Exhibit 3.4
FIRST AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
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THIS AGREEMENT, dated December 6, 1999, and effective as of June 17, 1999,
is among the individuals and/or entities signing it below.
WHEREAS, the individuals and entities signing this Agreement desire to form
a limited liability company known as G.A.S. ORANGE ASSOCIATES, L.L.C. pursuant
to the Delaware Limited Liability Company Act;
WHEREAS, the individuals and entities signing this Agreement desire to
establish their respective rights and obligations pursuant to the Delaware
Limited Liability Company Act in connection with forming such a limited
liability company;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are acknowledged, the individuals and entities signing this
Agreement below agree as follows:
ARTICLE I
DEFINITIONS
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1.1 Definitions. In this Agreement, the following terms shall have the
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meanings set forth below:
(a) "Certificate of Formation" shall mean the Certificate of
Formation of the Company filed with the Delaware Secretary of State on June 17,
1999, as it may from time to time be amended.
(b) "Capital Account" as of any date shall mean the Capital
Contribution to the Company by a Member, adjusted as of such date pursuant to of
this Agreement.
(c) "Capital Contribution" shall mean any contribution by a Member to
the capital of the Company in cash, property or services rendered or a
promissory note or other obligation to contribute cash or property or to render
services.
(d) "Code" shall mean the Internal Revenue Code of 1986, as amended,
or any superseding federal revenue statute.
(e) "Company" shall refer to G.A.S. ORANGE ASSOCIATES, L.L.C.
(f) "Distribution" means any cash and other property paid to a Member
by the Company from the operations of the Company.
(g) "Fiscal Year" shall mean the fiscal year of the Company, which
shall be the year ending December 31.
(h) "Membership Interests" shall mean with respect to the Company the
value of all Capital Contributions and with respect to any Member the ratio of
the value of the Capital Contribution of such Member to the aggregate value of
all Capital Contributions.
(i) "Member" shall mean each Person who or which executes a
counterpart of this Agreement as a Member and each Person who or which may
hereafter become a party to this Agreement.
(j) "Net Losses" shall mean the losses of the Company, if any;
determined in accordance with generally accepted accounting principals employed
under the cash method of accounting.
(k) "Net Profits" shall mean the income of the Company, if any,
determined in accordance with generally accepted accounting principles employed
under the cash method of accounting.
(l) "Delaware Act" shall mean the Delaware Limited Liability Company
Act as set forth in the Delaware Code Annotated, Title 6, Chapter 18.
(m) "Person" shall mean any corporation, governmental authority,
limited liability company, partnership, trust, unincorporated association or
other entity.
(n) "Selling Member" shall mean a Member desiring to sell a
Membership Interest.
(o) "Treasury Regulations" shall mean all proposed, temporary and
final regulations promulgated under the Code as from time to time in effect.
ARTICLE II
ORGANIZATION
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2.1 Formation. One or more Persons has acted or will act as an organizer
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or organizers to form a limited liability company by preparing, executing and
filing with the Delaware Secretary of State the Certificate of Formation
pursuant to the Delaware Act.
2.2 Name. The name of the Company is G.A.S. ORANGE ASSOCIATES, L.L.C.
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2.3 Principal Place of Business. The principal place of business of the
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Company within the State of New York shall be in Onondaga County, New York. The
Company may establish any other places of business as the Members may from time
to time deem advisable.
2.4 Term. The term of the Company shall begin on the date of filing of
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the Certificate of Formation with the Delaware Secretary of State and shall
continue until the Company is dissolved pursuant to this Agreement or the
Delaware Act.
2.5 Purposes. The purpose for which the Company is formed shall consist
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solely of the following:
(i) to acquire and own a general partner interest and a limited
partner interests in Project Orange Associates, L.P., a Delaware
Limited Partnership ("POA").
(ii) to acquire and maintain, directly or indirectly, equity
interests in Project Orange Funding L.P. and Project Orange Capital
Corp., and/or such other entities, the existence of which is necessary
or desirable for the purpose of owning, operating, maintaining and/or
financing POA, including without limitation in connection with the
issuance and servicing of the Senior Secured Notes ("Senior Secured
Notes") originally issued by said entities to Xxxxxxxxx, Xxxxxx and
Xxxxxxxx Securities Corporation pursuant to the Offering Memorandum of
said entities dated on or about November 17, 1999, as such Offering
Memorandum may be amended, supplemented or reissued from time to time.
(iii) to act as, and exercise all of the authority of, a general
partner and a limited partner of POA;
(iv) to take any and all other action necessary to maintain the
existence of the Company as a limited liability company in good
standing under the laws of the State of Delaware and/or to qualify the
Company to do business as a foreign limited liability company in any
other state in which such qualification is required; and
(v) to engage in any lawful acts or activities and to exercise any
powers permitted to limited liability companies organized under the
laws of the State of Delaware; provided that any such act, activity or
power is related or incidental to an necessary, appropriate or
convenient for the accomplishment of the foregoing purposes.
At all times as long as any obligations evidenced by the Senior Secured
Notes remain outstanding and are not discharged in full, and unless such action
is otherwise permitted under the Financing Documents or authorized in writing by
the Trustee, the Company shall be prohibited from engaging in any dissolution,
liquidation, consolidation, merger or sale of
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substantially all of the Company's assets, and shall not incur any indebtedness
except for indebtedness connected with or arising out of the purposes stated in
this Section 2.5 and normal trade accounts payable in the ordinary course of
business or as may otherwise by approved by the Trustee in writing.
ARTICLE III
MEMBERS
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3.1 Names. The names of the Members are as set forth in Exhibit A to
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this Agreement.
3.2 Additional Members. A Person may be admitted as a member after the
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date of this Agreement upon the vote or written consent of a majority of
Membership Interests.
3.2.A Member. In addition to the Members as set forth on Exhibit A and
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any other Members admitted in accordance with the terms of this Agreement, the
Company shall, on or before the date on which the Offering and the Partnership
Interest Purchase Agreement are consummated, admit and shall at all times at
which Senior Secured Notes are outstanding continue to have a "Special
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Independent Member". Although the Special Independent Member shall be a member
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of the Company under this Agreement and the Delaware Act, (i) all references in
this Agreement to a "Member" or the "Members" shall not, unless expressly
provided otherwise, include the Special Independent Member, (ii) the Special
Independent Member shall have no rights to receive any allocations of profits or
losses or distributions from the Company, (iii) the Special Independent Member
shall not, except as expressly provided herein, have any right to participate in
any actions or decisions required or permitted to be taken by the Members
hereunder and (iii) the Special Independent Member shall only have such rights,
benefits, duties and obligations in and to the Company as are expressly provided
under this Agreement.
As used herein the following terms shall have the following meanings:
(1) "Affiliate" shall have the same meaning as now defined in Section
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101 of the United States Bankruptcy Code and shall include all
"insiders", as such term is now defined in Section 101 of the Untied
States Bankruptcy Code, with respect to the Company and the Special
Independent Member.
(2) "Control" means the possession, directly or indirectly, of the power
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to direct or cause the direction of the management and policies of a
person or entity, whether through ownership of voting securities, by
contract or otherwise.
(3) "Special Independent Member" means an individual who is admitted to
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the Company as a Special Independent Member and who shall not have
been at the time of such individual's admission to the Company, and
may not have been at
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any time during the preceding five (t) years, and shall not be at
any time while serving as a Special Independent Member, (i) a direct
or indirect owner or beneficial holder of any equity interest of the
Company, or an officer, director, partner or employee of, the
Company or any of its equity owners, subsidiaries or Affiliates,
(ii) a substantial creditor, customer of, or supplier to, the
Company or any of its equity owners, subsidiaries or Affiliates,
(iii) a person or other entity controlling or under common Control
with any such equity owner, partner, supplier or customer, or (iv) a
member of the immediate family of any such equity owner, officer,
director, partner, employee, supplier or customer.
If, at any time during which any obligations evidenced by the Senior
Secured Notes remain outstanding and are not discharged in full, the Special
Independent Member resigns or otherwise ceases for any reason to be such (or to
qualify as a Special Independent Member), (i) no action requiring the
affirmative vote of the Special Independent Member shall be taken until a
successor Special Independent Member is appointed by the Members and such
Special Independent Member approves such action and (ii) the Members shall take
any and all actions as may be necessary or advisable to appoint a successor
Special Independent Member as promptly as possible.
3.3 Books and Records. The Company shall keep books and records of
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accounts and minutes of all meetings of the Members. Such books and records
shall be maintained on a cash basis in accordance with this Agreement.
3.4 Information. Each Member may inspect during ordinary business hours
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and at the principal place of business of the Company the Certificate of
Formation, the Operating Agreement, the minutes of any meeting of the Members
and any tax returns of the Company for the immediately preceding three (3)
Fiscal Years.
3.5 Limitation of Liability. Each Member's liability shall be limited as
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set forth in this Agreement, the Delaware Act and other applicable law. A
Member shall not be personally liable for any indebtedness, liability or
obligation of the Company, except that such Member shall remain personally
liable for the payment of his or her Capital Contribution of such Member and as
otherwise set forth in this Agreement, the Delaware Act and any other applicable
law.
3.6 Sale of All Assets. The Members shall have the right, by the vote or
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written consent of at least two-thirds of all Membership Interests, to approve
the sale, lease exchange or other disposition of all or substantially all of the
assets of the Company, subject to the limitations set forth in Section 4.1.B
herein.
3.7 Priority and Return of Capital. No Member shall have priority over
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any other Member, whether for the return of a Capital Contribution or for Net
Profits, Net Losses or a Distribution; provided, however, that this Section
shall not apply to loan or other indebtedness (as distinguished from a Capital
Contribution) made by a Member to the Company.
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3.8 Liability of a Member to the Company. A Member who or which
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rightfully receives the return of any portion of a Capital Contribution is
liable to the Company only to the extent now or hereafter provided by the
Delaware Act. A Member who or which receives a Distribution made by the Company
in violation of this Agreement or made when the Company's liabilities exceed its
assets (after giving effect to such Distribution) shall be liable to the Company
for the amount of such Distribution.
3.9 Financial Adjustments. No Members admitted after the date of this
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Agreement shall be entitled to any retroactive allocation of losses, income or
expense deductions incurred by the Company. The Members may, at the discretion
of the Members, at the time a Member is admitted, close the books and records of
the Company (as though the Fiscal Year had ended) or make pro rata allocations
of loss, income and expense deductions to such Member for that portion of the
Fiscal Year in which such Member was admitted in accordance with of the Code.
ARTICLE IV
MANAGEMENT
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4.1 Management by Members.
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(a) 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
the direction of the Members; and the Members may make all decisions and take
all action for the Company not otherwise provided for in this Agreement.
Without limiting the generality of the foregoing, the Members shall have the
duty and authority to perform the following:
(1) Managing the Company's daily activities and establishing and
administering Company policies, procedures, and long-range plans;
(2) Opening and maintaining bank and investment accounts and
arrangements, drawing checks and other orders for the payment of money, and
designating individuals with authority to sign or give instructions with respect
to those accounts and arrangements;
(3) Delegating both professional and administrative functions to
other Members and staff;
(4) Organizing operations, developing departments and
specialties, and maintaining performance standards;
(5) Maintaining effective Company objectives and organizational
structure;
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(6) Providing and maintaining adequate insurance coverage for
all appropriate areas of Company concern;
(7) Developing Company goals, budgets and objectives;
(8) Recommending mergers with other companies, and the admission
of new Members to the Company;
(9) Determining the Company's capital requirements and the
amount of Permanent Capital which the Company shall maintain;
(10) Entering into, making and performing contracts, agreements,
and other undertakings binding the Company that may be necessary, appropriate,
or advisable in furtherance of the purposes of the Company and making all
decisions and waivers thereunder;
(11) Collecting sums due the Company;
(12) To the extent that funds of the Company are available
therefor, paying debts and obligations of the Company;
(13) Acquiring, utilizing for Company purposes, and disposing of
any asset of the Company;
(14) Borrowing money or otherwise committing the credit of the
Company for Company activities and voluntary prepayments or extensions of debt;
(15) Selecting, removing and changing the authority and
responsibility of lawyers, accountants and other advisers and consultants to the
Company;
(b) Separateness Covenants. At all times as long as any obligations
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evidenced by the Senior Secured Notes remain outstanding and are not discharged
in full, the Members shall manage the business and affairs of the Company so
that, except as the Trustee may otherwise agree from time to time in writing,
the Company shall not:
(i) engage in any business or activity other than as provided in
Section 2.5 hereof;
(ii) fail to maintain its records, books of account and bank accounts
separate and apart from those of its Members and any other person or
entity;
(iii) have its assets listed on the financial statements of any other
entity (other than to the extent reflected on a consolidated financial
statement);
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(iv) commingle its assets with the assets of any of its Members or
of any other person or entity;
(v) fail either to hold itself out to the public as a legal entity
separate and distinct from any other entity or person or to conduct
its business solely in its own name;
(vi) fail to file its own tax returns, to the extent such returns
are required to be filed;
(vii) fail to pay its debts and liabilities only out of its own
assets;
(viii) fail to preserve its existence as an entity duly organized and
validly existing under the laws of the jurisdiction of its formation,
or otherwise fail to observe all its limited liability company and
other organizational formalities;
(ix) enter into any contract or agreement with any Member or
affiliate of the Company of a Member, except upon the terms and
conditions that commercially reasonable and substantially similar to
those that would be available on an arms-length basis with
unaffiliated third parties;
(x) fail to maintain a sufficient number of employees in light of
its contemplated business operations or fail to pay the salaries of
its own employees only from its own funds;
(xi) incur any debt, secured or unsecured, direct or contingent
(including guaranteeing any debt or obligation of any person, other
than the Senior Secured Notes), except in the ordinary course of its
business, provided that such debt is not evidenced by a note;
(xii) hold itself out to be responsible for the debts of another
person.
(xiii) own any subsidiary or make any investment in, any person or
entity, except for its ownership of partnership interests in POA or in
Project Orange Funding L.P. and Project Orange Capital Corp., and/or
such other entities, the existence of which is necessary or desirable
for the purpose of owning, operating, maintaining and /or financing
POA, including without limitation in connection with the issuance and
servicing of the Senior Secured Notes, or otherwise acquire the
obligations or securities of its Members or their Affiliates;
(xiv) make any loans or advances to any Member, Affiliate of the
Company or any third party;
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(xv) fail to allocate fairly and reasonably any overhead expenses
that are shared with an affiliate, including paying for office space
and services performed by an employee of an affiliate;
(xvi) fail to use separate stationery, invoices and checks bearing
its own name;
(xvii) pledge its assets for the benefit of any other person or
entity [other than pursuant to the terms of the Financing Documents];
(xviii) fail to correct any known misunderstandings regarding the
separate identity of the Company from that of any Member, affiliate
thereof or any other person;
(xix) fail to maintain adequate capital for the normal obligations
reasonably foreseeable in a business of its size and character and in
light of its contemplated business operations;
(xx) merge into or consolidate with any person or entity or
dissolve, terminate or liquidate in whole or in part, transfer or
otherwise dispose of all or substantially all of its assets or change
its legal structure; or
(xxi) fail to have a Special Independent Member.
As of the date hereof, the Special Independent Member of the Company is
Xxxxxx X. X'Xxxxx.
Notwithstanding anything to the contrary set forth in the Certificate of
Formation or this Agreement, so long as any obligations evidenced by the Senior
Secured Notes remain outstanding and are not discharged in full, the prior
written consent of all Members, including the Special Independent Member, shall
be required for the Company to:
(i) file or consent to a voluntary petition or otherwise initiate
proceedings for the Company to be adjudicated bankruptcy or insolvent
or seeking an order for relief as a debtor under the Bankruptcy Code
or file or consent to the filing of, or cause the filing of, any
petition seeking any composition, bankruptcy, reorganization,
readjustment, liquidation, dissolution or similar relief for the
Company under any applicable state or federal bankruptcy laws or any
other present or future applicable federal, state or other statute or
law relative to bankruptcy, insolvency or other relief for debtors, or
(ii) seek or consent to the appointment of a trustee, receiver,
conservator, assignee, sequestrator, custodian, liquidator (or other
similar official) of the
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Company or of all or any substantial part of the properties and assets
of the Company; or
(iii) make or consent to any general assignment for the benefit of
creditors, or
(iv) admit in writing its inability to pay its debts generally as
they become due, or declare or effect a moratorium on its debt, or
(v) sell, give, pledge, encumber, assign, transfer or otherwise
dispose of all or any part of the partnership interests in POA or the
taking of any other action that would cause the Company to fail to
have effective control over POA, or
(vi) amend or modify in any respect the Agreement Concerning
Management of Project Orange Associates, L.P. dated December 6, 1999
by and between G.A.S. Orange Associates, L.L.C. and G.A.S. Orange
Partners, L.P.
Except for the foregoing actions and decisions, and any other actions or
decisions for which the affirmative vote of the Special Independent Member is
expressly required hereunder, the Special Independent Member shall not be
entitled to participate in any actions or decisions of the Members. Whenever in
this Agreement the Special Independent Member is required to make an affirmative
vote to authorize any action or decision of the Company, the Special Independent
Member shall have an affirmative duty to consider the interests of the creditors
of the Company (and the interests of the creditors of POA as the case may be) as
well as the interest of the other Members of the Company in determining its
affirmative vote to authorize any action or decision of the Company, regardless
of whether the Company is insolvent at the time of such proposed action or
decision. In accordance with Section 18-1101 of the Delaware Act, this provision
is intended to modify any duty (including fiduciary duties) that the Special
Independent Member may have at law or in equity to the Company or its Members,
and the Special Independent Member shall not be liable to the Company or to any
Member based on its performance of its duties in good faith reliance on the
foregoing.
4.2 Intentionally Left Blank.
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4.3 Meetings of Members.
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(a) Annual Meeting. The annual meeting of the Members shall be held
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on each third Tuesday in March or at such other time as shall be determined by
the vote or written consent of the Membership Interests for the purpose of the
transaction of any business as may come before such meeting.
(b) Special Meetings. Special meetings of the Members, for any
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purpose or purposes, may be called by any Member.
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(c) Place of Meetings. Meetings of the Members may be held at any
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place, within or outside the State of New York, for any meeting of the Members
designated in any notice of such meeting. If no such designation is made, the
place of any such meeting shall be the chief executive office of the Company.
(d) Notice of Meetings. Written notice stating the place, day and
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hour of the meeting indicating that it is being issued by or at the direction of
the person or persons calling the meeting, stating the purpose or purposes for
which the meeting is called shall be delivered no fewer than ten (10) nor more
than sixty (60) days before the date of the meeting. Attendance of a Member at
a meeting shall constitute a waiver of notice of such meeting, except where a
Member 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.
(e) Record Date. For the purpose of determining the Members entitled
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to notice of or to vote at any meeting of Members or any adjournment of such
meeting, or Members entitled to receive payment of any Distribution, or to make
a determination of Members for any other purpose, the date on which notice of
the meeting is mailed or the date on which the resolution declaring Distribution
is adopted, as the case may be, shall be the record date for making such a
determination. When a determination of Members entitled to vote at any meeting
of Members has been made pursuant to this Section, the determination shall apply
to any adjournment of the meeting.
(f) Quorum. Members holding not less than a majority of all
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Membership Interests, represented in person or by proxy, shall constitute a
quorum at any meeting of Members. In the absence of a quorum at any meeting of
Members, a majority of the Membership Interests so represented may adjourn the
meeting from time to time for a period not to exceed sixty (60) days without
further notice. However, if the adjournment is for more than sixty (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 such meeting. At an 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 meeting may continue to transact business until adjournment,
notwithstanding the withdrawal during the meeting of Membership Interests whose
absence results in less than a quorum being present.
(g) Manner of Acting. If a quorum is present at any meeting, the vote
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or written consent of Members holding not less than a majority of Membership
Interests 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, the
Certificate of Formation or this Agreement. The act of a majority of the
Members of the Members present at a meeting at which a quorum is present shall
be the act of the Members who are present at a meeting of the Members at which
action on any Company matter is taken shall be presumed to have assented to the
action unless his dissent shall be entered in the minutes of the meeting or
unless he shall file his written dissent to such action
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with the person acting as Secretary of the meeting before the adjournment
thereof or shall deliver such dissent to the Company immediately after the
adjournment of the meeting. Such right to dissent shall not apply to a Member
who voted in favor of such action.
(h) Proxies.
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(i) A Member may vote in person, or in the case of a Member
other than the Special Independent Member, by proxy executed in writing by
the Member or by a duly authorized attorney-in-fact.
(ii) Every proxy must be signed by the Member or his attorney-
in-fact. No proxy shall be valid after the expiration of eleven (11) months
from the date thereof unless otherwise provided in the proxy. Every proxy
shall be revocable at the pleasure of the Member executing it, except as
otherwise provided in this Section.
(iii) The authority of the holder of a proxy to act shall not be
revoked by the incompetence or death of the Member who executed the proxy
unless, before the authority is exercised, written notice of an
adjudication of such incompetence or of such death is received by any
Member.
(iv) Except when other provision shall have been made by written
agreement between the parties, the record holder of a Membership Interest
which he, she or it holds as pledgee or otherwise as security or which
belong to another, shall issue to the pledgor or to such owner of such
Membership Interest, upon demand therefor and payment of necessary expenses
thereof, a proxy to vote or take other action thereon.
(v) A proxy which is entitled "irrevocable proxy" and which
states that it is irrevocable, is irrevocable when it is held by (1) a
pledgee, (2) a Person who has purchased or agreed to purchase the
Membership Interest, (3) a creditor or creditors of the Company who extend
or continue credit to the Company in consideration of the proxy if the
proxy states that it was given in consideration of such extension or
continuation of credit, the amount thereof, and the name of the person
extending or continuing credit, (4) a Person who has contracted to perform
services as an officer of the Company, if a proxy is required by the
contract of employment, if the proxy states that it was given in
consideration of such contract of employment, the name of the employee and
the period of employment contracted for, or (5) a nominee of any of the
Persons described in clauses (1)-(4) of this sentence.
(vi) Notwithstanding a provision in a proxy, stating that it is
irrevocable, the proxy becomes revocable after the pledge is redeemed, or
the debt of the Company is paid, or the period of employment provided for
in the contract of employment has terminated and, in a case provided for in
Section 4.3(h)(v)(3) or (4) of this Agreement, becomes revocable three (3)
years after the date of the proxy or at the
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end of the period, if any, specified therein, whichever period is less,
unless the period of irrevocability is renewed from time to time by the
execution of a new irrevocable proxy as provided in this Section. This
paragraph does not affect the duration of a proxy under paragraph
4.3(h)(ii) of this Section.
(vii) A proxy may be revoked, notwithstanding a provision making
it irrevocable, by a purchaser of a Membership Interest without knowledge of the
existence of such proxy.
4.4 Action by Members Without a Meeting.
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(a) Whenever the Members of the Company are required or permitted to
take any action by vote, such action may be taken without a meeting, without
prior notice and without a vote, if a consent or consents in writing, setting
forth the action so taken shall be signed by the Members who hold the voting
interests having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all of the
Members entitled to vote therein were present and voted and shall be delivered
to the office of the Company, its principal place of business or Member,
employee or agent of the Company. Delivery made to the office of the Company
shall be by hand or by certified or registered mail, return receipt requested.
(b) Every written consent shall bear the date of signature of each
Member who signs the consent, and no written consent shall be effective to take
the action referred to therein unless, within sixty (60) days of the earliest
dated consent delivered in the manner required by this Section to the Company,
written consents signed by a sufficient number of Members to take the action are
delivered to the office the Company, its principal place of business or Member,
employee or agent of the Company having custody of the records of the Company.
Delivery made to such office, principal place of business of a Member, employee
or agent shall be by hand or by certified or registered mail, return receipt
requested.
(c) Prompt notice of the taking of the action without a meeting by
less than unanimous written consent shall be given to each Member who have not
consented in writing but who would have been entitled to vote thereon had such
action been taken at a meeting.
4.5 Telephonic Meeting. Members of the Company may participate in any
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meeting of the Members by means of a conference telephone or similar
communications equipment if all Persons participating in such meeting can hear
one another for the entire discussion of the matter(s) to be voted upon.
Participation in a meeting pursuant to this Section 4.5 shall be deemed to
constitute presence in person at such meeting.
4.6 Waiver of Notice. Notice of a meeting need not be given to any Member
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who submits a signed waiver of notice, in person or by proxy, whether before or
after the meeting. The attendance of any Member at a meeting, in person or by
proxy, without protesting prior to
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the conclusion of the meeting the lack of notice of such meeting, shall
constitute a waiver of notice by him or her.
4.7 Voting Agreements. An agreement between two (2) or more Members, if
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in writing and signed by the parties thereto, may provide that in exercising any
voting rights, the Membership Interest held by them shall be voted as therein
provided, or as they may agree, or as determined in accordance with a procedure
agreed upon by them.
4.8 Liability for Certain Acts. The Members shall perform their duties in
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good faith, in a manner he or she reasonably believes to be in the best
interests of the Company and with such care as an ordinarily prudent person in a
similar position would use under similar circumstances. A Member who so
performs such duties shall not have any liability by reason of being or having
been a Member. A Member shall not be liable to the Company or any Member for
any loss or damage sustained by the Company or any Member, unless the loss or
damage shall have been the result of the gross negligence or willful misconduct
of such Member. Without limiting the generality of the preceding sentence, a
Member does not in any way guaranty the return of any Capital Contribution to a
Member or a profit for the Members from the operations of the Company.
4.9 No Exclusive Duty to Company. The Members shall not be required to
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manage the Company as their sole and exclusive function and they may have other
business interests and may engage in other activities in addition to those
relating to the Company. Neither the Company nor any Member shall have any
right pursuant to this Agreement to share or participate in such other business
interests or activities or to the income or proceeds derived therefrom. The
Members shall incur no liability to the Company or any Member as a result of
engaging in any other business interests or activities.
4.10 Indemnification. The Company shall indemnify and hold harmless the
---------------
Members, including the Special Independent Member, from and against all claims
and demands to the maximum extent permitted under the Delaware Act.
4.11 Salaries. The salaries and other compensation of the Members shall be
--------
fixed from time to time by the vote or written consent of at least a majority of
the Membership Interests.
4.12 Officers. The Members may designate one or more individuals as
--------
officers of the Company (who do not have to be a Member), who shall have such
titles and exercise and perform such powers and duties as shall be assigned to
them from time to time by the Members. Any officer may be removed by the Members
at any time, with or without cause. Each officer shall hold office until his or
her successor is elected and qualified. Any number of offices may be held by
the same individual. The salaries and other compensation of the officers shall
be fixed by the Members.
14
ARTICLE V
CAPITAL CONTRIBUTIONS
---------------------
5.1 Capital Contributions. Each Member shall contribute the amount set
---------------------
forth in Exhibit A to this Agreement as the Capital Contribution to be made by
him, her or it.
5.2 Additional Contributions. Except as set forth in Section 5.1 of this
------------------------
Agreement, no Member shall be required to make any Capital Contribution.
5.3 Capital Accounts. A Capital Account shall be maintained for each
----------------
Member. Each Member's Capital Account shall be increased by the value of each
Capital Contribution made by the Member, allocations to such Member of the Net
Profits and any other allocations to such Member of income pursuant to the Code.
Each Member's Capital Account will be decreased by the value of each
Distribution made to the Member by the Company, allocations to such Member of
Net Losses and other allocations to such Member pursuant to the Code.
5.4 Transfers. Upon a permitted sale or other transfer of a Membership
---------
Interest in the Company, the Capital Account of the Member transferring his, her
or its Membership Interests shall become the Capital Account of the Person to
which or whom such Membership Interest is sold or transferred in accordance with
Section 1.704-1(b) (2) (iv) of the Treasury Regulations.
5.5 Modifications. The manner in which Capital Accounts are to be
-------------
maintained pursuant to this Section is intended to comply with the requirements
of Section 704(b) of the Code. If, in the opinion of the Members, the manner in
which Capital Accounts are to be maintained pursuant to this Agreement should be
modified to comply with Section 704(b) of the Code, then the method in which
Capital Accounts are maintained shall be so modified; provided, however, that
any change in the manner of maintaining Capital Accounts shall not materially
alter the economic agreement between or among the Members.
5.6 Deficit Capital Account. Except as otherwise required in the Delaware
-----------------------
Act or this Agreement, no Member shall have any liability to restore all or any
portion of a deficit balance in a Capital Account.
5.7 Withdrawal or Reduction of Capital Contributions. A Member shall not
------------------------------------------------
receive from the Company any portion of a Capital Contribution until all
indebtedness, liabilities of the Company, except any indebtedness, liabilities
and obligations to Members on account of their Capital Contributions, have been
paid or there remains property of the Company, in the sole discretion of the
Members, sufficient to pay them. A Member, irrespective of the nature of the
Capital Contribution of such Member, has only the right to demand and receive
cash in return for such Capital Contribution.
15
ARTICLE VI
ALLOCATIONS AND DISTRIBUTIONS
-----------------------------
6.1 Allocations of Profits and Losses. After giving effect to the special
---------------------------------
allocations set forth in Section 6.2, the Net Profits and the Net Losses for
each Fiscal Year shall be allocated to each Member in proportion to their
Membership Interests.
6.2 Regulatory Allocations.
----------------------
(a) Qualified Income Offset. No Member shall be allocated Losses or
-----------------------
deductions if the allocation causes the Member to have an Adjusted Capital
Account Deficit. If a Member unexpectedly receives an adjustment, allocation or
distribution described in Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5) or
(6), such Member will be allocated items of income and gain of the Company
(consisting of a pro rata portion of each item of Company income, including
gross income and gain) for that taxable year in an amount sufficient to
eliminate such Adjusted Capital Account Deficit as quickly as possible.
(b) Minimum Gain Chargeback. Except as set forth in Regulation
-----------------------
Section 1.704-2(f)(2), (3), and (4), if, during any taxable year, there is a net
decrease in Minimum Gain, each Member, prior to any other allocation pursuant to
this Article VI, shall be specially allocated items of gross income and gain for
such taxable year (and, if necessary, subsequent taxable years) in an amount
equal to that Economic Interest Holder's share of the net decrease of Minimum
Gain, computed in accordance with Regulation Section 1.704-2(g). Allocations of
gross income and gain pursuant to this Section 6.2(b) shall be made first from
gain recognized from the disposition of Company assets subject to non-recourse
liabilities (within the meaning of the Regulations promulgated under Code
Section 752), to the extent of the Minimum Gain attributable to those assets,
and thereafter, from a pro rata portion of the Company's other items of income
and gain for the taxable year. It is the intent of the parties hereto that any
allocation pursuant to this Section 6.2(b) shall constitute a "minimum gain
chargeback" under Regulation Section 1.704-2(f).
(c) Contributed Property and Book-Ups.
---------------------------------
(i) Generally, the Capital Accounts of Members shall be
adjusted in accordance with Regulations Section 1.704-1(b)(2)(iv)(g) for
allocations to them of income, gain, loss, and deduction (including
depreciation, depletion, amortization or other cost recovery) as computed for
book purposes, with respect to property of the Company.
(ii) Notwithstanding Section 6.2(c)(i) hereof, if, with respect
to a property, the Company chooses to eliminate distortions caused by the
ceiling rule (as defined in Regulations Section 1.704-3(b)(1)) by means of the
Remedial Allocation Method (as defined in Regulations Section 1.704-3(d) and
as provided in Section 6.2(c) herein), then the Capital Accounts of Members
shall be adjusted in accordance with Regulations Section
16
1.704-3(d)(2) for allocations to them of income, gain, loss, and deduction
(including depreciation, depletion, amortization or other cost recovery) as
computed for book purposes, with respect to such property.
(d) Curative Allocations. Members who contribute (or are deemed to
--------------------
contribute under Regulation (S)1.704-1(b)(2)(iv)(g)) property with a fair market
book value that differs from the adjusted basis of the property for federal
income tax purposes shall have specifically allocated to them income, gain or
deduction that reflects the difference between the fair market book value and
the adjusted basis of such property according to (S)704(c) and Regulations
(S)1.704-3(c), or (d).
6.3 Distributions. The Members may from time to time, in the discretion
-------------
of the Members, make Distributions to the Members. All Distributions shall be
made to the Members pro rata in proportion to their Membership Interests as of
the record date set for such Distribution.
6.4 Offset. The Company may offset all amounts owing to the Company by a
------
Member against any Distribution to be made to such Member.
6.5 Limitation Upon Distributions. No Distribution shall be declared and
-----------------------------
paid unless, after such Distribution is made, the assets of the Company are in
excess of all liabilities of the Company.
6.6 Interest on and Return of Capital Contributions. No Member shall be
-----------------------------------------------
entitled to interest on his, her or its Capital Contribution or to a return of
his, her or its Capital Contribution, except as specifically set forth in this
Agreement.
6.7 Accounting Period. The accounting period of the Company shall be the
-----------------
Fiscal Year.
ARTICLE VII
TAXES
-----
7.1 Tax Returns. The Members shall cause to be prepared and filed all
-----------
necessary federal and state income tax returns for the Company. Each Member
shall furnish all pertinent information in its possession relating to Company
operations that is necessary to enable the Company's income tax returns to be
prepared and filed.
7.2 Tax Elections. The Company shall make the following elections on the
-------------
appropriate tax returns:
(a) To adopt the calendar year as the Fiscal Year;
17
(b) To adopt the cash method of accounting and keep the Company's
books and records on the income tax method;
(c) If a Distribution as described in Section 734 of the Code occurs
or if a transfer of a Membership Interest described in Section 743 of the Code
occurs, upon the written request of any Member, to elect to adjust the basis of
the property of the Company pursuant to Section 754 of the Code;
(d) To elect to amortize the organizational expenses of the Company
and the start-up expenditures of the Company under Section 195 of the Code
ratably over a period of sixty (60) months as permitted by Section 709(b) of the
Code; and
(e) Any other election that the Members may deem appropriate and in
the best interests of the Members.
Neither the Company nor any Member may make an election for the Company to be
excluded from the application of Subchapter K of chapter 1 of Subtitle A of the
Code or any similar provisions of applicable state law, and no provisions of
this Agreement shall be interpreted to authorize any such election.
7.3 Tax Matters Partners. The Members shall designate one Member to be
--------------------
the "tax matters partner" of the Company pursuant to Section 6231(a) (7) of the
Code. Any Member who is designated "tax matters partner" shall take any action
as may be necessary to cause each other Member to become a "notice partner"
within the meaning of Section 6223 of the Code.
ARTICLE VIII
TRANSFERABILITY
---------------
8.1 General. No Member shall gift, sell, assign, pledge, hypothecate,
-------
exchange or otherwise transfer to another Person any portion of a Membership
Interest, except with the prior written consent of all of the Members, and only
to the extent such transfer will not violate any provision of the Financing
Documents. Nothing set forth herein shall prohibit a Member from selling,
assigning or otherwise transferring his interest in the Company to another
Member who is a party to this Agreement. Any attempted transfer or withdrawal
in contravention of this Agreement shall be void ad initio and shall not bind or
be recognized by the Company.
8.2 Offer to Acquire. If a Member desires to sell a Membership Interest
----------------
to another Person (except for another Member), such Member shall obtain from
such Person a bona fide written offer to purchase such Membership Interest,
stating the terms and conditions upon which the purchase is to be made. Such
Member shall give written notification to the other Members of his, her or its
intention to sell such Membership Interest and a copy of such bona fide written
offer.
18
8.3 Right of First Refusal. Each Member other than the Selling Member, on
----------------------
a basis pro rata to the Membership Interests of each Member exercising his, her
or its right of first refusal, shall have the right to exercise a right of first
refusal to purchase all (but not less than all) of the Membership Interest
proposed to be sold by the Selling Member upon the same terms and conditions as
stated in the bona fide written offer by giving written notification to the
Selling Member of his, her or its intention to do so within thirty (30) days
after receiving written notice from the Selling Member. The failure of any
Member to so notify the Selling Member of a desire to exercise such right of
first refusal within such thirty (30) day period shall result in the termination
of such right of first refusal and the Selling Member shall be entitled to
consummate the sale of his, her or its Membership Interest with respect to which
such right of first refusal has not been exercised to the Person offering to do
so pursuant to the bona fide written offer. If the selling Member does to sell
his, her or its Membership Interest within thirty (30) days after receiving the
right to do so, his her or its right to do so terminates and the terms and
conditions of this Section shall again be in effect.
8.4 Closing. If any Member gives written notice to the Selling Member of
-------
his, her or its desire to exercise such right of first refusal and to purchase
all of the Selling Member's Interest upon the same terms and conditions as are
stated in the written offer, such Member shall have the right to designate the
time, date and place of closing within ninety (90) days after receipt of written
notification from the Selling Member of the bona fide offer.
8.5 Transferee Not a Member. No Person acquiring a Membership Interest
-----------------------
pursuant to this Section other than a Member shall become a Member unless such
Person is approved by the unanimous vote or written consent of all Membership
Interests. If no such approval is obtained, such Person's Membership Interest
shall only entitle such Person to receive the distributions and allocations of
profits and losses to which the Member from whom or which such Person received
such Membership Interest would be entitled. Any such approval may be subject to
any terms and conditions imposed by the Members.
8.6 Effective Date. Any sale of a Membership Interest or admission of a
--------------
Member pursuant to this Article shall be deemed effective as of the last day of
the calendar month in which such sale or admission occurs.
ARTICLE IX
DISSOLUTION
-----------
9.1 Dissolution. The Company shall not dissolve and terminate prior to
-----------
the date on which all obligations evidenced by the Senior Secured Notes have
been satisfied in full. The bankruptcy, dissolution, liquidation or termination
of a Member shall not cause the termination or dissolution of the Company, and
the business of the Company shall continue. Upon any such occurrence, the
trustee, receiver, executor, administrator, committee or conservator of such
Members shall have the rights of an assignee of the Membership Interests of such
Member for the purpose of settling or managing the former Member's estate of
property. At any time
19
thereafter, the Company shall be dissolved and its affairs shall be wound up
upon the first to occur of the following:
(a) The vote or written consent of at least two-thirds in interest of
all Members; or
(b) The bankruptcy, death, dissolution, expulsion, incapacity or
withdrawal of any Member or the occurrence of any other event that terminates
the continued membership of any Member, unless within one hundred eighty (180)
days after such event the Company is continued by the vote or written consent of
a majority in interest of all of the remaining Members.
9.2 Winding Up. Upon the dissolution of the Company the Members may, in
----------
the name of and for an on behalf of the Company, prosecute and defend suits,
whether civil, criminal or administrative, sell and close the Company's
business, dispose of and xxxxx the Company's property, discharge the Company's
liabilities and distribute to the Members any remaining assets of the Company,
all without affecting the liability of Members. Upon winding up of the Company,
the assets shall be distributed as follows:
(a) To creditors, including any Member who is a creditor, to the
extent permitted by law, in satisfaction of liabilities of the Company, whether
by payment or by establishment of adequate reserves, other than liabilities for
distributions to Members under Section 18-803 or Section 18-804 of the Delaware
Act;
(b) To Members and former Members in satisfaction of liabilities for
Distributions under Section 18-803 or Section 18-804 of the Delaware Act; and
(c) To Members first for the return of their Capital Contributions,
to the extent not previously returned, and second respecting their Membership
Interests, in the proportions in which the Members share in Distributions in
accordance with this Agreement.
9.3 Articles of Dissolution. Within ninety (90) days following the
-----------------------
dissolution and the commencement of winding up of the Company, or at any other
time there are no Members, articles of dissolution shall be filed with the
Delaware Secretary of State pursuant to the Delaware Act.
9.4 Deficit Capital Account. Upon a liquidation of the Company within the
-----------------------
meaning of Section 1.704-1(b) (2) (ii) (g) of the Treasury Regulations, if any
Member has a Deficit Capital Account (after giving effect to all contributions,
distributions, allocations and other adjustments for all Fiscal Years, including
the Fiscal Year in which such liquidation occurs), the Member shall have no
obligation to make any Capital Contribution, and the negative balance of any
Capital Account shall not be considered a debt owed by the Member to the Company
or to any other Person for any purpose.
20
9.5 Nonrecourse to Other Members. Except as provided by applicable law
----------------------------
or as expressly provided in this Agreement, upon dissolution, each Member shall
receive a return of his, her or its Capital Contribution solely from the assets
of the Company. If the assets of the Company remaining after the payment or
discharge of the debts and liabilities of the Company is insufficient to return
any Capital Contribution of any Member, such Member shall have no recourse
against any other Member.
9.6 Termination. Upon completion of the dissolution, winding up,
-----------
liquidation, and distribution of the assets of the Company, the Company shall be
deemed terminated.
ARTICLE X
GENERAL PROVISIONS
------------------
10.1 Notices. Any notice, demand or other communication required or
-------
permitted to be given pursuant to this Agreement shall have been sufficiently
given for all purposes if (a) delivered personally to the party or to an
executive officer of the party to whom such notice, demand or other
communication is directed or (b) sent by registered or certified mail, postage
prepaid, addressed to the Member or the Company at his, her or its address set
forth in this Agreement. Except as otherwise provided in this Agreement, any
such notice shall be deemed to be given three (3) business days after the date
on which it was deposited in a regularly maintained receptacle for the deposit
of United States mail, addressed and sent as set forth in this Section.
10.2 Amendments. This Agreement contains the entire agreement among the
----------
Members with respect to the subject matter of this Agreement, and supersedes
each course of conduct previously pursued or acquiesced in, and each oral
agreement and representation previously made, by the Members with respect
thereto, whether or not relied or acted upon. No course of performance or other
conduct subsequently pursued or acquiesced in, and no oral agreement or
representation subsequently made, by the Members, whether or not relied or acted
upon, and no usage of trade, whether or not relied or acted upon, shall amend
this Agreement or impair or otherwise affect any Member's obligations pursuant
to this Agreement or any rights and remedies of a Member pursuant to this
Agreement. No amendment to this Agreement shall be effective unless made in a
writing duly executed by all Members and specifically referring to each
provision of this Agreement being amended.
10.2.A Prohibited Amendments During the Period the Senior Secured Notes
----------------------------------------------------------------
are Outstanding. Notwithstanding Section 10.2, at all times during which any
---------------
obligation evidenced by the Senior Secured Notes remains outstanding and is not
discharged in full, none of the Sections 2.5, 3.2.A, 4.1(b), 9.1 or this Section
10.2.A may be amended without receiving the prior written consent of all of the
Members, including the Special Independent Member.
21
10.3 Construction. Whenever the singular number is used in this Agreement
------------
and when required by the context, the same shall include the plural and vice
versa, and the masculine gender shall include the feminine and neuter genders
and vice versa.
10.4 Headings. The headings in this Agreement are for convenience only and
--------
shall not be used to interpret or construe any provision of this Agreement.
10.5 Waiver. No failure of a Member to exercise, and no delay by a Member
------
in exercising, any right or remedy under this Agreement shall constitute a
waiver of such right or remedy. No waiver by a Member of any such right or
remedy under this Agreement shall be effective unless made in a writing duly
executed by all Members and specifically referring to each such right or remedy
being waived.
10.6 Severability. Whenever possible, each provision of this Agreement
------------
shall be interpreted in such a manner as to be effective and valid under
applicable law. However, if any provision of this Agreement shall be prohibited
by or invalid under such law, it shall be deemed modified to conform to the
minimum requirements of such law or, if for any reason it is not deemed so
modified, it shall be prohibited or invalid only to the extent of such
prohibition or invalidity without the remainder thereof or any other such
provision being prohibited or invalid.
10.7 Binding. This Agreement shall be binding upon and inure to the
-------
benefit of all Members, and each of the successors and assignees or the Members,
except that right or obligation of a Member under this Agreement may be assigned
by such Member to another Person without first obtaining the written consent of
all other Members.
10.8 Counterparts. This Agreement may be executed in counterparts, each of
------------
which shall be deemed an original and all of which shall constitute one and the
same instrument.
10.9 Governing Law. This Agreement shall be governed by, and interpreted
-------------
and construed in accordance with, the laws of the State of Delaware, without
regard to principles of conflict of laws.
22
IN WITNESS WHEREOF, the individuals and/or entities signing this Agreement
below conclusively evidence their agreement to the terms and conditions of this
Agreement by so signing this Agreement.
THE XXXXXX FAMILY IRREVOCABLE TRUST
/s/ Xxxxxx X. X'Xxxxx
By: ____________________________________
Xxxxxx X. X'Xxxxx, Trustee
/s/ Xxxxxxx Xxxxxxx
________________________________________
Xxxxxxx Xxxxxxx
/s/ Xxxxxxx X. Xxxxxxx
________________________________________
Xxxxxxx X. Xxxxxxx
/s/ Xxxxx Xxxx
________________________________________
Xxxxx Xxxx
/s/ Xxxxxxx X. Xxxxxx
________________________________________
Xxxxxxx X. Xxxxxx
SPECIAL INDEPENDENT MEMBER
--------------------------
COUNTERPART SIGNATURE PAGE
--------------------------
The undersigned intending to be admitted to G.A.S. Orange Associates,
L.L.C., a Delaware limited liability company (the "Company"), as the Special
Independent Member of the Company pursuant to the terms and provisions of the
Limited Liability Company Agreement of the Company dated as of December 6, 1999
and effective as of June 17, 1999 (the "LLC Agreement"), a copy of which has
been provided to the undersigned, and to accept and agree to be bound by all the
terms and provision of the LLC Agreement applicable to the undersigned as
Special Independent Member, does hereby execute, acknowledge and deliver this
Counterpart Signature Page.
/s/ Xxxxxx X. X'Xxxxx
________________________________________
Xxxxxx X. X'Xxxxx
EXHIBIT A
---------
MEMBERS
-------
PERCENTAGE CAPITAL
NAME OWNERSHIP CONTRIBUTION
---- ----------- ------------
The Xxxxxx Family Irrevocable Trust 84.0% $840.00
Xxxxxxx Xxxxxxx 12.5% $125.00
Xxxxxxx X. Xxxxxxx 2.0% $ 20.00
Xxxxx Xxxx 1.0% $ 10.00
Xxxxxxx X. Xxxxxx 0.5% $ 5.00
2
