Exhibit 10.1
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
SOUTHSTAR ENERGY SERVICES LLC
(A Delaware Limited Liability Company)
(Member Managed)
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
SOUTHSTAR ENERGY SERVICES LLC
This Amended and Restated Limited Liability Company Agreement of
SouthStar Energy Services LLC, a limited liability company organized pursuant to
the Delaware Limited Liability Company Act, is effective as of the 1st day of
January, 2004, by and between Georgia Natural Gas Company ("GNGC") and Piedmont
Energy Company ("Piedmont") (referred to jointly herein as "Current Members,").
WITNESSETH
WHEREAS, the Current Members had previously entered into a limited
liability company agreement relating to the formation and operation of the
Company, which agreement and related Operating Policy and all schedules,
exhibits and amendments thereto, the Current Members intend to be superceded by
and terminated pursuant to the terms hereof;
WHEREAS, GNGC and Piedmont desire to maintain the Company as a limited
liability company pursuant to the Delaware Limited Liability Company Act, for
the purpose of selling on a non-regulated basis natural gas to target retail
customers, providing non-regulated products and services related to such sales,
and engaging in all other activities permitted by law and agreed to by the
Members pursuant to the terms of this Company Agreement;
NOW THEREFORE, in consideration of the mutual agreements, promises and
undertakings hereinafter set forth, the Members agree as follows:
ARTICLE I
Definitions
The following terms, as used herein, shall have the following meanings:
Act means the Delaware Limited Liability Company Act and all amendments to the
Act, as in effect from time to time.
Additional Member means a Person other than a Current Member who has acquired a
Company Interest from the Company or from another Member in accordance with
Article XII of this Company Agreement pursuant to an Admission Agreement.
2
Admission Agreement means the Agreement between an Additional Member and the
Company described in Section 9.1(b) substantially in the form set forth as
Exhibit E.
Affiliate means, with respect to any Person, (a) each entity that such Person
Controls: (b) each Person that Controls such Person, including, in the case of a
Member, such Person's parent, and (c) each entity that is under common Control
with such Person, including, in the case of a Member, each entity that is
Controlled by such Member's parent.
AGLR means AGL Resources Inc.
Allocable Share means, as to any Member, the percentage by which such Member
shall share in the distribution of any Company Income, which percentage may
change in proportion to which a change in the Member's Capital Account may bear
to the concurrent change in the Capital Account of the other Member(s). As of
the date hereof, each Member's Allocable Share is listed on Exhibit D.
Bankruptcy means, with respect to a Person: (i) the commencement against such
Person of proceedings for any relief under any bankruptcy or insolvency law, or
any law relating to the relief of debtors, readjustment of indebtedness,
reorganization, arrangement, composition, or extension of debts, provided such
proceeding shall not have been dismissed, nullified, stayed, or otherwise
rendered ineffective (but only so long as such ineffectiveness shall continue in
force) within ninety (90) days after the commencement of such proceedings; (ii)
the commencement by such Person of proceedings for any relief under any
bankruptcy or insolvency law, or any law relating to the relief of debtors,
readjustment of indebtedness, reorganization, arrangement, composition, or
extension of debts; (iii) a decree or order of a court having jurisdiction in
the premises for the appointment of a receiver, liquidator, or trustee or
assignee in bankruptcy or insolvency of such Person or of a substantial part of
such Person's property, or for the winding up or liquidation of its affairs,
which decree or order remains in force undischarged and unstayed for a period of
ninety (90) days; or (iv) a general assignment by such Person for the benefit of
creditors or the admission by such Person in writing of its inability to pay its
debts generally as they become due.
Business Plan means the plan by which the Members agree to conduct the business
of the Company, which plan may be adopted and amended by the Members from time
to time pursuant to Section 8.1(2).
Capital Account means the account maintained for a Member determined in
accordance with Section 9.4.
3
Capital Contribution means the value of Property contributed, from time to time,
to the Company by any one Member, or provided that such value, in the case of
Property other than cash, shall be the fair market value of such Property as
reasonably determined by the Member contributing such Property and the Executive
Committee or by the Dispute Resolution Procedures provided in Article 16 hereof.
Certificate of Formation shall mean the certificate of formation of the Company
as filed with the Delaware Secretary of State's Office.
Change in Control means: (a) with respect to Piedmont, the acquisition by any
single Person or group of Affiliates, of Control of PNG; or (b) with respect to
GNGC, the acquisition by any single Person or group of Affiliates, of Control of
AGLR.
Code means the Internal Revenue Code of 1986, as amended from time to time, or
any successor thereto; any reference to a section of the Code or the Regulations
shall mean such section or any successor thereto as in effect at the time or
times in question.
Company means SouthStar Energy Services LLC, a limited liability company formed
under the laws of Delaware.
Company Agreement means this Amended and Restated Limited Liability Company
Agreement of SouthStar Energy Services LLC, including all amendments adopted in
accordance with this Company Agreement and the Act, and together with all
Exhibits and Schedules hereto.
Company Income means profit and loss of the Company for any Fiscal Year as
determined in accordance with generally accepted accounting principles
consistently applied.
Company Interest means as to any Member, the percentage by which such Member
shall share in distributions of the Company's assets upon any liquidation of the
Company's Property, which percentage may change in proportion to the amount by
which such Member's Capital Account then bears to the total of the Capital
Accounts of all Members. The Company Interests of each of the Members as of the
date hereof is set forth on Exhibit D.
Company Property means all Property owned of record or beneficially by the
Company.
4
Control means the possession, directly or indirectly, through one or more
intermediaries, of (i) in the case of a corporation, more than fifty percent
(50%) of the outstanding voting securities of the corporation; (ii) in the case
of a limited liability company, partnership, limited partnership or venture, the
right to more than fifty percent (50%) of the distributions from such entity
(including liquidating distributions); and (iii) in the case of any other
entity, more than fifty percent (50%) of the economic or beneficial interest in
such entity.
Current Members has the meaning set forth in the preamble.
Delinquent Member shall have the meaning set forth in Section 9.3
Disposition (Dispose) means any sale, assignment, transfer, exchange, mortgage,
pledge, grant, hypothecation, or other transfer, absolute or as security or
encumbrance (including dispositions by operation of law).
Dissolution Event shall have the meaning set forth in Section 13.1.
Executive Committee shall have the meaning set forth in Section 8.1.
Executive Committee Representative or Representative means the representative
appointed by a Member to serve on the Executive Committee.
Fiscal Year shall have the meaning set forth in Section 4.4.
Liquidating Trustee means the Member or such other Person as all Members agree
(or, in the absence of such agreement, the Executive Committee), charged with
carrying out the winding up of the Company.
Majority Vote means approval by greater than fifty percent (50%) of the votes
cast by the voting Representatives on the Executive Committee, subject to the
provisions of Section 8.2 and 8.6 hereof.
Market Value means, with respect to a Company Interest of a Member: (i) the
Company's value as an on-going enterprise multiplied by (ii) the percentage of
the respective Member's Company Interest as of the date of such Disposition or
any other applicable date indicated by this Company Agreement.
5
Member means any Current Member or any Additional Member.
"Net Taxable Income" and "Net Tax Losses" mean the Company's taxable income or
loss determined in accordance with Code Section 703(a) for each of its Fiscal
Years (for this purpose, all items of income, gain, loss or deduction required
to be stated separately pursuant to Code Section 703(a)(l) will be included in
taxable income or loss) with the following adjustments: (i) such Net Taxable
Income and Net Tax Losses will be computed as if items of tax-exempt income and
nondeductible, non-capital expenditures (under Code Section 705(a)(l)(B) and
705(a)(2)(B)) were included in the computation of taxable income or loss; (ii)
that any items specially allocated pursuant to Article 6 hereof shall not be
taken into account in computing Net Taxable Income or Net Tax Losses; (iii) if
any Member contributes property to the Company with an initial book value to the
Company different from its adjusted basis for federal income tax purposes to the
Company, or if Company property is revalued in accordance with Treasury
Regulations Section 1.704-1 (b)(2)(iv)(f) or as otherwise required by the
Regulations, Net Taxable Income and Net Tax Losses will be computed as if the
initial adjusted basis for federal income tax purposes to the Company of such
contributed or revalued property equaled its initial book value to the Company
as of the date of contribution or revaluation; and (iv) credits or debits to
Capital Accounts due to a revaluation of Company assets in accordance with
Treasury Regulations Section 1 .704-l(b)(2)(iv)(f), or due to a distribution of
non-cash assets as provided in Section 12.2 hereof, will be taken into account
as gain or loss from the disposition of such assets for purposes of computing
Net Taxable Income and Net Tax Losses.
NG means Nashville Gas Company, a division of PNG.
Officer shall have the meaning set forth in Section 8.9(a).
Operating Budget shall have the meaning set forth in Section 8.l (a)(7).
Operating Policy shall mean that policy attached hereto as Exhibit F and adopted
hereby, as may be amended by the Members from time to time.
Person means an individual, trust, governmental authority, estate, or any
incorporated or unincorporated company, corporation, limited liability company,
partnership or other organization.
Piedmont means Piedmont Energy Company, a North Carolina corporation.
6
PNG means Piedmont Natural Gas Company, Inc., a North Carolina corporation.
Principal Office shall have the meaning set forth in Section 2.7.
Proceeding means any administrative or judicial adversary proceeding or hearing,
civil, criminal or investigative, the result of which may be that a court,
arbitrator, mediator or governmental agency may enter a judgment, order, decree,
or other determination which, if not appealed and reversed, would be binding.
Property means any property, real or personal, tangible or intangible, including
cash and any legal or equitable interest in such property.
Regulations means, except where the context indicates otherwise, the permanent
and temporary regulations of the United States Department of the Treasury under
the Code, including any amendments thereto.
Representative or Executive Committee Representative shall have the meaning set
forth in Section 8.2(a).
Retail Territory shall mean the states of Georgia, North Carolina, South
Carolina, and Tennessee or such other area designated by the Executive
Committee.
Selling Member shall have the meaning set forth in Section 12.4.
Services Agreement shall mean that certain agreement between the Company and AGL
Services Company, or its successors and assigns, dated the date hereof, a form
of which is attached hereto as Exhibit A.
Target Customer means retail residential, commercial and industrial customers of
natural gas in the Retail Territory.
Taxable Year shall mean the Fiscal Year unless changed by the Executive
Committee.
Tax Matters Member shall have the meaning Set forth in Section 11.3
Unanimous Vote means the approval by one hundred percent (100%) of the votes
cast by the voting Representatives on the Executive Committee.
7
Withdrawing Member has the meaning set forth in Section 12.6.
ARTICLE II
Formation
2.1 Organization. The Current Members agree to jointly operate, a
Delaware limited liability company pursuant to the provisions of the Act. The
Current Members intend that the Company not be deemed a partnership (including a
limited partnership) or joint venture, and that no Member be deemed a partner or
joint venturer of any other Member, for any purpose other than federal and state
tax purposes, and this Company Agreement may not be construed to suggest
otherwise.
2.2 Termination of Prior Agreements. The Current Members agree that
this Company Agreement hereby terminates, supercedes and restates the prior
Limited Liability Company Agreement of the Company, dated July 1, 1998 as may
have been amended; the Company's Operating Policy, dated July 14, 1998, as may
have been amended and the Interim Exceptions to Delegation of Authority Levels
related thereto.
2.3 Agreement. For and in consideration of the mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Members hereby agree to the
terms and conditions of this Company Agreement, as it may from time to time be
amended according to its terms. It is the express intention of the Members that
this Company Agreement, as it may be amended from time to time in accordance
with its terms, except to the extent a provision of this Company Agreement
expressly incorporates federal income tax rules by reference to sections of the
Code or Regulations or is expressly prohibited or ineffective under the Act,
shall govern with respect to the subject matter hereof, even when inconsistent
with, or different than, the provisions of the Act or any other law or rule. To
the extent any provision of this Company Agreement is prohibited or ineffective
under the Act, this Company Agreement shall be considered amended to the
smallest degree possible in order to make this Company Agreement effective under
the Act. In the event the Act is subsequently amended or interpreted in such a
way to make any provision of this Company Agreement that was formerly invalid
valid, such provision shall be considered to be valid from the effective date of
such interpretation or amendment.
2.4 Name. The name of the Company is "SouthStar Energy Services LLC".
2.5 Effective Date. This Company Agreement shall be deemed effective as
of January 1, 2004.
2.6 Term. The Company commenced its existence upon the filing of its
Certificate of Formation and shall continue in existence until it is dissolved
and terminated by the affirmative action of the Members.
2.7 Registered Agent, Registered Office and Principal Office. The
registered office of the Company required by the Act to be maintained in the
State of Delaware shall be the office of the initial registered agent named in
the Delaware Certificate or such other office (which need not be a place of
business of the Company) as the Executive Committee may designate in the manner
provided by Law. The registered agent of the
8
Company in the State of Delaware shall be the initial registered agent named in
the Delaware Certificate or such other Person or Persons as the Executive
Committee may designate in the manner provided by Law. The principal office (the
"Principal Office") of the Company in the United States shall be at such place
as the Executive Committee may designate, which need not be in the State of
Delaware, and the Company shall maintain records there or such other place as
the Executive Committee shall designate and shall keep the street address of
such principal office at the registered office of the Company in the State of
Delaware. The Company may have such other offices as the Executive Committee may
designate.
2.8 Governmental Applications. The Members agree to cooperate and
exercise due diligence in securing any necessary regulatory approvals and such
other matters as may be necessary or appropriate for purposes of effectuating
the business of the Company. Notwithstanding the foregoing, in the event any
Member is a regulated entity, as defined below, or has an Affiliate that is a
regulated entity, nothing in this Section 2.8 shall be construed to obligate
that Member to seek, or join in, any regulatory approval if that Member
reasonably concludes that such action may have a material adverse impact on that
Member or any Affiliate, or to accept any issued approval if such issued
approval contains conditions not requested by such Member and reasonably
unacceptable to such Member. For purposes of this Section 2.8 a regulated entity
is one whose ongoing business is subject to review, approval or oversight by a
federal or state regulatory body or agency.
ARTICLE III
Nature of Business
The Company is empowered to (a) engage in the purchase, transportation
and sale of natural gas on a non-regulated basis for Target Customers of such
products located in the Retail Territory; (b) provide risk management
instruments, associated with the products and services set forth in subpart (a)
of this Article 3 to Target Customers located in the Retail Territory in
accordance with the Operating Policy and this Company Agreement; (c) provide
non-regulated products and services related to the efficient use of natural gas
to Target Customers located in the Retail Territory; (d) engage in all other
activities permitted by law if approved by the Executive Committee; and (e)
engage in any and all activities incidental to the foregoing, including the sale
of the Company's under-utilized gas transportation and gas storage assets (and
commodities attendant to such assets) pursuant to the risk management guidelines
of the Operating Policy, regardless of whether the sale or use of such assets is
to the Target Customers or within the Retail Territory; provided however, that
the Company must have initially acquired such assets for service to the Target
Customers in the Retail Territory. The Company is empowered to take any and all
action necessary, appropriate, or convenient for the accomplishment of its
purposes, and for the benefit of the Company and its Property, including, but
not limited to:
(a) Entering into and performing contracts of any kind;
9
(b) Acquiring, selling, conveying, pledging, constructing, operating,
maintaining, owning, transferring, renting, or leasing any Property;
(c) Applying for and obtaining governmental authorizations and
approvals; and
(d) Bringing and defending actions at law or equity.
ARTICLE IV
Accounting, Records and Reports
4.1 Records to be Maintained. The Company shall maintain the following
accurate and complete records at the Principal Office or at such other locations
as may be provided by the Members:
(a) a current list of the full name and last known business address of
each Member;
(b) a copy of the Certificate of Formation and all amendments thereto;
(c) copies of each of the Company's Federal, state and local tax
returns and reports, as filed, for the last seven taxable periods;
(d) copies of this Company Agreement, including all amendments thereto;
(e) Company audited financial statements for the last seven Fiscal
Years;
(f) books and records of the Company; and
(g) minutes of the Executive Committee.
4.2 Accounting. Books and records of the Company shall be maintained on
an accrual accounting basis, and the Company's net profit or net loss shall be
determined on the basis of the Fiscal Year and in accordance with generally
accepted accounting principles consistently applied.
4.3 Financial Reports. The Executive Committee shall cause the
following financial statements to be prepared, in each case in accordance with
generally accepted accounting principles consistently applied on a consolidated
and consolidating (i.e., by line of business) basis, and shall cause to be
delivered to each Person who was a Member during the applicable period described
below:
(a) a balance sheet and statement of income, statement of cash flow and
Member's capital account as of the end of or for, as the case may be,
each month, each within thirty (30) days after the end of each month;
(b) (i) a balance sheet as of the end of each fiscal quarter of the
Company and as of the fiscal quarter of each Member; (ii) an income
statement for such quarters and year-to-date; (iii) a statement of each
Member's Capital Account as of the end of such quarters; and (iv) a
statement of cash flows for such quarter and year-to-date (including
sufficient information to permit the Members to calculate their tax
accruals), each within thirty (30) days after the end of such quarters
(or more frequently if agreed by the Executive Committee);
10
(c) (i) a balance sheet as of the end of each Fiscal Year of the
Company and as of the end of the fiscal year of each Member; (ii) an
income statement for such fiscal years; (iii) a statement of each
Members Capital Account as of the end of such fiscal years; (iv) such
federal, state and local income tax returns and such other accounting
tax information and schedules as shall be necessary for the preparation
by each Member of its income tax return for such fiscal years; and (v)
a statement of cash flows for such fiscal years, each within ninety
(90) days after the end of such fiscal years; and
(d) audited annual financial statements prepared by a national CPA firm
selected by the Executive Committee within ten (10) days after such
statements are furnished to the Company but in no event later than
sixty (60) days after the end of each Fiscal Year of the Company and
each fiscal year of each Member.
4.4 Fiscal Year. The fiscal year of the Company shall end on December
31 unless otherwise required by the Code.
4.5 Accounts. The Company shall maintain a record of each Member's
Capital Account in accordance with Section 9.4
4.6 Access to Records and Audit Reports. Each Member or its authorized
representative shall have unrestricted, but reasonable, access at the Company's
principal place of business and other appropriate locations, during ordinary
business hours, to all properties, books, records, personnel, vendor agreements,
accounts and information regarding the Company for such review and audit as the
examining Member deems appropriate in its sole discretion reasonably exercised.
A Member's review and audit rights shall extend to goods and services furnished
by a Member or its Affiliate to the Company and such furnishing Member shall
exercise best efforts to provide materials reasonably required by the examining
Member in order to perform its review and audit. All reviews and audits by a
Member pursuant to this Section 4.6 shall be at the expense of the Member
conducting such review or audit.
4.7 Other Notices. The Company shall notify each Member in writing of
any of the following immediately upon learning of the occurrence thereof,
describing the same and, if applicable, the steps being taken by the Company
with respect thereto:
(a) the occurrence of the default by the Company under any material
note, indenture, loan agreement, mortgage, lease, deed or other
material similar agreement to which the Company is a party or by which
it is bound;
(b) the institution of any litigation, arbitration proceeding or
governmental proceeding affecting the Company, whether or not
considered to be covered by insurance, if the damages being sought in
such litigation exceed $100,000 or, if not specified in such
litigation, could reasonably be expected to exceed $100,000;
(c) the entry of any judgment or decree against the Company, if the
amount of such judgment exceeds $100,000; and
(d) the occurrence of a material adverse change in the business,
operations, assets, condition (financial or otherwise) or prospects of
the Company resulting in a liability or loss to the Company in excess
of $100,000.
11
ARTICLE V
Representations and Warranties of Members
Each Member hereby represents and warrants to the Company and each
other Member that:
(a) if such Member is an organization, that it is duly organized,
validly existing, and in good standing under the law of its state of
incorporation or organization and that it has full organizational power
to execute and agree to this Company Agreement and to perform its
obligations under this Company Agreement;
(b) except as provided in Section 12.3 such Member is acquiring its
Company Interest for such Members own account as an investment and
without an intent to distribute the interest;
(c) such Member acknowledges that such Company Interests have not been
registered under the Securities Act of 1933 or any state securities
laws and may not be resold or transferred by the Member without
appropriate registration or the availability of an exemption from such
requirements;
(d) such Member, by itself or together with its advisors, is
experienced in making investments comparable to its investment in the
Company and is capable of judging for itself the risks inherent in such
investment;
(e) such Member has the financial capacity to hold its investment in
the Company for an indefinite period of time and to meet its
obligations to make Capital Contributions under this Company Agreement,
and acknowledges that the disposition of such investment is restricted
both pursuant to federal and state securities laws and pursuant to the
terms of this Company Agreement;
(f) such Member acknowledges that it has received access to all
information that it deems necessary in order to make its decision to
invest in the Company;
(g) this Company Agreement has been duly executed and delivered by it
and constitutes its valid and binding obligation, enforceable in
accordance with its terms;
(h) neither the execution and delivery of this Company Agreement nor
the consummation of the transactions contemplated hereby nor compliance
by it with any provisions hereof (1) conflicts with, or results in a
breach or contravention of, or in a default or the creation of any lien
under, any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, license, agreement, or other instrument or
obligation to which it is a party or by which it or its properties are
bound, or (2) violates any law, order, writ, injunction or decree
applicable to it or any of its properties;
(i) no consent, approval or other action by any court, governmental
authority or third party is required in connection with its execution,
delivery and performance of this Company Agreement;
(j) the name and address of each such Member is as reflected on
Exhibit C attached hereto;
12
(k) as to Piedmont, there are no lawsuits or contested administrative
proceedings against Piedmont that would have a material adverse affect
on Piedmont's ability to perform its obligations as a member under this
Company Agreement;
(l) as to GNGC there are no lawsuits or contested administrative
proceedings against GNGC that would have a material adverse affect on
GNGC's ability to perform its obligations as a member under this
Company Agreement.
ARTICLE VI
Rights and Duties of Members
6.1 Member Requirements. A Member must remain a Member during the term
of the Company and may dispose of all or any portion of its Company Interest
only in strict accordance with the terms and conditions of this Company
Agreement (including, without limitation, Article XII). Any attempted
Disposition of all or any portion of its Company Interest, other than in strict
accordance with this Company Agreement, shall be, and is hereby declared, null
and void ab initio. The Members agree that breach of the provisions of this
Section 6.1 may cause irreparable injury to the Company for which monetary
damages (or other remedy at law) are inadequate in view of (i) the complexities
and uncertainties in measuring the actual damages that would be sustained by
reason of the failure of a Member to comply with such provisions and (ii) the
uniqueness of the Company business and the relationship among the Members.
Accordingly, the Members agree that the provisions of this Section 6.1 may be
enforced by specific performance.
6.2 [Intentionally Left Blank]
6.3 [Intentionally Left Blank]
6.4 Unauthorized Expenses or Contracts. A Member may not, without the
prior approval of the Executive Committee, cause the Company to enter into or
make any contract, security agreement, financing statement, note or similar
instrument, mortgage or guaranty, incur any obligation, or expend any money,
except and unless an expenditure is required by the terms of a contract or
instrument theretofore duly entered into by the Company and authorized in
accordance with this Company Agreement. Should a Member breach this Section 6.4,
such Member will indemnify, defend and hold the other Members harmless from all
liabilities, costs, and damages resulting from such breach.
6.5 Authority of Members to Bind the Company. The Members hereby agree
that no individual Member or Members can bind the Company unless such Member or
Members are acting with the express written authority of the Executive
Committee.
6.6 Limitation of Liability of Members. Except as provided for in
Section 6.4 no Member shall be liable for the debts, obligations or liabilities
of the Company, including under a judgment, decree or order of court, except as
may be otherwise expressly agreed to in writing by such Member directly to the
applicable third Person.
6.7 Contracts to Limit Members' Liabilities. Unless approved by the
Executive Committee, no contract, lease, sublease, note, deed or other agreement
or
13
instrument shall be executed and delivered by or on behalf of the Company if
there is contained therein any provision whatsoever that states or suggests that
the claims of any party thereto and other beneficiaries thereunder are not
limited solely to the assets of the Company, and any contract, lease, sublease,
note, deed or other agreement or instrument containing any such provision shall
be null and void and shall not constitute a valid obligation of the Company.
6.8 Liability of Members for Certain Acts or Omissions. Any act or
omission by a Member when acting as an authorized representative of the Company
and within the scope of such authorization, the effect of which may cause or
result in loss or damage to the Company, shall not subject the Member to any
liability to the Company or any other Member so long as such act or omission was
not done fraudulently or in bad faith or as a result of willful and wanton
misconduct or gross negligence. Nothing in this Section 6.8 shall limit the
liability of a Member for any loss or damages to the Company resulting from (a)
the failure of such Member to perform any obligation of such Member under this
Company Agreement or (b) any act or omission to act of the Member under any
contractual arrangement with the Company, which limitations will be governed
pursuant to the terms of any such contractual arrangement.
6.9 Indemnification.
(a) The Company to the fullest extent permitted by the Act shall
defend, indemnify and hold harmless any Member, Executive Committee
Representative (or alternate), or Company officer, employee or agent,
who was or is a party to, or is threatened to be made a party to, or is
involved in, any threatened, pending or completed Proceeding, by a
third party (including any action by or in the right of the Company) by
reason of any acts, omissions or alleged acts or omissions by such
Member, Executive Committee Representative (or alternate), or Company
officer, employee or agent undertaken on behalf of the Company and with
the authorization of the Company, against and from losses, damages,
claims and expenses for which such Member, Executive Committee
Representative (or alternate), or Company officer, employee or agent
has not otherwise been reimbursed (including (i) reasonable attorneys
fees, judgments, and fines in all cases and (ii) amounts paid in
settlement if agreed to by the Executive Committee) actually and
reasonably incurred in connection with such Proceeding, so long as such
act or omission was not done fraudulently or in bad faith or as a
result of willful and wanton misconduct or gross negligence or, with
respect to any criminal Proceeding, such Person had no reasonable cause
to believe his conduct was unlawful.
(b) Subject to limitations and conditions as provided in this Article
VI, each Person who was or is a party to, or is threatened to be made a
party to, or is involved in, any threatened, pending or completed
Proceeding by reason of the fact that such Person is or was serving at
the request of the Company as a member, officer, employee, or agent of
another foreign or domestic limited liability company, corporation.
partnership, joint venture, sole proprietorship, or other enterprise,
shall be defended, indemnified and held harmless by the Company to the
fullest extent permitted by the Act, against and from losses, damages,
claims and expenses for which such Person has not otherwise been
14
reimbursed (including (i) reasonable attorneys' fees, judgments, and
fines in all cases and (ii) amounts paid in settlement if agreed to by
the Executive Committee) actually and reasonably incurred in connection
with such Proceeding, so long as the acts or omissions or alleged acts
or omissions forming the basis for such Proceeding were not done
fraudulently or in bad faith or as a result of willful and wanton
misconduct or gross negligence or, with respect to any criminal
Proceeding, such Person had no reasonable cause to believe his conduct
was unlawful.
(c) Indemnification under this Article VI shall continue as to a Person
who has ceased to serve in the capacity that initially entitled such
Person to indemnity under this Company Agreement. The rights granted
pursuant to this Article VI shall be deemed contract rights, and no
amendment, modification or repeal of this Article VI shall have the
effect of limiting or denying any such rights with respect to actions
taken or Proceedings arising prior to any such amendment, modification
or repeal. It is expressly acknowledged that the indemnification
provided in this Article VI could involve indemnification for
negligence but cannot involve indemnification for any act or omission
done fraudulently or in bad faith or as a result of willful and wanton
misconduct or gross negligence or, with respect to any criminal
Proceeding, if such Person had reasonable cause to believe his conduct
was unlawful.
(d) The right to indemnification conferred in this Article VI shall not
be exclusive of any other right which a Member or other Person
indemnified pursuant to this Section 6.9 may have or hereafter acquire
under any law, any provision of the Certification of Formation, this
Company Agreement, any agreement, any vote of Members or otherwise.
6.10 Credit Support. Subject to the execution and effectiveness of the
Indemnification Agreement among the Members, dated and executed the date hereof
and in the form attached hereto as Exhibit G, GNGC, acting alone or through its
Affiliates, agrees to exercise commercially reasonable efforts to provide credit
support on acceptable terms, and in an amount not to exceed a ceiling
established by the Executive Committee, to the extent required to support the
Company's commercial operations. Such credit support shall be in a form and in
amounts acceptable to the Executive Committee and to the GNGC Affiliate
providing the credit support, and may include, without limitation, comfort
letters, a guaranty of the Company's performance or a letter of credit. In the
event the Company must post a letter of credit as a result in a reduction of the
credit rating of AGLR the Company shall pay one hundred percent (100%) of the
cost of obtaining the letter of credit.
6.11 Insurance. To the extent not inconsistent with the Act and other
laws and public policies of the State of Delaware, the Company will purchase and
maintain its own policies of insurance of such types and in such amounts and
containing such terms and conditions as is customary for a company that is
similarly situated to the Company; provided, however, that unless the Executive
Committee determines otherwise, the Company shall not be required to obtain any
insurance for the benefit of any Member or any Representative acting in their
capacity as a Member or Representative.
15
6.12 Services Obligation. Each of the Members agrees to provide the
services of certain personnel to the Company in the manner established by the
Executive Committee and as further set forth in the Operating Policy or the
Services Agreement.
ARTICLE VII
Competition and Conflicts of Interest
7.1 Company Opportunity and Non-Competition.
(a) The assets of the Company shall at all times be dedicated
exclusively to the benefit of the Company. Subject to the foregoing and
except as otherwise set forth herein, any Member or Affiliate of any
Member may participate in other business activities, whether or not any
such activities are competitive with the business of the Company. No
Officer, Executive Committee Representative or employee of the Company,
so long as such individuals remain in such capacity, shall participate
in business in competition with the business of the Company unless such
activity is undertaken exclusively as Officer, employee or agent of a
Member or Affiliate of a Member. No transaction with the Company shall
be voidable solely because a Member has a direct or indirect interest
in the transaction if either the transaction is arms-length and fair to
the Company or the disinterested Members (knowing the material facts of
the transaction and the Member's interest) or their Representatives on
the Executive Committee specifically authorize, approve, or ratify the
transaction.
(b) Notwithstanding the foregoing and except as provided in
paragraph (d) of this Section, in the absence of the approval of the
Executive Committee, no Member or Affiliate (resulting from a "Change
in Control" or otherwise) of any Member shall (i) engage in the
purchase, transportation and sale of natural gas on a non-regulated
basis for Target Customers of such products located in the Retail
Territory; provided, however, that with respect to this Section 7.1(b),
"Target Customers" shall not include (a) those customers listed on
Schedule A hereto, as amended from time to time by agreement of the
Members or (b) those industrial customers of either Member with whom
such Member has a national account relationship that originated outside
of the Retail Territory, but which customer might have ancillary
business within the Retail Territory (a "Non-Competing Customer"),
which customers the Current Members have agreed (or may agree after the
date hereof) shall be excepted from the provisions; or (ii) sell or
otherwise permit any non-Affiliate to use any trade name, trademark or
service xxxx licensed to the Company by such Member in connection with
a non-Affiliate's purchase, transportation and sale of natural gas in
the Retail Territory. Nor shall anything in this Section restrict, or
be construed to apply to, (i) sales, services (including the
transportation of Gas) or the sale of products of the type provided at
the time of execution of this Company Agreement, or mandated directly
or indirectly by a regulatory body, including, but not limited to, the
imputation of revenues, expenses or rate base, the effect of which is
to create a penalty, economic or otherwise, for the failure to provide
such sales, services or
16
products, by PNG and NG in their respective certificated service
territories, or AGL and Chattanooga Gas Company in their respective
certificated service territories.
(c) Further, the Members acknowledge and agree that each
Members' assets, businesses, interests in joint ventures, partnerships
and other entities existing as of the date hereof ("Grandfathered
Assets"), and the ownership and operation of such Grandfathered Assets,
shall not, subject to the terms of this Section 7.1(c) be deemed in
violation of the provisions of Section 7.1(b). The Members further
acknowledge and agree that the provisions of Section 7.1(b) are not
intended to prohibit the good-faith business activities of a Member
after the date hereof that involve assets and interests similar in
nature to the Grandfathered Assets, so long as such activities are not
engaged in for the purpose of, and/or such activities do not have the
principal effect of, circumventing the provisions of Section 7.1(b). In
this regard, the Members hereby affirm and agree that notwithstanding
the language set forth in this paragraph, each of the Members is
committed to conducting its business in compliance with the provisions
of Section 7.1(b), is committed to the success of the Company with
respect to Target Customers in the Retail Territory, and will otherwise
avail itself of the language set forth in this paragraph in good faith
consistent with such acknowledgments and affirmations.
(d) No Member or Affiliate shall acquire, directly or
indirectly, a Person, which Person's primary business is the purchase,
transportation and sale of natural gas on a non-regulated basis for
Target Customers located in the Retail Territory. In the event a Member
or Affiliate acquires, directly or indirectly, a Person, which has as
an on-going ancillary business that is engaged in the purchase,
transportation and sale of natural gas on a non-regulated basis for
Target Customers located in the Retail Territory with the exception of
any business such Person may have with any Non-Competing Customer (an
"Acquisition") whether through the ownership of assets, a division, a
subsidiary, or otherwise (such assets being referred to herein as the
"Competing Assets"), the acquiring Member or Affiliate shall either:
(1) consummate the sale of such Competing Assets to a third
party or affirmatively discontinue such ancillary business
within 180 days of the date of such Acquisition; or
(2) contribute such Competing Assets to the Company, thereby
increasing the amount of such Member's Capital Account at the
then current fair market value of the Competing Assets as
proposed in good faith by the contributing Member. The
contributing Member shall provide the non-contributing Members
notice (an "Assessment Notice") of its intent to make such
contribution, which notice shall contain (i) information and
details relating to the Competing Assets; (ii) the
contributing Member's determination of the fair market value
for the assets; and (iii) the basis for such determination.
17
The non-contributing Member may elect to (i) make a capital
contribution (a "Matching Contribution") to the Company, which
contribution shall be equal to the amount necessary to maintain such
Member's Company Interest in the same proportion to the contributing
Member's Company Interest prior to taking into account the effect of
either contribution or (ii) not make any capital contribution in which
case such Member's Company Interest and Allocable share shall be
diluted in proportion to the contributing Member's adjusted Membership
Interest and Allocable Share . The non-contributing Member shall give
the contributing Member notice of its intent to make a Matching
Contribution and the amount of such Matching Contribution within thirty
(30) days of its receipt of the Assessment Notice. The consummation of
such a Matching Contribution shall be conditioned upon the contribution
of the Competing Assets to the Company.
Each Member's Company Interest and Allocable Share shall be adjusted to
reflect the proportionate change to their Capital Accounts as such
change bears to concurrent change in the other Members' Capital
Accounts (if any) after taking into effect the contribution(s)
contemplated hereby. In the event any non-contributing Member disagrees
on the appropriate fair market value for the Competing Assets, the
non-contributing Member shall give notice of such disagreement within
thirty (30) days of such Member's receipt of the Assessment Notice (or
concurrent with such non-contributing Member's notice regarding its
Matching Contribution), at which point, either Member shall submit the
issue to the Dispute Resolution Procedures as provided in Article 16
hereof.
The exercise of either Member's right to contribute Competing Assets or
a Matching Contribution in accordance with this Section shall be
irrevocable.
7.2 Survival of Non-Competition Provisions. The provisions of Section
7.1 shall remain in effect, with respect to each Member and its Affiliates or
former Member and its Affiliates of the Company until the first anniversary of
the date upon which any such Member becomes a Withdrawing Member pursuant to a
sale of 100% of its Company Interest pursuant to this Agreement; provided
however, that from and after the date that is six months following such date a
Member becomes a withdrawing Member, the provisions of Section 7.1 shall have no
effect with respect to Affiliates of the Withdrawing Member to the extent such
Affiliates result from a Change in Control transaction of such Withdrawing
Member announced and consummated subsequent to the date such Member sold 100% of
its Company Interest.
7.3 Competition between Members. Except as specifically provided in
this Article VII, nothing shall limit or restrict the ability of Members or
their Affiliates to compete with each other.
ARTICLE VIII
Management
8.1 Management by Members and the Executive Committee.
18
(a) Except as described below in this Article VIII, the management of
the Company is fully vested in the Members, acting exclusively in their
membership capacities or otherwise through the Executive Committee as
established hereby. To facilitate the orderly and efficient management of the
Company, the Members shall act (a) collectively as a "committee of the whole"
(named the Executive Committee), (b) through the delegation of responsibility
and authority to the Officers pursuant to Section 8.9 and (c) through the
delegation from time to time of certain responsibility and authority to
particular Members pursuant to Section 8.11. No Member has the right, power or
authority to act for or on behalf of the Company, to do any act that would be
binding on the Company, or to incur any expenditures on behalf of the Company,
except in accordance with the immediately preceding sentence or as otherwise
specifically provided herein. Decisions or actions taken in accordance with the
provisions of this Company Agreement shall constitute decisions or actions by
the Company and shall be binding on each Member, Representative, Officer and
employee of the Company. Except as otherwise provided in this Company Agreement,
the property, business and affairs of the Company shall be under the direction
of the Executive Committee and the Officers acting pursuant to Section 8.9.
Except for matters requiring the action of the Members under the terms of this
Company Agreement, the Executive Committee shall have the power to take any
action that the Members may take under law, subject to any restrictions set
forth in this Company Agreement.
The approval by a Unanimous Vote of the Executive Committee shall be required
before any of the following acts involving the Company may be taken:
1. approving and adopting or amending any written policy
between the Members and the Company contemplated in this
Company Agreement, including the Operating Policy;
2. approving and adopting the Company's written Business Plan,
and amending or modifying any provision of the Business Plan;
3. entering into, amending, modifying, or terminating a
material agreement with a term in excess of the term set forth
in the Operating Policy or involving aggregate consideration
(including assumed actual and contingent liabilities) or
receipts, or delivery or receipt of goods or services having a
value, in excess of the amount set forth in the Operating
Policy, over the term of the agreement;
4. entering into, amending, modifying, or terminating any
contract or commitment to acquire or transfer any asset, the
fair market value or aggregate consideration (including
assumed actual and contingent liabilities) of which exceeds
the amount set forth in the Operating Policy;
5. filing any claim or lawsuit against any Person where the
amount claimed is in excess of the amount set forth in
Operating Policy, or settling any claim or lawsuit where the
fair market value of the settlement amount is in excess of
such amount;
6. borrowing any principal amount in excess of the amount set
forth in the Operating Policy, incurring any future borrowing
liability whatsoever
19
in excess of such amount, lending or guaranteeing any material
amount of third party indebtedness (including, without
limitation, under any contract or arrangement referred to in
this Section 8.1) it being understood that such limitation
shall not be a limitation on the amount or type of trade
payables that may be incurred in the ordinary course of
business consistent in all respects with past practices by the
Company;
7. approving or modifying any fiscal year capital budget or
operating budget (the "Operating Budget") and contributions to
the Operating Fund for each Fiscal Year, which shall not be
exceeded without the express consent of a Unanimous Vote of
the Executive Committee;
8. the indemnification of any Officer, employee, agent or any
other Person except as specifically provided herein;
9. executing or otherwise entering into, or amending,
modifying, or terminating, any employment agreement with the
President or a Vice President or similarly compensated person,
the election or removal of the President or any Vice President
or the hiring or firing of other similarly compensated person
with or without cause;
10. setting or amending the compensation level of the
President or any Vice President or other similarly compensated
person;
11. revaluing any property or asset outside of the normal
course of business;
12. taking any action in the Company's capacity as a
shareholder, partner or member of any Person to the extent
such action would require a Unanimous Vote if taken under this
Company Agreement;
13. taking action that will result in any material Company
Property being burdened by a material lien or other
encumbrance it being understood that such limitation shall not
be a limitation on the Company's ability to incur trade
payables in the ordinary course of business consistent in all
respects with past practices by the Company;
14. except as otherwise required by Section 10.1 hereof
approving the distribution of Company Property to Members;
15. except as contemplated in the Operating Policy, executing
or otherwise entering into, or amending, modifying, or
terminating (other than in accordance with, or pursuant to,
the terms of such agreement), any agreement with a Member, an
Officer or employee of the Company, an Affiliate of a Member,
or a person related by blood or marriage to an Officer or
employee of the Company, involving aggregate consideration
(including assumed actual and contingent liabilities) or fair
market value or actual or contingent liability in excess of
$10,000;
16. the admission of an Additional Member;
17. transferring all or substantially all of the assets of the
Company;
20
18. dissolving the Company to the extent that Section 12.4 and
Article XIII of this Company Agreement requires Unanimous
Consent to dissolve the Company;
19. the filing of a petition as debtor in a United States
Bankruptcy Court or taking any material affirmative act that
would result in the Company's Bankruptcy;
20. merging or consolidating the Company with or into any
other Person;
21. a change in the name of the Company;
22. entering into any modification or amendment of this
Company Agreement;
23. approving and adopting the written Company compensation
plan for the Company's Officers;
24. extension of the term of the Company;
25. hiring of outside attorneys (except in instances where (i)
the President of the Company concludes that the delay
associated with Executive Committee approval of the hiring of
outside legal counsel could have an adverse impact on the
Company, or (ii) the President of the Company believes that
the total legal fees associated with the matter requiring
outside legal counsel will not exceed $15,000, in which cases
the President shall be authorized to hire outside counsel),
auditors and financial consultants; and
26. approving significant Company regulatory filings and
material public announcements (which shall in no event include
advertising undertaken in the ordinary course and consistent
with the Operating Policy) or to the extent such filings or
announcements may relate principally to such Member or its
Affiliates or business.
(b) Any other action required or permitted to be taken by the act of
the Executive Committee under this Company Agreement and not
specifically identified as a Unanimous Consent matter may be taken by a
Majority Vote of the Executive Committee.
(c) If the matter being voted on does not receive the requisite vote,
the matter shall be deemed to be denied; furthermore, unless otherwise
provided herein, if the matter being voted on provides for more than
two alternatives and no alternative receives the requisite vote no
alternative shall be selected.
(d) Prior to the admission of a new Member, the Executive Committee
shall review and revise this Agreement (including but not limited to
this Section 8.1 and make such changes in the approval procedure as the
Executive Committee agrees are required to govern the operation of the
Company after the admission of the new Member; and, further, the
provisions of Article XII hereof which make reference to "per-capita"
shall all automatically be deemed to references to `pro-rata" (unless
the Current Members shall otherwise agree).
21
(e) The Executive Committee may create subcommittees and delegate to
such subcommittees the authority and responsibility to act on behalf of
the Executive Committee, including the consent to, and action upon,
those items listed under Section 8.1 above as requiring the Unanimous
Consent of the Executive Committee, and may rescind any such
delegations, as it may deem appropriate.
8.2 Composition, Term and Duties.
(a) The Executive Committee shall be comprised of three representatives
for each Member (such Member's "Representative(s)"). All
Representatives shall be entitled to receive notices and agendas of
upcoming Executive Committee meetings, attend all Executive Committee
meetings and participate in all discussions, and receive minutes from
previous Executive Committee meetings. With the approval of the other
Members, a Member may bring support staff to Executive Committee
meetings. Such staff shall be subject to confidentiality requirements
deemed appropriate by the Executive Committee. The Representatives
selected by each Member shall cast their votes as a single voting
block. Each voting block shall be entitled to cast the following number
of votes on matters requiring the approval of the Executive Committee:
each voting block shall have one vote, or fractional part thereof, for
each percentage point, or fractional part thereof, of Company Interest
credited to the Member.
(b) Each Representative shall be entitled to hold office until death,
resignation or removal. A Member may replace the Representative
appointed by such Member in the event of a vacancy. Any Representative
may be removed at any time, with or without cause, by the Member
entitled to appoint such Representative, but not otherwise. Any
Representative on the Executive Committee may appoint a proxy
(including another Representative, the Chairman, or the Secretary of
such meeting) to attend meetings and vote (including, without
limitation, voting on any matter before the Executive Committee).
Without limiting the generality of the foregoing, in determining if a
quorum is present, all Representatives in attendance by means of a
proxy shall be included in the count of a quorum.
8.3 Annual and Regular Meetings. The Executive Committee shall hold an
annual meeting, and may hold regular meetings, at such time and place as the
Executive Committee determines by resolution but in any event the Executive
Committee shall, unless the Executive Committee otherwise agrees, hold regular
meetings at sites selected by the Executive Committee during the months of
February, May, August and November of each year.
8.4 Special Meetings. Special meetings of the Executive Committee may
be called by the Chairman, the Executive Committee or any Member, upon no less
than ten (10) days prior written notice to all Representatives on the Executive
Committee.
8.5 Notice of Meetings. Notice of special, annual and regular meetings
must be given in writing to each Representative on the Executive Committee at
least ten days in advance of such meeting and shall state the purpose of the
meeting. Notice of such meeting may be waived by the Executive Committee.
22
8.6 Quorum and Manner of Acting. The presence of at least one
Representative of each Member shall constitute a quorum. No action may be taken
at a meeting of the Executive Committee in the absence of a quorum. In the event
all Representatives of a Member receive notice of an annual, regular or special
meeting in accordance with this Agreement and do not participate in such meeting
either in person or by proxy, such Representatives shall be deemed to have
attended such meeting and voted as a block not to take action submitted to the
Executive Committee for approval at such meeting. In the event a Member or all
Representatives of a Member abstain from voting (without granting a proxy with
respect to such vote) on a matter presented to the Executive Committee for
approval, such abstention shall be noted in the Company's records and the votes
of such Member or Representative shall be disregarded for purposes of
determining whether or not the matter before the Executive Committee receives
unanimous or majority approval. Restated, with respect to any unanimous consent
matter, if one Member abstains from casting its votes, that abstention shall be
noted and, notwithstanding such abstention, the affirmative vote of each of the
other Members for the matter in question shall constitute unanimous approval for
purposes hereof. As further example, and with respect to a majority approval
matter, if one Member abstains from casting its votes, that abstention shall be
noted and, notwithstanding such abstention, the affirmative vote of a Member or
Members holding a majority of the votes, determined without regard to the votes
held by the abstaining Member, shall constitute majority approval for purposes
hereof. Any action the Executive Committee may take may be taken without a
meeting by unanimous written consent of the Representatives. For purposes of the
immediately preceding sentence, the signature of only one Member's
Representative shall be deemed to constitute written consent of all of that
Member's Representatives. Meetings of the Executive Committee may take place by
telephone or any means where any persons attending can hear and speak to each
other.
8.7 No Compensation. No Representative on the Executive Committee shall
be entitled to compensation for his/her services, or any reimbursement of
expenses incurred, as a Representative on the Executive Committee.
8.8 Disclaimer of Duties; Indemnification. EXCEPT AS OTHERWISE PROVIDED
SECTION 7.1 AND SUCH DUTIES TO THE COMPANY AS ARE IMPOSED BY APPLICABLE LAW,
EACH REPRESENTATIVE SHALL REPRESENT, AND OWE DUTIES TO, ONLY THE MEMBER THAT
DESIGNATED SUCH REPRESENTATIVE (THE NATURE AND EXTENT OF SUCH DUTIES BEING AN
INTERNAL CORPORATE AFFAIR OF SUCH MEMBER), AND NOT TO THE COMPANY, ANY OTHER
MEMBER OR REPRESENTATIVE, OR ANY OFFICER OR EMPLOYEE OF THE COMPANY.
8.9 Officers
(a) Generally. The Company shall have agents, referred to as "Officers"
of the Company. An Officer shall not be entitled to serve as a
Representative and vice versa. These agents (whose authority is limited
pursuant to the following sentence) shall be appointed in the manner
specified below and shall have the titles and authority specified in
this Section 8.9. Each Officer shall have only the authority specified
below, and shall, subject to the general control of the
23
Executive Committee, be responsible for the day-to-day operations and
direction of the affairs and business of the Company.
(b) Officers. The elected Officers shall be the President and as
appointed from time to time, in accordance with subsection (c) below,
Vice Presidents as the Executive Committee may approve.
(c) Election and Term of Office. The President and Vice President(s),
if any shall be elected annually upon the Unanimous Vote of the
Executive Committee at the annual meeting If a new President or Vice
President is not elected at an annual meeting of the Executive
Committee, the incumbent Officer shall continue to serve until such
Officer is removed, and a replacement elected, all upon the unanimous
vote of each of the Members at the following annual meeting of the
Executive Committee. Notwithstanding the foregoing, any Officer may be
removed by the Executive Committee with or without cause upon the
unanimous vote of each the Members. Vacancies in any office shall be
filled by the Executive Committee.
(d) Chairman of the Executive Committee. A Chairman shall preside at
meetings of the Executive Committee, and shall exercise such powers and
perform such duties as may be assigned to him/her by this Company
Agreement or the Executive Committee. The Chairman shall serve for a
term of one year and the office of Chairman shall rotate annually among
the Charter Members.
(e) President. The President, subject to the general control of the
Executive Committee, shall be responsible for the day-to-day operation
and direction of the affairs of the Company, employees and agents,
shall supervise generally the affairs of the Company, and, subject to
the limitations imposed by this Company Agreement, any employment
agreement, any employee plan, or any resolution of the Executive
Committee, shall have full authority to execute all documents and to
take all actions that the Company may legally take. Except for such
meetings or portions thereof during which the Executive Committee shall
declare itself to be in "executive session," the President shall attend
all meetings of the Executive Committee (but as President shall not be
entitled to vote on matters before the Executive Committee) and
exercise such other powers and perform such other duties as may be
assigned to him/her by this Company Agreement or the Executive
Committee, including such duties and powers stated in any employment
agreement.
(f) Vice Presidents. In the absence of the President, the Vice
Presidents designated by the Executive Committee shall, except as
hereinafter provided, have all of the powers and duties conferred upon
the President. Each of the Vice Presidents shall, subject to the
limitations imposed by this Company Agreement, any employment
agreement, any employee plan, or any resolution of the Executive
Committee, have the same power as the President to sign certificates,
contrasts and other instruments of the Company. Any Vice President
shall perform such other duties and may exercise such other powers as
may from time to time be assigned to him by this Company Agreement, the
Executive Committee, the Chairman, or the President.
24
(g) Secretary and Assistant Secretaries. The Secretary shall attend and
record or cause to be recorded in books provided for that purpose the
minutes of the meetings or actions of the Members and the meetings or
actions of the Executive Committee or any subcommittees thereof, shall
see that all notices are duly given in accordance with the provisions
of this Company Agreement and as required by law, shall be custodian of
all records (other than financial), shall see that the books, reports,
statements, certificates and all other documents and records required
by law are properly kept and filed, and, in general, shall perform all
duties incident to the office of Secretary.
(h) Powers of Attorney. The Executive Committee may xxxxx xxxxxx of
attorney or other authority as appropriate to establish and evidence
the authority of the Officers.
(i) Borrowed Employees. Subject to approval by the Company's President,
the Company may borrow a Member's employees on a full or part time
basis, or a Member's Affiliate's employees, with that Member or
Affiliate's consent, from time to time on a temporary basis for
purposes associated with the Company's business. Out-of-pocket expenses
and reasonable salaries and benefits associated with such borrowed
employees shall be addressed in the Operation Policy. The Members
acknowledge and agree that part-time borrowed employees may continue to
perform services for the lending Member or its Affiliates.
(j) Leased Employees. The Company may lease a Member's employees on a
full or part time basis, or a Member's Affiliate's employees, with that
Member or Affiliate's consent, from time to time on a temporary basis
for purposes associated with the Company's business. Out-of-pocket
expenses and reasonable salaries and benefits associated with such
leased employees shall be addressed in an agreement between the loaning
Member or Affiliate and the Company. The Members acknowledge and agree
that part-time leased employees may continue to perform services for
the lending Member or its Affiliates.
(k) Employee Transfers. With the prior approval of the affected Member,
the Company, with Executive Committee approval if required by Section
8.1(a)(15) or if not, approval by the Company's President, shall be
entitled to hire employees of any Member (including its Affiliates) to
fill vacancies within the Company. With the prior approval of the
Executive Committee, a Member (including its Affiliates) shall be
entitled to hire employees of the Company to fill vacancies with such
Member; provided however, that no such approval shall be necessary to
allow GNGC or an Affiliate thereof to hire any personnel acting as a
Service Personnel under the terms of the Services Agreement. The
granting of credit for past service with the prior employer for
purposes of the hired employee's compensation and benefit plans shall
be at the discretion of the new employer.
8.10 Expenses. The Company shall pay only those expenses incurred by
the Officers and employees that are directly attributable to the Company's
business.
8.11 Delegation to Particular Member. The Executive Committee may
delegate to one or more Members, in writing, such authority and duties as the
Executive Committee may deem advisable, including its authority under Section
8.1 hereof.
25
Decisions or actions taken by any such Member in accordance with the provisions
of this Agreement shall constitute decisions or actions by the Company and shall
be binding on each Member, Representative, Officer and employee of the Company.
Any delegation pursuant to this Section 8.11 may be revoked at any time by the
Executive Committee. With respect to duties discharged hereunder by a Member (a)
such Member may discharge such duties through the personnel of an Affiliate of
such Member, and (b) unless the Members otherwise agree, the Company shall
compensate such Member (or its Affiliate, as applicable) for the performance of
such duties as set forth in the Operating Policy.
ARTICLE IX
Contributions and Capital Accounts
9.1 Capital Contributions.
(a) As of the Effective Date, the Current Members agree hereby that
each and the other has made capital contributions to the Company in
consideration for such Member's Company Interest and the Company
Interest of each Current Member in proportion with the other and the
balance of each Member's Capital Account is reflected on Exhibit D
hereto, as may be amended from time to time.
(b) Any Additional Member shall make the Capital Contribution described
in such Additional Member's Admission Agreement ("Admission
Agreement"). The amount of the Additional Member's initial Capital
Contributions, the time for making such contributions, and any changes
in the other Members' Capital Accounts, Allocable Shares and Company
Interests that result, shall be set forth in such Additional Member's
Admission Agreement.
9.2 Additional Capital Contributions. As and when the Executive
Committee determines that the Company needs cash from time to time, each Member
agrees that it shall make Capital Contributions to the Company in an amount in
accordance with its respective Company Interest for the purposes determined by
the Unanimous Vote of the Executive Committee authorizing such Capital
Contributions in accordance with Section 8.1. The Capital Accounts of the
contributing Members shall be adjusted pro rata to reflect the amount of such
contribution in proportion with the other Members.
9.3 Failure to Contribute. If a Member (a "Delinquent Member") does not
contribute, within 3 days of the date required, all or any portion of a Capital
Contribution that Member is required to make as provided in this Company
Agreement the remaining Members in proportion to their Allocable Shares or in
such other percentages as they may agree may make the Capital Contribution that
the Delinquent Member failed to make and the Allocable Shares of the Members,
including the Delinquent Member, shall be adjusted to reflect the Delinquent
Member's failure to make the Capital Contribution and the resulting increase in
the Capital Accounts of the remaining Members and appropriate adjustments in the
Members' Company Interests.,
9.4 Capital Accounts, Allocations, and Distributions Attributable to
Transferred Interest. A Capital Account is and shall be maintained for each
Member. Each Member's Capital Account shall be increased by (a) the amount of
money contributed by that Member to the Company, (b) the fair market value of
property
26
contributed by that Member to the Company (net of liabilities secured by such
contributed property that the Company is considered to assume or take subject to
under Section 752 of the Code), and (c) allocations to that Member of Company
Net Taxable Income and Net Tax Losses (or items thereof), including income and
gain exempt from tax and income and gain described in Treasury Regulation
Section l.704-l(b)(2)(iv)(g), but excluding income and gain described in
Treasury Regulation Section 1.704-1(b)(4)(i), and shall be decreased by (d) the
amount of money distributed to that Member by the Company, (e) the fair market
value of property distributed to that Member by the Company (net of liabilities
secured by such distributed property that such Member is considered to assume or
take subject to under Section 752 of the Code), (f) allocations to that Member
of expenditures of the Company described (or treated as described) in Section
705(a)(2)(B) of the Code, and (g) allocations of Company loss and deduction (or
items thereof), including loss and deduction described in Treasury Regulation
Section 1.704-1 (b)(2)(iv)(g), but excluding items described in (f) above and
loss or deduction described in Treasury Regulation Section 1.704-1 (b)(4)(i) or
1.704-I (b)(4)(iii). The Members' Capital Accounts shall also be maintained and
adjusted as permitted by the provisions of Treasury Regulation Section 1.704- I
(b)(2)(iv)(f) and as required by the other provisions of Treasury Regulation
Sections 1.704- 1(b)(2)(iv) and I .704-1(b)(4), including adjustments to reflect
the allocations to the Members of depreciation, depletion, amortization, and
gain or loss as computed for book purposes rather than the allocation of the
corresponding items as computed for tax purposes, as required by Treasury
Regulation Section 1.704-1(b)(2)(iv)(g). Thus, the Members' Capital Accounts
shall be increased or decreased to reflect a revaluation of the Company's
property on its books based on the fair market value of the Company's property
on the date of adjustment immediately prior to (A) the contribution of money or
other property to the Company by a new or existing Member as consideration for a
Membership Interest, (B) the distribution of money or other property by the
Company to a Member as consideration for a Membership Interest, or (C) the
liquidation of the Company. A Member that has more than one Membership Interest
shall have a single Capital Account that reflects all such Membership Interests,
regardless of the class of Membership Interests owned by such Member and
regardless of the time or manner in which such Membership Interests were
acquired. Upon the Disposition of all or a portion of a Membership Interest, the
Capital Account of the Disposing Member that is attributable to such Membership
Interest shall carry over to the Assignee in accordance with the provisions of
Treasury Regulation Section 1.704-1 (b)(2)(iv)(l).
9.5 Withdrawal of Capital. Except as otherwise provided herein, no
Member shall be entitled to withdraw all or any portion of its Capital
Contribution or receive interest on its contributed capital or Capital Account.
ARTICLE X
Allocations and Distributions
10.1 Allocations of Company Income. As of the end of each Fiscal Year
(or any other, shorter period selected by the Executive Committee), the Company
Income shall be determined in accordance with generally accepted accounting
principles, as provided in Section 4.2. No later than 90 days after the end of
the Fiscal Year, the
27
Company shall make an annual distribution to its Members equal to no less than
75% of its Company Income for that immediately preceding Fiscal Year, unless
otherwise determined by a Unanimous Vote of the Members. The distribution shall
be allocated among the Members in accordance with their Allocable Share as of
the end of the Fiscal Year for which the Company Income has been calculated;
provided however, that the allocation of any cash distribution between the
Current Members shall be adjusted as necessary to maintain the Current Members'
Company Interest as reflected in the Capital Accounts of each Member in
proportion with the other as of the end of the prior Fiscal Year, which
adjustment may include a distribution of cash to maintain such proportions in
the event of the Company's loss of earnings for any Fiscal Year.
10.2 General Tax Allocations. As of the end of each Fiscal Year, Net
Taxable Income and Net Taxable Losses shall be allocated among the Members
according to their respective Allocable Share.
10.3 Special Allocations. At the end of each Fiscal Year and
notwithstanding any provision of Section 10.2, the following special allocations
shall be made for both Capital Account and for federal income tax purposes
unless otherwise provided:
(a) In accordance with the ordering rules of Treasury Regulation
Section 1.704-2(j), items of gross income and realized gain first shall
be allocated in an amount and in a manner that complies with the
"chargeback" requirement of Treasury Regulation Section 1.704-2(i)(4),
the `qualified income offset" requirement of Treasury Regulation
Section 1.704-1 (b)(2)(ii)(d), and the "minimum gain chargeback"
requirement of Treasury Regulation Section 1.704-2(f). Further, any
"partner non-recourse deductions" within the meaning of Treasury
Regulation Section 1 .704-2(i)(2) attributable to "partner non-recourse
debt" shall be allocated to the Member who bears the "economic risk of
loss" for such debt in accordance with Treasury Regulation Section
1.704-2(i). Any losses in excess of the losses allowable to the Members
pursuant to the Treasury Regulations promulgated under Code Section
704(b) shall first be allocated to the extent allowable hereunder to
Members who are not precluded from receiving such allocations by the
preceding provisions of this subparagraph (a), if any, and shall
thereafter be allocated as provided in Section 10.2.
(b) If a taxing authority ignores the characterization of any amounts
paid to a Member (or an Affiliate thereof) as salaries, management
fees, commissions, interest or other compensation for services
("Compensation"), and refuses to treat such payments as either
guaranteed payments within the meaning of Code Section 707(c) or
payments made to such Member other than in such Member's capacity as a
"partner" within the meaning of Code Section 707(a), and such taxing
authority ultimately treats such amounts paid to a Member (or an
affiliate thereto) as a distribution to such Member for federal income
tax purposes which reduces such Member's Capital Account, then the
Compensation shall be treated as an allocation of an item of income or
gain of the Company to the recipient Member so that, consistent with
the intent of the Members, the Compensation shall not be treated as a
distribution which reduces the recipient Member's Capital Account.
Accordingly, such Member shall be allocated the first available items
of Company
28
income and gain (including in a succeeding year) in an amount equal to
the Compensation.
(c) If the Company owns (x) any property contributed by a Member that
had a fair market value different from its adjusted basis for federal
income tax purposes on the date of the contribution, or (y) any
property that has been revalued pursuant to Treasury Regulation Section
1.704-I (b)(2)(iv)(f), then for federal income tax purposes only and
not for Capital Account purposes, any income, gain, loss or deduction
with respect to such property shall be allocated among the Members in
accordance with Code Section 704(c) and the Treasury Regulations
thereunder. Pursuant to the "traditional method" of making Code Section
704(c) allocations described in Treasury Regulation Section ss.
1.704-3(b).
ARTICLE XI
Taxes
11.1 Tax Elections. Upon written request of a Member, the Company shall
file an election under Section 754 of the Code and the treasury regulations
thereunder to adjust the basis of the Company assets under Section 734(b) or
743(b) of the Code, and shall cause the Company to file a corresponding election
under the applicable sections of state and local law.
11.2 Tax Returns. The Executive Committee shall cause federal, state
and local tax returns for the Company to be prepared and filed with the
appropriate authorities in a timely manner. In compliance with applicable
regulations, the Company shall cause to be delivered to each Person who was a
Member at any time during such Fiscal Year all information concerning the
Company necessary for the preparation of such Person's tax returns, including a
statement showing such Person's share of taxable gain or taxable loss (or items
thereof) for such year for federal, state and local tax purposes.
11.3 Tax Matters Member.
(a) GNGC, or an Affiliate of GNGC, is hereby appointed the "Tax Matters
Partner" (herein sometimes referred to as the "Tax Matters Member") of
the Company for all purposes pursuant to Sections 6221 and 6231 of the
Code. The Tax Matters Member, or its designee, shall (i) furnish to
each Member a copy of each notice or other communication received from
the Internal Revenue Service or applicable state authority (except such
notices or communications as are sent directly to each such Member),
(ii) keep each Member informed of any administrative or judicial
Proceeding, as required by Section 6223(g) of the Code, (iii) allow
each Member an opportunity to participate in all administrative and
judicial Proceedings involving the tax matters of the Company, and (iv)
advise and consult with each Member as to proposed adjustments to the
federal or state income tax returns of the Company. At least fifteen
(15) days prior to the filing of the Company's U.S. Partnership Tax
Return, a draft of such return shall be circulated to each other Member
for its review. The Tax Matters Member shall circulate to each other
Member a draft of any state income tax return promptly
29
after it is available, and, in any event, at least fifteen (15) days
prior to the filing of any such return. Prior to the filing of any
other federal, state or local tax return, the Tax Matters Member shall
cause a draft of such tax return to be circulated to each other Member
for its review promptly after it is available. The Company shall not be
obligated to pay any fees or other compensation to the Tax Matters
Member in its capacity as such, provided that the Company shall
reimburse the Tax Matters Member for any and all out-of-pocket costs
and expenses (including reasonable attorneys' and other professional
fees) incurred by it in its capacity as Tax Matters Member. The Company
shall indemnify, defend and hold the Tax Matters Member harmless from
and against any loss, liability, damage, cost or expense (including
reasonable attorneys' fees) sustained or incurred as a result of any
act or decision concerning Company tax matters and within the scope of
such Member's responsibility as Tax Matters Member, so long as such act
or decision was not done fraudulently or in bad faith or as a result of
willful and wanton misconduct or gross negligence or, with respect to
any criminal Proceeding against the Tax Matters Member, such Member had
no reasonable cause to believe its conduct was unlawful. The Tax
Matters Member shall consult with each other Member concerning the cost
of legal services. The Tax Matters Member may resign upon thirty (30)
days written notice to the Company. Notwithstanding the foregoing, the
Tax Matters Member is not authorized to take any action with regard to
the foregoing matters which would be binding on either the Company or
the Member without the approval of the Executive Committee.
(b) If a Member objects to the tax treatment of an item on any income
tax return, such Member shall promptly inform the Tax Matters Member of
its objection and the grounds upon which the objection is based. If the
Tax Matters Member, after due consideration of a Members objection, is
of the view that the tax treatment of the item in question on the
return as originally submitted is reasonable, then the Tax Matters
Member shall cause the Company to file the return reporting the item in
question in the manner originally submitted.
11.4 Tax Controversies. The Members shall comply with the
responsibilities outlined in this Section and in Sections 6222 through 6231 and
6050K of the Code (including any Treasury Regulations promulgated thereunder)
and in doing so shall incur no liability to any other Member. The Tax Matters
Member shall not agree to any extension of the statute of limitations for making
assessments of tax on behalf of the other Members without first obtaining the
written consent of the other Members. The Tax Matters Member shall not bind the
other Member to a settlement agreement in respect of taxes without obtaining the
written consent of the other Member. Any Member who enters into a settlement
agreement with the Secretary of the Treasury with respect to any "partnership
items", as defined in Section 6231 (a)(3) of the Code, shall notify the other
Member of such settlement agreement and its terms within 90 days from the date
of settlement. The Tax Matters Member shall not, in its capacity as Tax Matters
Member, file a petition under Code Sections 6226, 6228 or any other Code
Sections with respect to any Company item, or other tax matters involving the
Company, without the consent of the other Members. The Company shall retain its
records with respect to each fiscal year until the expiration of 90 days after
the period within which additional federal or state income tax may be assessed
for such year. The provisions of this Section will survive the
30
termination of the Company and the transfer of either Member's Company Interest
and will remain binding on the Members for a period of time necessary to resolve
any and all matters regarding the federal and, if applicable, state income
taxation of the Company.
ARTICLE XII
Disposition of Company Interests
12.1 Right of Disposition. Each Member agrees not to Dispose of its
Company Interest, in whole or in part, or to withdraw from the Company, except
as provided in this Article. In connection with any Disposition, each Member
party to such Disposition (including any Additional Member admitted as a Member
as a result of such Disposition) shall provide to the Company the information
required to revise Exhibits B and C only as to such Members, and Exhibit D shall
be so revised and distributed to Members. Nothing in this Article XII shall be
construed to limit a Member's ability to transfer its entire Company Interest to
an entity that is wholly owned, directly or indirectly, by such Member or is
wholly-owned, directly or indirectly, by the entity that owns one hundred
percent of such Member. Such a transfer to a wholly-owned Person will be
recognized by the Company upon receipt of written notice from the transferor
Member.
12.2 Dispositions not in Compliance with this Article Void. Any
attempted Disposition of a Company Interest, or any part thereof, not in
compliance with this Article XII is null and void ab initio.
12.3 Disposition Between Members.
(a) Except as provided in this Section 12.3, unless the Executive
Committee provides otherwise by Unanimous Vote, a Member shall not be
permitted to Dispose of less than one hundred percent (100%) of its
Company Interest. In the event a Member desires to Dispose of all of
its Company Interest, it shall first offer such Company Interest to the
remaining Member at Market Value. In the case of a Disposition of all
of the Company Interest of a Member (whether occurring pursuant to this
Section 12.3 or otherwise), the other Member may designate a third
party or parties to purchase all or part of such Company Interest and
continue the business of the Company without dissolution. Should the
remaining Member elect not to purchase such Company Interest or to
designate a third-party purchaser or the Members are unable to agree
upon the terms upon which a sale shall take place, the Member desiring
to sell its Company Interest shall be entitled to attempt to sell to a
third party in accordance with Section 12.4.
(b)
(1) GNGC is hereby granted three options to purchase
Piedmont's Membership Interest ("Annual Purchased Interest"),
which options shall vest on January 1st of each of the 2008,
2009 and 2010 Fiscal Years (respectively the "2008 Option,
"2009 Option" and "2010 Option" or collectively referred to as
the "Options"). The 2008 Option shah entitle GNGC to purchase
33.3% of Piedmont's then current Company Interest; the 2009
Option shall entitle GNGC to purchase 50% of Piedmont's
31
Company Interest; and the 2010 Option shall entitle GNGC to
purchase 100% of Piedmont's Company Interest. Upon GNGC's
exercise of either of the 2008 Option or the 2009 Option.
Piedmont may cause GNGC to purchase 100% of its remaining
Company Interest (the "Put Option"), which, when exercised,
will be included in the Annual Purchase Interest. The purchase
and corresponding increases and decreases in the Member's
Company Interest whether by exercise of an Option or the Put
Option shall be proportionately reflected in each Member's
Capital Account and Allocable Share.
(2) The effective date of any purchase made pursuant to an
Option or the Put Option shall be 12:01 AM, January 1st of the
Fiscal Year in which the option is exercised (the "Option
Effective Date"). The purchase price for the Annual Purchased
Interest upon the exercise of any Option or Put Option shall
be the Market Value of the Annual Purchased Interest as of the
Option Effective Date. Piedmont and GNGC agree that any
purchase made pursuant to this Section 12.3 shall be made
pursuant to the Conveyance and Assignment Agreement and LLC
Interest Power in the form attached hereto as Exhibit I and
the purchase price for the Annual Purchased Interest shall be
paid in cash simultaneously with the execution and delivery of
such agreements.
(3) By November 1st in the year preceding the exercise of any
Option, GNGC shall deliver a written signed notice (the
"Initial Notice") to Piedmont specifying (A) whether GNGC
intends to exercise its Option and (B) the anticipated Market
Value of the Annual Purchased Interest subject to such Option.
By or before the immediately following December 15th, Piedmont
shall deliver a written signed notice (the "Response Notice")
to GNGC indicating either: (A) it accepts and agrees to the
Market Value proposed by the Initial Notice and consequently,
whether it intends to exercise its Put Option at the proposed
Market Value (aggregated for the entire Company Interest
subject to such Put Option); or (B) it disagrees with the
Market Value proposed in the Initial Notice and
counter-proposes an alternative Market Value, which
alternative Market Value must be provided therein. GNGC has 20
days from receipt of the Response Notice to respond by written
notice to Piedmont regarding whether it accepts Piedmont's
alternative Market Value. If GNGC does not accept Piedmont's
alternative Market Value, either GNGC or Piedmont may invoke
the Dispute Resolution Procedures of Article 16 hereof to
determine the appropriate Market Value for the Annual
Purchased Interest.
Upon the date of either (A) GNGC's notice of acceptance of
Piedmont's alternative Market Value or (B) the determination
of an appropriate Market Value pursuant to the Dispute
Resolution Procedures, Piedmont shall have 10 days to provide
written signed notice to GNGC stating that it intends to
exercise its Put Option at the then-determined Market Value
(aggregated for the entire Company Interest subject to such
Put Option).
32
Failure to provide such notice shall constitute a waiver of
the Put Option (as applicable for such Option). Notice of the
exercise of the Options or the Put Option as expressed in
signed writing by either Member is irrevocable.
(5) The consummation of any purchase pursuant to the exercise
of any Option or Put Option granted by this Section may
necessarily be conditioned on the consent of the Georgia
Public Service Commission (GaPSC) or such other conditions of
other governmental authorities having jurisdiction over the
Company or either of the Members. Each Member hereby agrees to
act in good faith and to use all commercially reasonable
efforts to consummate the purchases contemplated hereby,
including the execution of any Conveyance and Assignment
Agreement, LLC Interest Power or similar documents and actions
necessary and reasonable to obtain the consent of the GaPSC
before the closing of any such purchase proposed hereby.
(6) Upon the consummation of the purchase of all of Piedmont's
Membership Interest, Piedmont will withdraw from the Company
and become a "Withdrawing Member" as defined under Section
12.6 hereof.
12.4 Third Party Disposition Procedures. A Member (the "Selling
Member") may sell all of its Company Interest to any bona fide third party
purchaser permitted to be a member of a limited liability company under the Act,
for cash or other consideration, provided that (i) such Member first complies in
good faith with the provisions of Section 12.3(a) above (ii) the Selling Member
allows the remaining Member to match the bona fide third party offer, and (iii)
each Member approves the sale of such Company Interest to such third party
purchaser and such third party becoming an Additional Member, which approval may
be by such Member at its sole discretion reasonably exercised. No such third
party purchaser may become an Additional Member without execution of an
Admission Agreement. To satisfy clause (ii) above, the Selling Member shall
present a written offer to the remaining Member, through the Executive
Committee, stating the name of the proposed third party purchaser (the
"Purchaser") and all the terms and conditions of the proposed offer, including
sales price. The non-selling Member shall have the right for a period of sixty
(60) days from receipt of such written offer to elect to accept such written
offer on the same terms and conditions applicable to such proposed purchaser In
the event the remaining Member does not elect to purchase the Company Interest
from the Selling Member, the remaining Member does not approve the sale of such
Company Interest to the Original Purchaser, the Selling Member elects to
continue its attempt to sell such Company Interest, and the date of such
rejection or failure to approve a sale hereunder is after December 31, 2010
(otherwise the Selling Member shall have no right to sell its interest
hereunder) the following procedure shall apply:
(a) The Selling Member may present a bona fide written offer from a
different third party purchaser (the "Purchaser") to the remaining
Member in accordance with this Section 12.4 provided that the
Replacement Purchaser offer must be presented to the remaining Members
on or before 5:00 p.m. Central Time on the fifth business day following
the Selling Member's receipt of notice that the sale of
33
its Company Interest to the Original Purchaser was not approved. The
remaining Member shall have the right for a period of sixty (60) days
from receipt of such written offer to elect to accept such written
offer on the same terms and conditions applicable to such Replacement
Purchaser.
(b) In the event the Selling Member does not present a written offer
from a Replacement Purchaser, the remaining Member does not elect to
purchase the Selling Member's Company Interest or a sale of the Selling
Member's Company Interest to the Replacement Purchaser is not approved
and the Selling Member elects to continue its attempt to sell its
Company interest, the Selling Member and the remaining Member will
engage a third party appraiser ("Appraiser") to determine the Market
Value of the Selling Member's Company Interest. In the event the
Members do not agree on the Market Value of the Selling Member's
Company Interest, either Member may elect to resolve the dispute in
accordance with Article 16 hereof.
(c) The remaining Member shall have the option to either: (i) purchase
the Selling Member's Company Interest for a purchase price equal to
such remaining Member's per capita share of the lesser of (x) the fair
Market Value determined by the Appraiser or (y) the lowest third party
written offer previously presented to the remaining Member by the
Selling Member; or (ii) dissolve the Company. Unless the remaining
Member elects to purchase the Selling Member's Company Interest
pursuant to Section 1 2.4(c)(i) hereof, or the Selling Member elects to
discontinue the sale of its Company Interest pursuant to Section
12.4(d)below, the Members unanimously agree in advance to dissolve the
Company pursuant to Section 12.4(c)(ii).
(d) A Selling Member that (i) elects to sell its Company Interest
pursuant to this Section 12.4 and presents a third party offer shall be
entitled to discontinue its effort to sell its Company Interest at any
time. However, in the event of discontinuance of its attempt to sell
its Company Interest, such Member shall not be entitled to attempt to
sell its Company Interest again pursuant to this Section 12.4 during a
period beginning on the day it elects to discontinue its attempt to
sell its Company Interest and ending on the 180th day following such
election.
12.5 Changes In Control.
(a) In the event a Member experiences a Change in Control ("affected
Member"), each of the other Members (each a "non-affected Member")
shall have the following options:
(1) if the affected Member is GNGC, Piedmont shall have the
option to (A) acknowledge the Change in Control and remain a
Member or (B) cause GNGC to purchase its entire Company
Interest, each in accordance with the procedure provided in
this Section 12.5.
(2) if the affected Member is Piedmont, GNGC shall have the
option to either: (A) acknowledge the Change in Control and
remain a Member,(B) purchase Piedmont's entire Company
Interest or (C) Piedmont shall have
34
the right to cause GNGC to purchase its entire Company
Interest, each in accordance with the procedure provided in
this Section 12.5.
(b) Each non-affected Member may exercise its options independently
of the other non-affected Member, if any. The affected Member shall
give signed written notice of the proposed Change of Control
transaction to the non-affected Member(s) no later than
contemporaneously with public announcement of the Change in Control,
and in no event less than 30 days prior to consummation of such Change
in Control. The non-affected Member(s) (or the affected Member in the
event of Piedmont's option pursuant to paragraph 2(C) above) shall give
the other Member (or the acquirer of the affected Member, as
applicable) signed written notice (the "Option Notice") of the option
it has chosen pursuant to Section 12.5(a) within 45 days of the date of
notice of the Change of Control. If the non-affected Member(s) (or the
affected Member in the event of Piedmont's option pursuant to paragraph
2(C) above) has chosen option (B) in paragraph (1) above, or options
(B) or (C) in paragraph (2) above, each as applicable, the Option
Notice must contain the sale/purchase price for the Member's entire
Company Interest, which purchase price shall be equal to the Market
Value of such Company Interest determined as of the date of the
announcement of any such Change in Control. If there is a disagreement
regarding the Market Value proposed as the purchase/sale price for the
respective Company Interest, either Member, within twenty (20) days
from its receipt of the Option Notice, may initiate the Dispute
Resolution Procedures provided in Article 16 hereof to determine the
appropriate Market Value for the respective Company Interest. Any sale
of the Member's Company Interest shall be made pursuant to a Conveyance
and Assignment Agreement substantially in the form of Exhibit I hereto.
Any election by a non-affected Member made pursuant to this Section
12.5 (signed and written as specified above) is irrevocable.
(c) The consummation of any agreement or exercise of right to sell or
purchase a Member's Company Interest shall be subject to the
consummation of the Change in Control. In the event that a disposition
pursuant to this Section is terminated because the Change in Control
was not consummated, the affected Member shall bear (and refund and
reimburse the Company and the other Members as appropriate) one hundred
percent (100%) of all third party costs incurred by Company and the
Members in connection with the terminated disposition.
(d) In the event the non-affected Member elects to consent to the
Change in Control, the affected Member, or any successor Person created
as a result of the Change in Control, shall retain its Company
Interest.
12.6 Withdrawal from Company. Upon a transfer of a Member's entire
Company Interest in accordance with this Article XII, such Member (the
"Withdrawing Member") shall be deemed to have withdrawn as a Member and shall
have no further rights or obligations as a Member under this Company Agreement,
except those obligations set forth under Section 7.2, Section 15.9 and Section
12.7. Nothing in this Section 12.6 shall alter a Member's obligations set forth
in Section 6.1 Other than as set forth herein; no Member shall be entitled to
withdraw from the Company.
35
12.7 Transition Costs. In the event of a transfer of a Member's entire
Company Interest in accordance with this Article XII, and the Company's use of
service marks and trade names licensed by the Withdrawing Member or an Affiliate
to the Company ceases upon the Member's withdrawal from the Company, the
Withdrawing Member shall reimburse the Company for all direct costs reasonably
incurred by the Company in connection with its discontinuance of use of the
service marks and trade names, including, for example, costs incurred in
connection with the changing of signs and Company stationary and revising
existing advertisements.
ARTICLE XIII
Dissolution and Winding Up
13.1 Dissolution. The Company shall be dissolved and its affairs wound
up upon the first to occur of the following events ("Dissolution Event")
(a) the unanimous written consent of all of the Members;
(b) an event which makes it unlawful for the Company business to be
continued;
(c) the sale or disposition of all or substantially all of the
Company's assets and properties; and
(d) the entry of a decree of judicial dissolution under ss.18-802 of
the Act.
13.2 Effect of Dissolution.
(a) Upon dissolution, the Company shall cease carrying on as
distinguished from winding up the Company business; however, the
Company is not terminated, but continues until the winding up of the
affairs of the Company is completed and the certificate of cancellation
has been issued by the Secretary of the State of Delaware. The
Liquidating Trustee shall in an orderly manner wind up the affairs of
the Company and make an accounting of the Capital Account of each
Member and of the Company assets, liabilities and operations from the
date of the last previous accounting to the date of such dissolution.
(b) In the event of dissolution, the Members shall in good
faith, and for a period of no less than 30 days, attempt to
negotiate and agree upon a method of dissolution of the
Company in an effort to minimize the losses or other adverse
effects normally attendant to such an event (the "Negotiated
Dissolution"). In such efforts, and without limiting all other
appropriate considerations, the Members acknowledge and agree
that they shall consider the costs and benefits (tax-related
and otherwise) of no fewer than the following two
alternatives:
(1) selling the Company (or its assets) in whole, thereby
converting the Company (or its assets) to cash for the
purposes of winding-up the Company and distributing the
remaining cash to the Members (a "Company Sale");
(2) distributing the Company's assets to the Members in such a
manner as the Members may agree, and in so doing, cause such
distributions to be tax-free, or tax favorable, under 1R
Section 731, and other applicable law
36
(a "Tax Advantaged Distribution"). In connection with a Tax
Advantaged Distribution, the Members shall consider
distributing the Company's assets to the Members on such basis
as is appropriate, including on a state-by-state basis,
relative to the principal service territory of the Members'
Affiliates (e.g. North Carolina with respect to Piedmont and
Georgia with respect to GNGC).
(c) If the Members are unable to agree upon an Negotiated Dissolution,
the Members shall engage an Investment Bank agreeable to each Member
(or, in the absence of such agreement, each Member shall select an
Investment Bank and the Banks so selected shall agree upon a third
party Bank) to serve as Liquidating Trustee hereunder (such Investment
Bank being referred required to herein as the "Auctioneer"). The
Auctioneer shall be obligated to auction the Company, in an "open"
auction (the "Auction") in compliance with the principles and
mechanism/procedure set forth below (the "Auction Procedures").
Consistent with the Auction Procedures the Auctioneer shall be
instructed to maximize the value of the distributions that ultimately
will be made to the Members upon completion of the dissolution (the
"Value Maximization Principle"). In attempting to achieve the Value
Maximization Principle, the Auctioneer may, in its professional
judgment, auction the Company in its totality or, alternatively,
auction the Company's constituent components on a state-by-state (or
territory-by-territory) basis.
(d) To the extent a Member or any Affiliate of a Member desires to
participate, directly or indirectly, as a bidder in the Auction, notice
of such intent shall be given to each Member as well as to each
participant in the Auction. Proper notice of such participation shall
be a condition to a Member's (or Affiliate's) participation in the
Auction. The Auctioneer shall be charged with taking such steps as it
deems appropriate to ensure that all bidders are bona fide bidders with
the financial resources (or financing) available to consummate the
acquisition. Except as provided in Section 13.2(f), the consideration
offered in all bids considered by the Auctioneer shall be cash or cash
equivalents payable in immediately available funds, and such bids shall
offer a firm purchase price which is not contingent on "earn-out" or
related concepts.
(e) The Auction shall be structured as a "sequential" auction with each
bidder given an opportunity, and a finite period of time (e.g., 6
hours) to exceed the then current highest bid. When any participant
makes a bid in the auction, the amount and identity of such bidder
shall be made known by the Auctioneer to each other participant. Once a
bid is made, it shall be irrevocable unless and until a higher bidder
is thereafter made. All participants will always be given the
opportunity to make a higher bid and notice that (with respect to each
bid that may be accepted by the Auctioneer), unless a higher bid is
tendered within a finite period of time, the Company will be sold at
the then current highest bid.
(f) If a Member is a successful bidder, it may, at its option, either
(i) elect to pay the purchase price amount offered in the successful
bid to the Company in cash or cash equivalents, or (ii) elect to
receive the assets for which it has successfully bid as an in-kind
distribution from the Company pursuant to Section 13.3 hereof.
37
13.3 Distribution of Assets on Dissolution. Upon the winding up of the
Company, the Company Property shall be distributed:
(a) to creditors, including Members who are creditors (other than by
reason of the operation and effect of ss.18-60 1 or ss.18-604 of the
Act) to the extent otherwise permitted by law, in satisfaction of the
Company's liabilities; and then
(b) to the establishment of any reserves which the Liquidating Trustee
may deem reasonably necessary for any contingent or unforeseen
liabilities or obligations of the Company arising out of or in
connection with the Company. Such reserves may be paid over by the
Liquidating Trustee to an agent, as escrowed, to be held by him for the
purpose of disbursing such reserves in payment of any of the
aforementioned contingencies, and, at the expiration of such period as
the Liquidating Trustee shall deem advisable, for distributing the
balance thereafter remaining in the manner hereinafter provided; and
then
(c) to Members in satisfaction of liabilities for distributions; and
then
(d) to Members to the extent of and in proportion with their respective
positive Capital Account; and then
(e) the remainder, if any, to the Members in proportion to their
respective Company Interest as in effect at the moment of the event
giving rise to such dissolution.
Distributions under this Section 13.3 shall be in cash or in-kind as determined
by the provisions set forth in Article XIII hereof. All of the Members shall
endeavor to facilitate Tax Advantaged Distributions to each of the other
Members.
13.4 Winding Up and Cert of Cancellation. The winding up of the Company
shall be completed when all debts, liabilities, and obligations of the Company
have been paid and discharged or reasonably adequate provision therefore has
been made, and all of the remaining property and assets of the Company have been
distributed to the Members. Upon the completion of winding up of the Company, a
certificate of cancellation shall be delivered to the Secretary of the State of
Delaware for filing. The certificate of cancellation shall set forth the
information required by the Act.
13.5 Termination. A reasonable time shall be allowed for the orderly
liquidation of the assets of the Company and the discharge of liabilities to
creditors so as to enable the Executive Committee (or other Person winding up
the Company's affairs) to minimize the normal losses attendant upon a
liquidation. Each of the Members shall be furnished, by the Executive Committee,
with a statement setting forth the assets and liabilities of the Company as of
the date of complete liquidation. Upon compliance with the distribution plan set
forth in Section 13.3 (including payment over to the agent-escrowee if there are
sufficient funds therefore), the Company terminates.
13.6 Use of Company Identity.
(a) In the event of the dissolution of the Company, any Member shall be
entitled to purchase from the Company the exclusive rights to all
Company-owned trade names, trademarks or service marks, as well as all
related logos, addresses, telephone numbers and similar forms of
identification (such items referred to
38
collectively as the "Trade Name") in accordance with the following
procedure. In the event only one Member desires to purchase the Trade
Name, the Members shall attempt to negotiate acceptable terms and
conditions. If the Members are unable to reach agreement, the Members
shall initiate the Dispute Resolution Process detailed in Article 16.
The proceeds of the purchase of the Trade Name shall be distributed in
accordance with Section 13.3 of this Company Agreement.
(b) In all other cases relating to dissolution, unless the Members
agree otherwise in a signed written agreement approved by the Executive
Committee, no Member or Affiliate shall use the Company owned
trademarks, trade names, service marks (or any deceptively similar
trademarks, trade names or service marks), telephone number or address,
for twenty-four (24) months after the dissolution of the Company.
ARTICLE XIV
14.1 Amendment. This Company Agreement may be amended or modified from
tune to time only by a written instrument (including, without limitation, any
Admission Agreement) adopted by the Members. No Member shall have any vested
rights in this Company Agreement which may not be modified through an amendment
to this Company Agreement.
ARTICLE XV
Miscellaneous Provisions
15.1 Entire Agreement. This Company Agreement along with the exhibits
attached hereto as may be amended from time to time, represents the entire
agreement with respect to the subject matter hereof among all the Members and
between the Members and the Company.
15.2 Successors and Assigns. Subject to the provisions on Disposition
set forth herein, this Company Agreement shall bind and inure to the benefit of
the parties hereto and their respective successors and permitted assigns.
15.3 Governing Law. THIS COMPANY AGREEMENT SHALL BE GOVERNED BY AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE. WITH RESPECT
TO ANY PROCEEDING RELATING TO THIS COMPANY AGREEMENT, EACH MEMBER IRREVOCABLY
SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF DELAWARE AND
THE UNITED STATES DISTRICT COURT LOCATED IN THE STATE OF DELAWARE, AND WAIVES
ANY OBJECTION WHICH IT MAY HAVE TO THE LAYING OF VENUE OF ANY PROCEEDING BROUGHT
IN ANY SUCH COURT AND WAIVES ANY CLAIM THAT SUCH PROCEEDING HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM.
15.4 Notices. All notices required or permitted to be given or made
under this Company Agreement shall be given or made in writing. Such notices
shall be delivered by hand delivery, by facsimile or similar electronic means,
by nationally recognized overnight courier, or by certified or registered mail,
return receipt requested, addressed as
39
set forth in Exhibit B or any amendment thereto. Any party may change its
address for the purpose of this Section 15.4 by notice to the other(s) given in
the manner set forth above.
15.5 Right of Creditors and Third Parties under Company Agreement. This
Company Agreement is entered into among the Company and the Members for the
exclusive benefit of the Company, its Members, and their successors and
permitted assignees. This Company Agreement is expressly not intended for the
benefit of any creditor of the Company or any other Person (other than any
Person with a right to indemnification under Section 6.9) Except and only to the
extent provided by applicable statute, no such creditor or third party shall
have any rights under this Company Agreement or any agreement between the
Company and any Member with respect to any Capital Contribution or otherwise.
15.6 No Action for Partition. No Member shall have any right to
maintain any action for partition with respect to the property of the Company.
15.7 Title to Company Property. Title to Company Property shall be held
in the name of the Company or its nominee.
15.8 Company Funds. Company funds shall be deposited in one or more
accounts with a bank or banks located within the United States and approved by
the Executive Committee. Pending use in the business of the Company or
distribution to the Members, the funds of the Company may, in the discretion of
the Executive Committee, be deposited in a bank account or accounts, or invested
in such interest-bearing taxable or nontaxable investments, including without
limitation, checking and savings accounts, certificates of deposit and time or
demand deposits in commercial banks, U.S. government securities, securities
guaranteed by U.S. Government agencies, bankers' acceptances, Eurodollar
deposits and notes, both fixed rate and floating securities issued by money
market mutual funds, savings and loan association deposits, deposits in members
of the Federal Home Loan Bank System, or commercial paper, rated A-i or better
by Standard & Poor's Corporation or Prime-i or better by Moody's Commercial
Paper Division of Xxxxx'x Investor Services, Inc., or the successor to either of
them, provided that the Executive Committee shall not cause the Company to make
any such deposits or Investments that have a remaining maturity of more than one
year or that would require registration of the Company under the Investment
Company Act of 1940. Such funds shall not be commingled with funds of any other
Person.
15.9 Confidentiality. Except as hereinafter provided, the Company and
each Member (a) shall treat as confidential and not disclose to any unauthorized
third party (including a Member's employees or Affiliates who have no need to
know) any confidential information obtained either directly or indirectly from
any other Member pursuant to this Company Agreement, or confidential information
developed or acquired on behalf of the Company by the Executive Committee or the
Company's Officers or employees (collectively "Confidential Information"), and
(b) shall not use any such Confidential Information for any purpose other than
in connection with the activities of the Company pursuant to this Company
Agreement. The limitations in this Section 15.9 shall not apply to the extent
Confidential Information: (i) was already in the possession of the receiving
Member, or its Affiliate, at the time it obtained such Confidential
40
Information; (ii) was or is published or otherwise is or becomes generally
available to the public through no fault of such receiving Member, or its
Affiliate, (iii) was or is lawfully made available to such Member or its
Affiliate without restriction by any Person which is not bound by an obligation
of confidentiality or use with respect to the information; (iv) was or is
independently developed by such Member or its Affiliate; or (v) is required to
be disclosed by operation of law or regulation, required in any Proceeding,
requested by a regulatory body and the disclosing Member deems it advisable, in
its discretion, to comply with the request, or is deemed advisable to be
disclosed in the good faith judgment of the disclosing Member in any Proceeding.
In the event disclosure is required or requested the disclosing Member shall
exercise all reasonable efforts to disclose such Confidential Information
pursuant to a confidentiality agreement or protective order. The Members and the
Executive Committee shall establish and enforce reasonable procedures for the
protection of Confidential Information and shall restrict disclosure of such
Confidential Information to those of the Company's employees, Officers, agents,
and Affiliates of each Member and the Company who need to know such Confidential
Information in connection with their functions and the purposes of the Company
as set forth herein. Each Member and the Executive Committee shall take such
reasonable and prudent steps and precautionary measures as may be required to
ensure compliance with this Section 15.9 by such of their or the Company's
employees, Officers, agents, Affiliates and other Persons as shall be given
access to such Confidential Information and shall be responsible for compliance
by its employees, officers, agents and Affiliates. Nothing in this Section 15.9
shall be construed to prohibit a Member's disclosure to its attorneys, auditors,
or other consultants, provided such attorneys, auditors or other consultants are
advised of this Section 15.9 and agree to be bound thereby.
15.10 Transaction Costs. Each Member shall bear and pay its own
transaction costs relating to the negotiation and execution of this Company
Agreement.
15.11 Severability. If any provision of this Company Agreement is
determined to be invalid, illegal or otherwise unenforceable for any reason by a
court of competent jurisdiction, the remaining terms and conditions of this
Company Agreement shall remain in full force and effect to the fullest extent
permitted by law. In such an event, the Members agree to make a good faith
effort to renegotiate the affected provisions.
SECTION 16
DISPUTE RESOLUTION PROCEDURES
16.1 Process
(a) In the event of any dispute or controversy arising under the
Company Agreement ("Dispute") as to the "fair market value" of any
property or asset or the Market Value of the Company Interest of any
Member or the Company (the "Disputed Asset") or other value, such
Dispute shall be resolved pursuant to the terms hereof (the "Dispute
Resolution Procedures"). Such process shall be initiated by written
notice from one Member involved in the Dispute to the other Members.
41
(b) Within ten (10) business days of notice of initiation of the
Dispute Resolution Process, each disputing Member shall simultaneously
disclose to the other in writing the amount in dollars representing the
amount it believes is the appropriate value of the Disputed Asset (the
"Fair Market Amount") as established by the terms hereof or any other
agreement between the parties, if any. Each Member shall determine its
Fair Market Amount on the assumption that it would be paid or pay the
other Member, the Company or any third party, as applicable, in cash on
the first day of the first calendar month which is at least ten days
after the date that such Fair Market Amounts are simultaneously
exchanged (such assumed date of payment being hereinafter called the
"Assumed Payment Date"). During the fifteen-day period following the
exchange of Fair Market Amounts as aforesaid, the Members shall attempt
to resolve the difference between their respective Fair Market Amounts
so as to avoid the delay and expense of the arbitration procedure
hereinafter set forth.
16.2 If the Members are unable to agree to a settlement within the
aforesaid fifteen-day period, then copies of both Fair Market Amounts, exactly
as originally exchanged by the parties, with no improvement, adjustment or
amendment whatsoever, shall be placed in one sealed envelope to be held by an
appointed party for ultimate submission to an unaffiliated accounting firm,
investment banking firm or other valuation expert (the "Appraiser") selected in
accordance with the procedure set forth in Paragraph 3 below.
16.3 At the option of any Member involved in the Dispute, the Dispute
may be submitted to resolution to an Appraiser. The Members shall have 10 days
upon the exercise of this option to mutually agree on the identity of the
Appraiser for the Dispute. If the Appraiser initially selected declines to
accept such engagement, the Members shall agree on another third party as the
Appraiser. If the Members are unable to agree upon an Appraiser to so act within
10 Business Days, either Member may elect that the CPR Institute for Dispute
Resolution make such a selection.
16.4 The Appraiser shall be instructed to independently determine the
proper amount, (the "Proper Amount") for the appropriate value of the Disputed
Asset on the assumption that such Proper Amount was paid or contributed in cash
on the Assumed Payment Date. The Proper Amount shall be determined by the
Appraiser based on his or her findings of facts and conclusions of law
applicable to the Dispute without any knowledge of the Fair Market Amounts,
which amounts each Member agrees to keep confidential. Neither Member shall,
prior to the Appraiser's determination of the Proper Amount, directly or
indirectly disclose to the Appraiser, in its submissions to the Appraiser or
otherwise, its or the other Member's Fair Market Amount (although each Member
may submit to the Appraiser evidence and other support for the amount which such
Member claims to be the Proper Amount so long as it does not disclose to the
Appraiser the extent to which such claimed Proper Amount differs from its or the
other Member's Fair Market Amount). Each Member agrees that it shall, and shall
cause the Company to, make available to the Appraiser all relevant books and
records relating to the Disputed Asset and all other information requested by
the Appraiser.
42
16.5 The Appraiser shall notify the parties in writing of his or her
determination of the Proper Amount within thirty days or such later practicable
date of the receipt of the Dispute. Promptly thereafter the Members shall
deliver to the Appraiser the Fair Market Amounts held by them and authorize the
Appraiser to review the Fair Market Amount of each Member. The Appraiser will
promptly thereafter deliver to each Member his or her written report (the
Appraiser's Report) containing (a) the Appraiser's determination of which of the
two Fair Market Amounts is closer to the Proper Amount, which closer Fair Market
Amount is the awarded amount, and (b) a certification that the Appraiser did
not, before determining the Proper Amount, (i) obtain from either Member,
directly or indirectly, knowledge of either Member's Fair Market Amount or (ii)
obtain from any other source knowledge of either Member's Fair Market Amount.
The Members hereby agree that the Appraiser's conclusion shall be conclusive and
binding on the Members. Any purchase, sale, contribution or other action related
to or conditioned upon the resolution of the Dispute shall be consummated within
5 Business Days or the Appraiser's decision or such later date as the Members
may mutually agree and shall be based upon the awarded amount selected by the
Appraiser.
16.6 The fees of the Appraiser and the other costs and expenses,
including attorneys' and other similar expenses, of the arbitration proceeding
shall be borne by the Member which submitted the Fair Market Amount which
differs the most from the Proper Amount determined by the Appraiser.
43
IN WITNESS WHEREOF, the Current Members have caused their authorized officers to
sign this Company Agreement as of the date first written above.
PIEDMONT ENERGY COMPANY
By: /s/ Xxxxx X. X'Xxxx
------------------------------
Title: Vice President
GEORGIA NATURAL GAS COMPANY
By: /s/ Xxxxxxx X. X'Xxxxx
------------------------------
Title: Executive Vice President
and Chief Financial Officer
44
