EXHIBIT 4.1
LIMITED LIABILITY COMPANY AGREEMENT
OF
RELIANT ENERGY TRANSITION BOND COMPANY LLC
Effective as of November 10, 1999
TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS............................................................... 1
ARTICLE II
FORMATION OF THE COMPANY.................................................. 2
2.1 Formation........................................................... 2
2.2 Name................................................................ 3
2.3 Place of Business................................................... 3
2.4 Registered Office and Registered Agent.............................. 3
2.5 Term................................................................ 3
2.6 Purpose of the Company.............................................. 3
ARTICLE III
INITIAL MEMBER............................................................ 3
ARTICLE IV
CAPITAL OF THE COMPANY.................................................... 3
4.1 Common Shares and Initial Contributions............................. 3
4.2 Additional Contributions............................................ 4
4.3 Additional Issuances of Common Shares............................... 4
4.4 Record of Contributions............................................. 4
4.5 No Fractional Common Shares......................................... 4
4.6 Interest............................................................ 4
4.7 Loans from Members.................................................. 5
4.8 Withdrawal or Reduction of Members' Capital Contributions........... 5
4.9 Loans to Company.................................................... 5
4.10 Borrowing........................................................... 5
4.11 No Further Obligation............................................... 5
ARTICLE V
RIGHTS AND OBLIGATIONS OF MEMBERS......................................... 5
5.1 Limitation of Members' Responsibility, Liability.................... 5
5.2 Return of Distributions............................................. 6
5.3 Priority and Return of Capital...................................... 6
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ARTICLE VI
MEETINGS OF MEMBERS; AMENDMENTS........................................... 6
6.1 Meetings............................................................ 6
6.2 Place of Meetings................................................... 6
6.3 Notice of Meetings.................................................. 6
6.4 Meeting of All Members.............................................. 6
6.5 Record Date......................................................... 6
6.6 Quorum.............................................................. 6
6.7 Manner of Acting.................................................... 7
6.8 Proxies............................................................. 7
6.9 Action by Members Without a Meeting................................. 7
6.10 Waiver of Notice.................................................... 7
6.11 Special Prohibitions and Limitations................................ 7
6.12 Amendments to be Adopted Solely by the Managers..................... 8
6.13 Amendments.......................................................... 8
ARTICLE VII
RIGHTS AND DUTIES OF MANAGERS............................................. 9
7.1 Management.......................................................... 9
7.2 Number and Qualifications........................................... 9
7.3 Powers of the Managers.............................................. 9
7.4 Initial Manager..................................................... 9
7.5 Place of Meetings................................................... 9
7.6 Meetings of Managers................................................ 9
7.7 Quorum.............................................................. 9
7.8 Attendance and Waiver of Notice..................................... 10
7.9 Action by Managers Without a Meeting................................ 10
7.10 Compensation of Managers............................................ 10
7.11 Committees.......................................................... 10
7.12 Liability of Managers............................................... 10
7.13 Officers............................................................ 11
ARTICLE VIII
INDEMNIFICATION........................................................... 11
8.1 Indemnification..................................................... 11
8.2 Power to Indemnify in Actions, Suits or Proceedings Other Than
Those by or in the Right of the Company........................... 11
8.3 Power to Indemnify in Actions, Suits or Proceedings by or in the
Right of the Company.............................................. 12
8.4 Good Faith Defined.................................................. 12
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8.5 Advancement or Reimbursement of Expenses............................ 12
8.6 Nonexclusivity and Survival of Indemnification...................... 13
8.7 Insurance........................................................... 13
8.8 Interested Party Transactions....................................... 13
ARTICLE IX
ISSUANCE OF CERTIFICATES.................................................. 14
9.1 Issuance of Certificates............................................ 14
9.2 Lost, Stolen or Destroyed Certificates.............................. 14
9.3 Registered Owners................................................... 14
ARTICLE X
ALLOCATIONS AND DISTRIBUTIONS............................................. 15
10.1 Allocations......................................................... 15
10.2 Distributions....................................................... 15
ARTICLE XI
ACCOUNTING PERIOD, RECORDS AND REPORTS.................................... 15
11.1 Accounting Period................................................... 15
11.2 Records, Audits and Reports......................................... 15
11.3 Inspection.......................................................... 15
ARTICLE XII
TAX MATTERS............................................................... 15
12.1 Tax Returns and Elections........................................... 15
12.2 State, Local or Foreign Income Taxes................................ 15
12.3 Assignments and Issuance of Additional Common Shares................ 16
ARTICLE XIII
RESTRICTIONS ON TRANSFERABILITY; ADMISSION OF SUBSTITUTE MEMBERS.......... 16
13.1 Generally........................................................... 16
13.2 Restriction on Transfer............................................. 16
13.3 Substituted Members................................................. 16
ARTICLE XIV
DISSOLUTION AND TERMINATION............................................... 17
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14.1 Dissolution......................................................... 17
14.2 Effect of Dissolution............................................... 17
14.3 Winding Up, Liquidating and Distribution of Assets.................. 17
14.4 Certificate of Cancellation......................................... 18
14.5 Return of Contribution Non-recourse to Other Members................ 18
ARTICLE XV
MISCELLANEOUS PROVISIONS.................................................. 18
15.1 Notices............................................................. 18
15.2 Books of Account and Records........................................ 19
15.3 Application of Delaware Law......................................... 19
15.4 Waiver of Action for Partition...................................... 19
15.5 Execution of Additional Instruments................................. 19
15.6 Headings............................................................ 19
15.7 Waivers............................................................. 19
15.8 Rights and Remedies Cumulative...................................... 19
15.9 Severability........................................................ 19
15.10 Heirs, Successors and Assigns....................................... 20
15.11 Creditors........................................................... 20
15.12 Counterparts........................................................ 20
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LIMITED LIABILITY COMPANY AGREEMENT
This Limited Liability Company Agreement (this "Agreement") is made
and executed to be effective as of November 10, 1999, by Reliant Energy,
Incorporated, a Texas corporation.
WHEREAS, a certificate of formation of Reliant Energy Transition Bond
Company LLC (the "Company"), has been filed with the Secretary of State of the
State of Delaware; and
WHEREAS, it is desired that the orderly management of the affairs of
the Company be provided for;
NOW, THEREFORE, it is agreed as follows:
ARTICLE I
DEFINITIONS
The following terms used in this Agreement shall have the following
meanings (unless otherwise expressly provided herein):
"Additional Member" shall mean any Person admitted to the Company as
an Additional Member pursuant to Section 4.3 of this Agreement.
"Affiliate," with respect to a specified Person, shall mean a Person
that directly, or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, the Person specified. For
purposes of this definition, "control" shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
"Agreement" shall mean this Agreement as originally executed and
as it may be amended from time to time hereafter.
"Capital Contribution" shall mean any contribution to the capital of
the Company in cash or property by a Member whenever made. "Initial Capital
Contribution" shall mean the initial Capital Contribution by a Member pursuant
to Section 4.1(b) of this Agreement.
"Capital Percentage" shall mean a Member's ownership interest in the
Company expressed as a percentage of the total Common Shares issued and
outstanding.
"Certificate of Formation" shall mean the Certificate of Formation of
the Company filed with and endorsed by the Secretary of State of the State of
Delaware, as such certificate may be amended from time to time hereafter.
"Code" shall mean the Internal Revenue Code of 1986, as amended, or
corresponding provisions of subsequent superseding federal revenue laws.
"Common Share" shall mean an undivided portion of all of the rights,
duties, obligations and ownership interests in the Company.
"Delaware Act" shall mean the Delaware Limited Liability Company Act,
as the same may be amended from time to time hereafter.
"Entity" shall mean any foreign or domestic general partnership,
limited partnership, limited liability company, corporation, joint enterprise,
trust, business trust, employee benefit plan, cooperative or association.
"Fiscal Year" shall mean the Company's fiscal year, which shall be
determined by the Managers in accordance with Section 706(b) of the Code.
"Manager" shall mean any of the managers of the Company duly appointed
or elected to serve in such capacity under Delaware law and this Agreement.
"Member" shall mean each Person who executes a counterpart of this
Agreement as a Member and each Person who may hereafter become an Additional
Member pursuant to Section 4.3 or a Substituted Member pursuant to Section 13.3;
but shall not include any Member that ceases to be a Member.
"Person" shall mean any individual or Entity, and any heir, executor,
administrator, legal representative, successor or assign of such "Person" where
the context so admits.
"Requisite Interest" shall mean the Members holding more than 50% of
the issued and outstanding Common Shares held by Members at any given time.
"Substituted Member" shall mean any transferee or assignee of Common
Shares that is admitted to the Company as a Member pursuant to Section 13.3.
ARTICLE II
FORMATION OF THE COMPANY
2.1 Formation. On November 10, 1999, the Certificate of Formation of
the Company was filed with the Secretary of State of the State of Delaware
pursuant to the Delaware Act.
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2.2 Name. The name of the Company is Reliant Energy Transition Bond
Company LLC. If the Company shall conduct business in any jurisdiction other
than the State of Delaware, it shall register the Company or its trade name with
the appropriate authorities in such state in order to have the legal existence
of the Company recognized.
2.3 Place of Business. The Company may locate its places of business
and registered office at any place or places as the Managers may from time to
time deem advisable.
2.4 Registered Office and Registered Agent. The Company's registered
office shall be at the office of its registered agent at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and the name of its initial registered agent at such
address shall be The Corporation Trust Company.
2.5 Term. The Company and this Agreement shall continue until the
earliest of (a) such time as all of the Company's assets have been sold or
otherwise disposed of, (b) such time as the Company's existence has been
terminated as otherwise provided herein or in the Delaware Act, or (c) 30 years
from the date hereof.
2.6 Purpose of the Company. The purpose of the Company shall be to
do any or all things that may lawfully be done by a limited liability company
pursuant to the Delaware Act. The Company shall have any and all powers
necessary or desirable to carry out the purpose and business of the Company to
the extent the same may be legally exercised by limited liability companies
under the Delaware Act. The Company shall carry out the foregoing activities
pursuant to the Certificate of Formation and this Agreement.
ARTICLE III
INITIAL MEMBER
The name and place of business of the initial Member (the "Initial
Member") is as follows:
Reliant Energy, Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
ARTICLE IV
CAPITAL OF THE COMPANY
4.1 Common Shares and Initial Contributions.
(a) A class of equity interests denominated the "Common Shares"
is hereby designated as the sole class of equity interests of the Company. Each
issued and outstanding
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Common Share shall at any time represent that undivided portion of all of the
rights, duties, obligations and ownership interests in the Company in proportion
to the total number of Common Shares outstanding at such time.
(b) The Company will issue to the Initial Member 1,000 Common
Shares upon payment of $1,000 to the Company from the Initial Member, which
shall be deemed to be the "Initial Capital Contribution" of the Initial Member.
Upon receipt of the Initial Capital Contribution and issuance of said 1,000
Common Shares, such Common Shares shall be validly issued and outstanding, fully
paid and nonassessable.
4.2 Additional Contributions. No Member shall be required to make
additional Capital Contributions unless, and except on such terms as, the
Managers and Members unanimously agree.
4.3 Additional Issuances of Common Shares
(a) In the event of any additional Capital Contributions, and in
order to raise additional capital or to acquire assets, to redeem or retire
Company debt or for any other purpose, the Company is authorized to issue Common
Shares from time to time to Members or to other Persons, subject to the approval
of the Requisite Interest. The Company may assume liabilities in connection with
any such issuance. The Managers shall determine the consideration and terms and
conditions with respect to any such issuance of Common Shares. The Managers
shall do all things necessary to comply with the Delaware Act and are authorized
and directed to do all things they deem to be necessary or advisable in
connection with any such issuance, including, without limitation, compliance
with any statute, rule, regulation or guideline of any federal, state or other
governmental agency.
(b) Upon (i) the execution and delivery to the Company of this
Agreement, as it may be amended, by any Person who is issued any Common Shares,
(ii) receipt by the Company of any Capital Contribution required of such Person
made in connection with the issuance of Common Shares, (iii) consent by all
other Members to such Person being admitted as an Additional Member and (iv) any
other action required by Delaware law, such Person shall be admitted as an
Additional Member of the Company.
4.4 Record of Contributions. The books and records of the Company
shall include true and full information regarding the amount of cash and cash
equivalents and designation and statement of the value of any other property
contributed by each Member to the Company.
4.5 No Fractional Common Shares. No fractional Common Shares shall
be issued by the Company unless otherwise determined by the Managers; instead,
each fractional Common Share shall be rounded to the nearest whole Common Share.
4.6 Interest. No interest shall be paid by the Company on Capital
Contributions.
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4.7 Loans from Members. Loans by a Member to the Company shall not
be considered Capital Contributions.
4.8 Withdrawal or Reduction of Members' Capital Contributions.
(a) A Member shall not be entitled to withdraw any part of his
Capital Contribution or to receive any distribution from the Company, except as
otherwise provided in this Agreement.
(b) A Member shall not receive out of the Company's property any
part of his Capital Contributions until all liabilities of the Company, except
liabilities to Members on account of their Capital Contributions, have been paid
or there remains property of the Company sufficient to pay them.
(c) A Member, irrespective of the nature of his Capital
Contribution, has only the right to demand and receive cash in return for his
Capital Contribution.
4.9 Loans to Company. Nothing in this Agreement shall prevent any
Member from making secured or unsecured loans to the Company by agreement with
the Company.
4.10 Borrowing. In the event that the Company, in order to discharge
costs, expenses or indebtedness, requires funds in excess of the funds provided
by Capital Contributions of the Members and by revenues, the Managers shall be
authorized, at any time and from time to time, to cause the Company to borrow
additional funds, as shall in the judgment of the Managers be sufficient for
such purposes and upon such terms as the Managers may deem advisable.
4.11 No Further Obligation. Except as expressly provided for in or
contemplated by this Article IV, no Member shall have any obligation to provide
funds to the Company, whether by Capital Contributions, loans, return of monies
received pursuant to the terms of this Agreement or otherwise.
ARTICLE V
RIGHTS AND OBLIGATIONS OF MEMBERS
5.1 Limitation of Members' Responsibility, Liability. The Members
shall not perform any act on behalf of the Company, incur any expense,
obligation or indebtedness of any nature on behalf of the Company, or in any
manner participate in the management of the Company or receive or be credited
with any amounts, except as specifically contemplated hereunder. The Members
shall not be personally liable for any amount in excess of their respective
Capital Contributions, and shall not be liable for any of the debts or losses of
the Company, except to the extent that a liability of the Company is founded
upon or results from an unauthorized act or activity of such Member. In
addition, each Member's liability shall be limited as set forth in the Delaware
Act and other applicable law hereafter in effect.
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5.2 Return of Distributions. In accordance with Section 18-607 of
the Delaware Act, a Member will be obligated to return any distribution from the
Company only as provided by applicable law.
5.3 Priority and Return of Capital. Except as may be provided in
this Agreement, no Member shall have priority over any other Member, either as
to the return of Capital Contributions or as to profits, losses or
distributions; provided that this Section shall not apply to loans (as
distinguished from Capital Contributions) that a Member has made to the Company.
ARTICLE VI
MEETINGS OF MEMBERS; AMENDMENTS
6.1 Meetings. Meetings of the Members, for any purpose or purposes,
unless otherwise prescribed by statute, may be called by any Manager or by any
Member or group of Members holding, in the aggregate, 25% or more of the Capital
Percentage.
6.2 Place of Meetings. The Members may designate any place as the
place of meeting for any meeting of the Members. If no designation is made, the
meeting shall be held at the principal offices of the Company.
6.3 Notice of Meetings. Except as provided in Section 6.4, written
notice stating the place, day and hour of the meeting and the purpose or
purposes for which the meeting is called shall be delivered not less than ten
nor more than 60 days before the date of the meeting, either personally or by
mail, by or at the direction of the Manager or Person calling the meeting, to
each Member entitled to vote at such meeting. If mailed, such notice shall be
deemed to be delivered when deposited in the United States mail, addressed to
the Member at his address as it appears on the books of the Company, with
postage thereon prepaid. If transmitted by way of facsimile, such notice shall
be deemed to be delivered on the date of such facsimile transmission to the fax
number, if any, for the respective Member that has been supplied by such Member
to the Manager and identified as such Member's facsimile number.
6.4 Meeting of All Members. If all of the Members shall meet at any
time and place and consent to the holding of a meeting at such time and place,
such meeting shall be valid without call or notice, and at such meeting lawful
action may be taken.
6.5 Record Date. For the purpose of determining Members entitled to
notice of or to vote at any meeting of Members, the Managers may set a record
date. When a determination of Members entitled to vote at any meeting of
Members has been made as provided in this Section, such determination shall
apply to any adjournment thereof.
6.6 Quorum. Members holding at least a majority of Common Shares
entitled to vote, represented in person or by proxy, shall constitute a quorum
at any meeting of Members.
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In the absence of a quorum at any such meeting, Members holding a majority of
such Common Shares so represented may adjourn the meeting from time to time for
a period not to exceed 60 days without further notice. However, if the
adjournment is for more than 60 days, or if after the adjournment a new record
date is fixed for the adjourned meeting, a notice of the adjourned meeting shall
be given to each Member of record entitled to vote at the meeting.
At such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted that might have been transacted at
the meeting as originally noticed. The Members present at a duly organized
meeting may continue to transact business until adjournment, notwithstanding the
withdrawal during such meeting of Members holding that number of Common Shares
whose absence would cause less than a quorum.
6.7 Manner of Acting. If a quorum is present, the affirmative vote
of the Requisite Interest on the subject matter shall be the act of the Members,
unless the vote of a greater or lesser proportion or number is otherwise
required by the Delaware Act, by the Certificate of Formation or by this
Agreement.
6.8 Proxies. At all meetings of Members, a Member may vote in person
or by proxy executed in writing by the Member or by a duly authorized attorney-
in-fact. Such proxy shall be filed with the Managers of the Company before or
at the time of the meeting. No proxy shall be valid after 11 months from the
date of its execution, unless otherwise provided in the proxy.
6.9 Action by Members Without a Meeting. Action required or
permitted to be taken at a meeting of Members may be taken without a meeting if
the action is evidenced by one or more written consents describing the action
taken, signed by Members entitled to vote thereon holding not less than the
number of Common Shares required to approve such action and delivered to the
Managers of the Company for inclusion in the minutes or for filing with the
Company records. Action taken under this Section is effective when all Members
entitled to vote thereon holding not less than the number of Common Shares
required to approve such action have signed the consent, unless the consent
specifies a different effective date. The record date for determining Members
entitled to take action without a meeting shall be the date the first Member
signs a written consent.
6.10 Waiver of Notice. When any notice is required to be given to any
Member, a waiver thereof in writing signed by the Person entitled to such
notice, whether before, at or after the time stated therein, shall be equivalent
to the giving of such notice.
6.11 Special Prohibitions and Limitations. Without the prior approval
of the Requisite Interest, the Company shall not (i) sell, exchange or otherwise
dispose of all or substantially all of the assets of the Company outside the
ordinary course of business of the Company (provided, however, that this
provision shall not be interpreted to preclude or limit the mortgage, pledge,
hypothecation or grant of a security interest in all or substantially all of the
assets of the Company and shall not apply to any forced sale of any or all of
the assets of the Company pursuant to the foreclosure of (or in lieu of
foreclosure), or other realization upon, any such
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encumbrance), (ii) merge, consolidate or combine with any other Person, or (iii)
issue additional Common Shares.
6.12 Amendments to be Adopted Solely by the Managers. The Managers,
without the consent at the time of any Member, may amend any provision of this
Agreement and execute, swear to, acknowledge, deliver, file and record whatever
documents may be required in connection therewith, to reflect:
(a) a change in the name of the Company or the location of the
principal place of business of the Company;
(b) the admission, substitution or withdrawal of Members in
accordance with this Agreement;
(c) a change that is necessary or advisable in the opinion of the
Managers to qualify the Company as a company in which members have limited
liability under the laws of any state or other jurisdiction or to ensure that
the Company will not be treated as an association taxable as a corporation for
federal income tax purposes;
(d) a change that (i) in the sole discretion of the Managers does
not adversely affect the Members in any material respect, (ii) is necessary or
desirable to satisfy any requirements, conditions or guidelines contained in any
opinion, directive, order, ruling or regulation of any federal or state agency
or contained in any federal or state statute or (iii) is required or
contemplated by this Agreement;
(e) a change in any provision of this Agreement that requires any
action to be taken by or on behalf of the Company or the Members pursuant to the
requirements of Delaware law if the provisions of Delaware law are amended,
modified or revoked so that the taking of such action is no longer required;
provided that this Section 6.2(e) shall be applicable only if such changes are
not materially adverse to the Members;
(f) a change that is necessary or desirable in connection with
the issuance of Common Shares pursuant to Section 4.3; or
(g) any other amendments similar to the foregoing.
Each Member hereby appoints each Manager as its attorney-in-fact to
execute any amendment permitted by this Section 6.12.
6.13 Amendments. A proposed amendment to this Agreement (other than
one permitted by Section 6.12) shall be effective upon its adoption by Members
holding in excess of 80% of the issued and outstanding Common Shares at such
time. The Company shall notify all Members upon final adoption or rejection of
any proposed amendment to this Agreement.
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ARTICLE VII
RIGHTS AND DUTIES OF MANAGERS
7.1 Management. The powers of the Company shall be exercised by or
under the authority of, and the business and affairs of the Company shall be
managed under, its Managers. In addition to the powers and authorities
expressly conferred by this Agreement upon the Managers, the Managers may
exercise all such powers of the Company and do all such lawful acts and things
as are not directed or required to be exercised or done by the Members by the
Delaware Act, the Certificate of Formation of the Company or this Agreement.
7.2 Number and Qualifications. The number of Managers of the Company
shall initially be one; but the number of Managers may be changed by unanimous
agreement of the Members. Managers need not be residents of the State of
Delaware or Members of the Company. The Managers, in their discretion, may elect
a chairman of the Managers who shall preside at any meetings of the Managers.
7.3 Powers of the Managers. Without limiting the generality of
Section 7.1, the Managers shall have power and authority, acting in concert in
accordance with this Agreement, to cause the Company to do and perform all acts
as may be necessary or appropriate to the conduct of the Company's business.
7.4 Initial Manager. The initial Manager shall be ▇▇▇▇ ▇▇▇▇▇▇▇▇.
The Members shall have the right to take action pursuant to a meeting of the
Members or unanimous written consent of the Members to designate one or more
Managers and to remove, replace or fill any vacancy occurring for any reason of
any Manager.
7.5 Place of Meetings. All meetings of the Managers of the Company
or committees thereof may be held either within or without the State of
Delaware. Any Manager may participate in a meeting by means of conference
telephone or similar equipment, and participation by such means shall constitute
presence in person at the meeting.
7.6 Meetings of Managers. Meetings of the Managers may be called by
any Manager on two days' notice to each Manager, either personally or by mail,
telephone or telegram.
7.7 Quorum. At all meetings of the Managers, the presence of a
majority of the Managers shall be necessary and sufficient to constitute a
quorum for the transaction of business unless a greater number is required by
law. The act of a majority of the Managers present at a meeting at which a
quorum is present shall be the act of the Managers, except as otherwise provided
by law, Certificate of Formation or this Agreement. If a quorum shall not be
present at any meeting of the Managers, the Managers present at the meeting may
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present.
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7.8 Attendance and Waiver of Notice. Attendance of a Manager at any
meeting shall constitute a waiver of notice of such meeting, except where a
Manager attends a meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened. Neither the business to be transacted at, nor the purpose
of, any regular or special meeting of the Managers need be specified in the
notice or waiver of notice of such meeting.
7.9 Action by Managers Without a Meeting. Action required or
permitted to be taken at a meeting of Managers may be taken without a meeting if
the action is evidenced by one or more written consents describing the action
taken, signed by a majority of the Managers and included in the Company minutes
or records. Action taken under this Section is effective when a majority of the
Managers have signed the consent, unless the consent specifies a different
effective date. The record date for determining Managers entitled to take
action without a meeting shall be the date the first Manager signs a written
consent.
7.10 Compensation of Managers. Managers, as such, shall not receive
any stated salary for their services, but shall receive such compensation for
their services as may be from time to time approved by the Members, provided
that nothing contained in this Agreement shall preclude any Manager from serving
the Company in any other capacity and receiving compensation for service. In
addition, a fixed sum and expenses of attendance, if any, may be allowed for
attendance at each meeting of the Managers.
7.11 Committees. The Managers may, by resolution, designate from
among the Managers one or more committees, each of which shall be comprised of
one or more Managers, and may designate one or more of the Managers as alternate
members of any committee, who may, subject to any limitations imposed by the
Managers, replace absent or disqualified Managers at any meeting of that
committee. Such committee shall have and may exercise all of the authority of
the Managers, subject to the limitations set forth in this Agreement and under
the Delaware Act.
7.12 Liability of Managers. A Manager shall not be liable under any
judgment, decree or order of a court, or in any other manner, for any debt,
obligation or liability of the Company by reason of his acting as a Manager of
the Company. A Manager of the Company shall not be personally liable to the
Company or its Members for monetary damages for breach of fiduciary duty as a
Manager, except for liability for any acts or omissions that involve intentional
misconduct, fraud or a knowing violation of law or for a distribution in
violation of Delaware law as a result of the willful or grossly negligent act or
omission of the Manager. If the laws of the State of Delaware are amended after
the date of this Agreement to authorize action further eliminating or limiting
the personal liability of Managers, then the liability of a Manager of the
Company, in addition to the limitation on personal liability provided herein,
shall be limited to the fullest extent permitted by the amended laws of the
State of Delaware. Any repeal or modification of this Section 7.12 by the
Members of the Company shall be prospective only, and shall not adversely affect
any limitation on the personal liability of a Manager of the Company existing at
the time of such repeal or modification or thereafter arising as a result of
acts or omissions prior to the time of such repeal or modification.
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7.13 Officers. The Managers of the Company may elect the officers of
the Company, who shall hold offices specified by the Managers for such terms and
shall exercise such powers and perform such duties as shall be determined from
time to time by the Managers; and each officer of the Company shall hold office
until his successor is chosen and qualified or until his earlier resignation or
removal. Any officer elected by the Managers may be removed at any time by the
affirmative vote of the Managers. Any vacancy occurring in any office of the
Company may be filled by the unanimous agreement of the Managers. The salaries
of all officers of the Company shall be fixed by the Managers but must be
approved by the Members.
ARTICLE VIII
INDEMNIFICATION
8.1 Indemnification. Each Person who at any time shall be, or shall
have been, a Member, Manager or officer of the Company, or any Person who, while
a Member, Manager, officer, employee or agent of the Company, is or was serving
at the request of the Company as a director, member, manager, officer, partner,
venturer, proprietor, trustee, employee, agent or similar functionary of an
Entity, shall be entitled to indemnification as and to the fullest extent
permitted by the provisions of Delaware law or any successor statutory
provisions, as from time to time amended. The foregoing right of
indemnification shall not be deemed exclusive of any other rights to which one
to be indemnified may be entitled as a matter of law or under this Agreement,
any other agreement, by vote of the Members or disinterested Managers or
otherwise, both as to any action in an official capacity and as to action in
another capacity while holding such office. Any repeal of this Section 8.1
shall be prospective only, and shall not adversely affect any right of
indemnification existing at the time of such repeal or modification or
thereafter arising as a result of acts or omissions prior to the time of such
repeal or modification. Any Person entitled to indemnification in accordance
with this Section 8.1 shall hereinafter be referred to as an "Indemnitee." If
any provision or provisions of this Agreement relating to indemnification shall
be held to be invalid, illegal or unenforceable for any reason whatsoever, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby; and, to the fullest extent possible,
the provisions of this Agreement shall be construed so as to give effect to the
intent manifested by the provision held invalid, illegal or unenforceable,
including, without limitation, by allowing indemnification by vote of the
Members or Managers or the disinterested minority thereof.
8.2 Power to Indemnify in Actions, Suits or Proceedings Other Than
Those by or in the Right of the Company. Without limiting the provisions of
Section 8.1, the Company may indemnify an Indemnitee who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Company) by reason of the fact
that the Indemnitee is or was a Member or Manager or officer of the Company,
or is or was serving at the request of the Company as a director, member,
manager, officer, employment or agent of an Entity, against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by the Indemnitee in connection with such action, suit or
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proceeding if the Indemnitee acted in good faith and in a manner the Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe the Indemnitee's conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the Indemnitee did not act in good faith and
in a manner that the Indemnitee reasonably believed to be in or not opposed to
the best interests of the Company, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that the Indemnitee's conduct was
unlawful.
8.3 Power to Indemnify in Actions, Suits or Proceedings by or in the
Right of the Company. Without limiting the provisions of Section 8.1, the
Company may indemnify an Indemnitee who was or is a party or is threatened to be
made a party to any threatened, pending or completed action or suit by or in the
right of the Company to procure a judgment in its favor by reason of the fact
that the Indemnitee is or was a Member or Manager or officer of the Company, or
is or was serving at the request of the Company as a director, member, manager,
officer, employee or agent of an Entity against expenses (including attorneys'
fees) actually and reasonably incurred by the Indemnitee in connection with the
defense or settlement of such action or suit if the Indemnitee acted in good
faith and in a manner the Indemnitee reasonably believed to be in or not opposed
to the best interests of the Company; except that no indemnification shall be
made in respect of any claim, issue or matter as to which the Indemnitee shall
have been adjudged to be liable to the Company unless and only to the extent
that the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, the Indemnitee is fairly and reasonably entitled to
indemnification for such expenses that the court shall deem proper.
8.4 Good Faith Defined. For purposes of any determination under this
Article VIII, a Person shall be deemed to have acted in good faith and in a
manner such Person reasonably believed to be in or not opposed to the best
interests of the Company, or, with respect to any criminal action or proceeding,
to have had no reasonable cause to believe such Person's conduct was unlawful,
if such Person's action is based upon the records of the Company and upon such
information, opinions, reports or statements presented to the Company by any of
the Members, Managers, officers, employees or committees of the Company or by
any other Person as to matters the Person reasonably believes are within such
other Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Company, including information, opinions,
reports or statements as to the value and amount of assets, liabilities, profits
or losses of the Company or any other facts pertinent to the existence and
amount of assets from which distributions to the Members might properly be paid.
The provisions of this Section 8.4 shall not be deemed to be exclusive or to
limit in any way the circumstances in which a Person may be deemed to have met
the applicable standards of conduct set forth in the provisions of the Delaware
Act, or in Section 8.2 or Section 8.3, as the case may be.
8.5 Advancement or Reimbursement of Expenses. The Company may pay in
advance or reimburse expenses actually or reasonably incurred or anticipated by
an Indemnitee in connection with an appearance as a witness or other
participation in a proceeding whether or not
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such Indemnitee is a named defendant or a respondent in the proceeding. To
obtain reimbursement or an expense advance, the requesting Person shall submit
to the Company a written request with such information as is reasonably
available. If the expense advance is to be paid prior to final disposition of
the proceeding, there shall be included a written statement of such Person's
good faith belief that such indemnification is appropriate under the
circumstances and, if such Person is not a Member or Manager, that such Person
has met the necessary standard of conduct under Section 8.2 or Section 8.3 as
applicable or otherwise has met any applicable standard of conduct under the
Delaware Act and an undertaking to repay any amount paid if it is ultimately
determined that those conduct requirements were not met. Upon receipt of the
request, the Managers and Members (by unanimous agreement), shall determine
whether such Person is entitled to such reimbursement or an expense advance. If
the request is rejected, the Company shall notify such Person of the reason
therefor. If, within sixty days of the Company's receipt of the request, the
request for payment is not acted on, such Person shall have the right to an
adjudication in any court of competent jurisdiction of such Person's entitlement
to such indemnification or expense advance.
8.6 Nonexclusivity and Survival of Indemnification. The
indemnification and advancement of expenses provided by, or granted pursuant to,
the other subsections of this Article VIII shall not be deemed exclusive of any
other rights to which one seeking indemnification and advancement of expenses
may be entitled under this Agreement, any other agreement, by vote of the
disinterested Members or Managers or otherwise, both as to action in an official
capacity and as to action in any other capacity while holding such office, it
being the policy of the Company that, if the Managers and Members unanimously
approve, indemnification specified in this Article VIII shall be made to the
fullest extent permitted by law. The provisions of this Article VIII shall not
be deemed to preclude the indemnification of any Person who is not specified in
this Article VIII but whom the Company has the power or obligation to indemnify
under the provisions of the Delaware Act or otherwise.
8.7 Insurance. The Company may purchase and maintain insurance on
behalf of any Person who is or was a Member, Manager, officer, employee or agent
of the Company, or is or was serving at the request of the Company as a member,
manager, director, officer, employee or agent of an Entity against any liability
asserted against and incurred by such Person in any such capacity or arising out
of such Person's status as such, whether or not the Company would have the power
or the obligation to indemnify such Person against such liability under the
provisions of this Article VIII.
8.8 Interested Party Transactions. Without limiting the generality
of any other provision hereof, the Company may (except as otherwise specifically
provided for in this Agreement) enter into any contract, arrangement or
transaction between the Company and one or more Members, Managers or officers,
or between the Company and an Entity that is an Affiliate of one or more Members
or officers or in which a Member, Manager or officer has an interest or serves
as a director, member, manager, officer, partner, venturer, proprietor, trustee,
employee, agent or similar functionary and such contract, arrangement or
transaction shall not, because of such interest by or position of a Member,
Manager or officer, be void or voidable nor impose on any such Person any burden
or obligation to show the fairness of the contract, arrangement or transaction,
but shall
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instead be accorded the same treatment as a contract, arrangement or
understanding between the Company and an unrelated party.
ARTICLE IX
ISSUANCE OF CERTIFICATES
9.1 Issuance of Certificates. Upon the issuance of Common Shares,
the Company shall issue one or more certificates representing such Common Shares
(each a "Certificate") in the name of the Members owning such Common Shares.
Upon the transfer of a Common Share, the Company shall issue replacement
Certificates according to such procedures as the Company may reasonably
establish.
9.2 Lost, Stolen or Destroyed Certificates. The Company shall issue
a new Certificate in place of any Certificate previously issued if the
registered owner of the Certificate:
(a) makes proof by affidavit, in form and substance satisfactory
to the Company, that a previously issued Certificate has been lost, destroyed or
stolen;
(b) requests the issuance of a new Certificate before the Company
has notice that the Certificate has been acquired by a purchaser for value in
good faith and without notice of an adverse claim;
(c) if requested by the Company, delivers to the Company a bond,
in form and substance satisfactory to the Company, with such surety or sureties
and with fixed or open penalty as the Company may direct to indemnify the
Company against any claim that may be made on account of the alleged loss,
destruction or theft of the Certificate; and
(d) satisfies any other reasonable requirements imposed by the
Company.
When a Certificate has been lost, destroyed or stolen, and the Member fails to
notify the Company within a reasonable time after he has notice of it, and a
transfer of the Common Shares represented by the Certificate is registered
before the Company receives such notification, the Member shall be precluded
from making any claim against the Company for such transfer or for a new
Certificate.
9.3 Registered Owners. The Company shall be entitled to treat the
registered owner of any Common Shares as the Person that owns such Common Shares
and, accordingly, shall not be bound to recognize any equitable or other claim
to or interest in such Common Shares on the part of any other Person, regardless
of whether it shall have actual or other notice thereof, except as otherwise
provided by law.
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ARTICLE X
ALLOCATIONS AND DISTRIBUTIONS
10.1 Allocations. Except as may otherwise be unanimously agreed by
the Managers with the consent of the Members, all items of income, gain, loss,
deduction, and credit of the Company shall be allocated among the Members in
accordance with their Capital Percentages.
10.2 Distributions. From time to time the Managers by unanimous
agreement may determine to what extent (if any) the Company's cash on hand
exceeds its current and anticipated needs, including, without limitation, for
operating expenses, debt service, acquisitions, and a reasonable contingency
reserve, and if such an excess exists, cause the Company to distribute to the
Members, in accordance with their Capital Percentages (or such other proportions
as all of the Managers may agree, with the consent of the Members) an amount in
cash equal to that excess.
ARTICLE XI
ACCOUNTING PERIOD, RECORDS AND REPORTS
11.1 Accounting Period. The Company's accounting period shall be the
Fiscal Year.
11.2 Records, Audits and Reports. At the expense of the Company, the
Managers shall maintain records and accounts of all operations and expenditures
of the Company.
11.3 Inspection. The books and records of the Company shall be
maintained at the principal place of business of the Company and shall be open
to inspection by the Members at all reasonable times during any business day.
ARTICLE XII
TAX MATTERS
12.1 Tax Returns and Elections. The Managers or their designees shall
cause the preparation and timely filing of all tax returns required to be filed
by the Company pursuant to the Code and all other tax returns that the Managers
or their designees deem necessary and are required to be filed by the Company.
Copies of such returns, or pertinent information therefrom, shall be furnished
to the Members as promptly as practicable after filing.
12.2 State, Local or Foreign Income Taxes. In the event state or
foreign income taxes are applicable, any references to federal income taxes or
to "income taxes" contained herein shall refer to federal, state, local and
foreign income taxes. References to the Code or Treasury
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Regulations shall be deemed to refer to corresponding provisions that may become
applicable under state, local or foreign income tax statutes and regulations.
12.3 Assignments and Issuance of Additional Common Shares. The
Company shall allocate taxable items attributable to a Common Share that is
assigned or newly issued during a Fiscal Year between the assignor and the
assignee of such Common Share or the existing Members and the new Members by
closing the books of the Company as of the end of the day prior to the day in
which such Common Shares are assigned or issued.
ARTICLE XIII
RESTRICTIONS ON TRANSFERABILITY;
ADMISSION OF SUBSTITUTE MEMBERS
13.1 Generally.
(a) All Common Shares at any time and from time to time
outstanding shall be held subject to the conditions and restrictions set forth
in this Article, which conditions and restrictions shall apply equally to the
Members and their respective transferees (except as otherwise expressly stated),
and each Member by executing this Agreement or by accepting a Certificate or
other indicia of ownership therefor from the Company agrees with the Company and
with each other Member to such conditions and restrictions. Without limiting the
generality of the foregoing, the Company shall require as a condition to the
transfer of record ownership of Common Shares that the transferee of such Common
Shares execute and deliver this Agreement as evidence that such Common Shares
are held subject to the terms, conditions and restrictions set forth herein.
(b) The personal representative (or other successor-in-interest)
of a deceased Member shall, subject to the provisions of this Article XIII,
succeed to the deceased Member's interest in the Company. However, such personal
representative (or other successor in interest) shall not be entitled to be
admitted as a Member unless the conditions specified in this Article XIII are
met.
13.2 Restriction on Transfer. No Common Shares shall be sold,
assigned, given, transferred, exchanged, devised, bequeathed, pledged or
otherwise disposed of to any Person except in accordance with the terms of this
Agreement. All Certificates shall contain conspicuous notation on such
Certificate indicating that the transfer of such Common Shares is subject to the
terms and restrictions of this Agreement, and each Member consents to the
placement of such legend on the Certificate or Certificates representing the
Common Shares owned by such Member.
13.3 Substituted Members. Any Person that acquires any Common Shares
that is not already a Member shall not have the right to participate in the
management of the business and affairs of the Company, to vote such Common
Shares, or to become a Member of
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the Company unless the Members of the Company unanimously consent to such Person
becoming a Member of the Company. If such Person is not admitted as a Member of
the Company, such Person only is entitled to receive the share of profits,
distributions, and allocations of income, gain, loss, deduction, credit, or
similar item to which the Person would be entitled if such Person were a Member
of the Company.
ARTICLE XIV
DISSOLUTION AND TERMINATION
14.1 Dissolution. The Company shall dissolve upon the occurrence of
any of the following events:
(i) when the period fixed for the duration of the Company
shall expire;
(ii) if the Members so agree in writing;
(iii) if the Requisite Interest votes to dissolve the Company;
or
(iv) as otherwise provided under Delaware law.
14.2 Effect of Dissolution. Upon the occurrence of any of the events
specified in this Article effecting the dissolution of the Company, the Company
shall cease to carry on its business, except insofar as may be necessary for the
winding up of its business, but its separate existence shall continue until a
certificate of cancellation has been issued by the Secretary of State of the
State of Delaware or until a decree dissolving the Company has been entered by a
court of competent jurisdiction.
14.3 Winding Up, Liquidating and Distribution of Assets.
(a) Upon dissolution, an accounting shall be made of the
accounts of the Company and of the Company's assets, liabilities and operations,
from the date of the last previous accounting until the date of dissolution. The
Managers shall immediately proceed to wind up the affairs of the Company.
(b) If the Company is dissolved and its affairs are to be wound
up, the Managers shall (1) sell or otherwise liquidate all of the Company's
assets as promptly as practicable (except to the extent the Managers may
determine to distribute any assets in kind to the Members), (2) allocate any
income or loss resulting from such sales to the Members in accordance with this
Agreement, (3) discharge all liabilities to creditors in the order of priority
as provided by law, (4) discharge all liabilities of the Members (other than
liabilities to Members or for Capital Contributions to the extent unpaid in
breach of an obligation to do so), including all costs relating to the
dissolution, winding up and liquidation and distribution of assets, (5)
establish such reserves as the Managers may determine to be reasonably necessary
to provide for contingent liabilities of
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the Company, (6) discharge any liabilities of the Company to the Members other
than on account of their interests in Company capital or profits and (7)
distribute the remaining assets to the Members, either in cash or in kind, as
determined by the Managers, pro rata according to the relative number of Common
Shares held by each. If any assets of the Company are to be distributed in kind,
the net fair market value of such assets as of the date of dissolution shall be
determined by independent appraisal or by agreement of the Managers.
(c) Notwithstanding anything to the contrary in this Agreement,
upon a liquidation of the Company no Member shall have any obligation to make
any contribution to the capital of the Company other than any Capital
Contributions such Member agreed to make in accordance with this Agreement.
(d) Upon completion of the winding up, liquidation and
distribution of the assets, the Company shall be deemed terminated.
(e) The Managers shall comply with any applicable requirements
of applicable law pertaining to the winding up of the affairs of the Company and
the final distribution of its assets.
14.4 Certificate of Cancellation. When all debts, liabilities and
obligations have been paid and discharged or adequate provisions have been made
therefor and all of the remaining property and assets have been distributed to
the Members, a Certificate of Cancellation shall be executed in duplicate, and
verified by the person signing the Certificate of Cancellation and filed with
the Secretary of State of the State of Delaware, which Certificate shall set
forth the information required by the Delaware Act.
14.5 Return of Contribution Non-recourse to Other Members. Except as
provided by law, upon dissolution, each Member shall look solely to the assets
of the Company for the return of the Member's Capital Contribution. If the
Company property remaining after the payment or discharge of the debts and
liabilities of the Company is insufficient to return the cash or other property
contribution of one or more Members, such Member or Members shall have no
recourse against any other Member.
ARTICLE XV
MISCELLANEOUS PROVISIONS
15.1 Notices. Any notice, demand or communication required or
permitted to be given by any provision of this Agreement shall be deemed to have
been sufficiently given or served for all purposes if delivered personally to
the party or to an executive officer of the party to whom the same is directed
or if sent by registered or certified mail, postage and charges prepaid,
addressed to the Member's and/or Company's address, as appropriate, which is set
forth in this Agreement.
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If mailed, any such notice shall be deemed to be delivered two calendar days
after being deposited in the United States mail with postage thereon prepaid,
addressed and sent as aforesaid.
15.2 Books of Account and Records. Proper and complete records and
books of account in which shall be entered fully and accurately all transactions
and other matters relating to the Company's business in such detail and
completeness as is customary and usual for businesses of the type engaged in by
the Company shall be kept or shall be caused to be kept by the Company. Such
books and records shall be maintained as provided in Section 11.3. The books
and records shall at all times be maintained at the principal executive office
of the Company and shall be open to the reasonable inspection and examination of
the Members or their duly authorized representatives during reasonable business
hours.
15.3 Application of Delaware Law. This Agreement, and the application
of interpretation hereof, shall be governed exclusively by its terms and by the
laws of the State of Delaware, and specifically the Delaware Act.
15.4 Waiver of Action for Partition. Each Member irrevocably waives,
during the term of the Company, any right that such Member may have to maintain
any action for partition with respect to the property of the Company.
15.5 Execution of Additional Instruments. Each Member hereby agrees
to execute such other and further statements of interest and holdings,
designations, powers of attorney and other instruments necessary to comply with
any laws, rules or regulations.
15.6 Headings. The headings in this Agreement are inserted for
convenience only and are in no way intended to describe, interpret, define or
limit the scope, extent or intent of this Agreement or any provision hereof.
15.7 Waivers. No waiver of any right under this Agreement shall be
effective unless evidenced in writing and executed by the Person entitled to the
benefits thereof. The failure of any party to seek redress for violation of or
to insist upon the strict performance of any covenant or condition of this
Agreement shall not prevent another act or omission, which would have originally
constituted a violation, from having the effect of an original violation.
15.8 Rights and Remedies Cumulative. The rights and remedies provided
by this Agreement are cumulative and the use of any one right or remedy by any
party shall not preclude or waive the right to use any or all other rights or
remedies. Said rights and remedies are given in addition to any other rights the
parties may have by law, statute, ordinance or otherwise.
15.9 Severability. If any provision of this Agreement or the
application thereof to any person or circumstance shall be invalid, illegal or
unenforceable to any extent, the remainder of this Agreement and the application
thereof shall not be affected and shall be enforceable to the fullest extent
permitted by law.
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15.10 Heirs, Successors and Assigns. Each and all of the covenants,
terms, provisions and agreements herein contained shall be binding upon and
inure to the benefit of the parties hereto and, to the extent permitted by this
Agreement, their respective heirs, legal representatives, successors and
assigns.
15.11 Creditors. None of the provisions of this Agreement shall be for
the benefit of or enforceable by any creditors of the Company.
15.12 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original but all of which shall constitute one
and the same instrument.
EXECUTED to be effective as of the date first above written.
RELIANT ENERGY, INCORPORATED
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇
Treasurer