EXHIBIT 13
AUTOMATED SUBSTATION DEVELOPMENT COMPANY, L.L.C.
AMENDED AND RESTATED
OPERATING AGREEMENT
THIS AMENDED AND RESTATED OPERATING AGREEMENT (the "Agreement") is
entered into as of the day of , 199 , by and among Public
Service Company of Oklahoma, an Oklahoma corporation ("PSO"), Xxxxxxx X.
Xxxxx, a natural person ("Xxxxx"), Xxxxxx X. Xxxxxxxxxx, a natural person
("Xxxxxxxxxx"), and RIKA Management Company, L.L.C., and Oklahoma limited
liability company ("Management"), collectively referred to herein as the
"Members" of Automated Substation Development Company, L.L.C., an Oklahoma
limited liability company (the "Company"), and supersedes all prior operating
agreements of the Company. In consideration of the mutual covenants and
conditions hereinafter set forth, the Members hereby agree that the terms of
the Operating Agreement governing the Company shall be as follows:
ARTICLE I
Organizational Matters
1.01 Formation. The Company has been formed as a limited liability
company pursuant to the provisions of the Act (as hereinafter defined). The
rights and obligations of the Members, the Manager designated herein, and the
affairs of the Company, shall be governed first by the mandatory provisions of
the Act, second by the Company's Articles of Organization, third by this
Agreement and fourth by the optional provisions of the Act. In the event of
any conflict among the foregoing, the conflict shall be resolved in the order
of priority set forth in the preceding sentence.
1.02 Name. The name of the Company shall be "Automated Substation
Development Company, L.L.C."
1.03 Principal Office. The principal office of the Company in the
State of Oklahoma shall be located at 0000 Xxxxx Xxxxxxxx, Xxxxx, Xxxxxxxx
00000. The name and address of the resident agent of the Company is Xxxxxxx
X. Xxxxx, 00000 X. Xxxxxx, Xxxxx, Xxxxxxxx 00000. The Company may also
maintain offices at such other place or places as the Managers deem advisable.
1.04 Term. The Company commenced upon the filing for record of the
Company's Articles of Organization with the Oklahoma Secretary of State on the
day of , 199__, and shall continue until 12:00 midnight,
December 31, 2015, unless sooner terminated as herein provided.
ARTICLE II
Definitions
2.01 Definitions. For purposes of this Agreement, the following terms
shall have the following meanings.
"Act" means the Oklahoma Limited Liability Company Act, 18 Okla. Stat.
Sec. 2000 et seq. (Supp. 1993), as it may be amended from time to time, and any
successor to such act.
"Affiliate" means any Person that directly or indirectly controls, is
controlled by, or is under common control with, such Person. As used in this
definition of "Affiliate," the term "control" means either (i) the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through ownership of voting
securities, by contract or otherwise or (ii) a direct or indirect equity
interest of ten percent (10%) or more in the entity.
"Agreement" means this Operating Agreement, as it may be amended or
supplemented from time to time.
"Articles of Organization" means the articles of organization, as
amended from time to time, filed by the Company under the Act.
"Assignee" means a Person to whom one or more Units have been
transferred, by transfer or assignment or otherwise, in a manner permitted
under this Agreement, and who has agreed to be bound by the terms of this
Agreement but who has not become a Substitute Member.
"Business Day" means Monday through Friday of each week, except legal
holidays recognized as such by the Government of the United States or the
State of Oklahoma.
"Capital Account" means each capital account maintained for a Member
pursuant to Section 4.03.
"Capital Contributions" means the sum of the total amount of cash and
the total value of property contributed or services rendered, or a promissory
note or other binding obligation to contribute cash or property or to perform
services contributed to the Company by all Members, or any one Member, as the
case may be (or the predecessor holders of any Units of any such Members).
"Capital Gain" means the Company's allocable share of gain from the
disposition by the Company of a capital asset as defined in the Code
(including any portion of such gain treated as ordinary income).
"Cash Available for Distribution" means, with respect to any period, all
cash receipts and funds received by the Company (except for Capital
Contributions) minus (i) all cash expenditures and (ii) the Company's cash
management fund representing working capital or other reserves.
"Code" means the Internal Revenue Code of 1986, as amended, as in effect
from time to time.
"Company" means the limited liability company formed by the filing of
the Company's Articles of Organization with the Oklahoma Secretary of State.
"Company Property" means all property owned, leased or acquired by the
Company from time to time.
"Disqualified Member" has the meaning specified in Section 12.01.
"Event of Default" shall have the meaning ascribed to it in the Member
Agreement.
"Event of Dissolution" has the meaning specified in Section 12.01.
"Income" and "Loss" mean an amount equal to the Company's taxable income
or loss (including capital loss) for each taxable year, determined in
accordance with Section 703(a) of the Code (for this purpose, all items of
income, gain, loss, or deduction required to be stated separately pursuant to
Section 703(a)(1) of the Code shall be included in taxable income or loss),
with the following adjustments:
(a) Any income of the Company that is exempt from federal income
tax and not otherwise taken into account in computing Income or Loss shall be
added to such Income or Loss;
(b) Any expenditures of the Company described in Section
705(a)(2)(B) of the Code or treated as Section 705(a)(2)(B) of the Code
expenditures pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(i),
and not otherwise taken into account in computing Income or Loss, shall be
subtracted from such Income or Loss; and
(c) Upon the distribution of property by the Company to a Member,
gain or loss attributable to the difference between the fair market value of
the property and its basis shall be treated as recognized.
"Majority Vote of the Members" means the affirmative vote of the holders
of a majority of the Voting Rights held by the Members.
"Managers" means the Persons designated pursuant to Article VI.
"Mandatory provisions of the Act" means those provisions of the Act
which may not be waived by the Members acting unanimously or otherwise.
"Member" means any person signing this Agreement as a Member of the
Company.
"Member Agreement" means that certain agreement between PSO, Smith,
Loudermilk, and others, of even date herewith.
"Outstanding" means the number of Units issued by the Company as shown
on the Company's books and records. The term does not include any authorized
Units not issued by the Company or any Units issued but subsequently
reacquired by the Company and held in the Company's treasury.
"Person" means a natural person, partnership, trust, estate, association
or domestic or foreign limited partnership, limited liability company, or
corporation.
"PSO Note" means the promissory note of Management in favor of PSO,
dated __________________, 1995.
"R&D Agreement" means that certain PSO Specific Software Application and
Development Agreement between PSO and Management, dated , 1995.
"Record Holder" means the Person in whose name such Unit is registered
on the books and records of the Company as of the close of business on a
particular Business Day.
"Substitute Member" means a transferee of a Unit who is admitted as a
Member to the Company pursuant to Section 11.01 in place of and with all the
rights of a Member.
"Tax Matters Partner" means the Member designated pursuant to Section
9.02.
"Unit" means a Unit representing an interest in the capital of the
Company.
"Voting Rights" has the meaning specified in Section 7.02.
ARTICLE III
Purpose
3.01 Purpose of the Company. The purpose of the Company is to engage
in any lawful act or activity for which limited liability companies may be
organized under the Act. Such acts or activities may include, but shall not
be limited to, acquiring, operating and maintaining real and personal
properties in the United States and foreign countries. In transacting such
business, the Company may:
(a) acquire an ownership, working, royalty or other interest in
stocks, real estate and other properties, either alone or in conjunction with
other parties;
(b) dispose of, rent, lease, transfer, encumber or otherwise
utilize Company assets used in connection with Company operations as the
Managers deem advisable;
(c) employ such personnel and obtain such legal, accounting, and
other professional services and advice as the Managers may deem advisable in
the course of the Company's operations under this Agreement;
(d) pay all ad valorem taxes levied or assessed against the
Company's assets, and all other taxes (other than income taxes) directly
relating to operations conducted under this Agreement;
(e) execute all contracts, agreements, documents, or instruments
of any kind as may be appropriate for carrying out the purposes of the
Company;
(f) procure and maintain in force such insurance, including
public liability, automotive liability, worker's compensation, and employer's
liability insurance, as may be prudent to protect the Company against
liability for loss and damages which may be occasioned by the activities to be
engaged in by the Company;
(g) purchase and establish inventories of equipment and material
required or expected to be required in connection with the Company's
operations;
(h) contract or enter into agreements for the performance of
services and the purchase and sale of material, equipment, supplies, and
property, both real and personal;
(i) conduct operations either alone or as a joint venturer,
co-tenant, partner, or in any other manner of participation with any Member or
third parties and to enter into agreements and contracts setting forth the
terms and provisions of such participation;
(j) borrow money from any Person, including, without limitation,
banks, other lending institutions, and Members, for Company purposes and
pledge Company Property for the repayment of such loans;
(k) sell, relinquish, release, abandon, or otherwise dispose of
Company assets, including undeveloped, productive, and condemned properties,
in accordance with other provisions herein; and
(l) perform any and all other acts or activities customary or
incident to conducting the above Company operations.
ARTICLE IV
Capital Contributions
4.01 Authorized Units. The Company shall have the authority to issue
an aggregate of one hundred (100) Units.
4.02 Capital Contributions.
(a) Initial Unit Ownership. Prior to payment in full of all
amounts owed by Management under the PSO Note, ownership of Units in the
Company shall be as follows:
(i) Smith, Loudermilk, and Management herebysurrender their
respective membership interests in the Company in exchange for twenty-nine
(29) Units, of which ten (10) Units are hereby issued to Xxxxx, fourteen (14)
Units are hereby issued to Xxxxxxxxxx, and five (5) Units are hereby issued to
Management. Upon the issuance of Units to PSO pursuant to Section 4.02(b),
the Units held by Smith, Loudermilk, and Management shall in the aggregate
constitute 29% of the Outstanding Units of the Company.
(ii) For good and valuable consideration, thereceipt of which
is hereby acknowledged by the Company, PSO is hereby issued seventy-one (71)
Units, constituting 71% of the Outstanding Units of the Company.
(b) After Payment of PSO Note. After the PSO Note has been paid
in full, Unit ownership shall be reappointed as follows:
Member Units % Unit Ownership
PSO 48 48%
Xxxxx 19 19%
Xxxxxxxxxx 28 28%
Management 5 5%
100 100%
4.03 Capital Accounts.
(a) The Company shall maintain for each Member a separate Capital
Account. The term "Capital Account" shall mean as to any Member and as to any
Units held by that Member the amount of the initial Capital Contribution
attributable to the Units held by that Member, which amount shall be (i)
increased by subsequent Capital Contributions by such Member, and Capital Gain
and Income allocated to such Member pursuant to Section 5.02, and (ii)
decreased by distributions to such Member pursuant to Section 5.01 and Losses
allocated to such Member pursuant to Section 5.02. Distributions shall be
debited to Capital Accounts in the year containing the record date for such
distribution.
(b) It is not currently anticipated that the Company will receive
any Capital Contributions in any form other than cash. In the event any
in-kind contributions or contributions in the form of services are ever made,
the Capital Account of the Member shall be increased by the fair market value
of the property or services contributed by such Member.
(c) The foregoing definition of Capital Account and certain other
provisions of this Agreement are intended to comply with Treasury Regulations
Section 1.704-1(b), and shall be interpreted and applied in a manner
consistent with that regulation. Such regulation contains additional rules
governing maintenance of capital accounts that have not been addressed in this
Agreement.
(d) An Assignee of a Unit will succeed to the Capital Account
relating to the Unit transferred. However, if the transfer causes a
termination of the Company under Section 708(b)(1)(B) of the Code, the Company
Property shall be deemed to have been distributed in liquidation of the
Company to the Members (including the transferee of a Unit) pursuant to
Section 12.02 and recontributed by such Members and transferees in
reconstitution of the Company. The Capital Accounts of such reconstituted
Company shall be maintained in accordance with the principles of this Section
4.03.
(e) At such times as may be permitted or required by Treasury
Regulations issued pursuant to Section 704 of the Code, the Capital Accounts
shall be revalued and adjusted to reflect the then fair market value of
Company Property and the Capital Accounts shall be maintained to comply with
Treasury Regulations Section 1.704-1(b)(2)(iv)(f). All allocations of gain
resulting from such revaluation shall be made consistently with that
regulation, and to the extent not inconsistent therewith, the Income
allocation provisions of Section 5.02 hereof.
4.04 Interest. No interest shall be paid by the Company on
Capital Contributions, on balances in a Member's Capital Account or on any
other funds distributed or distributable under this Agreement.
4.05 No Withdrawal. Except as otherwise required under any
mandatory provisions of the Act, no Member shall without the written consent
of all remaining Members of the Company have (i) any right to resign
voluntarily or otherwise to withdraw from the Company, or (ii) any right to
the withdrawal or reduction of any part of his Capital Contribution.
4.06 Loans. Loans by a Member to the Company shall not be
considered Capital Contributions. The Company may not make loans to any
Member or any Affiliate of any Member without a Majority Vote of the Members.
ARTICLE V
Allocations and Distributions
5.01 Distribution of Cash Available for Distribution.
Distributions of all Cash Available for Distribution shall be made as
determined by a Majority Vote of the Members. Any distribution of property
shall be treated as a distribution of cash in the amount of the fair market
value of such property. Distribution shall be made to the Members by the
Company pro rata, according to the number of Units held by each, with all
Outstanding Units being treated alike.
5.02 Allocation of Income and Loss.
(a) All items of income, loss, deduction or credit shall be
allocated to all Members and Assignees in accordance with their respective
Units in the Company. All outstanding Units shall be treated equally.
(b) Notwithstanding anything to the contrary in this Section
5.02, if there is a net decrease in "minimum gain" (within the meaning of
Treasury Regulations Section 1.704-2(g)(2) during a fiscal year, all Members
with a deficit balance in their Capital Accounts at the end of that year
(excluding items described in Treasury Regulations Section 1.704-2(f)) shall
be allocated, before any other allocations of Company items for such fiscal
year, items of Income and gain for such year (and if necessary, subsequent
years), in an amount and in the proportions necessary to eliminate such
deficits as quickly as possible. The foregoing sentence is intended to be a
"minimum gain charge back" provision as described in Treasury Regulations
Section 1.704-2(f), and shall be interpreted and applied in all respects in
accordance with that regulation.
(c) If during any fiscal year of the Company, any Member
unexpectedly receives an adjustment, allocation, or distribution of the type
described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4),(5), or (6),
that Member shall be allocated items of Income in an amount and manner
sufficient to eliminate that Member's deficit Capital Account balance as
quickly as possible.
(d) Under regulations prescribed by the Secretary of the
Treasury pursuant to Section 704(c) of the Code, items of Capital Gain, Income
and Loss with respect to property contributed to the Company by a Member shall
be shared among Members so as to take account of the variation between the
basis of the property to the Company and its fair market value at the time of
contribution. The Members shall have the power to make such elections, adopt
such conventions, and allocate Capital Gain, Income and Loss as each of them
deems appropriate to comply with Section 704(c) of the Code and any Treasury
Regulations promulgated thereunder and to preserve, to the extent possible,
uniformity of the Units. Any items allocated under this Section 5.02.D shall
not be debited or credited to Capital Accounts to the extent that item is
already taken into account (upon formation or otherwise) in determining a
Member's Capital Account.
(e) Upon the transfer of a Unit, Income, Capital Gain and Loss
attributable to the transferred Unit shall, for federal income tax purposes,
be allocated to the owners of such Unit on the basis of the Income or Loss for
each month that such Person was the owner of such Units. The Members may
revise, alter, or otherwise modify the method of allocation as they determine
necessary to comply with Section 706 of the Code and regulations or rulings
promulgated thereunder.
(f) If, and to the extent that, any Member is deemed to
recognize Income as a result of any transaction between the Member and the
Company pursuant to Sections 482, 483, 1272-1274, or 7872 of the Code, or any
similar provision now or hereafter in effect, any corresponding resulting Loss
or deduction of the Company shall be allocated to the Member who was charged
with that Income.
(g) All tax credits for federal or state income tax purposes
shall be allocated in the same manner as Income.
ARTICLE VI
Management and Operation of Business
6.01. Managers. Management of the Company shall be vested in two
(2) Managers, who shall be elected by Majority Vote of the Members at any
annual or special meeting called for that purpose.
6.02. Authority of Managers. Any Person serving as Manager may
exercise all the powers of the Company whether derived from law, the Articles
of Organization or this Agreement, except such powers as are by statute, by
the Articles of Organization or by this Agreement vested solely in the
Members.
6.03. Restrictions on Managers. Notwithstanding any other
provision hereof, unless and until there shall have occurred an Event of
Default, no Manager shall have the authority to cause the Company to do or
commit to do any of the following acts, without the prior unanimous written
consent of the specific act by the Members; however, upon the occurrence of an
Event of Default, each Manager shall have the authority to cause the Company
to do or commit to do such acts upon the Majority Vote of the Members:
(a) Borrow money in excess of $10,000;
(b) Sell any assets of the Company (or assets, in related
transactions) having a fair market value over $10,000;
(c) Enter into any contract involving an anticipated total
expenditure of over $10,000;
(d) Do any act which would make it impossible to carry on the
ordinary business of the Company;
(e) Compromise any claim over $10,000;
(f) Admit a Person as a Member;
(g) Knowingly perform any act that would subject a Member to
personal liability;
(h) Amend the Articles of Organization; or
(i) Approve any business plan of the Company.
6.04. Outside Activities. The Members and Managers their
respective Affiliates have business interests and engage in business
activities in addition to those relating to the Company. No provision of this
Agreement shall be deemed to prohibit the Members, the Managers or their
respective Affiliates from conducting such businesses and activities, provided
they are not in direct competition with the Company. Neither the Company nor
any Member shall have any rights by virtue of this Agreement or the
relationship contemplated herein in any non-competing business ventures of any
other Member or the Affiliates of such Member.
6.05. Limitation on Liability of Managers. No Person serving as
Manager shall be liable to the Company for monetary damages for breach of
fiduciary duty as a Manager; provided, however, that nothing contained herein
shall eliminate or limit the liability of such Person (i) for any breach of
the Manager's duty of loyalty to the Company, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation
of the law and, (iii) for any transaction from which the Manager derived an
improper personal benefit.
ARTICLE VII
Rights and Obligations of the Members
7.01 Limitation of Liability. Anything herein to the contrary
notwithstanding, except as otherwise expressly agreed in writing, a Member
shall not be personally liable for any debts, liabilities, or obligations of
the Company, whether to the Company, to any of the other Members, or to
creditors of the Company, beyond the Capital Account of the Member, together
with the Member's share of the assets and undistributed profits of the
Company.
7.02 Voting Rights. Action requiring a vote of the Members may
be taken by a Majority Vote of the Members. Unless and until there shall have
occurred an Event of Default, PSO shall hold 4% of all Voting Rights, Xxxxx
shall hold 45 1/2%, Xxxxxxxxxx shall hold 45 1/2%, and Management shall hold
5%. Upon the occurrence of an Event of Default, Management shall hold 100% of
all Voting Rights, and PSO, Xxxxx and Xxxxxxxxxx will hold no Voting Rights.
7.03 Indemnification.
(a) To the maximum extent permitted by law, the Company shall
indemnify and hold harmless the Managers, all Members, their respective
Affiliates, and the employees and agents of the Company (each, an
"Indemnitee") from and against any and all losses, claims, demands, costs,
damages, liabilities, joint and several, expenses of any nature (including
attorneys' fees and disbursements), judgments, fines, settlements, penalties
and other expenses actually and reasonably incurred by the Indemnitee in
connection with any and all claims, demands, actions, suits, or proceedings,
civil, criminal, administrative or investigative, in which the Indemnitee may
be involved, or threatened to be involved, as a party or otherwise, by reason
of the fact that the Indemnitee is or was a Manager or Member of the Company
or is or was an employee or agent of the Company, including Affiliates of the
foregoing, arising out of or incidental to the business of the Company,
provided, (i) the Indemnitee's conduct did not constitute willful misconduct
or recklessness, (ii) the action is not based on breach of this Agreement,
(iii) the Indemnitee acted in good faith and in a manner he or it reasonably
believed to be in, or not opposed to, the best interests of the Company and
within the scope of such Indemnitee's authority and (iv) with respect to a
criminal action or proceeding, the Indemnitee had no reasonable cause to
believe its 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, in and of itself, create a
presumption or otherwise constitute evidence that the Indemnitee acted in a
manner contrary to that specified above.
(b) Expenses incurred by an Indemnitee in defending any claim,
demand, action, suit or proceeding subject to this Section 7.03 may, from time
to time, be advanced by the Company prior to the final disposition of such
claim, demand, action, suit or proceeding upon receipt by the Company of an
undertaking by or on behalf of the Indemnitee to repay such amount if it shall
ultimately be determined that such person is not entitled to be indemnified as
authorized in this Section 7.03.
(c) Indemnification provided by this Section 7.03 shall be in
addition to any other rights to which the Indemnitee may be entitled under any
agreement, vote of the Members, as a matter of law or equity, or otherwise,
and shall inure to the benefit of the successors, assignees, heirs, personal
representatives and administrators of the Indemnitee.
(d) The Company may purchase and maintain insurance, at the
Company's expense, on behalf of any Indemnities against any liability that may
be asserted against or expense that may be incurred by an Indemnitee in
connection with the activities of the Company regardless of whether the
Company would have the power to indemnify such Indemnitee against such
liability under the provisions of this Agreement.
ARTICLE VIII
Books, Records, and Accounting
8.01 Books and Records. Appropriate books and records with
respect to the Company's business shall at all times be kept at the principal
office of the Company or at such other places as agreed to by the Members.
Any records maintained by the Company in the regular course of its business
may be kept on, or be in the form of, magnetic tape, photographs or any other
information storage device, provided that the records so kept are convertible
into clearly legible written form within a reasonable period of time. Each
Member shall have the right upon demand and at such Member's own expense to
inspect and copy any of the Company's books and records and obtain such other
information regarding the affairs of the Company.
8.02 Accounting. The books of the Company for regulatory and
financial reporting purposes shall be maintained on cash basis of accounting.
The Company books for purposes of maintaining and determining Capital Accounts
shall be maintained in accordance with the provisions of this Agreement,
Section 704 of the Code and, to the extent not inconsistent therewith, the
principles described above for financial reporting and regulatory purposes.
Comparisons of budgeted income and expenses to actual income and expenses of
the Company shall be on the accrual basis of accounting.
8.03 Fiscal Year. The fiscal year of the Company shall be the
calendar year, unless otherwise determined by Majority Vote of the Members.
ARTICLE IX
Tax Matters
9.01 Taxable year. The taxable year of the Company shall be the
calendar year, unless otherwise determined by Majority Vote of the Members.
9.02 Tax Controversies. The "Tax Matters Partner" (as defined in
Section 6231 of the Code) shall be determined by a Majority Vote of the
Members, and shall be authorized and required to represent the Company, at the
Company's expense, in connection with all examinations of the Company's
affairs by tax authorities, including resulting administrative and judicial
proceedings. Each Member agrees to cooperate with the Tax Matters Partner,
and to do or refrain from doing any or all things reasonably required by the
Tax Matters Partner to conduct such proceedings.
9.03 Taxation as a Partnership. No election shall be made by the
Company or any Member for the Company to be excluded from the application of
any provision of Subchapter K, Chapter 1 of Subtitle A of the Code or from any
similar provisions of any state tax laws.
ARTICLE X
Transfer of Units
10.01. Transfer.
(a) The term "transfer," when used in this Article X with respect
to a Unit, shall be deemed to refer to a transaction by which the Member
assigns all or a portion of its Units, or any interest therein, to another
Person, or by which the holder of a Unit assigns the Unit to another Person as
Assignee, and includes a sale, assignment, gift, pledge, encumbrance,
hypothecation, mortgage, transfer by will or intestate succession, exchange,
or any other disposition.
(b) No Units shall be transferred, in whole or in part, except in
accordance with the terms and conditions set forth in this Article X. Any
transfer or purported transfer of any Units not made in accordance with this
Article X shall be null and void. If for any reason any such transfer is not
null and void, then the Assignee shall not be a Substitute Member, and shall
have no right to participate in Company's affairs as a Member thereof, but
instead shall be entitled to receive only the share of profits or other
compensation by way of income and the return of contributions to which the
transferring Member would otherwise be entitled at the time said transferring
Member would be entitled to receive the same.
10.02. Transfer of Units by a Member.
(a) No Units may be transferred by a Member unless the following
conditions are first satisfied:
(i) A Majority Vote of Members approving the transfer has
been obtained, such approval to be evidenced by a written instrument, dated
and signed by the Members; provided, however, no such approval shall be
required with respect to any transfer of Units by PSO to its parent
corporation, Central and South West Corporation, or any direct or indirect
subsidiary of such parent corporation;
(ii) The transferee and each Member execute and file all
documents necessary for the transferee to be a Substitute Member and be bound
by the terms hereof and such transferee is admitted as a Substitute Member;
and
(iii) The Company receives an Opinion of Counsel that such
transfer would not materially adversely affect the classification of the
Company as a partnership for federal and (as applicable) state income tax
purposes.
(b) The transfer restrictions on Company Units shall be
conspicuously noted in an appropriate legend on any Unit certificates issued.
(c) In no event shall any Unit be transferred to a minor or any
incompetent except by will or intestate succession.
(d) The Company need not recognize, for any purpose, any transfer
of all or any fraction of a Unit unless there shall have been filed with the
Company and recorded on the Company's books a duly executed and acknowledged
counterpart of the instrument of assignment and such instrument evidences the
written acceptance by the Assignee of all of the terms and provisions of this
Agreement and represents that such assignment was made in accordance with all
applicable laws and regulations.
(e) Any holder of a Unit (including a transferee thereof) shall
be deemed conclusively to have agreed to comply with and be bound by all terms
and conditions of this Agreement, with the same effect as if such holder had
executed an express acknowledgment thereof, whether or not such holder in fact
has executed such an express acknowledgment.
10.03. Restrictions on Transfer. Notwithstanding the other
provisions of this Article X, no transfer of any Unit of any Member shall be
made if the transfer (i) would violate applicable federal and state securities
laws or rules and regulations of the Securities and Exchange Commission, any
state securities commission or any other governmental authority with
jurisdiction over the transfer, (ii) would materially adversely affect the
classification of the Company as a partnership for federal or (as applicable)
state income tax purposes, or (iii) would affect the Company's qualification
as a limited liability company under the Act.
10.04. Issuance of Certificates. The Company may issue one or
more Certificates in the name of the Member evidencing the number of Units
issued. Upon the transfer of a Unit in accordance with Article X, the Company
shall, if certificates have been issued, issue replacement Certificates. All
Certificates shall contain legends required by this Agreement or otherwise
required by law.
10.05. Lost, Stolen or Destroyed Certificates. The Company shall
issue a new Certificate in place of any Certificate previously issued if the
Record Holder of the Certificate: (i) makes proof by affidavit that a
previously issued Certificate has been lost, stolen, or destroyed; (ii)
requests the issuance of a new Certificate before the Company has notice that
the Units evidenced by such Certificate have been acquired by a purchaser for
value in good faith and without notice of an adverse claim; and (iii) if
required by the Company, delivers to the Company a bond with surety or
sureties acceptable to the Company, to indemnify the Company against any claim
that may be made on account of the alleged loss, destruction or theft of the
Certificate. The Company shall be entitled to treat each Record Holder as the
Member or Assignee in fact of any Units and, accordingly, shall not be
required to recognize any equitable or other claim or interest in or with
respect to the Units on the part of any other Person, regardless of whether it
has actual or other notice thereof.
ARTICLE XI
Admission of Substitute and Additional Members
11.01. Admission of Substitute Members.
(a) Upon a transfer of a Unit by a Member in accordance with
Article X (but not otherwise), the transferor shall have the power to give,
and by transfer of any Certificate issued shall be deemed to have given, the
transferee the right to apply to become a Substitute Member with respect to
the Unit acquired, subject to the conditions of and in the manner permitted
under this Agreement. An Assignee of a Certificate representing a Unit shall
not become a Substitute Member with respect to the transferred Unit (whether
or not such transferee is then a Member or Substitute Member with respect to
other previously acquired Units) unless and until all of the following
conditions are satisfied:
(i) The instrument of assignment sets forth the intentions of
the assignor that the Assignee succeed to the assignor's interest as a
Substitute Member in his place;
(ii) The assignor and Assignee shall have fulfilled all other
requirements of this Agreement;
(iii) The Assignee shall have paid all reasonable legal fees
and filing costs incurred by the Company in connection with his substitution
as a Member; and
(iv) The Members shall have unanimously approved such
substitution in writing, which approval may be granted or withheld by each
Member in its sole and absolute discretion and may be arbitrarily withheld,
and the books and records of the Company have been modified to reflect the
admission; provided, no such approval shall be required with respect to any
transfer by PSO to its parent corporation, Central and South West Corporation,
or any direct or indirect subsidiary of such parent corporation.
(b) The admission of an Assignee as a Substitute Member with
respect to a transferred Unit shall become effective on the date the Members
give their unanimous written consent to the admission and the books and
records of the Company have been modified to reflect such admission. Any
Member who transfers all of his Units with respect to which it had been
admitted as a Member shall cease to be a Member of the Company upon a transfer
of such Units in accordance with Article X and the execution of a counterpart
of this Agreement by the transferee and shall have no further rights as a
Member in or with respect to the Company (whether or not the Assignee of such
former Member is admitted to he Company as a Substitute Member).
11.02. Admission of Additional Members. Except as otherwise
provided in Section 6.03, additional Units may be authorized and issued by the
Company upon such terms and conditions as may be approved by a Majority Vote
of the Members. Upon the proposed issuance of any such additional Units, each
existing Member shall have the preemptive right, but not the obligation, to
purchase such portion of the newly issued Units as the ratio of the number of
Units then held by such Member bears to the total number of Units held by
Members and outstanding before the issuance of the new Units, together with
such Member's proportionate share of the other newly issued Units as to which
other Members fail to exercise their preemptive rights.
ARTICLE XII
Dissolution and Liquidation
12.01 Disqualification of Member. Upon the death, incapacity,
resignation, expulsion, bankruptcy or dissolution of a Member (such Member
being hereinafter sometimes referred to as a "Disqualified Member"), or the
occurrence of any other event which terminates the continued membership of a
Member in the Company (any of such events being referred to herein as an
"Event of Dissolution"), the Company shall dissolve and its affairs shall be
wound up; provided, however, it is agreed that without the consent of all
other Members, no Member may voluntarily resign from the Company until after
the second anniversary of the date of this Agreement. The Company shall
thereafter conduct only activities necessary to wind up its affairs, unless
there is at least one (1) remaining Member and within sixty (60) days after
the occurrence of an Event of Dissolution, all the remaining Members
unanimously agree to continue the Company. If any election to continue the
Company is made, then:
(a) The remaining Members may elect, within thirty (30) days of
the decision to continue the Company, to purchase the Disqualified Member's
Units upon such terms and conditions as the remaining Members and the
Disqualified Member or the legal representative of the Disqualified Member,
may agree. In the event the remaining Members and the Disqualified Member (or
such legal representative) do not agree upon terms and conditions for a
purchase of the Units of the Disqualified Member,the remaining Members shall
have an option (to be exercised within sixty (60) days after the occurrence of
the Event of Dissolution, by giving notice to the Disqualified Member, or such
legal representative) to purchase the Units for a cash purchase price
determined by the value of the Capital Account of the Disqualified Member, as
of the end of the calendar month preceding the occurrence of the Event of
Dissolution, adjusted as if all Company Property were sold at fair market
value, and all liabilities of the Company were paid and the Company was
liquidated in accordance with the provisions of Section 12.02.
(b) The Company shall continue until the expiration of the term
for which it was formed or until the occurrence of another Event of
Dissolution, in which event any remaining Members shall again elect whether to
continue the Company pursuant to this Section 12.01.
12.02 Dissolution and Liquidation. The Company shall be
dissolved and its affairs shall be wound up upon the occurrence of any of the
following: (i) the term of the Company stated in Articles of Organization
expires; (ii) if, upon the occurrence of an Event of Dissolution, the
remaining Members fail to continue the Company pursuant to Section 11.01; or
(iii) all Members vote to dissolve the Company.
12.03 Method of Winding Up. Upon dissolution of the Company
pursuant to Section 12.02, the Company shall immediately commence to liquidate
and wind up its affairs. The Members shall continue to share profits and
losses during the period of liquidation and winding up in the same proportion
as before commencement of winding up and dissolution. The proceeds from the
liquidation and winding up shall be applied in the following order of
priority:
(a) To creditors, including Members who are creditors, to the
extent permitted by law, in satisfaction of liabilities of the Company other
than liabilities to Members on account of their Capital Contributions or on
account of a Member's withdrawal from the Company or pursuant to a withdrawal
of capital; and
(b) The balance, to Members in accordance with their Capital
Accounts. Unless the Members shall unanimously determine otherwise, all
distributions will be made in cash, and none of the Company Property will be
distributed in kind to the Members.
12.04 Filing Articles of Dissolution. Upon the completion of the
distribution of Company Property as provided in Section 12.02, Articles of
Dissolution shall be filed as required by the Act, and each member agrees to
take whatever action may be advisable or proper to carry out the provisions of
this Section.
12.05 Return of Capital. The return of Capital Contributions
shall be made solely from Company Property.
ARTICLE XIII
Amendment of Agreement; Meetings
13.01 Amendments. Unless and until there shall have occurred an
Event of Default, all amendments to this Agreement shall require the unanimous
consent of the Members. Upon the occurrence of an Event of Default, all
amendments to this Agreement may be effected by a Majority Vote of the
Members, subject to the provisions of Section 13.02.
13.02 Limitations on Amendments. Notwithstanding any other
provision of this Agreement, no amendment to this Agreement may without the
unanimous approval of all Members (i) enlarge the obligations of any Member
under this Agreement or (ii) amend this Section 13.02 or Section 13.01.
13.03 Meetings. Meetings may be called by any Member, by giving
at least five (5) business days prior notice of the time, place and purpose of
the meeting to all Members. Special meetings for the purpose of approval of a
transfer of a Member may be held only on the 1st or 15th day of the month, or
if either of these days falls on a Saturday, Sunday, or legal Holiday, on the
first day thereafter.
13.04. Adjournment. When a meeting is adjourned to another time
or place, notice need not be given of the adjourned meeting, if the time and
place thereof are announced at the meeting at which the adjournment is taken,
unless such adjournment shall be for more than forty-five days. At the
adjourned meeting, the Company may transact any business which might have been
transacted at the original meeting. If the adjournment is for more than
forty-five days, a notice of the adjourned meeting shall be given in
accordance with this Section 13.04.
13.05. Waiver of Notice; Consent to Meeting; Approval of Minutes.
The transactions of any meeting of the Company, however called and noticed,
and whenever held, are as valid as though had at a meeting duly held after
regular call and notice, if a quorum is present either in person or by proxy,
and if, either before or after the meeting, each of the Members entitled to
vote, but not present in person or by proxy, approves by signing a written
waiver of notice or an approval to the holding of the meeting or an approval
of the minutes thereof. All waivers, consents, and approvals shall be filed
with the Company records or made a part of the minutes of the meeting.
Attendance of a Member at a meeting shall constitute a waiver of notice of the
meeting, except when such Member objects, at the beginning of the meeting, to
the transaction of any business because the meeting is not lawfully called or
convened; and except that attendance at a meeting is not a waiver of any right
to object to the consideration of matters required to be included in the
notice of the meeting, but not so included, if the objection is expressly made
at the meeting.
13.06 Quorum. The holders of a majority of the Voting Rights,
represented in person or by proxy, shall constitute a quorum at a meeting of
Members. The Members present at a duly called or held meeting at which a
quorum is present may continue to participate at such meeting until
adjournment, notwithstanding the withdrawal of enough Members to leave less
than a quorum, if any action taken (other than adjournment) is approved by the
requisite percentage of Voting Rights of Members specified in this Agreement.
In the absence of a quorum, any meeting of Members may be adjourned from time
to time by a Majority Vote of the Members represented either in person or by
proxy entitled to vote, but no other matters may be proposed, approved or
disapproved, except as provided in Section 13.04.
13.07 Action Without a Meeting. Any action that may be taken by
any vote of the Members may be taken without a meeting if a consent to such
action is signed by all Members.
ARTICLE XIV
General Provisions
14.01 Notices. Any notice, demand, request or report required or
permitted to be given or made to a Member under this Agreement shall be in
writing and shall be deemed given or made when delivered in person or when
sent by first class mail to the Member. Any notice, payment, or report to be
given or sent to a Member hereunder shall be deemed conclusively to have been
given or sent, upon mailing of such notice, payment, or report to the address
shown on the records of the Company, regardless of any claim of any Person who
may have an interest in the Unit by reason of an assignment or otherwise.
14.02 Captions. All article and section captions in this
Agreement are for convenience only. They shall not be deemed part of this
Agreement and in no way define, limit, extend or describe the scope or intent
of any provisions hereof. Except as specifically provided otherwise,
references to "Articles" and "Sections" are to Articles and Sections of this
Agreement.
14.03 Pronouns and Plurals. Whenever the context may require,
any pronoun used in this Agreement shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns, pronouns and verbs
shall include the plural and vice versa.
14.04 Further Action. The parties to this Agreement shall
execute and deliver all documents, provide all information and take or refrain
from taking action as may be necessary or appropriate to achieve the purposes
of this Agreement.
14.04 Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their heirs, executors,
administrators, successors, legal representatives and permitted assignees.
14.06 Integration. This Agreement constitutes the entire
agreement among the parties hereto pertaining to the subject matter hereof and
supersedes all prior agreements and understandings pertaining thereto.
14.07 Waiver. No failure by any party to insist upon the strict
performance of any covenant, duty, agreement or condition of this Agreement or
to exercise any right or remedy consequent upon a breach thereof shall
constitute waiver of any such breach or any other covenant, duty, agreement or
condition.
14.08 Counterparts. This Agreement may be executed in
counterparts, all of which together shall constitute an agreement binding on
all the parties hereto, notwithstanding that all such parties are not
signatories to the original or the same counterpart. Each party shall become
bound by this Agreement immediately upon affixing its signature hereto,
independently of the signature of any other party.
14.09 Applicable Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of Oklahoma, without
regard to its principles of conflict of laws.
14.10 Invalidity of Provisions. If any provision of this
Agreement is or becomes invalid, illegal, or unenforceable in any respect, the
validity, legality, and enforceability of the remaining provisions contained
herein shall not be affected thereby.
14.11 Conveyances. All of the assets of the Company shall be
held in the name of the Company. Any deed, xxxx of sale, mortgage, lease,
contract of sale or other instrument purporting to convey or encumber the
interest of the Company of all or any portion of the assets of the Company
shall be sufficient when signed by a Manager.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the ______ day of ______________, 199 .
MEMBERS:
______________________________
XXXXXXX X. XXXXX
XXXXXX X. XXXXXXXXXX
RIKA MANAGEMENT COMPANY, L.L.C.
By:
Xxxxxxx X. Xxxxx, Manager
PUBLIC SERVICE COMPANY
OF OKLAHOMA
By:___________________________
Title:________________________
