AMENDED AND RESTATED
MEMBER AGREEMENT
This Amended and Restated Member Agreement (the "Agreement") entered
into on the ____ day of __________, 1997, by and among Public Service Company of
Oklahoma, an Oklahoma corporation ("PSO"); Xxxxxx Xxxxx, a natural person
("Monika"); Nuvest, L.L.C., an Oklahoma limited liability company ("Nuvest");
Numanco, L.L.C., an Oklahoma limited liability company ("Numanco LLC"); and NSS
Numanco, Inc., a Pennsylvania Corporation ("Numanco Inc.").
W I T N E S S E T H:
1. In consideration of the mutual promises set forth herein, the parties
agree as follows:
Recitals.
1.1. Pursuant to an agreement dated February 22, 1996 (the "Initial
Agreement"), PSO advanced an aggregate of $3,700,000 (the "PSO Advance" to
Canton, L.L.C., an Oklahoma limited liability company ("Canton"). Canton, in
turn, loaned such amount to Nuvest for the purpose of acquiring all of the
capital stock of Numanco Inc. Such acquisition was consummated on or about
February 26, 1996.
1.2. Contemporaneously with the execution of the Initial Agreement, PSO
made application to the Securities and Exchange Commission ("SEC") for
permission under the 1935 Act to acquire an equity interest in Nuvest. Such SEC
approval was obtained in December, 1996.
1.3. Subsequent to Nuvest's acquisition of Numanco Inc., Nuvest and
Numanco Inc. formed Numanco LLC, and Nuvest assumed all of Canton's obligation
to repay the PSO Advance. The parties entered into the original version of this
Agreement effective as of December 31, 1996, to memorialize the parties'
respective rights and obligations with respect to the management of the
businesses in which the Nuvest and its subsidiaries, Numanco Inc. and Numanco
LLC, are engaged, all as described in the Business Plan.
1.4 PSO and Monika (hereinafter referred to as the "Members"), and the
other parties hereto, now desire to amend and restate this Agreement for the
purpose of memorializing certain changes to the buy-sell rights of the Members;
provided, all changes effected hereby shall be deemed effective as of December
31, 1996.
2. Amendments to Charter Documents.
2.1. Contemporaneously with the execution and delivery of this
Agreement:
(a) PSO and Monika shall execute and deliver (i) Amended and
Restated Articles of Organization for Nuvest in the form attached as Exhibit A,
and (ii) an Amended and Restated Operating Agreement for Nuvest in the form
attached as Exhibit B, and
(b) Nuvest and Numanco Inc. shall execute and deliver (i)
Amended and Restated Articles of Organization for Numanco LLC in the form
attached as Exhibit C, and (ii) an Amended and Restated Operating Agreement for
Numanco LLC in the form of Exhibit D.
3. PSO's Investment in Nuvest.
3.1. Effective as of December 31, 1996, $700,000 of the PSO Advance was
converted to a contribution by PSO to the capital of Nuvest, the balance ($3
million) was returned to PSO, and the PSO Advance was deemed repaid in full. The
parties acknowledge that no interest, stand-by, option, or similar fee was or
will be paid to PSO in connection with the PSO Advance, nor was PSO under any
obligation to indemnify Canton or any of the parties to this Agreement against
any market risk or any other claim, loss, damage or liability whatsoever.
3.2. PSO guaranteed:
(a) For a period not to exceed three (3) years, the
performance of the Numanco Companies' obligations under that certain promissory
note in the amount of $3,000,000, by Nuvest to Bank of Oklahoma, N.A. (the
"Bank"), the proceeds of which were used by Nuvest to return to PSO the amount
described in Section 3.1, and
(b) For a period not to exceed three (3) years, the
performance of the Numanco Companies' obligations under a revolving line of
credit in the amount of $9,000,000, secured by short-term receivables of the
Numanco Companies.
4. Conditions Precedent to PSO's Obligations.
Before PSO shall have any obligation to execute and deliver this
Agreement or perform its obligations under Section 3, each of the following
conditions shall be fulfilled to PSO's satisfaction:
4.1. PSO shall have obtained the approval from the SEC for its
participation in the transactions contemplated by this Agreement, or shall have
obtained advice of counsel that such approval is not required.
4.2. No breach shall have occurred of any of the covenants of parties
other than PSO under the Initial Agreement, this Agreement, or of Xxxxxxx Xxxxx
under his Manager's Agreement with Nuvest and Numanco LLC;
4.3. The amendments to the Articles of Organization and Operating
Agreement of Nuvest and Numanco LLC, as described in Section 2 above, shall have
been effected;
4.4. The representations and warranties contained in Section 6 below
shall be true and correct.
5. Definitions.
When used herein, the following terms shall have the meanings ascribed
to them:
5.1. "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.
5.2. "Business Plan" means the operating plan of the Numanco Companies,
which shall include a description of lines of business, targeted gross margins,
targeted fixed operating costs, and a pro forma cash flow budget, profit and
loss statement, and balance sheet, as same may be amended from time to time
pursuant to Section 6.21.
5.3. "Capital Expenditures" means, for any period, amounts added or
required to be added to the property, plant and equipment or other fixed assets
account on the balance sheet of any Numanco Company, prepared in accordance with
GAAP, in respect of (a) the acquisition, construction, improvement or
replacement of land, buildings, machinery, equipment, leaseholds and any other
real or personal property, (b) to the extent not included in clause (a) above,
materials, contract labor and direct labor relating thereto (excluding amounts
properly expensed as repairs and maintenance in accordance with GAAP) and (c)
software development costs to the extent not expensed.
5.4. "Capitalized Lease" means any lease which is required to be
capitalized on the balance sheet of the lessee in accordance with GAAP,
including Statement Nos. 13 and 98 of the Financial Accounting Standards Board.
5.5. "Capitalized Lease Obligations" means the amount of the liability
reflecting the aggregate discounted amount of future payments under all
Capitalized Leases calculated in accordance with GAAP, including Statement Nos.
13 and 98 of the Financial Accounting Standards Board.
5.6. "Cash Equivalents" means: (a) negotiable certificates of deposit,
time deposits (including sweep accounts), demand deposits and bankers'
acceptances having a maturity of nine months or less and issued by any United
States financial institution having capital and surplus and undivided profits
aggregating at least $100,000,000 and rated at least Prime-1 by Xxxxx'x
Investors Service, Inc. or A-1 by Standard & Poor's Ratings Group; (b) corporate
obligations having a maturity of nine months or less and rated at least Prime-1
by Xxxxx'x Investors Service, Inc. or A-1 by Standard & Poor's Ratings Group;
(c) any direct obligation of the United States of America or any agency or
instrumentality thereof, or of any state or municipality thereof, (i) which has
a remaining maturity at the time of purchase of not more than one year or which
is subject to a repurchase agreement with any financial institution referred to
in clause (a) above, exercisable within one year from the time of purchase, and
(ii) which, in the case of obligations of any state or municipality, is rated at
least Aa by Xxxxx'x Investors Service, Inc. or AA by Standard & Poor's Ratings
Group; and (d) any mutual fund or other pooled investment vehicle rated at least
Aa by Xxxxx'x Investors Service, Inc. or AA by Standard & Poor's Ratings Group
which invests principally in obligations described above.
5.7. "Code" means the federal Internal Revenue Code of 1986.
5.8. "Distribution" means, with respect to each Numanco Company: (a)
the declaration or payment of any dividend or distribution, including dividends
payable in shares of capital stock of or other equity interests in the Numanco
Company on or in respect of any shares of any class of capital stock of or other
equity interests in the Numanco Company; (b) the purchase, redemption or other
retirement of any shares of capital stock of or other equity interest in the
Numanco Company or of options, warrants or other rights for the purchase of such
shares, directly or indirectly; (c) any other distribution on or in respect of
any shares of capital stock of or equity or other beneficial interest in the
Numanco Company; (d) any payment of principal or interest with respect to, or
any purchase, redemption or defeasance of, any Indebtedness of the Numanco
Company; and (e) any loan or advance by the Numanco Company to, or any other
Investment by the Numanco Company in, the holder of any shares of any class of
capital stock of or equity interest in the Numanco Company, or any Affiliate of
such holder; provided, however, that the term "Distribution" shall not include
(i) any payment in the ordinary course of business in respect of (A) reasonable
compensation paid to employees, officers, directors and managers, (B) advances
to employees for travel expenses, drawing accounts and similar expenditures, or
(C) rent paid to, or accounts payable for services rendered or goods sold by,
any person who is not an Affiliate of the Numanco Company or (ii) any payment by
the Numanco Company which constitutes repayment of an Indebtedness permitted
under Sections 6.13(e) and (f).
5.9. "Environmental laws" means all applicable federal, state or local
statutes, laws, ordinances, codes, rules, regulations and guidelines (including
consent decrees and administrative orders) relating to public health and safety
and protection of the environment, including the Federal Occupational Health and
Safety Act.
5.10. "ERISA" means the federal Employee Retirement Income Security
Act of 1974.
5.11. "Financing Debt" means each of the items described in clauses (a)
through (f) of the definition of the term "Indebtedness".
5.12. "GAAP" means generally accepted accounting principles as from
time to time in effect, including the statements and interpretations of the
United States Financial Accounting Standards Board.
5.13. "Guarantee" means, with respect to each Numanco Company: (a) any
guarantee by the Numanco Company of the payment or performance of, or any
contingent obligation by the Numanco Company, in respect of, any Indebtedness or
other obligation of any primary obligor; (b) any other arrangement whereby
credit is extended to a primary obligor on the basis of any promise or
undertaking of the Numanco Company, including any binding "comfort letter" or
"keep well agreement" written by the Numanco Company, to a creditor or
prospective creditor of such primary obligor, to (i) pay the Indebtedness of
such primary obligor, (ii) purchase an obligation owed by such primary obligor,
(iii) pay for the purchase or lease of assets or services regardless of the
actual delivery thereof or (iv) maintain the capital, working capital, solvency
or general financial condition of such primary obligor; (c) any liability of the
Numanco Company, as a general partner of a partnership in respect of
Indebtedness or other obligations of such partnership; (d) any liability of the
Numanco Company as a joint venturer of a joint venture in respect of
Indebtedness or other obligations of such joint venture; and (e) reimbursement
obligations, whether contingent or matured, of the Numanco Company with respect
to letters of credit, bankers acceptances, surety bonds, other financial
guarantees; whether or not any of the foregoing (a) through (e) are reflected on
the balance sheet of the Numanco Company or in a footnote thereto.
5.14. "Hazardous Material" means any pollutant, toxic or hazardous
material or waste, including any "hazardous substance" or "pollutant" or
"contaminant" as defined in section 101(14) of the Federal Comprehensive
Environmental Response, Compensation and Liability Act of 1980 or any other
Environmental Law or regulated as toxic or hazardous under the Federal Resource
Conservation and Recovery Act or any other Environmental Law.
5.15. "Indebtedness" means, with respect to each Numanco Company, all
obligations, contingent or otherwise, which in accordance with GAAP are required
to be classified upon the balance sheet of the Numanco Company as liabilities,
but in any event including (without duplication): (a) borrowed money; (b)
indebtedness evidenced by notes, debentures or similar instruments; (c)
Capitalized Lease Obligations; (d) the deferred purchase price of assets or
securities, including related noncompetition, consulting and stock repurchase
obligations (other than ordinary trade accounts payable within six months after
the incurrence thereof in the ordinary course of business); (e) mandatory
redemption or dividend rights on capital stock (or other equity); (f)
reimbursement obligations, whether contingent or matured, with respect to
letters of credit, bankers acceptances, surety bonds, and other financial
guarantees; (g) unfunded pension liabilities; (h) obligations that are
immediately and directly due and payable out of the proceeds of or production
from property; (i) liabilities secured by any Lien existing on property owned or
acquired by the Numanco Company, whether or not the liability secured thereby
shall have been assumed; and (j) all Guarantees in respect of Indebtedness of
others.
5.16. "Investment" means, with respect to each Numanco Company: (a) any
share of capital stock, partnership, membership, or other equity interest,
evidence of Indebtedness or other security issued by any other Person; (b) any
loan, advance or extension of credit to, or contribution to the capital of, any
other Person; (c) any Guarantee of the Indebtedness of any other Person; (d) any
acquisition of all or any part of the business of any other Person or the assets
comprising such business or part thereof; and (e) any other similar investment.
The investments described in the foregoing clauses (a) through (e) shall be
included in the term "Investment" whether they are made or acquired by purchase,
exchange, issuance of stock or other securities, merger, reorganization or any
other method; provided, however, that the term "Investment" shall not include
(i) current trade and customer accounts receivable for property leased, goods
furnished or services rendered in the ordinary course of business and payable in
accordance with customary trade terms, (ii) advances and prepayments to
suppliers for property leased, goods furnished and services rendered in the
ordinary course of business, (iii) advances to employees for travel expenses,
drawing accounts and similar expenditures, (iv) stock or other securities
acquired in connection with the satisfaction or enforcement of Indebtedness or
claims due to the Numanco Company or as security for any such Indebtedness or
claim, (v) demand deposits in banks or similar financial institutions, or (vi)
investment in ARC, L.L.C., ESG, L.L.C., and ESGI, Inc.
5.17. "Lien" means, with respect to each Numanco Company: (a) any lien,
encumbrance, mortgage, pledge, charge or security interest of any kind upon any
property or assets of the Numanco Company, whether now owned or hereafter
acquired, or upon the income or profits therefrom; (b) the acquisition of, or
the agreement to acquire, any property or asset upon conditional sale or subject
to any other title retention agreement, device or arrangement (including a
Capitalized Lease); (c) the sale, assignment, pledge or transfer for security of
any accounts, general intangibles or chattel paper of the Numanco Company, with
or without recourse; (d) the transfer of any tangible property or assets for the
purpose of subjecting such items to the payment of previously outstanding
Indebtedness in priority to payment of the general creditors of the Numanco
Company; and (e) the existence for a period of more than 120 consecutive days of
any Indebtedness against the Numanco Company which if unpaid would by law be
given any priority over general creditors.
5.18. "Numanco Companies" means, collectively, Numanco Inc., Nuvest,
and Numanco LLC, and each direct or indirect subsidiary of each such company;
individually, each such entity shall be referred to as a "Numanco Company."
5.19. "Person" means any present or future natural person or any
corporation, association, partnership, joint venture, limited liability, joint
stock or other company, business trust, trust, organization, business or
government or any governmental agency or political subdivision thereof.
5.20. "Plan" means, at any date, any pension benefit plan subject to
Title IV of ERISA maintained, or to which contributions have been made or are
required to be made, by any Numanco Company within six years prior to such date.
5.21. "Xxxxx" means Xxxxxxx X. Xxxxx, the current Manager of the
Numanco Companies.
5.22. "Buy-Sell Event" shall have the meaning ascribed to it in
Section 7.
5.23. "Interest" shall mean a Member's direct and indirect interest in
the capital and profits of the Numanco Companies as a whole, as determined from
the Member's Sharing Ratio set forth in each Numanco Company Operating
Agreement.
5.24. "Exercising Party" shall have the meaning ascribed to it in
Section 8.5(a).
5.25. "Agreed Value" shall have the meaning ascribed to it in
Section 8.6.
5.26. "Purchase Price" shall have the meaning ascribed to it in
Section 8.6.
5.27. "Contract" shall have the meaning ascribed to it in
Section 8.6(a).
5.28. "Valuation Date" shall have the meaning ascribed to it in
Section 8.6(a).
5.29. "Direct Costs" shall have the meaning ascribed to it in
Section 8.6(c).
5.30. "Prime Rate" shall have the meaning ascribed to it in
Section 8.6(e).
5.31. "FMV Net Worth" shall mean (i) ninety percent (90%) of the
Purchase Price calculated pursuant to subsections (a) through (h) of Section
8.6, (ii) plus all current assets of the Numanco Companies, (iii) plus all fixed
assets of the Numanco Companies at an agreed upon value, and (iv) less all
liabilities of the Numanco Companies (except the fee payable to Xxxxx under
Section 5.5 of the Manager's Agreement). An example calculation of the FMV Net
Worth is set forth in Exhibit F.
5.32. "Request Date" shall have the meaning ascribed to it in
Section 8.8(a).
5.33. "Manager's Agreement" shall mean the agreement between Xxxxx and
the Numanco Companies relating to Xxxxx'x appointment as Manager of such
companies.
5.34. "1935 Act" shall mean the Public Utility Holding Company Act of
1935, as amended, and the rules and regulations promulgated thereunder by the
SEC.
6. Covenants, Representations and Warranties.
Except as may be otherwise mutually agreed upon in writing, (i) Monika
agrees to vote her interest in Nuvest to authorize the Manager and the Numanco
Companies to accomplish the following, and (ii) Nuvest, Numanco LLC, and Numanco
Inc. hereby jointly and severally covenant, represent and warrant to PSO the
following:
6.1. Books and Records. Each Numanco Company shall make and keep books,
records and accounts, which, in reasonable detail, accurately and fairly reflect
the transactions and dispositions of its assets, and devise and maintain a
system of internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with management's
general or specific authorization, (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles or any other criteria applicable to such
statements and to maintain accountability for assets, (iii) access to assets is
permitted only in accordance with management's general or specific
authorization, and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
6.2. Financial Information. Each Numanco Company shall furnish the
following reports to PSO:
(a) As soon as practicable after the end of each fiscal year,
and in any event within 120 days thereafter, a balance sheet of the Numanco
Company as of the end of such fiscal year, and a statement of income and a
statement of changes in financial position of the Numanco Company for such year,
prepared in accordance with GAAP and setting forth in each case in comparative
form the figures of the previous fiscal year, all in reasonable detail including
all supporting schedules and comments.
(b) As soon as practicable after the end of the first, second
and third quarterly accounting periods in each fiscal year of the Numanco
Company, and in any event within 45 days thereafter, a balance sheet of the
Numanco Company as of the end of each such quarterly period, and a statement of
income and a statements of changes and financial condition of the Numanco
Company and its subsidiaries (if any) for such period and for the current fiscal
year to date, prepared in accordance with GAAP, setting forth in each case
comparisons to the Business Plan (as hereinafter defined) and the corresponding
period to the previous fiscal year, all in reasonable detail and signed, subject
to changes resulting from year-end audit adjustments, by the Manager.
(c) As soon as available after the end of each month, and in
any event within thirty (30) days thereafter, (i) a balance sheet of the Numanco
Company as of the end of such month, and a statement of income and changes in
financial position for the month and for the current fiscal year to date, both
prepared in accordance with GAAP setting forth in each case comparisons to the
Business Plan and the corresponding periods of the previous fiscal year; (ii) a
pro forma cash flow statement of anticipated cash flow for the next succeeding
90 day period of the Numanco Company prepared on a consolidated basis setting
forth, in each case, comparisons to the Business Plan and the corresponding
periods of the previous fiscal year, all in reasonable detail and signed,
subject to changes resulting from year-end audit adjustments, by the Manager and
accompanied by a statement explaining any material differences between budgeted
and actual results; and (iii) a memorandum from the Manager reporting on the
Numanco Company's operations, describing significant events or circumstances
affecting operations and containing such other matters as are requested by PSO.
6.3. Additional Information. Each Numanco Company shall furnish to
PSO:
(a) Upon request from a Member, a certificate executed by the
Manager stating that neither the Numanco Company nor any of its subsidiaries is
in default under its Articles of Organization or Operating Agreement, this
Agreement, any promissory note, or any other material agreement to which it is a
party or to which it or any of its properties is subject.
(b) Promptly following receipt thereof, any letters furnished
to the Numanco Company by its independent public accountants which comment on
the accounting practices of the Numanco Company.
(c) Promptly (but in any event within five days) after the
discovery of any material adverse event or circumstance affecting the Numanco
Company including, but not limited to, the filing of any material litigation
against the Numanco Company or any subsidiary and the discovery that the Numanco
Company is not, or with the passage of time will not be, in compliance with any
provision of this Agreement, any promissory note, or any other material
agreement of the Numanco Company, a notice specifying the nature and period of
existence thereof, and the actions the Numanco Company has taken and/or proposes
to take with respect thereto. The Numanco Company shall furnish the Members with
monthly reports updating and describing any developments relating to matters
described under this subparagraph and will promptly notify the Members of any
material developments or changes relating thereto.
(d) Promptly following the preparation thereof, copies of the
minutes of proceedings (or consents) of the Numanco Company's Manager and the
Members together with all written materials given to the Manager.
(e) With reasonable promptness, such other information and
data with respect to the Numanco Company and its subsidiaries (if any) as any
Member may from time to time reasonably request.
6.4. Audit and Inspection. From time to time at reasonable intervals
upon request of PSO, each Numanco Company shall furnish to PSO such other
information regarding the business, assets, financial condition, income or
prospects of the Numanco Company PSO may reasonably request, including copies of
all tax returns, licenses, agreements, leases and instruments to which any of
the Numanco Company is party. PSO shall have the right during normal business
hours upon reasonable notice and at reasonable intervals to examine the books
and records of the Numanco Company, to make copies and notes therefrom for the
purpose of ascertaining compliance with or obtaining enforcement of this
Agreement.
6.5. Confidentiality of Information. With respect to each Numanco
Company (a) PSO agrees that any information obtained by it pursuant to this
Agreement or which is proprietary to the Numanco Company or otherwise
confidential will not be disclosed without the prior written consent of the
Numanco Company except as may be required to be disclosed in order to comply
with any applicable law, rule, regulation, order or request of any governmental
agency or authority; provided, that without the prior written consent of the
Numanco Company, PSO may disclose such information to its parent corporation,
Central and South West Corporation, any direct or indirect subsidiary of such
parent, or any governmental agency having jurisdiction over any such entity; and
(b) similarly, the Numanco Company agrees that any information obtained by it
pursuant to this Agreement or which is proprietary to PSO or otherwise
confidential will not be disclosed without the prior written consent of PSO
except as may be required to be disclosed in order to comply with any applicable
law, rule, regulation, order or request of any governmental agency or authority.
Each Numanco Company shall require each of its employees who is expected to
become familiar with the Numanco Company's trade secrets or other proprietary or
confidential information to execute a confidentiality agreement containing
appropriate terms to protect such information.
6.6. Property and Liability Insurance. Each Numanco Company shall cause
to be kept insured all of the Numanco Company's assets which are of insurable
character, and which are customarily insured by companies engaged in the same or
similar businesses by financially sound and reputable insurers against loss or
damage by fire, explosion or other hazards customarily insured against by such
comparable companies with extended coverage in amounts sufficient to prevent the
Numanco Company from becoming a co-insurer, except for normal deductibles, but
not, in any event, less than eighty percent (80%) of the insurable value of the
property. Each Numanco Company will maintain, with financially sound and
reputable insurers, such insurance against hazards and risks and liabilities to
persons and property as are customarily insured against by companies engaged in
the same or similar businesses. The amount of liability insurance shall be at
least $1,000,000 for property damage and $1,000,000 for personal injury
regardless of the number of persons injured. Each Numanco Company will promptly
notify PSO of any change in insurance coverage. The Numanco Company shall
promptly cause all policies of insurance obtained by it in accordance with its
obligations hereunder to provide that they may not be cancelled unless the
insurance carrier gives PSO (or, if the insurer requires, a designated
representative of PSO) at least 30 days prior written notice thereof.
6.7. Licenses, Permits, Franchises, Etc. Each Numanco Company shall
qualify to conduct business in each jurisdiction in which the nature of its
business or activities requires it to so qualify, shall remain in good standing
in each such jurisdiction, and shall acquire and keep in force all other
licenses, permits, franchises, and other rights necessary to the operation of
its business.
6.8 Preservation of Goodwill. Each Numanco Company shall preserve
intact the present business organization, rights and privileges and present
goodwill and, to the best of its ability relationships existing with other
parties and will at all times cause to be done all things necessary to maintain,
preserve, and renew its existence and will observe and conform with all valid
requirements of all governmental authorities relating to the conduct of the
business of the Numanco Company, the failure of which would have a material
adverse effect on the Numanco Company.
6.9. Compliance with Laws. Each Numanco Company shall comply with all
applicable laws, rules and regulations of all governmental authorities, the
violation of which might have a material adverse effect upon its business or
financial condition. Without limiting the effect of the foregoing, each Numanco
Company shall (a) use and operate all of its facilities and properties in
material compliance with all Environmental Laws, keep all necessary permits,
approvals, certificates, licenses and other authorizations relating to
environmental matters in effect and remain in material compliance therewith, and
handle all Hazardous Materials in material compliance with all applicable
Environmental Laws, and (b) shall immediately notify PSO, and provide copies
upon receipt, of all written claims, complaints, notices or inquiries from any
third party (including, but not limited to, any governmental authorities)
relating to the condition of its facilities and properties or compliance with
Environmental Laws, and shall promptly cure and have dismissed with prejudice to
the satisfaction of PSO any actions and proceedings relating to compliance with
Environmental Laws.
6.10. ERISA. Each Numanco Company shall comply in all material respects
with the provisions of ERISA and the Code applicable to each Plan. Each Numanco
Company shall furnish to PSO as soon as available the following items with
respect to any Plan (a) any request for a waiver of the funding standards or an
extension of the amortization period, (b) any reportable event (as defined in
section 4043 of ERISA), unless the notice requirement with respect thereto has
been waived by regulation, (c) any notice received by the Company that the
Pension Benefit Credit Corporation has instituted or intends to institute
proceedings to terminate any Plan, or that any Multiemployer Plan is insolvent
or in reorganization, and (d) notice of the possibility of the termination of
any Plan by its administrator pursuant to section 4041 of ERISA.
6.11. Compliance with Obligations. Each Numanco Company shall comply
with all of the obligations which it has incurred or to which it becomes subject
pursuant to any contract or agreement, whether oral or written, express or
implied, the breach of which might have a material adverse effect upon its
business or financial condition, unless and to the extent that the same are
being contested in good faith and by appropriate proceedings and adequate
reserves have been set aside on its books with respect thereto.
6.12. Taxes. Each Numanco Company shall pay and discharge all taxes,
assessments, interest and installments on mortgages and governmental charges
against it or against any of its properties, upon the respective dates when due,
except to the extent that (i) such taxes, assessments, interest, installments
and governmental charges are contested in good faith and by appropriate
proceedings in such manner as not to cause any materially adverse effect on its
financial condition or loss of any right of redemption from any sale, and (ii)
the Numanco Company shall have set aside on its books reserves (segregated to
the extent required by generally accepted accounting principles) adequate with
respect to such liabilities.
6.13. Indebtedness. No Numanco Company shall create, incur, assume or
otherwise become or remain liable with respect to any Indebtedness except the
following:
(a) Indebtedness under this Agreement.
(b) Current liabilities, other than Financing Debt, incurred
in the ordinary course of business.
(c) To the extent that payment thereof shall not at the time
be required by Section 6.12, Indebtedness in respect of taxes, assessments,
governmental charges and claims for labor, materials and supplies.
(d) Indebtedness in respect of deferred taxes arising in the
ordinary course of business.
(e) Up to $12 million of Indebtedness owed by Nuvest, Numanco
Inc., and/or Numanco LLC to Bank of Oklahoma, N.A., or any substantially
equivalent financial institution, provided the payment of such Indebtedness is
secured by a pledge of the Numanco Companies' accounts receivables and the
proceeds of such Indebtedness are used in accordance with the Business Plan.
(f) Indebtedness owed by Numanco Inc. to Nuvest or by Numanco
LLC to Nuvest.
6.14. Guarantees; Letter of Credit. No Numanco Company shall become or
remain liable with respect to any Guarantee, including reimbursement
obligations, whether contingent or matured, under letters of credit or other
financial guarantees by third parties, except under this Agreement, and except
under a bond or guarantee issued by one Numanco Company to secure the
performance by another Numanco Company of any agreement to furnish temporary
employment services to an unrelated entity.
6.15. Lease Obligations. No Numanco Company shall be or become
obligated as lessee under any lease, except as provided in the Business Plan.
6.16. Liens. No Numanco Company shall create, incur or enter into, or
suffer to be created or incurred or to exist, any Lien, except under this
Agreement, and except Liens granted to secure the Indebtedness described under
Sections 6.13(e) and (f).
6.17. Investments and Acquisitions. No Numanco Company shall have
outstanding, acquire, commit itself to acquire or hold any Investment (including
any Investment consisting of the acquisition of any business) except for (i)
Investments in Cash Equivalents; (ii) Nuvest's Investment in Numanco Inc. and
Numanco LLC; and (iii) Numanco Inc.'s Investment in Numanco LLC. The parties
acknowledge and approve of the formation of A.R.C., L.L.C. and E.S.G., L.L.C.,
each an Oklahoma limited liability company, and the Numanco Companies'
investment in each such entity.
6.18. Distributions. No Numanco Company shall make any Distributions
other than (a) Distributions required for the purpose of paying (i) permitted
Indebtedness, or (ii) income tax liability as set forth in Section 5.01 of the
Numanco Company's Operating Agreement, and (b) Distributions otherwise
contemplated by this Agreement.
6.19. Reimbursement of Expenses. Members shall not be entitled to any
compensation for attendance at meetings of the Members, except that upon a
Member's request the Numanco Company shall reimburse him for all reasonable
travel, food and lodging expenses incurred or paid by him in connection with
attendance at such meetings.
6.20. Maintenance of Properties. Each Numanco Company will maintain and
keep its properties, real and personal, in good repair, working order, and
condition, and from time to time make all necessary or desirable repairs,
renewals, and replacements, so that its business may be properly and
advantageously conducted at all times.
6.21. Business Plan Revisions. The Business Plan may be revised from
time to time in accordance with the following:
(a) At least annually, or more often as the Manager or any
Member may request, the Manager or Member shall furnish a copy of any proposed
revisions to the Manager and the Members at least 30 days prior to the beginning
of its proposed implementation. The proposed amendment to the Business Plan
shall become effective if approved by all the Members and the Manager. A copy of
the Numanco Companies' Business Plan existing as of the date hereof is attached
hereto as Exhibit G.
(b) For all purposes of this Agreement, the term "Business
Plan" shall mean the Business Plan most recently amended pursuant to Section
6.21(a) until further amended.
6.22. Patents, Trademarks and Copyrights. Intellectual property of
the Numanco Company shall be governed by the following provisions:
(a) No Numanco Company will do any act or omit to do any act
whereby any Numanco Company patent or any patent licensed by the Numanco Company
may become abandoned or rendered invalid. Each Numanco Company shall take all
such actions as may be necessary to maintain the validity of all such patents.
(b) No Numanco Company will do any act or omit to do any act
whereby any Numanco Company trademark or any trademark licensed by the Numanco
Company may become abandoned or rendered invalid. Each Numanco Company shall
take all such actions as may be necessary to maintain the validity of all such
trademarks.
(c) Each Numanco Company has placed and will continue to place
appropriate notice of copyright on all copies embodying Numanco Company
copyrighted works which are publicly distributed and the Numanco Company will
not do any act or omit to do any act whereby any Numanco Company copyright may
become invalidated or dedicated to the public domain.
(d) Each Numanco Company will take all steps necessary in the
opinion of counsel in any proceeding before the United States Patent and
Trademark Office, United States Register of Copyrights or similar office or
agency of the United States or any office of the Secretary of State (or
equivalent) of any state thereof, to maintain and prosecute each application and
registration of Numanco Company patents, trademarks and copyrights, including,
without limitation, filing of renewals, extensions, affidavits of use and
incontestability, and opposition, interference and cancellation proceedings.
(e) With respect to each Numanco Company, in the event that
any Numanco Company patent, trademark, or copyright is infringed,
misappropriated or diluted by a third party, the Numanco Company shall, unless
the Numanco Company shall determine in its reasonable business judgment that
such trademark, patent or copyright is of negligible economic value to the
business of the Numanco Company, promptly xxx for infringement, misappropriation
and/or dilution and to obtain injunctive relief and recover damages therefor,
and shall take such other actions to protect such patent, trademark, or
copyright, all as the Numanco Company shall deem appropriate in its reasonable
business judgment under the circumstances.
6.23. Merger, Consolidation, Sale of Assets, Organic Changes. No
Numanco Company shall issue or agree to issue any additional stock or membership
interests or cause any division or splitting of any such stock or ownership
interests, reclassification, exchange or substitution thereof or approve or
agree to any reorganization, merger, consolidation or combination with any
corporation or other entity or sell or lease (as lessor) more than 5 percent of
the Numanco Company's total consolidated assets in any 12-month period (other
than sales or other dispositions of inventory in the normal course of business
or as provided in the Business Plan), or liquidate, dissolve recapitalize or
reorganize in any form of transaction. No Numanco Company shall adopt any
amendment, modification or waiver of any provision of its Operating Agreement or
Articles of Organization, except as provided in this Agreement.
6.24. Insider Transactions. No Numanco Company shall engage in any
transaction with its Manager or any of its Members except (a) as provided in
this Agreement, or the Numanco Company's management agreement with the Manager,
or any related Agreement, and (b) reimbursements of reasonable expenses incurred
in the ordinary course of business.
6.25. Type of Business. Each Numanco Company shall engage only in (a)
the business of providing temporary manpower services to the electric utility
industry, and (b) its historical base of business, and (c) other businesses
approved in the Business Plan.
6.26. Conflicting Agreements or Actions. No Numanco Company shall enter
into any agreement or make any amendment to any agreement or take any other
action which would restrict or adversely affect the Numanco Company's
performance of its obligations to PSO under its Articles of Organization, as
amended, its Operating Agreement, this Agreement or any agreement referred to
herein.
6.27. Capital Expenditures. No Numanco Company will make Capital
Expenditure in excess 25% of the amount set forth in the Business Plan during
any one fiscal year.
7. Buy-Sell Events.
Each of the following events shall be a "Buy-Sell Event" (collectively,
the "Buy-Sell Events"):
7.1. If (a) the FMV Net Worth shall fall to zero or below, (b) the
Members and the Manager shall fail to reach agreement on a new or revised
Business Plan within thirty (30) days after PSO has made a request for same, and
(c) PSO shall provide notice to Monika that it desires to invoke the provisions
of this Section 7.1.
7.2. If PSO shall decline to vote its Interest in Nuvest to renew
Xxxxx'x Manager's Agreement upon the same terms.
7.3. If any Numanco Company shall default in the payment when due of
any principal or interest on any Indebtedness or shall default under or fail to
perform or observe any material term, covenant or other agreement contained in,
any material agreement, document or instrument to which it is a party or to
which it or its assets is bound, and such default or failure to perform shall
continue and remain unwaived by the obligee for more than thirty (30) days after
written notice thereof or any applicable period of grace therein specified,
whichever is longer, except where the Numanco Company is in good faith and
through appropriate proceedings contesting such default or failure to perform.
7.4. If any covenant, representation or warranty made herein or in
connection with the transactions contemplated in this Agreement shall be
breached or shall prove to have been false or incorrect on the date as of which
made resulting in a material adverse effect on the Numanco Company and such
false or incorrect representation or warranty shall not have been remedied
within thirty (30) days after written notice thereof shall have been given to
the Numanco Company.
7.5. If any Numanco Company shall make an assignment for the benefit of
creditors, or shall admit in writing its inability to pay its debts as they
become due, or an order for relief is entered against the Numanco Company under
any bankruptcy laws or the Numanco Company shall file any petition or answer
seeking for itself any reorganization, arrangement, composition, readjustment,
dissolution or similar relief under any present or future statute, law or
regulation, or shall file an answer admitting the material allegations of a
petition filed against the Numanco Company in any such proceeding, or shall seek
or consent to the acquiesce in the appointment of any trustee, receiver or
liquidator of the Numanco Company of all or any substantial part of the
properties of the Numanco Company.
7.6. If Monika shall die, become disabled (such that she cannot perform
her duties as a Member for a period of six continuous months), or file for
protection under the bankruptcy laws, or with respect to any Numanco Company,
there shall occur any other event that, under the laws of the State of Oklahoma,
would result in the dissolution of the Numanco Company (other than the event
described in Section 7.10); provided, none of the foregoing events described in
this Section 7.6 relating to Monika shall result in a Buy-Sell Event under this
Section 7.6 as long as Xxxxx is serving as Manager of each Numanco Company and
Xxxxx either (i) acquires or succeeds to all of Monika's interest in Nuvest and
becomes a Substitute Member of Nuvest, or (ii) becomes trustee of a trust that
acquires or succeeds to all of Monika's interest in Nuvest and, in his capacity
as such trustee, becomes a Substitute Member of Nuvest (provided, it is agreed
that if for any reason Xxxxx ceases to serve as the trustee of such trust, the
interest in Nuvest held by the trust shall automatically convert to an economic
interest having no voting rights), or (iii) acquires or succeeds to all of
Monika's interest in Nuvest through any combination of (i) or (ii).
7.7. If Xxxxx shall:
(a) Make an assignment for the benefit of creditors or file
for protection under the bankruptcy laws or become the subject of an involuntary
petition under such laws, and fail to rescind such assignment or dismiss such
petition within thirty (30) days after his receipt of notice of a complaint of
violation of this Section 7.7(a) by any party hereto; or;
(b) breach his duty of loyalty to any Numanco Company, or any
obligation under his Manager's Agreement, and fail to cure such breach within
thirty (30) days after his receipt of notice of the breach by any party hereto;
or
(c) enter into any transaction in which he derives an improper
personal benefit to the detriment of a Numanco Company, and fail to rescind such
transaction or, if the transaction cannot be rescinded, remit such improper
personal benefit to the Numanco Company within thirty (30) days after his
receipt of notice of a complaint of violation of this Section 7.7(c) by any
party hereto.
7.8. If Xxxxx shall die or suffer a "disability," which shall mean any
physical or mental condition which would prevent him from performing his duties
under his Manager's Agreement for a period of six continuous months.
7.9. If, after December 31, 1999, Xxxxx shall voluntarily resign his
position as Manager of any Numanco Company after providing the Numanco Company
with six (6) months' prior notice.
7.10 If PSO shall involuntarily withdraw, or be ordered to withdraw,
from Nuvest as a result of requirements imposed by regulatory authorities having
jurisdiction over PSO.
7.11 If any one of the following events shall occur:
(a) PSO shall fail to agree to guarantee the lines of credit
necessary to supply the sources of funds budgeted in the most recently approved
Business Plan (to the extent the same cannot be supplied out of current
operations); or
(b) PSO shall fail to approve a proposed amendment to the most
recently approved Business Plan, if such proposed amendment would require PSO to
guarantee a line of credit necessary to supply the sources of funds budgeted in
such proposed amendment (to the extent the same cannot be supplied out of
current operations), so long as (i) such proposed amendment is consistent with
the lines of business described in the most recently approved Business Plan, and
(ii) there has not been a material adverse change in any such lines of business
or in any of the other assumptions underlying such Business Plan; or
(c) All of the following shall occur:
(i) both of the current representatives of PSO (or
the representatives of any affiliate of PSO) who are assigned the primary
responsibility for monitoring PSO's investment in the Numanco Companies and are
serving as the principal contact between PSO and the Manager cease, for any
reason, to serve in such capacity;
(ii) the person or persons appointed by PSO to
replace such representatives, after serving in such capacity for a period of at
least 90 days, are, despite the good faith efforts of such replacements and the
Manager, unsatisfactory to the Manager; and
(iii) the person or persons appointed by PSO, at the
request of the Manager, to replace the persons described in (ii), after serving
in such capacity for a period of at least 90 days, are, despite the good faith
efforts of such replacements and the Manager, unsatisfactory to the Manager;
provided, this Section 7.11(c) shall not apply if the person or persons
appointed by PSO to replace the persons described in (ii) is one or both of the
current representatives of PSO (or its affiliate) described in (i).
8. Consequences of a Buy-Sell Event.
8.1. Indemnity. The Numanco Companies shall be jointly and severally
liable to PSO for any amounts PSO may be required to pay pursuant to its
guaranty of any Indebtedness, and all attorneys fees and additional other costs
PSO may incur in connection therewith. The payment of all of amounts covered by
this indemnity shall be secured by a security interest in the same collateral
held by the creditor to whom such Indebtedness was owed.
8.2. Enforcement. Upon the occurrence of a Buy-Sell Event, PSO may
proceed to protect and enforce its rights by a suit in equity, action at law or
other appropriate proceeding for the collection of amounts it is due, for the
specific performance of any agreement contained herein or in the Operating
Agreement of any Numanco Company or in any other documents executed and
delivered in connection herewith, or for an inunction against a violation of any
of the terms or provisions hereof or thereof or in aid of the exercise of any
power granted hereby or thereby or by law.
8.3. Reallocation of Voting Rights. Notwithstanding the parties'
respective interests in the profits and capital of Nuvest, Voting Rights (as
such term is defined in the Nuvest Operating Agreement) with respect to all
matters coming before a vote of the Members of Nuvest shall be apportioned as
follows:
(a) Prior to the occurrence of a Buy-Sell Event, the Voting
Rights of the Members of Nuvest shall be apportioned 4.9% for PSO, and 95.1% for
Monika.
(b) Upon occurrence of a Buy-Sell Event, the Voting Rights
shall be reapportioned 51% for PSO and 49% for Monika; provided, however, to the
extent required by the 1935 Act, PSO shall limit its control over Nuvest, and,
in turn, Nuvest's control over all other Numanco Companies, to one or more of
the following: (A) electing a new Manager for one or all of the Numanco
Companies, (B) electing new officers for Numanco Inc., (C) overseeing the
development of a restructured operating plan for the Numanco Companies, and/or
(D) liquidating and dissolving the Numanco Companies; provided further, in the
event Monika is entitled to purchase the Interest of PSO pursuant to one of the
provisions of Section 8.4, and Monika provides notice to PSO pursuant to Section
8.5(a) that she is exercising such right, then PSO shall refrain from exercising
its control pursuant to (A), (B), (C), and (D) above until such time as Monika's
right to purchase PSO's Interest lapses because of Monika's failure, for
whatever reason (as long as the reason is not due to any breach of duty by PSO),
to purchase PSO's Interest on the closing date described in Section 8.5(b) and
in accordance with the other terms described in Sections 8.5 and 8.6.
8.4. Buy-Sell. Subject to the provisions of Sections 8.5 and 8.6:
(a) Upon the occurrence of the Buy-Sell Event set forth in
Section 7.1, Monika may purchase all (but not less than all) of PSO's Interest,
and if Monika chooses not to do so, PSO may purchase all (but not less than all)
of Monika's Interest. Monika shall have no right to require PSO to purchase her
Interest.
(b) Upon the occurrence of the Buy-Sell Event set forth in
Section 7.2, Monika may, at her option, either purchase all (but not less than
all) of PSO's Interest, or require PSO to purchase all (but not less than all)
of Monika's Interest. PSO shall have no right to purchase any of Monika's
Interest, should Monika choose not to exercise her rights under this Section
8.4(b).
(c) Upon the occurrence of one of the Buy-Sell Events set
forth in Sections 7.3, 7.4, 7.5, 7.6, or 7.7, PSO shall have the right to
purchase all (but not less than all) of Monika's Interest. Monika shall have no
right to purchase any of PSO's Interest or to require PSO to purchase her
Interest.
(d) Upon the occurrence of one of the Buy-Sell Events set
forth in Section 7.8, Monika may require PSO to purchase all of her Interest. If
Monika chooses not to do so, PSO may purchase not more than fifty percent (50%)
(but not less than 50%) of Monika's Interest, and, at PSO's option, PSO may
cause the Operating Agreements of the Numanco Companies, as applicable, to
convert any Interest retained by Monika in any Numanco Company to a non-voting
Interest.
(e) Upon the occurrence of the Buy-Sell Event set forth in
Section 7.9, PSO may purchase all (but not less than all) of Monika's Interest.
If PSO chooses not to do so, the parties will proceed to sell the Numanco
Companies as soon as is reasonably practicable, and the proceeds of such sale
shall be distributed between PSO and Monika in accordance with their respective
Interests.
(f) Upon the occurrence of the Buy-Sell Event set forth in
Section 7.10, Monika may purchase all (but not less than all) of PSO's Interest.
If Monika chooses not to do so, the parties will proceed to sell the Numanco
Companies as soon as is reasonably practicable, and the proceeds of such sale
shall be distributed between PSO and Monika in accordance with their respective
Interests.
(g) Upon the occurrence of a Buy-Sell Event set forth is
Section 7.11, PSO shall, at Monika's request, purchase all (but not less than
all) of Monika's Interest, [and if Monika chooses not to do so, PSO may purchase
all, but not less than all, of Monika's Interest].
8.5. Purchase Procedures. Any right to compel the purchase or sale
of an Interest under Section 8.4 may be exercised only pursuant to the following
procedures and terms:
(a) The party entitled to exercise the right (the "Exercising
Party") shall provide the other party with notice of the Exercising Party's
intent to purchase the Interest of the other party (or the Exercising Party's
intent to require the other party to purchase the Exercising Party's Interest,
as the case may be) within thirty (30) days after the occurrence of the event
giving rise to the right.
(b) The closing of Monika's purchase of PSO's Interest shall
occur on the one hundred twentieth (120th) day following PSO's receipt of
Monika's notice described in Section 8.5(a), at the corporate offices of PSO in
Tulsa, Oklahoma; provided, in no event shall PSO be obligated to sell its
Interest to Monika unless and until PSO is released of all liability under its
guaranty and any other agreement by which it is or has become responsible for
the payment of all or a part of the Indebtedness.
(c) In the event that notice pursuant to Section 8.5(a) will
result in the purchase by PSO of all or a part of Monika's Interest
(irrespective of whether PSO or Monika is the Exercising Party), PSO shall, as
soon as is reasonably practicable after such notice is given, file an
application with the SEC for approval to acquire such Interest and pursue such
application in good faith and with reasonable diligence. The closing of PSO's
purchase of Monika's Interest shall occur at PSO's corporate offices in Tulsa on
the thirtieth (30th) day following PSO's receipt of an order from the SEC
approving the purchase; provided, if the SEC denies PSO's application or fails
for any reason to rule on the application within ninety (90) days after such
notice is given pursuant to Section 8.5(a), then:
(i) if PSO is the Exercising Party, PSO's purchase
rights shall lapse with respect to the event giving right to such purchase
right; and
(ii) if Monika is the Exercising Party, the parties
shall proceed to sell the Numanco Companies as soon as is reasonably
practicable, and the proceeds of such sale shall be distributed between PSO and
Monika as follows:
(A) Monika shall receive all of the
proceeds of such sale until she has received an amount equal to the Purchase
Price for her Interest that would otherwise have been payable to Monika pursuant
to Section 8.6, plus simple interest on such amount at a varying rate per annum
equal to the Prime Rate (as defined in Section 8.6(e)), plus one percent (1%),
accrued during a period commencing on the date that is 120 days after the date
of the Buy-Sell Event and ending on the date Monika receives payment under this
Section 8.5(c)(ii)(A), and.
(B) The remainder of such proceeds, if any,
shall be paid to PSO; provided further, if such SEC approval is obtained at any
time prior to the consummation of the sale of the Numanco Companies, the Numanco
Companies shall not be sold and PSO and Monika shall proceed with the closing of
the sale of Monika's Interest to PSO on the thirtieth (30th) day after receipt
of the SEC order, at the Purchase Price, plus simple interest on such amount
calculated in accordance with Section 8.5(c)(ii)(A).
8.6. Purchase Price Calculation. The Members shall use their best
efforts to determine the value of each Member's Interest, as of the first day of
each calendar quarter (the "Agreed Value"). The Agreed Value shall not be
effective unless it is reduced to writing and signed by all Members. The
purchase price to be paid for the selling Member's Interest purchase pursuant to
Section 8.4 (the "Purchase Price") shall be the most recently determined Agreed
Value multiplied by the ratio the selling Member's Interest bears to the total
Interests of all Members; provided, if the Members cannot unanimously agree on
the Agreed Value at the quarterly meeting, or if the Agreed Value was not signed
by all Members, or if no Agreed Value was determined within a period of three
(3) months prior to the date of occurrence of the Buy-Sell Event, then the
Purchase Price of the Interest being purchased and sold shall be calculated as
follows:
(a) For each Numanco Company, an estimate shall be made of the
gross proceeds expected to be received from each service "Contract" (defined as
any written or oral agreement or understanding pursuant to which the Numanco
Company has the right to render a service to any Person who is not an Affiliate
of the Numanco Company) in effect as of the ninetieth (90th) day following the
date of the Buy-Sell Event (the "Valuation Date").
(b) There shall be added to or subtracted from the gross
proceeds determined pursuant to Section 8.6(a) any proceeds attributable to any
additions or deletions to the Contract effected through the Valuation Date.
(c) With respect to each Contract, an estimate shall be made
of all "Direct Costs" (defined as the sum of the gross payroll expense, the
pass-through per diem expense, the employer payroll tax expense, and other
direct costs required in order to perform the Contract) the Numanco Company will
be required to incur in order to perform the work specified under the Contract.
(d) With respect to each Contract, the net proceeds of the
Contract shall be determined by subtracting the Direct Costs estimated pursuant
to Section 8.6(c) from the gross proceeds estimated pursuant to Sections 8.6(a)
and (b).
(e) The present value of the net proceeds of each Contract, as
calculated pursuant to Section 8.6(d), shall be determined, using as a discount
rate the "Prime Rate", as published in the Wall Street Journal ("WSJ") on the
Valuation Date (or, if WSJ is not published on the Valuation Date, on the next
date in which the WSJ is published), plus one percent (1%).
(f) The present value of each Contract, as determined pursuant
to Section 8.6(e), shall be added together.
(g) The sum calculated pursuant to Section 8.6(f) shall be
multiplied by the ratio the Interest being purchased and sold bears to the total
Interests of all Members.
(h) The Purchase Price shall be determined by adding the
amount calculated pursuant to Section 8.6(g) to the capital account balance
(including undistributed earnings) in each Numanco Company, as of the Valuation
Date, of the Member whose Interest is being purchased and sold.
8.7 Covenant Not to Compete. The Members acknowledge that any sale
which occurs pursuant to Section 8.4 shall involve the sale of the good will of
the business of the Numanco Companies. The parties agree that the Purchase Price
(whether pursuant to the Agreed Value or the formula set forth in Sections
8.6(a) through (h)) includes consideration for the good will of the business.
Therefore, the selling Member agrees for and in consideration of the Purchase
Price, to execute a Noncompetition Agreement in favor of the Company in the form
attached hereto as Exhibit E.
8.8 Additional Purchase/Sale Rights. Unless the parties otherwise agree
in writing, the Members shall have the following additional purchase and sale
rights:
(a) During the month of January in the year 2000, and during
the month of January of each year thereafter while this Agreement remains in
effect, either Member may request that the other Member purchase the requesting
Member's Interest. The date of any such request shall be referred to herein as
the "Request Date."
(b) If, within thirty (30) days after the Request Date, the
other Member declines the request or the Members are unable to agree upon a
purchase price for the requesting Member's Interest, the Members shall proceed
to sell the Numanco Companies as soon as is reasonably practicable at a sales
price both Members agree upon. However, if
(i) within sixty (60) days after the Request Date,
the Members do not reach agreement as to a sales price for the Numanco Companies
to a third party, or
(ii) the Members agree upon a sales price for the
Numanco Companies to a third party but a letter of intent for the sale of the
Numanco Companies at such price is not signed within one-hundred eighty (180)
days after the Request Date, then the parties shall follow the procedures
described in Section 8.8(d).
(c) If, pursuant to a request made by a Member under Section
8.8(a), the Members do agree upon a purchase price for the requesting Member's
Interest, the Members shall have a period of one-hundred twenty (120) days after
the Request Date to enter into a definitive agreement between themselves for the
purchase and sale of the selling Member's Interest, which agreement shall
provide for the closing of such transaction to occur not later than one-hundred
eighty (180) days after the Request Date. However, if
(i) within the 120-day period following the Request
Date, the Members do not enter into a definitive agreement between themselves
for the purchase and sale of the selling Member's Interest, or
(ii) the Members enter into a definitive agreement
between themselves for the purchase and sale of the selling Member's Interest,
but the closing of the sale of the selling Member's Interest does not, for any
reason (including the failure of the SEC to approve the sale under the
circumstances described in Section 8.8(e)), occur within the 180-day period
following the Request Date, then the parties shall follow the procedures
described in Section 8.8(d).
(d) The parties shall have a period of thirty (30) days after the
occurrence of the final event applicable under Section 8.8(b)(i) or (ii), or the
final event applicable under Section 8.8(c)(i) or (ii), as the case may be, to
agree to continue operating the Numanco Companies under this Agreement, the
Operating Agreements, and the Manager's Agreement, but if the parties cannot
reach agreement to continue operations within such 30-day period, the parties
shall proceed to sell the Numanco Companies at the best sales price available in
the market. The proceeds of a sale effected pursuant to the preceding sentence
shall be distributed between the Members in accordance with the liquidation
provisions of the Operating Agreements of the Numanco Companies. Until the
closing of such sale, all such Operating Agreements, the Managers' Agreement,
and this Agreement shall remain in full force and effect.
(e) If, pursuant to a request made by Monika under Section 8.8(a), PSO
agrees to purchase Monika's Interest for a mutually agreeable purchase price,
then (i) PSO shall, as soon as is reasonably practicable after reaching such
agreement, file an application with the SEC for approval to acquire such
Interest and pursue such application in good faith and with reasonable
diligence, and (ii) the definitive agreement for such purchase and sale shall
provide, as a condition precedent to PSO's obligation to purchase Monika's
Interest, that the SEC shall have issued an order, prior to the expiration of
the 180-day period specified in Section 8.8(c), approving PSO's acquisition of
the Interest.
9. Notices.
9.1. All notices required or given under this Agreement shall be in
writing and shall be deemed given (i) when received, if personally delivered;
(ii) the day after it is sent, if sent by a recognized expedited delivery
service with next-day delivery requested; or (iii) five days after it is sent,
if mailed, postage prepaid, via certified mail, return receipt requested. In
each case, notice shall be sent to:
If to PSO: Public Service Company of Oklahoma
000 Xxxx 0xx Xxxxxx
Xxxxx, XX 00000-0000
Attn: Xxxxxx X. Xxxxxxxx
If to any other party: Xxxxxx Xxxxx
0000 Xxxx 00xx Xxxxx
Xxxxxx Xxxxx
Xxxxx, XX 00000
or such other addresses as such party shall have specified by notice in writing
to the other party.
10. Limitation of Members' Liability.
10.1 Limitation of Members' Liability. Anything herein to the contrary
notwithstanding, except as otherwise expressly agreed in writing, no Member
shall be personally liable for any of the obligations created by this Agreement
or for any debts, liabilities, or obligations of any of the Numanco Companies,
whether to any one of such Companies, to any of the other Members, or to
creditors of the Companies, beyond the Member's Capital Account, as defined in
the Operating Agreement for each Numanco Company, together with the Member's
share of the assets and undistributed profits of the Numanco Company.
11. General.
11.1. Entire Agreement. This Agreement constitutes the whole and entire
agreement between the parties pertaining to the subject matter hereof, and
supersedes all prior agreements or understandings. This Agreement may not be
modified except by an instrument in writing signed by all parties.
11.2. Governing Law. The validity, construction and enforcement of, and
the remedies under, this Agreement shall be governed in accordance with the laws
of Oklahoma, except any choice of law provision of Oklahoma law shall not apply
if the law of a state or jurisdiction other than Oklahoma would apply thereby.
11.3. Jurisdiction and Venue. The parties to this Agreement agree that
jurisdiction and venue of any action brought to enforce, or to construe or
determine the validity of, any term or provision contained in this agreement
shall properly lie in the District Court of Tulsa County, Oklahoma, or the
United States District Court for the Northern District of Oklahoma. Such
jurisdiction and venue are merely permissive; jurisdiction and venue shall also
continue to lie in any court where jurisdiction and venue would otherwise be
proper. The parties further agree that the mailing by certified or registered
mail, return receipt requested, of any process required by either such court
shall, when received, constitute valid and lawful service of process against
them, without the necessity for service by any other means otherwise provided by
statute or rule of court.
11.4. Binding Effect; 1935 Act Compliance; Assignment. This Agreement
shall inure to the benefit of and be binding upon the parties hereto and their
respective personal representatives, successors and permitted assigns; provided,
however, any obligation of PSO hereunder or under any other agreement or
instrument referred to herein shall be conditioned upon compliance with the
regulatory approval requirements of the 1935 Act. No party may assign his
obligations hereunder without the prior written consent of all other parties;
provided, however, without the prior consent of any other party, PSO may assign
this Agreement to its parent corporation, Central and South West Corporation, or
any direct or indirect subsidiary of such parent.
11.5. Injunctive Relief. Each of the parties hereto hereby acknowledges
that in the event of a breach by any of them of any material provision of this
Agreement, the aggrieved party may be without an adequate remedy at law. Each of
the parties therefore agrees that in the event of a breach of any material
provision of this Agreement the aggrieved party may elect to institute and
prosecute proceedings in any court of competent jurisdiction to enforce specific
performance or to enjoin the continuing breach of such provision, as well as to
obtain damages for breach of this Agreement. By seeking or obtaining any such
relief, the aggrieved party will not be precluded from seeking or obtaining any
other relief to which it may be entitled.
11.6. Waiver. Except as otherwise provided in this Agreement, any
failure of any of the parties to comply with any obligation, covenant, agreement
or condition herein may be waived by the parties entitled to the benefits
thereof only by a written instrument signed by the party granting such waiver,
but such waiver or failure to insist upon strict compliance with such
obligation, covenant, agreement or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure.
11.7. 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.
11.8. 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.
11.9. 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.
11.10. Severability 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.
11.11. Captions. The headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement.
11.12. Expenses. Each party to this Agreement shall bear its, his or
her own expenses incurred in connection with negotiation, preparation and
execution of this Agreement and the transactions contemplated herein.
11.13. Confidentiality. The terms of this Agreement shall remain
confidential between the parties, except that without the consent of any other
party, PSO may disclose such terms and furnish a copy of this Agreement to its
parent corporation and affiliates described in Section 10.4 above, and to any
governmental agency having jurisdiction over PSO or any such entity.
11.14. Attorneys Fees. If any action is brought to enforce, or to
construe or determine the validity of, any term or provision of this agreement,
the prevailing party shall be entitled to reasonable attorney's fees and costs
of the action.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
Public Service Company of Oklahoma
By:
Title:
Xxxxxx Xxxxx
Numanco, L.L.C.
By:
Title:
Nuvest, L.L.C.
By:
Title:
NSS Numanco, Inc.
By:
Title:
Exhibits:
A Amended and Restated Articles of Organization for Nuvest
B Amended and Restated Operating Agreement for Nuvest
C Amended and Restated Articles of Organization for Numanco LLC
D Amended and Restated Operating Agreement for Numanco LLC
E Noncompetition Agreement
F Example of FMV Net Worth Calculation
G Business Plan for the Numanco Companies
