 is expected for 2002. LEGAL IMPACT Both the Federal Cable Act and the City's franchise agreement with Americast prohibit the City from renegotiating the terms of the franchise agreement as a condition to consenting to Americast's proposed transfer of its cable television franchise with the City. ALTERNATIVES The City Council could approve, amend, or deny the proposed agreement with WideOpenWest. Respectfully submitted for Council Consideration. SRS JII \ IIj" J JJ INTERNET• CABLE• PHONE D. Craig Martin Direct Dial: 269-567-4200 E-Mail: cmartin @wideopenwest.com May 15, 2006 CONFIDENTIAL Ms. Dolonna Mecum City Clerk City of Elgin 150 Dexter Court Elgin, IL 60120 Re: City of Elgin, Illinois; Change of Control Agreement; Avista Capital Partners, LP ("Avista") Ownership Interest Dear Ms. Mecum: Enclosed is a confidential copy of the Amended and Restated Operating Agreement of Racecar Holdings, LLC, dated May 1, 2006 (the effective date of the change of ownership of WideOpenWest Illinois, LLC). The Operating Agreement evidences the obligations set forth in Section 3.1 of the Change of Control Agreement entered into between the municipality and WideOpenWest Illinois, LLC by describing "Avista's percentage ownership interest as of the date of Closing of the change of control transaction" which, as represented in the Form 394 Application and supplemental materials, constitutes a majority, controlling, interest. In particular, see the definition of "Change of Control" and "Voting Units" (only Class A Common Units are permitted to vote) along with Section 8.1 and Schedule A, Members. Please call if you have any questions. This Amended and Restated Operating Agreement of Racecar Holdings, LLC, dated May 1, 2006 is submitted solely for purposes of evidencing the aforementioned compliance and, therefore, is CONFIDENTIAL and is not to be disclosed or otherwise made public. Very truly yours, WOW e net, bl• ' Ione D. Crai Martin Gener Counsel 259 East Michigan Avenue,Suite 209 Kalamazoo,Michigan 49007 t 269-561-4200 f 269-567-4193 www.wowway.com EXECUTION COPY AMENDED AND RESTATED OPERATING AGREEMENT OF RACECAR HOLDINGS, LLC A DELAWARE LIMITED LIABILITY COMPANY THE SECURITIES REPRESENTED BY THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 NOR REGISTERED OR QUALIFIED UNDER ANY STATE SECURITIES LAWS. BECAUSE SUCH SECURITIES HAVE NOT BEEN REGISTERED OR QUALIFIED THEY MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE, TRANSFERRED, PLEDGED, OR HYPOTHECATED UNLESS THE SECURITIES HAVE BEEN QUALIFIED AND REGISTERED UNDER APPLICABLE STATE AND FEDERAL SECURITIES LAWS OR UNLESS, IN THE OPINION OF COUNSEL SATISFACTORY TO THE COMPANY, SUCH QUALIFICATION AND REGISTRATION IS NOT REQUIRED. TRANSFER OF THE SECURITIES REPRESENTED BY THIS AGREEMENT MAY BE FURTHER SUBJECT TO THE RESTRICTIONS, TERMS AND CONDITIONS SET FORTH HEREIN. K&E 11059805.11 TABLE OF CONTENTS ARTICLE I DEFINITIONS 1 1.1 Terms 1 1.2 Terms Generally 16 ARTICLE II ORGANIZATIONAL MATTERS 16 2.1 Formation 16 2.2 Certificate 16 2.3 Name 17 2.4 Term 17 2.5 Office and Agent 17 2.6 Qualification in Other Jurisdictions 17 ARTICLE III PURPOSE AND POWERS OF THE COMPANY 17 3.1 Purpose 17 3.2 Powers of the Company 17 3.3 Liability of Members 19 3.4 Capital Contributions 19 ARTICLE IV CAPITAL CONTRIBUTIONS 19 4.1 Initial Capitalization 19 • 4.2 Return on Capital Contributions 20 4.3 Membership Interest 20 4.4 Loans From Members 20 4.5 Reserves 21 ARTICLE V ALLOCATIONS AND ELECTIONS 21 5.1 Allocations 21 5.2 Certain Book-Ups 21 5.3 Minimum Gain Chargeback 21 5.4 Qualified Income Offset 21 5.5 Nonrecourse Deductions 21 5.6 Curative Allocations 22 5.7 Loss Limitation 22 5.8 Allocations for Tax Purposes 22 5.9 Section 754 Election 23 ARTICLE VI DISTRIBUTIONS 23 6.1 Tax Distributions 23 6.2 Other Cash Flow Distributions 23 6.3 Return of Distributions 24 6.4 Limitation on Distributions 24 ARTICLE VII MEMBERS 24 7.1 Limited Liability 24 7.2 Members 24 K&E 11059805.11 7.3 Admission of New Members 25 ARTICLE VIII MANAGEMENT OF THE COMPANY 25 8.1 Board of Managers 25 8.2 Committees of the Board. 27 8.3 Officers. 28 8.4 Performance of Duties; Liability of Managers and Officers 29 8.5 Indemnification 30 8.6 Insurance 31 ARTICLE IX MEMBERS; VOTING RIGHTS 31 9.1 Meetings of Members. 31 9.2 Voting Rights 32 9.3 Registered Members 32 9.4 Limitation of Liability 32 9.5 Withdrawal; Resignation 32 9.6 Death of a Member 32 9.7 Authority 32 9.8 Outside Activities 32 9.9 Indemnification and Reimbursement for Payments on Behalf of a Member 33 ARTICLE X UNITS; MEMBERSHIP 33 10.1 Units Generally 33 10.2 Authorization and Issuance of Units 34 10.3 Conversion. 34 10.4 Issuance of Additional Units 35 10.5 Admission as Member 36 ARTICLE XI MANAGEMENT INCENTIVE MEMBERS 36 11.1 Admission of Management Incentive Members 36 11.2 Vesting 36 11.3 Time Vesting 36 11.4 Performance Vesting 36 11.5 Tax Matters 39 11.6 Issuance of Additional Management Incentive Units 39 ARTICLE XII REDEMPTION OPTION 39 12.1 Redemption Option/Forfeiture of Unvested Units 39 ARTICLE XIII TRANSFERS; LEGEND 41 13.1 Resignation; Withdrawal; Assignment of Interest by a Member; Admission of Members 41 13.2 Transfer of Equity Securities 42 13.3 First Offer Right 42 13.4 Tag Along Rights 43 13.5 Permitted Transfers 44 ii K&E 11059805.11 . 13.6 Drag Along Rights 44 13.7 Preemptive Rights 46 13.8 Initial Public Offering 46 13.9 Deliveries for Transfer 47 13.10 Prospective Transferees 47 13.11 Legend 48 ARTICLE XIV DISSOLUTION EVENTS AND TERMINATION OF MEMBERSHIP INTERESTS 48 14.1 Dissolution 48 14.2 Liquidation 48 14.3 Final Statement 49 14.4 Right to Continue Business of Company 49 14.5 Certificates of Dissolution, Continuance and Cancellation 49 ARTICLE XV BOOKS AND RECORDS 50 15.1 Records 50 15.2 Delivery to Member and Inspection 50 15.3 Reports 51 15.4 Tax Returns 51 ARTICLE XVI MISCELLANEOUS 51 16.1 Representations and Warranties of Members 51 16.2 Titles 53 16.3 Waiver of Partition 53 16.4 Confidentiality 53 16.5 Tax Status 54. 16.6 Waiver of Jury Trial 54 16.7 Survival of Representations and Obligations 54 16.8 Attorneys' Fees 54 16.9 Governing Law/Venue 54 16.10 Paragraph Headings 54 16.11 Capitalized Terms 54 16.12 Recitals 54 16.13 Severability 54 16.14 Amendments 55 16.15 Gender and Number 55 16.16 Notice 55 16.17 Waiver 56 16.18 Counterparts 56 16.19 Merger of Prior Agreement and Understandings 56 16.20 Covenant to Sign Documents 56 16.21 Multiple Ownership of Membership Interest 56 16.22 Other States 56 16.23 Remedies Cumulative 56 SCHEDULE A-MEMBERS K&E 11059805 11 R 1 EXECUTION COPY AMENDED AND RESTATED OPERATING AGREEMENT OF RACECAR HOLDINGS, LLC A DELAWARE LIMITED LIABILITY COMPANY This Amended and Restated Operating Agreement (this "Agreement"), is made as of this 1st day of May, 2006 (the "Effective Date"), by and among those parties whose names and addresses appear on Schedule A, attached hereto, (collectively referred to as the "Members" or individually as a"Member"), with reference to the following facts: A. A Certificate of Formation (the "Certificate") for Racecar Holdings, LLC (the "Company"), a limited liability company under the laws of the State of Delaware, was filed with the Secretary of State for the State of Delaware on December 1,2005. B. The Members desire to amend and restate the Original Operating Agreement under the Act. NOW, THEREFORE, the Members by this Agreement amend and restate the Original Operating Agreement for the Company as set forth below. ARTICLE I DEFINITIONS 1.1 Terms. When used in this Agreement, the following terms shall have the meanings set forth below (all terms used in this Agreement that are not defined in this Article I shall have the meanings set forth elsewhere in this Agreement): Accountants. The term "Accountants" shall mean a nationally recognized firm of independent certified public accountants selected by the Board. Act. The term "Act" shall mean the Delaware Limited Liability Company Act, 6 Del. C. §18-101, et seq., as amended from time to time. Additional Units. The term "Additional Units" shall have the meaning specified in Section 10.4. Adjusted Capital Account Deficit. The term "Adjusted Capital Account Deficit" shall mean, 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: (a) Credit to such Capital Account any amount which such Member is obligated to restore or is deemed obligated to restore pursuant to Treas. Reg. § 1.704-2(g); and (b) Debit to such Capital Account the items described in Treas. Reg. § 1.704-1(b)(2)(ii)(d)(4), (5) and (6). K&E 11059805.11 Affiliate. The term "Affiliate" shall mean, with regard to any Person, any Person directly or indirectly, through one or more intermediaries, controlling, controlled by, or under common control with such Person; provided, however, that no individual shall be deemed to be an Affiliate of any other Person solely by reason of his or her being an officer or manager of such Person and no Person shall be deemed to be an Affiliate of any other Person solely by reason of its being a member of the same limited liability company as, or limited partner of, such Person; provided, further, that(i) Steven Webster and Thompson Dean shall be deemed to be "Affiliates" of Avista for the purposes of this Agreement and (ii) any executive employee of Parinvest SAS or Enac Ventures LLC (together, `Buns") shall be deemed to be "Affiliates" of Euris for the purposes of this Agreement. The term "control," as used in this definition of"Affiliate", shall mean with respect to any Person the right to exercise, directly or indirectly, more than ten percent (10%) of the ordinary voting rights (without the happening of any contingency) attributable to the controlled entity, and, with respect to any individual, partnership, trust, other entity or association, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of the controlled entity. Agreement. The term "Agreement" shall mean this Amended and Restated Operating Agreement, as originally executed and as hereafter amended from time to time, including any exhibits and schedules hereto. Approved Sale. The term "Approved Sale" shall have the meaning set forth in Section 13.6. Assignee. The term "Assignee" shall mean a Person who has acquired an economic interest in the Company but has not been admitted as a substitute Member in accordance with this Agreement. Avista. The term "Avista" shall mean Avista Capital Partners, L.P., a Delaware limited partnership and Avista Capital Partners (Offshore), LP, a Bermuda partnership, together with one or more of their Affiliates. Bankruptcy. The term "Bankruptcy" shall mean, with respect to any Person: the filing of a petition by or against a Person as "debtor" under Title 11 of the United States Code ("Bankruptcy Code") seeking the adjudication of such Person as bankrupt or the appointment of a trustee, receiver, or custodian of such Person's assets; the making by such Person of a general assignment for the benefit of creditors; the entry of an order,judgment, or decree by any court of competent jurisdiction appointing a trustee, receiver, or custodian to take possession of or control over the assets of such Person unless such proceedings and the person appointed are dismissed within ninety(90) days of the date upon which the court issued its order,judgment, or decree; or the determination by the Bankruptcy Court or the written admission of such Person that such Person is generally unable to pay his or her debts as they become due within the meaning of Section 303(h)(1) of the Bankruptcy Code. Base EBITDA. The term "Base EBITDA" shall have the meaning as identified in Table_ 11.4(a), as adjusted pursuant to Section 11.4. 2 K&E 11059805.11 Base Rate. The term "Base Rate" shall mean on any date, a variable rate per annum equal to the rate of interest published, from time to time, by The Wall Street Journal as the "prime rate" at large U.S. money center banks. Board. The term "Board" shall have the meaning set forth in Section 8.1. Capital Account. The term "Capital Account" shall mean, for each Member, the sum of (a) such Member's Capital Contributions, if any, when and as received, and Initial Capital Account plus (b)the Net Profits and other items of Company income and gain allocated to such Member pursuant to Article V, minus (c) the aggregate amount of distributions of cash made to such Member, minus (d) the Net Losses and other items of Company loss and deduction allocated to such Member pursuant to Article V, minus (e) the Gross Asset Value of the allocable share of the Company assets distributed to such Member in kind, and (f) otherwise adjusted in accordance with Treas. Reg. § 1.704-1. Capital Contribution. The term "Capital Contribution" shall mean for each Member the total amount of cash and the fair market value of property contributed (or deemed to be contributed) to the Company by such Member pursuant to Sections 4.1 and 4.2, net of any liabilities associated with such contributed property that the Company is considered to assume or "take subject to" under Section 752 of the Code, which shall be reflected on Schedule A hereto as amended from time to time in accordance with the terms of this Agreement. Capital Interest. The term "Capital Interest" shall mean any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation), including, without limitation, common stock, preferred stock, partnership interests (general and limited) and membership and limited liability company interests and units, and any and all warrants, rights or options to purchase or other arrangements or rights to acquire any of the foregoing. Cash Proceeds Multiple. The term "Cash Proceeds Multiple" means with respect to any Change of Control, the number derived by dividing (i) the cumulative cash proceeds and the Fair Market Value of any Marketable Securities (together with any escrowed funds and other forms of consideration to the extent such escrowed funds or other forms of consideration have been released or converted to cash, as applicable) realized by Avista from its investment in the Company up to and including the date of consummation of such Change of Control (including, without limitation, any distributions of cash from the Company to Avista up to such date) net of any fees and expenses, by(ii) the total equity capital invested in the Company by Avista. Cause. The term "Cause" shall mean, with respect to any Management Incentive Member, "Cause" as defined in such Management Incentive Member's Employment Agreement; provided, that to the extent any such Management Incentive Member is not a party to an Employment Agreement with the Company or any of its Subsidiaries, for purposes of this Agreement the term "Cause" shall mean, with respect to such Management Incentive Member, such Management Incentive Member's (a) conviction, guilty plea, or plea of"no contest" to any felony or other crime involving moral turpitude, (b) commission of any act involving dishonesty, fraud or breach of the duty of loyalty with respect to the Company, (c) engaging in any conduct bringing the Company (or its officers or directors) into public disgrace or disrepute, (d) gross 3 K&E 11059805.11 • negligence or willful misconduct with respect to the Company, (e) substantial and repeated failure to perform the duties of his or her position, after being given written notice and reasonable opportunity to cure such deficiency (but only if such deficiency is subject to cure), or (f)material breach of this Agreement. Certificate. The term "Certificate" shall mean the Certificate of Formation for the Company originally filed with the Delaware Secretary of State and as amended from time to time. Chairman. The term "Chairman"shall have the meaning attributed to it in Section 8.1(g). Charged Member. The term"Charged Member" shall have the meaning attributed to it in Section 9.9. Change in Control. The term "Change of Control" shall mean, and be deemed to have occurred, if (a) Avista shall, at any time prior to an underwritten public offering of Capital Interests of the Company, not own, in the aggregate, directly or indirectly, beneficially and of record, at least fifty-one percent (51%) of the voting power of the outstanding Voting Units of the Company; and/or (b) any person, entity or "group" (within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended) (other than Avista) shall, at any time following an underwritten public offering of Capital Interests of the Company, have acquired direct or indirect beneficial ownership of more than fifty-one percent (51%) of the voting power of the outstanding Voting Units of the Company; and/or (c) at any time Continuing Directors shall not constitute at least a majority of the Board (or similar governing body) of the Company; and/or (d) at any time, the Company shall cease to directly or indirectly own, beneficially and of record, one hundred percent (100%) of the issued and outstanding equity interests of WideOpenWest Finance,LLC. Class A Common Unit. The term "Class A Common Unit" shall mean a Unit having the rights and obligations specified with respect to Class A Common Units in this Agreement. The number of Class A Common Units initially held by each Member is listed on Schedule A attached hereto, subject to adjustment pursuant to this Agreement. Class B Common Unit. The term "Class B Common Unit" shall mean a Unit having the rights and obligations specified with respect to Class B Common Units in this Agreement. The number of Class B Common Units initially held by each Member is listed on Schedule A attached hereto, subject to adjustment pursuant to this Agreement. Class C Common Unit. The term "Class C Common Unit" shall mean a Unit having the rights and obligations specified with respect to Class C Common Units in this Agreement. The number of Class C Common Units initially held by each Member is listed on Schedule A attached hereto, subject to adjustment pursuant to this Agreement. Class A Owner. The term "Class A Owner" shall mean a person that holds one or more Class A Common Units. Class B Owner. The term "Class B Owner" shall mean a person that holds one or more Class B Common Units. 4 K&E 11059805 11 Class C Owner. The term "Class C Owner" shall mean a person that holds one or more Class C Common Units. Code. The term"Code" shall mean the Internal Revenue Code of 1986, as amended from time to time, the provisions of succeeding law, and to the extent applicable, the Treasury Regulations. Common Owner. The term "Common Owner" shall mean a Member of one or more Common Units. Common Unit. The term "Common Unit" shall mean a Class A Common Unit, a Class B Common Unit or a Class C Common Unit. Company. The term "Company" shall mean Racecar Holdings, LLC, a Delaware limited liability company. Continuing Director. The term "Continuing Director" shall mean, at any date, an individual (a)who is a member of the Board on the date hereof, (b)who, as at such date, has been a member of such Board (or similar governing body) for at least the twelve (12) preceding months, (c)who has been nominated to be a member of such Board directly or indirectly, by Avista, or (d)who has been nominated to be a member of such Board by a majority of the other Continuing Directors then in office. Cost. The term "Cost" means the actual price paid for the Unit in question at the time of its initial purchase from the Company or by the holder thereof, except in the case of the Class C Common Units, for which"Cost" shall mean the Purchase Price. Credit Agreement. The term "Credit Agreement" shall mean, together, (a) that certain Credit Agreement for the$570,000,000 senior first lien credit facilities and (b) that certain Credit Agreement for the $150,000,000 senior second lien credit facility, each dated as of the date hereof and each by and among WideOpenWest Finance LLC, a Delaware limited liability company, as borrower; Racecar Acquisition, LLC, a Delaware limited liability company, WOW Cleveland,WOW Illinois,WOW Networks and WOW Ohio, as parent guarantors; Credit Suisse, Cayman Islands Branch, as Administrative Agent; Wachovia Bank, National Association, as Syndication Agent; Credit Suisse Securities (USA) LLC, as Sole Lead Arranger and Sole Bookrunner; and the certain lenders party thereto from time to time. EBITDA. The term "EBITDA" shall mean, for any period, the sum of(a) net income (or net loss) of WideOpenWest Finance, LLC and its subsidiaries for such period, plus (b) the following to the extent deducted in calculating such net income (or net loss): (i) interest expense, (ii) income tax expense, (iii) depreciation expense, (iv) amortization expense, (v) costs and expenses incurred in connection with the transactions contemplated by the Purchase Agreement payable prior to December 31, 2007, (vi) fees and expenses incurred in connection with any issuance of debt or equity securities, any refinancing transaction, or acquisitions permitted under the Company's credit facilities, (vii) management fees paid to Avista, (viii) loss from the early extinguishment of indebtedness or hedging obligations, (ix) extraordinary losses, (x) any non- cash compensation expense arising from the management option plans and (xi) certain non- recurring losses as determined by the board of directors.of WideOpenWest Finance, LLC in 5 K&E 11059805.11 � r consultation with the Chief Executive Officer, minus (c) to the extent added in calculating such net income (or net loss), (y) any net after-tax income from the early extinguishment of indebtedness or hedging obligations and (z) extraordinary and non-recurring gains as determined by the Board, in consultation with the Chief Executive Officer. EBITDA and all accounting terms used in the definition of EBITDA shall be calculated in accordance with GAAP applied on a basis consistent with the management bank model and otherwise as approved by the Board. EBITDA Metric. The term "EBITDA Metric" shall have the meaning attributed to it in Section 11.4. Effective Date. The term "Effective Date" shall have the meaning specified in the preamble. Election Notice. The term "Election Notice" shall have the meaning attributed to it in Section 13.7. Election Period. The term "Election Period" shall have the meaning attributed to it in Section 13.2. Equity Securities. The term "Equity Securities" shall mean,with regard to any Person, as applicable, (a) any capital stock, partnership, membership, joint venture or other ownership or equity interests, or other share capital of such Person, (b) any securities of such Person directly or indirectly convertible into or exchangeable for any capital stock, partnership, membership, joint venture or other ownership or equity interests, or other share capital (whether voting or non- voting, whether preferred, common or otherwise) of such Person or containing any profit participation features with respect to such Person, (c) any rights or options directly or indirectly to subscribe for or to purchase any capital stock, partnership, membership,joint venture or other ownership or equity interests, other share capital of such Person or securities containing any profit participation features with respect to such Person or directly or indirectly to subscribe for or to purchase any securities directly or indirectly convertible into or exchangeable for any capital stock, partnership, membership, joint venture or other ownership interests, other share capital of such Person or securities containing any profit participation features with respect to such Person, (d) any share or Unit appreciation rights, phantom share or Unit rights,'contingent interest or other similar rights relating to such Person, or(e) any Equity Securities of such Person issued or issuable with respect to the securities referred to in clauses (a) through (d) above in connection with a combination of Units, recapitalization, exchange, merger, consolidation or other reorganization. Unless the context otherwise requires, the term "Equity Securities" refers to Equity Securities of the Company or any successor corporation of the Company. Employment Agreement. The term "Employment Agreement" shall mean any employment agreement by and between the Company and a Management Incentive Member. Estimated Tax Amount. The term"Estimated Tax Amount" shall mean, for any Member, for a Fiscal Year, the Member's Tax Amount for such Fiscal Year as estimated in good faith from time to time by the Board. In making such Estimate, the Board shall take into account amounts shown in Internal Revenue Service Form 1065 filed by the Company and similar state or local forms filed by the Company for the preceding taxable year and such other adjustments as 6 K&E 11059805.11 in the reasonable business judgment of the Board are necessary or appropriate to reflect the estimated operations of the Company for the Fiscal Year. Event of Dissolution. The term "Event of Dissolution" shall have the meaning attributed to it in Section 14.1. Excess Amount. The term `Excess Amount" shall have the meaning specified in Section 6.1. Fair Market Value. The term"Fair Market Value" shall mean, that as of any date, the fair market value on such date as determined by the Board or as otherwise provided. For this purpose, the Board may in its sole discretion value securities that are restricted by law, contract, market conditions (including trading volume relative to the Company's holding) or otherwise as to saleability or transferability at an appropriate discount, based on the nature and term of such restrictions. With respect to the computation of the redemption price as of any Redemption Date required by Section 12.1 hereof, "Fair Market Value" shall mean the amount the holder of such Units would receive if(i) each asset owned by the Company had been sold for its Fair Market Value as of such date, (ii) any gain or loss resulting from such deemed sale were allocated to the Capital Accounts of the holder of such Units consistent with Section 14.2 and the proceeds from such deemed sale were applied in the manner specified in Section 14.2; provided, that with respect to the computation of(i) the redemption price as of any Redemption Date required by Section 12.1 hereof after the consummation of an Initial Public Offering or (ii) the "Fair Market Value"of any Marketable Securities as of any computation date, "Fair Market Value" shall mean the average of the closing prices of the sales of any Equity Security on all securities exchanges on which such Equity Security may at the time be listed, or, if there have been no sales on any such exchange on any day, the average of the highest bid and lowest asked prices on all such exchanges at the end of such day, or, if on any day such Equity Security is not so listed, the average of the representative bid and asked prices quoted in the NASDAQ System as of 4:00 P.M., New York time, or, if on any day such Equity Security is not quoted in the NASDAQ System, the average of the highest bid and lowest asked prices on such day in the domestic over- the-counter market as reported by the National Quotation Bureau Incorporated, or any similar successor organization, in each such case averaged over a period of 21 days consisting of the day as of which the Fair Market Value is being determined and the 20 consecutive business days prior to such day. Family Group. The term "Family Group" shall mean, with respect to a natural person, such person's spouse, ancestors and descendents (whether natural or adopted) and any trust or other entity (including a partnership or limited liability company) solely for the benefit of such person and/or for such person's spouse, their respective ancestors or descendants. Financial Advisory Agreement. The term "Financial Advisory Agreement" shall mean that certain Financial Advisory Agreement dated as of the date hereof by and between the Company and Avista Capital Holdings, LP. Fiscal Year. The term "Fiscal Year" shall mean the taxable year of the Company, which shall be the calendar year or such other taxable year as is required (or, in the Board's discretion, permitted)by Section 706(b) of the Code. 7 K&E 11059805 11 GCL. The term "GCL" shall mean the general corporate law of the State of Delaware, as in effect from time to time. Good Reason. The term "Good Reason" shall mean, with respect to any Management Incentive Member, "Good Reason" as defined in such Management Incentive Member's Employment Agreement; provided,that to the extent any such Management Incentive Member is not a party to an Employment Agreement with the Company or any of its Subsidiaries, for purposes of this Agreement the term "Good Reason" shall mean, with respect to such Management Incentive Member, (a) an assignment of duties to such Management Incentive Member that are materially inconsistent with his or her title and position, or any other action by the Company that results in a significant diminution in his or her title, position, authority or responsibilities in effect as of the date following the date hereof, which reduction has not been remedied by the Company within forty-five (45) days after written notification to the Company containing a reasonably detailed description of such reduction, or (b) such Management Incentive Member is required to relocate outside of a one hundred (100) mile radius from his or her current work location to perform his or her duties,provided that reasonable travel required by the Company shall not be considered a relocation for this purpose. Gross Asset Value. The term "Gross Asset Value" shall mean, with respect to any Company asset, the adjusted basis of the Company asset for federal income tax purposes, except as follows: (a) The initial Gross Asset Value of any Company asset contributed by a Member to the Company shall be the gross Fair Market Value of such Company asset as of the date of such contribution, determined under Section 4.1 and, with respect to all contributions not specified in Section 4.1,in good faith by the Board; (b) The Gross Asset Value of each Company asset shall be adjusted to equal its respective gross Fair Market Value, as of the following times: (i)the acquisition of an additional Interest (other than the Interest of a Management Incentive Member, unless otherwise determined by the Board) by any new or existing Member in exchange for more than a de minimis Capital Contribution; (ii) the distribution by the Company to a Member of more than a de minimis amount of Company assets (including cash) as consideration for all or part of its Interest unless the Board determines that such adjustment is not necessary to reflect the relative economic interests of the Members in the Company; (iii)the liquidation of the Company within the meaning of Treas. Reg. § 1.704-1(b)(2)(ii)(g); and (iv)in the Board's discretion, under generally accepted accounting practices if substantially all of the Company's assets (excluding money) consists of stock, securities or similar instruments that are readily tradable on an established securities market; (c) The Gross Asset Value of a Company asset distributed to any Member shall be the Fair Market Value of such Company asset as of the date of distribution thereof; (d) The Gross Asset Value of each Company asset shall be increased or decreased, as the case may be, to reflect any adjustments to the adjusted basis of such Company asset pursuant to Section 734(b) or Section 743(b) of the Code, but only to the extent that such adjustments are taken into account in determining Capital Account balances pursuant to Treas. 8 K&E 11059805.I1 Reg. § 1.704-1(b)(2)(iv)(m); provided, however, that Gross Asset Values shall not be adjusted pursuant to this subparagraph (d) to the extent that the Board determines that an adjustment pursuant to subparagraph (b) above is necessary or appropriate in conjunction with a transaction that would otherwise result in an adjustment pursuant to this subparagraph; and (e) If the Gross Asset Value of a Company asset has been determined or adjusted pursuant to subparagraphs (a), (b) or (d) above, such Gross Asset Value shall thereafter be adjusted to reflect the depreciation or amortization taken into account with respect to such Company asset for purposes of computing Net Profits and Net Losses. Incapacity. The term "Incapacity" shall mean, as to any Person, the death or the adjudication of incompetence or insanity of such Person, or Bankruptcy or dissolution of such Person (except in any case in which a Member that is a partnership or limited liability company shall be reconstituted by its remaining partners or members, as applicable, following any liquidation or dissolution caused by the legal incapacity of one or more of its partners or members, as applicable) or termination (other than by merger or consolidation), as the case may be, of such Person. Indemnitee. The term "Indemnitee" shall have the meaning specified in Section 8.6. Initial Capital Account. The term "Initial Capital Account" shall have the meaning specified in Section 4.1. Initial Common Capital Account. The term "Initial Common Capital Account" has the meaning specified in Section 4.1. Initial Public Offering. The term "Initial Public Offering" shall mean the first time a registration statement filed under the Securities Act with the Securities and Exchange Commission respecting an offering, whether primary or secondary, of shares of common stock (or securities convertible into, or exchangeable for, common stock or rights to acquire common stock or such securities of the Company or the New Company) is declared effective and the securities so registered are issued and sold. Issuance Notice. The term "Issuance Notice" shall have the meaning attributed to it-in Section 13.7. Liquidator. The term "Liquidator" shall mean the Person responsible for winding up the Company pursuant to Section 14.2 hereof Manager. The term "Manager" shall have the meaning attributed to it in Section 8.1. Majority of the Board. The term "Majority of the Board" shall mean, at any time, a combination of the Managers on the Board having a majority of the votes (as determined in accordance with this Agreement) of all of such Managers who are then elected. Majority in Interest. The term "Majority in Interest" shall mean a Member or Members which own a majority of the votes of all the Voting Units outstanding at the time. A Majority in 9 K&E 11059805.11 Interest of any group of Members that is less than all the Members shall be determined by applying the principles set forth in the preceding sentence to such group of Members. Management Coinvestor. The term "Management Coinvestor" shall mean those Members that are identified as such on Schedule A attached hereto. Management Incentive Member. The term "Management Incentive Member" shall mean a Member that holds Class C Common Units, subject to the terms and conditions applicable to such Management Incentive Member set forth in this Agreement. Management Incentive Unit. The term "Management Incentive Unit" shall mean a Unit granted to a Management Incentive Member. Management Manager. The term "Management Manager" shall mean the executive officer of the Company who from time to time is a Manager. Marketable Security. The term "Marketable Security" means an Equity Security that is freely tradable with no restrictions at the time in question on any nationally recognized securities exchange or quotation system. Member. The terms "Member" and "Members" shall mean each Person who (a) is an initial signatory to this Agreement, or has been admitted to the Company as a Member in accordance with this Agreement or is an Assignee who has become a Manager or Non-Managing Member in accordance with this Agreement, and (b) has not become the subject of a Bankruptcy or Incapacity or ceased to be a Member in accordance with this Agreement or for any other reason. Members Agreement. The term "Members Agreement" shall mean that certain Members Agreement dated as of the date hereof by and among the Company and the Members party thereto. Membership Interest. The term "Membership Interest" shall mean a Member's entire interest in the Company, the right to vote on or participate in the Company's management, and the right to receive information concerning the business and affairs of the Company, in each case, to the extent expressly provided in this Agreement or required by the Act, which interest shall be a"security" governed by Section 8-103 of the Uniform Commercial Code. Members Schedule. The term "Members Schedule" shall have the meaning attributed to it in Section 10.1. Minimum Gain. The term "Minimum Gain" shall mean, with respect to each Nonrecourse Liability of the Company, the amount of gain (of whatever character), if any, that would be realized by the Company if it disposed of(in a taxable transaction) the Company's property subject to such liability in full satisfaction thereof(and for no other consideration), and then aggregating the amounts so computed. A Member's share of Minimum Gain shall, at the end of any Fiscal Year, equal the excess of(x) the sum of the nonrecourse deductions allocated to such Member (and such Member's predecessors in interest) and the aggregate distributions to such Member (and such Member's predecessors in interest) up to that time of proceeds of 10 KALE 11059805.11 • Nonrecourse Liabilities that are allocable to an increase in Minimum Gain over (y) the sum of such Member's (and such Member's predecessors in interest) aggregate share of the net decreases in Minimum Gain up to that time and such Member's (and such Member's predecessors in interest) aggregate share of the decreases up to that time in Minimum Gain resulting from revaluations of Company property subject to one or more nonrecourse liabilities of the Company as computed in accordance with the provisions of Treas. Reg. § 1.704-2(g). MKMB Coinvestor. The term "MKMB Coinvestor"shall mean MKMB Corporation. Net Income. The term "Net Income" shall mean Net Profits allocated to such Member for such Fiscal Year with respect to its Units pursuant to Article V. Net Profits and Net Losses. The terms "Net Profits" and "Net Losses" shall mean, for each Fiscal Year or such other applicable period, an amount equal to the Company's taxable income or loss for such Fiscal Year or period, determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss or deduction required to be separately stated pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the following adjustments: (a) Any income of the Company that is exempt from federal income tax and not otherwise taken into account in computing Net Profits or Net Losses pursuant to this definition shall be added to such taxable income or loss; (b) Any expenditures of the Company described in Section 705(a)(2)(B) of the Code or treated as Section 705(a)(2)(B) of the Code expenditures pursuant to Treas. Reg. § 1.704-1(b)(2)(iv)(i) (other than expenses in respect of which an election is properly made under Section 709 of the Code), and not otherwise taken into account in computing Net Profits or Net Losses pursuant to this definition shall be subtracted from such taxable income or loss; (c) In the event the Gross Asset Value of any Company asset is adjusted pursuant to subparagraph (b) or (c) of the definition of Gross Asset Value, the amount of such adjustment shall be taken into account as gain or loss from the disposition of such Company asset for purposes of computing Net Profits or Net Losses; (d) Gain or loss resulting from any disposition of any Company asset with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of the Company asset disposed of notwithstanding that the adjusted tax basis of such Company asset may differ from its Gross Asset Value; (e) Depreciation with respect to any Company asset shall be computed by reference to the adjusted Gross Asset Value of such asset, notwithstanding that the adjusted tax basis of such Company asset differs from its Gross Asset Value; and (f) Any items of income, gain, loss or deduction allocated under Sections 5.2 through 5i7 hereof shall be excluded. New Company. The term "New Company" shall have the meaning set forth in Section 13.8. 11 K&E 11059805 11 • New Company Shares. The term "New Company Shares" shall have the meaning set forth in Section 13.8. Non-Managing Member. The terms "Non-Managing Member" and "Non-Managing Members" shall refer to each Member (other than a Management Incentive Member) that is not then currently acting as a Manager as they may appear on Schedule B. Nonrecourse Liability. The term "Nonrecourse Liability" shall have the meaning set forth in Treasury Regulations Section 1.752-1(a)(2). Nonvoting Unit. The term "Nonvoting Unit" shall mean any Class B Common Unit or Class C Common Unit. Notice. The term "Notice" shall mean all written notices, requests, approvals, consents, demands or other communications, signed on behalf of the Person giving such Notice and (a) sent by certified or registered mail and receipt therefor delivered to the party sending the Notice, (b) sent by telecopier or telegraph, (c) deposited with Federal Express or any other reputable overnight delivery service for delivery the next day or(d) delivered or sent, to parties to this Agreement to the addresses set forth in Section 16.16 or at such other addresses as such receiving party may designate by Notice to the other parties. Offer Notice. The term "Offer Notice" shall have the meaning attributed to it in Section 13.3. Offered Securities. The term "Offered Securities" shall have the meaning attributed to it in Section 13.7. Officers. The term "Officers"shall have the meaning attributed to it in Section 8.3Ca). Original Operating Agreement. The term "Original Operating Agreement" shall mean that certain initial Operating Agreement for the Company dated as of December 1, 2005. Person. The term "Person" shall mean an individual, partnership, limited liability company, trust, estate, association, joint stock company, unincorporated organization, governmental or regulatory body or other entity. Performance Vest Units or PVU. The term "Performance Vest Units" or "PVU" shall have the meaning attributed to it in Section 11.4. Preferred Unit. The terms "Preferred Unit" shall have the meaning attributed to it in Section 10.2. Preemptive Period. The term "Preemptive Period" shall have the meaning attributed to it in Section 13.7. Profit Percentage. The term "Profit Percentage" of a Common Owner from time to time shall mean the percentage equivalent of a fraction, (a) the numerator of which is the number of Common Units held by such Common Owner at such time as set forth on Schedule A attached 12 K&E 11059805.11 hereto, and (b) the denominator of which is the aggregate number of Common Units held by all Common Owners at such time. Pro Rata Share. The term "Pro Rata Share" shall mean, as to any Member the percentage derived by dividing (i) the Fair Market Value of the Units held by such Member as of any particular date, by(ii)the Fair Market Value of all Units as of such date. Purchase Agreement. The term "Purchase Agreement" shall mean the Agreement and Plan of Merger by and among Racecar Acquisition, LLC, a Delaware limited liability company, Racecar 1, Inc., a Delaware corporation, Racecar 2, Inc., a Delaware corporation, Racecar 3, Inc., a Delaware corporation, Racecar 4, Inc., a Delaware corporation, WideOpenWest Holdings, LLC, a Delaware limited liability company, WOW Cleveland, Wow Illinois, WOW Ohio, and WOW Networks, dated as of December 13, 2005, as amended. Purchase Price. The term "Purchase Price" shall mean the purchase price per unit of Class C Common Units awarded to Management Incentive Members, which shall be $0.90 per Unit. Quarterly Estimated Tax Amount. The term "Quarterly Estimated Tax Amount" shall mean, for any Member in any calendar quarter of a Fiscal Year, the excess, if any of (i) the product of(A) % in the case of the first calendar quarter of the Fiscal Year, V2 in the case of the second calendar quarter of the Fiscal Year, 3/4 in the case of the third calendar quarter of the Fiscal Year, and 1 in the case of the fourth calendar quarter of the Fiscal Year and (B) a Member's Estimated Tax Amount for such Fiscal Year over(ii) all distributions previously made during such Fiscal Year to such Member. Redemption Date. The term "Redemption Date" shall have the meaning specified in Section 12.1(e). Redemption Notice. The term "Redemption Notice" shall have the meaning attributed to it in Section 12.1Cd). Redemption Option. The term"Redemption Option" shall have the meaning attributed to it in Section 12.1. Registration Agreement. The term "Registration Agreement" shall mean that certain Registration Agreement dated as of the date hereof by and among the Company and the Members party thereto. Regulatory Allocations. The term "Regulatory Allocations" shall have the meaning attributed to it in Section 5.6. Restricted Securities. The term "Restricted Securities" shall mean (a)the securities issued hereunder, and (b) any securities issued with respect to the securities referred to in clause (a) above in connection with a conversion, combination or subdivision of Units, recapitalization, merger, consolidation or other reorganization. As to any particular Restricted Securities, such securities shall cease to be Restricted Securities when they have (i) been registered under the Securities Act pursuant to an effective registration statement thereunder and 13 K&E 11059805.11 disposed of in accordance with the registration statement covering them, (ii)been sold pursuant to Rule 144 (or any similar provision then in force) under the Securities Act, or (iii) been otherwise transferred and new certificates (if such securities are certificated) for them not bearing the Securities Act legends set forth in Section 13.11 have been delivered by the Company. Whenever any particular securities cease to be Restricted Securities, the holder thereof shall be entitled to receive from the Company, without expense, in accordance with and subject to compliance with the provisions of Section 13.10, new securities of like tenor not bearing legends of the character set forth in Section 13.11. Rollover Coinvestors. The term "Rollover Coinvestors" shall mean, collectively, the Management Coinvestors and the MKMB Coinvestor. Sale of the Company. The term "Sale of the Company" shall mean (a) the dissolution and winding-up of the Company, (b) the sale of all or substantially all of the Units in the Company or(c)the sale by the Company of all or substantially all of its assets. Sale Notice. The term "Sale Notice" shall have the meaning attributed to it in Section 13.4. Securities Act. The term "Securities Act" shall mean the Securities Act of 1933, as amended, or any similar federal statute then in effect, and any reference to a particular section thereof shall include a reference to the comparable section, if any, of any such similar federal statute, and the rules and regulations promulgated thereunder. Shares. The term "Shares" shall mean shares in any of WOW Cleveland, WOW Illinois or WOW Ohio. Shortfall Amount. The term "Shortfall Amount" shall have the meaning specified in Section 6.1. Standard of Care. The term "Standard of Care" shall have the meaning specified in Section 8.6. Subsidiary. The term "Subsidiary" of any Person (the "parent") shall mean any other Person whose (a) securities having ordinary voting power to elect a majority of its board of directors or managing or general partners (or other persons having similar functions) or (b) other ownership interests (including partnership and membership interests) ordinarily constituting a majority interest in the capital, profits or cash flow of such Person, are at the time, directly or indirectly, owned or controlled by such parent, or by one or more other Subsidiaries of such parent, or by such parent and one or more of its other Subsidiaries. Target EBITDA. The term "Target EBITDA" shall have the meaning as identified in Table 11.4(a), as adjusted pursuant to Section 11.4. Tax Amount. The term "Tax Amount" of any Member of a Fiscal Year means the product of (a) the Tax Rate for such Fiscal Year and (b) the Net Income allocated to such Member for such Fiscal Year with respect to its Units pursuant to Article VI. 14 K&E 11059805.11 Tax Distribution. The term "Tax Distribution" shall mean any distributions made by the Company pursuant to Section 6.1. Tax Matters Member. The term "Tax Matters Member" shall have the meaning attributed to it in Section 8.1(d). Tax Rate. The term "Tax Rate" shall mean, for any period, the highest marginal blended federal, state and local income tax rate applicable for such period to an individual residing in New York, New York, taking into account for federal income tax purposes, the deductibility of state and local taxes. If higher, federal Tax Distributions will be based on federal alternative minimum taxable income and rates (using the highest marginal federal alternative minimum tax rate applicable to an individual). Termination. The term "Termination" shall have the meaning attributed to it in Section 12.1. Terminated Member. The term "Terminated Member" shall mean any Person who has ceased to be a Member for any reason, or the estate of or successor in interest to such Person. Upon becoming a Terminated Member hereunder, if such Person, or the estate or successor interest to such Person, continues to hold Units, then such Person or holder shall automatically be deemed to be a Member but shall not be entitled to any rights of a Member for purposes of this Agreement. Time Vest Units. The term "Time Vest Units" shall have the meaning attributed to it in Section 11.3. Transaction Documents. The term "Transaction Documents" shall mean (a) the Purchase Agreement, (b) the Financial Advisory Agreement, (c)the Credit Agreement, (d) the Members Agreement and(e)the Registration Agreement. Transfer. The term "Transfer" and all related forms of the word shall refer to any assignment, transfer, sale, exchange, conveyance, pledge, hypothecation, gift (testamentary or inter vivos), or encumbrance of a Membership Interest, or attempt to do any of the aforementioned, whatsoever,whether made voluntarily involuntarily or by operation of law. Transferring Member. The term "Transferring Member" shall have the meaning attributed to it in Section 13.3. Treasury Regulations. The term "Treasury Regulations shall mean the final or temporary regulations that have been issued by the U.S. Department of Treasury pursuant to its authority under the Code, and any successor regulations. Unit. The term"Unit" shall mean a unit of interest in the Company held by a Member, as set forth opposite the name of such Member in Schedule A, in certain allocations of Net Profits and Net Losses of the Company and in certain distributions with respect thereto. Except to the extent otherwise provided herein, each class of Unit represents the same fractional interest in such Net Profits, Net Losses and distributions as each other Unit in such class. Units may be issued in different classes and whole and fractional numbers. The number and classes of Units 15 K&E 11059805.11 issued and assigned to each Member is listed on Schedule A attached hereto subject to adjustment pursuant to Section 10.5 and Section 11.6. Unvested Units. The term "Unvested Units" shall mean any Units that are not Vested Units as of a particular Vesting Date. Vested Units. The term "Vested Units" means any Units that are either Time Vest Units or Performance Vest Units that have vested on a particular Vesting Date in accordance with the terms and conditions set forth in Article XI. Vesting Date. The term "Vesting Date" shall have the meaning attributed to it in Section 11.4. Voting Units. The term "Voting Units" shall mean the Class A Common Units, and any successor Capital Interest thereto. WOW Cleveland. The term "WOW Cleveland" shall mean WideOpenWest Cleveland, Inc., a Delaware corporation. WOW Illinois. The term "WOW Illinois" shall mean WideOpenWest Illinois, Inc., a Delaware corporation. WOW Networks. The term "WOW Networks" shall mean WideOpenWest Networks, Inc., a Delaware corporation. WOW Ohio. The term "WOW Ohio" shall mean WideOpenWest Ohio, Inc., a Delaware corporation. 1.2 Terms Generally. The definitions in Article I shall apply equally to both the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words "include," "includes"and"including" shall be deemed to be followed by the phrase"without limitation." ARTICLE II ORGANIZATIONAL MATTERS 2.1 Formation. The Members have formed a Delaware limited liability company under the laws of the State of Delaware by filing the Certificate with the Delaware Secretary of State. This Agreement, which amends and restates the Original Operating Agreement in its entirety, shall be deemed effective as of the Effective Date. The rights and liabilities of the Members shall be determined pursuant to the Act and this Agreement. To the extent that the rights or obligations of any Member are different by reason of any provision of this Agreement than they would be in the absence of such provisions, this Agreement shall, to the extent permitted by the Act, control. 2.2 Certificate. The Certificate of Formation of the Company has been filed in the Office of the Secretary of State for the State of Delaware. 16 K&E 11059805.11 2.3 Name. The name of the Company shall be "Racecar Holdings, LLC." The Company may conduct business under that name or any other name hereafter approved by the Board. 2.4 Term. The term of the Company commenced as of the date of the filing of the Certificate and, unless sooner terminated under Section 14.1, shall terminate on December 31, 2050. 2.5 Office and Agent. The Company shall continuously maintain an office and registered agent in the State of Delaware as required by the Act. The principal office of the Company shall be located at 65 East 55th Street - 18th Floor, New York, NY 10022 or such other location as the Board may determine. The registered agent shall be as stated in the Certificate or as otherwise determined by the Board. 2.6 Qualification in Other Jurisdictions. The Board shall cause the Company to be qualified or registered under assumed or fictitious name statutes or similar laws in any jurisdiction in which the Company owns property or transacts business to the extent, in the reasonable judgment of the Board, such qualification or registration is necessary or advisable in order to protect the limited liability of the Members or to permit the Company lawfully to own property or transact business. The Board, as an authorized person within the meaning of the Act, shall execute, deliver and file any certificates (and any amendments and/or restatements thereof) necessary for the Company to qualify to do business in a jurisdiction in which the Company may wish to conduct business. ARTICLE III PURPOSE AND POWERS OF THE COMPANY 3.1 Purpose. The nature or purpose of the business to be conducted or promoted by the Company is to engage in any lawful act or activity for which limited liability companies may be organized under the Act. The Company may engage in any and all activities necessary, desirable or incidental to the accomplishment of the foregoing. Notwithstanding anything herein to the contrary, nothing set forth herein shall be construed as authorizing the Company to possess any purpose or power, or to do any act or thing, forbidden by law to a limited liability company organized under the laws of the State of Delaware. 3.2 Powers of the Company. (a) Subject to the provisions of this Agreement, the Company shall have the power and authority to take any and all actions necessary, appropriate, proper, advisable, convenient or incidental to or for the furtherance of the purposes set forth in Section 3.1, including, but not limited to the power: (i) to conduct its business, carry on its operations and have and exercise the powers granted to a limited liability company by the Act in any state, territory, district or possession of the United States, or in any foreign country that may be necessary, convenient or incidental to the accomplishment of the purpose of the Company; (ii) to acquire by purchase, lease, contribution of property or otherwise, own, hold, operate, maintain, finance, refinance, improve, lease, sell, convey, mortgage, transfer, 17 K&E 11059805.11 demolish or dispose of any real or personal property that may be necessary, convenient or incidental to the accomplishment of the purpose of the Company; (iii) to enter into, perform and carry out contracts of any kind, including, without limitation, contracts with any Member or any Affiliate thereof, or any agent of the Company necessary to, in connection with, convenient to, or incidental to the accomplishment of the purpose of the Company; (iv) to purchase, take, receive, subscribe for or otherwise acquire, own, hold, vote, use, employ, sell, mortgage, lend, pledge, or otherwise dispose of, and otherwise use and deal in and with, shares or other interests in or obligations of domestic or foreign corporations, associations, general or limited partnerships (including, without limitation, the power to be admitted as a partner thereof and to exercise the rights and perform the duties created thereby), trusts, limited liability companies (including, without limitation, the power to be admitted as a member or appointed as a manager thereof and to exercise the rights and perform the duties created thereby) or individuals or direct or indirect obligations of the United States or of any government, state, territory, governmental district or municipality or of any instrumentality of any of them; (v) to lend money for any proper purpose, to invest and reinvest its funds, and to take and hold real and personal property for the payment of funds so loaned or invested; (vi) to sue and be sued, complain and defend, and participate in administrative or other proceedings, in its name; (vii) to appoint employees and agents of the Company, and define their duties and fix their compensation; (viii) to indemnify any Person in accordance with the Act and to obtain any and all types of insurance; (ix) to cease its activities and obtain a Certificate of Cancellation from the Delaware Secretary of State; (x) to negotiate, enter into, renegotiate, extend, renew, terminate, modify, amend, waive, execute, acknowledge or take any other action with respect to any lease, contract or security agreement in respect of any assets of the Company; (xi) to borrow money and issue evidences of indebtedness and guaranty indebtedness (whether of the Company or any of its Subsidiaries), and to secure the same by a mortgage,pledge or other lien on the assets of the Company; (xii) to pay, collect, compromise, litigate, arbitrate or otherwise adjust or settle any and all other claims or demands of or against the Company or to hold such proceeds against the payment of contingent liabilities; and 18 K&E 11059805 11 (xiii) to make, execute, acknowledge and file any and all documents or instruments necessary, convenient or incidental to the accomplishment of the purpose of the Company. (b) Subject to the provisions of this Agreement, the Company, and the Board, on behalf of the Company, may enter into and perform any and all documents, agreements and instruments contemplated thereby, all without any further act, vote or approval of any Member, and the Board may authorize any Person (including, without limitation, any other Member) to enter into and perform any document on behalf of the Company. 3.3 Liability of Members. No Manager or other Member shall be personally liable for any debts, liabilities or obligations of the Company, whether arising in contract, tort or otherwise. 3.4 Capital Contributions. Each Member shall be responsible for the making of any Capital Contribution required to be made to the Company by such Member pursuant to the terms hereof and each Manager or other Member shall be responsible for the amount of any distribution made to such Manager or other Member that must be returned to the Company pursuant to the Act. ARTICLE IV CAPITAL CONTRIBUTIONS 4.1 Initial Capitalization. (a) The Company has been initially capitalized with $183,448,470.16. Each Member has contributed to the Company the amount set forth opposite its name under the column "Capital Contribution" on Schedule A attached hereto. As of the date of this Agreement, each Rollover Coinvestor has made an initial Capital Contribution by delivering to the Company Shares with an aggregate value of(i) with respect to the Management Coinvestors, $6,648,470.84, and (ii) with respect to the MKMB Coinvestor, $299,999.32, each as identified on Schedule A as consideration for the number of Class A Common Units shown opposite such Rollover Coinvestor's name on Schedule A. Each other Member has made an initial Capital Contribution by delivering to the Company cash in the aggregate amount of$176,500,000.00 as consideration for the number and type of Common Units shown opposite its name on Schedule A hereto. Each Management Incentive Member has made a Capital Contribution in the amount shown opposite such Management Incentive Member's name on Schedule A. On the Effective Date, each Member will have an initial positive Capital Account in the amount of its Capital Contribution with an "Initial Common Capital Account"in the amount shown opposite his or its name on such Schedule A. The Initial Common Capital Accounts shall be the "Initial Capital Accounts." (b) The Capital Contribution of any Management Incentive Member with respect to Management Incentive Units issued after the date of this Agreement shall be the Purchase Price paid by such Management Incentive Member to the Company for the Units awarded in accordance with the provisions of Section 11.1. (c) No Member shall have any obligation at any time to make any Capital Contribution to the Company in addition to the Capital Contributions described in this Section 4.1. 19 K&E 11059805.11 • , 4.2 Return on Capital Contributions. (a) Except as otherwise provided in this Agreement, no return shall be paid by the Company to any Member on account of any Capital Contribution. No Member shall have liability to any other Member for the return of any Capital Contribution and any such return shall be made only to the extent of available Company assets in accordance with the terms of this Agreement. (b) Except as otherwise provided in this Agreement, no Member shall have priority over any other Member as to the return of its Capital Contribution or as to distributions of cash made by the Company. (c) Except as otherwise provided in this Agreement, no Member shall be entitled to withdraw any part of its Capital Contribution or Capital Account or to (i) receive any distributions from the Company, (ii) demand or receive property other than cash in return for its Capital Contribution or(iii) receive any funds or property of the Company. (d) Any distribution made to the Members shall be deemed to comply with all applicable laws including Section 18-607 of the Act. However, if any court of competent jurisdiction holds that,notwithstanding the provisions of this Agreement, any distribution made by the Company in violation of Section 18-607 of the Act was made with the knowledge of a Member of such violation, any obligation under applicable law to return the same or any portion thereof shall be the obligation of such Member and not of the Board or any other Member. (e) No Member shall receive any interest, salary or drawing (other than pursuant to the Employment Agreement or Financial Advisory Agreement with such Member, if any) with respect to its Capital Contributions or its Capital Account or for services rendered on behalf of the Company or otherwise in its capacity as a Member (including as a Manager) or other Member, except as otherwise specifically provided in this Agreement or as approved by the Board. (f) Except as otherwise provided herein and by applicable state law, the Members shall not be liable to make Capital Contributions, and no Member shall be required to lend any funds to the Company. No Member shall have any personal liability for the repayment of any Capital Contribution of any other Member. 4.3 Membership Interest. A Membership Interest shall for all purposes be personal property. No Member has any interest in specific Company property. 4.4 Loans From Members. A loan by a Member to the Company shall not be considered a Capital Contribution. If any Member shall advance funds to the Company, the making of such advances shall not result in any credit to such Member's Capital Account. The amount of any such advances shall be a debt of the Company to such Member and shall be payable or collectible in accordance with the terms and conditions upon which such advances are made; provided that the terms of any such loan shall not be less favorable to the Company than would be available to the Company from unrelated lenders. 20 K&E 11059605.11 • 4.5 Reserves. Reserves in an amount determined by the Board may be retained out of Capital Contributions, net proceeds from sales or refinancing or net proceeds from operations. Any reserves remaining on dissolution of the Company shall be held until the final liquidation and then distributed to the Members in accordance with the provisions of Section 14.2. ARTICLE V ALLOCATIONS AND ELECTIONS 5.1 Allocations. The Company's Net Profit and Net Loss for any fiscal period shall be allocated among the Members in such a manner that, as of the end of such fiscal period and to the extent possible, the Capital Account of each Member shall be equal to the respective net amount which would be distributed to such Member under this Agreement, determined as if the Company were to (a) liquidate the assets of the Company for an amount equal to their Gross Asset Value as of the end of such fiscal period and (b) distribute the proceeds in liquidation in accordance with Section 14.3. 5.2 Certain Book-Ups. To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Code Sections 734(b) or 743(b) is required to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated, as provided in Treas. Reg. § 1.704-1(b)(2)(iv)(m), as an item of Net Profit (if the adjustment increases such basis) or Net Loss (if the adjustment decreases such basis) and such Net Profit or Net Loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Treasury Regulations. 5.3 Minimum Gain Chargeback. Notwithstanding any other provision of this Article V, if there is a net decrease in Minimum Gain during any Fiscal Year, each Member shall be specially allocated items of Company income and gain for such Fiscal Year (and, if necessary, subsequent Fiscal Years) in an amount equal to such Member's share of the net decrease in Minimum Gain. The items to be so allocated shall first consist of gains recognized from the disposition of the Company's assets subject to one or more nonrecourse liabilities of the Company to the extent of the decrease in Minimum Gain attributable to the disposition of such items of property and the remainder shall consist of a pro rata portion of the other items of Company income and gain for that year. 5.4 Qualified Income Offset. Notwithstanding anything in this Article V to the contrary (other than Section 5.3 hereof), in the event any Member unexpectedly receives any adjustments, allocations or distributions described in Treas. Reg. § 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Company income and gain (including gross income) shall be specially allocated to such Member in an amount and manner sufficient to eliminate the Adjusted Capital Account Deficit created by such adjustments, allocations or distributions as quickly as possible. This subsection is intended to comply with the qualified income offset requirement in Treas. Reg. § 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith. 5.5 Nonrecourse Deductions. Nonrecourse deductions (as defined in Treas. Reg. § 1.704-2(b)(1)) for any Fiscal Year shall be allocated among the Members in proportion to their 21 K&E 11059805 11 . respective allocations for such Fiscal Year of Net Profit or Net Loss (as applicable) under Section 5.1. 5.6 Curative Allocations. The allocations set forth in Sections 5.2 through 5.5 (the "Regulatory Allocations") are intended to comply with certain requirements of Treas. Reg. § 1.704-1(b). Notwithstanding any other provisions of this Article V (other than the Regulatory Allocations), the Regulatory Allocations shall be taken into account in allocating other Net Profits and Net Losses and items of income, gain, loss and deduction among Members so that, to the extent possible, the net amount of such allocations of other Net Profits and Net Losses and other items and the Regulatory Allocations to each Member shall be equal to the net amount that would have been allocated to such Member if the Regulatory Allocations had not occurred. 5.7 Loss Limitation. Net Losses allocated pursuant to Section 5.1 shall not exceed the maximum amount of Net Losses that can be allocated without causing any Member to have(with respect to the class of Units against which the Net Loss is being allocated) an Excess Loss. For this purpose, "Excess Loss" means any Net Losses the allocation of which to a Member would cause such Member to have an Adjusted Capital Account Deficit (or increase the amount of such deficit) at the end of any Fiscal Year. If some but not all Members would be allocated an Excess Loss as a consequence of an allocation of Net Losses pursuant to Section 5.1, the foregoing limitation shall be applied on a Member by Member basis so as to allocate the maximum permissible Net Losses to each Member under Treas. Reg. §1.704-1(b)(2)(ii)(d). Any Net Losses in excess of the limitation contained in this Section 5.7 shall be allocated to the Common Owners in proportion to their Common Units. Prior to any allocation of Net Profits under Section 5.1, after an Excess Loss has been allocated to one of more Members, an equal amount of Net Profits shall be allocated to such Members in proportion to and to the extent of the Excess Losses previously allocated to them. 5.8 Allocations for Tax Purposes. (a) In accordance with Section 704(c) of the Code and the Treasury Regulations thereunder, income, gain, loss, and deduction with respect to any property contributed to the capital of the Company shall, solely for tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such property to the Company for federal income tax purposes and its initial Gross Asset Value using the traditional method described in Treas. Reg. § 1.704-3(b). (b) In the event the Gross Asset Value of any Company asset is adjusted pursuant to Section 5.2 or clauses (b) or ) of the definition of Gross Asset Value, 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 Gross Asset Value in the same manner as under Section 704(c) of the Code and the Treasury Regulations thereunder using the remedial method described in Treas. Reg. § 1.704-3(d). (c) Except as otherwise provided herein, for United States federal, state and local income tax purposes, the income, gains, losses and deductions of the Company shall, for each taxable period, be allocated among the Members in the same manner and in the same proportion that such items have been allocated among the Members' respective Capital Accounts. 22 K&E 11059805.11 5.9 Section 754 Election. The Board may, in its sole discretion, make an election under Section 754 of the Code in connection with the transfer of an interest in, or a distribution of property by, the Company. ARTICLE VI DISTRIBUTIONS 6.1 Tax Distributions. Subject to the restrictions of the Company's and/or its Subsidiaries' then applicable debt financing agreements (including the Credit Agreement), and subject to the retention of any other amounts necessary to satisfy the Company's and/or its Subsidiaries' obligations, at least five days before each date prescribed by the Code for a calendar year corporation to pay quarterly installments of estimated tax, the Company shall use commercially reasonable efforts to distribute to each Member cash in proportion to and to the extent of such Member's Quarterly Estimated Tax Amount for the applicable calendar quarter. If, at any time after the final Quarterly Estimated Tax Amount has been distributed pursuant to the previous sentence with respect to any Fiscal Year, the aggregate Tax Distributions to any Member with respect to such Fiscal Year are less than such Member's Tax Amount for such Fiscal Year(a "Shortfall Amount"), then the Company shall use commercially reasonable efforts to distribute cash in proportion to and to the extent of each Member's Shortfall Amount. The Company shall use commercially reasonable efforts to distribute Shortfall Amounts with respect to a Fiscal Year before the 75` day of the next succeeding Fiscal Year (provided that if the Company has made distributions other than pursuant to this Section 6.1, then the Company may apply such distributions to reduce any Shortfall Amount). If the aggregate distributions made to any Member pursuant to this Section 6.1 for any Fiscal Year exceed such Member's Tax Amount (an "Excess Amount"), then such Excess Amount shall reduce subsequent distributions that would be made to such Member pursuant to this Section 6.1, except to the extent taken into account as an advance pursuant to the next sentence. Distributions made pursuant to this Section 6.1 shall be taken into account as advances on distributions made pursuant to Section 6.2, and shall (to the extent not previously taken into account pursuant to this sentence) reduce the distributions to be made to any Member under Section 6.2,when and as paid by the Company. 6.2 Other Cash Flow Distributions. Subject to Section 6.1 and any restrictions contained in any agreement between the Company and any lender to the Company or its Subsidiaries, the Board shall distribute to the Members, at such times and in such amounts as the Board determines, the Company's available cash in the following order of priority: (a) First, to all Common Owners in proportion to their respective Initial Common Capital Accounts, until each Common Owner shall have received pursuant to this Section 6.2(a) an aggregate amount equal to its Initial Common Capital Account; and (b) Second, the balance to all Members in proportion to their respective Profit Percentages; _ provided that except in relation to Tax Distributions, any amounts that would otherwise be distributable to a Management Incentive Member pursuant to this Article VI of Article XIV 23 K&E 11059805.11 below in respect of any Class C Common Units that are not at the time of such distribution Vested Units shall be placed into an escrow account for the benefit of such Management Incentive Members to be distributed to such Management Incentive Member upon such Class C Common Units having become Vested Units. If, for any reason, any Class C Common Units that are not Vested Units have been redeemed pursuant to Article XII below, or it becomes apparent that any Class C Common Units that have not become Vested Units can no longer become Vested Units, any amounts held in escrow related to such Class C Common Units as have been redeemed or which can no longer become Vested Units shall be re-distributed to the Members in accordance with this Section 6.2 (assuming that such Class C Common Units as may no longer become Vested Units do not exist for the purposes of such re-distribution). 6.3 Return of Distributions. In accordance with the Act and the laws of the State of Delaware, a member of a limited liability company may, under certain circumstances, be required to return amounts previously distributed to a member. It is the intent of the Members that no distribution to any Member pursuant to Article VI or Article XIV hereof shall be deemed a return of money or other property paid or distributed in violation of the Act. The payment of any such money or distribution of any such property to a Member shall be deemed to be a compromise within the meaning of the Act, and the Member receiving such money or property shall not be required to return to any Person any such money or property. However, if any court of competent jurisdiction holds that, notwithstanding the provisions of this Agreement, any member is obligated to make any such payment, such obligation shall be the obligation of such Member and not of the other Members. 6.4 Limitation on Distributions. Notwithstanding any provision to the contrary contained in this Agreement, the Company shall not make any distribution if such distribution would violate Section 18-607 of the Act or other applicable law or if such distribution would violate any of the Company's debt financing agreements or any other debt financing agreement of which the Company is a guarantor, but shall instead made such distribution as soon as practicable after such time as the making of such distribution would not cause such violation. ARTICLE VII MEMBERS 7.1 Limited Liability. Unless required by law, no Member shall be personally liable for any debt, obligation, or liability of the Company, regardless of whether that liability or obligation arises in contract,tort, or otherwise. 7.2 Members. The Members of the Company as of the date hereof are those Persons whose names appear on the signature pages of this Agreement, and each of said Persons shall be deemed to have been admitted as a Member of the Company upon the date this Agreement becomes effective without the need for any further action or consent by any Person and each of such Persons shall be deemed to have been issued their respective Membership Interests on the date hereof(including, without limitation, the respective Units that correspond to and are part of such Membership Interests as indicated on Schedule A attached hereto). The Board shall cause the Company to prepare and send transaction statements for such Membership Interests to the extent required by the Uniform Commercial Code. 24 K&E 11059805.11 7.3 Admission of New Members. The Board may, from time to time, admit new Non-Managing Members subject to the following: (i) the new member shall make a Capital Contribution in such amount and on such terms as the Board deems appropriate based upon the needs of the Company, the net value of its assets, the Company's financial condition, and the benefits anticipated to be realized by the additional Non-Managing Member; (ii) no additional Non-Managing Members shall be admitted if the effect of such admission would be to terminate the Company within the meaning of Code Section 708(b); and (iii)the additional Non-Managing Member agrees to be bound by the terms of this Agreement; provided, however, that the addition of Management Incentive Members shall be governed by Section 11.1 and not this Section 7.3. ARTICLE VIII MANAGEMENT OF THE COMPANY 8.1 Board of Managers. (a) Establishment. There is hereby established a committee (the "Board") comprised of natural persons (the "Managers") having the authority and duties set forth in this Agreement. Each Manager shall be entitled to one vote. Any decisions to be made by the Board shall require the approval of a Majority of the Board. Except as provided in the immediately preceding sentence, no Manager acting alone, or with any other Manager or Managers, shall have the power to act for or on behalf of, or to bind the Company (including as a result of each Manager being a "manager" (as that term is defined in the Act) of the Company as further provided in this Section 8.1(a)). Each Manager shall be a "manager" (as that term is defined in the Act) of the Company, but, notwithstanding the foregoing, no Manager shall have any rights or powers beyond the rights and powers granted to such Manager in this Agreement. Managers need not be residents of the State of Delaware. (b) Powers. The business and affairs of the Company shall be managed by or under the direction of the Board. All actions outside of the ordinary course of business of the Company to be taken by or on behalf of the Company shall require the approval of a Majority of the Board. (c) Number of Managers; Term of Office. The authorized number of Managers is, as of the date hereof, seven (7) Managers and, hereafter, subject to the terms and provisions of the Members Agreement, the authorized number of Managers may be increased or decreased by the Board; provided that Avista shall always maintain proportionately the same representation on the Board following any such increase or decrease. The Managers shall, except as hereinafter otherwise provided for filling vacancies, be elected by a Majority in Interest and shall hold office until their respective successors are elected and qualified or until their earlier death, resignation or removal. The Managers as of the date hereof are listed on the attached Schedule B. (d) The Company hereby designates Avista (or such other Member as Avista in its sole discretion designates from time to time) to act as the "Tax Matters Member" in accordance with Section 6221 through 6233 of the Code. The Tax Matters Member is authorized to represent the Company before the Internal Revenue Service and any other governmental agency with jurisdiction, and to sign such consents and to enter settlements and other agreements with such agencies as the Tax Matters Member deems necessary or advisable; provided, however, that (i) any material action taken by the Tax Matters Member in its capacity as such (including, 25 K&E 11059805.11 without limitation, the extension of any statute of limitations, the making of any tax elections and the filing or settlement of any action or suit) shall require the prior consent of the Board, (ii)the Tax Matters Member shall provide to the Board a timely and complete summary of each oral and written communication from or to the U.S. Internal Revenue Service relating to any material Company tax matter and shall promptly furnish to the Board a copy of all written correspondence relating thereto, (iii)the Tax Matters Member shall promptly provide to the Board detailed accounts of all stages of each administrative or judicial proceeding relating to Company tax matters and shall provide the Board sufficient notice to enable the Board to participate fully therein, and (iv) the Tax Matters Member shall consult with and obtain prior approval of the Board with respect to any other action taken as Tax Matters Member. (e) Meetings of the Board. The Board shall meet at such time and at such place (either within or outside of the State of Delaware) as the Board may designate. Special meetings of the Board shall be held on the call of the Chairman (as herein defined) or any four (4) Managers upon at least two (2) days (if the meeting is to be held in person) or one (1) days (if the meeting is to be held by telephone communications or video conference) oral or written notice to the Managers, or upon such shorter notice as may be approved by all of the Managers. Any Manager may waive such notice as to himself. A record shall be maintained by the Secretary of the Company of each meeting of the Board. (i) Conduct of Meetings. Any meeting of the Board may be held in person, telephonically or by video conference. (ii) Quorum. A Majority of the Board shall constitute a quorum of the Board for purposes of conducting business. At all times when the Board is conducting business at a meeting of the Board, a quorum of the Board must be present at such meeting. If a quorum shall not be present at any meeting of the Board, then the Managers present at the meeting may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. A Manager may vote or be present at a meeting either in person or by proxy. (iii) Attendance and Waiver of Notice. Attendance of a Manager at any meeting shall constitute a waiver of notice of such meeting, except where a Manager attends a meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board need be specified in the notice or waiver of notice of such meeting. (iv) Actions Without a Meeting. Notwithstanding any provision contained in this Agreement, any action of the Board may be taken without a meeting if a consent or consents in writing, setting forth the action so taken, shall be signed by a Majority of the Board. A record shall be maintained by the Secretary of the Company of each such action taken by written consent of the Board. (f) Compensation of the Managers. Managers, as such, shall not receive any stated salary for their services, but shall receive such reasonable compensation for their services as may be from time to time agreed upon with respect to any particular Manager by a Majority of the 26 K&E 11059805.11 Board. In addition, a fixed sum and reimbursement for out-of-pocket expenses of attendance, if any, may be allowed for attendance at each regular or special meeting of the Board; provided, that nothing contained in this Agreement shall be construed to preclude any Manager (including the Chief Executive Officer) from serving the Company or any of its subsidiaries in any other capacity and receiving compensation for such service. (g) Chairman of the Board. A Majority of the Board may elect any one of the Managers to be the Chairman of the Board (the "Chairman"). At any time, the Chairman, if any, can be removed from his or her position as Chairman by a Majority of the Board. The Chairman, in his or her capacity as the Chairman of the Board, shall not have any of the rights or powers of an officer of the Company. The Chairman shall preside at all meetings of the Board and at all meetings of the Members at which he or she shall be present. 8.2 Committees of the Board. (a) Creation. The Board may, by resolution, designate from among the Managers one or more committees (including, but not limited to, an Audit Committee, a Nominating Committee, and a Compensation Committee), each of which shall be comprised of one or more Managers, and may designate one or more of the Managers as alternate members of any committee, who may, subject to any limitations imposed by the Board, replace absent or disqualified Managers at any meeting of that committee. Any such committee, to the extent provided in such resolution, shall have and may exercise all of the authority of the Board, subject to the limitations set forth in the Act or in the establishment of the committee. Any members thereof may be removed by a Majority of the Board. Unless the resolution designating a particular committee or this Agreement expressly so provides, a committee of the Board shall not have the authority to authorize or make a distribution to the Members or to authorize the issuance of Units. (b) Limitation of Authority. No committee of the Board shall have the authority of the Board in reference to: (i) amending this Agreement, except that a committee may, to the extent provided in the resolution designating that committee or in this Agreement, exercise the authority of the Board provided in this Agreement to establish the relative rights, obligations, preferences and limitations of any type, class or series of Units; (ii) approving a plan of merger of the Company; (iii) recommending to the Members a voluntary dissolution of the Company or a revocation thereof; (iv) filling vacancies in the Board; (v) fixing the compensation of any member or alternate members of such committee; (vi) approving a Sale of the Company; (vii) admitting new or substitute Members; or 27 K&E 11059805.11 (viii) altering or repealing any resolution of the Board that by its terms provides that it shall not be so amendable or repealable. 8.3 Officers. (a) Appointment of Officers. The Board shall appoint individuals as officers ("Officers") of the Company, which may include a Chief Executive Officer, a President, a Chief Financial Officer, a Secretary and such other officers (such as a Chief Operating Officer, a Treasurer or any number of Vice Presidents) as the Board deems advisable. No officer need be a Member or a Manager. An individual may be appointed to more than one office. Each officer of the Company shall be a "manager" (as that term is used in the Act) of the Company, but, notwithstanding the foregoing, no officer of the Company shall have any rights or powers beyond the rights and powers granted to such officer in this Agreement. The officers of the Company as of the date hereof are listed on the attached Schedule C. (b) Duties of Officers Generally. Under the direction of and, at all times, subject to the authority of the Board, the Officers shall have full and complete discretion to manage and control the day-to-day business, operations and affairs of the Company in the ordinary course of its business, to make all decisions affecting the day-to-day business, operations and affairs of the Company in the ordinary course of its business and to take all such actions as they deem necessary or appropriate to accomplish the foregoing, in each case, unless the Board shall have previously restricted (specifically or generally) such powers. In addition, the Officers shall have such other powers and duties as may be prescribed by the Board or this Agreement. The Chief Executive Officer and the President shall have the power and authority to delegate to any agents or employees of the Company rights and powers of Officers of the Company to manage and control the day-to-day business, operations and affairs of the Company in the ordinary course of its business, as the Chief Executive Officer or the President may deem appropriate from time to time, in each case, unless the Board shall have previously restricted (specifically or generally) such powers. (c) Authority of Officers. Subject to Section 8.3(b), any Officer of the Company shall have the right, power and authority to transact business in the name of the Company or to act for or on behalf of or to bind the Company. With respect to all matters within the ordinary course of business of the Company, third parties dealing with the Company may rely conclusively upon any certificate of any Officer to the effect that such Officer is acting on behalf of the Company. (d) Removal, Resignation and Filling of Vacancy of Officers. The Board may remove any Officer, for any reason or for no reason, at any time. Any Officer may resign at any time by giving written notice to the Board, and such resignation shall take effect at the date of the receipt of that notice or any later time specified in that notice; provided, that unless otherwise specified in that notice, the acceptance of the resignation shall not be necessary to make it effective. Any such resignation shall be without prejudice to the rights, if any, of the Company or such Officer under this Agreement. A vacancy in any office because of death, resignation, removal or otherwise shall be filled in the manner prescribed in this Agreement for regular appointments to that office. 28 K&E 11059805.11 • (e) Compensation of Officers. The Officers shall be entitled to receive compensation from the Company as determined by the Board. (f) Chief Executive Officer. Under the direction of and, at all times, subject to the authority of the Board, the Chief Executive Officer shall have general supervision over the day-to-day business, operations and affairs of the Company and shall perform such duties and exercise such powers as are incident to the office of chief executive officer of a corporation organized under the GCL. The Chief Executive Officer shall have such other powers and perform such other duties as may from time to time be prescribed by the Board. (g) President. Under the direction of and, at all times, subject to the authority of the Board, the President, if any, shall perform such duties and exercise such powers as are incident to the office of president of a corporation organized under the GCL. In the absence of the Chief Executive Officer, the President shall perform the duties of the Chief Executive Officer. The President shall have such other powers and perform such other duties as may from time to time be prescribed by the Board. (h) Chief Financial Officer. The Chief Financial Officer shall keep and maintain, or cause to be kept and maintained, adequate and correct books and records of accounts of the properties and business transactions of the Company, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital and Units, and, in general, shall perform all the duties incident to the office of the chief financial officer of a corporation organized under the GCL. The Chief Financial Officer shall have the custody of the funds and securities of the Company, and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Company. The Chief Financial Officer shall have such other powers and perform such other duties as may from time to time be prescribed by the Board, the Chief Executive Officer and/or the President. (i) Secretary. The Secretary shall (i)keep the minutes of the meetings of the Members and the Board in one or more books provided for that purpose; (ii) see that all notices to be given by the Company are duly given in accordance with the provisions of this Agreement and as required by law; (iii)be custodian of the company records; (iv) keep a register of the addresses of each Member which shall be furnished to the Secretary by such Member; (v) have general charge of the Members Schedule; and (vi) in general perform all duties incident to the office of the secretary of a corporation organized under the GCL. The Secretary shall have such other powers and perform such other duties as may from time to time be prescribed by the Board, the Chief Executive Officer and/or the President. (j) Other Officers. All other Officers of the Company shall have such powers and perform such duties as may from time to time be prescribed by the Board and/or the Chief Executive Officer. 8.4 Performance of Duties; Liability of Managers and Officers. In performing his or her duties, each of the Managers and the Officers shall be entitled to rely in good faith on the provisions of this Agreement and on information, opinions, reports, or statements (including financial statements and information, opinions, reports or statements as to the value or amount of the assets, liabilities, Profits or Losses of the Company or any facts pertinent to the existence and 29 K&E 11059805.11 amount of assets from which distributions to Members might properly be paid), of the following other Persons or groups: (A) one or more Officers or employees of the Company; (B) any attorney or independent accountant employed or engaged by the Company; or (C) any other Person who has been employed or engaged by the Company, or selected with reasonable care by or on behalf of the Company, in each case as to matters which such relying Person reasonably believes to be within such other Person's professional or expert competence. The preceding sentence shall in no way limit any Person's right to rely on information to the extent provided in Section 18-406 of the Act. No individual who is a Manager or an Officer of the Company, or any combination of the foregoing, shall be personally liable under any judgment of a court, or in any other manner, for any debt, obligation, or liability of the Company, whether that liability or obligation arises in contract, tort, or otherwise, solely by reason of being a Manager or an Officer of the Company or any combination of the foregoing. 8.5 Indemnification (a) No Manager or Non-Managing Member or any direct or indirect officer, manager, stockholder, partner, member, director, agent or employee of a Manager or Non-Managing Member (each an "Indemnitee"), shall be liable, responsible or accountable in damages or otherwise to the Company or to any Member, for any act or failure to act by such Indemnitee in connection with the conduct of the business of the Company, or by any other such Indemnitee in performing or participating in the performance of the obligations of the Board or the Company, so long as such Indemnitee acted in the good faith belief that such action or failure to act was in the best interests, or not opposed to the best interests, of the Company and/or its Subsidiaries and such action or failure to act was not in violation of this Agreement and did not constitute gross negligence or willful misconduct (the "Standard of Care"). No Person who is a Manager or a Non-Managing Member or an Officer of the Company, or any combination of the foregoing, shall be personally liable under any judgment of a court, or in any other manner, for any debt, obligation, or liability of the Company, whether that liability or obligation arises in contract,tort, or otherwise, solely by reason of being a Manager or a Non-Managing Member or an Officer of the Company or any combination of the foregoing. (b) So long as an Indemnitee has acted in accordance with the Standard of Care, the Company shall indemnify and hold harmless each Indemnitee to the fullest extent permitted by law against losses, damages, liabilities, costs or expenses (including reasonable attorney's fees and expenses and amounts paid in settlement) incurred by any such Indemnitee in connection with any action, suit or proceeding to which such Indemnitee may be made a party or otherwise involved or with which it shall be threatened by reason of its being a Manager or Non-Managing Member of this Company, or an officer, manager, stockholder, partner, member, director, agent or employee of a Manager, or while acting as (or on behalf of) a Manager or Non-Managing Member on behalf of the Company or in the Company's interest; provided, however, that nothing contained in this Section is intended or shall be construed to obligate any Member to the Company or to the Board in any amount in excess of its liability as set forth in Section 3.3 hereof. Such attorney's fees and expenses shall be paid by the Company as they are incurred upon receipt, in each case, of an undertaking by or on behalf of the Indemnitee to repay such amounts if it is ultimately determined that such Indemnitee is'not entitled to indemnification with respect thereto. 30 K&E 11059805.11 8.6 Insurance. The Company shall have the power to purchase and maintain insurance on behalf of any Person who is or was an agent of the Company against any liability asserted against such Person and incurred by such Person in any such capacity, or arising out of such Person's status as an agent, whether or not the Company would have the power to indemnify such Person against such liability under the provisions of Section 8.5 or under applicable law. ARTICLE IX MEMBERS; VOTING RIGHTS 9.1 Meetings of Members. (a) Generally. Meetings of the Members may be called by (i) the Board or (ii)by a Member or Members holding more than a Majority in Interest. Only Members who hold Class A Common Units or Class B Common Units shall have the right to attend meetings of the Members. All meetings of the Members shall be held telephonically or at the principal office of the Company or at such other place within or without the State of Delaware as may be determined by the Board or Member(s) calling the meeting and set forth in the respective notice or waivers of notice of such meeting. A record shall be maintained by the Secretary of the Company of each meeting of the Members. (b) Notice of Meetings of Members. Written or printed notice stating the place, day and hour of the meeting and, in the case of a special meeting of the Members, describing the purposes for which the meeting is called shall be delivered not fewer than ten days, but not more than sixty days, before the date of the meeting, either personally or by any written method by which it is reasonable to expect that the Members would receive such notice not later than the business day prior to the date of the meeting, to each holder of Voting Units (with a copy to the Secretary of the Company), by or at the direction of the Member(s) calling the meeting or the Board, as the case may be. Such notice may, but need not, specify the purpose or purposes of such meeting and may, but need not, limit the business to be conducted at such meeting to such purpose(s). (c) Quorum. Except as otherwise provided herein or by applicable law, at any time, a Majority in Interest, represented in person or by proxy, shall constitute a quorum of Members for purposes of conducting business. Once a quorum is present at the meeting of the Members, the subsequent withdrawal from the meeting of any Member prior to adjournment or the refusal of any Member to vote shall not affect the presence of a quorum at the meeting. If, however, such quorum shall not be present at any meeting of the Members, the Members entitled to vote at such meeting shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until Members which own a Majority in Interest shall be present or represented. Except as otherwise required by applicable law, resolutions of the Members at any meeting of Members shall be adopted by the affirmative vote of a majority of the Voting Units represented and entitled to vote at such meeting at which a quorum is present. (d) Actions Without a Meeting. Unless otherwise prohibited by law, any action to be taken at a meeting of the Members may be taken without a meeting if a consent or consents in writing, setting forth the action so taken, shall be signed by a Member or Members holding not 31 K&E 11059805.11 • a . less than a Majority in Interest. A record shall be maintained by the Secretary of the Company of each such action taken by written consent of a Member or Members. 9.2 Voting Rights. Except as specifically provided herein or otherwise required by applicable law, for all purposes hereunder, including for purposes of Article IX hereof, each Member shall be entitled to (x) one vote per Voting Unit held by such Member and (y) no votes for any Nonvoting Units held by such Member. A Member which owns Voting Units may vote or be present at a meeting either in person or by proxy. 9.3 Registered Members. The Company shall be entitled to treat the owner of record of any Units as the owner in fact of such Unit for all purposes, and accordingly shall not be bound to recognize any equitable or other claim to or interest in such Unit on the part of any other person, whether or not it shall have express or other notice of such claim or interest, except as expressly provided by this Agreement or the laws of the State of Delaware. 9.4 Limitation of Liability. No Member will be obligated personally for any debt, obligation or liability of the Company or of any of its subsidiaries or other Members by reason of being a Member, whether arising in contract, tort or otherwise. Except as otherwise provided in the Act or by law, no Member will have any fiduciary or other duty to another Member with respect to the business and affairs of the Company or of any of its subsidiaries. No Member will have any responsibility to restore any negative balance in his or her Capital Account or to contribute to or in respect of the liabilities or obligations of the Company or of any of its subsidiaries or return distributions made by the Company. 9.5 Withdrawal; Resignation. A Member shall not cease to be a Member as a result of the Bankruptcy of such Member or as a result of any other events specified in § 18-304 of the Act. So long as a Member continues to own or hold any Units, such Member shall not have the ability to resign as a Member prior to the dissolution and winding up of the Company and any such resignation or attempted resignation by a Member prior to the dissolution or winding up of the Company shall be null and void. As soon as any Person who is a Member ceases to own or hold any Units, such Person shall no longer be a Member. 9.6 Death of a Member. The death of any Member shall not cause the dissolution of the Company. In such event the Company and its business shall be continued by the remaining Member or Members and the Units owned by the deceased Member shall automatically be transferred to such Member's heirs (provided that, within a reasonable time after such transfer, the applicable heirs shall comply with Section 10.5 of this Agreement). 9.7 Authority. No Member, in its capacity as a Member, shall have the power to act for or on behalf of or to bind the Company. 9.8 Outside Activities. Subject to the terms of any written agreement by any Member to the contrary (including the non-competition agreements with employees of the Company or any of its subsidiaries), a Member may have business interests and engage in business activities in addition to those relating to the Company, including business interests and activities which compete with the Company, and no Member (unless such Member is an employee of the Company or one of its subsidiaries) shall have any duty or obligation to bring any "corporate 32 K&E 11059805 11 opportunity" to the Company. Subject to the terms of any written agreement by any Member to the contrary, neither the Company nor any other Member shall have any rights by virtue of this Agreement in any business interests or activities of any Member. 9.9 Indemnification and Reimbursement for Payments on Behalf of a Member (a) If the Company is obligated to pay any amount to a governmental agency or to any other Person (or otherwise makes a payment) because of a Member's status or otherwise specifically attributable to a Member (including, without limitation, federal, state and local withholding taxes imposed with respect to any award of Units to a Management Incentive Member, any payments to a Management Incentive Member, withholding taxes with respect to foreign members, state personal property taxes, state unincorporated business taxes, etc.), then such Member (the "Charged Member") shall indemnify the Company in full for the entire amount paid (including, without limitation, any interest, penalties and expenses associated with such payment). The amount to be indemnified shall be charged against the Capital Account of the Charged Member, and, at the option of the Board, either: (i) promptly upon notification of an obligation to indemnify the Company, the Charged Member shall make a cash payment to the Company equal to the full amount to be indemnified (and the amount paid shall be added to the Charged Member's Capital Account but shall not be deemed to be a Capital Contribution hereunder), or (ii) the Company shall reduce current or subsequent distributions that would otherwise be made to the Charged Member until the Company has recovered the amount to be indemnified (provided that the amount of such reduction shall be deemed to have been distributed for all purposes of this Agreement, but such deemed distribution shall not further reduce the Charged Member's Capital Account). (b) A Charged Member's obligation to make contributions to the Company under this Section 9.9 shall survive the termination, dissolution, liquidation and winding up of the Company, and for purposes of this Section 9.9, the Company shall be treated as continuing in existence. The Company may pursue and enforce all rights and remedies it may have against each Charged Member under this Section 9.9, including instituting a lawsuit to collect such contribution with interest calculated at a rate equal to the Base Rate plus six percentage points per annum(but not in excess of the highest rate per annum permitted by law). ARTICLE X UNITS; MEMBERSHIP 10.1 Units Generally. The Membership Interests of the Members shall be represented by issued and outstanding Units, which may be divided into one or more types, classes or series, with each type or class or series having the rights and privileges, including voting rights, if any, set forth in this Agreement. The Secretary of the Company shall maintain a schedule of all Members from time to time with the Units held by them (as the same may be amended, modified or supplemented from time to time, the "Members Schedule"), a copy of which as of the execution of this Agreement is attached hereto as Schedule A. Ownership of a Unit (or fraction 33 K&E 11059805.11 thereof) shall not entitle a Member to call for a partition or division of any property of the Company or for any accounting. 10.2 Authorization and Issuance of Units. (a) Preferred Units. The Company is hereby authorized to issue classes and series of Preferred Units. With respect to such classes and series of Preferred Units, the Board is authorized to provide for the issuance of such Preferred Units in any class or series by amending this Agreement to reflect such issuance and to establish the Preferred Units to be included in each such class or series, and to fix the relative rights, obligations, preferences and limitations of the Preferred Units of each such class or series. (b) Class A Common Units. The Company is hereby authorized to issue up to 1,234,150 Class A Common Units, 1,234,150 of which are issued and outstanding as of the date hereof as set forth on Schedule A(as in effect on the date hereof). (c) Class B Common Units. The Company is hereby authorized to issue up to 600,000 Class B Common Units, 600,000 of which are issued and outstanding as of the date hereof as set forth on Schedule A(as in effect on the date hereof). (d) Class C Common Units. The Company is hereby authorized to issue up to 203,767 Class C Common Units, none of which are issued and outstanding as of the date hereof as set forth on Schedule A (as in effect on the date hereof). (e) Other Common Units. Subject to Section 13.7, in addition to the Class A Common Units, Class B Common Units, Class C Common Units, the Company is hereby authorized to issue other classes and series of Common Units. With respect to such other classes and series of Common Units, the Board is hereby authorized to provide for the issuance of such Common Units in any class or series by amending this Agreement to reflect such issuance and to establish the Common Units to be included in each such class or series, and to fix the relative rights, obligations,preferences and limitations of the Common Units of each such class or series. 10.3 Conversion. (a) Conversion of Class B Common Units. Each holder of Class B Common Units shall be entitled to convert its Class B Common Units into Class A Common Units (i) in connection with any Change of Control, immediately prior to and in connection with the consummation of such Change of Control, upon written request to the Company, or (ii) immediately prior to any Transfer in accordance with Section 13.2 that has been approved by Avista in writing in advance. The Company shall effect such conversion in a timely manner so as to enable each such holder to participate in such Change of Control. The Company shall not cancel the Class B Common Units so converted before the tenth (10th) day following the consummation of such Change of Control or Transfer and shall reserve such Class B Common Units until such tenth (10th) day for reissuance in compliance with the next sentence. If any Class B Common Units are converted into Class A Common Units in connection with a Change of Control or Transfer and such Class A Common Units are not actually distributed, disposed of or sold pursuant to such Change of Control or Transfer, such Class A Common Units shall be promptly converted back into the same number of Class B Common Units. 34 K&E 11059805.11 (b) Conversion Procedure. (i) Unless otherwise provided, in connection with any conversion contemplated by Section 10.3(a) each conversion of one class of Units into the other class of Units shall be effected by the surrender of the certificate or certificates representing the Units to be converted at the principal office of the Company at any time during normal business hours, together with a written notice by the holder of such Units stating that (a) such holder desires to convert the Units, or a stated number of the Units, of such class of Units represented by such certificate or certificates into the other class of Units and (b) upon such conversion such holder and its affiliates shall not directly or indirectly own, control or have power to vote or dispose of a greater quantity of securities of any kind issued by the Company than such holder and its affiliates are permitted to own, control or have power to vote or dispose of under any applicable law, regulation, rule or other governmental requirement (and such statement shall obligate the Company to issue such Units). Unless otherwise provided in connection with the Change or Control or Transfer contemplated by Section 10.3(a), each conversion shall be deemed to have been effected as of the close of business on the date on which such certificate or certificates have been surrendered and such notice has been received, and at such time the rights of the holder of the converted Class B Common Units or Class A Conunon Units, as the case may be, as such holder shall cease and the Person or Persons in whose name or names the certificate or certificates for Class A Common Units or Class B Common Units are to be issued upon such conversion shall be deemed to have become the holder or holders of record of the Class A Common Units or Class B Common Units represented thereby. (ii) Promptly after the surrender of certificates and the receipt of written notice, the Company shall issue and deliver in accordance with the surrendering holder's instructions (a)the certificate or certificates for the Class A Common Units or Class B Common Units issuable upon such conversion and (b) a certificate representing any Class B Common Units or Class A Common Units which was represented by the certificate or certificates delivered to the Company in connection with such conversion but which was not converted. (iii) The Company shall take all such actions as may be necessary to assure that all Units issued pursuant to this Section 10.3 may be so issued without violation of any applicable law or governmental regulation or any requirements of any domestic securities exchange upon which Units may be listed (except for official notice of issuance which shall be immediately transmitted by the Company upon issuance). The Company shall not close its books against the transfer of Units in any manner which would interfere with the timely conversion of any Units. (c) Additional Units. Except as expressly provided by this Agreement, the Company shall not authorize,issue or sell, or cause to be authorized, issued or sold, any Units. 10.4 Issuance of Additional Units. Subject to Article XIII, the Company (with the approval of the Board) shall have the right to issue further authorized but unissued Units in addition to those issued pursuant to Section 4.1 ("Additional Units"); provided, that the Company shall not issue any Units to any Person unless such Person has executed and delivered to the Secretary of the Company the documents described in Section 10.5 hereof. Upon the 35 K&E 11059805.11 • issuance of Units, the Board shall adjust the Capital Accounts of the Members as necessary in accordance with Article IV. 10.5 Admission as Member. Any Person that has acquired Units will be admitted to the Company as a Member with respect to such Units as promptly as reasonably practicable after (i)payment of the Capital Contribution for such Units, and (ii) the timely execution, acknowledgment and delivery by the Member of such other instruments as are required by the Board, including an acknowledgment to be subject to and bound by the terms, conditions and obligations of this Agreement. Upon the amendment of the Members Schedule by the Secretary of the Company and the satisfaction of any other applicable conditions, such Person shall be admitted as a Member and deemed listed as such on the books and records of the Company and thereupon shall be issued his or its Units. The Board shall also adjust the Capital Accounts of the Members as necessary in accordance with Article IV. ARTICLE XI MANAGEMENT INCENTIVE MEMBERS 11.1 Admission of Management Incentive Members. Any person who has been awarded Management Incentive Units hereunder will be admitted to the Company as a Management Incentive Member with respect to such Units as promptly as reasonably practicable after (i) payment of the Purchase Price for such Units, (ii) delivery to the Company, within 15 days after the award of such Units, of a completed and signed election under Section 83(b) of the Code with respect to such Units, and (iii) the timely execution, acknowledgment and delivery by the Management Incentive Member of such other instruments as are required by the Board, including an acknowledgment to be subject to and bound by the terms, conditions and obligations of this Agreement. 11.2 Vesting. The Management Incentive Units shall be subject to vesting as more fully described in Sections 11.3 through 11.6. 11.3 Time Vesting. Fifty percent (50%) of the Management Incentive Units are subject to time vesting (the "Time Vest Units") as described below. The Management Incentive Units shall become vested with respect to the Time Vest Units on May 1 of each year, at the rate of twenty percent(20%)per year,beginning as of May 1, 2007, and ending on May 1, 2011, if as of each such date the Management Incentive Member is still employed by the Company or one of its subsidiaries. If the Management Incentive Member ceases to be employed by the Company or its subsidiaries on any date other than May 1 of any year included above, the percentage of the Time Vest Units that are vested shall equal the percentage of the Time Vest Units which were vested as of the immediately preceding May 1. 11.4 Performance Vesting. Fifty percent (50%) of the Management Incentive Units shall be subject to performance vesting (the "Performance Vest Units" or "PVUs") as described in this Section 11.4. (a) Annual Performance Vesting. The Performance Vest Units may become vested for up to twenty percent (20%) of the Performance Vest Units each year that the Company achieves the EBITDA targets for the fiscal year ending on December 31st of the applicable fiscal year(the 36 K&E 11059805.11 • "Vesting Date") if, and only if, the Management Incentive Member is still employed by the Company or its subsidiaries as of the applicable Vesting Date. If the Company achieves actual EBITDA for the fiscal year ending on the Vesting Date equal to, or in excess of, the Base EBITDA set forth on Table 11.4(0 below ("EBITDA Metric"), then a proportion of the Performance Vest Units eligible to become vested and exercisable as of the applicable Vesting Date shall become vested as follows: (i) fifty percent (50%) of the eligible Performance Vest Units, plus (ii) a further percentage of the eligible Performance Vest Units derived by multiplying (x) fifty percent (50%) by (y) the quotient derived by dividing (A) the amount by which the EBITDA achieved exceeds the Base EBITDA up to a maximum of the Target EBITDA, by (B) the amount derived by deducting the Base EBITDA amount from the Target EBITDA. Table 11.4(a) .. ..l;h�'`_C` r• . ,- :`;,a ,,,as.- ,YaT..k�;��?'N,•;��i,:;,<g;E,�R�k t��3,1Ys�St�.��o � �:. esP:t�i 1,n 1u ,4`",'�e�,-iluYFtf Ve.-?�A n;�:wnu at sES-I T,-�D;AkVI 4ye t.ri c.f o ar-v$,�y' n, y;. .o 4 1 s;,i�R - ;tJ_ ,,�.� s cf e a PKI CITC 011 -1 rag, • ; 20t 404617,041 rt6g 00. tit AV' Viki g t 6 ha1 i � ig ' o iBITD 100/ $108.0 $128.3 $144.7 $160.7 $176.9 NBase:r: _". 50% ' $106.0 $121.8 $131.5 $140.3 $150.0 (e.g. if the EBITDA achieved in 2006 is $107.0 million, using the formula set forth . above, the proportion of Performance Vest Units vesting on the December 31, 2006 will be equal to: 20%*(50% + (50%*(($107,000,000 - $106,000,000)/($108,000,000 - $106,000,000))) = 15% of the Performance Vest Units will vest) (b) Adjustments to Determination of EBITDA. For the purposes of calculating EBITDA pursuant to Section 11.4(a) above, to the extent actual EBITDA exceeds Target EBITDA in any particular fiscal year the amount by which actual EBITDA exceeds Target EBITDA for the purposes of calculating the Performance Vest Units that will vest as of any immediately preceding or immediately following Vesting Date may be applied as an adjustment to the calculation of EBITDA for the purposes of calculating EBITDA either (i) for such immediately preceding Vesting Date, (ii) for such immediately following Vesting Date, or (iii) both (i) and (ii) up to a maximum aggregate amount of the excess. The effective date of vesting shall be the fiscal year end of any year included above even though EBITDA for the related period may not be determined until a date thereafter. For example, showing the adjustment amount in bold in the following calculations: if actual EBITDA for the fiscal year ending December 31, 2006 was $106.0 million, for December 31, 2007 was $135.0 million, and for December 31, 2008 was $130.0 million then the Performance Vest Units vesting as of the Vesting Dates December 31, 2006, December 31, 2007 and December 31, 2008 will be as follows: (i) 20%*(50% + 50%(($106,000,000 + $2,000,000 - $106,000,000)/($108,000,000 - $106,000,000))) = 20% of the Performance Vest Units will vest, (ii) 20%*(50% + 50%(($128,300,000 + $0 - $121,800,000)/($128,300,000 - $121,800,000))) = 20% of the Performance Vest Units will vest, (iii) 20%*(50% + 50%(($130,000,000 + $4,700,000 - $131,500,000)/($144,700,000 - $131,500,000))) = 12.42% of the Performance Vest Units will vest. 37 K&E 11059805 11 (c) Adjustments of Targets and Determination of EBITDA. Base EBITDA and Target EBITDA shall be adjusted from time to time in good faith by the Board (including the Management Manager) in connection with the acquisition or divestiture by the Company of any other business or interest therein. In connection with any such acquisition or divestiture, the Board will approve and adopt revised levels of Base EBITDA and Target EBITDA for each fiscal year remaining during which Performance Vest Units are subject to vesting pursuant to Sections 11.4(a) and 11.4(b) above. The revised Base EBITDA and Target EBITDA shall be determined based upon financial projections for the Company approved in good faith by the Board in connection with its approval of such acquisition or disposition. The effective date of vesting shall be the fiscal year end of any year included above even though EBITDA for the related period may not be determined until a date thereafter. If the Management Incentive Member ceases to be employed by the Company or its subsidiaries on any date other than the fiscal year end of any year included above, the percentage of the Performance Vest Units that are vested shall equal the percentage of the Performance Vest Units which were vested as of the immediately preceding fiscal year end. (d) Time Accelerated Vesting. If as of May 1, 2015 the Management Incentive Member has been continually employed by the Company or its subsidiary, any portion of the Performance Vest Units which have not vested shall automatically become vested and exercisable. (e) Acceleration of Vesting on Change of Control. If the Management Incentive Member has been continuously employed by the Company or one of its subsidiaries from the date of this Agreement until the date of consummation of a Change of Control, then as of the date of the consummation of such Change of Control, (A) one hundred percent (100%) of all outstanding unvested Time Vest Units will vest, and (B)to the extent the applicable Cash Proceeds Multiple set forth in Table 11.4(e) below is exceeded for the related period, any outstanding unvested Performance Vest Units will vest. Table 11.4(e) ..��`.zy' �.�v~�il`'�•1 ..ibiY':FS.i,..�..y�h'E'ti;�Y•.f",''c. �..�1.. .��.......1�:.ui�e:a y.'. . _ -i Ce o � ""�' 7 �"�_... .;; 'y� 4tiw°-e° t-5l�i:%` y;>L4;, ',� r•�;`.t; ti, a' .xar� :u,=^: ,�°� >�' �i�' ?��a� iu:Y'-�`h�c -� ang„.o 'Co'"��troi��kcc,� _..,;>r,�c� ;' ,�� � •.��'�-a� -r;,,�s,,,.. ��.� �•: •, �ti itaJ$�� . �. a`{^.W"c; .dsK•11;.X11:,` $'r•. �, ke E -y?° M 'wJ P '0•'"^a-�tk'S r�.,y�04 '1�' a `„� �,5'la�s`'A ti �}r'',t,wt t 91;.,, yr Q'ti * { ;.:7:a1 t •F,t. *`�xta�;ir+'L��',,.y ,1;'^.rl• •a pcc (� t >' l'... j'�. r5�, 'F}>i``�P}'+ t �. «d����{J a.. -•F:. ,itcY�� � �y}. ��; A” �0?;.�p�i � 1,,,...,-,,, ?.,.,,,,. n�"`l.k'- � Pr'._ s ';ac.#`- gl P: •4.4. r _,✓k.44 y .g i"�jAn;r�>l�% { ,, ,,,;,5 C 3t� e w�. ,r'- 'TI' r � -' n �.k' � �'' w r a.•.>'r'�1 'a. �x ?.�1F>�',S3•"�!.1=x' �,rp7•E•5 N '•. E �fi, r'w`. }• � 1;^r ..F�-,t+. -4 O 9r -1` y >•y:W�3e f1]�4� ,. A, � `Y`.Q y `E-1/40 4..,."A i,M �j5' <-. #..,,+� '•. ":k w+ f "'r. d 1 T *X y Z>, fi.d. ;!.*� rt i`l: 1.1}t�.r,.' N 5 i a Kli ••z s<1, 1:- .�� ta.9 .n fb £�`1k,�X f'-, in.:, .vn.t+`?•T,�r�}9.�i.1 � Y a �.. .•;. � F'al , vo .za`k3 rrx,....},yp:,.>'rraa,:1,'•`irC T:.z�*('}�,''.t,Y:.i.�.tS r :�hM�?`-�y',.1�,t...-L"; tit;•J - 1} .;aS,:--. .��r�r.;j*�- t �': ._ .n .. :'iw a.��"r� .,iL 41t ,_:,�A,!.t.CH:�.'1%:�.v.')�.^-.•SS%.�i.•n ai_4�_:.t[A.w�G4}N ,.v;i After the date hereof but prior to the date that is three years after the date hereof 2.5 After the date that is three years after the date hereof but prior to the date that is four years after the date hereof 3.0 On or after the date that is four years after the date hereof 4.0 38 K&E 11059805.11 11.5 Tax Matters. Notwithstanding any other provision of this Agreement (other than Section 9.9), if the Company is required to withhold federal, state or local income taxes attributable to any amount considered to be compensation includable in a Management Incentive Member's gross income by reason of an award of Units to such Management Incentive Member or the making of an election under Section 83(b) of the Code with respect thereto, or by reason of any payment made or to be made to a Management Incentive Member under this Agreement, the Company in its discretion shall determine the method and amount of withholding. 11.6 Issuance of Additional Management Incentive Units. The Board may from time to time issue additional Management Incentive Units; provided, however, that, subject to the approval of the Board, the terms of an award of Management Incentive Units to a Management Incentive Member may provide for a different redemption price and different vesting schedule (on a basis that may vary among Management Incentive Members or among awards to the same Management Incentive Member)than that specified in Section 12.1 below. ARTICLE XII REDEMPTION OPTION 12.1 Redemption Option/Forfeiture of Unvested Units. If any Management Incentive Member ceases to be employed by the Company and its Subsidiaries (the"Termination") for any reason, all Units initially issued to such Management Incentive Member (whether held by such Management Incentive Member or one or more Permitted Transferees) may be subject to redemption by the Company pursuant to the terms and conditions set forth in this Section 12.1 (the"Redemption Option"). (a) In the event that the Management Incentive Member's employment is terminated by such Management Incentive Member for Good Reason or without Good Reason, or the Company terminates such Management Incentive Member's employment for Cause or without Cause all Units initially issued to such Management Incentive Member shall be subject to redemption by the Company at the option of the Company and the redemption price for such Units shall be as set forth in Table 12.1(a)below: Table a ble 12.1(a) . ns � IMgnaip4 7,,' Yillii lb L it s 007- -6 �J fa"nYi�:a � nD�o•.',r?.�.s . F x .4% °: a: �wh$ou r. •ti.W- f Ggi Realo u�. . ‘wt . us of o 9 u fi ','tg ..:,,w t O,_ pfe'� t'a . � `i ,404,1`w,,i;i ' " �� i ,t 0 : A°A !Fay. J't e- " a ,� ✓ l4`: AZes. i ('T i } , ,%I:; }. - ; t r: ''�! , i- r„ ; ; !�a4ii, t^y 1,t.iA.:,, J . Yi r014 i�F •�,t .y . .. ; ` 4410� 'y t' �-' �i tn j. :ae�;�y c lyF, SJ§e PC ei ':'F 1b si tt�I's f 'l �_#. � 7.-,:x,, ', .'101.'4,,W-Ph k:V 'v� +'Jr 4.' -a i! .7Adil , .�_�ti,.0 = .•a+,k„ ,d.,g£,S ` es to Lower of Cost or Fair Market Value” " =%filed�Yitetgi� ,Y ,, 4''`` �:rj:-.1. Fair Market Value Cost .Co e 1.10004114-I 1 f�^. .�zt �^F.fiM1x*'r-M1stiaa��w� _ Gs �.+oan' no `'Rts Fair Market Value Greater of Cost or Fair Market Value Lower of Cost or f, 1 s, la g vii- ,-, Y ,, E MAYA: Fair Market Value 39 K&E 11059805.11 a (b) In the event that the Management Incentive Member's employment is terminated due to the Incapacitation of such Management Incentive Member then all Units initially issued to such Management Incentive Member shall be subject to redemption by the Company at the option of(i) the Company, and, (ii) the Management Incentive Member or his or her executor, representative or guardian, as applicable, and the redemption price for such Units shall be as follows: (x) for all Unvested Class C Common Units, the lower of Cost or Fair Market Value, and (y) for all Vested Class C Common Units and all Class A Common Units, the Fair Market Value of such Units at the time of redemption. (c) Notwithstanding anything to the contrary set forth in this Article XII, the right of the Company to redeem any Units as described more fully in Section 12.1(a) and (c) above, and the right of the Management Incentive Member or his or her executor, representative or guardian, as applicable, to cause the Company to redeem the Units pursuant to Section 12.1(b) above shall terminate upon the consummation of a Initial Public Offering; provided that (i) the rights of the Company to redeem Units in relation to a termination of the Employment Agreement of a Management Incentive Member due to such Management Incentive Member resigning without Good Reason or due to such Management Incentive Member's Employment Agreement being terminated for Cause shall survive for a period of two (2) years following the date of the consummation of a Initial Public Offering, and (ii) to the extent any Units that would otherwise be subject to redemption pursuant to Section 12.1(b) above remain subject to the transfer restrictions set forth in Article XIII of this Agreement, such Units shall remain subject to redemption pursuant to Section 12.1(a) following the consummation of a Initial Public Offering. (d) The Board or the Management Incentive Member or his or her executor, as applicable, may elect to cause the Company to purchase all or any portion of the Units initially issued to the Management Incentive Member pursuant to Section 12.1(a) or (b) above, as applicable, by delivering written notice (the "Redemption Notice") to, (i) in the case of the Company exercising its right, such Management Incentive Member, and to any Permitted Transferee of the Management Incentive Member Units, and (ii) in the case of any Management Incentive Member or his or her executor, as applicable, the Company, for any Units initially issued to such Management Incentive Member at any time up to one hundred eighty (180) days after the termination of such Management Incentive Member's Employment Agreement. The Redemption Notice shall set forth the number of Units to be acquired from each holder of Units initially issued to the Management Incentive Member in question, the aggregate consideration to be paid for such Units and the time and place for the closing of the transaction. The number of Units to be redeemed shall first be satisfied to the extent possible from the Units held by the Management Incentive Member at the time of delivery of the Redemption Notice. If the number of Units then held by the Management Incentive Member is less than the total number of Units elected to be purchased, the remaining Units elected to be purchased shall be purchased from the other holder(s) of Units initially issued to the Management Incentive Member under this Agreement, pro rata according to the number of Units held by such other holder(s) at the time of delivery of such Redemption Notice (determined as close as practicable to the nearest whole Unit). (e) The closing of the purchase of the Units pursuant to the Repurchase Option shall take place on the date designated in the Redemption Notice, which date shall not be more than 60 days nor less than five days after the delivery of the later of either such notice to be delivered 40 K&E 11059805.11 (the "Redemption Date"). The Company shall pay for the Units to be purchased pursuant to the Repurchase Option by delivery of a check or wire transfer of funds in the aggregate amount of the purchase price for such Units. In addition, the Company may pay the purchase price for any Units acquired hereunder by offsetting any bona fide debts owed by the Management Incentive Member to the Company. In connection with any redemption of Units hereunder, the Company shall be entitled to receive customary representations and warranties from the sellers regarding such Transfer of Units (including representations and warranties regarding good title to such Units, free and clear of any liens or encumbrances) and to require all sellers' signatures be guaranteed by a national bank or reputable securities broker. If there is more than one holder of Units, the failure of any one holder to perform its obligations hereunder shall not excuse or affect the obligations of any other holder, and the closing of the purchases from such other holder shall not excuse, or constitute a waiver of the Company's rights against, the defaulting holder. (f) Notwithstanding anything to the contrary contained in this Agreement, all redemptions of Units by the Company described in Sections 12.1(a) and 12.1(b) shall be subject to applicable restrictions contained in the GCL and the Act and in the Company's and its Subsidiaries' debt and equity financing agreements and if any such restrictions prohibit the redemption of Units pursuant to Sections 12.1(a) and 12.1(b) which the Company is otherwise entitled or required to make, the time periods provided in Section 12.1(e) shall be suspended, and the Company may make such redemptions as soon as any applicable restrictions allow. Furthermore, nothing shall require the Company to segregate or set aside any funds or other property for the purpose of making any payment or distribution pursuant to this Section 12.1. The right of any Management Incentive Member or beneficiary thereof to receive any payment or distribution hereunder shall be an unsecured claim against the general assets of the Company. ARTICLE XIII TRANSFERS; LEGEND 13.1 Resignation; Withdrawal; Assignment of Interest by a Member; Admission of Members. (a) Except as provided in Section 13.1(b), no Member that holds Common Units shall resign or voluntarily withdraw as a Member or make a Transfer other than in accordance with the terms and conditions set forth in this Article XIII. (b) Upon the Bankruptcy, termination, liquidation or dissolution of a Member which is a partnership, trust, corporation, limited liability company or other entity or the Bankruptcy, death or Incompetence of a Member who is an individual, the estate or successor in interest of such Member shall thereupon succeed to the rights of such Member as a Member to receive allocations and distributions hereunder and may become a substitute Member upon the terms and conditions set forth in Section 13.1(c)hereof. (c) The admission of any additional Member (including, without limitation, any Management Incentive Member) or substitute Member shall not become effective until (i) the Board, gives its written consent (which consent may be withheld with or without cause in the Board's sole discretion), and (ii) such additional or substitute Member and the withdrawing Member and/or the transferor Member, as the case may be, shall have executed, acknowledged 41 K&E 1105980S 1) and delivered such instruments as are required by the Board evidencing the intent of such Member to become such. The additional or substitute Member shall thereafter have all of the rights and obligations of a Member hereunder. (d) Notwithstanding anything to the contrary herein, no sale, assignment, transfer or other disposition of Units shall be permitted, nor shall any transferee become a beneficial owner of Units pursuant to a sale, assignment, transfer or other disposition, if such sale, assignment, transfer or other Disposition would cause (i) the Company to be treated as a publicly traded partnership within the meaning of Section 7704 of the Code; (ii) the Company to have more than one hundred (100) members (as determined for purposes of Section 7704 of the Code, including the look-through rule of Treasury Regulations Section 1.7704-1(h)(3)); or (iii) without the prior written consent of the Board, fifty percent (50%) or more of the total interest in the Company's capital and profits to be sold or exchanged in one or more transactions in the aggregate within a 12-month period. 13.2 Transfer of Equity Securities. Prior to the date that is one year following the date of the consummation of an Initial Public Offering, no Member shall sell, transfer, assign, pledge or otherwise dispose of (whether with or without consideration and whether voluntarily or involuntarily or by operation of law, but excluding by way of merger or consolidation) any interest in his or its Equity Securities (a "Transfer"), except (i) pursuant to the provisions of Sections 13.4, 13.5 or 13.6 and (ii) with the prior written consent of Avista, pursuant to the provisions of Section 13.3. Except as set forth in Section 13.5, no Member shall consummate any Transfer until thirty (30) days after the later of the delivery to the Company and the other Members of such Member's Offer Notice or Sale Notice (if any), unless the parties to the Transfer have been finally determined pursuant to this Section 13.2 prior to the expiration of such 30-day period (the"Election Period"). 13.3 First Offer Right. Prior to the consummation of a Initial Public Offering, and subject to the general restriction set forth in Section 13.2 above, at least thirty (30) days prior to making any Transfer of any Equity Securities, the transferring Member (the "Transferring Member") shall deliver a written notice (an "Offer Notice") to the Company and Avista. The Offer Notice shall disclose in reasonable detail the proposed number of Equity Securities to be transferred, the proposed terms and conditions of the Transfer and the identity, background and ownership of the prospective transferee(s), and the Offer Notice shall constitute a binding offer to sell the Equity Securities on such terms and conditions. First, the Company may elect to purchase all or part of the Equity Securities specified in the Offer Notice at the price and on the terms specified therein by delivering written notice of such election to the Transferring Member and Avista as soon as practical but in any event within ten days after the delivery of the Offer Notice. If the Company has not elected to purchase all of the Equity Securities within such ten day period, Avista may elect to purchase any or all of the Equity Securities specified in the Offer Notice remaining available after the Company's election has been consummated at the price and on the terms specified therein by delivering written notice of such election to the Transferring Member as soon as practical but in any event within twenty (20) days after delivery of the Offer Notice. If the Company and/or Avista have elected to purchase Equity Securities from the Transferring Member, the transfer or transfers of such Equity Securities shall be consummated as soon as practical after the delivery of the election notice(s) to the Transferring Member, but in any event within ten (10) days after the expiration of the Election Period. To the extent that the 42 K&E 11059805.11 Company and Avista have not elected to purchase all of the Equity Securities being offered, the Transferring Member may, within thirty (30) days after the expiration of the Election Period and subject to the provisions of Section 13.4 below, transfer such Equity Securities to one or more third parties at a price no less than the price per share specified in the Offer Notice and on other terms no more favorable to the transferees thereof than offered to the Company and Avista in the Offer Notice. Any Equity Securities not transferred within such 30-day period shall be reoffered to the Company and Avista under this Section 13.3 prior to any subsequent Transfer. The purchase price specified in any Offer Notice shall be payable solely in cash at the closing of the transaction or in installments over time, and no Equity Securities may be pledged except on terms and conditions satisfactory to the Majority in Interest. 13.4 Tag Along Rights. (a) Prior to the date that is one year following the date of the consummation of a Initial Public Offering, at least ten (10) days prior to any Transfer of Equity Securities by Avista (other than a Public Sale, or a Transfer to the Company pursuant to Section 13.3), Avista (the "Transferring Member") shall deliver a written notice (the "Sale Notice") to the Company and the other Members (the "Other Members"), specifying in reasonable detail the identity, background and ownership (if applicable) of the prospective transferee(s), the number and type of Equity Securities to be transferred and the terms and conditions of the Transfer (which notice maybe the same notice and given at the same time as the Offer Notice under Section 13.3). The Other Members may elect to participate in the contemplated Transfer at the same price per Equity Security (whether voting or non-voting Units) and on the same terms by delivering written notice to the Transferring Member within ten (10) days after delivery of the Sale Notice. If any Other Members have elected to participate in such Transfer, the Transferring Member and such Other Members shall be entitled to sell their Pro Rata Share of the Equity Securities to be Transferred in the contemplated Transfer. (b) Any of the Other Members may elect to sell in any Transfer contemplated under this Section 13.4 a lesser number of Equity Securities than such Other Member is entitled to sell hereunder, in which case the Transferring Member shall have the right to sell an additional number of Equity Securities in such Transfer equal to the number that such Other Member has elected not to sell. Each Transferring Member shall use commercially reasonable efforts to obtain the agreement of the prospective transferee(s)to the participation of the Other Members in any contemplated Transfer, and no Transferring Member shall transfer any of its Equity Securities to any prospective transferee if such prospective transferee(s) declines to allow the participation of the Other Members. Each Member transferring Equity Securities pursuant to this Section 13.4 shall pay its Pro Rata Share of the expenses incurred by the Members in connection with such transfer and shall be obligated to join in any indemnification or other obligations that the Transferring Member agrees to provide in connection with such transfer based upon its Pro Rata Share (other than any such obligations that relate specifically to a particular Member such as indemnification with respect to representations and warranties given by a Member regarding such Member's title to and ownership of Equity Securities; provided that no holder shall be obligated in connection with such Transfer to agree to indemnify or hold harmless the transferees with respect to an amount in excess of the net cash proceeds paid to such holder in connection with such Transfer). 43 K&E 11059805 11 13.5 Permitted Transfers. (a) The restrictions set forth in this Article XIII shall not apply with respect to any Transfer of Equity Securities by any Member (i) in the case of a natural Person, by will or pursuant to applicable laws of descent and distribution or among such Person's Family Group or (ii) in the case of a non-natural Person, (A) to its members, partners or shareholders (including by way of distribution), (B) as part of a syndication of the Equity Securities initially purchased by Avista within ninety (90) days of the date hereof; provided that Avista retains Equity Securities having an initial purchase price of at least $60,000,000, or (C) among its Affiliates (collectively referred to herein as "Permitted Transferees"); provided that, other than in relation to a transfer by Avista pursuant to this Section 13.5 following the consummation of an Initial Public Offering, the restrictions contained in this Article XIII shall continue to be applicable to the Equity Securities after any such Transfer and provided further that the transferees of such Equity Securities shall have agreed in writing to be bound by the provisions of this Agreement affecting the Equity Securities so transferred. (b) Notwithstanding the foregoing, no party hereto shall avoid the provisions of this Agreement by making one or more transfers to one or more Permitted Transferees and then disposing of all or any portion of such party's interest in any such Permitted Transferee. 13.6 Drag Along Rights. (a) If the Board and the holders of a majority of the Avista Membership Interests then outstanding approve a Sale of the Company to a non-Affiliate and deliver written notice to the holders of Equity Securities invoking the provisions of this Section 13.6 (any such sale, an "Approved Sale"), the holders of Equity Securities shall consent to, vote in favor of and raise no objections against the Approved Sale. (b) If the Approved Sale is structured as (i) a merger or consolidation, each holder of Equity Securities shall vote such holder's Equity Securities to approve such merger or consolidation, whether by written consent or at a Members meeting (as requested by the Board) and waive all dissenter's rights, appraisal rights and similar rights in connection with such merger or consolidation, (ii) a sale of Equity Securities, each holder of Equity Securities shall agree to sell, and shall sell, all of such holder's Equity Securities and rights to acquire Equity Securities on the terms and conditions so approved by the Board, or (iii) a sale of assets, each holder of Equity Securities shall vote its Equity Securities to approve such sale and any subsequent liquidation of the Company or other distribution of the proceeds therefrom, whether by written consent or at a Members meeting(as requested by the Board). (c) In furtherance of the foregoing, (i) each holder of Equity Securities shall take, with • respect to such holder's Equity Securities, all necessary or desirable actions reasonably requested by the Board in connection with the consummation of the Approved Sale and (ii) each holder of Equity Securities shall make the same representations,warranties, indemnities and agreements as each other holder, including without limitation, voting to approve such transaction and executing the applicable purchase agreement and related documents, except that (A) each holder of Equity Securities shall be obligated only to make representations and warranties with respect to such holder's title to and ownership of Equity Securities, authorization, execution and delivery of 44 K&E 11059805 11 relevant documents by such Member, enforceability of relevant agreements against such holder and other matters relating to such holder, to enter into covenants in respect of a Transfer of such holder's Equity Securities in connection with such Approved Sale and to enter into indemnification obligations with respect to the foregoing, in each case to the extent that each other holder is similarly obligated, but no Member shall be obligated to enter into indemnification obligations with respect to any of the foregoing with respect to such other holder or such other holder's Equity Securities, and (B) in no event shall any Member be liable in respect of any indemnity obligations with respect to such holder and the Company and its Subsidiaries in general pursuant to any Approved Sale in an aggregate amount in excess of the total consideration payable to such holder in such Approved Sale. (d) The obligations of the holders of Equity Securities with respect to an Approved Sale are subject to the satisfaction of the following conditions: (i) upon the consummation of the Approved Sale each Member participating in such Approved Sale shall receive the same form of consideration and the same portion of the aggregate net consideration (net of any post-closing adjustments and following the payment of the reasonable expenses of the Members that are not otherwise paid by the Company or the acquiring party) as such holder would have received if such aggregate net consideration had been received by the Company and distributed in complete liquidation pursuant to the rights and preferences set forth in Section 14.2 of the Operating Agreement as in effect immediately prior to the consummation of the Approved Sale; (ii) if any holders of a class of Equity Securities are given an option as to the form and amount of consideration to be received, each holder of such class of Equity Securities will be given the same option; and (iii) each holder of then currently exercisable rights to acquire a particular class of Equity Securities will be given an opportunity to exercise such rights prior to the consummation of the Approved Sale and participate in such sale as holders of such class of Equity Securities. (e) If the Company or the holders of the Company's securities enter into any negotiation or transaction for which Rule 506 (or any similar rule then in effect) promulgated by the Securities Exchange Commission may be available with respect to such negotiation or transaction (including a merger, consolidation or other reorganization), the holders of Equity Securities shall at the request of the Company, appoint a "purchaser representative" (as such term is defined in Rule 501) reasonably acceptable to the Company. If any holder of Equity Securities appoints a purchaser representative designated by the Company, the Company shall pay the fees of such purchaser representative. However, if any holder of Equity Securities declines to appoint the purchaser representative designated by the Company, such holder shall appoint another purchaser representative (reasonably acceptable to the Company), and such holder shall be responsible for the fees of the purchaser representative so appointed. (f) Subject to Section 13.6(e) above, each holder of Equity Securities shall, to the extent requested by the Company, pay such holder's Pro Rata Share of the expenses incurred by the holders in connection with an Approved Sale. (g) With respect solely to any Approved Sale, each Management Incentive Member hereby constitutes and appoints the Chief Executive Officer, as his or her true and lawful agent and attorney-in-fact, with full power and authority in his or her name, place and stead, to execute, swear to, acknowledge, deliver, file and record in the appropriate public offices the 45 K&E 11059805.11 • applicable purchase agreement and related certificates, instruments and other documents relating to such Approved Sale and all amendments thereof in accordance with the terms of this Section 13.6 that the Chief Executive Officer deems appropriate or necessary to consummate such Approved Sale. The foregoing power of attorney is irrevocable and coupled with an interest, and shall survive the death, disability, incapacity dissolution, bankruptcy, insolvency or termination of any Management Incentive Member and the transfer of all or any portion of such Management Incentive Member's Units and shall extend to such Management Incentive Member's heirs, successors, assigns and representatives. 13.7 Preemptive Rights. Subject to Section 13.7(b), if the Company proposes to issue any Equity Securities, the Company will offer to sell to each Member a number of such securities ("Offered Securities") equal to the product of(i) such Member's Pro Rata Share, and (ii) the number of Offered Securities. The Company shall give each Member at least ten (10) days prior written notice of any proposed issuance to other Persons, which notice shall disclose in reasonable detail the proposed terms and conditions of such issuance (the "Issuance Notice"). Each Member will be entitled to purchase such securities at the same price and on the same terms (including, if more than one type of security is issued, the same proportionate mix of such securities) as the securities are to be issued by delivery of irrevocable written notice (the "Election Notice") to the Company of such election within ten (10) days after delivery of the Issuance Notice (the "Preemptive Period"). If any Member has elected to purchase any Offered Securities, the sale of such securities shall be consummated in no event earlier than ten days after the delivery of the Election Notice. To the extent the Members do not elect to purchase all of the Offered Securities, then the Company may issue the remaining Offered Securities at a price and on terms no more favorable to the transferee(s) thereof than those specified in the Issuance Notice during the 180-day period following the Preemptive Period. Notwithstanding anything in this Section 13.7(a) to the contrary, the Company shall not be deemed to have breached this Section 13.7(a) if, within ten (10) days following the issuance of any Equity Securities in contravention of this Section 13.7, the Company or the Transferee of such Equity Securities offers to sell a portion of such Equity Securities or additional Equity Securities to each Member so that, taking into account such previously-issued securities and any such additional securities, each Member will have had the right to purchase or subscribe for securities in a manner consistent with the allocation provided in the initial sentence of this Section 13.7(a). (b) The rights contained in this Article V shall not apply to (i) the issuance of Equity Securities as a dividend or upon any subdivision or split of outstanding Equity Securities; (ii)the issuance of Equity Securities pursuant to any underwritten public offering, (iii) the issuance of any Equity Securities as consideration for the acquisition of any Person or business or unit or division thereof or any other asset or other property to be used in the operations of the Company or any of its Subsidiaries; (iv) the issuance of Equity Securities to any strategic partner of the Company or one or more of its Subsidiaries; (v) the issuance of Equity Securities in any offering where Avista does not acquire further Equity Securities; (vi) the issuance of Equity Securities to employees, consultants, representatives, agents and service providers to the Company; or (vii) the issuance of Equity Securities in connection with any debt financing on market terms. 13.8 Initial Public Offering. At any time upon the determination of the Board, in its sole discretion, subject to receipt of applicable regulatory approvals, either (i) the Company shall be required to contribute all or a specified portion of the assets of the Company to a corporation 46 K&E 11059805.11 newly formed under the laws of the State of Delaware (the "New Company"), or (ii) the Members shall be required to contribute their Units to the New Company, in each case in exchange for shares of the New Company's common stock having substantially the same voting rights as the Units being contributed ("New Company Shares"), and the Company shall cause the New Company to file and use its best efforts to have declared effective a registration statement under the Securities Act for an Initial Public Offering, to cause the New Company and its officers and employees to use their best efforts to market the New Company Shares, subject to all applicable Securities Act restrictions. To the extent required by the underwriters managing a registered public offering of the New Company Shares, each Member agrees to complete and execute all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting agreements. 13.9 Deliveries for Transfer. (a) In connection with the Transfer of any Restricted Securities, the holder thereof will deliver written notice to the Company describing in reasonable detail the Transfer or proposed Transfer. In addition, in the case of any Certificated Units (as defined below), if the holder of such Restricted Securities delivers to the Company an opinion of counsel that no subsequent Transfer of such Restricted Securities will require registration under the Securities Act, the Company will promptly upon such contemplated Transfer deliver new certificates or instruments, as the case may be, for such Restricted Securities which do not bear the restrictive legend relating to the Securities Act as set forth below. If the Company is not required to deliver new certificates or instruments, as the case may be, for such Restricted Securities not bearing such legend, the holder thereof will not Transfer the same until the prospective transferee has confirmed to the Company in writing its agreement to be bound by the conditions contained in this Section 13.9. (b) Notwithstanding any other provisions of this Article XIII, no Transfer of the whole or any part of the interest in the Company of a Member may be made unless in the opinion of counsel (who may be counsel for the Company), reasonably satisfactory in form and substance to the Board and counsel for the Company (which opinion may be waived, in whole or in part, at the discretion of the Board), such Transfer would not violate any federal securities laws or any state or provincial securities or "blue sky" laws (including any investor suitability standards) applicable to the Company or the interest to be transferred, or cause the Company to be required to register as an Investment Company under the Investment Company Act of 1940, as amended. Such opinion of counsel shall be delivered in writing to the Company prior to the date of the Transfer. 13.10 Prospective Transferees. Subject to the terms of this Agreement, the Company, the Board and each Management Incentive Member agree to cooperate, as may reasonably be requested, in order to provide any information and access to any information to any prospective transferee in connection with a proposed Transfer. Upon request of the Board,the Company shall promptly supply to the Board or any of its prospective transferees all information required to be delivered in connection with a transfer pursuant to Rule 144A of the Securities and Exchange Commission. 47 K&E 11059805.11 13.11 Legend. In the event that certificates representing the Units are issued ("Certificated Units"), such certificates will bear the following legend: "THE UNITS REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED AS OF MAY 1, 2006, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN EXEMPTION FROM REGISTRATION THEREUNDER. THE TRANSFER OF THE UNITS REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE CONDITIONS SPECIFIED IN A LIMITED LIABILITY COMPANY AGREEMENT, GOVERNING THE ISSUER (THE "COMPANY") AND BY AND AMONG CERTAIN INVESTORS. A COPY OF SUCH CONDITIONS SHALL BE FURNISHED BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT CHARGE." ARTICLE XIV DISSOLUTION EVENTS AND TERMINATION OF MEMBERSHIP INTERESTS 14.1 Dissolution. (a) Subject to Section 14.4, the Company shall dissolve on the earlier of December 31, 2050, or the occurrence of an Event of Dissolution. (b) Each of the following shall be an"Event of Dissolution": (i) Vote of the Board and an election by a Majority in Interest of the Members to Dissolve; (ii) Sale, exchange or other disposition of all or substantially all of the assets of the Company and the receipt of all consideration therefor; and (iii) The entry of a decree of judicial dissolution under § 18-802 of the Act; provided, that, notwithstanding anything contained herein to the contrary, no Member shall make an application for the dissolution of the Company pursuant to § 18-802 of the Act without the approval of the Board. Dissolution of the Company shall be effective on the day on which the event occurs giving rise to the dissolution,but the Company shall not terminate until the winding up of the Company has been completed, the assets of the Company have been distributed as provided in Section 14.2 and the Certificate shall have been canceled. 14.2 Liquidation. Upon the termination and dissolution of the Company the Board shall take all steps necessary and proper to effect an orderly liquidation of the Company business and shall apply and distribute the net proceeds of such liquidation in the following order of priority: 48 K&E 11059805.I I (a) to creditors, including Members who are creditors (but excluding liabilities to Members for distributions under Section 18-606 of the Act), to the extent otherwise permitted by law, in satisfaction of liabilities of the Company (other than contingent, conditional or unmatured liabilities for which reserves are established pursuant to Section 14.2(b)), whether by payment or the making of reasonable provision for payment thereof (b) to the establishment of any reserves determined by the Board to be reasonably necessary or appropriate to provide for any contingent, conditional or unmatured Company liabilities and obligations (which reserves may be paid over to a bank or trust company, as escrowee, to be held by such escrowee for the purpose of disbursing such reserves in payment of the referenced liabilities and obligations) and, at the expiration of such period as the Board shall deem advisable, to pay over the balance thereafter remaining for distribution in a manner hereinafter set forth in this Section 14.2; and (c) to the Members, in accordance with Section 6.2. The winding up and liquidation of the business of the Company under this Section 14.2 shall be conducted within such period of time as shall reasonably be determined by the Board in light of market conditions, any pending proceedings in a bankruptcy court or other court of law, and in order to maximize the proceeds on the disposition of Company assets. This Agreement shall remain in full force and effect during the period of winding up and until the filing of a certificate of cancellation with the Secretary of State of Delaware upon completion of the liquidation of the Company's affairs, and during such period the Board shall continue to have all powers herein specified, subject to the condition that the Company's affairs shall be conducted in a manner consistent with the winding up of the business of the Company. In the event that the Board determines that it is necessary or appropriate to make a distribution of Company property in-kind, such property shall be transferred and conveyed to the Members as tenants to vest in each of them as a tenant-in-common an undivided interest in the whole of said property equal to the respective interests in the distribution of proceeds in accordance with Section 14.2(c) hereof; provided, however, that assets consisting of securities may be distributed to the parties pro rata based on their respective interests in the distribution of proceeds in accordance with Section 14.2(c)hereof 14.3 Final Statement. As soon as practicable after the dissolution of the Company, a final statement of its assets and liabilities shall be prepared by the Accountants and furnished to the Members. 14.4 Right to Continue Business of Company. Upon the occurrence of an Event of Dissolution, the Company shall be dissolved unless, within ninety (90) days of such event, a Majority in Interest of the remaining Members (other than Management Incentive Members) agree in writing to continue the business of the Company. Upon the Bankruptcy or other Incapacity of any Member, the Company shall not be dissolved and the business of the Company shall be continued, and by becoming parties to this Agreement all Members agree to such continuance. 14.5 Certificates of Dissolution, Continuance and Cancellation. Pursuant to Section 18-203 of the Act, the Board and Members shall file, when appropriate, a Certificate of 49 K&E 11059805.11 Dissolution, or a Certificate of Cancellation. Pursuant to Sections 18-202, 18-208 and 18-211 of the Act, the Board or a Majority in Interest of the Members shall file, when appropriate, an amendment to the Certificate of Formation, a restated Certificate of Formation or Certificate of Correction, as applicable. ARTICLE XV BOOKS AND RECORDS 15.1 Records. At all times during the continuance of the Company, the Board shall keep or cause to be kept, true and complete books of account in accordance with the accounting methods followed for federal income tax purposes. The books and records of the Company shall reflect all 'the Company transactions and shall be appropriate and adequate for the Company's business. Books and records of the Company shall include: (a) a cm-rent alphabetical list of the full name and last known business or residence address of each Member, together with the Capital Contribution, Initial Capital Account and share in Net Profits and Net Losses of each Member; (b) a copy of the Certificate of Formation and this Agreement, together with any amendments, and executed copies of any powers of attorney pursuant to which any amendment has been executed; (c) copies of the Company's federal, state, and local income tax or information returns and reports, if any, for the six (6) most recent tax years; and (d) the following financial information: (i) audited financial statements (or, if not available to the Board, unaudited financial statements) for each of the three most recent Fiscal Years; (ii) unaudited financial statements, to the extent available to the Board, for each quarterly period ended in the then current Fiscal Year; (iii) reasonably detailed calculations of EBITDA for each completed quarterly period and fiscal year in the form presented to the Board; and (iv) any budgets or business plans reviewed or approved by the Board, including, without limitation, any budgets or plans forming the basis for any adjustment to Base EBITDA or Target EBITDA. 15.2 Delivery to Member and Inspection. (a) Each Member has the right, on reasonable request, to inspect during normal business hours any of the Company's records required to be maintained by Section 15.1. (b) Notwithstanding anything to the contrary in this Article XV or elsewhere in this Agreement, Members shall not have a general right to inspect the following: 50 K&E 11059805.11 (i) internal memoranda of the Board, whether relating to Company matters or any other matters; (ii) correspondence with and memoranda of advice from attorneys for the Company or the Board; (iii) correspondence and memoranda of advice to or from accountants for the Company or the Board; and (iv) trade secrets and customer lists of the Company or the Board, investor information, financial statements of investors or Members, supplier lists, and similar and related materials, documents and correspondence. 15.3 Reports. For each Fiscal Year, the Board shall send to each Person who was a Member at any time during such Fiscal Year, within ninety (90) days after the close of such Fiscal Year or as soon as practicable thereafter, an Internal Revenue Service Form K-1 (and any relevant state or local equivalent form) and such other information, if any, with respect to the Company as may be necessary for the preparation of (i) such Member's federal income tax returns, including a statement showing such Member's Capital Account and such Member's share of taxable income, net operating loss, capital gain or loss, and credits for such Fiscal Year for federal income tax purposes, and (ii) such state and local income tax returns and other tax returns as are required to be filed by such Member as a result of the Company's activities in such jurisdiction. 15.4 Tax Returns. The Company's fiscal year shall be January 1 to December 31. The Company's accountants shall be instructed to prepare and file all required income tax returns for the Company. Subject to Section 8.1(d), Avista shall make any tax election necessary for completion of the Company's tax returns. ARTICLE XVI MISCELLANEOUS 16.1 Representations and Warranties of Members. By execution and delivery of this Agreement, each of the Members (i)represents and warrants that such Member's Membership Interest in the Company is intended to be and is being acquired solely for such Member's own account for investment and with no present intention of distributing or reselling all or any part thereof; (ii) acknowledges that he, she or it is able and is prepared to bear the economic risk of making the capital contribution contemplated hereby with respect to such Member's Membership Interest in the Company and the holding by the Company of its assets and properties as contemplated hereby and to suffer any loss up to the amount of such Member's liability in connection with the investment by the Company in such assets and properties, and (iii)represents that such Member is authorized, and has all requisite power and authority, under such Member's charter and by-laws or other articles or agreements of organization and the laws of the jurisdiction where such Member is incorporated or otherwise organized, to become a Member, that this Agreement has been duly and validly executed by such Member, and that this Agreement constitutes a valid and binding obligation of such Member, subject to any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws now or hereafter in effect 51 K&E 11059805.11 relating to creditors' rights generally or to general principles of equity. Each Member further represents that: (a) such Member is an "accredited investor," as such term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act, or otherwise possesses such investment experience, financial resources (including substantial income and/or net worth), and information concerning the Company and its affairs, so as not to require the protection of the registration requirements of the Securities Act and applicable state securities laws in connection with the purchase of the Membership Interests. (b) such Member's knowledge and experience in financial and business matters are such that such Member is capable of evaluating, and such Member has evaluated, the risks of making the capital contribution hereby contemplated and the risks of the investment by the Company in its assets and properties as contemplated hereby; (c) he or she understands that, in addition to the restrictions contained in Article XN hereof, his or her Interest in the Company may only be disposed of pursuant to an effective registration statement under the Securities Act and state securities laws or pursuant to an exemption therefrom and that he or she cannot sell such Interest without such registration or exemption; that the Company has neither filed such a registration statement nor sought an exemption; that the Company has not agreed to do so nor does it contemplate doing so in the future; that in the absence of such a registration statement or such an exemption, he or she may have to hold his or her interest in the Company indefinitely and may be unable to liquidate it in case of an emergency; (d) he or she understands that the Company's interest in any securities which it may now own or hereafter hold may only be disposed of pursuant to an effective registration statement under the Securities Act and state securities laws or pursuant to an exemption therefrom and that the Company may not sell such securities without such registration statement or exemption; that no issuer of such securities has filed such a registration statement or sought an exemption from such registration, nor can there be any assurance that a registration statement once filed will be declared effective by the Commission or the securities commission of any state; that in the absence of such registration or such an exemption, the Company may have to hold such securities indefinitely and that the Company may be unable to liquidate such securities in case of an emergency; (e) he or she further understands that the exemption under Rule 144 under the Securities Act for holders of securities which have been held for at least two years since the acquisition of such securities from the issuer or any affiliate of the issuer and concerning which issuer there is available specified public information may not be available to him or her or to the Company for sales of Company interests or any securities now or hereafter held by the Company, respectively, because the Company does not contemplate making available such public information, the issuers of any securities held by the Company may not choose to make such public information available, and there may never be a trading market for the interests in the Company or such securities sufficient to permit compliance with the "brokers' transaction" requirement of such Rule; 52 K&E 11059805.1 • T `1 (f) he or she realizes that, in the absence of availability of Rule 144, any disposition by him or her of his interest in the Company or any disposition by the Company of any securities now or hereafter held by the Company may require compliance with Regulation A or another exemption under the Securities Act of 1933 and state securities laws, and that the Company and the issuers of such securities are under no obligation to take any action in furtherance of making Rule 144 or any other exemption so available; (g) he or she is able financially to comply with his obligations hereunder; (h) he or she is aware that no federal or state agency has (i) made any finding or determination as to the fairness of any aspect of the investment in the interests in the Company or (ii) passed on or endorsed the merits of the offering of the interests in the Company or the adequacy of any offering memorandum or disclosure document furnished to such Member in connection therewith; and (i) all documents, records and books pertaining to this investment which such Member has requested have been made available to his or her attorney, accountant or offeree representative and himself or herself. 16.2 Titles. The titles to Articles and Sections of this Agreement are for convenience only and shall not be interpreted to limit or amplify the provisions of this Agreement. 16.3 Waiver of Partition. Each Member, during the term of the Company, hereby waives any right to partition of the Company property. 16.4 Confidentiality. By executing this Agreement, each Member expressly agrees, at all times during the term of the Company and thereafter and whether or not at that time it is a Member of the Company, to maintain the confidentiality of, and not to disclose to any Person other than the Company, another Member or a person designated by the Company, any information that is not generally known to the public relating to the identity of any Member, the business, financial structure, financial position or financial results, clients or affairs of the Company; provided that each Member may deliver or disclose confidential information to (i) its executives, officers,partners, members,managers, employees, agents, attorneys and affiliates (to the extent such disclosure reasonably relates to the administration of the investment represented by its interest in the Company and such persons agree to comply with the terms of this Section 16.4), (ii) its financial advisors and other professional advisors who agree to comply with the terms of this Section 16.4, (iii) any Person to which it sells or offers to sell its interest in the Company or any part thereof or any participation therein in accordance with the transfer restrictions contained in this Agreement (if such Person has agreed in writing prior to its receipt of such confidential information to be bound by the provisions of this Section 16.4), (iv) any regulatory or self regulatory authority having jurisdiction over a Member or any nationally 'recognized rating agency that requires access to information about a Member's investment portfolio, or (v) any other Person to which such delivery or disclosure may be necessary (a) to effect compliance with any law, rule, regulation or order applicable to a Member, (b) in response to any subpoena or other legal process, or (c) in connection with any litigation to which a Member is a party. 53 K&E 11059805.11 16.5 Tax Status. The Company is intended to qualify for federal income tax purposes as a partnership that is not publicly traded. No Member shall take any action inconsistent with such qualification, including the filing of an election under Treasury Regulation Section 301.7701-3 to be taxed as an association. 16.6 Waiver of Jury Trial. Each of the parties hereto waives to the fullest extent permitted by law any right it may have to trial by jury in respect of any claim, demand, action or cause of action based on, or arising out of, under or in connection with this Agreement, or any course of conduct, course of dealing,verbal or written statement or action of any party hereto, in each case whether now existing or hereafter arising, and whether in contract, tort, equity or otherwise. The parties to this Agreement each hereby agrees that any such claim, demand, action or cause of action shall be decided by court trial without a jury and that the parties to this Agreement may file an original counterpart of a copy of this Agreement with any court as evidence of the consent of the parties hereto to the waiver of their right to trial by jury. 16.7 Survival of Representations and Obligations. Each and every warranty, representation, covenant and agreement set forth herein shall be true as of the date of execution hereof and as of the closing date of the subject transaction, shall survive the closing contemplated herein and the delivery of the assets and transfer of the title thereto, and shall be binding upon and inure to the benefit of the parties hereto and their representatives, heirs, successors and assigns. 16.8 Attorneys' Fees. In the event of any action brought by a party against the other arising out of this Agreement, or for the purpose of enforcing the Agreement or collecting any damages alleged to have resulted to one of the parties by reason of the breach or failure of performance of the other, the party prevailing in any such action shall be entitled to recover reasonable attorneys' fees and costs of suit as maybe determined by the applicable court. 16.9 Governing Law/Venue. It is the intent of the parties hereto that all questions with respect to the construction of this Agreement and the rights and liabilities of the parties hereto, shall be determined solely in accordance with the provisions of the laws of the State of Delaware. 16.10 Paragraph Headings. The subject headings of the paragraphs of this Agreement are included for purposes of convenience only and shall not affect the construction or interpretation of any of its provisions. 16.11 Capitalized Terms. Except as otherwise expressly provided herein, all capitalized terms herein which are defined in this Agreement shall have the meaning ascribed to them in this Agreement. 16.12 Recitals. The recitals contained in this Agreement are hereby incorporated by reference within the terms and conditions of this Agreement and are to have full force and effect. To the extent that the terms and conditions of the Agreement differ from such recitals, then the terms and conditions of this Agreement shall control. 16.13 Severability. In the event that any of the terms of this Agreement are held to be partially or wholly invalid or unenforceable for any reason whatsoever, such holding shall not 54 K&E 11059805.11 affect, alter, modify or impair in any manner whatsoever, any of the other terms, or the remaining portion of any term,held to be partially invalid or unenforceable. 16.14 Amendments. The parties hereto may at any time amend this Agreement by approval of the Board and an election by a Majority in Interest of the Members; provided, that (i) any such amendment that would have a material and adverse effect on any holder of Class A Common Units shall also require the prior consent of the holders of eighty-five percent (85%)% of the Class A Common Units; provided further, that any such amendment that would treat a holder or group of holders of Class A Common Units in a manner differently from any other holders of Class A Common Units shall also require the consent of such holder or the holders of a majority of the Class A Common Units held by the group adversely treated; (ii) any such amendment that would have a material and adverse effect on any holder of Class B Common Units shall also require the prior consent of the holders of a majority of the Class B Common Units; and (iii) any such amendment that would have a material and adverse effect on any Management Incentive Member shall also require the prior consent of the Chief Executive Officer, in such person's capacity as representative of all Management Incentive Members. Notwithstanding anything to the contrary set forth in this Section 16.14, to the extent there is an adjustment to the Aggregate Merger Consideration (as defined in the Purchase Agreement) after the date hereof pursuant to the terms of the Purchase Agreement, the Board shall be entitled to amend this Agreement and the Schedules and Exhibits hereto in its sole discretion solely in order to reflect the effect of such adjustment. 16.15 Gender and Number. Whenever required by the context, the singular number shall include the plural number, the plural number shall include the singular number, the masculine gender shall include the neuter and feminine genders and vice versa. 16.16 Notice. Any Notice or Notices required under the provisions of this Agreement shall be sent to the addresses set forth below, or as otherwise notified to the other party in writing: if to Avista Avista Capital Partners, L.P. 65 East 55th Street, 18th Floor New York,NY 10022 Attention: David Burgstahler Telecopier No.: (212) 593-6921 with copies to (which shall not constitute notice) to: Kirkland&Ellis LLP Citigroup Center, 39th Floor 153 East 53rd Street New York, NY 10022 Attention: Adrian van Schie Telecopier No.: (212)446-4900 55 K&E 11059805.11 if to any other Member, to such Member's address as set forth in the records of the Company. Any Notice sent as set forth above shall be deemed to have been given (a) on the date of sending thereof, if sent by messenger, telecopier or telegraph; (b) the day following the date it was deposited, if sent by overnight delivery service; or (c) five (5) days after it was mailed, if sent by certified or registered mail, return receipt requested,postage prepaid. 16.17 Waiver. One or more waivers of any covenant, term or condition of this Agreement by a party shall not be construed by a party as a waiver of a subsequent breach of the same covenant, term or condition. The consent or approval of a party to or of any act by the a party of a nature requiring consent or approval shall not be deemed to waive or render unnecessary consent to or approval of any subsequent similar act. The failure of a Member to insist on the strict performance of any covenant or duty required by the Agreement, or to pursue any remedy under the Agreement, shall not constitute a waiver of the breach or the remedy. 16.18 Counterparts. This Agreement may be executed in one or more counterparts, each of which when executed and delivered shall be an original, and all of which when executed shall constitute one and the same instrument. 16.19 Merger of Prior Agreement and Understandings. This Agreement and the other documents incorporated herein by reference or otherwise referred to herein (including, without limitation, the Transaction Documents) contain the entire understanding between the parties relating to the transaction contemplated hereby and all other prior contemporaneous agreements, understandings, representations and statements, oral or written, are merged herein and shall be of no further force or effect. 16.20 Covenant to Sign Documents. Each Member shall execute, with acknowledgment or affidavit if required, all documents reasonably necessary or expedient to cause the formation of the Company. 16.21 Multiple Ownership of Membership Interest. A Membership Interest may be held jointly by husband and wife as community property, or by husband and wife or by unrelated persons as joint tenants or tenants in common, as shown on the signature page of the Agreement or in the Company's books and records. A Membership Interest owned by more than one person shall be deemed to be held by the owners as one Member. The Company and the Board shall be entitled to consider any notice, vote, check, or similar document signed by any one of the owners to bind all the owners. Similarly, in determining the number of Members for purposes of Section 15.2, each owner shall have the same rights as a Member to inspect the books and records of the Company. 16.22 Other States. If the business of the Company is carried on or conducted in states other than Delaware, the Board shall execute documents as may be required or requested so that the Board may legally qualify the Company in the other states. The Board shall have the authority to designate a Company's office or principal place of business in any other state. 16.23 Remedies Cumulative. The remedies of the Members under the Agreement are cumulative and shall not exclude any other remedies to which the Member may be lawfully entitled. Each of the parties confirms that damages at law may be an inadequate remedy for a 56 K&E 11059805.1 t 4 breach or threatened breach of any provision hereof. The respective rights and obligations hereunder shall be enforceable by specific performance, injunction or other suitable remedy, but nothing herein contained is intended to or shall limit or affect any rights at law or by statute or otherwise of any party aggrieved as against the other parties for a breach or threatened breach of any provision hereof, it being the intention by this Section to make clear the agreement of the parties that the respective rights and obligations of the parties hereunder shall be enforceable in equity as well as at law or otherwise. * * * * * 57 K&E 11059805.11 IN WITNESS WHEREOF, all of the Members of Racecar Holdings, LLC, a Delaware limited liability company, have executed this Agreement, effective as of the date first written above. AVISTA CAPITAL PARTNERS, L.P. By: Avista Capital Partners GP, LLC Its: General Partner - `By: � Name: ,,i f ,v r 5s))-4..1%../� . l ex Its: AVISTA CAPITAL PARTNERS (OFFSHORE), LP By: Avista Capital Partners GP, LLC Its: General Partner By: Name: it viol Qv t-5 S+a.&l�r Its: ,l • Signature Page to Amended and Restated Operating Agreement of Racecar Holdings,LLC • THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY I . / / Name: Timoth. S. Collins Its: Authorized Representative Signature Page to Amended and Restated Operating Agreement • THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY FOR ITS GROUP ANNUITY SEPARATE ACCOUNT By: CieZet,c-ico Name: Timothy 1. Collins Its: Authorized Representative Signature Page to Amended and Restated Operating Agreement NORTH AMERICAN STRATEGIC PARTNERS,L.P. By: North American Strategic Partners GP,LP., its .,ener. partner By: Name: -DA/uie,t r't'!. CAL;t( Its: M 0}1(Wq �iYGc4-01� Signature Page to Amended and Restated Operating Agreement • • er THE LINCOLN NATIONAL LIFE INSURANCE COMPANY By:Delaware Investment Advisers,a Series of Delaware Management Business Trust,Attorney-in-Fact By: Name:Richard L. Corwin Title: Vice President 3 • , CO-INVESTMENT PARTNERS 2005, L.P. By: CIP Partners II, LLC, its general partner By: Lexington Advisors Inc., managing member By: Name: B. D. Osman Its: Executive Vice President CO-INVESTMENT PARTNERS (NY), L.P. By: CIP Partners II, LLC, its general partner By: Lexington Advisors Inc.,managing member By: Name: Bart D. Osman Its: Executive Vice President Signature Page to Amended and Ratatcd OPmting Agreement PA RINVEST SAS By: ,� � Name Di !�'R BQUE Its: ;residen, ENAC VENT :-. S LLC By: Name. Didie Its: Se etary of+ nac, Managing Me • Signature Page to Amended and Restated Operating Agreement PARINVEST SAS By: _ Name Di !'BQUE Its: -;residen, ENAC VENT t_. S LLC By: Name Didie ' � , Its: Se etary of nac, Managing Me • • • Signature Page to Amended and Restated Operating Agreement ammo(*moo Put rPao' ol eaea fis • • • • • • • • • • • • r - �4��-ng-4,•A-A-91,1-6/ z. .ya&Le." a'24/V ?S C :etxnejt '3N!`'IvIN3 ILLLSO3 O DVW • BOSCOLO INTERVEST LIMITED IWO By: Name: Cgat.,nt, T 0'11 •3(2, Its: S Vaum PaL�m Amended and pawed OPmnad AV ae • • • MKMB CORPORATION By: Name: fi?A51/2c Its: C iopmN Cz-v, Signature Page to Amended and Restated Operating Agreement SCHEDULE A MEMBERS Member's Name Capital Class A Class B Class C Initial Common Contribution Common Common Common Units Capital Account Units Units Avista Capital Partners, L.P. $74,240,072.00 742,400.72 - - $74,240,072.00 Avista Capital Partners (Offshore), $5,759,928.00 57,599.28 - - $5,759,928.00 LP The Northwestern Mutual Life $57,000,000.00 - 570,000.00 - $57,000,000.00 Insurance Company The Northwestern Mutual Life $3,000,000.00 - 30,000.00 - $3,000,000.00 Insurance Company for its Group Annuity Separate Account North American Strategic Partners, $7,500,000.00 75,000.00 - - $7,500,000.00 LP, an affiliate of Standard Life Investments Lincoln National Life Insurance $10,000,000.00 100,000.00 - - $10,000,000.00 Company Co-Investment Partners 2005, L.P. $3,912,000.00 39,120.00 - - $3,912,000.00 Co-Investment Partners (NY), L.P. $4,088,000.00 40,880.00 - - $4,088,000.00 Parinvest SAS $4,750,000.00 47,500.00 - - $4,750,000.00 Enac Ventures LLC $250,000.00 2,500.00 - - $250,000.00 Boscolo Intervest Limited $3,000,000.00 30,000.00 - - $3,000,000.00 Macro Continental, Inc. $3,000,000.00 30,000.00 - - $3,000,000.00 MKMB Corporation $299,999.32 2,999.99 - - $299,999.32 A-1 K&E 11059805 11 Management Coinvestors - See $6,648,470.84 66,484.71 - - $6,648,470.84 Exhibit A to this Schedule Management Incentive Members - - - - - - See Exhibit B to this Schedule TOTAL $183,448,470.16 1,234,484.70 600,000.00 0 $183,448,470.16 For addresses, see Exhibit C to this Schedule. a a A-2 K&E 11059805 11 Exhibit C to Schedule A MEMBER ADDRESSES If to Avista: See Section 16.16. If to Standard Life: North American Strategic Partners, L.P. Standard Life Investments (USA) Ltd. John J. Guinee One Beacon Street, 34th floor Boston, MA 02108-3106 with a copy to (which shall not constitute notice): Alison T Bomberg Ropes & Gray LLP One International Place Boston, MA 02110-2624 If to Northwestern: The Northwestern Mutual Life Insurance Company 720 East Wisconsin Avenue Milwaukee, WI 53202 Attention: Timothy S. Collins Telecopier No.: (414) 665-7124 and A-6 K&E 11059805.11 Attention: Matthew E. Gabrys, Esq. Telecopier No.: (414) 625-2458 If to Lincoln: The Lincoln National Life Insurance Company c/o Delaware Investment Advisers 2005 Market Street, Mail Stop 40-146 Philadelphia, PA 19103 Attention: Richard Corwin Telecopier No.: (215) 255-1296 If to Lexington: Lexington Partners 660 Madison Avenue 23rd Floor New York, NY 10021 Attention: Bart Osman Telecopier No.: 212-754-1494 with a copy to (which shall not constitute notice): Kramer Levin Naftalis &Frankel LLP 1177 Avenue of the Americas New York, New York 10036 Attention: Shari K. Krouner Telecopier No. 212-715-8222 A-7 K&E 11059805.11 If to Euris: PARINVEST c/o RALLYE 9 Avenue Matignon 2nd Floor 75008 Paris Attention: Louis Duquesne If to Macro: Macro Continental Inc. c/o AGROSA Apartado Postal 4353 Antiguo Edificio Aceitera Corona Del Cem. Gnl. 2 Cuadras al Este Managua,Nicaragua Attention: Jose Ignacio Gonzalez e-mail:jigonzalez @kronmy.com conzalez @kromny.corn agonzalez@kromny.com with a copy to (which shall not constitute notice): Fox Horan & Camerini LLP Attn. Rafael Urquia, Esq. 825 Third Ave. New York, NY 10022 Attention: Rafael Urquia, Esq. If to Boscolo: Boscolo Intervest Limited A-8 K&E 11059805.11 • Residencial Acropolis Calle Jaboncillo de Apartamentos Terranova 600 metros Sur Oeste y 200 Este Escazu, Costa Rica Attention: Jaime J. Montealegre e-mail:jjmontealegre @sigmas.net with a copy to (which shall not constitute notice): Fox Horan & Camerini LLP Attn. Rafael Urquia, Esq. 825 Third Ave. New York,NY 10022 Attention: Rafael Urquia, Esq. If to MKMB Coinvestor: MKMB Corporation 17 N. Loomis Suite#1A Chicago, IL 60607 Attention: Marc B. Brooks Chairman and CEO If to any Management Coinvestor or Management Incentive Member: c/o WideOpenWest Networks, LLC 7887 East Belleview Avenue, Suite 1000 Englewood, CO 80111 • • A-9 K&E 11059805.11 � . • SCHEDULE B MANAGERS David Burgstahler Ben Silbert Jason Mozingo Brendan Scollans James Finkelstein Colleen Abdoulah B-1 K&E 11059805.11 1 SCHEDULE C OFFICERS Colleen Abdoulah — Chief Executive Officer and President Steven Cochran — Treasurer Craig Martin — Secretary David Burgstahler — Vice President Ben Silbert — Vice President C-1 K&E 11059805.11