1
EXHIBIT 3.16
LIMITED LIABILITY COMPANY AGREEMENT
OF
MIDDLETOWN POWER LLC
A Delaware Limited Liability Company
THIS LIMITED LIABILITY COMPANY AGREEMENT OF MIDDLETOWN POWER LLC (this
"Agreement"), dated as of July 30, 1999 (the "Effective Date"), is adopted,
executed and agreed to, for good and valuable consideration, by the Members (as
defined below).
RECITALS
1. NRG Connecticut Generating LLC, a Delaware limited liability
company ("NRG CT"), has agreed to become the Sole Member of the Company (as
defined below), which was formed for the purpose of acquiring, operating and
owning the Project (as defined below).
2. NRG CT desires to enter into this Agreement to agree upon various
matters relating to the Company.
ARTICLE 1
DEFINITIONS
1.01 DEFINITIONS. As used in this Agreement, the following terms have
the respective meanings set forth below or set forth in the Sections referred to
below:
ACQUISITION - the Company's acquisition of the Project from the
Seller pursuant to the Asset Purchase Agreement.
ACQUISITION DATE - the Closing Date, as defined in the Asset
Purchase Agreement.
ACT - the Delaware Limited Liability Company Act.
AFFECTED MEMBER - Section 9.01.
AFFILIATE - 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 Member'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.
AGREEMENT - introductory paragraph.
ALTERNATE REPRESENTATIVE - Section 6.02(a)(i).
ASSET PURCHASE AGREEMENT - that certain Purchase and Sale
Agreement, dated as of July 1, 1999, by and between Seller and NRG,
assigned to the Company as of December ___, 1999.
ASSIGNEE - any Person that acquires a Membership Interest or any
portion thereof
1
2
through a Disposition; provided, however, that, an Assignee shall have
no right to be admitted to the Company as a Member except in accordance
with Section 3.03(b)(iii).
BANKRUPTCY OR BANKRUPT - with respect to any Person, that (a)
such Person (i) makes a general assignment for the benefit of creditors;
(ii) files a voluntary bankruptcy petition; (iii) becomes the subject of
an order for relief or is declared insolvent in any federal or state
bankruptcy or insolvency proceedings; (iv) files a petition or answer
seeking for such Person a reorganization, arrangement, composition,
readjustment, liquidation, dissolution, or similar relief under any Law;
(v) files an answer or other pleading admitting or failing to contest
the material allegations of a petition filed against such Person in a
proceeding of the type described in subclauses (i) through (iv) of this
clause (a); or (vi) seeks, consents to, or acquiesces in the appointment
of a trustee, receiver, or liquidator of such Person or of all or any
substantial part of such Person's properties; or (b) against such
Person, a proceeding seeking reorganization, arrangement, composition,
readjustment, liquidation, dissolution, or similar relief under any Law
has been commenced and 60 Days have expired without dismissal thereof or
with respect to which, without such Person's consent or acquiescence, a
trustee, receiver, or liquidator of such Person or of all or any
substantial part of such Person's properties has been appointed and 60
Days have expired without the appointment's having been vacated or
stayed, or 60 Days have expired after the date of expiration of a stay,
if the appointment has not previously been vacated.
BUDGET - the annual budget for the Company that is approved by
the Management Committee, as such may be amended from time to time. The
Budget shall cover both operating and capital items.
BUSINESS DAY - any day other than a Saturday, a Sunday, or a
holiday on which national banking associations in Minnesota, Connecticut
or New York are not open for business.
BUYOUT EVENT - Section 9.01.
CAPITAL ACCOUNT - the account to be maintained by the Company for
each Member in accordance with Section 4.06.
CAPITAL CONTRIBUTION - with respect to any Member, the amount of
money and the net agreed value of any property (other than money)
contributed to the Company by the Member. Any reference in this
Agreement to the Capital Contribution of a Member shall include a
Capital Contribution of its predecessors in interest.
CERTIFIED PUBLIC ACCOUNTANTS - a firm of independent public
accountants selected from time to time by the Management Committee.
CHANGE OF MEMBER CONTROL - with respect to any Member, an event
(such as a Disposition of voting securities) that causes such Member to
cease to be Controlled by such Member's Parent; provided, however, that
an event that causes any of such Member's Parents to be Controlled by
another Person shall not constitute a Change of Member Control.
CLAIM - any and all judgments, claims, causes of action, demands,
lawsuits, suits, proceedings, Governmental investigations or audits,
losses, assessments, fines, penalties,
2
3
administrative orders, obligations, costs, expenses, liabilities and
damages (whether actual, consequential or punitive), including interest,
penalties, reasonable attorney's fees, disbursements and costs of
investigations, deficiencies, levies, duties and imposts.
CODE - the Internal Revenue Code of 1986, as amended.
COMPANY - Middletown Power LLC, a Delaware limited liability
company.
CONFIDENTIAL INFORMATION - information and data (including all
copies thereof) that is furnished or submitted by any of the Members or
their Affiliates, whether oral (and if oral, reduced to writing and
marked "confidential" within 10 days of disclosure), written, or
electronic, on a confidential basis to the other Members or their
Affiliates in connection with the Company, and any and all of the
activities and studies performed pursuant to this Agreement or any
Project Agreement, and the resulting information and data obtained from
those studies. Notwithstanding the foregoing, the term "Confidential
Information" shall not include any information that:
(a) is in the public domain at the time of its disclosure or
thereafter (other than as a result of a disclosure directly or
indirectly by a Member or its Affiliates in contravention of this
Agreement or any Project Agreement);
(b) as to any Member, was in the possession of such Member or its
Affiliates prior to the execution of this Agreement; or
(c) is engineering information (for example, heat balance and
capital cost information) that has been independently acquired or
developed by a Member or its Affiliates without violating any of the
obligations of such Member or its Affiliates under this Agreement.
CONTROL - the possession, directly or indirectly of either of the
following:
(a) (i) in the case of a corporation, more than 50% of the
outstanding voting securities thereof; (ii) in the case of a limited
liability company, partnership, limited partnership or venture, the
right to more than 50% of the distributions therefrom (including
liquidating distributions); (iii) in the case of a trust or estate,
including a business trust, more than 50% of the beneficial interest
therein; and (iv) in the case of any other entity, more than 50% of the
economic or beneficial interest therein; or
(b) in the case of any entity, the power or authority, through
ownership of voting securities, by contract or otherwise, to exercise a
controlling influence over the management of the entity.
CORPORATE SERVICES AGREEMENT - the Corporate Services Agreement
between and among NRG, the Company and the Operator, relating to the provision
of specified services to the Company and the Operator.
DAY - a calendar day; provided, however, that if any period of
Days referred to in this Agreement shall end on a Day that is not a
Business Day, then the expiration of such period shall be automatically
extended until the end of the first succeeding Business Day.
3
4
DEFAULT - the failure of a Member to comply in any material
respect with any of its material agreements, covenants or obligations
under this Agreement; the failure of any representation or warranty made
by a Member in this Agreement to have been true and correct in all
material respects at the time it was made; or the failure of a Member,
without justified cause, to take any action materially necessary for the
progress of the Project consistent with or required by the terms of this
Agreement (including participating in meetings or decisions).
DEFAULT RATE - a rate per annum equal to the lesser of (a) a
varying rate per annum equal to the sum of (i) the prime rate as
published in The Wall Street Journal, with adjustments in that varying
rate to be made on the same date as any change in that rate is so
published, plus (ii) 3% per annum, and (b) the maximum rate permitted by
Law.
DEFERRED AMOUNT - Section 9.03(c).
DELAWARE CERTIFICATE - Section 2.01.
DISPOSE, DISPOSING OR DISPOSITION - with respect to any asset
(including a Membership Interest or any portion thereof), a sale,
assignment, transfer, conveyance, gift, exchange or other disposition
(other than the pledge or assignment to any creditor of the Company or
NRG CT, or any collateral agent for such creditor, of any Membership
Interest as security for the indebtedness to such creditor) of such
asset, whether such disposition be voluntary, involuntary or by
operation of Law, including the following: (a) in the case of an asset
owned by a natural person, a transfer of such asset upon the death of
its owner, whether by will, intestate succession or otherwise; (b) in
the case of an asset owned by an entity, (i) a merger or consolidation
of such entity (other than where such entity is the survivor thereof),
(ii) a conversion of such entity into another type of entity, or (iii) a
distribution of such asset, including in connection with the
dissolution, liquidation, winding-up or termination of such entity
(unless, in the case of dissolution, such entity's business is continued
without the commencement of liquidation or winding-up); and (c) a
disposition in connection with, or in lieu of, a foreclosure of an
Encumbrance; but such terms shall not include the creation of an
Encumbrance.
DISPUTE - Section 10.01.
DISPUTE NOTICE - Section 10.02.
DISPUTING MEMBER - Section 10.01.
DISSOLUTION EVENT - Section 11.01(a).
EFFECTIVE DATE - introductory paragraph.
ENCUMBER, ENCUMBERING, OR ENCUMBRANCE - the creation of a
security interest, lien, pledge, mortgage or other encumbrance, whether
such encumbrance be voluntary, involuntary or by operation of Law;
provided, however, that the pledge or assignment to any creditor of the
Company or NRG CT, or any collateral agent for such creditor, of any
Membership Interest as security for the indebtedness to such creditor
shall not be deemed to
4
5
be an Encumbrance thereof.
FAIR MARKET VALUE - Section 9.03.
GOVERNMENTAL AUTHORITY (OR GOVERNMENTAL) - a federal, state,
local or foreign governmental authority; a state, province,
commonwealth, territory or district thereof; a county or parish; a city,
town, township, village or other municipality; a district, ▇▇▇▇ or other
subdivision of any of the foregoing; any executive, legislative or other
governing body of any of the foregoing; any agency, authority, board,
department, system, service, office, commission, committee, council or
other administrative body of any of the foregoing; any court or other
judicial body; and any officer, official or other representative of any
of the foregoing.
INCLUDING - including, without limitation.
ISO - the independent system operator established to sell power
in the market served by the Company.
LAW - any applicable constitutional provision, statute, act, code
(including the Code), law, regulation, rule, ordinance, order, decree,
ruling, proclamation, resolution, judgment, decision, declaration, or
interpretative or advisory opinion or letter of a Governmental Authority
having valid jurisdiction.
LENDING MEMBER - Section 4.03(a)(ii).
LOAN DOCUMENTS - any and all documents relating to money borrowed
by the NRG CT including money borrowed through public or private sales
of its debt securities, as the same may be amended or restated from time
to time.
MANAGEMENT COMMITTEE - Section 6.02.
MANAGER - Section 6.03.
MANAGER MEMBERS - Section 6.02.
MEMBER - any Person executing this Agreement as of the date of
this Agreement as a member or hereafter admitted to the Company as a
member as provided in this Agreement, but such term does not include any
Person who has ceased to be a member in the Company.
MEMBERSHIP INTEREST - with respect to any Member, (a) that
Member's status as a Member; (b) that Member's share of the income,
gain, loss, deduction and credits of, and the right to receive
distributions from, the Company; (c) all other rights, benefits and
privileges enjoyed by that Member (under the Act, this Agreement, or
otherwise) in its capacity as a Member, including that Member's rights
to vote, consent and approve and otherwise to participate in the
management of the Company, including through the Management Committee;
and (d) all obligations, duties and liabilities imposed on that Member
(under the Act, this Agreement or otherwise) in its capacity as a
Member, including any obligations to make Capital Contributions.
5
6
NON-CONTRIBUTING MEMBER - Section 4.03(a).
NRG - NRG Energy, Inc., a Delaware Corporation.
NRG CT- Recital 1.
OFFICER - any Person designated as an officer of the Company as
provided in Section 6.02(j), but such term does not include any Person
who has ceased to be an officer of the Company.
O&M AGREEMENT - the Operation and Maintenance Agreement between
the Company and the Operator, relating to the operation and maintenance
of the Project.
OPERATOR - NRG Middletown Operations Inc., a Delaware
corporation.
OUTSIDE ACTIVITIES - Section 6.05(b).
PARENT - if applicable to a Member, the company or companies set
forth opposite the name of such Member on Exhibit A.
PERMITS - all permits, licenses, approvals or other actions of
Governmental Authorities that are required for the ownership and
operation of the Project, as contemplated by this Agreement.
PERSON - the meaning assigned that term in Section 18-101(11) of
the Act and also includes a Governmental Authority and any other entity.
POWER PURCHASE AGREEMENT - the Power Sales and Agency Agreement
between the Company and NRG Power Marketing Inc., a Delaware
corporation.
PROJECT - the electric generation assets and all related items of
tangible and intangible property to be acquired by the Company pursuant
to the Asset Purchase Agreement.
PROJECT AGREEMENTS - the Asset Purchase Agreement, the O&M
Agreement, the Power Purchase Agreement and any other agreements
required in connection with the acquisition, operation or ownership of
the Project.
PROJECT SITE - the parcel of land upon which the Project is
located and the parcels of land from which the Project's water rights
are derived, as set forth in the Asset Purchase Agreement.
PURCHASE PRICE - Section 9.03.
REPRESENTATIVE - Section 6.02(a)(i).
SECURITIES ACT - the Securities Act of 1933.
SELLER - Connecticut Light & Power Company.
6
7
SHARING RATIO - subject in each case to adjustments in accordance
with this Agreement or in connection with Dispositions of Membership
Interests, (a) in the case of a Member executing this Agreement as of
the date of this Agreement or a Person acquiring such Member's
Membership Interest, the percentage specified for that Member as its
Sharing Ratio on Exhibit A, and (b) in the case of Membership Interest
issued pursuant to Section 3.04, the Sharing Ratio established pursuant
thereto; provided, however, that the total of all Sharing Ratios shall
always equal 100%.
SOLE DISCRETION - a Member's sole and absolute discretion, with
or without cause, and subject to whatever limitations or qualifications
the Member may impose.
TAX MATTERS MEMBER - Section 7.03(a).
TERM - Section 2.06.
TERMINATED MEMBER - Section 9.05.
TREASURY REGULATIONS - the regulations (including temporary
regulations) promulgated by the United States Department of the Treasury
pursuant to and in respect of provisions of the Code. All references
herein to sections of the Treasury Regulations shall include any
corresponding provision or provisions of succeeding, similar or
substitute, temporary or final Treasury Regulations.
WORKING CAPITAL REQUIREMENTS - an amount equal to the operating
cash requirements for the operation of the Project for the next 3
succeeding calendar months (including any capital expenditures) as
determined by the net operating cash expenditures planned for the next
succeeding calendar quarter according to the Budget in excess of cash
receipts planned for such next succeeding calendar quarter according to
the budget.
Other terms defined herein have the meanings so given them.
1.02 CONSTRUCTION. Unless the context requires otherwise: (a) the gender
(or lack of gender) of all words used in this Agreement includes the masculine,
feminine, and neuter; (b) references to Articles and Sections refer to Articles
and Sections of this Agreement; (c) references to Exhibits refer to the Exhibits
attached to this Agreement, each of which is made a part hereof for all
purposes; (d) references to Laws refer to such Laws as they may be amended from
time to time, and references to particular provisions of a Law include any
corresponding provisions of any succeeding Law; and (e) references to money
refer to legal currency of the United States of America.
ARTICLE 2
ORGANIZATION
2.01 FORMATION. The Company has been organized as a Delaware limited
liability company by the filing of a Certificate of Formation, dated as of the
Effective Date (the "Delaware Certificate"), with the Secretary of State of
Delaware pursuant to the Act.
2.02 NAME. The name of the Company is "Middletown Power LLC" and
all Company business must be conducted in that name or such other names that
comply with Law as the
7
8
Management Committee may select.
2.03 REGISTERED OFFICE; REGISTERED AGENT; PRINCIPAL OFFICE IN THE UNITED
STATES; OTHER OFFICES. 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 Management Committee may
designate in the manner provided by Law. The registered agent of the 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 Management Committee
may designate in the manner provided by Law. The principal office of the Company
in the United States shall be at such place as the Management 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 Management 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 Management Committee may designate.
2.04 PURPOSES. The purposes of the Company are to acquire, operate and
own the Project; to enter into and perform its obligations under the Project
Agreements; and to engage in any activities directly or indirectly relating
thereto, including obtaining financing for the foregoing.
2.05 FOREIGN QUALIFICATION. Prior to the Company's conducting business
in any jurisdiction other than Delaware, the Management Committee shall cause
the Company to comply, to the extent procedures are available and those matters
are reasonably within the control of the Management Committee, with all
requirements necessary to qualify the Company as a foreign limited liability
company in that jurisdiction. At the request of the Management Committee, each
Member shall execute, acknowledge, swear to, and deliver all certificates and
other instruments conforming with this Agreement that are necessary or
appropriate to qualify, continue, and terminate the Company as a foreign limited
liability company in all such jurisdictions in which the Company may conduct
business.
2.06 TERM. The period of existence of the Company (the "Term") commenced
on the Effective Date and shall end at such time as a certificate of
cancellation is filed with the Secretary of State of Delaware in accordance with
Section 11.04. Such period may be extended from time to time by Members holding
a majority of the Membership Interests.
2.07 NO STATE-LAW PARTNERSHIP. The Members intend that the Company not
be a partnership (including a limited partnership) or joint venture, and that no
Member be a partner or joint venturer of any other Member, for any purposes
other than federal and state tax purposes, and this Agreement may not be
construed to suggest otherwise.
2.08 UNITS; CERTIFICATES OF MEMBERSHIP INTEREST; APPLICABILITY OF
ARTICLE 8 OF UCC. Membership Interests shall be represented by units ("Units").
The number of authorized Units shall be one thousand (1,000). All Membership
Interests shall be represented by certificates in such form as the Management
Committee shall from time to time approve, shall be recorded in a register
thereof maintained by the Company, and shall be subject to such rules for the
issuance thereof as the Management Committee may from time to time determine.
Membership Interests shall be subject to the provisions of Article 8 of the
Uniform Commercial Code as may be applicable from time to time.
8
9
ARTICLE 3
MEMBERSHIP; DISPOSITIONS OF INTERESTS
3.01 INITIAL MEMBERS. The initial Members of the Company are the Persons
executing this Agreement as of the date of this Agreement as Members, each of
which is admitted to the Company as a Member effective contemporaneously with
the execution by such Person of this Agreement.
3.02 REPRESENTATIONS, WARRANTIES AND COVENANTS. Each Member hereby
represents, warrants and covenants to the Company and each other Member that the
following statements are true and correct as of the Effective Date and shall be
true and correct at all times that such Member is a Member:
(a) that Member is duly incorporated, organized or formed (as
applicable), validly existing, and (if applicable) in good standing
under the Law of the jurisdiction of its incorporation, organization or
formation; if required by applicable Law, that Member is duly qualified
and in good standing in the jurisdiction of its principal place of
business, if different from its jurisdiction of incorporation,
organization or formation; and that Member has full power and authority
to execute and deliver this Agreement and to perform its obligations
hereunder, and all necessary actions by the board of directors,
shareholders, managers, members, partners, trustees, beneficiaries, or
other applicable Persons necessary for the due authorization, execution,
delivery, and performance of this Agreement by that Member have been
duly taken;
(b) that Member has duly executed and delivered this Agreement
and the other documents contemplated herein, and they constitute the
legal, valid and binding obligation of that Member enforceable against
it in accordance with their terms (except as may be limited by
bankruptcy, insolvency or similar Laws of general application and by the
effect of general principles of equity, regardless of whether considered
at law or in equity); and
(c) that Member's authorization, execution, delivery, and
performance of this Agreement does not and will not (i) conflict with,
or result in a breach, default or violation of, (A) the organizational
documents of such Member, (B) any contract or agreement to which that
Member is a party or is otherwise subject, or (C) any Law, order,
judgment, decree, writ, injunction or arbitral award to which that
Member is subject; or (ii) require any consent, approval or
authorization from, filing or registration with, or notice to, any
Governmental Authority or other Person, unless such requirement has
already been satisfied.
3.03 DISPOSITIONS AND ENCUMBRANCES OF MEMBERSHIP INTERESTS.
(a) GENERAL RESTRICTION. A Member may not Dispose of or Encumber
all or any portion of its Membership Interest except in strict
accordance with this Section 3.03. (References in this Section 3.03 to
Dispositions or Encumbrances of a "Membership Interest" shall also refer
to Dispositions or Encumbrances of a portion of a Membership Interest.)
Any attempted Disposition or Encumbrance of a Membership Interest, other
than in strict accordance with this Section 3.03, shall be, and is
hereby declared, null and void ab initio. The Members agree that a
breach of the provisions of this Section 3.03 may cause irreparable
injury to the Company and to the other Members for which monetary
damages (or other remedy at law) are inadequate in view of (i) the
complexities and uncertainties in
9
10
measuring the actual damages that would be sustained by reason of the
failure of a Member to comply with such provision and (ii) the
uniqueness of the Company business and the relationship among the
Members. Accordingly, the Members agree that the provisions of this
Section 3.03 may be enforced by specific performance.
(b) DISPOSITIONS OF MEMBERSHIP INTERESTS.
(i) GENERAL RESTRICTION. A Member may not Dispose of all
or any portion of its Membership Interest except by complying
with all of the following requirements:
(A) such Member must receive the unanimous consent
of the non-Disposing Members, which consent shall not be
unreasonably withheld by each of such other Members;
provided, however, that such consent need not be obtained
if (I) the proposed Assignee is a Wholly-Owned Affiliate
of the Disposing Member and (II) such proposed Assignee
demonstrates to the reasonable satisfaction of the other
Members that it has the ability to meet the financial and
contractual commitments and other obligations of the
Disposing Member; and
(B) such Member must comply with the requirements
of Section 3.03(b)(iii) and, if the Assignee is to be
admitted as a Member, Section 3.03(b)(ii).
(ii) ADMISSION OF ASSIGNEE AS A MEMBER. An Assignee has
the right to be admitted to the Company as a Member, with the
Membership Interest (and attendant Sharing Ratio) so transferred
to such Assignee, only if (A) the Disposing Member making the
Disposition has granted the Assignee either (I) the Disposing
Member's entire Membership Interest or (II) the express right to
be so admitted; and (B) such Disposition is effected in strict
compliance with this Section 3.03.
(iii) REQUIREMENTS APPLICABLE TO ALL DISPOSITIONS AND
ADMISSIONS. In addition to the requirements set forth in Sections
3.03(b)(i) and 3.03(b)(ii), any Disposition of a Membership
Interest and any admission of an Assignee as a Member shall also
be subject to the following requirements, and such Disposition
(and admission, if applicable) shall not be effective unless such
requirements are complied with; provided, however, that the
Management Committee, in its sole and absolute discretion, may
waive any of the following requirements:
(A) DISPOSITION DOCUMENTS. The following
documents must be delivered to the Management Committee
and must be satisfactory, in form and substance, to the
Management Committee:
(I) DISPOSITION INSTRUMENT. A copy
of the instrument pursuant to which the Disposition
is effected.
(II) RATIFICATION OF THIS AGREEMENT.
An instrument, executed by the Disposing Member and
its Assignee, containing the following information
and agreements, to the extent
10
11
they are not contained in the instrument described
in Section 3.03(b)(iii)(A)(I): (1) the notice
address of the Assignee; (2) if applicable, the
Parent of the Assignee; (3) the Sharing Ratios
after the Disposition of the Disposing Member and
its Assignee (which together must total the Sharing
Ratio of the Disposing Member before the
Disposition); (4) the Assignee's ratification of
this Agreement and agreement to be bound by it, and
its confirmation that the representations and
warranties in Section 3.02 are true and correct
with respect to it; (5) the Assignee's ratification
of all of the Project Agreements and agreement by
be bound by them, to the same extent that the
Disposing Member was bound by them prior to the
Disposition; and (6) representations and warranties
by the Disposing Member and its Assignee (aa) that
the Disposition and admission is being made in
accordance with all applicable Laws, and (bb) that
the matters set forth in Sections
3.03(b)(iii)(A)(III) and (IV) are true and correct.
(III) SECURITIES LAW OPINION. Unless
the Membership Interest subject to the Disposition
is registered under the Securities Act and any
applicable state securities Law, or the proposed
Assignee is a Wholly-Owned Affiliate as described
in 3.03(b)(i)(A) above, a favorable opinion of the
Company's legal counsel, or of other legal counsel
acceptable to the Management Committee, to the
effect that the Disposition and admission is being
made pursuant to a valid exemption from
registration under those Laws and in accordance
with those Laws.
(IV) TAX OPINION. A favorable
opinion of the Certified Public Accountants, or of
other certified public accountants acceptable to
the Management Committee, to the effect that the
Disposition would not result in the Company's being
considered to have terminated within the meaning of
Code Section 708.
(B) PAYMENT OF EXPENSES. The Disposing
Member and its Assignee shall pay, or reimburse the
Company for, all reasonable costs and expenses incurred by
the Company in connection with the Disposition and
admission, including the legal fees incurred in connection
with the legal opinions referred to in Sections
3.03(b)(iii)(A)(III) and (IV), on or before the tenth Day
after the receipt by that Person of the Company's invoice
for the amount due.
(C) NO RELEASE. No Disposition of a
Membership Interest shall effect a release of the
Disposing Member from any liabilities to the Company or
the other Members arising from events occurring prior to
the Disposition.
(iv) CHANGE OF MEMBER CONTROL. A Change of Member
Control must also comply with the requirements of this Section
3.03.
11
12
(c) ENCUMBRANCES OF MEMBERSHIP INTEREST. A Member may Encumber
its Membership Interest if the instrument creating such Encumbrance
provides that any foreclosure of such Encumbrance (or Disposition in
lieu of such foreclosure) must comply with the requirements of Section
3.03(b).
(d) RIGHT OF FIRST REFUSAL. Except as otherwise expressly
permitted by this Agreement, this Section 3.03(d) shall apply to any
proposed voluntary Disposition of a Membership Interest to any purchaser
(other than a majority owned Affiliate of the disposing party) for
consideration in the form of cash or promissory notes or other
obligations to pay sums certain. The Member proposing to make such a
Distribution shall provide written notice (a "Disposition Notice") to
the remaining Members at least 90 days prior to the proposed
Disposition. The Disposition Notice must set forth the identity of the
proposed transferee, the sale price, and all other material terms and
conditions of the proposed Disposition. In the Case of a Change of
member Control, the Disposition notice must set forth the portion, if
less than 100%, of the total purchase price that is applicable to such
Member's Membership Interest. Upon receipt of a Disposition Notice, the
remaining Members shall have the option for a period of 30 days to
purchase all, but not less than all, of such Membership Interest. Such
Membership Interest shall be allocated to the Members exercising their
option under this Section 3.03(d) pro rata in accordance with their
Membership Interests. The purchase pursuant to the exercise of this
option shall be at the price and pursuant to the terms and conditions of
the proposed Disposition. If no Member exercises such option, the Member
proposing such Disposition shall be free, for a period of 60 days after
the expiration of the remaining Members' options, to Dispose of the
Membership Interests that were the subject of the Disposition Notice,
but only to the party, and for the price and on the terms and
conditions, set forth in the Disposition Notice. If the proposed
disposition does not occur within 60 days after the expiration of the
remaining Members' options, the Membership Interest may not be Disposed
of pursuant to this Section 30.3(d) unless the Member again complies
with the terms of this Agreement.
(e) RIGHTS IN MEMBERSHIP INTERESTS PLEDGED AS COLLATERAL. Any
other provision of this Agreement to the contrary notwithstanding, by
executing and delivering this Agreement, each Member shall be deemed to
have consented to (i) the pledge, assignment, hypothecation and transfer
to any creditor of the Company or NRG CT or its agents, successors or
assigns of, and the grant to such creditor or other Person of a lien on
and security interest in, as security for the indebtedness of the
Company or NRG CT to such creditor, all of such Member's right, title
and interest in, to and under its Membership Interest and any other
collateral securing such indebtedness, (ii) the exercise by any such
creditor or other Person of the rights and remedies under any security
document related to such collateral, including, without limitation, the
right to exercise the voting and consensual rights and other powers of
each Member to the extent provided in any such security document, and
(ii) the right to foreclose upon or exercise a power of sale with
respect to the Membership Interest of each Member and any other
collateral subject to such security documents and to cause the agent or
designee of such creditor or any third party purchaser of such
Membership Interest to become an additional or substitute Member, and
(c) all other provisions of the loan and security documents relating to
such indebtedness or collateral, the issuance of new or substituted
Membership Interests, or the ownership of Membership Interests.
3.04 CREATION OF ADDITIONAL MEMBERSHIP INTEREST. Additional Membership
Interests may
12
13
be created and issued to existing Members or to other Persons, and such other
Persons may be admitted to the Company as Members, with the unanimous consent of
the existing Members, on such terms and conditions as the existing Members may
unanimously determine at the time of admission. The terms of admission or
issuance must specify the Sharing Ratios applicable thereto and may provide for
the creation of different classes or groups of Members having different rights,
powers, and duties. The Management Committee may reflect the creation of any new
class or group in an amendment to this Agreement indicating the different
rights, powers, and duties. Any such admission is effective only after the new
Member has executed and delivered to the Members an instrument containing the
notice address of the new Member, the Assignee's ratification of this Agreement
and agreement to be bound by it, and its confirmation that the representations
and warranties in Section 3.02 are true and correct with respect to it. The
provisions of this Section 3.04 shall not apply to Dispositions of Membership
Interests or admissions of Assignees in connection therewith, such matters being
governed by Section 3.03.
3.05 ACCESS TO INFORMATION. Each Member shall be entitled to receive any
information that it may request concerning the Company; provided, however, that
this Section 3.05 shall not obligate the Company or the Management Committee to
create any information that does not already exist at the time of such request
(other than to convert existing information from one medium to another, such as
providing a printout of information that is stored in a computer database). Each
Member shall also have the right, upon reasonable notice, and at all reasonable
times during usual business hours to inspect the properties of the Company and
to audit, examine and make copies of the books of account and other records of
the Company. Such right may be exercised through any agent or employee of such
Member designated in writing by it or by an independent public accountant,
engineer, attorney or other consultant so designated. The Member making the
request shall bear all costs and expenses incurred in any inspection,
examination or audit made on such Member's behalf. Confidential Information
obtained pursuant to this Section 3.05 shall be subject to the provisions of
Section 3.06.
3.06 CONFIDENTIAL INFORMATION.
(a) Except as permitted by Section 3.06(b),
(i) each Member shall keep confidential all Confidential
Information and shall not disclose any Confidential Information
to any Person, including any of its Affiliates, and
(ii) each Member shall use the Confidential Information
only in connection with the Company.
(b) Notwithstanding Section 3.06(a), but subject to the other
provisions of this Section 3.06, a Member may make the following
disclosures and uses of Confidential Information:
(i) disclosures to another Member in connection with
the Company;
(ii) disclosures and uses that are approved by the
Management Committee;
(iii) disclosures to an Affiliate of such Member on a
"need to know" basis
13
14
in connection with the Company, if such Affiliate has agreed to
abide by the terms of this Section 3.06;
(iv) disclosures to a Person that is not a Member or an
Affiliate of a Member, if such Person has been retained to
provide services by the Member in connection with the Company or
such Member's Membership Interest and has agreed to abide by the
terms of this Section 3.06;
(v) disclosures to lenders, potential lenders or other
Persons providing financing for the Project, potential equity
purchasers, if such Persons have agreed to abide by the terms of
this Section 3.06;
(vi) disclosures to ISO and its consultants and
representatives;
(vii) disclosures to Governmental Authorities that are
necessary to operate the Project consistent with the Project
Agreements;
(viii) disclosures that a Member is legally compelled to
make by deposition, interrogatory, request for documents,
subpoena, civil investigative demand, order of a court of
competent jurisdiction, or similar process, or otherwise by Law
or securities exchange requirements; provided, however, that,
prior to any such disclosure, such Member shall, to the extent
legally permissible:
(A) provide the Management Committee with prompt
notice of such requirements so that one or more of the
Members may seek a protective order or other appropriate
remedy or waive compliance with the terms of this Section
3.06(b)(vii);
(B) consult with the Management Committee on the
advisability of taking steps to resist or narrow such
disclosure; and
(C) cooperate with the Management Committee and
with the other Members in any attempt one or more of them
may make to obtain a protective order or other appropriate
remedy or assurance that confidential treatment will be
afforded the Confidential Information; and in the event
such protective order or other remedy is not obtained, or
the other Members waive compliance with the provisions
hereof, such Member agrees (I) to furnish only that
portion of the Confidential Information that the other
Members are advised by counsel to the disclosing Member is
legally required and (II) to exercise all reasonable
efforts to obtain assurance that confidential treatment
will be accorded such Confidential Information.
(c) Each Member shall take such precautionary measures as may
be required to ensure (and such Member shall be responsible for)
compliance with this Section 3.06 by any of its Affiliates, and its and
their directors, officers, employees and agents, and other Persons to
which it may disclose Confidential Information in accordance with this
Section 3.06.
(d) A Terminated Member shall promptly destroy (and provide a
certificate of destruction to the Company with respect to) or return to
the Company, as directed by the
14
15
Management Committee, all Confidential Information in its possession.
Notwithstanding the immediately-preceding sentence, a Terminated Member
may, subject to the other provisions of this Section 3.06, retain and
use Confidential Information for the limited purpose of preparing such
Terminated Member's tax returns and defending audits, investigations and
proceedings relating thereto.
(e) The Members agree that no adequate remedy at law exists
for a breach or threatened breach of any of the provisions of this
Section 3.06, the continuation of which unremedied will cause the
Company and the other Members to suffer irreparable harm. Accordingly,
the Members agree that the Company and the other Members shall be
entitled, in addition to other remedies that may be available to them,
to immediate injunctive relief from any breach of any of the provisions
of this Section 3.06 and to specific performance of their rights
hereunder, as well as to any other remedies available at law or in
equity.
(f) The obligations of the Members under this Section 3.06
shall terminate on the third anniversary of the end of the Term.
3.07 LIABILITY TO THIRD PARTIES. No Member shall be liable for the
debts, obligations or liabilities of the Company.
3.08 WITHDRAWAL. A Member may not withdraw or resign from the Company.
ARTICLE 4
CAPITAL CONTRIBUTIONS
4.01 INITIAL CAPITAL CONTRIBUTIONS. Contemporaneously with the
execution by such Member of this Agreement, each Member shall make the Capital
Contributions described for that Member in Exhibit A.
4.02 SUBSEQUENT CAPITAL CONTRIBUTIONS. Without creating any rights in
favor of any third party, each Member shall contribute to the Company, in cash,
on or before the date specified as hereinafter described, that Member's Sharing
Ratio of all monies that in the unanimous judgment of the Management Committee
are necessary to enable the Company to acquire the Project from the Seller and
to cause the assets of the Company to be properly operated and maintained and to
discharge its costs, expenses, obligations, and liabilities, including without
limitation its Sharing Ratio of the purchase price set forth in the Asset Sale
Agreement, and its Sharing Ratio of Working Capital Requirements in order to
bring current Company bank accounts to an amount equal to the Working Capital
Requirements, as more particularly described in Section 5.01 below. The
Management Committee shall notify each other Member of the need for Capital
Contributions pursuant to this Section 4.02 when appropriate, which notice must
include a statement in reasonable detail of the proposed uses of the Capital
Contributions and a date (which date may be no earlier than the fifth Business
Day following each Member's receipt of its notice) before which the Capital
Contributions must be made. Notices for Capital Contributions must be made to
all Members in accordance with their Sharing Ratios.
4.03 FAILURE TO CONTRIBUTE. (a) If a Member does not contribute,
within 10 Days of the date required, all or any portion of a Capital
Contribution that Member is required to make as provided in this Agreement, the
other Members may cause the Company to exercise, on notice to
15
16
that Member (the "Non-Contributing Member"), one or more of the following
remedies:
(i) taking such action (including court proceedings) as
the other Members may deem appropriate to obtain payment by the
Non-Contributing Member of the portion of the Non-Contributing
Member's Capital Contribution that is in default, together with
interest thereon at the Default Rate from the date that the
Capital Contribution was due until the date that it is made, all
at the cost and expense of the Non-Contributing Member;
(ii) permitting the other Members in proportion to their
Sharing Ratios or in such other percentages as they may agree
(the "Lending Member," whether one or more), to advance the
portion of the Non-Contributing Member's Capital Contribution
that is in default, with the following results:
(A) the sum advanced constitutes a loan from the
Lending Member to the Non-Contributing Member and a
Capital Contribution of that sum to the Company by the
Non-Contributing Member pursuant to the applicable
provisions of this Agreement,
(B) the principal balance of the loan and all
accrued unpaid interest thereon is due and payable in
whole on the tenth Day after written demand therefor by
the Lending Member to the Non-Contributing Member,
(C) the amount lent bears interest at the Default
Rate from the Day that the advance is deemed made until
the date that the loan, together with all interest accrued
on it, is repaid to the Lending Member,
(D) all distributions from the Company that
otherwise would be made to the Non-Contributing Member
(whether before or after dissolution of the Company)
instead shall be paid to the Lending Member until the loan
and all interest accrued on it have been paid in full to
the Lending Member (with payments being applied first to
accrued and unpaid interest and then to principal),
(E) the payment of the loan and interest accrued on
it is secured by a security interest in the
Non-Contributing Member's Membership Interest, as more
fully set forth in Section 4.03(b), and
(F) the Lending Member has the right, in addition
to the other rights and remedies granted to it pursuant to
this Agreement or available to it at Law or in equity, to
take any action (including court proceedings) that the
Lending Member may deem appropriate to obtain payment by
the Non-Contributing Member of the loan and all accrued
and unpaid interest on it, at the cost and expense of the
Non-Contributing Member;
(iii) exercising the rights of a secured party under the
Uniform Commercial Code of the State of Delaware, as more fully
set forth in Section 4.03(b); or
16
17
(iv) exercising any other rights and remedies available at
Law or in equity.
In addition, the failure to make such contributions shall constitute a Default
by the Non-Contributing Member, and the other Members shall have the rights set
forth in Article 9 with respect to such Default.
(b) Each Member grants to the Company, and to each Lending Member
with respect to any loans made by the Lending Member to that Member as a
Non-Contributing Member pursuant to Section 4.03(a)(ii), as security,
equally and ratably, for the payment of all Capital Contributions that
Member has agreed to make and the payment of all loans and interest
accrued on them made by Lending Members to that Member as a
Non-Contributing Member pursuant to Section 4.03(a)(ii), a security
interest in and a general lien on its Membership Rights and the proceeds
thereof, all under the Uniform Commercial Code of the State of Delaware.
On any default in the payment of a Capital Contribution or in the
payment of such a loan or interest accrued on it, the Company or the
Lending Member, as applicable, is entitled to all the rights and
remedies of a secured party under the Uniform Commercial Code of the
State of Delaware with respect to the security interest granted in this
Section 4.03(b). Each Member shall execute and deliver to the Company
and the other Members all financing statements and other instruments
that the Lending Member may request to effectuate and carry out the
preceding provisions of this Section 4.03(b). At the option of a Lending
Member, this Agreement or a carbon, photographic, or other copy hereof
may serve as a financing statement.
4.04 LOANS. If the Company does not have sufficient cash to pay its
obligations, any Member(s) that may agree to do so with the consent of the
Management Committee may advance all or part of the needed funds to or on behalf
of the Company. An advance described in this Section 4.04 constitutes a loan
from the Member to the Company, bears interest at a rate determined by the
Management Committee from the date of the advance until the date of payment, and
is not a Capital Contribution.
4.05 RETURN OF CONTRIBUTIONS. Except as expressly provided herein, a
Member is not entitled to the return of any part of its Capital Contributions or
to be paid interest in respect of either its Capital Account or its Capital
Contributions. An unrepaid Capital Contribution is not a liability of the
Company or of any Member. A Member is not required to contribute or to lend any
cash or property to the Company to enable the Company to return any Member's
Capital Contributions.
4.06 CAPITAL ACCOUNTS. A Capital Account shall be established and
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 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 income and gain (or items thereof), including income
and gain exempt from tax and income and gain described in Treasury Regulation
Section 1.704-1(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
17
18
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
1.704-1(b)(4)(iii). The Members' Capital Accounts shall also be maintained and
adjusted as permitted by the provisions of Treasury Regulation Section
1.704-1(b)(2)(iv)(f) and as required by the other provisions of Treasury
Regulation Sections 1.704-1(b)(2)(iv) and 1.704-1(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 or an increased Sharing Ratio, (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).
ARTICLE 5
DISTRIBUTIONS AND ALLOCATIONS
5.01 DISTRIBUTIONS OR ▇▇▇▇▇▇▇▇. Except as provided in the Loan
Documents, distributions to the Members shall be made only to all simultaneously
in proportion to their respective Sharing Ratios (at the time the amounts of
such distributions are determined), and distributions shall be made only in such
aggregate amounts and at such times as shall be determined by the Management
Committee and as are permitted by the Loan Documents. When so permitted, the
Management Committee shall endeavor to distribute to the Members, on or before
the last day of each calendar month, or more often if approved by the Management
Committee, the estimated amount of any cash available for such calendar month
(net of any adjustments, if any, made to reflect the actual cash available for
the preceding calendar month). Any cash in excess of the Working Capital
Requirements shall be distributed to the Members.
5.02 DISTRIBUTIONS ON DISSOLUTION AND WINDING UP. Upon the dissolution
and winding up of the Company, after adjusting the Capital Accounts for all
distributions made under Section 5.01 and all allocations under Article 5, all
available proceeds distributable to the Members as determined under Section
11.02 shall be distributed to all of the Members to the extent of the Members'
positive Capital Account balances.
5.03 ALLOCATIONS.
(a) For purposes of maintaining the Capital Accounts pursuant to
Section 4.06 and for income tax purposes, except as provided in Section
5.03(b), each item of income, gain, loss, deduction and credit of the
Company shall be allocated to the Members in accordance with their
Sharing Ratios.
18
19
(b) For income tax purposes, income, gain, loss, and deduction
with respect to property contributed to the Company by a Member or
revalued pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(f)
shall be allocated among the Members in a manner that takes into account
the variation between the adjusted tax basis of such property and its
book value, as required by Section 704(c) of the Code and Treasury
Regulation Section 1.704-1(b)(4)(i), using the remedial allocation
method permitted by Treasury Regulation Section 1.704-3(d).
5.04 VARYING INTERESTS. All items of income, gain, loss, deduction or
credit shall be allocated, and all distributions shall be made, to the Persons
shown on the records of the Company to have been Members as of the last calendar
day of the period for which the allocation or distribution is to be made.
Notwithstanding the foregoing, if during any taxable year there is a change in
any Member's Sharing Ratio, the Members agree that their allocable shares of
such items for the taxable year shall be determined on any method determined by
the Management Committee to be permissible under Code Section 706 and the
related Treasury Regulations to take account of the Members' varying Sharing
Ratios.
ARTICLE 6
MANAGEMENT
6.01 MANAGER MEMBERS. Except as described below in Section 6.03, the
management of the Company is fully vested in the Manager Members, acting
exclusively in their membership capacities. To facilitate the orderly and
efficient management of the Company, the Members shall act (a) together as the
Management Committee pursuant to Section 6.02, (b) through the delegation of
responsibility and authority to the Manager pursuant to Section 6.03, and (c)
through the delegation from time to time of certain responsibility and authority
to particular Members pursuant to Section 6.04. 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. Decisions or
actions taken 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.
6.02 MANAGEMENT COMMITTEE. All Members shall be the managing Members
of the Company (the "Manager Members") and shall act together through meetings
of a committee which is hereby named the "Management Committee." The Management
Committee shall conduct its affairs in accordance with the following provisions
and the other provisions of this Agreement:
(a) REPRESENTATIVES.
(i) DESIGNATION. To facilitate the orderly and
efficient conduct of Management Committee meetings, each Manager
Member shall notify the other Members, from time to time, of the
identity of two of its officers, employees or agents who will
represent it at such meetings (each a "Representative"). In
addition, each Manager Member may (but shall have not obligation
to) notify the other Members, from time to time, of the identity
of other officers, employees or agents who will represent it at
any meeting that the Member's Representatives are unable to
attend (each an "Alternate Representative"). (The term
"Representative" shall also
19
20
refer to any Alternate Representative that is actually performing
the duties of the applicable Representative.). The initial
Representatives of each Manager Member are set forth on Exhibit
A. A Member may designate different Representatives or Alternate
Representatives for any meeting of the Management Committee by
notifying each of the other Members at least three Business Days
prior to the scheduled date for such meeting; provided, however,
that if giving such advance notice is not feasible, then such new
Representatives or Alternate Representatives shall present
written evidence of their authority at the commencement of such
meeting.
(ii) AUTHORITY. Each Representative shall have the full
authority to act on behalf of the Member that designated such
Representative; the action of a Representative at a meeting (or
through a written consent) of the Management Committee shall bind
the Member that designated such Representative; and the other
Members shall be entitled to rely upon such action without
further inquiry or investigation as to the actual authority (or
lack thereof) of such Representative. In addition, the act of an
Alternate Representative shall be deemed the act of the
Representative for which such Alternate Representative is acting,
without the need to produce evidence of the absence or
unavailability of such Representative.
(iii) DISCLAIMER OF DUTIES; INDEMNIFICATION. 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. THE
PROVISIONS OF SECTION 6.05 SHALL ALSO INURE TO THE BENEFIT OF
EACH MEMBER'S REPRESENTATIVES. THE COMPANY SHALL INDEMNIFY,
PROTECT, DEFEND, RELEASE AND HOLD HARMLESS EACH REPRESENTATIVE
FROM AND AGAINST ANY CLAIMS ASSERTED BY OR ON BEHALF OF ANY
PERSON (INCLUDING ANOTHER MEMBER), OTHER THAN THE MEMBER THAT
DESIGNATED SUCH REPRESENTATIVE, THAT ARISE OUT OF, RELATE TO OR
ARE OTHERWISE ATTRIBUTABLE TO, DIRECTLY OR INDIRECTLY, SUCH
REPRESENTATIVE'S SERVICE ON THE MANAGEMENT COMMITTEE, OTHER THAN
SUCH CLAIMS ARISING OUT OF THE FRAUD OR WILLFUL MISCONDUCT OF
SUCH REPRESENTATIVE.
(iv) ATTENDANCE. Each Manager Member shall use all
reasonable efforts to cause its Representatives or Alternate
Representatives to attend each meeting of the Management
Committee, unless its Representatives are unable to do so because
of a "force majeure" event or other event beyond his reasonable
control, in which event such Manager Member shall use all
reasonable efforts to cause its Representatives or Alternate
Representatives to participate in the meeting by telephone
pursuant to Section 6.02(h).
(b) CHAIRMAN AND SECRETARY. One of the Representatives will be
designated as Chairman of the Management Committee, in accordance with
this Section 6.02(b), to preside over meetings of the Management
Committee. The Management Committee shall also
20
21
designate a Secretary of the Management Committee, who need not be a
Representative.
(c) PROCEDURES. The Secretary of the Management Committee
shall maintain written minutes of each of its meetings, which shall be
submitted for approval no later than the next regularly-scheduled
meeting. The Management Committee may adopt whatever rules and
procedures relating to its activities as it may deem appropriate,
provided that such rules and procedures shall not be inconsistent with
or violate the provisions of this Agreement.
(d) TIME AND PLACE OF MEETINGS. The Management Committee shall
meet quarterly, subject to more or less frequent meetings upon approval
of the Management Committee. Notice of, and an agenda for, all
Management Committee meetings shall be provided by the Chairman to all
Manager Members at least ten Days prior to the date of each meeting,
together with proposed minutes of the previous Management Committee
meeting (if such minutes have not been previously ratified). Special
meetings of the Management Committee may be called at such times, and in
such manner, as any Manager Member deems necessary. Any Member calling
for any such special meeting shall notify the Chairman, who in turn
shall notify all Manager Members of the date and agenda for such meeting
at least ten Days prior to the date of such meeting. Such ten-day period
may be shortened by the Management Committee. All meetings of the
Management Committee shall be held at a location designated by the
Chairman. Attendance of a Manager Member at a meeting of the Management
Committee shall constitute a waiver of notice of such meeting, except
where such Manager Member attends the meeting for the express purpose of
objecting to the transaction of any business on the ground that the
meeting is not lawfully called or convened.
(e) QUORUM. The presence of one Representative designated by
each Manager Member shall constitute a quorum for the transaction of
business at any meeting of the Management Committee.
(f) VOTING. Except as provided otherwise in this Agreement,
(i) voting at any meeting of the Management Committee shall be according
to the Manager Members' respective Sharing Ratios, and (ii) the
affirmative vote of Manager Members holding a majority of the Sharing
Ratios shall constitute the act of the Management Committee.
(g) ACTION BY WRITTEN CONSENT. Any action required or
permitted to be taken at a meeting of the Management Committee may be
taken without a meeting, without prior notice, and without a vote if a
consent or consents in writing, setting forth the action so taken, is
signed by Manager Members that could have taken the action at a meeting
of the Management Committee at which all Members entitled to vote on the
action were represented and voted.
(h) MEETINGS BY TELEPHONE. Members may participate in and hold
such meeting by means of conference telephone, video conference or
similar communications equipment by means of which all persons
participating in the meeting can hear each other. Participation in such
a meeting shall constitute presence in person at such meeting, except
where a Member participates in the meeting for the express purpose of
objecting to the transaction of any business on the ground that the
meeting is not lawfully called or convened.
(i) SUBCOMMITTEES. The Management Committee may create
such
21
22
subcommittees, delegate to such subcommittees such authority and
responsibility, and rescind any such delegations, as it may deem
appropriate.
(j) OFFICERS. The Management Committee may designate
one or more Persons to be Officers of the Company. Any Officers
so designated shall have such titles and, subject to the other
provisions of this Agreement, have such authority and perform
such duties as the Management Committee may specifically delegate
to them and shall serve at the pleasure of the Management
Committee.
6.03 MANAGER. The Members, through unanimous vote, shall designate a
manager of the Company (the "Manager"), who may be an employee of one of the
Members or an Affiliate of one of the Members.
(a) MANAGER'S DUTIES. The Manager shall, under the direction
of the Management Committee, perform the following duties:
(i) generally direct and coordinate the day-to-day
business activities of the Company, subject to subsection 6.03(b)
below;
(ii) administer, enforce and supervise the Project
Agreements to ensure compliance therewith, and performance
thereunder that conforms with the business plan of the Company;
(iii) prepare the Budget, business plans, forecasts, and
amendments/supplements thereto;
(iv) monitor and ensure compliance by the Company with
laws, regulations, and directives of governmental agencies with
jurisdiction over the Project and its operations, including
without limitation the ISO, the Federal Energy Regulatory
Commission and the Connecticut Department of Public Utility
Control;
(v) represent the Company in public and community
relations;
(vi) prepare and submit summary reports;
(vii) administer the services of outside professional
consultants engaged by the Manager to perform his or her duties
described herein; and
(viii) perform any other duties specifically delegated to
the Manager by the Management Committee.
(b) LIMITATIONS ON MANAGER'S AUTHORITY. Notwithstanding the
above, without the prior written approval of the Management Committee,
the Manager shall not take any actions with respect to:
(i) the borrowing of money or other financings;
(ii) the making of loans or advances or granting of
financial or operating guarantees;
22
23
(iii) the sale or lease of any asset or group of assets
(other than in the ordinary course of business);
(iv) the acquisition of any asset or group of assets
(other than in the ordinary course of business);
(v) the negotiation of, entering into, termination of,
or material amendment or modification of any labor contracts or
any other agreement pertaining to the business, finances or
operations of the Company;
(vi) changes in or adoption of accounting practices;
(vii) changes in or adoption of any material tax position
or policy;
(viii) acquiring any insurance coverage or any material
change therein;
(ix) distributions to the Members of cash or other
assets;
(x) approval of any capital improvements budget, any
capital maintenance budget or any operating budget;
(xi) any commitment or expenditure more than 10% in
excess of any annual budgeted amounts set forth in the Budget, or
any expenditure in excess of other budgeted amounts under any
capital maintenance budget or any capital improvements budget
previously approved by the Management Committee;
(xii) material contracts or transactions with either
Member or an Affiliate of either Member;
(xiii) renewal or termination of any agreement between the
Company and a Member or an Affiliate of a Member, or the
modification or amendment of any material term of any agreement
between the Company and a Member or an Affiliate of a Member;
(xiv) employment of attorneys in connection with any
legal claim or settlement of any action relating to a legal claim
which could have a material effect on the Company or either
Member;
(xv) the entering into of any new line of business;
(xvi) the making, execution or delivery of any assignment
of judgment, chattel mortgage, deed, guarantee, indemnity bond,
surety bond or contract to sell all or substantially all of the
property of the Company; or
(xvii) any merger, consolidation, reorganization, creation
of subsidiaries or entering into any joint ventures.
The Manager shall have only the specific duties delegated herein and by the
Management
23
24
Committee and authority to perform those duties; shall have no right to make
contributions to, or to share in the profits and losses of, and distributions
from, the Company; and shall have no right to vote on any matter pertaining to
the Company.
(c) SERVICE AND COMPENSATION.
(i) Notwithstanding that the Manager shall be an
employee of a Member (or its Affiliate), the Manager shall
discharge the duties set forth above. The Manager may engage
other employees of the Member (or its Affiliate) of which the
Manager is an employee, and third party contractors, to assist
the Manager in discharging the duties described above, subject to
the provisions below. Subject to the provisions next below, the
Company shall pay to the Member (or its Affiliate, as applicable)
that is the employer of the Manager (and such other employees of
such Member or Affiliate of such Member who are assisting the
Manager), for the man-hours expended by the Manager and such
other employees (rounded to the nearest quarter of man-hour) at
rates agreed upon by the Management Committee.
(ii) The Manager shall provide to the Management
Committee an annual budget with respect to services performed by
Manager, employees and third party consultants, as described
above, and for other costs associated therewith. Any payment for
services or third party expenses which causes the annual budgeted
amount for such category to be exceeded by 10% shall require
approval of the Management Committee. The annual budget for
services to be performed by the Manager shall be reviewed
quarterly by the Manager and the Management Committee, and shall
be revised as appropriate. In addition, The Manager shall
communicate promptly to the Management Committee any significant
variances from estimates set forth in the Budget with respect to
the services of Manager, employees and outside consultants.
(iii) The Manager may be replaced at any time by
unanimous decision of the Management Committee (excluding the
Manager, if the Manager is also a Representative or an Alternate
Representative).
d. INDEMNIFICATION. The Company shall indemnify, protect,
defend, release and hold harmless the Manager from and against any
claims asserted by or on behalf of any Person (including a Member, or
Wholly-Owned Affiliate of a Member, of which the Manager is not an
employee), other than the claims of a Member (or Wholly-Owned Affiliate
of a Member) of which the Manager is an employee based on such
employment relationship (which shall be an internal corporate affair of
such Member or Wholly-Owned Affiliate of such member), that arise out
of, relate to or are otherwise attributable to, directly or indirectly,
the Manager's performance of his or her duties on behalf of the Company,
except for claims arising out of the fraud or willful misconduct of the
Manager.
6.04 DELEGATION TO PARTICULAR MEMBER. The Management Committee may
delegate to one or more Members such authority and duties as the Management
Committee may deem advisable. 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
6.04 may be revoked at any time by the Management Committee. With respect to
duties
24
25
discharged hereunder by a Member (a) such Member may discharge such duties
through the personnel of a 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 in an amount equal to the
man-hours expended by the personnel of such Member (or its Affiliate) multiplied
by the applicable rate(s) shown on Exhibit B (which rates each shall escalate on
the first day of each calendar year during the term hereof by an amount which is
5% of the rate applicable during the prior calendar year), and shall reimburse
such Member for all out of pocket costs incurred by such Member in discharging
such duties. In addition, prior to performing any such duties, the performing
Member shall provide to the other Member for approval an estimate of man-hours
and types of personnel required to perform the delegated duties and a schedule
for the performance of the delegated duties and for other costs associated
therewith, and shall promptly inform the other Member of any variance from the
budget or schedule.
6.05 AFFILIATE AGREEMENTS; CONFLICTS OF INTEREST.
(a) Subject to Section 6.05(b) below, the Members agree that the
Company shall enter into the following agreements with the Members'
Affiliates:
(i) the Power Purchase Agreement;
(ii) the O&M Agreement; and
(iii) the Corporate Services Agreement.
(b) The terms of such agreements shall be subject to the
unanimous approval of the Management Committee.
(c) Subject to any other agreement between the Members (and
their respective Affiliates, as applicable), a Member or an Affiliate of
a Member may engage in and possess interests in other business ventures
of any and every type and description, independently or with others,
including ones in competition with the Company, with no obligation to
offer to the Company, any other Member or any Affiliate of another
Member the right to participate therein. Subject to, and in addition to,
Section 6.05(a), the Company may transact business with any Member or
Affiliate thereof, provided the terms of those transactions are approved
by the Management Committee or expressly contemplated by this Agreement.
Without limiting the generality of the foregoing, the Members recognize
and agree that they and their respective Affiliates currently engage in
certain activities involving the generation, transmission, distribution,
marketing and trading of electricity and other energy products
(including futures, options, swaps, exchanges of future positions for
physical deliveries and commodity trading), and the gathering,
processing, storage and transportation of such products, as well as
other commercial activities related to such products, and that these and
other activities by Members and their Affiliates may be made possible or
more profitable by reason of the Company's activities (herein referred
to as "Outside Activities"). The Members agree that (i) no Member or
Affiliate of a Member shall be restricted in its right to conduct,
individually or jointly with others, for its own account any Outside
Activities, and (ii) no Member or its Affiliates shall have any duty or
obligation, express or implied, to account to, or to share the results
or profits of such Outside Activities with, the Company, any other
Member or any Affiliate of any other Member, by reason of such Outside
Activities.
25
26
6.06 UNANIMOUS CONSENT REQUIRED FOR CERTAIN ACTION. Any other
provision of this Agreement to the contrary notwithstanding, the unanimous
consent of the Members, and at least one Independent Member, shall be required
to:
(a) File a bankruptcy or insolvency petition or otherwise
institute insolvency proceedings with respect to the Company, or take
any action that would result in such an event occurring with respect to
any Owner Entity.
(b) Cause the dissolution, liquidation, consolidation, merger
or sale of substantially all of the assets of the Company or any Owner
Entity.
(c) Cause or permit the Company to engage in any other
activity other than those set forth in Section 2.04.
(d) Amend this Agreement in any manner that would have a
material adverse impact on any creditor of the Company.
6.07 CERTAIN ACTIONS PROHIBITED. So long as the Company has any
indebtedness outstanding, (a) the Company shall not be dissolved, liquidated,
consolidated or merged with any other entity, nor shall this Agreement be
amended in any manner that would have a material adverse impact on the holders
of such indebtedness, and (b) notwithstanding the failure of the Members to
continue the existence of the Company as provided in Section 2.06 during such
period, no action shall be taken by the Company or any of the Members shall
cause any collateral for such indebtedness to be liquidated or that would
adversely affect the rights of the holders of such indebtedness or their agents
to exercise their rights under any security documents relating thereto or to
retain such collateral until such indebtedness is paid in full or otherwise
completely discharged.
6.08 DISCLAIMER OF DUTIES AND LIABILITIES.
(a) NO MEMBER SHALL OWE ANY DUTY (INCLUDING ANY FIDUCIARY
DUTY) TO THE OTHER MEMBERS OR TO THE COMPANY, OTHER THAN THE DUTIES THAT
ARE EXPRESSLY SET FORTH IN THIS AGREEMENT.
(b) NO MEMBER SHALL BE LIABLE (WHETHER IN CONTRACT, TORT OR
OTHERWISE) FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL
DAMAGES).
(c) THE OBLIGATIONS OF THE MEMBERS UNDER THIS AGREEMENT ARE
OBLIGATIONS OF THE MEMBERS ONLY, AND NO RECOURSE SHALL BE AVAILABLE
AGAINST ANY OFFICER, DIRECTOR OR AFFILIATE OF ANY MEMBER, EXCEPT AS
PERMITTED UNDER APPLICABLE LAW.
6.09 INDEMNIFICATION. Each Member shall indemnify, protect, defend,
release and hold harmless each other Member, and such other Member's
Representatives, Affiliates, and their respective directors, officers, employees
and agents from and against any Claims asserted by or on behalf of any Person
(including another Member) that arise out of, relate to or are otherwise
attributable to, directly or indirectly, a breach by the indemnifying Member of
this Agreement, or the negligence, gross negligence or willful misconduct of the
indemnifying Member in connection with
26
27
the Project or this Agreement; provided, however, that this Section 6.05 shall
not apply to any Claim or other matter for which a Member (or its
Representative) has no liability or duty, or is indemnified or released,
pursuant to Section 6.02(a)(iii), 6.08 or 6.09.
ARTICLE 7
TAXES
7.01 TAX RETURNS. The Tax Matters Member shall prepare and timely file
(on behalf of the Company) all federal, state and local tax returns required to
be filed by the Company. Each Member shall furnish to the Tax Matters Member all
pertinent information in its possession relating to the Company's operations
that is necessary to enable the Company's tax returns to be timely prepared and
filed. The Company shall bear the costs of the preparation and filing of its
returns.
7.02 TAX ELECTIONS. The Company shall make the following elections on
the appropriate tax returns:
(a) to adopt as the Company's fiscal year the calendar year;
(b) to adopt the accrual method of accounting;
(c) if a distribution of the Company's property as described
in Code Section 734 occurs or upon a transfer of Membership Interest as
described in Code Section 743 occurs, on request by notice from any
Member, to elect, pursuant to Code Section 754, to adjust the basis of
the Company's properties;
(d) to elect to amortize the organizational expenses of the
Company ratably over a period of 60 months as permitted by Section
709(b) of the Code; and
(e) any other election the Management Committee may deem
appropriate.
Neither the Company nor any Member shall make an election for the Company to be
excluded from the application of the provisions of subchapter K of chapter 1 of
subtitle A of the Code or any similar provisions of applicable state law and no
provision of this Agreement (including Section 2.07) shall be construed to
sanction or approve such an election.
7.03 TAX MATTERS MEMBER. (a) NRG CT shall be the "tax matters partner"
of the Company pursuant to Section 6231(a)(7) of the Code (the "Tax Matters
Member"). At the request of each other Member, the Tax Matters Member shall take
such action as may be necessary to cause, to the extent possible, such other
Member to become a "notice partner" within the meaning of Section 6223 of the
Code. The Tax Matters Member shall inform each other Member of all significant
matters that may come to its attention in its capacity as Tax Matters Member by
giving notice thereof on or before the fifth Business Day after becoming aware
thereof and, within that time, shall forward to each other Member copies of all
significant written communications it may receive in that capacity.
(a) The Tax Matters Member shall take no action without the
authorization of the Management Committee, other than such action as may
be required by Law. Any cost or expense incurred by the Tax Matters
Member in connection with its duties, including the
27
28
preparation for or pursuance of administrative or judicial proceedings,
shall be paid by the Company.
(b) The Tax Matters Member shall not enter into any extension
of the period of limitations for making assessments on behalf of the
Members without first obtaining the consent of the Management Committee.
The Tax Matters Member shall not bind any Member to a settlement
agreement without obtaining the consent of such Member. Any Member that
enters into a settlement agreement with respect to any Company item (as
described in Code Section 6231(a)(3)) shall notify the other Members of
such settlement agreement and its terms within 90 Days from the date of
the settlement.
(c) No Member shall file a request pursuant to Code Section
6227 for an administrative adjustment of Company items for any taxable
year without first notifying the other Members. If the Management
Committee consents to the requested adjustment, the Tax Matters Member
shall file the request for the administrative adjustment on behalf of
the Members. If such consent is not obtained within 30 Days from such
notice, or within the period required to timely file the request for
administrative adjustment, if shorter, any Member, including the Tax
Matters Member, may file a request for administrative adjustment on its
own behalf. Any Member intending to file a petition under Code Sections
6226, 6228 or other Code Section with respect to any item involving the
Company shall notify the other Members of such intention and the nature
of the contemplated proceeding. In the case where the Tax Matters Member
is the Member intending to file such petition on behalf of the Company,
such notice shall be given within a reasonable period of time to allow
the other Members to participate in the choosing of the forum in which
such petition will be filed.
(d) If any Member intends to file a notice of inconsistent
treatment under Code Section 6222(b), such Member shall give reasonable
notice under the circumstances to the other Members of such intent and
the manner in which the Member's intended treatment of an item is (or
may be) inconsistent with the treatment of that item by the other
Members.
ARTICLE 8
BOOKS, RECORDS, REPORTS, AND BANK ACCOUNTS
8.01 MAINTENANCE OF BOOKS.
(a) The Management Committee shall keep or cause to be kept at
the principal office of the Company or at such other location approved
by the Management Committee complete and accurate books and records of
the Company, supporting documentation of the transactions with respect
to the conduct of the Company's business and minutes of the proceedings
of its Members and the Management Committee, and any other books and
records that are required to be maintained by applicable Law.
(b) The books of account of the Company shall be (i)
maintained on the basis of a fiscal year that is the calendar year, (ii)
maintained on an accrual basis in accordance with generally accepted
accounting principles, consistently applied, and (iii) audited by the
Certified Public Accountants at the end of each calendar year.
8.02 REPORTS.
28
29
(a) With respect to each calendar year, the Management
Committee shall prepare and deliver to each Member:
(i) Within 120 Days after the end of such calendar
year, a profit and loss statement and a statement of cash flows
for such year, a balance sheet and a statement of each Member's
Capital Account as of the end of such year, together with a
report thereon of the Certified Public Accountants; and
(ii) 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 on or before July
15 following the end of each calendar year of its income tax
return with respect to such year.
(b) Within 15 Business Days after the end of each calendar month,
the Management Committee shall cause to be prepared and delivered to
each Member, with an appropriate certificate of the Person authorized to
prepare the same (provided that the Management Committee may change the
financial statements required by this Section 8.02(b) to a quarterly
basis or may make such other change therein as it may deem appropriate):
(i) A profit and loss statement and a statement of cash
flows for such month (including sufficient information to permit
the Members to calculate their tax accruals), for the portion of
the calendar year then ended;
(ii) A balance sheet and a statement of each Member's
Capital Account as of the end of such month and the portion of
the calendar year then ended; and
(iii) A statement comparing the actual financial status
and results of the Company as of the end of or for such month and
the portion of the calendar year then ended with the budgeted or
forecasted status and results as of the end of or for such
respective periods.
(c) The Management Committee shall also cause to be prepared
and delivered to each Member such other reports, forecasts, studies,
budgets and other information as the Management Committee may request
from time to time.
8.03 BANK ACCOUNTS. Funds of the Company shall be deposited in such
banks or other depositories as shall be designated from time to time by the
Management Committee. All withdrawals from any such depository shall be made
only as authorized by the Management Committee and shall be made only by check,
wire transfer, debit memorandum or other written instruction.
ARTICLE 9
BUYOUT OPTION
9.01 BUYOUT EVENTS. This Article 9 shall apply to any of the following
events (each a "Buyout Event"):
29
30
(a) a Member shall dissolve or become Bankrupt; or
(b) a Member shall commit a Default.
In each case, the Member with respect to whom a Buyout Event has occurred is
referred to herein as the "Affected Member."
9.02 PROCEDURE. If a Buyout Event occurs and is not cured within 30
Business Days of the Affected Member's receipt of notice thereof from another
Member (or such shorter period (not less than 10 Business Days) as may be
reasonable under the circumstances and set forth in such notice), then each of
the other Members shall have the option to acquire the Membership Interest of
the Affected Member (or to cause it to be acquired by a third party designated
by the other Members), in accordance with procedures that are substantively
equivalent to those set forth in Section 3.03(b)(iii) (and with the Members
exercising such preferential right also being referred to herein as "Purchasing
Members").
9.03 PURCHASE PRICE. The purchase price for a Membership Interest
being purchased pursuant to this Article 9 (the "Purchase Price") shall be
determined in the following manner. The Affected Member and the Purchasing
Members shall attempt to agree upon the fair market value of the applicable
Membership Interest and the terms and method of payment of such amount. If those
Members do not reach such agreement on or before the 30th Day following the
exercise of the option, any such Member, by notice to the others, may require
the determination of fair market value and the terms and method of payment to be
made by the Arbitrator pursuant to Article 10.
9.04 CLOSING. If an option to purchase is exercised in accordance with
the other provisions of this Article 9, the closing of such purchase shall occur
on the 30th Day after the determination of the Fair Market Value pursuant to
Section 9.03 (or, if later, the fifth Business Day after the receipt of all
applicable regulatory and governmental approvals to the purchase), and shall be
conducted in a manner substantively equivalent to that set forth in Section
3.03.
9.05 TERMINATED MEMBER. Upon the occurrence of a closing under Section
9.04, the following provisions shall apply to the Affected Member (now a
"Terminated Member"):
(a) The Terminated Member shall cease to be a Member
immediately upon the occurrence of the closing.
(b) As the Terminated Member is no longer a Member, it will no
longer be entitled to receive any distributions (including liquidating
distributions) or allocations from the Company, and neither it nor its
Representative shall be entitled to exercise any voting or consent
rights or to receive any further information (or access to information)
from the Company.
(c) The Terminated Member must pay to the Company all amounts
owed to it by such Member.
(d) The Terminated Member shall remain obligated for all
liabilities it may have under this Agreement or otherwise with respect
to the Company that accrue prior to the closing.
30
31
(f) The Sharing Ratio of the Terminated Member shall be
allocated among the purchasing Members in the proportion of the total
Purchase Price paid by each.
ARTICLE 10
DISPUTE RESOLUTION
10.01 DISPUTES. This Article 10 shall apply to any dispute arising
under or related to this Agreement (whether arising in contract, tort or
otherwise, and whether arising at law or in equity), including (a) any dispute
regarding the construction, interpretation, performance, validity or
enforceability of any provision of this Agreement or whether any Person is in
compliance with, or breach of, any provisions of this Agreement, and (b) the
applicability of this Article 10 to a particular dispute. Notwithstanding the
foregoing, this Article 10 shall not apply to any matters that, pursuant to the
provisions of this Agreement, are to be resolved by a vote of the Members
(including through the Management Committee); provided, however, that if a vote,
approval, consent, determination or other decision must, under the terms of this
Agreement, be made (or withheld) in accordance with a standard other than Sole
Discretion (such as a reasonableness standard), then the issue of whether such
standard has been satisfied may be a dispute to which this Article 10 applies.
Any dispute to which this Article 10 applies is referred to herein as a
"Dispute." With respect to a particular Dispute, each Member that is a party to
such Dispute is referred to herein as a "Disputing Member." The provisions of
this Article 10 shall be the exclusive method of resolving Disputes.
10.02 NEGOTIATION TO RESOLVE DISPUTES. If a Dispute arises, either
Disputing Member may initiate the dispute-resolution procedures of this Article
10 by delivering a notice (a "Dispute Notice") to the other Disputing Members.
Within 10 Days of delivery of a Dispute Notice, each Disputing Member shall
designate a representative, and such representatives shall promptly meet
(whether by phone or in person) in a good faith attempt to resolve the Dispute.
If such representatives can resolve the Dispute, such resolution shall be
reported in writing and shall be binding upon the Disputing Members. If such
representatives are unable to resolve the Dispute within 30 Days following the
delivery of the Dispute Notice (or such other period as such representatives may
agree), or if a Disputing Member fails to appoint a representative within 10
Days of delivery following the delivery of the Dispute Notice, then any
Disputing Member may take such Dispute to litigation.
ARTICLE 11
DISSOLUTION, WINDING-UP AND TERMINATION
11.01 DISSOLUTION. The Company shall dissolve and its affairs shall be
wound up on the first to occur of the following events (each a "Dissolution
Event"):
(a) the unanimous consent of the Members; or
(b) entry of a decree of judicial dissolution of the Company
under Section 18-802 of the Act.
11.02 WINDING-UP AND TERMINATION.
(a) On the occurrence of a Dissolution Event, the Management
Committee shall
31
32
select one Member to act as liquidator. The liquidator shall proceed
diligently to wind up the affairs of the Company and make final
distributions as provided herein and in the Act. The costs of winding up
shall be borne as a Company expense. Until final distribution, the
liquidator shall continue to operate the Company properties with all of
the power and authority of the Members. The steps to be accomplished by
the liquidator are as follows:
(i) as promptly as possible after dissolution and again
after final winding up, the liquidator shall cause a proper
accounting to be made by a recognized firm of certified public
accountants of the Company's assets, liabilities, and operations
through the last calendar day of the month in which the
dissolution occurs or the final winding up is completed, as
applicable;
(ii) the liquidator shall discharge from Company funds
all of the Indebtedness and other debts, liabilities and
obligations of the Company (including all expenses incurred in
winding up and any loans described in Section 4.03) or otherwise
make adequate provision for payment and discharge thereof
(including the establishment of a cash escrow fund for contingent
liabilities in such amount and for such term as the liquidator
may reasonably determine); and
(iii) all remaining assets of the Company shall be
distributed to the Members as follows:
(A) the liquidator may sell any or all Company
property, including to Members, and any resulting gain or
loss from each sale shall be computed and allocated to the
Capital Accounts of the Members in accordance with the
provisions of Article 5;
(B) with respect to all Company property that has
not been sold, the fair market value of that property
shall be determined and the Capital Accounts of the
Members shall be adjusted to reflect the manner in which
the unrealized income, gain, loss, and deduction inherent
in property that has not been reflected in the Capital
Accounts previously would be allocated among the Members
if there were a taxable disposition of that property for
the fair market value of that property on the date of
distribution; and
(C) Company property (including cash) shall be
distributed among the Members in accordance with Section
5.02; and those distributions shall be made by the end of
the taxable year of the Company during which the
liquidation of the Company occurs (or, if later, 90 Days
after the date of the liquidation).
(b) The distribution of cash or property to a Member in
accordance with the provisions of this Section 11.02 constitutes a
complete return to the Member of its Capital Contributions and a
complete distribution to the Member of its Membership Interest and all
the Company's property and constitutes a compromise to which all Members
have consented pursuant to Section 18-502(b) of the Act. To the extent
that a Member returns funds to the Company, it has no claim against any
other Member for those funds.
11.03 DEFICIT CAPITAL ACCOUNTS. No Member will be required to pay to
the Company, to
32
33
any other Member or to any third party any deficit balance that may exist from
time to time in the Member's Capital Account.
11.04 CERTIFICATE OF CANCELLATION. On completion of the distribution of
Company assets as provided herein, the Members (or such other Person or Persons
as the Act may require or permit) shall file a certificate of cancellation with
the Secretary of State of Delaware, cancel any other filings made pursuant to
Section 2.05, and take such other actions as may be necessary to terminate the
existence of the Company. Upon the filing of such certificate of cancellation,
the existence of the Company shall terminate (and the Term shall end), except as
may be otherwise provided by the Act or other applicable Law.
ARTICLE 12
GENERAL PROVISIONS
12.01 OFFSET. Whenever the Company is to pay any sum to any Member, any
amounts that Member owes the Company may be deducted from that sum before
payment.
12.02 NOTICES. Except as expressly set forth to the contrary in this
Agreement, all notices, requests or consents provided for or permitted to be
given under this Agreement must be in writing and must be delivered to the
recipient in person, by courier or mail or by facsimile or other electronic
transmission. A notice, request or consent given under this Agreement is
effective on receipt by the Member to receive it; provided, however, that a
facsimile or other electronic transmission that is transmitted after the normal
business hours of the recipient shall be deemed effective on the next Business
Day. All notices, requests and consents to be sent to a Member must be sent to
or made at the addresses given for that Member on Exhibit A or in the instrument
described in Section 3.03(b)(iv)(A)(II) or 3.04, or such other address as that
Member may specify by notice to the other Members. Any notice, request or
consent to the Company must be given to all of the Members. Whenever any notice
is required to be given by Law, the Delaware Certificate or this Agreement, a
written waiver thereof, signed by the Person entitled to notice, whether before
or after the time stated therein, shall be deemed equivalent to the giving of
such notice.
12.03 ENTIRE AGREEMENT; SUPERSEDING EFFECT. This Agreement constitutes
the entire agreement of the Members and their Affiliates relating to the Company
and the transactions contemplated hereby and supersedes all provisions and
concepts contained in all prior contracts or agreements between the Members or
any of their Affiliates with respect to the Company and the transactions
contemplated hereby, whether oral or written.
12.04 PRESS RELEASES. Each Member agrees that it shall not (and shall
cause its Affiliates not to), without the other Members' consent, issue a press
release or have any contact with or respond to the news media with any sensitive
or Confidential Information, except as required by securities or similar laws
applicable to a Member and its Affiliates. Any press release by a Member or its
Affiliates with respect to any sensitive or Confidential Information shall be
subject to review and approval by the other Party, which approval shall not be
unreasonably withheld.
12.05 EFFECT OF WAIVER OR CONSENT. Except as otherwise provided in this
Agreement, a waiver or consent, express or implied, to or of any breach or
default by any Member in the performance by that Member of its obligations with
respect to the Company is not a consent or waiver to or of any other breach or
default in the performance by that Member of the same or any
33
34
other obligations of that Member with respect to the Company. Except as
otherwise provided in this Agreement, failure on the part of a Member to
complain of any act of any Member or to declare any Member in default with
respect to the Company, irrespective of how long that failure continues, does
not constitute a waiver by that Member of its rights with respect to that
default until the applicable statute-of-limitations period has run.
12.06 AMENDMENT OR RESTATEMENT. This Agreement or the Delaware
Certificate may be amended or restated only by a written instrument executed
(or, in the case of the Delaware Certificate, approved) by all of the Members.
12.07 BINDING EFFECT. Subject to the restrictions on Dispositions set
forth in this Agreement, this Agreement is binding on and shall inure to the
benefit of the Members and their respective successors and permitted assigns.
12.08 GOVERNING LAW; SEVERABILITY. This Agreement is governed by and
shall be construed in accordance with the Law of the state of Delaware,
excluding any conflict-of-laws rule or principle that might refer the governance
or the construction of this Agreement to the Law of another jurisdiction. In the
event of a direct conflict between the provisions of this Agreement and any
mandatory, non-waivable provision of the Act, such provision of the Act shall
control.
NRG CONNECTICUT GENERATING LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: President
34
35
EXHIBIT A
Members:
NRG CONNECTICUT GENERATING LLC
35