Form of Second Amended And Restated Limited Liability Company Agreement of Helio LLC

FORM OF



SECOND AMENDED AND RESTATED



LIMITED LIABILITY COMPANY AGREEMENT



OF



HELIO LLC



by and among



EARTHLINK, INC.;



SK TELECOM USA HOLDINGS, INC.;



HELIO, INC.



and



HELIO LLC



Dated as of , 2007












TABLE OF CONTENTS



Page

ARTICLE 1 DEFINITIONS 1
1.1. Certain Definitions 1

ARTICLE 2 THE OPERATING COMPANY AND ITS BUSINESS 9
2.1. Formation; Effectiveness 9
2.2. Name 9
2.3. Term 9
2.4. Filing of Certificate and Amendments 9
2.5. Purpose and Powers 9
2.6. Principal Office: Registered Agent 10
2.7. Names and Addresses of Members 10
2.8. Partnership Treatment 10

ARTICLE 3 REPRESENTATIONS AND WARRANTIES 10
3.1. Representations of the Members 10

ARTICLE 4 TRANSFER RESTRICTIONS 11
4.1. Transfer Restrictions 11
4.2. [Reserved] 12
4.3. Right of First Refusal 12
4.4. Tag-along Right 13
4.5. Limitation on the Right of First Refusal and Tag-along Right 13
4.6. Drag-along Right 13
4.7. Sale of Operating Company 15

ARTICLE 5 RESTRICTED SERVICES 15
5.1. Restricted Services 15
5.2. Products and Services Outside the Business Plan 16
5.3. Wimax Enabled Devices 16
5.4. [Reserved] 16
5.5. ASP 16
5.6. Future Services 16
5.7. Exclusivity 16
5.8. [Reserved] 17
5.9. Availability of Injunctive Relief 17

ARTICLE 6 MANAGEMENT OF THE OPERATING COMPANY 17
6.1. Management of the Operating Company 17
6.2. Compensation 18
6.3. Issuances of Membership Units 19
6.4. Officers 19




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ARTICLE 7 MEMBERSHIP UNITS AND MEMBERS 19
7.1. Membership Units 19
7.2. Powers of Members 20
7.3. Partition 20
7.4. Place of Members92 Meetings 20
7.5. Meetings 20
7.6. Telephonic Meetings 20
7.7. Notice of Meetings 20
7.8. Waivers 20
7.9. Quorum 20
7.10. Proxies 21
7.11. Voting Power 21
7.12. Written Consent 21
7.13. Liability 21
7.14. Designation of Tax Matters Member: Tax Matters 21

ARTICLE 8 ADMISSION OF ADDITIONAL MEMBERS 22
8.1. Admission Upon Transfer 22
8.2. Admission Upon Contribution 22
8.3. Joinder 22
8.4. Acceptance of Prior Acts 22

ARTICLE 9 CAPITAL CONTRIBUTIONS AND CAPITAL ACCOUNTS 23
9.1. Capital Contributions 23
9.2. Membership Units; Capital Contributions 25
9.3. Capital Accounts 25

ARTICLE 10 TAX ALLOCATIONS 26
10.1. Allocation of Profits 26
10.2. Allocation of Losses 27
10.3. Special Allocations 28
10.4. Other Allocation Rules 29

ARTICLE 11 DISTRIBUTIONS 30
11.1. Distributions 30
11.2. Distribution of the Proceeds upon Dissolution 31
11.3. No Withdrawal 31
11.4. Mandatory Tax Distribution 31
11.5. Special Distribution to Management Company 31
11.6. Limitations on Distributions 32

ARTICLE 12 ANCILLARY AGREEMENTS; OPERATING BUDGETS; FINANCIAL REPORTS 33
12.1. Ancillary Agreements 33
12.2. Operating Budgets 33




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12.3. Financial Reports 33
12.4. Books and Records 34

ARTICLE 13 TERMINATION OF THE OPERATING COMPANY; LIQUIDATION AND DISTRIBUTION OF ASSETS 34
13.1. No Dissolution 34
13.2. Events Causing Dissolution 34
13.3. Survival 34
13.4. Winding Up 34
13.5. Filing of Certificate of Cancellation 35
13.6. Material Breach 35
13.7. Claims of the Members 35

ARTICLE 14 WITHDRAWAL OF A MEMBER 35
14.1. Withdrawal of a Member 35
14.2. Effect of Withdrawal 35

ARTICLE 15 EXCHANGE 35
15.1. Exchange of Membership Units 35
15.2. Public Offering of Class A Common Stock 36
15.3. Issuance and Conversion of Preferred Stock 36
15.4. Equity Plan Compensation 37
15.5. Availability of Authorized and Unissued Class A Common Stock 37

ARTICLE 16 ADDITIONAL AGREEMENTS 38
16.1. Maintenance of Parent Entity as a Party 38
16.2. Certificates 38
16.3. Security 39
16.4. Lost or Destroyed Certificates 39
16.5. Most Favored Company 39
16.6. Most Favored Pricing 39
16.7. Change of Control 39
16.8. Standstill 40
16.9. Non-Hire and Non-Solicitation of Employees 40
16.10. Members92 Expenses 40
16.11. Insurance 40
16.12. Freedom of Action 41
16.13. Indemnification 41

ARTICLE 17 DISPUTE RESOLUTION 41
17.1. Dispute Resolution 41
17.2. Right to Injunctive Relief Before Appointment of Arbitrators 43

ARTICLE 18 MISCELLANEOUS 43
18.1. Governing Law 43




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18.2. Notices 43
18.3. Compliance with Applicable Laws 45
18.4. Severability 45
18.5. Counterparts 45
18.6. Headings 45
18.7. Successors and Assigns 45
18.8. Entire Agreement; Amendment; Waiver 46
18.9. No Relief of Liabilities 46
18.10. Further Assurances 46
18.11. Third Party Beneficiaries 46


Schedules

Schedule 9.1.1 Capital Contributions
Schedule 9.1.2 SKT Contributions

Exhibits

Exhibit A Joinder




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



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



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



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



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



ARTICLE 1
DEFINITIONS



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



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



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



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



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



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



"Agreement" shall have the meaning set forth in the introductory paragraph.








"Ancillary Agreements" shall mean, collectively, the Stockholders92 Agreement, the Contribution and Formation Agreement, the SKT Contribution Agreement and the Registration Rights Agreement.



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



"Board of Directors" shall mean the Board of Directors of the Management Company.



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



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



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



"CEO" shall have the meaning set forth in Section 6.4 .



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



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



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



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



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



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



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



"Common Member" shall mean a Member holding Common Membership Units.



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



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



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



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



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



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



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



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



"CPR" shall have the meaning set forth in Section 17.1.2.



"EarthLink" shall have the meaning set forth in the introductory paragraph.



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



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



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



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



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



"GAAP" shall mean United States generally accepted accounting principles.



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



"ICC" shall have the meaning set forth in Section 17.1.3.



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



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



"JV Securities" shall mean the Membership Units and the Shares.



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



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



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



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



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



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



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



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



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



"Members92 Meeting" shall have the meaning set forth in Section 7.4 .



"Membership Interest" shall mean a Member92s entire equity ownership interest in the Operating Company at any particular time, including such Member92s share of the profits and losses of the Operating Company and right to receive distributions of the Operating Company92s assets, and all other benefits to which a Member may be entitled, all in accordance with the provisions of this Agreement and the Act, together with the obligations of such Member to comply with all the terms and provisions of this Agreement. The Membership Interests constitute one class of limited liability company interest in the Operating Company.



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



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



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



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



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



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



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



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



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



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



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



" Original Agreement " shall have the meaning set forth in the Recitals.



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



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



"Percentage Interest" shall mean a Member92s percentage interest in the total number of outstanding Membership Units as determined by dividing the number of Membership Units owned by such Member or any Subsidiary or Parent Entity of such Member by the total number of outstanding Membership Units then owned by all Members (including all Subsidiaries or Parent Entities of such Members). The Percentage Interests owned by the Class B Members as of the Contribution Closing are set forth on Schedule 9.1.1 .



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



"Person" shall mean any natural person or Entity.



"Preferred Member" shall mean a Member holding Preferred Membership Units.



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



"Preferred Stock" shall mean the preferred stock of the Management Company.



"Provider" shall have the meaning set forth in Section 5.5 .



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



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



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



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



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



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



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



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



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



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