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EXHIBIT 3.4
LIMITED LIABILITY COMPANY AGREEMENT
OF
▇▇▇▇▇▇ KILL POWER LLC
A Delaware Limited Liability Company
THIS LIMITED LIABILITY COMPANY AGREEMENT OF ▇▇▇▇▇▇ KILL POWER LLC (this
"Agreement"), dated as of April 29, 1999 (the "Effective Date"), is adopted,
executed and agreed to, for good and valuable consideration, by the Members (as
defined below).
RECITALS
1. NRG Northeast Generating LLC, a Delaware limited liability
company ("NE Genco"), NRG Eastern LLC, a Delaware limited liability company
("Eastern"), and Northeast Generation Holding LLC, a Delaware limited liability
company ("Holding") have agreed to become Members of the Company (as defined
below), which was formed for the purpose of acquiring, operating and owning the
Project (as defined below).
2. NE Genco, Eastern and Holding now desire 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 that certain Asset
Sales Agreement, dated as of December 23, 1998, by and between Seller
and NRG, assigned to the Company as of June 1, 1999.
ASSIGNEE - any Person that acquires a Membership Interest or
any portion thereof 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,
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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,
Massachusetts 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, 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 - ▇▇▇▇▇▇ Kill 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:
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(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.
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
NE Genco, 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
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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).
EASTERN - Recital 1.
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 NE Genco, or any collateral agent for such creditor, of any
Membership Interest as security for the indebtedness to such creditor
shall not be deemed to 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.
HOLDING - Recital 1.
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 NE Genco 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.
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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.
NON-CONTRIBUTING MEMBER - Section 4.03(a).
NE GENCO - Recital 1.
NRG - NRG Energy, Inc., a Delaware Corporation.
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 ▇▇▇▇▇▇ Kill 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 electricity generating plants and facilities 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.
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SELLER - Niagara Mohawk Power Corporation
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 "▇▇▇▇▇▇ Kill Power LLC" and
all Company business must be conducted in that name or such other names that
comply with Law as the Management Committee may select.
2.03 REGISTERED OFFICE; REGISTERED AGENT; PRINCIPAL OFFICE IN THE
UNITED STATES; OTHER OFFICES. The
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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.
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,
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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 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
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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 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.
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(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 30.0(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 NE Genco 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 NE Genco 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 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
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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 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
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(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 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
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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 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
(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.
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(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 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).
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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.
(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. Eastern and Holdings 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:
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(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 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 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
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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 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;
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(ii) administer, enforce and supervise
the Project Agreements to ensure compliance therewith, and
performance thereunder that conforms with the business plan of
the LLC;
(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 Massachusetts Department
of Telecommunications and Energy;
(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;
(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 Partnership;
(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;
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(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 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,
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directly or indirectly, the Manager's performance of his or her duties
on behalf of the LLC, 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 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.
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:
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(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 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:
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(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) Eastern 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.
(b) 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 preparation
for or pursuance of administrative or judicial proceedings, shall be
paid by the Company.
(c) 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.
(d) 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.
(e) 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
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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.
(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.
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ARTICLE 9
BUYOUT OPTION
9.01 BUYOUT EVENTS. This Article 9 shall apply to any of the
following events (each a "Buyout Event"):
(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.
(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.
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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 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
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(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 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.
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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, except for the
Preliminary Agreement as specifically provided herein, and for liabilities
accrued under the Preliminary Agreement.
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 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. If any provision of the Act provides that it may be varied or
superseded in a limited liability company agreement (or otherwise by agreement
of the members or managers.
NRG NORTHEAST GENERATING LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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Title: President
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NRG EASTERN LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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Title: President
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NORTHEAST GENERATION HOLDING LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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Title: President
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28
▇▇▇▇▇▇ Kill Power LLC
MEMBERS
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MEMBER CAPITAL CONTRIBUTION NUMBER OF UNITS PERCENTAGE OWNERSHIP
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NRG Northeast $990.00 990 99.0%
Generating LLC
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NRG Eastern LLC $5.00 5 0.5%
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Northeast Generation $5.00 5 0.5%
Holding LLC
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