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Exhibit 3.2
LIMITED LIABILITY COMPANY AGREEMENT
OF
NRG SOUTH CENTRAL GENERATING LLC
A Delaware Limited Liability Company
THIS LIMITED LIABILITY COMPANY AGREEMENT OF NRG SOUTH CENTRAL GENERATING
LLC (this "Agreement"), dated as of January 12, 2000 (the "Effective Date"), is
adopted, executed and agreed to, for good and valuable consideration, by the
Members (as defined below).
RECITALS
1. NRG Central U.S. LLC ("NRG Central") and South Central Generation
Holding LLC ("South Central"), both of which are Delaware limited liability
companies, agree to become Members of the Company (as defined below), which was
formed for the purpose of acquiring and owning the Projects (as defined below).
2. NRG Central and South Central desire to enter into this Agreement to
agree upon various matters relating to the Company.
ARTICLE 1
DEFINITIONS
1.01 Definitions. As used in this Agreement, the following terms have the
respective meanings set forth below or set forth in the Sections referred to
below:
Acquisition - the Owner Entities' acquisition of the Projects from
the Seller pursuant to the Asset Purchase Agreement.
Act - the Delaware Limited Liability Company Act.
Affected Member - Section 9.01.
Affiliate - with respect to any Person, (a) each entity that such
Person Controls; (b) each Person that Controls such Person, including, in
the case of a Member, such Member's Parent; and (c) each entity that is
under common Control with such Person, including, in the case of a Member,
each entity that is Controlled by such Member's Parent.
Agreement - introductory paragraph.
Alternate Representative - Section 6.02(a)(i).
Asset Purchase Agreement - that certain Fifth Amended and Restated
Asset Purchase and Reorganization Agreement, dated as of September 21,
1999, by and between the Seller, Louisiana Generating and, as to certain
sections only, NRG, and all ancillary agreements and documents related
thereto.
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Assignee - any Person that acquires a Membership Interest or any
portion thereof through a Disposition; provided, however, that, an
Assignee shall have no right to be admitted to the Company as a Member
except in accordance with Section 3.03(b)(iii).
Bankruptcy or Bankrupt - with respect to any Person, that (a) such
Person (i) makes a general assignment for the benefit of creditors; (ii)
files a voluntary bankruptcy petition; (iii) becomes the subject of an
order for relief or is declared insolvent in any federal or state
bankruptcy or insolvency proceedings; (iv) files a petition or answer
seeking for such Person a reorganization, arrangement, composition,
readjustment, liquidation, dissolution, or similar relief under any Law;
(v) files an answer or other pleading admitting or failing to contest the
material allegations of a petition filed against such Person in a
proceeding of the type described in subclauses (i) through (iv) of this
clause (a); or (vi) seeks, consents to, or acquiesces in the appointment
of a trustee, receiver, or liquidator of such Person or of all or any
substantial part of such Person's properties; or (b) against such Person,
a proceeding seeking reorganization, arrangement, composition,
readjustment, liquidation, dissolution, or similar relief under any Law
has been commenced and 60 Days have expired without dismissal thereof or
with respect to which, without such Person's consent or acquiescence, a
trustee, receiver, or liquidator of such Person or of all or any
substantial part of such Person's properties has been appointed and 60
Days have expired without the appointment's having been vacated or stayed,
or 60 Days have expired after the date of expiration of a stay, if the
appointment has not previously been vacated.
Business Day - any day other than a Saturday, a Sunday, or a holiday
on which national banking associations in Minnesota, Illinois or New York
are not open for business.
Buyout Event - Section 9.01.
Capital Account - the account to be maintained by the Company for
each Member in accordance with Section 4.06.
Capital Contribution - with respect to any Member, the amount of
money and the net agreed value of any property (other than money)
contributed to the Company by the Member. Any reference in this Agreement
to the Capital Contribution of a Member shall include a Capital
Contribution of its predecessors in interest.
Certified Public Accountants - a firm of independent public
accountants selected from time to time by the Management Committee.
Change of Member Control - with respect to any Member, an event
(such as a Disposition of voting securities) that causes such Member to
cease to be Controlled by such Member's Parent; provided, however, that an
event that causes any of such Member's Parents to be Controlled by another
Person shall not constitute a Change of Member Control.
Claim - any and all judgments, claims, causes of action, demands,
lawsuits, suits, proceedings, Governmental investigations or audits,
losses, assessments, fines, penalties, administrative orders, obligations,
costs, expenses, liabilities and damages (whether actual, consequential or
punitive), including interest, penalties, reasonable attorney's fees,
disbursements and costs of investigations, deficiencies, levies, duties
and imposts.
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Code - the Internal Revenue Code of 1986, as amended.
Company - NRG South Central Generating LLC, a Delaware limited
liability company.
Confidential Information - information and data (including all
copies thereof) that is furnished or submitted by any of the Members or
their Affiliates, whether oral (and if oral, reduced to writing and marked
"confidential" within 10 days of disclosure), written, or electronic, on a
confidential basis to the other Members or their Affiliates in connection
with the Company, and any and all of the activities and studies performed
pursuant to this Agreement, the Asset Purchase Agreement, or the Loan
Documents, and the resulting information and data obtained from those
studies. Notwithstanding the foregoing, the term "Confidential
Information" shall not include any information that:
(a) is in the public domain at the time of its disclosure or
thereafter (other than as a result of a disclosure directly or indirectly
by a Member or its Affiliates in contravention of this Agreement);
(b) as to any Member, was in the possession of such Member or its
Affiliates prior to the execution of this Agreement; or
(c) is engineering information (for example, heat balance and
capital cost information) that has been independently acquired or
developed by a Member or its Affiliates without violating any of the
obligations of such Member or its Affiliates under this Agreement.
Control - the possession, directly or indirectly of either of the
following:
(a) (i) in the case of a corporation, more than 50% of the
outstanding voting securities thereof; (ii) in the case of a limited
liability company, partnership, limited partnership or venture, the right
to more than 50% of the distributions therefrom (including liquidating
distributions); (iii) in the case of a trust or estate, including a
business trust, more than 50% of the beneficial interest therein; and (iv)
in the case of any other entity, more than 50% of the economic or
beneficial interest therein; or
(b) in the case of any entity, the power or authority, through
ownership of voting securities, by contract or otherwise, to exercise a
controlling influence over the management of the entity.
Day - a calendar day; provided, however, that if any period of Days
referred to in this Agreement shall end on a Day that is not a Business
Day, then the expiration of such period shall be automatically extended
until the end of the first succeeding Business Day.
Default - the failure of a Member to comply in any material respect
with any of its material agreements, covenants or obligations under this
Agreement; the failure of any representation or warranty made by a Member
in this Agreement to have been true and correct in all material respects
at the time it was made; or the failure of a Member, without justified
cause, to take any action materially necessary for the progress of the
business of
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South Central consistent with or required by the terms of this Agreement
(including participating in meetings or decisions).
Default Rate - a rate per annum equal to the lesser of (a) a varying
rate per annum equal to the sum of (i) the prime rate as published in The
Wall Street Journal, with adjustments in that varying rate to be made on
the same date as any change in that rate is so published, plus (ii) 3% per
annum, and (b) the maximum rate permitted by Law.
Delaware Certificate - Section 2.01.
Dispose, Disposing or Disposition - with respect to any asset
(including a Membership Interest or any portion thereof), a sale,
assignment, transfer, conveyance, gift, exchange or other disposition
(other than the pledge or assignment to any creditor of the Company or any
collateral agent for such creditor, of any Membership Interest as security
for the indebtedness to such creditor) of such asset, whether such
disposition be voluntary, involuntary or by operation of Law, including
the following: (a) in the case of an asset owned by a natural person, a
transfer of such asset upon the death of its owner, whether by will,
intestate succession or otherwise; (b) in the case of an asset owned by an
entity, (i) a merger or consolidation of such entity (other than where
such entity is the survivor thereof), (ii) a conversion of such entity
into another type of entity, or (iii) a distribution of such asset,
including in connection with the dissolution, liquidation, winding-up or
termination of such entity (unless, in the case of dissolution, such
entity's business is continued without the commencement of liquidation or
winding-up); and (c) a disposition in connection with, or in lieu of, a
foreclosure of an Encumbrance; but such terms shall not include the
creation of an Encumbrance.
Dispute - Section 10.01.
Dispute Notice - Section 10.02.
Disputing Member - Section 10.01.
Dissolution Event - Section 11.01(a).
Effective Date - introductory paragraph.
Encumber, Encumbering, or Encumbrance - the creation of a security
interest, lien, pledge, mortgage or other encumbrance, whether such
encumbrance be voluntary, involuntary or by operation of Law; provided,
however, that the pledge or assignment to any creditor of the Company or
any collateral agent for such creditor, of any Membership Interest as
security for the indebtedness to such creditor shall not be deemed to be
an Encumbrance thereof.
Fair Market Value - Section 9.03.
Governmental Authority (or Governmental) - a federal, state, local
or foreign governmental authority; a state, province, commonwealth,
territory or district thereof; a county or parish; a city, town, township,
village or other municipality; a district, ▇▇▇▇ or other subdivision of
any of the foregoing; any executive, legislative or other governing body
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of any of the foregoing; any agency, authority, board, department, system,
service, office, commission, committee, council or other administrative
body of any of the foregoing; any court or other judicial body; and any
officer, official or other representative of any of the foregoing.
including - including, without limitation.
Independent Member - means a Member of NRG Central of South Central
that is a natural person who is not an officer, director, agent, employee
or representative of the Company, NRG, NRG Central, South Central, any
Owner Entity, or any Affiliate of any of the foregoing.
Law - any applicable constitutional provision, statute, act, code
(including the Code), law, regulation, rule, ordinance, order, decree,
ruling, proclamation, resolution, judgment, decision, declaration, or
interpretative or advisory opinion or letter of a Governmental Authority
having valid jurisdiction.
Lending Member - Section 4.03(a)(ii).
Loan Documents - any and all documents relating to money borrowed by
the Company, including money borrowed through public or private sales of
its debt securities, as the same may be amended or restated from time to
time.
Louisiana Generating - Louisiana Generating LLC, a Delaware limited
liability company.
Management Committee - Section 6.02.
Member - any Person executing this Agreement as of the date of this
Agreement as a member or hereafter admitted to the Company as a member as
provided in this Agreement, but such term does not include any Person who
has ceased to be a member in the Company.
Membership Interest - with respect to any Member, (a) that Member's
status as a Member; (b) that Member's share of the income, gain, loss,
deduction and credits of, and the right to receive distributions from, the
Company; (c) all other rights, benefits and privileges enjoyed by that
Member (under the Act, this Agreement, or otherwise) in its capacity as a
Member, including that Member's rights to vote, consent and approve and
otherwise to participate in the management of the Company, including
through the Management Committee; and (d) all obligations, duties and
liabilities imposed on that Member (under the Act, this Agreement or
otherwise) in its capacity as a Member, including any obligations to make
Capital Contributions.
Non-Contributing Member - Section 4.03(a).
NRG - NRG Energy, Inc., a Delaware corporation.
NRG New Roads - NRG New Roads Holdings LLC, a Delaware limited
liability company.
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Officer - any Person designated as an officer of the Company as
provided in Section 6.02(j), but such term does not include any Person who
has ceased to be an officer of the Company.
Owner Entities - Louisiana Generating and NRG New Roads.
Outside Activities - Section 6.04.
Parent - if applicable to a Member, the company or companies set
forth opposite the name of such Member on Exhibit A.
Permits - all permits, licenses, approvals or other actions of
Governmental Authorities that are required for the ownership and operation
of the businesses of the Company, as contemplated by this Agreement.
Person - the meaning assigned that term in Section 18-101(11) of the
Act and also includes a Governmental Authority and any other entity.
Projects - the electricity generating plants and facilities and all
related items of tangible and intangible property to be acquired by the
Owner Entities pursuant to the Asset Purchase Agreement.
Purchase Price - Section 9.03.
Representative - Section 6.02(a)(i).
Securities Act - the Securities Act of 1933.
Seller - ▇▇▇▇▇ ▇. ▇▇▇▇▇ as Chapter 11 Trustee of Cajun Electric
Power Cooperative, Inc.
Sharing Ratio - subject in each case to adjustments in accordance
with this Agreement or in connection with Dispositions of Membership
Interests, (a) in the case of a Member executing this Agreement as of the
date of this Agreement or a Person acquiring such Member's Membership
Interest, the percentage specified for that Member as its Sharing Ratio on
Exhibit A, and (b) in the case of Membership Interest issued pursuant to
Section 3.04, the Sharing Ratio established pursuant thereto; provided,
however, that the total of all Sharing Ratios shall always equal 100%.
Sole Discretion - a Member's sole and absolute discretion, with or
without cause, and subject to whatever limitations or qualifications the
Member may impose.
Tax Matters Member - Section 7.03(a).
Term - Section 2.06.
Terminated Member - Section 9.05.
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Treasury Regulations - the regulations (including temporary
regulations) promulgated by the United States Department of the Treasury
pursuant to and in respect of provisions of the Code. All references
herein to sections of the Treasury Regulations shall include any
corresponding provision or provisions of succeeding, similar or
substitute, temporary or final Treasury Regulations.
Uniform Commercial Code - means the Uniform Commercial Code as in
effect from time to time in the State of New York.
Other terms defined herein have the meanings so given them.
1.02 Construction. Unless the context requires otherwise: (a) the gender
(or lack of gender) of all words used in this Agreement includes the masculine,
feminine, and neuter; (b) references to Articles and Sections refer to Articles
and Sections of this Agreement; (c) references to Exhibits refer to the Exhibits
attached to this Agreement, each of which is made a part hereof for all
purposes; (d) references to Laws refer to such Laws as they may be amended from
time to time, and references to particular provisions of a Law include any
corresponding provisions of any succeeding Law; and (e) references to money
refer to legal currency of the United States of America.
ARTICLE 2
ORGANIZATION
2.01 Formation. The Company has been organized as a Delaware limited
liability company by the filing of a Certificate of Formation, dated as of the
Effective Date (the "Delaware Certificate"), with the Secretary of State of
Delaware pursuant to the Act.
2.02 Name. The name of the Company is "NRG South Central Generating LLC"
and all Company business must be conducted in that name or such other names that
comply with Law as the Management Committee may select.
2.03 Registered Office; Registered Agent; Principal Office in the United
States; Other Offices. The registered office of the Company required by the Act
to be maintained in the State of Delaware shall be the office of the initial
registered agent named in the Delaware Certificate or such other office (which
need not be a place of business of the Company) as the Management Committee may
designate in the manner provided by Law. The registered agent of the Company in
the State of Delaware shall be the initial registered agent named in the
Delaware Certificate or such other Person or Persons as the Management Committee
may designate in the manner provided by Law. The principal office of the Company
in the United States shall be at such place as the Management Committee may
designate, which need not be in the State of Delaware, and the Company shall
maintain records there or such other place as the Management Committee shall
designate and shall keep the street address of such principal office at the
registered office of the Company in the State of Delaware. The Company may have
such other offices as the Management Committee may designate.
2.04 Purposes. The purposes of the Company are (i) to acquire a 100%
member interest in each of the Owner Entities; (ii) to cause the Owner Entities
to enter into, and perform their respective obligations under the Asset Purchase
Agreement; and (iii) to engage in any activities directly or indirectly relating
thereto, including obtaining financing for and contributing required capital to
the Owner Entities for the foregoing purposes.
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2.05 Foreign Qualification. Prior to the Company's conducting business in
any jurisdiction other than Delaware, the Management Committee shall cause the
Company to comply, to the extent procedures are available and those matters are
reasonably within the control of the Management Committee, with all requirements
necessary to qualify the Company as a foreign limited liability company in that
jurisdiction. At the request of the Management Committee, each Member shall
execute, acknowledge, swear to, and deliver all certificates and other
instruments conforming with this Agreement that are necessary or appropriate to
qualify, continue, and terminate the Company as a foreign limited liability
company in all such jurisdictions in which the Company may conduct business.
2.06 Term. The period of existence of the Company (the "Term") commenced
on the Effective Date and shall end at such time as a certificate of
cancellation is filed with the Secretary of State of Delaware in accordance with
Section 11.04. Such period may be extended from time to time by Members holding
a majority of the Membership Interests.
2.07 No State-Law Partnership. The Members intend that the Company not be
a partnership (including a limited partnership) or joint venture, and that no
Member be a partner or joint venturer of any other Member, for any purposes
other than federal and state tax purposes, and this Agreement may not be
construed to suggest otherwise.
2.08 Units; Certificates of Membership Interest; Applicability of Article
8 of UCC. Membership Interests shall be represented by units ("Units"). The
number of authorized Units shall be one thousand (1,000). All Membership
Interests shall be represented by certificates in such form as the Management
Committee shall from time to time approve, shall be recorded in a register
thereof maintained by the Company, and shall be subject to such rules for the
issuance thereof as the Management Committee may from time to time determine.
Membership Interests shall be subject to the provisions of Article 8 of the
Uniform Commercial Code as may be applicable from time to time.
ARTICLE 3
MEMBERSHIP; DISPOSITIONS OF INTERESTS
3.01 Initial Members. The initial Members of the Company are the Persons
executing this Agreement as of the date of this Agreement as Members, each of
which is admitted to the Company as a Member effective contemporaneously with
the execution by such Person of this Agreement.
3.02 Representations, Warranties and Covenants. Each Member hereby
represents, warrants and covenants to the Company and each other Member that the
following statements are true and correct as of the Effective Date and shall be
true and correct at all times that such Member is a Member:
(a) that Member is duly incorporated, organized or formed (as
applicable), validly existing, and (if applicable) in good standing under
the Law of the jurisdiction of its incorporation, organization or
formation; if required by applicable Law, that Member is duly qualified
and in good standing in the jurisdiction of its principal place of
business, if different from its jurisdiction of incorporation,
organization or formation; and that Member has full power and authority to
execute and deliver this Agreement and to perform its obligations
hereunder, and all necessary actions by the board of directors,
shareholders,
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members, partners, trustees, beneficiaries, or other applicable Persons
necessary for the due authorization, execution, delivery, and performance
of this Agreement by that Member have been duly taken;
(b) that Member has duly executed and delivered this Agreement and
the other documents contemplated herein, and they constitute the legal,
valid and binding obligation of that Member enforceable against it in
accordance with their terms (except as may be limited by bankruptcy,
insolvency or similar Laws of general application and by the effect of
general principles of equity, regardless of whether considered at law or
in equity); and
(c) that Member's authorization, execution, delivery, and
performance of this Agreement does not and will not (i) conflict with, or
result in a breach, default or violation of, (A) the organizational
documents of such Member, (B) any contract or agreement to which that
Member is a party or is otherwise subject, or (C) any Law, order,
judgment, decree, writ, injunction or arbitral award to which that Member
is subject; or (ii) require any consent, approval or authorization from,
filing or registration with, or notice to, any Governmental Authority or
other Person, unless such requirement has already been satisfied.
3.03 Dispositions and Encumbrances of Membership Interests.
(a) General Restriction. A Member may not Dispose of or Encumber all
or any portion of its Membership Interest except in strict accordance with
this Section 3.03. (References in this Section 3.03 to Dispositions or
Encumbrances of a "Membership Interest" shall also refer to Dispositions
or Encumbrances of a portion of a Membership Interest.) Any attempted
Disposition or Encumbrance of a Membership Interest, other than in strict
accordance with this Section 3.03, shall be, and is hereby declared, null
and void ab initio. The Members agree that a breach of the provisions of
this Section 3.03 may cause irreparable injury to the Company and to the
other Members for which monetary damages (or other remedy at law) are
inadequate in view of (i) the complexities and uncertainties in measuring
the actual damages that would be sustained by reason of the failure of a
Member to comply with such provision and (ii) the uniqueness of the
Company business and the relationship among the Members. Accordingly, the
Members agree that the provisions of this Section 3.03 may be enforced by
specific performance.
(b) Dispositions of Membership Interests.
(i) General Restriction. A Member may not Dispose of all or
any portion of its Membership Interest except by complying with all
of the following requirements:
(A) such Member must receive the unanimous consent of
the non-Disposing Members, which consent shall not be
unreasonably withheld by each of such other Members; provided,
however, that such consent need not be obtained if (I) the
proposed Assignee is a Wholly-Owned Affiliate of the Disposing
Member and (II) such proposed Assignee demonstrates to the
reasonable satisfaction of the other Members that it has the
ability to meet the financial and contractual commitments and
other obligations of the Disposing Member; and
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(B) such Member must comply with the requirements of
Section 3.03(b)(iii) and, if the Assignee is to be admitted as
a Member, Section 3.03(b)(ii).
(ii) Admission of Assignee as a Member. An Assignee has the
right to be admitted to the Company as a Member, with the Membership
Interest (and attendant Sharing Ratio) so transferred to such
Assignee, only if (A) the Disposing Member making the Disposition
has granted the Assignee either (I) the Disposing Member's entire
Membership Interest or (II) the express right to be so admitted; and
(B) such Disposition is effected in strict compliance with this
Section 3.03.
(iii) Requirements Applicable to All Dispositions and
Admissions. In addition to the requirements set forth in Sections
3.03(b)(i) and 3.03(b)(ii), any Disposition of a Membership Interest
and any admission of an Assignee as a Member shall also be subject
to the following requirements, and such Disposition (and admission,
if applicable) shall not be effective unless such requirements are
complied with; provided, however, that the Management Committee, in
its sole and absolute discretion, may waive any of the following
requirements:
(A) Disposition Documents. The following documents
must be delivered to the Management Committee and must be
satisfactory, in form and substance, to the Management
Committee:
(I) Disposition Instrument. A copy of the
instrument pursuant to which the Disposition is
effected.
(II) Ratification of this Agreement. An
instrument, executed by the Disposing Member and its
Assignee, containing the following information and
agreements, to the extent they are not contained in the
instrument described in Section 3.03(b)(iii)(A)(I): (1)
the notice address of the Assignee; (2) if applicable,
the Parent of the Assignee; (3) the Sharing Ratios after
the Disposition of the Disposing Member and its Assignee
(which together must total the Sharing Ratio of the
Disposing Member before the Disposition); (4) the
Assignee's ratification of this Agreement and agreement
to be bound by it, and its confirmation that the
representations and warranties in Section 3.02 are true
and correct with respect to it; (5) the Assignee's
ratification of all of the Company's Agreements and
agreement by be bound by them, to the same extent that
the Disposing Member was bound by them prior to the
Disposition; and (6) representations and warranties by
the Disposing Member and its Assignee (aa) that the
Disposition and admission is being made in accordance
with all applicable Laws, and (bb) that the matters set
forth in Sections 3.03(b)(iii)(A)(III) and (IV) are true
and correct.
(III) Securities Law Opinion. Unless the
Membership Interest subject to the Disposition is
registered under the Securities Act and any applicable
state securities Law, or the
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proposed Assignee is a Wholly-Owned Affiliate as
described in 3.03(b)(i)(A) above, a favorable opinion of
the Company's legal counsel, or of other legal counsel
acceptable to the Management Committee, to the effect
that the Disposition and admission is being made
pursuant to a valid exemption from registration under
those Laws and in accordance with those Laws.
(IV) Tax Opinion. A favorable opinion of the
Certified Public Accountants, or of other certified
public accountants acceptable to the Management
Committee, to the effect that the Disposition would not
result in the Company's being considered to have
terminated within the meaning of Code Section 708.
(B) Payment of Expenses. The Disposing Member and
its Assignee shall pay, or reimburse the Company for, all
reasonable costs and expenses incurred by the Company in
connection with the Disposition and admission, including the
legal fees incurred in connection with the legal opinions
referred to in Sections 3.03(b)(iii)(A)(III) and (IV), on or
before the tenth Day after the receipt by that Person of the
Company's invoice for the amount due.
(C) No Release. No Disposition of a Membership
Interest shall effect a release of the Disposing Member from
any liabilities to the Company or the other Members arising
from events occurring prior to the Disposition.
(iv) Change of Member Control. A Change of Member
Control must also comply with the requirements of this Section 3.03.
(c) Encumbrances of Membership Interest. A Member may Encumber its
Membership Interest if (i) the instrument creating such Encumbrance
provides that any foreclosure of such Encumbrance (or Disposition in lieu
of such foreclosure) must comply with the requirements of Section 3.03(b),
and (ii) any such Encumbrance is not prohibited by the Loan Documents.
(d) Right of First Refusal. Except as otherwise expressly permitted
by this Agreement, this Section 3.03(d) shall apply to any proposed
voluntary Disposition of a Membership Interest to any purchaser (other
than a majority owned Affiliate of the disposing party) for consideration
in the form of cash or promissory notes or other obligations to pay sums
certain. The Member proposing to make such a Distribution shall provide
written notice (a "Disposition Notice") to the remaining Members at least
90 days prior to the proposed Disposition. The Disposition Notice must set
forth the identity of the proposed transferee, the sale price, and all
other material terms and conditions of the proposed Disposition. In the
Case of a Change of member Control, the Disposition notice must set forth
the portion, if less than 100%, of the total purchase price that is
applicable to such Member's Membership Interest. Upon receipt of a
Disposition Notice, the remaining Members shall have the option for a
period of 30 days to purchase all, but not less than all, of such
Membership Interest. Such Membership Interest shall be allocated to the
Members exercising their option under this Section 3.03(d) pro rata in
accordance with their
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Membership Interests. The purchase pursuant to the exercise of this option
shall be at the price and pursuant to the terms and conditions of the
proposed Disposition. If no Member exercises such option, the Member
proposing such Disposition shall be free, for a period of 60 days after
the expiration of the remaining Members' options, to Dispose of the
Membership Interests that were the subject of the Disposition Notice, but
only to the party, and for the price and on the terms and conditions, set
forth in the Disposition Notice. If the proposed disposition does not
occur within 60 days after the expiration of the remaining Members'
options, the Membership Interest may not be Disposed of pursuant to this
Section 30.3(d) unless the Member again complies with the terms of this
Agreement.
(e) Rights In Membership Interests Pledged as Collateral. Any other
provision of this Agreement to the contrary notwithstanding, by executing
and delivering this Agreement, each Member shall be deemed to have
consented to (i) the pledge, assignment, hypothecation and transfer to any
creditor of the Company or South Central or its agents, successors or
assigns of, and the grant to such creditor or other Person of a lien on
and security interest in, as security for the indebtedness of the Company
or South Central to such creditor, all of such Member's right, title and
interest in, to and under its Membership Interest and any other collateral
securing such indebtedness, (ii) the exercise by any such creditor or
other Person of the rights and remedies under any security document
related to such collateral, including, without limitation, the right to
exercise the voting and consensual rights and other powers of each Member
to the extent provided in any such security document, and the right to
foreclose upon or exercise a power of sale with respect to the Membership
Interest of each Member and any other collateral subject to such security
documents and to cause the agent or designee of such creditor or any third
party purchaser of such Membership Interest to become an additional or
substitute Member, and (iii) all other provisions of the loan and security
documents relating to such indebtedness or collateral, the issuance of new
or substituted Membership Interests, or the ownership of Membership
Interests.
3.04 Creation of Additional Membership Interest. Additional Membership
Interests may be created and issued to existing Members or to other Persons, and
such other Persons may be admitted to the Company as Members, with the unanimous
consent of the existing Members, on such terms and conditions as the existing
Members may unanimously determine at the time of admission. The terms of
admission or issuance must specify the Sharing Ratios applicable thereto and may
provide for the creation of different classes or groups of Members having
different rights, powers, and duties. The Management Committee may reflect the
creation of any new class or group in an amendment to this Agreement indicating
the different rights, powers, and duties. Any such admission is effective only
after the new Member has executed and delivered to the Members an instrument
containing the notice address of the new Member, the Assignee's ratification of
this Agreement and agreement to be bound by it, and its confirmation that the
representations and warranties in Section 3.02 are true and correct with respect
to it. The provisions of this Section 3.04 shall not apply to Dispositions of
Membership Interests or admissions of Assignees in connection therewith, such
matters being governed by Section 3.03.
3.05 Access to Information. Each Member shall be entitled to receive any
information that it may request concerning the Company; provided, however, that
this Section 3.05 shall not obligate the Company or the Management Committee to
create any information that does not already exist at the time of such request
(other than to convert existing information from one medium to another, such as
providing a printout of information that is stored in a computer database). Each
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Member shall also have the right, upon reasonable notice, and at all reasonable
times during usual business hours to inspect the properties of the Company and
to audit, examine and make copies of the books of account and other records of
the Company. Such right may be exercised through any agent or employee of such
Member designated in writing by it or by an independent public accountant,
engineer, attorney or other consultant so designated. The Member making the
request shall bear all costs and expenses incurred in any inspection,
examination or audit made on such Member's behalf. Confidential Information
obtained pursuant to this Section 3.05 shall be subject to the provisions of
Section 3.06.
3.06 Confidential Information.
(a) Except as permitted by Section 3.06(b),
(i) each Member shall keep confidential all Confidential
Information and shall not disclose any Confidential Information to
any Person, including any of its Affiliates, and
(ii) each Member shall use the Confidential Information only
in connection with the Company.
(b) Notwithstanding Section 3.06(a), but subject to the other
provisions of this Section 3.06, a Member may make the following
disclosures and uses of Confidential Information:
(i) disclosures to another Member in connection with the
Company;
(ii) disclosures and uses that are approved by the Management
Committee;
(iii) disclosures to an Affiliate of such Member on a "need to
know" basis in connection with the Company, if such Affiliate has
agreed to abide by the terms of this Section 3.06;
(iv) disclosures to a Person that is not a Member or an
Affiliate of a Member, if such Person has been retained to provide
services by the Member in connection with the Company or such
Member's Membership Interest and has agreed to abide by the terms of
this Section 3.06;
(v) disclosures to lenders, potential lenders or other Persons
providing financing to the Company and potential purchasers of
equity interests in the Company, so long as such Persons have agreed
to abide by the terms of this Section 3.06;
(vi) disclosures to any independent system operator or its
consultants and representatives in connection with the conduct of
the businesses of the Owner Entities;
(vii) disclosures to Governmental Authorities that are
necessary to operate the Projects;
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(viii) disclosures that a Member is legally compelled to make
by deposition, interrogatory, request for documents, subpoena, civil
investigative demand, order of a court of competent jurisdiction, or
similar process, or otherwise by Law or securities exchange
requirements; provided, however, that, prior to any such disclosure,
such Member shall, to the extent legally permissible:
(A) provide the Management Committee with prompt notice
of such requirements so that one or more of the Members may
seek a protective order or other appropriate remedy or waive
compliance with the terms of this Section 3.06(b)(vii);
(B) consult with the Management Committee on the
advisability of taking steps to resist or narrow such
disclosure; and
(C) cooperate with the Management Committee and with the
other Members in any attempt one or more of them may make to
obtain a protective order or other appropriate remedy or
assurance that confidential treatment will be afforded the
Confidential Information; and in the event such protective
order or other remedy is not obtained, or the other Members
waive compliance with the provisions hereof, such Member
agrees (I) to furnish only that portion of the Confidential
Information that the other Members are advised by counsel to
the disclosing Member is legally required and (II) to exercise
all reasonable efforts to obtain assurance that confidential
treatment will be accorded such Confidential Information.
(c) Each Member shall take such precautionary measures as may be
required to ensure (and such Member shall be responsible for) compliance
with this Section 3.06 by any of its Affiliates, and its and their
directors, officers, employees and agents, and other Persons to which it
may disclose Confidential Information in accordance with this Section
3.06.
(d) A Terminated Member shall promptly destroy (and provide a
certificate of destruction to the Company with respect to) or return to
the Company, as directed by the Management Committee, all Confidential
Information in its possession. Notwithstanding the immediately-preceding
sentence, a Terminated Member may, subject to the other provisions of this
Section 3.06, retain and use Confidential Information for the limited
purpose of preparing such Terminated Member's tax returns and defending
audits, investigations and proceedings relating thereto.
(e) The Members agree that no adequate remedy at law exists for a
breach or threatened breach of any of the provisions of this Section 3.06,
the continuation of which unremedied will cause the Company and the other
Members to suffer irreparable harm. Accordingly, the Members agree that
the Company and the other Members shall be entitled, in addition to other
remedies that may be available to them, to immediate injunctive relief
from any breach of any of the provisions of this Section 3.06 and to
specific performance of their rights hereunder, as well as to any other
remedies available at law or in equity.
(f) The obligations of the Members under this Section 3.06 shall
terminate on the third anniversary of the end of the Term.
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3.07 Liability to Third Parties. No Member shall be liable for the debts,
obligations or liabilities of the Company.
3.08 Withdrawal. A Member may not withdraw or resign from the Company.
ARTICLE 4
CAPITAL CONTRIBUTIONS
4.01 Initial Capital Contributions. Contemporaneously with the execution
by such Member of this Agreement, each Member shall make the Capital
Contributions described for that Member in Exhibit A.
4.02 Subsequent Capital Contributions. Without creating any rights in
favor of any third party, each Member shall contribute to the Company, in cash,
on or before the date specified as hereinafter described, that Member's Sharing
Ratio of all monies that in the unanimous judgment of the Management Committee
are necessary to enable the Company to acquire additional businesses for South
Central and to cause the existing businesses of South Central to be properly
operated and maintained and to pay and perform their respective costs, expenses,
obligations, and liabilities. The Management Committee shall notify each other
Member of the need for Capital Contributions pursuant to this Section 4.02 when
appropriate, which notice must include a statement in reasonable detail of the
proposed uses of the Capital Contributions and a date (which date may be no
earlier than the fifth Business Day following each Member's receipt of its
notice) before which the Capital Contributions must be made. Notices for Capital
Contributions must be made to all Members in accordance with their Sharing
Ratios.
4.03 Failure to Contribute. (a) If a Member does not contribute, within 10
Days of the date required, all or any portion of a Capital Contribution that
Member is required to make as provided in this Agreement, the other Members may
cause the Company to exercise, on notice to that Member (the "Non-Contributing
Member"), one or more of the following remedies:
(i) taking such action (including court proceedings) as the
other Members may deem appropriate to obtain payment by the
Non-Contributing Member of the portion of the Non-Contributing
Member's Capital Contribution that is in default, together with
interest thereon at the Default Rate from the date that the Capital
Contribution was due until the date that it is made, all at the cost
and expense of the Non-Contributing Member;
(ii) permitting the other Members in proportion to their
Sharing Ratios or in such other percentages as they may agree (the
"Lending Member," whether one or more), to advance the portion of
the Non-Contributing Member's Capital Contribution that is in
default, with the following results:
(A) the sum advanced constitutes a loan from the Lending
Member to the Non-Contributing Member and a Capital
Contribution of that sum to the Company by the
Non-Contributing Member pursuant to the applicable provisions
of this Agreement,
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(B) the principal balance of the loan and all accrued
unpaid interest thereon is due and payable in whole on the
tenth Day after written demand therefor by the Lending Member
to the Non-Contributing Member,
(C) the amount lent bears interest at the Default Rate
from the Day that the advance is deemed made until the date
that the loan, together with all interest accrued on it, is
repaid to the Lending Member,
(D) all distributions from the Company that otherwise
would be made to the Non-Contributing Member (whether before
or after dissolution of the Company) instead shall be paid to
the Lending Member until the loan and all interest accrued on
it have been paid in full to the Lending Member (with payments
being applied first to accrued and unpaid interest and then to
principal),
(E) the payment of the loan and interest accrued on it
is secured by a security interest in the Non-Contributing
Member's Membership Interest, as more fully set forth in
Section 4.03(b), and
(F) the Lending Member has the right, in addition to the
other rights and remedies granted to it pursuant to this
Agreement or available to it at Law or in equity, to take any
action (including court proceedings) that the Lending Member
may deem appropriate to obtain payment by the Non-Contributing
Member of the loan and all accrued and unpaid interest on it,
at the cost and expense of the Non-Contributing Member;
(iii) exercising the rights of a secured party under the
Uniform Commercial Code, as more fully set forth in Section 4.03(b);
or
(iv) exercising any other rights and remedies available at Law
or in equity.
In addition, the failure to make such contributions shall constitute a Default
by the Non-Contributing Member, and the other Members shall have the rights set
forth in Article 9 with respect to such Default.
(b) Subject and subordinate to the rights of any creditor of the
Company under the Loan Documents, each Member grants to the Company, and
to each Lending Member with respect to any loans made by the Lending
Member to that Member as a Non-Contributing Member pursuant to Section
4.03(a)(ii), as security, equally and ratably, for the payment of all
Capital Contributions that Member has agreed to make and the payment of
all loans and interest accrued on them made by Lending Members to that
Member as a Non-Contributing Member pursuant to Section 4.03(a)(ii), a
security interest in and a general lien on its Membership Rights and the
proceeds thereof, all under the Uniform Commercial Code. On any default in
the payment of a Capital Contribution or in the payment of such a loan or
interest accrued on it, the Company or the Lending Member, as applicable,
is entitled to all the rights and remedies of a secured party under the
Uniform Commercial Code with respect to the security interest granted in
this Section 4.03(b). Each Member shall execute and deliver to the Company
and the other Members all financing statements and other
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instruments that the Lending Member may request to effectuate and carry
out the preceding provisions of this Section 4.03(b). At the option of a
Lending Member, this Agreement or a carbon, photographic, or other copy
hereof may serve as a financing statement.
4.04 Loans. If the Company does not have sufficient cash to pay its
obligations, any Member(s) that may agree to do so with the consent of the
Management Committee may advance all or part of the needed funds to or on behalf
of the Company. An advance described in this Section 4.04 constitutes a loan
from the Member to the Company, bears interest at a rate determined by the
Management Committee from the date of the advance until the date of payment, and
is not a Capital Contribution.
4.05 Return of Contributions. Except as expressly provided herein, a
Member is not entitled to the return of any part of its Capital Contributions or
to be paid interest in respect of either its Capital Account or its Capital
Contributions. An unrepaid Capital Contribution is not a liability of the
Company or of any Member. A Member is not required to contribute or to lend any
cash or property to the Company to enable the Company to return any Member's
Capital Contributions.
4.06 Capital Accounts. A Capital Account shall be established and
maintained for each Member. Each Member's Capital Account shall be increased by
(a) the amount of money contributed by that Member to the Company, (b) the fair
market value of property contributed by that Member to the Company (net of
liabilities secured by such contributed property that the Company is considered
to assume or take subject to under Section 752 of the Code), and (c) allocations
to that Member of Company income and gain (or items thereof), including income
and gain exempt from tax and income and gain described in Treasury Regulation
Section 1.704-1(b)(2)(iv)(g), but excluding income and gain described in
Treasury Regulation Section 1.704-1(b)(4)(i), and shall be decreased by (d) the
amount of money distributed to that Member by the Company, (e) the fair market
value of property distributed to that Member by the Company (net of liabilities
secured by such distributed property that such Member is considered to assume or
take subject to under Section 752 of the Code), (f) allocations to that Member
of expenditures of the Company described (or treated as described) in Section
705(a)(2)(B) of the Code, and (g) allocations of Company loss and deduction (or
items thereof), including loss and deduction described in Treasury Regulation
Section 1.704-1(b)(2)(iv)(g), but excluding items described in (f) above and
loss or deduction described in Treasury Regulation Section 1.704-1(b)(4)(i) or
1.704-1(b)(4)(iii). The Members' Capital Accounts shall also be maintained and
adjusted as permitted by the provisions of Treasury Regulation Section
1.704-1(b)(2)(iv)(f) and as required by the other provisions of Treasury
Regulation Sections 1.704-1(b)(2)(iv) and 1.704-1(b)(4), including adjustments
to reflect the allocations to the Members of depreciation, depletion,
amortization, and gain or loss as computed for book purposes rather than the
allocation of the corresponding items as computed for tax purposes, as required
by Treasury Regulation Section 1.704-1(b)(2)(iv)(g). Thus, the Members' Capital
Accounts shall be increased or decreased to reflect a revaluation of the
Company's property on its books based on the fair market value of the Company's
property on the date of adjustment immediately prior to (A) the contribution of
money or other property to the Company by a new or existing Member as
consideration for a Membership Interest or an increased Sharing Ratio, (B) the
distribution of money or other property by the Company to a Member as
consideration for a Membership Interest, or (C) the liquidation of the Company.
A Member that has more than one Membership Interest shall have a single Capital
Account that reflects all such Membership Interests, regardless of the class of
Membership Interests owned by such Member and regardless of the time or manner
in which such Membership Interests were acquired. Upon the Disposition of all or
a portion of a Membership Interest, the Capital Account of the Disposing
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Member that is attributable to such Membership Interest shall carry over to the
Assignee in accordance with the provisions of Treasury Regulation Section
1.704-1(b)(2)(iv)(1).
ARTICLE 5
DISTRIBUTIONS AND ALLOCATIONS
5.01 Distributions or ▇▇▇▇▇▇▇▇. Except as provided in the Loan Documents,
distributions to the Members shall be made only to all simultaneously in
proportion to their respective Sharing Ratios (at the time the amounts of such
distributions are determined), and distributions shall be made only in such
aggregate amounts and at such times as shall be determined by the Management
Committee and as are permitted by the Loan Documents. When so permitted, the
Management Committee shall endeavor to distribute to the Members, on or before
the last day of each calendar month, or more often if approved by the Management
Committee, the estimated amount of any cash available for such calendar month
(net of any adjustments, if any, made to reflect the actual cash available for
the preceding calendar month).
5.02 Distributions on Dissolution and Winding Up. Upon the dissolution and
winding up of the Company, after adjusting the Capital Accounts for all
distributions made under Section 5.01 and all allocations under Article 5, all
available proceeds distributable to the Members as determined under Section
11.02 shall be distributed to all of the Members to the extent of the Members'
positive Capital Account balances.
5.03 Allocations.
(a) For purposes of maintaining the Capital Accounts pursuant to
Section 4.06 and for income tax purposes, except as provided in Section
5.03(b), each item of income, gain, loss, deduction and credit of the
Company shall be allocated to the Members in accordance with their Sharing
Ratios.
(b) For income tax purposes, income, gain, loss, and deduction with
respect to property contributed to the Company by a Member or revalued
pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(f) shall be
allocated among the Members in a manner that takes into account the
variation between the adjusted tax basis of such property and its book
value, as required by Section 704(c) of the Code and Treasury Regulation
Section 1.704-1(b)(4)(i), using the remedial allocation method permitted
by Treasury Regulation Section 1.704-3(d).
5.04 Varying Interests. All items of income, gain, loss, deduction or
credit shall be allocated, and all distributions shall be made, to the Persons
shown on the records of the Company to have been Members as of the last calendar
day of the period for which the allocation or distribution is to be made.
Notwithstanding the foregoing, if during any taxable year there is a change in
any Member's Sharing Ratio, the Members agree that their allocable shares of
such items for the taxable year shall be determined on any method determined by
the Management Committee to be permissible under Code Section 706 and the
related Treasury Regulations to take account of the Members' varying Sharing
Ratios.
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ARTICLE 6
MANAGEMENT
6.01 Management by Members. Except as described below in Sections 6.03 and
6.05, the management of the Company is fully vested in the Members, acting
exclusively in their membership capacities. To facilitate the orderly and
efficient management of the Company, the Members shall act (a) collectively as a
"committee of the whole" pursuant to Section 6.02, or (b) through the delegation
from time to time of certain responsibility and authority to particular Members
pursuant to Section 6.03. No Member has the right, power or authority to act for
or on behalf of the Company, to do any act that would be binding on the Company,
or to incur any expenditures on behalf of the Company, except in accordance with
the immediately preceding sentence. Decisions or actions taken in accordance
with the provisions of this Agreement shall constitute decisions or actions by
the Company and shall be binding on each Member, Representative, Officer and
employee of the Company.
6.02 Management Committee. All Members shall act collectively through
meetings as a "committee of the whole" which is hereby named the "Management
Committee." The Management Committee shall conduct its affairs in accordance
with the following provisions and the other provisions of this Agreement:
(a) Representatives.
(i) Designation. To facilitate the orderly and efficient
conduct of Management Committee meetings, each Member shall notify
the other Members, from time to time, of the identity of two of its
officers, employees or agents who will represent it at such meetings
(each a "Representative"). In addition, each Member may (but shall
have not obligation to) notify the other Members, from time to time,
of the identity of other officers, employees or agents who will
represent it at any meeting that the Member's Representatives are
unable to attend (each an "Alternate Representative"). (The term
"Representative" shall also refer to any Alternate Representative
that is actually performing the duties of the applicable
Representative.). The initial Representatives of each Member are set
forth on Exhibit A. A Member may designate different Representatives
or Alternate Representatives for any meeting of the Management
Committee by notifying each of the other Members at least three
Business Days prior to the scheduled date for such meeting;
provided, however, that if giving such advance notice is not
feasible, then such new Representatives or Alternate Representatives
shall present written evidence of their authority at the
commencement of such meeting.
(ii) Authority. Each Representative shall have the full
authority to act on behalf of the Member that designated such
Representative; the action of a Representative at a meeting (or
through a written consent) of the Management Committee shall bind
the Member that designated such Representative: and the other
Members shall be entitled to rely upon such action without further
inquiry or investigation as to the actual authority (or lack
thereof) of such Representative. In addition, the act of an
Alternate Representative shall be deemed the act of the
Representative for which such Alternate Representative is acting,
without the need to produce evidence of the absence or
unavailability of such Representative.
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(iii) DISCLAIMER OF DUTIES; INDEMNIFICATION. EACH
REPRESENTATIVE SHALL REPRESENT, AND OWE DUTIES TO, ONLY THE MEMBER
THAT DESIGNATED SUCH REPRESENTATIVE (THE NATURE AND EXTENT OF SUCH
DUTIES BEING AN INTERNAL CORPORATE AFFAIR OF SUCH MEMBER), AND NOT
TO THE COMPANY, ANY OTHER MEMBER OR REPRESENTATIVE, OR ANY OFFICER
OR EMPLOYEE OF THE COMPANY. THE PROVISIONS OF SECTION 6.04 SHALL
ALSO INURE TO THE BENEFIT OF EACH MEMBER'S REPRESENTATIVES. THE
COMPANY SHALL INDEMNIFY, PROTECT, DEFEND, RELEASE AND HOLD HARMLESS
EACH REPRESENTATIVE FROM AND AGAINST ANY CLAIMS ASSERTED BY OR ON
BEHALF OF ANY PERSON (INCLUDING ANOTHER MEMBER), OTHER THAN THE
MEMBER THAT DESIGNATED SUCH REPRESENTATIVE, THAT ARISE OUT OF,
RELATE TO OR ARE OTHERWISE ATTRIBUTABLE TO, DIRECTLY OR INDIRECTLY,
SUCH REPRESENTATIVE'S SERVICE ON THE MANAGEMENT COMMITTEE, OTHER
THAN SUCH CLAIMS ARISING OUT OF THE FRAUD OR WILLFUL MISCONDUCT OF
SUCH REPRESENTATIVE.
(iv) Attendance. Each Member shall use all reasonable efforts
to cause its Representatives or Alternate Representatives to attend
each meeting of the Management Committee, unless its Representatives
are unable to do so because of a "force majeure" event or other
event beyond his reasonable control, in which event such Member
shall use all reasonable efforts to cause its Representatives or
Alternate Representatives to participate in the meeting by telephone
pursuant to Section 6.02(h).
(b) Chairman and Secretary. One of the Representatives will be
designated as Chairman of the Management Committee, in accordance with
this Section 6.02(b), to preside over meetings of the Management
Committee. The Management Committee shall also designate a Secretary of
the Management Committee, who need not be a Representative.
(c) Procedures. The Secretary of the Management Committee shall
maintain written minutes of each of its meetings, which shall be submitted
for approval no later than the next regularly-scheduled meeting. The
Management Committee may adopt whatever rules and procedures relating to
its activities as it may deem appropriate, provided that such rules and
procedures shall not be inconsistent with or violate the provisions of
this Agreement.
(d) Time and Place of Meetings. The Management Committee shall meet
quarterly, subject to more or less frequent meetings upon approval of the
Management Committee. Notice of, and an agenda for, all Management
Committee meetings shall be provided by the Chairman to all Members at
least ten Days prior to the date of each meeting, together with proposed
minutes of the previous Management Committee meeting (if such minutes have
not been previously ratified). Special meetings of the Management
Committee may be called at such times, and in such manner, as any Member
deems necessary. Any Member calling for any such special meeting shall
notify the Chairman, who in turn shall notify all Members of the date and
agenda for such meeting at least ten Days prior to the date of such
meeting. Such ten-day period may be shortened by the Management Committee.
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All meetings of the Management Committee shall be held at a location
designated by the Chairman. Attendance of a Member at a meeting of the
Management Committee shall constitute a waiver of notice of such meeting,
except where such Member attends the 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.
(e) Quorum. The presence of one Representative designated by each
Member shall constitute a quorum for the transaction of business at any
meeting of the Management Committee.
(f) Voting. Except as provided otherwise in this Agreement, (i)
voting at any meeting of the Management Committee shall be according to
the Members' respective Sharing Ratios, and (ii) the affirmative vote of
Members holding a majority of the Sharing Ratios shall constitute the act
of the Management Committee.
(g) Action by Written Consent. Any action required or permitted to
be taken at a meeting of the Management Committee may be taken without a
meeting, without prior notice, and without a vote if a consent or consents
in writing, setting forth the action so taken, is signed by Members that
could have taken the action at a meeting of the Management Committee at
which all Members entitled to vote on the action were represented and
voted.
(h) Meetings by Telephone. Members may participate in and hold such
meeting by means of conference telephone, video conference or similar
communications equipment by means of which all persons participating in
the meeting can hear each other. Participation in such a meeting shall
constitute presence in person at such meeting, except where a Member
participates in the 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.
(i) Subcommittees. The Management Committee may create such
subcommittees, delegate to such subcommittees such authority and
responsibility, and rescind any such delegations, as it may deem
appropriate.
(j) Officers. The Management Committee may designate one or more
Persons to be Officers of the Company. Any Officers so designated shall
have such titles and, subject to the other provisions of this Agreement,
have such authority and perform such duties as the Management Committee
may specifically delegate to them and shall serve at the pleasure of the
Management Committee.
6.03 Delegation to Particular Member. The Management Committee may
delegate to one or more Members such authority and duties as the Management
Committee may deem advisable. Decisions or actions taken by any such Member in
accordance with the provisions of this Agreement shall constitute decisions or
actions by the Company and shall be binding on each Member, Representative,
Officer and employee of the Company. Any delegation pursuant to this Section
6.03 may be revoked at any time by the Management Committee. With respect to
duties discharged hereunder by a Member (a) such Member may discharge such
duties through the personnel of a Affiliate of such Member, and (b) unless the
Members otherwise agree, the Company shall compensate such Member (or its
Affiliate, as applicable) for the performance of such duties in an amount equal
to the man-hours expended by the personnel of such Member (or its Affiliate)
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multiplied by the applicable rate(s) shown on Exhibit B (which rates each shall
escalate on the first day of each calendar year during the term hereof by an
amount which is 5% of the rate applicable during the prior calendar year), and
shall reimburse such Member for all out of pocket costs incurred by such Member
in discharging such duties. In addition, prior to performing any such duties,
the performing Member shall provide to the other Member for approval an estimate
of man-hours and types of personnel required to perform the delegated duties and
a schedule for the performance of the delegated duties and for other costs
associated therewith, and shall promptly inform the other Member of any variance
from the budget or schedule.
6.04 Affiliate Agreements; Conflicts of Interest. Subject to any other
agreement between the Members (and their respective Affiliates, as applicable),
a Member or an Affiliate of a Member may engage in and possess interests in
other business ventures of any and every type and description, independently or
with others, including ones in competition with the Company, with no obligation
to offer to the Company, any other Member or any Affiliate of another Member the
right to participate therein. The Company may transact business with any Member
or Affiliate thereof, provided the terms of those transactions are approved by
the Management Committee or expressly contemplated by this Agreement. Without
limiting the generality of the foregoing, the Members recognize and agree that
they and their respective Affiliates currently engage in certain activities
involving the generation, transmission, distribution, marketing and trading of
electricity and other energy products (including futures, options, swaps,
exchanges of future positions for physical deliveries and commodity trading),
and the gathering, processing, storage and transportation of such products, as
well as other commercial activities related to such products, and that these and
other activities by Members and their Affiliates may be made possible or more
profitable by reason of the Company's activities (herein referred to as "Outside
Activities"). The Members agree that (i) no Member or Affiliate of a Member
shall be restricted in its right to conduct, individually or jointly with
others, for its own account any Outside Activities, and (ii) no Member or its
Affiliates shall have any duty or obligation, express or implied, to account to,
or to share the results or profits of such Outside Activities with, the Company,
any other Member or any Affiliate of any other Member, by reason of such Outside
Activities.
6.05 Unanimous Consent Required for Certain Action. Any other provision of
this Agreement to the contrary notwithstanding, the unanimous consent of the
Members, and at least one Independent Member, shall be required to:
(a) File a bankruptcy or insolvency petition or otherwise institute
insolvency proceedings with respect to the Company, or take any action
that would result in such an event occurring with respect to any Owner
Entity.
(b) Cause the dissolution, liquidation, consolidation, merger or
sale of substantially all of the assets of the Company or any Owner
Entity.
(c) Cause or permit the Company to engage in any other activity
other than those set forth in Section 2.04.
(d) Amend this Agreement in any manner that would have a material
adverse impact on any creditor of the Company.
6.06 Certain Actions Prohibited. So long as the Company has any
indebtedness outstanding, (a) the Company shall not be dissolved, liquidated,
consolidated or merged with any
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other entity, nor shall this Agreement be amended in any manner that would have
a material adverse impact on the holders of such indebtedness, and (b)
notwithstanding the failure of the Members to continue the existence of the
Company as provided in Section 2.06 during such period, no action shall be taken
by the Company or any of the Members that shall cause any collateral for such
indebtedness to be liquidated or that would adversely affect the rights of the
holders of such indebtedness or their agents to exercise their rights under any
security documents relating thereto or to retain such collateral until such
indebtedness is paid in full or otherwise completely discharged.
6.07 Disclaimer of Duties and Liabilities.
(a) NO MEMBER SHALL OWE ANY DUTY (INCLUDING ANY FIDUCIARY DUTY) TO
THE OTHER MEMBERS OR TO THE COMPANY, OTHER THAN THE DUTIES THAT ARE
EXPRESSLY SET FORTH IN THIS AGREEMENT.
(b) NO MEMBER SHALL BE LIABLE (WHETHER IN CONTRACT, TORT OR
OTHERWISE) FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES.
(c) THE OBLIGATIONS OF THE MEMBERS UNDER THIS AGREEMENT ARE
OBLIGATIONS OF THE MEMBERS ONLY, AND NO RECOURSE SHALL BE AVAILABLE
AGAINST ANY OFFICER, DIRECTOR OR AFFILIATE OF ANY MEMBER, EXCEPT AS
PERMITTED UNDER APPLICABLE LAW.
6.08 Indemnification. Each Member shall indemnify, protect, defend,
release and hold harmless each other Member, and such other Member's
Representatives, Affiliates, and their respective directors, officers, employees
and agents from and against any Claims asserted by or on behalf of any Person
(including another Member) that arise out of, relate to or are otherwise
attributable to, directly or indirectly, a breach by the indemnifying Member of
this Agreement, or the negligence, gross negligence or willful misconduct of the
indemnifying Member in connection with this Agreement; provided, however, that
this Section 6.08 shall not apply to any Claim or other matter for which a
Member (or its Representative) has no liability or duty, or is indemnified or
released, pursuant to Section 6.02(a)(iii), 6.07 or 6.08.
ARTICLE 7
TAXES
7.01 Tax Returns. The Tax Matters Member shall prepare and timely file (on
behalf of the Company) all federal, state and local tax returns required to be
filed by the Company. Each Member shall furnish to the Tax Matters Member all
pertinent information in its possession relating to the Company's operations
that is necessary to enable the Company's tax returns to be timely prepared and
filed. The Company shall bear the costs of the preparation and filing of its
returns.
7.02 Tax Elections. The Company shall make the following elections on the
appropriate tax returns:
(a) to adopt as the Company's fiscal year the calendar year;
(b) to adopt the accrual method of accounting;
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(c) if a distribution of the Company's property as described in Code
Section 734 occurs or upon a transfer of Membership Interest as described
in Code Section 743 occurs, on request by notice from any Member, to
elect, pursuant to Code Section 754, to adjust the basis of the Company's
properties;
(d) to elect to amortize the organizational expenses of the Company
ratably over a period of 60 months as permitted by Section 709(b) of the
Code; and
(e) any other election the Management Committee may deem
appropriate.
Neither the Company nor any Member shall make an election for the Company to be
excluded from the application of the provisions of subchapter K of chapter 1 of
subtitle A of the Code or any similar provisions of applicable state law and no
provision of this Agreement (including Section 2.07) shall be construed to
sanction or approve such an election.
7.03 Tax Matters Member.
(a) NRG Central shall be the "tax matters partner" of the Company
pursuant to Section 6231(a)(7) of the Code (the "Tax Matters Member"). At
the request of each other Member, the Tax Matters Member shall take such
action as may be necessary to cause, to the extent possible, such other
Member to become a "notice partner" within the meaning of Section 6223 of
the Code. The Tax Matters Member shall inform each other Member of all
significant matters that may come to its attention in its capacity as Tax
Matters Member by giving notice thereof on or before the fifth Business
Day after becoming aware thereof and, within that time, shall forward to
each other Member copies of all significant written communications it may
receive in that capacity.
(b) The Tax Matters Member shall take no action without the
authorization of the Management Committee, other than such action as may
be required by Law. Any cost or expense incurred by the Tax Matters Member
in connection with its duties, including the preparation for or pursuance
of administrative or judicial proceedings, shall be paid by the Company.
(c) The Tax Matters Member shall not enter into any extension of the
period of limitations for making assessments on behalf of the Members
without first obtaining the consent of the Management Committee. The Tax
Matters Member shall not bind any Member to a settlement agreement without
obtaining the consent of such Member. Any Member that enters into a
settlement agreement with respect to any Company item (as described in
Code Section 6231(a)(3)) shall notify the other Members of such
settlement agreement and its terms within 90 Days from the date of the
settlement.
(d) No Member shall file a request pursuant to Code Section 6227 for
an administrative adjustment of Company items for any taxable year without
first notifying the other Members. If the Management Committee consents to
the requested adjustment, the Tax Matters Member shall file the request
for the administrative adjustment on behalf of the Members. If such
consent is not obtained within 30 Days from such notice, or within the
period required to timely file the request for administrative adjustment,
if shorter, any Member, including the Tax Matters Member, may file a
request for administrative adjustment on its own behalf. Any Member
intending to file a petition under Code Sections
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6226, 6228 or other Code Section with respect to any item involving the
Company shall notify the other Members of such intention and the nature of
the contemplated proceeding. In the case where the Tax Matters Member is
the Member intending to file such petition on behalf of the Company, such
notice shall be given within a reasonable period of time to allow the
other Members to participate in the choosing of the forum in which such
petition will be filed.
(e) If any Member intends to file a notice of inconsistent treatment
under Code Section 6222(b), such Member shall give reasonable notice under
the circumstances to the other Members of such intent and the manner in
which the Member's intended treatment of an item is (or may be)
inconsistent with the treatment of that item by the other Members.
ARTICLE 8
BOOKS, RECORDS, REPORTS, AND BANK ACCOUNTS
8.01 Maintenance of Books.
(a) The Management Committee shall keep or cause to be kept at the
principal office of the Company or at such other location approved by the
Management Committee complete and accurate books and records of the
Company, supporting documentation of the transactions with respect to the
conduct of the Company's business and minutes of the proceedings of its
Members and the Management Committee, and any other books and records that
are required to be maintained by applicable Law.
(b) The books of account of the Company shall be (i) maintained on
the basis of a fiscal year that is the calendar year, (ii) maintained on
an accrual basis in accordance with generally accepted accounting
principles, consistently applied, and (iii) audited by the Certified
Public Accountants at the end of each calendar year.
8.02 Reports.
(a) With respect to each calendar year, the Management Committee
shall prepare and deliver to each Member:
(i) Within 120 Days after the end of such calendar year, a
profit and loss statement and a statement of cash flows for such
year, a balance sheet and a statement of each Member's Capital
Account as of the end of such year, together with a report thereon
of the Certified Public Accountants; and
(ii) Such federal, state and local income tax returns and such
other accounting, tax information and schedules as shall be
necessary for the preparation by each Member on or before July 15
following the end of each calendar year of its income tax return
with respect to such year.
(b) Within 15 Business Days after the end of each calendar month,
the Management Committee shall cause to be prepared and delivered to each
Member, with an appropriate certificate of the Person authorized to
prepare the same (provided that the Management Committee may change the
financial statements required by this Section
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8.02(b) to a quarterly basis or may make such other change therein as it
may deem appropriate):
(i) A profit and loss statement and a statement of cash flows
for such month (including sufficient information to permit the
Members to calculate their tax accruals), for the portion of the
calendar year then ended;
(ii) A balance sheet and a statement of each Member's Capital
Account as of the end of such month and the portion of the calendar
year then ended; and
(iii) A statement comparing the actual financial status and
results of the Company as of the end of or for such month and the
portion of the calendar year then ended with the budgeted or
forecasted status and results as of the end of or for such
respective periods.
(c) The Management Committee shall also cause to be prepared and
delivered to each Member such other reports, forecasts, studies, budgets
and other information as the Management Committee may request from time to
time.
8.03 Bank Accounts. Funds of the Company shall be deposited in such banks
or other depositories as shall be designated from time to time by the Management
Committee. All withdrawals from any such depository shall be made only as
authorized by the Management Committee and shall be made only by check, wire
transfer, debit memorandum or other written instruction.
ARTICLE 9
BUYOUT OPTION
9.01 Buyout Events. This Article 9 shall apply to any of the following
events (each a "Buyout Event"):
(a) a Member shall dissolve or become Bankrupt; or
(b) a Member shall commit a Default.
In each case, the Member with respect to whom a Buyout Event has occurred is
referred to herein as the "Affected Member."
9.02 Procedure. If a Buyout Event occurs and is not cured within 30
Business Days of the Affected Member's receipt of notice thereof from another
Member (or such shorter period (not less than 10 Business Days) as may be
reasonable under the circumstances and set forth in such notice), then each of
the other Members shall have the option to acquire the Membership Interest of
the Affected Member (or to cause it to be acquired by a third party designated
by the other Members), in accordance with procedures that are substantively
equivalent to those set forth in Section 3.03(b)(iii) (and with the Members
exercising such preferential right also being referred to herein as "Purchasing
Members").
9.03 Purchase Price; Terms and Method of Payment. The purchase price for a
Membership Interest being purchased pursuant to this Article 9 (the "Purchase
Price") shall be
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determined in the following manner. The Affected Member and the Purchasing
Members shall attempt to agree upon the fair market value of the applicable
Membership Interest and the terms and method of payment of such amount. If those
Members do not reach such agreement on or before the 30th Day following the
exercise of the option, any such Member, by notice to the others, may require
the determination of fair market value and the terms and method of payment to be
made by the Arbitrator pursuant to Article 10.
9.04 Closing. If an option to purchase is exercised in accordance with the
other provisions of this Article 9, the closing of such purchase shall occur on
the 30th Day after the determination of the Fair Market Value pursuant to
Section 9.03 (or, if later, the fifth Business Day after the receipt of all
applicable regulatory and governmental approvals to the purchase), and shall be
conducted in a manner substantively equivalent to that set forth in Section
3.03.
9.05 Terminated Member. Upon the occurrence of a closing under Section
9.04, the following provisions shall apply to the Affected Member (now a
"Terminated Member"):
(a) The Terminated Member shall cease to be a Member immediately
upon the occurrence of the closing.
(b) As the Terminated Member is no longer a Member, it will no
longer be entitled to receive any distributions (including liquidating
distributions) or allocations from the Company, and neither it nor its
Representative shall be entitled to exercise any voting or consent rights
or to receive any further information (or access to information) from the
Company.
(c) The Terminated Member must pay to the Company all amounts owed
to it by such Member.
(d) The Terminated Member shall remain obligated for all liabilities
it may have under this Agreement or otherwise with respect to the Company
that accrue prior to the closing.
(f) The Sharing Ratio of the Terminated Member shall be allocated
among the purchasing Members in the proportion of the total Purchase Price
paid by each.
ARTICLE 10
DISPUTE RESOLUTION
10.01 Disputes. This Article 10 shall apply to any dispute arising under
or related to this Agreement (whether arising in contract, tort or otherwise,
and whether arising at law or in equity), including (a) any dispute regarding
the construction, interpretation, performance, validity or enforceability of any
provision of this Agreement or whether any Person is in compliance with, or
breach of, any provisions of this Agreement, and (b) the applicability of this
Article 10 to a particular dispute. Notwithstanding the foregoing, this Article
10 shall not apply to any matters that, pursuant to the provisions of this
Agreement, are to be resolved by a vote of the Members (including through the
Management Committee); provided, however, that if a vote, approval, consent,
determination or other decision must, under the terms of this Agreement, be made
(or withheld) in accordance with a standard other than Sole Discretion (such as
a reasonableness standard), then the issue of whether such standard has been
satisfied may be a dispute to which this Article 10 applies.
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Any dispute to which this Article 10 applies is referred to herein as a
"Dispute." With respect to a particular Dispute, each Member that is a party to
such Dispute is referred to herein as a "Disputing Member." The provisions of
this Article 10 shall be the exclusive method of resolving Disputes.
10.02 Negotiation to Resolve Disputes. If a Dispute arises, either
Disputing Member may initiate the dispute-resolution procedures of this Article
10 by delivering a notice (a "Dispute Notice") to the other Disputing Members.
Within 10 Days of delivery of a Dispute Notice, each Disputing Member shall
designate a representative, and such representatives shall promptly meet
(whether by phone or in person) in a good faith attempt to resolve the Dispute.
If such representatives can resolve the Dispute, such resolution shall be
reported in writing and shall be binding upon the Disputing Members. If such
representatives are unable to resolve the Dispute within 30 Days following the
delivery of the Dispute Notice (or such other period as such representatives may
agree), or if a Disputing Member fails to appoint a representative within 10
Days of delivery following the delivery of the Dispute Notice, then any
Disputing Member may take such Dispute to litigation.
ARTICLE 11
DISSOLUTION, WINDING-UP AND TERMINATION
11.01 Dissolution. The Company shall dissolve and its affairs shall be
wound up on the first to occur of the following events (each a "Dissolution
Event"):
(a) the unanimous consent of the Members; or
(b) entry of a decree of judicial dissolution of the Company under
Section 18-802 of the Act.
11.02 Winding-Up and Termination.
(a) On the occurrence of a Dissolution Event, the Management
Committee shall select one Member to act as liquidator. The liquidator
shall proceed diligently to wind up the affairs of the Company and make
final distributions as provided herein and in the Act. The costs of
winding up shall be borne as a Company expense. Until final distribution,
the liquidator shall continue to operate the Company properties with all
of the power and authority of the Members. The steps to be accomplished by
the liquidator are as follows:
(i) as promptly as possible after dissolution and again after
final winding up, the liquidator shall cause a proper accounting to
be made by a recognized firm of certified public accountants of the
Company's assets, liabilities, and operations through the last
calendar day of the month in which the dissolution occurs or the
final winding up is completed, as applicable;
(ii) the liquidator shall discharge from Company funds all of
the Indebtedness and other debts, liabilities and obligations of the
Company (including all expenses incurred in winding up and any loans
described in Section 4.03) or otherwise make adequate provision for
payment and discharge thereof (including the establishment of a cash
escrow fund for contingent liabilities in such amount and for such
term as the liquidator may reasonably determine); and
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(iii) all remaining assets of the Company shall be distributed
to the Members as follows:
(A) the liquidator may sell any or all Company property,
including to Members, and any resulting gain or loss from each
sale shall be computed and allocated to the Capital Accounts
of the Members in accordance with the provisions of Article 5;
(B) with respect to all Company property that has not
been sold, the fair market value of that property shall be
determined and the Capital Accounts of the Members shall be
adjusted to reflect the manner in which the unrealized income,
gain, loss, and deduction inherent in property that has not
been reflected in the Capital Accounts previously would be
allocated among the Members if there were a taxable
disposition of that property for the fair market value of that
property on the date of distribution; and
(C) Company property (including cash) shall be
distributed among the Members in accordance with Section 5.02;
and those distributions shall be made by the end of the
taxable year of the Company during which the liquidation of
the Company occurs (or, if later, 90 Days after the date of
the liquidation).
(b) The distribution of cash or property to a Member in accordance
with the provisions of this Section 11.02 constitutes a complete return to
the Member of its Capital Contributions and a complete distribution to the
Member of its Membership Interest and all the Company's property and
constitutes a compromise to which all Members have consented pursuant to
Section 18-502(b) of the Act. To the extent that a Member returns funds to
the Company, it has no claim against any other Member for those funds.
11.03 Deficit Capital Accounts. No Member will be required to pay to the
Company, to any other Member or to any third party any deficit balance that may
exist from time to time in the Member's Capital Account.
11.04 Certificate of Cancellation. On completion of the distribution of
Company assets as provided herein, the Members (or such other Person or Persons
as the Act may require or permit) shall file a certificate of cancellation with
the Secretary of State of Delaware, cancel any other filings made pursuant to
Section 2.05, and take such other actions as may be necessary to terminate the
existence of the Company. Upon the filing of such certificate of cancellation,
the existence of the Company shall terminate (and the Term shall end), except as
may be otherwise provided by the Act or other applicable Law.
ARTICLE 12
GENERAL PROVISIONS
12.01 Offset. Whenever the Company is to pay any sum to any Member, any
amounts that Member owes the Company may be deducted from that sum before
payment.
12.02 Notices. Except as expressly set forth to the contrary in this
Agreement, all notices, requests or consents provided for or permitted to be
given under this Agreement must be in writing
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and must be delivered to the recipient in person, by courier or mail or by
facsimile or other electronic transmission. A notice, request or consent given
under this Agreement is effective on receipt by the Member to receive it;
provided, however, that a facsimile or other electronic transmission that is
transmitted after the normal business hours of the recipient shall be deemed
effective on the next Business Day. All notices, requests and consents to be
sent to a Member must be sent to or made at the addresses given for that Member
on Exhibit A or in the instrument described in Section 3.03(b)(iv)(A)(II) or
3.04, or such other address as that Member may specify by notice to the other
Members. Any notice, request or consent to the Company must be given to all of
the Members. Whenever any notice is required to be given by Law, the Delaware
Certificate or this Agreement, a written waiver thereof, signed by the Person
entitled to notice, whether before or after the time stated therein, shall be
deemed equivalent to the giving of such notice.
12.03 Entire Agreement; Superseding Effect. This Agreement constitutes the
entire agreement of the Members and their Affiliates relating to the Company and
the transactions contemplated hereby and supersedes all provisions and concepts
contained in all prior contracts or agreements between the Members or any of
their Affiliates with respect to the Company and the transactions contemplated
hereby, whether oral or written.
12.04 Press Releases. Each Member agrees that it shall not (and shall
cause its Affiliates not to), without the other Members' consent, issue a press
release or have any contact with or respond to the news media with any sensitive
or Confidential Information, except as required by securities or similar laws
applicable to a Member and its Affiliates. Any press release by a Member or its
Affiliates with respect to any sensitive or Confidential Information shall be
subject to review and approval by the other Party, which approval shall not be
unreasonably withheld.
12.05 Effect of Waiver or Consent. Except as otherwise provided in this
Agreement, a waiver or consent, express or implied, to or of any breach or
default by any Member in the performance by that Member of its obligations with
respect to the Company is not a consent or waiver to or of any other breach or
default in the performance by that Member of the same or any other obligations
of that Member with respect to the Company. Except as otherwise provided in this
Agreement, failure on the part of a Member to complain of any act of any Member
or to declare any Member in default with respect to the Company, irrespective of
how long that failure continues, does not constitute a waiver by that Member of
its rights with respect to that default until the applicable
statute-of-limitations period has run.
12.06 Amendment or Restatement. This Agreement or the Delaware Certificate
may be amended or restated only by a written instrument executed (or, in the
case of the Delaware Certificate, approved) by all of the Members.
12.07 Binding Effect. Subject to the restrictions on Dispositions set
forth in this Agreement, this Agreement is binding on and shall inure to the
benefit of the Members and their respective successors and permitted assigns.
12.08 Governing Law; Severability. This Agreement is governed by and shall
be construed in accordance with the Law of the State of Delaware, excluding any
conflict-of-laws rule or principle that might refer the governance or the
construction of this Agreement to the Law of another jurisdiction. In the event
of a direct conflict between the provisions of this Agreement and any mandatory,
non-waivable provision of the Act, such provision of the Act shall control.
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NRG CENTRAL U.S. LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
-----------------------------
Title: President
-----------------------------
SOUTH CENTRAL GENERATION HOLDING LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
-----------------------------
Title: President
-----------------------------
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Exhibit A
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Member Capital Contribution Number of Units Percentage
Ownership
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NRG Central U.S. LLC $500.00 500 50.0%
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South Central Generation $500.00 500 50.0%
Holding LLC
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