0001104659-18-055334.txt : 20180905 0001104659-18-055334.hdr.sgml : 20180905 20180905160637 ACCESSION NUMBER: 0001104659-18-055334 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 14 CONFORMED PERIOD OF REPORT: 20180831 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Termination of a Material Definitive Agreement ITEM INFORMATION: Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant ITEM INFORMATION: Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement ITEM INFORMATION: Changes in Control of Registrant ITEM INFORMATION: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers ITEM INFORMATION: Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20180905 DATE AS OF CHANGE: 20180905 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Clearway Energy, Inc. CENTRAL INDEX KEY: 0001567683 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 461777204 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-36002 FILM NUMBER: 181055176 BUSINESS ADDRESS: STREET 1: 300 CARNEGIE CENTER, SUITE 300 CITY: PRINCETON STATE: NJ ZIP: 08540 BUSINESS PHONE: 609-608-1525 MAIL ADDRESS: STREET 1: 300 CARNEGIE CENTER, SUITE 300 CITY: PRINCETON STATE: NJ ZIP: 08540 FORMER COMPANY: FORMER CONFORMED NAME: NRG Yield, Inc. DATE OF NAME CHANGE: 20130606 FORMER COMPANY: FORMER CONFORMED NAME: NRG Yieldco, Inc. DATE OF NAME CHANGE: 20130123 8-K 1 a18-24111_18k.htm 8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported):  August 31, 2018

 

CLEARWAY ENERGY, INC.

(Exact name of Registrant as specified in its charter)

 

Delaware

 

001-36002

 

46-1777204

(State or other jurisdiction of
incorporation)

 

(Commission File Number)

 

(IRS Employer Identification No.)

 

300 Carnegie Center, Suite 300, Princeton, New Jersey 08540

(Address of principal executive offices, including zip code)

 

(609) 608-1525

(Registrant’s telephone number, including area code)

 

NRG Yield, Inc.

804 Carnegie Center, Princeton, New Jersey 08540

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o                 Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o                 Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o                 Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o                 Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company o

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

 

 

 



 

Item 1.01 Entry into a Material Definitive Agreement.

 

Purchase and Sale Agreement

 

On August 31, 2018, pursuant to the terms of the Purchase and Sale Agreement (as amended, the “PSA”), dated February 6, 2018, by and among NRG Energy, Inc., a Delaware corporation (“NRG”), NRG Repowering Holdings LLC, a Delaware limited liability company (“Repowering” and, collectively with NRG, “NRG Energy”) and GIP III Zephyr Acquisition Partners, L.P., a Delaware limited partnership (“GIP”), GIP acquired from NRG Energy 100% of the outstanding membership interests of Zephyr Renewables LLC, a Delaware limited liability company (“Zephyr Renewables” and such transaction, the “Zephyr Transaction”), which owns, among other assets, (1) 100% of the shares of Class B common stock and 100% of the shares of Class D common stock (collectively, the “Company Shares”) of NRG Yield, Inc. (now known as Clearway Energy, Inc.), a Delaware corporation (the “Company”) and (2) 100% of the Class B units and 100% of the Class D units (collectively, the “Company Units”, and, collectively with the Company Shares, the “Company Securities”, and the sale of the Company Securities owned by NRG Energy to GIP, the “Company Securities Transaction”) of NRG Yield LLC (now known as Clearway Energy LLC), a Delaware limited liability company (“Yield LLC”), for an aggregate purchase price (the “Purchase Price”), paid in United States Dollars, of approximately $1.348 billion.  GIP funded the Purchase Price with capital contributions from limited partners of GIP investment funds.  As a result of the consummation of the Company Securities Transaction, GIP indirectly acquired a 45.2% economic interest in Yield LLC and 55% voting interest in the Company as of August 31, 2018.

 

The Company provided its consent to the Company Securities Transaction subject to the terms and conditions of the Consent and Indemnity Agreement, dated February 6, 2018, as amended (the “Consent and Indemnity Agreement”), by and among the Company, NRG, Repowering, GIP and, solely for purposes of Sections E.5, E.6 and G.12 thereof, NRG Yield Operating LLC (now known as Clearway Energy Operating LLC) (“Yield Operating LLC”), a Delaware limited liability company and a subsidiary of the Company.

 

Master Services Agreements

 

On August 31, 2018, in connection with the consummation of the Company Securities Transaction, the Company, Yield LLC and Yield Operating LLC entered into a Master Services Agreement with Zephyr Renewables (the “NYLD MSA”), pursuant to which Zephyr Renewables and certain of its affiliates or third party service providers will provide certain services to the Company and certain of its subsidiaries following the consummation of the Company Securities Transaction, in exchange for the payment of a fee in respect of such services.  The foregoing description of the NYLD MSA does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the NYLD MSA attached as Exhibit 10.1 hereto, which is incorporated herein by reference.

 

On August 31, 2018, in connection with the consummation of the Company Securities Transaction, the Company, Yield LLC and Yield Operating LLC entered into a Master Services Agreement with Zephyr Renewables (the “Zephyr MSA”), pursuant to which the Company and certain of its affiliates or third party service providers will provide certain services to Zephyr Renewables and certain of its subsidiaries following the consummation of the Company Securities Transaction, in exchange for the payment of a fee in respect of such services.  The foregoing description of the Zephyr MSA does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Zephyr MSA attached as Exhibit 10.2 hereto, which is incorporated herein by reference.

 

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ROFO Agreements

 

On August 31, 2018, in connection with the consummation of the Company Securities Transaction, the Company entered into a right of first offer agreement with Zephyr Renewables (the “Zephyr ROFO Agreement”), and solely for purposes of Section 2.4 thereof, GIP, pursuant to which Zephyr Renewables granted the Company and its subsidiaries a right of first offer on any proposed sale or transfer of certain assets owned by Zephyr Renewables.  The Zephyr ROFO Agreement also provides the Company the right to make an equity investment of up to $190,000,000 in one or more distributed generation portfolios developed or owned by Zephyr Renewables or its subsidiaries after August 31, 2018.  The foregoing description of the Zephyr ROFO Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Zephyr ROFO Agreement attached as Exhibit 10.3 hereto, which is incorporated herein by reference.

 

On August 31, 2018, the Company entered into a Third Amended and Restated Right of First Offer Agreement with NRG (the “Third Amended and Restated ROFO Agreement”), pursuant to which NRG will provide the Company and its subsidiaries a right of first offer on any proposed sale or transfer of 100% of the membership interests in Agua Caliente Borrower 1 LLC.  The foregoing description of the Third Amended and Restated ROFO Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Third Amended and Restated ROFO Agreement attached as Exhibit 10.5 hereto, which is incorporated herein by reference.

 

Voting and Governance Agreement

 

On August 31, 2018, in connection with the consummation of the Company Securities Transaction, the Company entered into a Voting and Governance Agreement with Zephyr Renewables (the “Voting and Governance Agreement”) relating to certain governance matters of the Company, including the composition of the board of directors of the Company (the “Board”), implementation of a proposal for an amendment of the Restated Certificate of Incorporation of the Company (the “Charter”) to stagger the Board and employment status of the CEO of the Company.  The foregoing description of the Voting and Governance Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Voting and Governance Agreement attached as Exhibit 10.4 hereto, which is incorporated herein by reference.

 

Limited Liability Company Agreement

 

On August 31, 2018, the Company entered into the Fourth Amended and Restated Limited Liability Company Agreement of Yield LLC with Zephyr Renewables (the “Fourth Amended and Restated Limited Liability Company Agreement”), which sets forth the rights and obligations of the Company, as managing member, and Zephyr Renewables, as member, of Yield LLC.  The foregoing description of the Fourth Amended and Restated Limited Liability Company Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Fourth Amended and Restated Limited Liability Company Agreement attached as Exhibit 10.6 hereto, which is incorporated herein by reference.

 

Transition Services Agreement

 

On August 31, 2018, in connection with the consummation of the Company Securities Transaction, the Company entered into a Transition Services Agreement with NRG (the “NRG TSA”), pursuant to which NRG or certain of its affiliates will provide certain services to the Company following the consummation of the Company Securities Transaction, in exchange for the payment of a fee in respect of such services.  The foregoing description of the NRG TSA does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the NRG TSA attached as Exhibit 10.7 hereto, which is incorporated herein by reference.

 

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364-Day Bridge Credit Agreement

 

On August 31, 2018, each of Yield Operating LLC, as borrower, and Yield LLC, as guarantor, entered into a senior unsecured 364-Day Bridge Credit Agreement (the “Bridge Credit Agreement”) with certain subsidiaries of Yield Operating LLC party thereto, as guarantors, Royal Bank of Canada, as administrative agent, the lenders party thereto and the other parties listed on the signature pages thereof.

 

The Bridge Credit Agreement provides that Yield Operating LLC can borrow up to a maximum principal amount of $1.5 billion at a rate per annum equal to LIBOR or a base rate plus an applicable margin equal to 3.00% in the case of LIBOR loans and  2.00% in the case of base rate loans, in each case subject to an additional 0.25% on the 90th day following the effective date of the Bridge Credit Agreement, 0.25% on the 180th day following such effective date and 0.50% on each 90th day thereafter while any loans remain outstanding. The obligation of the lenders to fund loans under the Bridge Credit Agreement will expire on the date that is 110 days after the effective date of the Bridge Credit Agreement.  Loans under the Bridge Credit Agreement will mature 364 days after the effective date of the Bridge Credit Agreement, provided that Yield Operating LLC may elect in its sole discretion to extend the maturity of up to one-third of the loans that are outstanding 60 days prior to such date for an additional 90-day period, so long as at least $300.0 million principal amount of loans remain outstanding.  Any such extension would be subject to the payment of an extension fee equal to 0.50% of the aggregate principal amount of the loans subject to such extension.  In addition, the lenders under the Bridge Credit Agreement will be paid a duration fee of 0.50% of the aggregate principal amount of outstanding loans on each of the 90th, 180th and 271st days after the effective date of the Bridge Credit Agreement.

 

Unused commitments under the Bridge Credit Agreement will be reduced (a) on the business day immediately succeeding the day on which the Company has satisfied its obligations under the 2014 Indenture and the 2015 Indenture to repurchase the Convertible Notes pursuant to the Repurchase Right and to settle all Convertible Notes in connection with the Zephyr Transaction, in an amount equal to the principal amount of the Convertible Notes that then remain outstanding, and (b) upon the completion of a successful consent solicitation, if any, providing a waiver with respect to the change of control offer requirements under a series of Yield Operating LLC’s outstanding senior notes, in an amount equal to the principal amount of the senior notes of such series.  In addition, outstanding loans under the Bridge Credit Agreement are required to be prepaid with the net cash proceeds received in connection with certain debt incurrences, equity issuances and non-ordinary course asset sales.

 

Borrowings under the Bridge Credit Agreement are guaranteed by Yield LLC and certain subsidiaries of Yield Operating LLC. The Bridge Credit Agreement contains covenants that limit certain of Yield Operating LLC’s and the guarantors’ activities, including those relating to mergers, consolidations, and granting additional security interests to secure debt. The Bridge Credit Agreement also contains customary events of default and related cure provisions, including the requirement that Yield Operating LLC pay additional interest at the rate of 2.0% per year upon the occurrence of certain events of default.

 

The foregoing summary of the Bridge Credit Agreement and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Bridge Credit Agreement, a copy of which is attached to this Current Report on Form 8-K as Exhibit 10.8 and incorporated herein by reference. A press release announcing the entry into the Bridge Credit Agreement is attached as Exhibit 99.1 to this Current Report on Form 8-K.

 

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Item 1.02 Termination of a Material Definitive Agreement.

 

On August 31, 2018, in connection with the consummation of the Company Securities Transaction, the Company entered into a Termination Agreement (the “MSA Termination Agreement”) with Yield LLC, Yield Operating LLC and NRG terminating the Management Services Agreement, dated as of July 22, 2013 (the “Original MSA”) by and among the Company, Yield LLC, Yield Operating LLC and NRG.

 

The foregoing summary of the MSA Termination Agreement and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the MSA Termination Agreement, attached as Exhibit 10.9 hereto, which is incorporated herein by reference.  For further information regarding specific terms and conditions of the Original MSA, reference is made to such agreement, which was filed with the SEC on July 26, 2013, as Exhibit 10.4 to the Company’s Current Report on Form 8-K and is incorporated by reference herein.

 

The information set forth in Item 1.01 is incorporated by reference herein.

 

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

 

The disclosures under Item 1.01 of this Current Report on Form 8-K relating to the Bridge Credit Agreement are also responsive to Item 2.03 of this report and are incorporated by reference into this Item 2.03.

 

Item 2.04 Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.

 

The consummation of the Company Securities Transaction on August 31, 2018 constituted a “Fundamental Change” and “Make-Whole Fundamental Change” under each of (1) the Indenture, dated February 11, 2014, by and among the Company, as issuer, Yield Operating LLC and Yield LLC, as guarantors, and Wilmington Trust, National Association, as trustee (the “2014 Indenture”), governing the 3.50% Convertible Senior Notes due 2019 (the “2019 Notes”), of which $329.2 million aggregate principal amount are outstanding, and (2) the Indenture, dated June 29, 2015, by and among the Company, as issuer, Yield Operating LLC and Yield LLC, as guarantors, and Wilmington Trust, National Association, as trustee (the “2015 Indenture”), governing the 3.25% Convertible Senior Notes due 2020 (the “2020 Notes” and together with the 2019 Notes, the “Convertible Notes”), of which $287.5 million aggregate principal amount are outstanding.  As a result, holders of the Convertible Notes have the right to require the Company to purchase for cash all or any portion of their Convertible Notes on a date to be specified by the Company (the “Fundamental Change Purchase Date”) at a price equal to 100% of the principal amount of the Convertible Notes to be purchased, plus accrued and unpaid interest, if any, to but excluding, the Fundamental Change Purchase Date, as set forth in the applicable Indenture (the “Repurchase Right”), which notice will be provided to the holders of the Convertible Notes by September 10, 2018.  In addition, holders of the 2019 Notes have the right to convert all or any portion of their 2019 Notes at any time prior to 5:00 p.m., New York City time, on January 30, 2019, which is the second Scheduled Trading Day (as defined in the 2014 Indenture) immediately preceding the maturity date of February 1, 2019 for cash in an amount equal to the sum of the Daily Conversion Values (as defined in the 2014 Indenture) during the 40-trading day period ending two trading days before the maturity date (as may be adjusted under the 2014 Indenture as a result of the Make-Whole Fundamental Change).  Pursuant to the terms of the 2014 Indenture, on July 26, 2018, the Company made an irrevocable election to settle the conversion of any 2019 Notes validly submitted for conversion on or after August 1, 2018 entirely in cash.  Because the Company Securities Transaction

 

5



 

constitutes a Make-Whole Fundamental Change under the 2014 Indenture, the conversion rate applicable to 2019 Notes surrendered for conversion at any time from and including August 31, 2018, the date on which the Make-Whole Fundamental Change occurred, up to and including the business day immediately prior to the Fundamental Change Purchase Date (such period, the “Make-Whole Fundamental Change Period”), shall be increased by additional shares, as determined by the Company in accordance with the 2014 Indenture.  The Company has determined that the additional shares per $1,000 principal amount of the 2019 Notes converted during the Make-Whole Fundamental Change Period is equal to 7.4334 additional shares and the relevant conversion rate for holders who elect to convert their 2019 Notes during the Make-Whole Fundamental Change Period will be increased to 50.3978, per $1,000 principal amount of the 2019 Notes, which is equivalent to a conversion price of approximately $19.84 per share.  The conversion rate for any 2019 Notes surrendered for conversion before or after the Make-Whole Fundamental Change Period will not be increased by the additional shares.

 

Holders of the 2020 Notes have the right to convert all or any portion of their 2020 Notes at any time prior to 5:00 p.m., New York City time, on the business day immediately preceding the Fundamental Change Purchase Date.  Upon conversion of any 2020 Notes, the Company will pay or deliver, as the case may be, to the converting holder, at the Company’s election, cash, shares of the Company’s Class C common stock, $0.01 par value per share (the “Class C Common Stock”) or any combination of the foregoing based on the then applicable conversion rate (as may be adjusted under the 2015 Indenture) in accordance with the 2015 Indenture. Although the Company Securities Transaction constitutes a Make-Whole Fundamental Change under the 2015 Indenture, no increase to the conversion rate for the 2020 Notes will apply as a result of the Make-Whole Fundamental Change because the applicable stock price for the Class C Common Stock is less than the lowest price set forth in the make-whole table in the 2015 Indenture.

 

Item 5.01 Changes in Control of Registrant.

 

The information set forth in Items 1.01 and 5.02 is incorporated by reference herein.

 

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

Effective immediately upon the consummation of the Company Securities Transaction, in accordance with the terms of the Consent and Indemnity Agreement and Voting and Governance Agreement, the size of the Board was increased to nine directors, which now include five directors designated by GIP, three independent directors currently serving on the Board, John Chlebowski, Brian Ford and Ferrell McClean, and Christopher S. Sotos, the CEO of the Company.

 

Resignation of Kirkland B. Andrews, John Chillemi and Mauricio Gutierrez

 

On August 31, 2018, Messrs. Kirkland B. Andrews, John Chillemi and Mauricio Gutierrez resigned from their respective positions as members of the board of directors of the Company.  Each of their respective resignations was effective upon the consummation of the Company Securities Transaction.  Each of their respective resignations was not the result, in whole or in part, of any disagreement with the Company.

 

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Resignation of David Callen as Vice President and Chief Accounting Officer

 

On August 31, 2018, effective immediately upon the consummation of the Company Securities Transaction, David Callen resigned from his position as Vice President and Chief Accounting Officer of the Company.  Mr. Callen’s resignation as Vice President and Chief Accounting Officer of the Company was not the result, in whole or in part, of any disagreement with the Company.

 

Election of Ms. Mary-Lee Stillwell as Vice President and Chief Accounting Officer

 

On August 31, 2018, effective immediately upon the consummation of the Company Securities Transaction, Mary-Lee Stillwell was appointed as Vice President and Chief Accounting Officer of the Company. Ms. Stillwell, age 45, previously served as Vice President and Assistant Controller of NRG since December 2012, where she was responsible for managing and directing NRG’s financial accounting and reporting activities as well as overseeing the accounting for the Renewables business and various shared service functions. Prior to her work at NRG, Ms. Stillwell served as Assistant Controller — Integration and Internal Controls of GenOn Energy, Inc., in Houston, Texas, from September 2010 to December 2012, where she was responsible for all Sarbanes-Oxley compliance as well as integrations of mergers and acquisitions. From April 2008 to September 2010, Ms. Stillwell served as the Director of  Financial and Tax Reporting for RRI Energy, Inc. and held various other accounting positions with the predecessor companies of RRI Energy, Inc. since January 2003. Prior to this, Ms. Stillwell was an auditor with PricewaterhouseCoopers in Houston, Texas. In connection with her appointment, Ms. Stillwell will receive a special one-time grant of Restricted Stock Units from the NRG Yield Long-Term Incentive Plan. The value of this award will be based upon the value of outstanding, unvested awards which forfeit upon her termination of employment with NRG.

 

The information set forth in Item 1.01 is incorporated by reference herein.

 

Election of Directors

 

On August 31, 2018, effective immediately upon the consummation of the Company Securities Transaction and the resignations of Messrs. Kirkland B. Andrews, John Chillemi and Mauricio Gutierrez from their respective positions as directors of the Board, Messrs. Jonathan Bram, Bruce MacLennan, E. Stanley O’Neal, Scott Stanley and Nathaniel Anschuetz became members of the board of directors of the Company.  Certain biographical and other information with respect to each director is set forth below.

 

Biography of Jonathan Bram

 

Jonathan Bram, 53, is a Founding Partner of GIP and serves on its Investment and Operating Committees. He leads GIP’s Power industry investment team in North America. Prior to the formation of GIP in 2006, Mr. Bram spent 15 years at Credit Suisse as a Managing Director in the Investment Banking Division, where he served as Co-Head of the Global Industrial and Services Group. From 2002 to 2004, he was Chief Operating Officer of the Investment Banking Division and prior to that time he was co-head of corporate finance for the 150 person U.S. Energy Group. Mr. Bram represented the firm in raising more than $30 billion of debt and equity capital for electric utilities and independent power generators globally. These companies and projects included renewable power facilities that utilized wind, solar, geothermal and hydroelectric technologies. Mr. Bram holds an A.B. in Economics from Columbia College. He is a member of the Board of Directors of Guacolda Energia, S.A. and previously served on the board of Terra-Gen Power as well as Channelview Cogeneration. Mr. Bram was selected to serve as a director due to, among other factors, his investment and strategic experience, his leadership skills, and his experience in mergers and acquisitions in the renewables sector, including GIP’s prior investment in Terra-Gen.

 

Biography of Bruce MacLennan

 

Bruce MacLennan, 51, is a Partner of GIP since January 2018 and serves on its Investment and Operating Committees. He focuses on the energy and electricity and renewables sectors and led GIP’s investment in Competitive Power Ventures, a power generation development and asset management company. Prior to joining GIP at its formation in 2006, Mr. MacLennan spent eight years at Credit Suisse, where he most recently served as a Director in the Investment Banking Division. Previously, he spent six years at Citibank and Citicorp Securities in New York and Tokyo. Mr. MacLennan holds an A.B. from Harvard University and an M.B.A. from the Wharton School of the University of Pennsylvania. He is currently a member of the Board of Directors of Competitive Power Ventures.  Mr. MacLennan was selected to serve as a director due to, among other factors, his renewables industry background, his expertise in mergers and acquisitions and capital markets, and his leadership skills.

 

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Biography of E. Stanley O’Neal

 

E. Stanley O’Neal, 66, served as Chairman of the Board and Chief Executive Officer of Merrill Lynch & Co., Inc. until October 2007. He became Chief Executive Officer of Merrill Lynch in 2002 and was elected Chairman of the Board in 2003. Mr. O’Neal was employed with Merrill Lynch for 21 years, serving as President and Chief Operating Officer from July 2001 to December 2002; President of U.S. Private Client from February 2000 to July 2001; Chief Financial Officer from 1998 to 2000 and Executive Vice President and Co-head of Global Markets and Investment Banking from 1997 to 1998. Before joining Merrill Lynch, Mr. O’Neal was employed at General Motors Corporation where he held a number of financial positions of increasing responsibility. Currently, Mr. O’Neal is a member of the Audit and Finance committees of Arconic Inc., an aluminum manufacturing company and the former parent company of Alcoa Inc. Mr. O’Neal is also a director of Platform Specialty Products Corporation, a global, diversified producer of high technology specialty chemical products and provider of technical services. Mr. O’Neal was a director of General Motors Corporation from 2001 to 2006, chairman of the board of Merrill Lynch & Co., Inc. from 2003 to 2007, and a director of American Beacon Advisors, Inc. (investment advisor registered with the Securities and Exchange Commission) from 2009 to September 2012. Mr. O’Neal was selected to serve as a director due to, among other factors, his extensive executive experience, financial expertise and leadership skills.

 

Biography of Scott Stanley

 

Scott Stanley, 61, is an Operating Partner of GIP since August 2018 and has been employed by GIP since April 2007 as an Operating Principal. Mr. Stanley holds a B.S. in Ceramic Engineering from The Ohio State University and has 39 years of experience in operational roles, including prior assignments with GE, Honeywell, and United Technologies. Working predominantly in the transport sector with GIP, Mr. Stanley has held roles as Chief Operating Officer with London City Airport, Gatwick Airport, and Pacific National and also served on the Board of Directors at Edinburgh Airport. Mr. Stanley was selected to serve as a director due to, among other factors, his operational and strategic experience.

 

Biography of Nathaniel Anschuetz

 

Nathaniel Anschuetz, 31, is a Vice President at GIP. Prior to joining GIP in 2012, Mr. Anschuetz was an Analyst in the Power & Utilities Coverage Group at Citigroup from June 2010 through June 2012.  Mr. Anschuetz holds a B.A. in Economics and Operations Research, and a concentration in Sustainable Development from Columbia College. Mr. Anschuetz was selected to serve as a director due to, among other factors, his renewables expertise.

 

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

 

On August 31, 2018, the Company filed a Certificate of Amendment to the Charter with the Secretary of State of the State of Delaware to change the Company’s name to “Clearway Energy, Inc.” effective as of August 31, 2018 (the “Name Change”).

 

Additionally, the Board amended and restated the Third Amended and Restated Bylaws of the Company (the “Fourth Amended and Restated Bylaws”), effective upon the effectiveness of the Certificate of Amendment, to reflect the Company’s name change to Clearway Energy, Inc..

 

The foregoing description of the Certificate of Amendment and the Fourth Amended and Restated Bylaws do not purport to be complete and are subject to, and qualified in their entirety by, the

 

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full text of the Certificate of Amendment and the Fourth Amended and Restated Bylaws attached hereto as Exhibits 3.1 and 3.2, respectively, which are incorporated herein by reference.

 

Item 7.01 Regulation FD Disclosure.

 

On August 31, 2018, the Company issued a press release announcing the consummation of the Company Securities Transaction and the Name Change.  A copy of the press release is furnished herewith as Exhibit 99.1.

 

In connection with the Name Change, new CUSIP numbers and ticker symbols were assigned to the Company’s Class A common stock, $0.01 par value per share, and Class C common stock, $0.01 par value per share.  The new CUSIP number for the Class A common stock is 18539C 105 and the new CUSIP number for the Class C common stock is 18539C 204. The Company’s Class A common stock will trade on the New York Stock Exchange under the symbol “CWEN.A”. The Company’s Class C common stock will trade on the New York Stock Exchange under the symbol “CWEN”.  The Company anticipates that trading under the new name, CUSIP numbers and ticker symbols will begin at the opening of trading on September 17, 2018.

 

The information in Exhibit 99.1 shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section.  The information Exhibit 99.1 shall not be incorporated by reference into any filing or other document under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing or document.

 

Cautionary Note Regarding Forward-Looking Statements.  This Form 8-K and the press release contain forward-looking statements which involve certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied by these statements.  Please refer to the cautionary note in the press release regarding these forward-looking statements.

 

Item 9.01 Financial Statements and Exhibits.

 

(d)                                 Exhibits

 

Exhibit Number

 

Document

 

 

 

3.1

 

Certificate of Amendment for the Restated Certificate of Incorporation of Clearway Energy, Inc., dated August 31, 2018

3.2

 

Fourth Amended and Restated Bylaws of Clearway Energy, Inc., dated August 31, 2018

10.1

 

Master Services Agreement, dated as of August 31, 2018, by and among NRG Yield, Inc., NRG Yield LLC, NRG Yield Operating LLC and Zephyr Renewables LLC

10.2

 

Master Services Agreement, dated as of August 31, 2018, by and among Zephyr Renewables LLC, NRG Yield, Inc., NRG Yield LLC, and NRG Yield Operating LLC

10.3

 

Right of First Offer Agreement, dated as of August 31, 2018, by and among NRG Yield, Inc., Zephyr Renewables LLC and solely for purposes of Section 2.4, GIP III Zephyr Acquisition Partners, L.P.

10.4

 

Zephyr Voting and Governance Agreement, dated as of August 31, 2018, by and between NRG Yield, Inc. and Zephyr Renewables LLC

 

9



 

10.5

 

Third Amended and Restated Right of First Offer Agreement, dated as of August 31, 2018, by and between NRG Yield, Inc. and NRG Energy, Inc.

10.6

 

Fourth Amended and Restated Limited Liability Company Agreement of NRG Yield LLC, dated as of August 31, 2018, by and between NRG Yield, Inc. and Zephyr Renewables LLC

10.7

 

Transition Services Agreement, dated August 31, 2018, by and between NRG Yield, Inc. and NRG Energy, Inc.

10.8

 

364-Day Bridge Credit Agreement, dated August 31, 2018, by and between NRG Yield Operating LLC, as borrower, NRG Yield LLC, as holdings, the lenders party thereto and Royal Bank of Canada, as administrative agent

10.9

 

Termination Agreement, dated as of August 31, 2018, by and among NRG Yield, Inc., NRG Yield LLC, NRG Yield Operating LLC and NRG Energy, Inc.

99.1

 

Press Release, dated August 31, 2018

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

Clearway Energy, Inc.

 

(Registrant)

 

 

 

By:

/s/ Kevin P. Malcarney

 

 

Kevin P. Malcarney

 

 

General Counsel and Corporate Secretary

 

Dated:  September 5, 2018

 

11


EX-3.1 2 a18-24111_1ex3d1.htm EX-3.1

Exhibit 3.1

 

CERTIFICATE OF AMENDMENT

 

TO THE

 

RESTATED CERTIFICATE OF INCORPORATION

 

OF

 

NRG YIELD, INC.

 

NRG Yield, Inc., a Delaware corporation (the “Company”), hereby certifies as follows:

 

FIRST.                   The Board of Directors of the Company duly adopted a resolution setting forth and declaring advisable the amendment of Article One of the Restated Certificate of Incorporation of the Company so that, as amended, said Article shall read as follows:

 

“The name of the corporation is Clearway Energy, Inc.”

 

SECOND.              That the aforesaid amendment has been duly adopted by the Board of Directors of the Company in accordance with Section 242 of the General Corporation Law of the State of Delaware.

 

IN WITNESS WHEREOF, the Company has caused this certificate to be signed by Christopher Sotos, its Chief Executive Officer, on the 31st day of August, 2018.

 

 

NRG YIELD, INC.

 

 

 

 

 

By:

/s/ Christoper S. Sotos

 

 

Name: Christopher S. Sotos

 

 

Title: Chief Executive Officer

 


EX-3.2 3 a18-24111_1ex3d2.htm EX-3.2

Exhibit 3.2

 

FOURTH AMENDED AND RESTATED BYLAWS
OF
CLEARWAY ENERGY, INC.

 

A Delaware Corporation

 

(Amended and Restated as of August 31, 2018)

 

ARTICLE I
OFFICES

 

Section 1.                                           Registered Office.  The registered office of Clearway Energy, Inc. (the “Corporation”) in the State of Delaware shall be located at 1209 Orange Street, Wilmington, DE 19801.  The name of the Corporation’s registered agent at such address shall be The Corporation Trust Company.  The registered office and/or registered agent of the Corporation may be changed from time to time by action of the board of directors.

 

Section 2.                                           Other Offices.  The Corporation may also have offices at such other places, both within and without the State of Delaware, as the Board of Directors of the Corporation (the “Board of Directors”) may from time to time determine or the business of the Corporation may require.

 

ARTICLE II
MEETINGS OF STOCKHOLDERS

 

Section 1.                                           Annual Meeting.  An annual meeting of the stockholders shall be held at such date and time specified by the Board of Directors for the purpose of electing directors and conducting such other proper business as may come before the annual meeting. At the annual meeting, stockholders shall elect directors and transact such other business as properly may be brought before the annual meeting pursuant to Section 11 of this ARTICLE II.

 

Section 2.                                           Special Meetings.  Subject to the rights of the holders of any class or series of preferred stock of the Corporation, special meetings of the stockholders may only be called in the manner provided in the certificate of incorporation of the Corporation, as amended and restated from time to time (the “Certificate of Incorporation”).

 

Section 3.                                           Place of Meetings.  The Board of Directors may designate any place, either within or without the State of Delaware, as the place of meeting for any annual meeting or for any special meeting.  If no designation is made, or if a special meeting be otherwise called, the place of meeting shall be the principal executive office of the Corporation.  If for any reason any annual meeting shall not be held during any year, the business thereof may be transacted at any special meeting of the stockholders.

 

Section 4.                                           Notice.  Whenever stockholders are required or permitted to take action at a meeting, written or printed notice stating the place, date, time and, in the case of special meetings, the purpose or purposes, of such meeting, shall be given to each stockholder entitled to vote on the record date, determined in accordance with the provisions of Section 3 of ARTICLE VI hereof.  If mailed, such notice shall be deemed to be delivered when deposited in the United States mail,

 



 

postage prepaid, addressed to the stockholder at his, her or its address as the same appears on the records of the Corporation.  An affidavit of the secretary or an assistant secretary or of the transfer agent of the Corporation that the notice required by this Section 4 has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein.  Whenever the giving of any notice to stockholders is required by applicable law, the Certificate of Incorporation or these Bylaws, a waiver thereof, given by the person entitled to said notice, whether before or after the event as to which such notice is required, shall be deemed equivalent to notice.  Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened.  Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in any waiver of notice unless so required by applicable law, the Certificate of Incorporation or these Bylaws.

 

Section 5.                                           Stockholders List.  The officer having charge of the stock ledger of the Corporation shall make, at least 10 days before every meeting of the stockholders, a complete list of the stockholders entitled to vote at such meeting arranged in alphabetical order, showing the address of each stockholder and the number of shares registered in the name of each stockholder.  Such list shall be open to the examination of any stockholder, the stockholder’s agent or attorney, at the stockholder’s expense, for any purpose germane to the meeting for a period of at least 10 days prior to the meeting, (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list shall be provided with the notice of the meeting or (ii) during ordinary business hours, at the principal place of business of the Corporation.  The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.  Except as provided by applicable law, the stock ledger shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list of stockholders or the books of the Corporation, or to vote in person or by proxy at any meeting of stockholders.

 

Section 6.                                           Quorum.  The holders of a majority in voting power of the outstanding shares of capital stock entitled to vote at the meeting of stockholders, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders, except as otherwise provided by the Delaware General Corporation Law (“DGCL”) or by the Certificate of Incorporation.  If a quorum is not present, the holders of a majority in voting power of the shares present in person or represented by proxy at the meeting, and entitled to vote at the meeting, may adjourn the meeting to another time and/or place.  When a specified item of business requires a vote by the holders of a class or series of shares of capital stock (if the Corporation shall then have outstanding shares of more than one class or series) voting as a class or series, the holders of a majority in voting power of the shares of such class or series shall constitute a quorum (as to such class or series) for the transaction of such item of business, except as otherwise provided by the DGCL or by the Certificate of Incorporation.

 

Section 7.                                           Adjourned Meetings.  When a meeting is adjourned to another time and place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken.  At the adjourned meeting the Corporation may transact any business which might have been transacted at the original meeting.  If the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed

 

2



 

for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

 

Section 8.                                           Vote Required.  When a quorum is present, the affirmative vote of the majority in voting power of shares present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders, unless (i) by express provisions of an applicable law, the rules and regulations of any stock exchange applicable to the Corporation, or of the Certificate of Incorporation a different vote is required, in which case such express provision shall govern and control the decision of such question, or (ii) the subject matter is the election of directors, in which case the Certificate of Incorporation shall govern and control the approval of such subject matter.

 

Section 9.                                           Voting Rights.  Except as otherwise provided by the DGCL, the Certificate of Incorporation or these Bylaws, every stockholder entitled to vote at any meeting of stockholders shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of capital stock held by such stockholder which has voting power upon the matter in question.

 

Section 10.                                    Proxies.  Each stockholder entitled to vote at a meeting of stockholders may authorize another person or persons to act for such stockholder by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period.  A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power.  A proxy may be made irrevocable regardless of whether the interest with which it is coupled is an interest in the stock itself or an interest in the Corporation generally.  Any proxy is suspended when the person executing the proxy is present at a meeting of stockholders and elects to vote, except that when such proxy is coupled with an interest and the fact of the interest appears on the face of the proxy, the agent named in the proxy shall have all voting and other rights referred to in the proxy, notwithstanding the presence of the person executing the proxy.  At each meeting of the stockholders, and before any voting commences, all proxies filed at or before the meeting shall be submitted to and examined by the secretary or a person designated by the secretary, and no shares may be represented or voted under a proxy that has been found to be invalid or irregular.

 

Section 11.                                    Business Brought Before a Meeting of the Stockholders.

 

(A)                               Annual Meetings.

 

(1)                                 At an annual meeting of the stockholders, only such nominations of persons for election to the Board of Directors shall be considered and such business shall be conducted as shall have been properly brought before the meeting.  To be properly brought before an annual meeting, nominations and other business must be (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (b) brought before the meeting by or at the direction of the Board of Directors or (c) otherwise properly brought before the meeting by a stockholder who (i) is a stockholder of record of the Corporation (and, with respect to any beneficial owner, if different, on whose behalf such business is proposed or such nomination or nominations are made, only if such beneficial owner is the beneficial owner of shares of the Corporation) both at the time the notice provided for in paragraph (A) of this Section 11 is delivered to the secretary of the Corporation and on the record date for the determination of

 

3



 

stockholders entitled to vote at the annual meeting of stockholders, (ii) is entitled to vote at the meeting, and (iii) complies with the notice procedures set forth in paragraph (A) of this Section 11. For nominations or other business to be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing and in proper form to the secretary of the Corporation. To be timely, a stockholder’s notice must be delivered to or mailed and received at the principal executive offices of the Corporation, not later than the close of business on the ninetieth (90th) day nor earlier than the close of business on the one hundred twentieth (120th) day prior to the first anniversary of the preceding year’s annual meeting (provided, however, that in the event that the date of the annual meeting is advanced more than thirty (30) days before or delayed more than seventy (70) days after such anniversary date, notice by the stockholder must be so delivered not earlier than the close of business on the one hundred twentieth (120th) day prior to such annual meeting and not later than the close of business on the later of the ninetieth (90th) day prior to such annual meeting or the tenth (10th) day following the day on which public announcement of the date of such meeting is first made by the Corporation). In no event shall the public announcement of an adjournment or postponement of an annual meeting commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above. Notwithstanding anything in this paragraph to the contrary, in the event that the number of directors to be elected to the Board of Directors at an annual meeting is increased and there is no public announcement by the Corporation naming the nominees for the additional directorships at least one hundred (100) days prior to the first anniversary of the preceding year’s  annual meeting, a stockholder’s notice required by paragraph (A) of this Section 11 shall also be considered timely, but only with respect to nominees for the additional directorships, if it shall be delivered to the secretary at the principal executive offices of the Corporation not later than the close of business on the tenth (10th) day following the day on which such public announcement is first made by the Corporation.

 

(2)                                 A stockholder’s notice providing for the nomination of a person or persons for election as a director or directors of the Corporation shall set forth (a) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination is made (and for purposes of clauses (ii) through (ix) below, including any interests described therein held by any affiliates or associates (each within the meaning of Rule 12b-2 under the Securities Exchange Act of 1934 (the “Exchange Act”) for purposes of these Bylaws) of such stockholder or beneficial owner or by any member of such stockholder’s or beneficial owner’s immediate family sharing the same household, in each case as of the date of such stockholder’s notice, which information shall be confirmed or updated, if necessary, by such stockholder and beneficial owner (x) not later than ten (10) days after the record date for the notice of the meeting to disclose such ownership as of the record date for the notice of the meeting, and (y) not later than eight (8) business days before the meeting or any adjournment or postponement thereof to disclose such ownership as of the date that is ten (10) business before the meeting or any adjournment or postponement thereof (or if not practicable to provide such updated information not later than eight (8) business days before any adjournment or postponement, on the first practicable date before any such adjournment or postponement)) (i) the name and address of such stockholder, as they appear on the Corporation’s books, and of such beneficial owner, (ii) the class or series and number of shares of capital stock of the Corporation which are, directly or indirectly, beneficially owned (within the meaning of Rule 13d-3 under the Exchange Act) (provided that a person shall in all events be deemed to beneficially own any shares of any class or series and number of shares of capital stock of the Corporation as to which such person has a right to acquire beneficial ownership at any time in the

 

4



 

future) and owned of record by such stockholder or beneficial owner, (iii) the class or series, if any, and number of options, warrants, puts, calls, convertible securities, stock appreciation rights, or similar rights, obligations or commitments with an exercise or conversion privilege or a settlement payment or mechanism at  a price related to any class or series of shares or other securities of the Corporation or with a value derived in whole or in part from the value of any class or series of shares or other securities of the Corporation, whether or not such instrument, right, obligation or commitment shall be subject to in the underlying class or series of shares or other securities of the Corporation (each a “Derivative Security”), which are, directly or indirectly, beneficially owned by such stockholder or beneficial owner, (iv) any agreement, arrangement, understanding, or relationship, including any repurchase or similar so-called “stock borrowing” agreement or arrangement, engaged in, directly or indirectly, by such stockholder or beneficial owner, the purpose or effect of which is to mitigate loss to, reduce the economic risk (of ownership or otherwise) of any class or series of capital stock or other securities of the Corporation by, manage the risk of share price changes for, or increase or decrease the voting power of, such stockholder or beneficial owner with respect to any class or series of capital stock or other securities of the Corporation, or that provides, directly or indirectly, the opportunity to profit from any decrease in the price or value of any class or series of capital stock or other securities of the Corporation, (v) a description of any other direct or indirect opportunity to profit or share in any profit (including any performance-based fees) derived from any increase or decrease in the value of shares or other securities of the Corporation, (vi) any proxy, contract, arrangement, understanding or relationship pursuant to which such stockholder or beneficial owner has a right to vote any shares or other securities of the Corporation, (vii) any rights to dividends on the shares of the Corporation owned beneficially by such stockholder or such beneficial owner that are separated or separable from the underlying shares of the Corporation, (viii) any proportionate interest in shares of the Corporation or Derivative Securities held, directly or indirectly, by a general or limited partnership in which  such stockholder or beneficial owner is a general partner or, directly or indirectly, beneficially owns an interest in a general partner, if any, (ix) a description of all agreements, arrangements, and understandings between such stockholder or beneficial owner and any other person(s) (including their name(s)) in connection with or related to the ownership or voting of capital stock of the Corporation or Derivative Securities, (x) any other information relating to such stockholder or beneficial owner that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for the election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder, (xi) a statement as to whether either such stockholder or beneficial owner intends to deliver a proxy statement and form of proxy to holders of at least the percentage of the Corporation’s voting shares required under applicable law to elect such stockholder’s nominees and/or otherwise to solicit proxies from the stockholders in support of such nomination and (xii) a representation that the stockholder is a holder of record of shares of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose such nomination, and (b) as to each person whom the stockholder proposes to nominate for election or reelection as a director, (i) all information relating to such person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to the Exchange Act and the rules and regulations promulgated thereunder (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected), (ii) a description of all direct and indirect compensation and other material agreements, arrangements and

 

5



 

understandings during the past three years, and any other material relationships, between or among such stockholder or beneficial owner, if any, and their respective affiliates and associates, or others acting in concert therewith, on the one hand, and each proposed nominee and his or her respective affiliates and associates, or others acting in concert therewith, on the other hand, including all information that would be required to be disclosed pursuant to Rule 404 promulgated under Regulation S-K if the stockholder making the nomination and any beneficial owner on whose behalf the nomination is made, or any affiliate or associate thereof or person acting in concert therewith, were the “registrant” for purposes of such rule and the nominee were a director or executive officer of such registrant, (iii) a completed and signed questionnaire regarding the background and qualifications of such person to serve as a director, a copy of which may be obtained upon request to the Secretary of the Corporation, (iv) all information with respect to such person that would be required to be set forth in a stockholder’s notice pursuant to this Section 11 if such person were a stockholder or beneficial owner, on whose behalf the nomination was made, submitting a notice providing for the nomination of a person or persons for election as a director or directors of the Corporation in accordance with this Section 11, and (v) such additional information that the Corporation may reasonably request to determine the eligibility or qualifications of such person to serve as a director or an independent director of the Corporation, or that could be material to a reasonable stockholder’s understanding of the qualifications and/or independence, or lack thereof, of such nominee as a director.

 

(3)                                 A stockholder’s notice regarding business proposed to be brought before a meeting of stockholders other than the nomination of persons for election to the Board of Directors shall set forth (a) as to the stockholder giving notice and the beneficial owner, if any, on whose behalf the proposal is made, the information called for by clauses (a)(ii) through (a)(ix) of the immediately preceding paragraph (2) (including any interests described therein held by any affiliates or associates of such stockholder or beneficial owner or by any member of such stockholder’s or beneficial owner’s immediate family sharing the same household, in each case as of the date of such stockholder’s notice, which information shall be confirmed or updated, if necessary, by such stockholder and beneficial owner (x) not later than ten (10) days after the record date for the notice of the meeting to disclose such ownership as of the record date for the notice of the meeting, and (y) not later than eight (8) business days before the meeting or any adjournment or postponement thereof to disclose such ownership as of the date that is ten (10) business before the meeting or any adjournment or postponement thereof (or if not practicable to provide such updated information not later than eight (8) business days before any adjournment or postponement, on the first practicable date before any such adjournment or postponement)), (b) a brief description of (i) the business desired to be brought before such meeting, (ii) the reasons for conducting such business at the meeting and (iii) any material interest of such stockholder or beneficial owner in such business, including a description of all agreements, arrangements and understandings between such stockholder or beneficial owner and any other person(s) (including the name(s) of such other person(s)) in connection with or related to the proposal of such business by the stockholder, (c) as to the stockholder giving notice and the beneficial owner, if any, on whose behalf the nomination is made, (i) a statement as to whether either such stockholder or beneficial owner intends to deliver a proxy statement and form of proxy to holders of at least the percentage of the Corporation’s voting shares required under applicable law to approve the proposal and/or otherwise to solicit proxies from stockholders in support of such proposal and (ii) any other information relating to such stockholder or beneficial owner that would be required to be disclosed in a proxy statement or other filings required to be made in connection with

 

6



 

solicitations of proxies for the election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder, (d) if the matter such stockholder proposes to bring before any meeting of stockholders involves an amendment to the Corporation’s Bylaws, the specific wording of such proposed amendment, (e) a representation that the stockholder is a holder of record of shares of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose such business and (f) such additional information that the Corporation may reasonably request regarding such stockholder or beneficial owner, if any, and/or the business that such stockholder proposes to bring before the meeting.  The foregoing notice requirements shall be deemed satisfied by a stockholder if the stockholder has notified the Corporation of his or her intention to present a proposal at an annual meeting in compliance with Rule 14a-8 (or any successor thereof) promulgated under the Exchange Act and such stockholder’s proposal has been included in a proxy statement that has been prepared by the Corporation to solicit proxies for such annual meeting.

 

(4)                                 Notwithstanding anything in these Bylaws to the contrary, only such persons who are nominated in accordance with the procedures set forth in paragraph (A) of this Section 11 shall be eligible to be elected at an annual meeting to serve as directors and no business shall be conducted at an annual meeting except in accordance with the procedures set forth in this Section 11. The presiding officer of an annual meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not properly made or any business was not properly brought before the meeting, as the case may be, in accordance with the provisions of this Section 11; if he or she should so determine, he or she shall so declare to the meeting and any such nomination not properly made or any business not properly brought before the meeting, as the case may be, shall not be transacted.

 

(B)                               Special Meetings of Stockholders.  Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting.  Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting (1) by or at the direction of the Board of Directors or (2) provided that the Board of Directors has determined that directors shall be elected at such meeting, by any stockholder of the Corporation who (a) is a stockholder of record of the Corporation (and, with respect to any beneficial owner, if different, on whose behalf such nomination or nominations are made, only if such beneficial owner is the beneficial owner of shares of the Corporation) both at the time the notice provided for in paragraph (B) of this Section 11 is delivered to the Corporation’s secretary and on the record date for the determination of stockholders entitled to vote at the special meeting, (b) is entitled to vote at the meeting and upon such election, and (c) complies with the notice procedures set forth in the third sentence of paragraph (B) of this Section 11.  In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any such stockholder entitled to vote in such election of directors may nominate a person or persons (as the case may be) for election to such position(s) as specified in the Corporation’s notice of meeting, if the stockholder’s notice required by paragraph (A)(2) of this Section 11 shall be delivered to the Corporation’s secretary at the principal executive offices of the Corporation not earlier than the close of business on the one hundred twentieth (120th) day prior to such special meeting and not later than the close of business on the later of the ninetieth (90th) day prior to such special meeting or the tenth (10th) day following the day on which public announcement is first made of the date of the special

 

7



 

meeting and of the nominees proposed by the Board of Directors to be elected at such meeting.  In no event shall the public announcement of an adjournment or postponement of a special meeting commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.

 

(C)                               General.

 

(1)                                 Only such persons who are nominated in accordance with the procedures set forth in this Section 11 shall be eligible to be elected at an annual or special meeting of stockholders of the Corporation to serve as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 11.  Notwithstanding the foregoing provisions of this Section 11, if the stockholder (or a qualified representative of the stockholder) does not appear at the annual or special meeting of stockholders of the Corporation to present a nomination or business, such nomination shall be disregarded and such proposed business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the Corporation.

 

(2)                                 For purposes of this section, “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or a comparable national news service or in a document publicly filed or furnished by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.

 

(3)                                 Notwithstanding the foregoing provisions of this Section 11, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Section 11.

 

(4)                                 Nothing in this section shall be deemed to (a) affect any rights of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act, (b) confer upon any stockholder a right to have a nominee or any proposed business included in the Corporation’s proxy statement, or (c) affect any rights of the holders of any series of preferred stock to elect directors pursuant to any applicable provisions of the Certificate of Incorporation.

 

Section 12.                                    Voting Procedures and Inspectors of Election at Meetings of Stockholders.  The Board of Directors, in advance of any meeting of stockholders, may, and shall if required by applicable law, appoint one or more inspectors, who may be employees of the Corporation, to act at the meeting and make a written report thereof.  The Board of Directors may designate one or more persons as alternate inspectors to replace any inspector who fails to act.  If no inspector or alternate is able to act at a meeting, the person presiding at the meeting may, and shall if required by applicable law, appoint one or more inspectors to act at the meeting.  Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability.  The inspectors shall (a) ascertain the number of shares outstanding and the voting power of each, (b) determine the shares represented at the meeting and the validity of proxies and ballots, (c) count all votes and ballots, (d) determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors, and (e) certify their determination of the number of shares represented at the meeting and their count of all votes and ballots.  The

 

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inspectors may appoint or retain other persons or entities to assist the inspectors in the performance of their duties.  Unless otherwise provided by the Board of Directors, the date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote at a meeting shall be determined by the person presiding at the meeting and shall be announced at the meeting.  No ballot, proxies or votes, or any revocation thereof or change thereto, shall be accepted by the inspectors after the closing of the polls unless the Court of Chancery of the State of Delaware upon application by a stockholder shall determine otherwise.  In determining the validity and counting of proxies and ballots cast at any meeting of stockholders, the inspectors may consider such information as is permitted by applicable law.  No person who is a candidate for office at an election may serve as an inspector at such election.

 

Section 13.                                    Conduct of Meetings; Organization.  The Board of Directors may adopt by resolution such rules and regulations for the conduct of the meeting of stockholders as it shall deem appropriate.  The chairman of the Board of Directors shall preside at all meetings of the stockholders.  If the chairman of the board is not present at a meeting of the stockholders, the vice chairman shall preside at such meeting.  If neither the chairman nor the vice chairman of the board is present at a meeting of the stockholders, the chief executive officer or the president (if the president is a director and is not also the chairman of the board) shall preside at such meeting, and, if the chief executive officer or the president is not present at such meeting, a majority of the directors present at such meeting shall elect one of their members to so preside.  Except to the extent inconsistent with such rules and regulations as adopted by the Board of Directors, the person presiding over any meeting of stockholders shall have the right and authority to convene and to adjourn the meeting, to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such person, are appropriate for the proper conduct of the meeting.  Such rules, regulations or procedures, whether adopted by the Board of Directors or prescribed by the presiding officer of the meeting, may include, without limitation, the following: (i) the establishment of an agenda or order of business for the meeting; (ii) rules and procedures for maintaining order at the meeting and the safety of those present; (iii) limitations on attendance at or participation in the meeting to stockholders of record of the Corporation, their duly authorized and constituted proxies or such other persons as the person presiding over the meeting shall determine; (iv) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (v) limitations on the time allotted to questions or comments by participants.  The presiding officer at any meeting of stockholders, in addition to making any other determinations that may be appropriate to the conduct of the meeting, shall, if the facts warrant, determine and declare to the meeting that a matter or business was not properly brought before the meeting and if such presiding officer should so determine, such person shall so declare to the meeting and any such matter or business not properly brought before the meeting shall not be transacted or considered.  Unless and to the extent determined by the Board of Directors or the person presiding over the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure.  The secretary, or in his or her absence, one of the assistant secretaries, shall act as secretary of the meeting.  In case none of the officers above designated to act as the person presiding over the meeting or as secretary of the meeting, respectively, shall be present, a person presiding over the meeting or a secretary of the meeting, as the case may be, shall be designated by the Board of Directors, and in case the Board of Directors has not so acted, in the case of the designation of a person to act as secretary of the meeting, designated by the person presiding over the meeting.

 

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Section 14.                                    Order of Business.  The order of business at all meetings of stockholders shall be as determined by the person presiding over the meeting.

 

ARTICLE III
DIRECTORS

 

Section 1.                                           General Powers.  Except as provided in the Certificate of Incorporation, the business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors.  In addition to such powers as are herein and in the Certificate of Incorporation expressly conferred upon it, the Board of Directors shall have and may exercise all the powers of the Corporation, subject to the provisions of the laws of Delaware, the Certificate of Incorporation and these Bylaws.

 

Section 2.                                           Number, Election and Term of Office.  The number of directors which constitute the entire Board of Directors of the Corporation shall be such number as is specified in, and the directors shall be elected and shall hold office only in the manner provided in, the Certificate of Incorporation.

 

Section 3.                                           Resignation.  Any director may resign at any time upon written or electronic notice to the Corporation.  Such resignation shall take effect at the time therein specified, and, unless otherwise specified in such resignation, the acceptance of such resignation shall not be necessary to make it effective.

 

Section 4.                                           Vacancies.  Vacancies and newly created directorships resulting from any increase in the total number of directors may be filled only in the manner provided in the Certificate of Incorporation.

 

Section 5.                                           Nominations.

 

(A)                               Subject to the provisions contained in the Certificate of Incorporation, only persons who are nominated in accordance with the procedures set forth in these Bylaws shall be eligible to serve as directors.  Nominations of persons for election to the Board of Directors of the Corporation may be made at a meeting of stockholders (i) by or at the direction of the Board of Directors or (ii) by any stockholder of the Corporation who was a stockholder of record at the time of giving of notice provided for in these Bylaws, who is entitled to vote generally in the election of directors at the meeting and who shall have complied with the notice procedures set forth in Section 11 of ARTICLE II.

 

(B)                               Subject to the Certificate of Incorporation, no person shall be eligible to serve as a director of the Corporation unless nominated in accordance with the procedures set forth in Section 11 of ARTICLE II.  The person presiding over the meeting of the stockholders shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the procedures prescribed by this section, and if he or she should so determine, he or she shall so declare to the meeting and the defective nomination shall be disregarded.  A stockholder seeking to nominate a person to serve as a director must also comply with all applicable requirements of the Exchange Act, and the rules and regulations thereunder with respect to the matters set forth in this section.

 

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Section 6.                                           Annual Meetings.  The annual meeting of the Board of Directors shall be held without other notice than these Bylaws immediately after, and at the same place as, the annual meeting of stockholders.

 

Section 7.                                           Other Meetings and Notices.  Regular meetings, other than the annual meeting, of the Board of Directors may be held without notice at such time and at such place as shall from time to time be determined by resolution of the Board of Directors.  Special meetings of the Board of Directors may be called by the chief executive officer of the Corporation, the most senior executive officer of the Corporation (if there is no chief executive officer), the chairman of the board, the vice chairman of the board, or a majority of the total number of directors then in office, on at least 24 hours’ notice to each director, either personally, by telephone, by mail, by telecopy or by other means of electronic transmission (notice by mail shall be deemed delivered three days after deposit in the U.S. mail).

 

Section 8.                                           Quorum, Required Vote and Adjournment.  A majority of the total number of directors then in office shall constitute a quorum for the transaction of business.  Unless by express provision of an applicable law, the Certificate of Incorporation or these Bylaws a different vote is required, the vote of a majority of directors present at a meeting at which a quorum is present shall be the act of the Board of Directors.  If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting.  At least 24 hours’ notice of any adjourned meeting of the Board of Directors shall be given to each director whether or not present at the time of the adjournment, if such notice shall be given by one of the means specified in Section 7 of this ARTICLE III other than by mail, or at least three days’ notice if by mail.  Any business may be transacted at an adjourned meeting that might have been transacted at the meeting as originally called.

 

Section 9.                                           Committees.  The Board of Directors may, by resolution passed by a majority of the total number of directors then in office, designate one or more committees, each committee to consist of one or more of the directors of the Corporation, which to the extent provided in said resolution or resolutions shall have and may exercise the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation (including the power and authority to designate other committees of the Board of Directors); provided, however, that no such committee shall have power or authority in reference to the following matters: (i) approving or adopting, or recommending to the stockholders, any action or matter expressly required by the DGCL to be submitted to stockholders for approval, or (ii) adopting, amending, or repealing the Bylaws of the Corporation.  The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee.  Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors.  Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors upon request.  Each committee designated by the Board of Directors shall be formed and function in compliance with applicable law and the rules and regulations of any national securities exchange on which any securities of the Corporation are listed.

 

Section 10.                                    Committee Rules.  Subject to applicable law, the rules and regulations of any national securities exchange on which any securities of the Corporation are listed and these Bylaws, each committee of the Board of Directors may fix its own rules of procedure and shall

 

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hold its meetings as provided by such rules, except as may otherwise be provided by a resolution of the Board of Directors designating such committee.  Unless otherwise provided in such a resolution, the presence of at least a majority of the members of the committee shall be necessary to constitute a quorum.  Unless otherwise provided in such a resolution, in the event that a member and that member’s alternate, if alternates are designated by the Board of Directors, of such committee is or are absent or disqualified, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in place of any such absent or disqualified member.

 

Section 11.                                    Communications Equipment.  Members of the Board of Directors or any committee thereof may participate in and act at any meeting of such board or committee through the use of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear and speak with each other, and participation in the meeting pursuant to this section shall constitute presence in person at the meeting.

 

Section 12.                                    Waiver of Notice and Presumption of Assent.  Any member of the Board of Directors or any committee thereof who is present at a meeting shall be conclusively presumed to have waived notice of such meeting except when such member attends for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting was not lawfully called or convened.  Such member shall be conclusively presumed to have assented to any action taken unless his or her dissent shall be entered in the minutes of the meeting or unless his or her written dissent to such action shall be filed with the person acting as the secretary of the meeting before the adjournment thereof or shall be forwarded by registered mail to the secretary of the Corporation immediately after the adjournment of the meeting.  Such right to dissent shall not apply to any member who voted in favor of such action.

 

Section 13.                                    Action by Written Consent.  Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting if the number of members of the Board of Directors or the relevant committee thereof, as the case may be required to take the action under consideration by the Board of Directors or any committee thereof, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board of Directors or committee.

 

ARTICLE IV
OFFICERS

 

Section 1.                                           Number.  The officers of the Corporation shall be elected by the Board of Directors and shall consist of a chairman of the board, a vice chairman of the board, a chief executive officer, a president, one or more vice-presidents, a secretary, a chief financial officer and such other officers and assistant officers as may be deemed necessary or desirable by the Board of Directors.  Any number of offices may be held by the same person, except that neither the chief executive officer nor the president shall also hold the office of secretary.  In its discretion, the Board of Directors may choose not to fill any office for any period as it may deem advisable, except that the offices of president and secretary shall be filled as expeditiously as possible.

 

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Section 2.                                           Election and Term of Office.  The officers of the Corporation shall be elected annually by the Board of Directors at its first meeting held after each annual meeting of stockholders or as soon thereafter as convenient.  Vacancies may be filled or new offices created and filled at any meeting of the Board of Directors.  Each officer shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation or removal as hereinafter provided.

 

Section 3.                                           Removal.  Any officer or agent elected by the Board of Directors may be removed by the Board of Directors at its discretion, but such removal shall be without prejudice to the contract rights, if any, of the person so removed.

 

Section 4.                                           Vacancies.  Any vacancy occurring in any office because of death, resignation, removal, disqualification or otherwise may be filled by the Board of Directors.

 

Section 5.                                           Compensation.  Subject to applicable law and the rules and regulations of any national securities exchange on which any securities of the Corporation are listed, the compensation of all executive officers shall be approved by the Board of Directors, and no officer shall be prevented from receiving such compensation by virtue of his or her also being a Director of the Corporation.

 

Section 6.                                           Chairman of the Board and Vice Chairman of the Board.  The Board of Directors shall elect, by the affirmative vote of a majority of the total number of directors then in office, a chairman of the Board of Directors and a vice chairman of the Board of Directors.  The chairman of the board shall preside at all meetings of the stockholders and of the Board of Directors and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors or provided in these Bylaws.  If the chairman of the Board of Directors is not present at a meeting of the stockholders or the Board of Directors, the vice chairman shall preside at such meeting.  If neither the chairman nor the vice chairman is present at a meeting of the stockholders or the Board of Directors, the chief executive officer or the president (if the president is a director and is not also the chairman of the Board of Directors) shall preside at such meeting, and, if the chief executive officer or the president is not present at such meeting, a majority of the directors present at such meeting shall elect one of their members to so preside.  The vice chairman shall be permitted to attend all meetings of standing committees of the Board of Directors on an ex officio basis.

 

Section 7.                                           Chief Executive Officer.  The chief executive officer shall have the powers and perform the duties incident to that position.  Subject to the powers of the Board of Directors, the chief executive officer shall be in the general and active charge of the entire business and affairs of the Corporation, and shall be its chief policy making officer.  The chief executive officer shall have such other powers and perform such other duties as may be prescribed by the Board of Directors or provided in these Bylaws.  The chief executive officer is authorized to execute bonds, mortgages and other contracts requiring a seal, under the seal of the Corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the Corporation.  Whenever the president is unable to serve, by reason of sickness, absence or otherwise, the chief executive officer shall perform all the duties and responsibilities and exercise all the powers of the president.

 

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Section 8.                                           The President.  The president of the Corporation shall, subject to the powers of the Board of Directors and the chief executive officer, have general charge of the business, affairs and property of the Corporation, and control over its officers, agents and employees.  The president shall see that all orders and resolutions of the Board of Directors are carried into effect.  The president is authorized to execute bonds, mortgages and other contracts requiring a seal, under the seal of the Corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the Corporation.  The president shall have such other powers and perform such other duties as may be prescribed by the chief executive officer, the Board of Directors or as may be provided in these Bylaws.

 

Section 9.                                           Vice Presidents.  The vice president, or if there shall be more than one, the vice presidents in the order determined by the Board of Directors, shall, in the absence or disability of the president, act with all of the powers and be subject to all the restrictions of the president.  The vice presidents shall also perform such other duties and have such other powers as the Board of Directors, the chief executive officer, the president or these Bylaws may, from time to time, prescribe.  The vice presidents may also be designated as executive vice presidents or senior vice presidents, as the Board of Directors may from time to time prescribe.

 

Section 10.                                    The Secretary and Assistant Secretaries.  The secretary shall attend all meetings of the Board of Directors, all meetings of the committees thereof and all meetings of the stockholders and record all the proceedings of the meetings in a book or books to be kept for that purpose or shall ensure that his or her designee attends each such meeting to act in such capacity.  Under the chairman of the board’s supervision, the secretary shall give, or cause to be given, all notices required to be given by these Bylaws or by law; shall have such powers and perform such duties as the Board of Directors, the chief executive officer, the president or these Bylaws may, from time to time, prescribe; and shall have custody of the corporate seal of the Corporation.  The secretary, or an assistant secretary, shall have authority to affix the corporate seal to any instrument requiring it and when so affixed, it may be attested by his or her signature or by the signature of such assistant secretary.  The Board of Directors may give general authority to any other officer to affix the seal of the Corporation and to attest the affixing by his or her signature.  The assistant secretary, or if there be more than one, any of the assistant secretaries, shall in the absence or disability of the secretary, perform the duties and exercise the powers of the secretary and shall perform such other duties and have such other powers as the Board of Directors, the chief executive officer, the president, or the secretary may, from time to time, prescribe.

 

Section 11.                                    The Chief Financial Officer.  The chief financial officer shall have the custody of the corporate funds and securities; shall keep full and accurate all books and accounts of the Corporation as shall be necessary or desirable in accordance with applicable law or generally accepted accounting principles; shall deposit all monies and other valuable effects in the name and to the credit of the Corporation as may be ordered by the chief executive officer or the Board of Directors; shall cause the funds of the Corporation to be disbursed when such disbursements have been duly authorized, taking proper vouchers for such disbursements; shall render to the Board of Directors, at its regular meeting or when the Board of Directors so requires, an account of the Corporation; and shall have such powers and perform such duties as the Board of Directors, the chief executive officer, the president or these Bylaws may, from time to time, prescribe.  If required by the Board of Directors, the chief financial officer shall give the Corporation a bond (which shall

 

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be rendered every six years) in such sums and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of the office of chief financial officer and for the restoration to the Corporation, in case of death, resignation, retirement or removal from office of all books, papers, vouchers, money and other property of whatever kind in the possession or under the control of the chief financial officer belonging to the Corporation.

 

Section 12.                                    Other Officers, Assistant Officers and Agents.  Officers, assistant officers and agents, if any, other than those whose duties are provided for in these Bylaws, shall have such authority and perform such duties as may from time to time be prescribed by resolution of the Board of Directors.

 

Section 13.                                    Absence or Disability of Officers.  In the case of the absence or disability of any officer of the Corporation and of any person hereby authorized to act in such officer’s place during such officer’s absence or disability, the Board of Directors may by resolution delegate the powers and duties of such officer to any other officer or to any director, or to any other person selected by it.

 

ARTICLE V
INDEMNIFICATION

 

Section 1.                                           Right to Indemnification.  Each person who was or is made a party or is threatened to be made a party to or is otherwise involved (including involvement as a witness) in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “proceeding”), by reason of the fact that he or she is or was a director or officer of the Corporation or a wholly owned subsidiary of the Corporation or, while a director, officer or employee of the Corporation or a wholly owned subsidiary of the Corporation, is or was serving at the request of the Corporation or a wholly owned subsidiary of the Corporation as a director, officer, employee, partner, member, manager, trustee, fiduciary or agent of another corporation or of a partnership, joint venture, limited liability company, trust or other entity or enterprise, including service with respect to an employee benefit plan (an “indemnitee”), shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the DGCL, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than permitted prior thereto), against all expense, liability and loss (including attorneys’ fees, judgments, fines, excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such indemnitee in connection therewith and such indemnification shall continue as to an indemnitee who has ceased to be a director, officer, employee, partner, member, manager, trustee, fiduciary or agent and shall inure to the benefit of the indemnitee’s heirs, executors and administrators; provided, however, that, except as provided in Section 2 of this ARTICLE V with respect to proceedings to enforce rights to indemnification or advance of expenses, the Corporation shall not indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee except to the extent such proceeding (or part thereof) was authorized in writing by the Board of Directors of the Corporation.  The right to indemnification conferred in this Section 1 of this ARTICLE V shall be a contract right and shall include the obligation of the Corporation to pay the expenses incurred in defending any such proceeding in advance of its final disposition (an “advance of expenses”); provided, however, that an advance of expenses incurred by an indemnitee in his or her capacity as a director or officer shall be made only upon delivery to the Corporation of an

 

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undertaking (an “undertaking”), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a “final adjudication”) that such indemnitee is not entitled to be indemnified for such expenses under this Section 1 of this ARTICLE V or otherwise.  For purposes of this ARTICLE V, a wholly owned subsidiary of the Corporation shall be deemed to include any subsidiary for which nominal equity interests have been issued to persons other than the Corporation or any of its subsidiaries pursuant to the laws of such subsidiary’s jurisdiction of incorporation or organization.

 

Section 2.                                           Procedure for Indemnification.  Any indemnification of an indemnitee or advance of expenses under Section 1 of this ARTICLE V shall be made promptly, and in any event within thirty days (or, in the case of an advance of expenses, twenty days), upon the written request of the indemnitee.  If the Corporation denies a written request for indemnification or advance of expenses, in whole or in part, or if payment in full pursuant to such request is not made within thirty days (or, in the case of an advance of expenses, twenty days), the right to indemnification or advances as granted by this ARTICLE V shall be enforceable by the indemnitee in any court of competent jurisdiction.  Such person’s costs and expenses incurred in connection with successfully establishing his or her right to indemnification or advance of expenses, in whole or in part, in any such action shall also be indemnified by the Corporation.

 

Section 3.                                           Insurance.  The Corporation may purchase and maintain insurance on its own behalf and on behalf of any person who is or was a director, officer, employee or agent of the Corporation or a wholly owned subsidiary of the Corporation or was serving at the request of the Corporation or a wholly owned subsidiary of the Corporation as a director, officer, employee, partner, member, manager, trustee, fiduciary or agent of another corporation, partnership, joint venture, limited liability company, trust or other entity or enterprise against any expense, liability or loss asserted against him or her and incurred by him or her in any such capacity, whether or not the Corporation would have the power to indemnify such person against such expenses, liability or loss under the DGCL.

 

Section 4.                                           Amendment or Repeal.  Any repeal or modification of the foregoing provisions of this ARTICLE V shall not adversely affect any right or protection hereunder of any indemnitee in respect of any act, omission or condition existing or event or circumstance occurring prior to the time of such repeal or modification.

 

Section 5.                                           Non-Exclusivity of Rights.  The rights to indemnification and to the advance of expenses conferred in this ARTICLE V and in the Certificate of Incorporation shall not be exclusive of any other right which any person may have or hereafter acquire hereunder or under any statute, by-law, agreement, vote of stockholders or disinterested directors or otherwise.

 

Section 6.                                           Other Sources.  The Corporation’s obligation, if any, to indemnify or to advance expenses to any director, officer or employee who was or is serving at its request as a director, officer, employee or agent of another entity shall be reduced by any amount such director, officer or employee may collect as indemnification or advancement of expenses from such other entity.

 

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Section 7.                                           Other Indemnification and Prepayment of Expenses.  This ARTICLE V shall not limit the right of the Corporation, to the extent and in the manner permitted by applicable law, to indemnify and to advance expenses to persons other than directors or officers (including employees and agents) with the same or lesser scope and effect as provided herein when and as authorized by appropriate corporate action.

 

Section 8.                                           Merger or Consolidation.  For purposes of this ARTICLE V, references to the “Corporation” shall include, in addition to the corporation resulting from or surviving a consolidation or merger with the Corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger with the Corporation which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers or employees, so that any person who is or was a director or officer of such constituent corporation or a wholly owned subsidiary of such constituent corporation or, while a director, officer or employee of such constituent corporation or a wholly owned subsidiary of such constituent corporation is or was serving at the request of such constituent corporation or a wholly owned subsidiary of such constituent corporation as a director, officer, employee, partner, member, manager, trustee, fiduciary or agent of another corporation or of a partnership, joint venture, limited liability company, trust or other entity or enterprise, including service with respect to an employee benefit plan, shall stand in the same position under this ARTICLE V with respect to the resulting or surviving corporation as he or she would have with respect to such constituent corporation if its separate existence had continued.

 

Section 9.                                           Severability.  If any provision of this ARTICLE V shall be found to be invalid or limited in application by reason of any law or regulation, it shall not affect the validity of the remaining provisions hereof.

 

ARTICLE VI
CERTIFICATES OF STOCK

 

Section 1.                                           General.  Every holder of stock in the Corporation shall be entitled to have a certificate, signed by, or in the name of the Corporation by the president or vice president and the secretary or an assistant secretary of the Corporation, certifying the number of shares owned by such holder in the Corporation, provided that the Board of Directors may provide by resolution or resolutions that some or all of any or all classes or series of its stock shall be uncertificated shares (except that the foregoing shall not apply to shares represented by a certificate until such certificate is surrendered to the Corporation). If a certificate is  countersigned by a transfer agent or a registrar, the required signatures may be facsimiles. In case any officer or officers who have signed, or whose facsimile signature or signatures have been used on, any such certificate or certificates shall cease to be such officer or officers of the Corporation whether because of death, resignation or otherwise before such certificate or certificates have been delivered by the Corporation, such certificate or certificates may nevertheless be issued and delivered as though the person or persons who signed such certificate or certificates or whose facsimile signature or signatures have been used thereon had not ceased to be such officer or officers of the Corporation. All certificates for shares shall be consecutively numbered or otherwise identified. The name of the person to whom the shares represented thereby are issued, with the number of shares and date of issue, shall be entered on the books of the Corporation. Shares of stock of the Corporation shall only be transferred on the books of the Corporation by the holder of record thereof or by such

 

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holder’s attorney duly authorized in writing, upon surrender to the Corporation of the certificate or certificates for such shares endorsed by the appropriate person or persons, with such evidence of the authenticity of such endorsement, transfer, authorization and other matters as the Corporation may reasonably  require, and accompanied by all necessary stock transfer stamps. In that event, it shall be the  duty of the Corporation to issue a new certificate to the person entitled thereto, cancel the old certificate or certificates and record the transaction on its books. Each such new certificate will be registered in such name as is requested by the holder of the surrendered certificate and shall  be substantially identical in form to the surrendered certificate. Upon the receipt of proper transfer instructions from the registered owner of uncertificated shares, if any,  such uncertificated shares shall be cancelled, issuance of new equivalent uncertificated or certificated shares shall be made to the stockholder entitled thereto and the transaction shall recorded upon the books and records of the Corporation. The Board of Directors may appoint one or more transfer agents or registrars or both in connection with the transfer of any class or series of securities of the Corporation.

 

Section 2.                                           Lost Certificates.  The Corporation may issue (i) a new certificate or certificates of stock or (ii) uncertificated shares in place of any certificate or certificates previously issued by the Corporation, as applicable, in place of any certificate or certificates previously issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed.  When authorizing such issue of a new certificate or certificates, the Corporation may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his or her legal representative, to give the Corporation a bond sufficient to indemnify the Corporation against any claim that may be made against the Corporation on account of the loss, theft or destruction of any such certificate or the issuance of such new certificate.

 

Section 3.                                           Fixing a Record Date for Stockholder Meetings.  In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than 60 nor less than 10 days before the date of such meeting.  If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be the close of business on the next day preceding the day on which notice is first given.  A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

 

Section 4.                                           Fixing a Record Date for Other Purposes.  In order that the Corporation may determine: (i) the stockholders entitled to receive payment of any dividend or other distribution or allotment or any rights; or (ii) the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purposes of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than 60 days nor less than 10 days prior to such action.  If no record date is fixed, the record date for determining

 

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stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.

 

Section 5.                                           Registered Stockholders.  Prior to the surrender to the Corporation of the certificate or certificates for a share or shares of stock with a request to record the transfer of such share or shares, the Corporation may treat the registered owner as the person entitled to receive dividends, to vote, to receive notifications and otherwise to exercise all the rights and powers of an owner.  The Corporation shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof.

 

Section 6.                                           Subscriptions for Stock.  Unless otherwise provided for in any subscription agreement, subscriptions for shares shall be paid in full at such time, or in such installments and at such times, as shall be determined by the Board of Directors.  Any call made by the Board of Directors for payment on subscriptions shall be uniform as to all shares of the same class or as to all shares of the same series.  In case of default in the payment of any installment or call when such payment is due, the Corporation may proceed to collect the amount due in the same manner as any debt due the Corporation.

 

ARTICLE VII
GENERAL PROVISIONS

 

Section 1.                                           Dividends.  Dividends upon the capital stock of the Corporation, subject to the provisions of the Certificate of Incorporation, may be declared by the Board of Directors at any regular or special meeting, in accordance with applicable law.  Dividends may be paid in cash, in property or in shares of the capital stock, subject to the provisions of the Certificate of Incorporation.  Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or any other purpose and the directors may modify or abolish any such reserve in the manner in which it was created.

 

Section 2.                                           Checks, Drafts or Orders.  All checks, drafts or other orders for the payment of money by or to the Corporation and all notes and other evidences of indebtedness issued in the name of the Corporation shall be signed by such officer or officers, agent or agents of the Corporation, and in such manner, as shall be determined by resolution of the Board of Directors or a duly authorized committee thereof.

 

Section 3.                                           Contracts.  In addition to the powers otherwise granted to officers pursuant to ARTICLE IV hereof, the Board of Directors may authorize any officer or officers, or any agent or agents, of the Corporation to enter into any contract or to execute and deliver any instrument in the name of and on behalf of the Corporation, and such authority may be general or confined to specific instances.

 

Section 4.                                           Loans.  Subject to compliance with applicable law (including, if applicable, Section 13(k) of the Exchange Act), the Corporation may lend money to, or guarantee any obligation of, or otherwise assist any officer or other employee of the Corporation or of its

 

19



 

subsidiaries, including any officer or employee who is a director of the Corporation or its subsidiaries, whenever, in the judgment of the directors, such loan, guaranty or assistance may reasonably be expected to benefit the Corporation and would not violate applicable law.  The loan, guaranty or other assistance may be with or without interest, and may be unsecured, or secured in such manner as the Board of Directors shall approve, including, without limitation, a pledge of shares of stock of the Corporation, subject to applicable law.  Nothing in this Section 4 shall be deemed to deny, limit or restrict the powers of guaranty or warranty of the Corporation at common law or under any statute.

 

Section 5.                                           Fiscal Year.  The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors.

 

Section 6.                                           Corporate Seal.  The Board of Directors may provide a corporate seal which shall be in the form of a circle and shall have inscribed thereon the name of the Corporation and the words “Corporate Seal, Delaware.” The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.  Notwithstanding the foregoing, no seal shall be required by virtue of this Section.

 

Section 7.                                           Voting Securities Owned By Corporation.  Voting securities in any other company held by the Corporation shall be voted by the chief executive officer, the president or a vice president, unless the Board of Directors specifically confers authority to vote with respect thereto, which authority may be general or confined to specific instances, upon some other person or officer.  Any person authorized to vote securities shall have the power to appoint proxies, with general power of substitution.

 

Section 8.                                           Inspection of Books and Records.  The Board of Directors shall have power from time to time to determine to what extent and at what times and places and under what conditions and regulations the accounts and books of the Corporation, or any of them, shall be open to the inspection of the stockholders; and no stockholder shall have any right to inspect any account or book or document of the Corporation, except as conferred by the laws of the State of Delaware, unless and until authorized so to do by resolution of the Board of Directors or of the stockholders of the Corporation.

 

Section 9.                                           Facsimile Signatures.  In addition to the provisions for use of facsimile signatures elsewhere specifically authorized in these Bylaws, facsimile signatures of any officer or officers of the Corporation may be used whenever and as authorized by the Board of Directors.

 

Section 10.                                    Section Headings.  Section headings in these Bylaws are for convenience of reference only and shall not be given any substantive effect in limiting or otherwise construing any provision herein.

 

Section 11.                                    Inconsistent Provisions.  In the event that any provision of these Bylaws is or becomes inconsistent with any provision of the Certificate of Incorporation, the DGCL, the Exchange Act or any regulation thereunder, or any other applicable law or regulation, the provision of these Bylaws shall not be given any effect to the extent of such inconsistency but shall otherwise be given full force and effect.

 

20



 

Section 12.                                    Notices.  Except as provided in Section 4 of ARTICLE II hereof and Section 7 of ARTICLE III hereof, all notices referred to herein shall be in writing, shall be delivered personally or by first class mail, postage prepaid, and shall be deemed to have been given when so delivered or mailed to the Corporation at its principal executive offices and to any stockholder at such holder’s address as it appears in the stock records of the Corporation (unless otherwise specified in a written notice to the Corporation by such holder).

 

Section 13.                                    Certificate of Incorporation.  Unless the context requires otherwise, references in these Bylaws to the Certificate of Incorporation (as it may be amended and restated from time to time) shall also be deemed to include any duly authorized certificate of designation relating to any series of Preferred Stock of the Corporation that may be outstanding from time to time.

 

ARTICLE VIII
AMENDMENTS

 

These Bylaws may be made, amended, altered, changed, added to or repealed as set forth in ARTICLE EIGHT of the Certificate of Incorporation.

 

*                                         *                                         *                                         *                                         *

 

21


EX-10.1 4 a18-24111_1ex10d1.htm EX-10.1

Exhibit 10.1

 

MASTER SERVICES AGREEMENT

 

by and among

 

NRG YIELD, INC.,

 

NRG YIELD LLC,

 

NRG YIELD OPERATING LLC

 

and

 

ZEPHYR RENEWABLES LLC

 

as Manager

 

Dated as of August 31, 2018

 



 

TABLE OF CONTENTS

 

ARTICLE 1 INTERPRETATION

1

1.1

Definitions

1

1.2

Headings and Table of Contents

5

1.3

Interpretation

5

1.4

Service Recipients Third Party Beneficiaries

6

1.5

Actions by the Manager or the Service Recipients

6

 

 

 

ARTICLE 2 APPOINTMENT OF THE MANAGER

7

2.1

Appointment and Acceptance

7

2.2

Other Service Recipients

7

2.3

Subcontracting and Other Arrangements

7

 

 

 

ARTICLE 3 SERVICES AND POWERS OF THE MANAGER

7

3.1

Services

7

3.2

Supervision of Manager’s Activities

7

3.3

Restrictions on the Manager

8

3.4

Errors and Omissions Insurance

8

 

 

 

ARTICLE 4 RELATIONSHIP BETWEEN THE MANAGER AND THE SERVICE RECIPIENTS

8

4.1

Other Activities

8

4.2

Independent Contractor, No Partnership or Joint Venture

8

 

 

 

ARTICLE 5 MANAGEMENT AND EMPLOYEES

9

5.1

Management and Employees

9

 

 

 

ARTICLE 6 INFORMATION AND RECORDS

9

6.1

Books and Records

9

6.2

Examination of Records by the Service Recipients

9

6.3

Access to Information by Manager Group

10

6.4

Additional Information

10

6.5

Confidential Information

11

 

 

 

ARTICLE 7 FEES AND EXPENSES

11

7.1

Annual Fee

11

7.2

Computation and Payment of Quarterly Annual Fee

12

7.3

Governmental Charges

12

7.4

Computation and Payment of Governmental Charges

12

 

 

 

ARTICLE 8 REPRESENTATIONS AND WARRANTIES OF THE MANAGER AND THE SERVICE RECIPIENTS

12

8.1

Representations and Warranties of the Manager

12

8.2

Representations and Warranties of the Service Recipients

13

 

i



 

ARTICLE 9 LIABILITY AND INDEMNIFICATION

14

9.1

Indemnity

14

9.2

Limitation of Liability

15

9.3

Benefit to all Manager Indemnified Parties

16

 

 

 

ARTICLE 10 TERM AND TERMINATION

16

10.1

Term

16

10.2

Termination by the Service Recipients

16

10.3

Termination by the Manager

17

10.4

Survival Upon Termination

18

10.5

Action Upon Termination

18

10.6

Release of Money or other Property Upon Written Request

18

 

 

 

ARTICLE 11 ARBITRATION

19

11.1

Dispute

19

11.2

Arbitration

19

11.3

Continued Performance

20

11.4

Urgent Relief

20

 

 

 

ARTICLE 12 GENERAL PROVISIONS

20

12.1

Amendment, Waiver

20

12.2

Assignment

21

12.3

Failure to Pay When Due

21

12.4

Invalidity of Provisions

22

12.5

Entire Agreement

22

12.6

Mutual Waiver of Jury Trial

22

12.7

Consent to Jurisdiction

22

12.8

Governing Law

23

12.9

Enurement

23

12.10

Notices

23

12.11

Further Assurances

24

12.12

Counterparts

24

 

Appendices

 

 

Appendix A

 

Services

 

ii



 

MASTER SERVICES AGREEMENT

 

This MASTER SERVICES AGREEMENT is made as of August 31, 2018 (the “Effective Date”), by and among NRG Yield, Inc., a Delaware corporation (“NYLD”), NRG Yield LLC, a Delaware limited liability company (“NYLD LLC”), NRG Yield Operating LLC, a Delaware limited liability company (“NYLD Op”), and Zephyr Renewables LLC, a Delaware limited liability company (the “Manager”). Each of NYLD, NYLD LLC, NYLD Op and the Manager is referred to herein as a “Party”, and together as the “Parties”.

 

RECITALS

 

A.                                    NYLD, NYLD LLC and NYLD Op directly and indirectly, as applicable, hold interests in the Service Recipients (as defined below).

 

B.                                    NYLD, NYLD LLC and NYLD Op wish to engage the Manager to provide or arrange for other Service Providers (as defined below) to provide the services set forth in this Agreement to the Service Recipients, subject to the terms and conditions of this Agreement, and the Manager wishes to accept such engagement.

 

C.                                    NYLD and Manager have also entered into a Master Services Agreement, dated as of August 31, 2018 (the “Corresponding MSA”), pursuant to which NYLD has agreed to provide, or cause to be provided, services to Manager on the terms and conditions set forth therein.

 

NOW THEREFORE in consideration of the mutual representations, warranties, covenants and agreements contained in this Agreement and other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the Parties agree as follows:

 

ARTICLE 1
INTERPRETATION

 

1.1                               Definitions

 

In this Agreement, except where the context otherwise requires, the following terms will have the following meanings:

 

AAA” has the meaning assigned thereto in Section 11.2.1.

 

Acquired Assets” means any renewable and conventional generation and thermal infrastructure asset acquired after the date hereof by any member of the YieldCo Group.

 

Affiliate” means with respect to any Person, any other Person that, directly or indirectly, through one or more intermediaries, Controls or is Controlled by, or is in common Control with, such Person.

 

Agreement” means this Master Services Agreement, and “herein,” “hereof,” “hereby,” “hereunder” and similar expressions refer to this Agreement and include every instrument

 

1



 

supplemental or ancillary to this Agreement and, except where the context otherwise requires, not to any particular article or section thereof.

 

Annual Fee” means the Management Group’s Cost of providing the Services for any calendar year; provided, that the Annual Fee for the first full calendar year following the Effective Date shall not exceed the amount set forth on Appendix A under the heading of “Effective Date Cost” or “Post-Transition Cost”, as applicable. The Annual Fee may be increased or decreased from time to time by an agreed upon amount resulting from the amendment of the scope of the Services pursuant to Section 12.1.1.

 

Arbitration” has the meaning assigned thereto in Section 11.2.1.

 

Arbitrators” has the meaning assigned thereto in Section 11.2.4.

 

Business” means the business carried on from time to time by the YieldCo Group.

 

Business Day” means every day except a Saturday or Sunday, or a legal holiday in the City of New York on which banking institutions are authorized or required by law, regulation or executive order to close.

 

Claims” has the meaning assigned thereto in Section 9.1.1.

 

Conflicts Committee” means the Corporate Governance, Conflicts and Nominating Committee of NYLD.

 

Control” or “control” (including the terms “controlled by” and “under common control with”), with respect to the relationship between or among two or more Persons, means the possession, directly or indirectly, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities, by contract or otherwise.

 

Corresponding MSA” has the meaning assigned thereto in the recitals.

 

Costs” means all costs and expenses incurred by the Manager Group in connection with the provision of the Services. Without limiting the generality of the foregoing, Costs are expected to include, among other things: (a) fees, costs and expenses incurred in connection the calculation and payment of taxes and the preparation and filing of tax returns; (b) fees, costs and expenses in connection with the procurement and allocation of insurance; (c) fees, costs and expenses incurred in connection with acquisition of information technology assets and implementation of information technology systems; and (d) any other fees, costs and expenses incurred by the relevant member of the Manager Group that are reasonably necessary for the performance by the relevant member of the Manager Group of its duties and functions under this Agreement.

 

Dispute” has the meaning assigned thereto in Section 11.1.

 

Effective Date” has the meaning assigned thereto in the preamble.

 

2



 

Expense Statement” has the meaning assigned thereto in Section 7.4.

 

GAAP” means generally accepted accounting principles in the United States used by NYLD in preparing its financial statements from time to time.

 

Governing Body” means (i) with respect to a corporation, the board of directors of such corporation, (ii) with respect to a limited liability company, the manager(s) or managing member(s) of such limited liability company, (iii) with respect to a limited partnership, the board, committee or other body of the general partner of such partnership that serves a similar function or the general partner itself (or if any such general partner is itself a limited partnership, the board, committee or other body of such general partner’s general partner that serves a similar function or such general partner’s partner) and (iv) with respect to any other Person, the body of such Person that serves a similar function, and in the case of each of (i) through (iv) includes any committee or other subdivision of such body and any Person to whom such body has delegated any power or authority, including any officer and managing director.

 

Governing Instruments” means (i) the certificate of incorporation and bylaws in the case of a corporation, (ii) the articles of formation and operating agreement in the case of a limited liability company (iii) the partnership agreement in the case of a partnership, and (iv) any other similar governing document under which an entity was organized, formed or created and/or operates.

 

Governmental Authority” means any (i) international, national, multinational, federal, state, regional, municipal, local or other government, governmental or public department, central bank, court, tribunal, arbitral body, commission, board, bureau, agency or instrumentality, domestic or foreign, including ISO/RTOs, (ii) self-regulatory organization or stock exchange, (iii) subdivision, agent, commission, board, or authority of any of the foregoing, or (iv) quasi-governmental or private body exercising any regulatory, expropriation or taxing authority under or for the account of any of the foregoing.

 

Governmental Charges” has the meaning assigned thereto in Section 7.3.

 

Indemnifying Party” means a Person against whom a claim for indemnification is asserted pursuant to Article 9.

 

Interest Rate” means, for any day, the rate of interest equal to the (a) overnight U.S. dollar London interbank offered rate on such day, and if such rate is unavailable, (b) the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day by the Federal Reserve Bank of New York.

 

ISO/RTO” means an independent electricity system operator, a regional transmission organization, national system operator or any other similar organization overseeing the transmission of energy in any jurisdiction in which the YieldCo Group owns assets or operates.

 

3



 

Laws” means any and all applicable (i) laws, constitutions, treaties, statutes, codes, ordinances, principles of common law and equity, rules, regulations and municipal bylaws whether domestic, foreign or international, (ii) judicial, arbitral, administrative, ministerial, departmental and regulatory judgments, orders, writs, injunctions, decisions, and awards of any Governmental Authority, and (iii) policies, practices and guidelines of any Governmental Authority which, although not actually having the force of law, are considered by such Governmental Authority as requiring compliance as if having the force of law, and the term “applicable,” with respect to such Laws and in the context that refers to one or more Persons, means such Laws that apply to such Person or Persons or its or their business, undertaking, property or securities at the relevant time and that emanate from a Governmental Authority having jurisdiction over the Person or Persons or its or their business, undertaking, property or securities.

 

Liabilities” has the meaning assigned thereto in Section 9.1.1.

 

Manager Group” means the Manager and its direct and indirect Subsidiaries (other than any member of the YieldCo Group).

 

Manager Indemnified Parties” has the meaning assigned thereto in Section 9.1.1.

 

Manager” has the meaning assigned thereto in the preamble.

 

NYLD” has the meaning assigned thereto in the preamble.

 

NYLD LLC” has the meaning assigned thereto in the preamble.

 

NYLD Op” has the meaning assigned thereto in the preamble.

 

Operating and Administrative Agreements” means the operating and administrative agreements in effect as of the Effective Date between certain members of the YieldCo Group and Affiliates of the Manager for such YieldCo Group members’ operating and administrative needs and, with respect to any Acquired Assets any operating and administrative agreements between any of the Acquired Assets and Affiliates of the Manager for such asset’s operating and administrative needs in effect as of the date of acquisition of the Acquired Asset by a member of the YieldCo Group.

 

Operational and Other Services” means any services provided by any member of the Manager Group to any member of the YieldCo Group, including financial advisory, operations and maintenance, marketing, agency, development, operating management and other services, including services provided under any Operating and Administrative Agreement.

 

Party” has the meaning assigned thereto in the preamble.

 

Permit” means any consent, license, approval, registration, permit or other authorization granted by any Governmental Authority.

 

4



 

Person” means any natural person, partnership, limited partnership, limited liability partnership, joint venture, syndicate, sole proprietorship, company or corporation (with or without share capital), limited liability corporation, unlimited liability company, joint stock company, unincorporated association, trust, trustee, executor, administrator or other legal personal representative, regulatory body or agency, government or Governmental Authority, authority or entity however designated or constituted and pronouns have a similarly extended meaning.

 

Quarter” means a calendar quarter ending on the last day of March, June, September or December.

 

Rules” has the meaning assigned thereto in Section 11.2.1.

 

Service Providers” means the Manager, any member of the Manager Group and any other entity or individual that the Manager has arranged to provide the Services to any Service Recipient.

 

Service Recipient” means NYLD, NYLD LLC, NYLD Op and their Subsidiaries as of the Effective Date, as well as any other direct and indirect Subsidiary of NYLD, NYLD LLC, NYLD Op, as applicable, acquired or formed after the date hereof that receives Services from a Service Provider pursuant to this Agreement.

 

Services” has the meaning assigned thereto in Section 3.1.

 

Subsidiary” means, with respect to any Person, (i) any other Person that is directly or indirectly Controlled by such Person, (ii) any trust in which such Person holds all of the beneficial interests or (iii) any partnership, limited liability company or similar entity in which such Person holds all of the interests other than the interests of any general partner, managing member or similar Person.

 

Third Party Claim” has the meaning assigned thereto in Section 9.1.2.

 

Transaction Fees” means fees paid or payable by the Service Recipients, which are on market terms, with respect to financial advisory services ordinarily carried out by investment banks in the context of mergers and acquisitions transactions.

 

YieldCo Group” means NYLD, NYLD LLC, NYLD Op and their direct and indirect Subsidiaries.

 

1.2                               Headings and Table of Contents

 

The inclusion of headings and a table of contents in this Agreement are for convenience of reference only and will not affect the construction or interpretation hereof.

 

1.3                               Interpretation

 

In this Agreement, unless the context otherwise requires:

 

5



 

1.3.1                     words importing the singular shall include the plural and vice versa, words importing gender shall include all genders or the neuter, and words importing the neuter shall include all genders;

 

1.3.2                     the words “include”, “includes”, “including”, or any variations thereof, when following any general term or statement, are not to be construed as limiting the general term or statement to the specific items or matters set forth or to similar items or matters, but rather as referring to all other items or matters that could reasonably fall within the broadest possible scope of the general term or statement;

 

1.3.3                     references to any Person include such Person’s successors and permitted assigns;

 

1.3.4                     any reference to a statute, regulation, policy, rule or instrument shall include, and shall be deemed to be a reference also to, all amendments made to such statute, regulation, policy, rule or instrument and to any statute, regulation, policy, rule or instrument that may be passed which has the effect of supplementing or superseding the statute, regulation, policy, rule or instrument so referred to;

 

1.3.5                     any reference to this Agreement or any other agreement, document or instrument shall be construed as a reference to this Agreement or, as the case may be, such other agreement, document or instrument as the same may have been, or may from time to time be, amended, varied, replaced, amended and restated, supplemented or otherwise modified;

 

1.3.6                     where a reference in this Agreement is made to a Section or Schedule, such reference shall be to a Section or Schedule to this Agreement unless otherwise indicated;

 

1.3.7                     in the event that any day on which any amount is to be determined or any action is required to be taken hereunder is not a Business Day, then such amount shall be determined or such action shall be required to be taken at or before the requisite time on the next succeeding day that is a Business Day; and

 

1.3.8                     except where otherwise expressly provided, all amounts in this Agreement are stated and shall be paid in U.S. currency.

 

1.4                               Service Recipients Third Party Beneficiaries

 

The Manager agrees that each of the Service Recipients, including any Service Recipient formed or acquired after the Effective Date in accordance with Section 2.2, shall be, and is hereby, named as express third-party beneficiaries of this Agreement entitled to all the benefits conferred under this Agreement.

 

1.5                               Actions by the Manager or the Service Recipients

 

Unless the context requires otherwise, where the consent of or a determination is required by the Manager or Service Recipient hereunder, the Parties shall be entitled to conclusively rely upon it having been given or taken, as applicable, if, the Manager or such Service Recipient, as applicable, has communicated the same in writing.

 

6



 

ARTICLE 2
APPOINTMENT OF THE MANAGER

 

2.1                               Appointment and Acceptance

 

2.1.1                     Subject to and in accordance with the terms, conditions and limitations in this Agreement, NYLD, NYLD LLC and NYLD Op hereby appoint the Manager to provide or arrange for other Service Providers to provide the Services to the Service Recipients.

 

2.1.2                     The Manager hereby accepts the appointment provided for in Section 2.1.1 and agrees to act in such capacity and to provide or arrange for other Service Providers to provide the Services to the Service Recipients upon the terms, conditions and limitations in this Agreement.

 

2.2                               Other Service Recipients

 

The Parties acknowledge that any Subsidiary of NYLD, NYLD LLC or NYLD Op formed or acquired in the future that is not a Service Recipient on the date hereof may become a Service Recipient under this Agreement. In the event that any such addition results in an amendment of the scope of the Services, such amendment shall be effectuated as provided by Section 12.1.1.

 

2.3                               Subcontracting and Other Arrangements

 

The Manager may subcontract to any other member of the Manager Group or any of its Affiliates, or arrange for the provision of any or all of the Services to be provided by it under this Agreement by any other member of the Manager Group or any of its Affiliates, and each of NYLD, NYLD LLC and NYLD Op hereby consents to any such subcontracting or arrangement; provided that the Manager shall remain responsible to the Service Recipients for any Services provided by such Person. Any such subcontracting will be subject to the terms of this Agreement and covered by the fees payable under this Agreement.

 

ARTICLE 3
SERVICES AND POWERS OF THE MANAGER

 

3.1                               Services

 

The Manager will provide, or arrange for the provision by other Service Providers of, and will have the exclusive power and authority to provide or arrange for the provision by other Service Providers of, the services set forth on Appendix A, as such Appendix A may be updated from time to time in accordance with this Agreement (the “Services”), to the Service Recipients.

 

3.2                               Supervision of Manager’s Activities

 

The Manager shall, at all times, be subject to the supervision of the relevant Service Recipient’s Governing Body and shall only provide or arrange for the provision of such Services as such Governing Body may request from time to time.

 

7



 

3.3                               Restrictions on the Manager

 

3.3.1                     The Manager shall, and shall cause any other Service Provider to, refrain from taking any action that is not in compliance with or would violate any Laws or that otherwise would not be permitted by the Governing Instruments of the Service Recipients. If the Manager or any Service Provider is instructed to take any action that is not in such compliance by a Service Recipient’s Governing Body, such person will promptly notify such Governing Body of its judgment that such action would not comply with or violate any such Laws or otherwise would not be permitted by such Governing Instrument.

 

3.3.2                     In performing its duties under this Agreement, each member of the Manager Group shall be entitled to rely in good faith on qualified experts, professionals and other agents (including on accountants, appraisers, consultants, legal counsel and other professional advisors) and shall be permitted to rely in good faith upon the direction of a Service Recipient’s Governing Body to evidence any approvals or authorizations that are required under this Agreement. All references in this Agreement to the Service Recipients or Governing Body for the purposes of instructions, approvals and requests to the Manager will refer to the Governing Body.

 

3.4                               Errors and Omissions Insurance

 

The Manager shall, and shall cause any other Service Provider to, at all times during the term of this Agreement maintain “errors and omissions” insurance coverage and other insurance coverage which is customarily carried by Persons performing functions that are similar to those performed by the Service Providers under this Agreement with reputable insurance companies and in an amount which is comparable to that which is customarily maintained by such other Persons. In each case, the relevant Service Recipients shall be included as additional insured or loss payees under the relevant policies.

 

ARTICLE 4
RELATIONSHIP BETWEEN THE MANAGER AND THE SERVICE RECIPIENTS

 

4.1                               Other Activities

 

No member of the Manager Group (and no Affiliate, director, officer, member, partner, shareholder or employee of any member of the Manager Group) shall be prohibited from engaging in other business activities or sponsoring, or providing services to, third parties that compete directly or indirectly with the Service Recipients.

 

4.2                               Independent Contractor, No Partnership or Joint Venture

 

The Parties acknowledge that the Manager is providing or arranging for the provision of the Services hereunder as an independent contractor and that the Service Recipients and the Manager are not partners or joint venturers with or agents of each other, and nothing herein will be construed so as to make them partners, joint venturers or agents or impose any liability for that reason on any of them as a result of this Agreement; provided, however, that nothing herein

 

8



 

will be construed so as to prohibit the Service Recipients and the Manager from embarking upon an investment together as partners, joint venturers or in any other manner whatsoever.

 

ARTICLE 5
MANAGEMENT AND EMPLOYEES

 

5.1                               Management and Employees

 

5.1.1                     The Manager shall arrange, or shall cause another member of the Manager Group to arrange, for such qualified personnel and support staff to be available to carry out the Services. Such personnel and support staff shall devote such of their time to the provision of the Services to the Service Recipients as the relevant member of the Manager Group reasonably deems necessary and appropriate in order to fulfill its obligations hereunder. Such personnel and support staff need not have as their primary responsibility the provision of the Services to the Service Recipients or be dedicated exclusively to the provision of the Services to the Service Recipients.

 

5.1.2                     Each of NYLD, NYLD LLC and NYLD Op shall, and shall cause each of the other Service Recipients to, do all things reasonably necessary on its part as requested by any member of the Manager Group consistent with the terms of this Agreement to enable such member of the Manager Group to fulfill its obligations, covenants and responsibilities hereunder, including making available to such member of the Manager Group, and granting such member of the Manager Group access to, the employees and contractors of the Service Recipients as any member of the Manager Group may from time to time reasonably request.

 

5.1.3                     The Manager agrees, and agrees to cause the Manager Group, to exercise the power and discharge the duties conferred under this Agreement honestly and in good faith, and to exercise the degree of care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. Manager shall be responsible for any member of the Manager Group’s failure to exercise such power and duties in accordance with the standards set forth in this Section 5.1.3.

 

ARTICLE 6
INFORMATION AND RECORDS

 

6.1                               Books and Records

 

The Manager shall, or shall cause any other member of the Manager Group to, as applicable, maintain proper books, records and documents on behalf of each Service Recipient, in which complete, true and correct entries, in conformity in all material respects with GAAP and all requirements of applicable Laws, will be made.

 

6.2                               Examination of Records by the Service Recipients

 

Upon reasonable prior notice by the Service Recipients to the relevant member of the Manager Group, the relevant member of the Manager Group will make available to the Service Recipients and their authorized representatives, for examination during normal business hours on

 

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any Business Day, all books, records and documents required to be maintained under Section 6.1. In addition, the applicable member of the Manager Group will make available to the Service Recipients or their authorized representatives such financial and operating data in respect of the performance of the Services under this Agreement as may be in existence and as the Service Recipients or their authorized representatives will from time to time reasonably request, including for the purposes of conducting any audit in respect of expenses of the Service Recipients or other matters necessary or advisable to be audited in order to conduct an audit of the financial affairs of the Service Recipients. Any examination of records will be conducted in a manner which will not unduly interfere with the conduct of the business of any member of the Manager Group in the ordinary course.

 

6.3                               Access to Information by Manager Group

 

6.3.1                     Each of NYLD, NYLD LLC and NYLD Op shall, and shall cause the other Service Recipients to:

 

6.3.1.1                         grant, or cause to be granted, to the Manager Group full access to all documentation and information reasonably necessary in order for the Manager Group to perform its obligations, covenants and responsibilities pursuant to the terms hereof and to enable the Manager Group to provide the Services; and

 

6.3.1.2                         provide, or cause to be provided, all documentation and information as may be reasonably requested by any member of the Manager Group, and promptly notify the appropriate member of the Manager Group of any material facts or information of which the Service Recipients are aware, including any known, pending or threatened suits, actions, claims, proceedings or orders by or against any member of the YieldCo Group before any Governmental Authority, that may affect the performance of the obligations, covenants or responsibilities of the Manager Group pursuant to this Agreement, including maintenance of proper financial records.

 

6.4                               Additional Information

 

The Parties acknowledge and agree that conducting the activities and providing the Services contemplated herein may have the incidental effect of providing additional information which may be utilized with respect to, or may augment the value of, business interests and related assets in which any of the Service Providers or any of its Affiliates has an interest and that, subject to compliance with this Agreement, none of the Service Providers or any of their respective Affiliates will be liable to account to the Service Recipients with respect to such activities or results; provided, however, that the relevant Service Provider will not (and will cause its Affiliates not to), in making any use of such additional information, do so in any manner that the relevant Service Provider or its Affiliates knows, or ought reasonably to know, would cause or result in a breach of any confidentiality provision of agreements to which any Service Recipient is a party or is bound.

 

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6.5                               Confidential Information

 

Manager shall not, and shall cause the other members of the Management Group not to, without the prior written consent of NYLD, publicly disclose any information it may have or obtain, in Manager’s capacity as a manager under this Agreement, concerning the Service Recipients and their respective assets, business, operations or prospects (the “Confidential Information”); provided, however, that Confidential Information shall not include information that (a) becomes generally available to the public other than as a result of a disclosure by a member of the Manager Group or any of its directors, officers, agents, or other representatives, (b) becomes available to a member of the Manager Group or any of its directors, officers, agents, or other representatives on a nonconfidential basis prior to its disclosure by the Service Recipients or their respective Affiliates, or their respective directors, officers, agents, or other representatives (and is not received in any other capacity of the members of the Manager Group) or (c) is required or requested to be disclosed by a member of the Manager Group as a result of any applicable legal or regulatory requirement or rule or regulation of any stock exchange, or other regulatory authority having jurisdiction over such member of the Manager Group. Notwithstanding the foregoing, the members of the Manager Group may disclose Confidential Information received by them to their employees, consultants, legal counsel, or other agents involved in providing services under this Agreement; provided, that Manager informs each such Person who has access to the Confidential Information of the confidential nature of such Confidential Information, the terms of this Agreement, and that such terms apply to them. If any member of the Manager Group is required to disclose information pursuant to clause (c) or (d) above, such member of the Manager Group will provide the NYLD with prompt written notice so that the NYLD may seek a protective order or other appropriate remedy or waive compliance with the non-disclosure provisions of this Section 6.5 with respect to the information required to be disclosed. If such protective order or other remedy is not obtained, Manager will furnish only that portion of such information that counsel advises is legally required to be furnished and will exercise reasonable efforts, at NYLD’s expense, to obtain reliable assurance that confidential treatment will be accorded such information. Notwithstanding anything contained in this Agreement to the contrary, the obligations of Manager set forth in this Section 6.5 shall survive any termination of this Agreement for a period of 12 months after such termination.

 

ARTICLE 7
FEES AND EXPENSES

 

7.1                               Annual Fee

 

7.1.1                     NYLD LLC, on behalf of the Service Recipients, hereby agrees to pay, during the term of this Agreement, the Annual Fee. The Annual Fee shall be pro-rated and paid quarterly in arrears. For purposes of the initial payment hereunder, the Annual Fee will accrue commencing on the Effective Date and will be pro-rated based on the actual number of days during the first Quarter in which this Agreement is in effect.

 

7.1.2                     The Annual Fee will not be reduced by operation of this Agreement by the amount of (i) any fees for Operational and Other Services that are paid or payable by any member of the YieldCo Group to any member of the Manager Group or (ii) any Transaction Fees.

 

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7.1.3                     Notwithstanding Section 7.1.2, the Annual Fee will be offset against the Annual Fee (as defined in the Corresponding MSA) payable under the Corresponding MSA.

 

7.2                               Computation and Payment of Quarterly Annual Fee

 

7.2.1                     Following the end of each Quarter, Manager shall prepare and deliver to NYLD LLC the accrued quarterly installment of the Annual Fee for such Quarter. NYLD LLC will, subject to any offset as contemplated by Section 7.1.3, pay the quarterly installment of the Annual Fee for each Quarter as soon as practicable following the end of the Quarter with respect to which such payment is due, but in any event no later than 30 days following the end of such Quarter.

 

7.3                               Governmental Charges

 

NYLD LLC, on behalf of the Service Recipients, shall pay or reimburse the relevant member of the Manager Group for all sales taxes, use taxes, value added taxes, withholding taxes or other similar taxes, customs duties or other governmental charges (“Governmental Charges”) that are levied or imposed by any Governmental Authority on such member of the Manager Group by reason of the provision of the Services by such member of the Manager Group in connection with this Agreement or any other agreement contemplated by this Agreement, or the fees or other amounts payable in connection therewith, except for any income taxes, corporation taxes, capital taxes or other similar taxes payable by any member of the Manager Group which are personal to such member of the Manager Group. Any failure by any member of the Manager Group to collect monies on account of these Governmental Charges shall not constitute a waiver of the right to do so. Governmental Charges will be offset against Governmental Charges (as defined in the Corresponding MSA) payable under the Corresponding MSA.

 

7.4                               Computation and Payment of Governmental Charges

 

From time to time the Manager shall, or shall cause the other Service Providers to, prepare statements (each an “Expense Statement”) documenting the Governmental Charges to be reimbursed pursuant to this Article 7 and shall deliver such statements to the relevant Service Recipient. All Governmental Charges reimbursable pursuant to this Article 7 shall, subject to any offset as contemplated by Section 7.3, be reimbursed by NYLD LLC, on behalf of the Service Recipients, no later than the date which is 30 days after receipt of an Expense Statement. The provisions of this Section 7.4 shall survive the termination of this Agreement.

 

ARTICLE 8
REPRESENTATIONS AND WARRANTIES
OF THE MANAGER AND THE SERVICE RECIPIENTS

 

8.1                               Representations and Warranties of the Manager

 

The Manager hereby represents and warrants to the Service Recipients that:

 

8.1.1                     it is validly organized and existing under the laws of the State of Delaware;

 

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8.1.2                     it, or any another Service Provider, as applicable, holds, and shall hold, such Permits as are necessary to perform its obligations hereunder and is not aware of, or shall inform the Service Recipients promptly upon knowledge of, any reason why such Permits might be cancelled;

 

8.1.3                     it has the power, capacity and authority to enter into this Agreement and to perform its obligations hereunder;

 

8.1.4                     it has taken all necessary action to authorize the execution, delivery and performance of this Agreement;

 

8.1.5                     the execution and delivery of this Agreement by it and the performance by it of its obligations hereunder do not and will not contravene, breach or result in any default under its Governing Instruments, or under any mortgage, lease, agreement or other legally binding instrument, Permit or applicable Law to which it is a party or by which it or any of its properties or assets may be bound, except for any such contravention, breach or default which would not have a material adverse effect on the business, assets, financial condition or results of operations of the Manager;

 

8.1.6                     no authorization, consent or approval, or filing with or notice to any Person is required in connection with the execution, delivery or performance by it of this Agreement; and

 

8.1.7                     this Agreement constitutes its valid and legally binding obligation, enforceable against it in accordance with its terms, subject to (i) applicable bankruptcy, insolvency, moratorium, fraudulent conveyance, reorganization and other laws of general application limiting the enforcement of creditors’ rights and remedies generally and (ii) general principles of equity, including standards of materiality, good faith, fair dealing and reasonableness, equitable defenses and limits as to the availability of equitable remedies, whether such principles are considered in a proceeding at law or in equity.

 

8.2                               Representations and Warranties of the Service Recipients

 

NYLD, NYLD LLC and NYLD Op, each hereby represents and warrants, on its behalf and on behalf of each of the other Service Recipients, to the Manager that:

 

8.2.1                     it is validly organized and existing under the Laws governing its formation and organization;

 

8.2.2                     it, or the relevant Service Recipient, holds such Permits necessary to own and operate the projects and entities that it directly or indirectly owns or operates from time to time and is not aware of any reason why such Permits might be cancelled;

 

8.2.3                     it has the power, capacity and authority to enter into this Agreement and to perform its duties and obligations hereunder;

 

8.2.4                     it has taken all necessary action to authorize the execution, delivery and performance of this Agreement;

 

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8.2.5                     the execution and delivery of this Agreement by it and the performance by it of its obligations hereunder do not and will not contravene, breach or result in any default under its Governing Instruments, or under any mortgage, lease, agreement or other legally binding instrument, Permit or applicable Law to which it is a party or by which any of its properties or assets may be bound, except for any such contravention, breach or default which would not have a material adverse effect on the business, assets, financial condition or results of operations of the Service Recipients as a whole;

 

8.2.6                     no authorization, consent or approval, or filing with or notice to any Person is required in connection with the execution, delivery or performance by it of this Agreement; and

 

8.2.7                     this Agreement constitutes its valid and legally binding obligation, enforceable against it in accordance with its terms, subject to: (i) applicable bankruptcy, insolvency, moratorium, fraudulent conveyance, reorganization and other laws of general application limiting the enforcement of creditors’ rights and remedies generally; and (ii) general principles of equity, including standards of materiality, good faith, fair dealing and reasonableness, equitable defenses and limits as to the availability of equitable remedies, whether such principles are considered in a proceeding at law or in equity.

 

ARTICLE 9
LIABILITY AND INDEMNIFICATION

 

9.1                               Indemnity

 

9.1.1                     NYLD, NYLD LLC and NYLD Op hereby jointly and severally agree, to the fullest extent permitted by applicable Laws, to indemnify and hold harmless, and to cause each other Service Recipient to indemnify and hold harmless, each member of the Manager Group, any of its Affiliates (other than any member of the YieldCo Group) and any directors, officers, agents, members, partners, stockholders and employees and other representatives of each of the foregoing (each, a “Manager Indemnified Party”) from and against any claims, liabilities, losses, damages (but expressly excluding any consequential damages that were not reasonably foreseeable and punitive damages, except to the extent awarded in a final judgment in respect of a Third Party Claim), costs or expenses (including legal fees) (“Liabilities”) incurred by them or threatened in connection with any and all actions, suits, investigations, proceedings or claims of any kind whatsoever, whether arising under statute or action of a Governmental Authority or otherwise or in connection with the business, investments and activities of the Service Recipients or in respect of or arising from this Agreement or the Services provided hereunder (“Claims”), including any Claims arising on account of the Governmental Charges contemplated by Section 7.3; provided, that no Manager Indemnified Party shall be so indemnified with respect to any Claim to the extent that such Claim is finally determined by a final and non-appealable judgment entered by a court of competent jurisdiction, or pursuant to a settlement agreement agreed to by such Manager Indemnified Party, to have resulted from such Manager Indemnified Party’s bad faith, fraud, willful misconduct or gross negligence or, in the case of a criminal matter, conduct undertaken with knowledge that the conduct was unlawful.

 

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9.1.2                     If any action, suit, investigation, proceeding or claim is made or brought by any third party with respect to which an Indemnifying Party is obligated to provide indemnification under this Agreement (a “Third Party Claim”), the Manager Indemnified Party will have the right to employ its own counsel in connection therewith, and the reasonable fees and expenses of such counsel, as well as the reasonable costs (excluding an amount reimbursed to such Manager Indemnified Party for the time spent in connection therewith) and out-of-pocket expenses incurred in connection therewith will be paid by the Indemnifying Party in such case, as incurred but subject to recoupment by the Indemnifying Party if ultimately it is not liable to pay indemnification hereunder.

 

9.1.3                     The Manager Indemnified Party and the Indemnifying Party agree that, promptly after the receipt of notice of the commencement of any Third Party Claim, the Manager Indemnified Party will notify the Indemnifying Party in writing of the commencement of such Third Party Claim (provided, that any accidental failure to provide any such notice will not prejudice the right of any such Manager Indemnified Party hereunder) and, throughout the course of such Third Party Claim, such Manager Indemnified Party will use its reasonable best efforts to provide copies of all relevant documentation to such Indemnifying Party, and to keep the Indemnifying Party apprised of the progress thereof, and to discuss with the Indemnifying Party all significant actions proposed.

 

9.1.4                     The Parties expressly acknowledge and agree that the right to indemnity provided in this Section 9.1 shall be in addition to and not in derogation of any other liability which the Indemnifying Party in any particular case may have or of any other right to indemnity or contribution which any Manager Indemnified Party may have by statute or otherwise at law.

 

9.1.5                     The indemnity provided in this Section 9.1 shall survive the completion of Services rendered under, or any termination or purported termination of, this Agreement.

 

9.2                               Limitation of Liability

 

9.2.1                     The Manager assumes no responsibility under this Agreement other than to render the Services in good faith and will not be responsible for any action of a Service Recipient’s Governing Body in following or declining to follow any advice or recommendations of the relevant Service Provider.

 

9.2.2                     The Service Recipients hereby agree that no Manager Indemnified Party will be liable to a Service Recipient, a Service Recipient’s Governing Body (including, for greater certainty, a director or officer of a Service Recipient or another individual with similar function or capacity) or any security holder or partner of a Service Recipient for any Liabilities that may occur as a result of any acts or omissions by the Manager Indemnified Party pursuant to or in accordance with this Agreement, except to the extent that such Liabilities are finally determined by a final and non-appealable judgment entered by a court of competent jurisdiction to have resulted from the Manager Indemnified Party’s bad faith, fraud, willful misconduct or gross negligence, or in the

 

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case of a criminal matter, conduct undertaken with knowledge that the conduct was unlawful.

 

9.2.3                     The maximum amount of the aggregate liability of the Manager Indemnified Parties pursuant to this Agreement will be equal to the amounts previously payable (not taking into account any offset contemplated by Article 7) in respect of Services pursuant to this Agreement in the two most recent calendar years by the Service Recipients pursuant to Article 7.

 

9.2.4                     For the avoidance of doubt, the provisions of this Section 9.2 shall survive the completion of the Services rendered under, or any termination or purported termination of, this Agreement.

 

9.3                               Benefit to all Manager Indemnified Parties

 

9.3.1                     NYLD, NYLD LLC and NYLD Op on behalf of themselves and the other Service Recipients, hereby constitute the Manager as trustee for each of the Manager Indemnified Parties of the covenants of the Service Recipients under this Article 9 with respect to such Manager Indemnified Parties and the Manager hereby accepts such trust and agrees to hold and enforce such covenants on behalf of the Manager Indemnified Parties.

 

9.3.2                     The Manager hereby constitutes the Service Recipients as trustees for each Service Recipient’s Governing Body (including, for greater certainty, a director or officer of a Service Recipient or another individual with similar function or capacity) or any security holder or partner of a Service Recipient, of the covenants of the Manager under this Article 9 with respect to such parties and the Service Recipients hereby accept such trust and agree to hold and enforce such covenants on behalf of such parties.

 

ARTICLE 10
TERM AND TERMINATION

 

10.1                        Term

 

This Agreement shall continue in full force and effect in perpetuity until terminated in accordance with Section 10.2, Section 10.3 or Section 12.1.1.

 

10.2                        Termination by the Service Recipients

 

10.2.1              NYLD, on behalf of the Service Recipients, may, subject to Section 10.2.2, terminate this Agreement effective upon 30 days’ prior written notice of termination to the Manager without payment of any termination fee if:

 

10.2.1.1                  any member of the Manager Group defaults in the performance or observance of any material term, condition or agreement contained in this Agreement in a manner that results in material harm to the Service Recipients and such default continues for a period of 30 days after written notice thereof specifying such default and requesting that the same be remedied in such 30-day period;

 

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10.2.1.2                  any member of the Manager Group engages in fraud, misappropriation of funds or embezzlement against any Service Recipient;

 

10.2.1.3                  any member of the Manager Group is grossly negligent in the performance of its obligations under this Agreement, and such gross negligence results in material harm to the Service Recipients;

 

10.2.1.4                  the Manager, NYLD, NYLD LLC or NYLD Op makes a general assignment for the benefit of its creditors, institutes proceedings to be adjudicated voluntarily bankrupt, consents to the filing of a petition of bankruptcy against it, is adjudicated by a court of competent jurisdiction as being bankrupt or insolvent, seeks reorganization under any bankruptcy law or consents to the filing of a petition seeking such reorganization or has a decree entered against it by a court of competent jurisdiction appointing a receiver liquidator, trustee or assignee in bankruptcy or in insolvency.

 

10.2.2              This Agreement may only be terminated pursuant to Section 10.2.1 above by NYLD with the prior approval of a majority of the members of the Conflicts Committee.

 

10.2.3              This Agreement may also be terminated by NYLD pursuant to Section 12.1.1 with the prior approval of a majority of the members of the Conflicts Committee.

 

10.2.4              Each of NYLD, NYLD LLC and NYLD Op hereby agrees and confirms that this Agreement may not be terminated due solely to the poor performance or underperformance of any of their Subsidiaries or the Business or any investment made by any member of the YieldCo Group on the recommendation of any member of the Manager Group.

 

10.3                        Termination by the Manager

 

10.3.1              The Manager may terminate this Agreement effective upon 180 days’ prior written notice of termination to NYLD without payment of any termination fee if:

 

10.3.1.1                  any Service Recipient defaults in the performance or observance of any material term, condition or agreement contained in this Agreement in a manner that results in material harm to the Manager and such default continues for a period of 30 days after written notice thereof specifying such default and requesting that the same be remedied in such 30-day period; or

 

10.3.1.2                  any Service Recipient makes a general assignment for the benefit of its creditors, institutes proceedings to be adjudicated voluntarily bankrupt, consents to the filing of a petition of bankruptcy against it, is adjudicated by a court of competent jurisdiction as being bankrupt or insolvent, seeks reorganization under any bankruptcy law or consents to the filing of a petition seeking such reorganization or has a decree entered against it by a court of competent jurisdiction appointing a receiver liquidator, trustee or assignee in bankruptcy or in insolvency.

 

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10.4                        Survival Upon Termination

 

If this Agreement is terminated pursuant to this Article 10 or Article 12, such termination will be without any further liability or obligation of any Party, except as provided in Section 1.3, Section 6.4, Section 6.5, Article 9, this Section 10.4, Section 10.6, Article 11, Section 12.3, Section 12.4, Section 12.5, Section 12.6, Section 12.7, Section 12.8, Section 12.9 and Section 12.10.

 

10.5                        Action Upon Termination

 

10.5.1              From and after the effective date of the termination of this Agreement, the Manager shall not be entitled to receive the Annual Fee for further Services under this Agreement, but will be paid all compensation accruing to and including the date of termination (including such day).

 

10.5.2              Upon any termination of this Agreement, the Manager shall promptly:

 

10.5.2.1                  after deducting any accrued compensation and reimbursements to which it is then entitled, pay to the Service Recipients all money collected and held for the account of the Service Recipients pursuant to this Agreement;

 

10.5.2.2                  deliver to the Service Recipients’ Governing Bodies a full accounting, including a statement showing all payments collected by it and a statement of all money held by it, covering the period following the date of the last accounting furnished to the Governing Bodies with respect to the Service Recipients; and

 

10.5.2.3                  deliver to the Service Recipients’ Governing Bodies all property and documents of the Service Recipients then in the custody of the Manager Group.

 

10.6                        Release of Money or other Property Upon Written Request

 

The Manager hereby agrees that any money or other property of the Service Recipients or their Subsidiaries held by the Manager Group under this Agreement shall be held by the relevant member of the Manager Group as custodian for such Person, and the relevant member of the Manager Group’s records shall be appropriately marked clearly to reflect the ownership of such money or other property by such Person. Upon the receipt by the relevant member of the Manager Group of a written request signed by a duly authorized representative of a Service Recipient requesting the relevant member of the Manager Group to release to the Service Recipient any money or other property then held by the relevant member of the Manager Group for the account of such Service Recipient under this Agreement, the relevant member of the Manager Group shall release such money or other property to the Service Recipient promptly, but in no event later than 7 days following such request. The relevant member of the Manager Group shall not be liable to any Service Recipient, a Service Recipient’s Governing Body or any other Person for any acts performed or omissions to act by a Service Recipient in connection with the money or other property released to the Service Recipient in accordance with the second sentence of this Section 10.6. Each Service Recipient shall indemnify and hold harmless the relevant member of the Manager Group, any of its Affiliates (other than any member of the YieldCo Group) and any directors, officers, agents, members, partners, shareholders and

 

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employees and other representatives of each of the foregoing from and against any and all Liabilities which arise in connection with the relevant member of the Manager Group’s release of such money or other property to such Service Recipient in accordance with the terms of this Section 10.6. Indemnification pursuant to this provision shall be in addition to any right of such Persons to indemnification under Section 10.1. For the avoidance of doubt, the provisions of this Section 10.6 shall survive termination of this Agreement. The Service Recipients hereby constitute the Manager as trustee for each Person entitled to indemnification pursuant to this Section 10.6 of the covenants of the Service Recipients under this Section 10.6 with respect to such Persons and the Manager hereby accepts such trust and agrees to hold and enforce such covenants on behalf of such Persons.

 

ARTICLE 11
ARBITRATION

 

11.1                        Dispute

 

Any dispute or disagreement of any kind or nature between the Parties arising out of or in connection with this Agreement (a “Dispute”) shall be resolved in accordance with this Article 11.

 

11.2                        Arbitration

 

11.2.1              Any Dispute shall be submitted to arbitration (the “Arbitration”) by three (3) Arbitrators pursuant to the procedure set forth in this Section 11.2 and pursuant to the then current Commercial Arbitration Rules (the “Rules”) of the American Arbitration Association (“AAA”). If the provisions of this Section 11.2 are inconsistent with the provisions of the Rules and to the extent of such inconsistency, the provisions of this Section 11.2 shall prevail in any Arbitration.

 

11.2.2              Any Party may make a demand for Arbitration by sending a notice in writing to any other Party, setting forth the nature of the Dispute, the amount involved and the name of one arbitrator appointed by such Party. The demand for Arbitration shall be made no later than thirty (30) days after the event giving rise to the Dispute.

 

11.2.3              Within thirty (30) days after any demand for Arbitration under Section 11.2.2, the other Party shall send a responding statement, which shall contain the name of one arbitrator appointed by the responding Party.

 

11.2.4              Within thirty (30) days of the appointment of the second arbitrator, the two party-appointed arbitrators shall appoint the third arbitrator, who shall act as the chair of the arbitration panel. The third arbitrator shall be appointed from the AAA National Roster (collectively with the two party-appointed arbitrators, the “Arbitrators”).

 

11.2.5              In connection with any Arbitration, the Arbitrators shall allow reasonable requests for (i) the production of documents relevant to the dispute and (ii) taking of depositions.

 

11.2.6              The seat of the arbitration will be the State of Delaware and the language of the arbitration will be English. The Arbitration hearings shall be held in a location in the

 

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State of Delaware specified in the demand for Arbitration and shall commence no later than thirty (30) days after the determination of the Arbitrator under Section 11.2.4.

 

11.2.7              The decision of the Arbitrators shall be made not later than sixty (60) days after its appointment. The decision of the Arbitrators shall be final without appeal and binding on the Parties, and may be enforced in any court of competent jurisdiction.

 

11.2.8              Each Party involved in the Dispute shall bear the costs and expenses of all lawyers, consultants, advisors, witnesses and employees retained by it in any Arbitration. The expenses of the Arbitrators shall be paid equally by the Parties unless the Arbitrators otherwise provides in its award.

 

11.2.9              Notwithstanding any conflicting choice of law provisions in this Agreement or any applicable principles of conflicts of law, the arbitration provisions set forth herein, and any Arbitration conducted hereunder, shall be governed exclusively by the Federal Arbitration Act, 9 U.S.C. § 1, et seq.

 

11.2.10       Judgment on the award rendered by the Arbitrators may be entered in any court having jurisdiction thereof.

 

11.3                        Continued Performance

 

During the conduct of Dispute resolution procedures pursuant to this Article 11, the Parties shall continue to perform their respective obligations under this Agreement and neither Party shall exercise any other remedies to resolve a Dispute.

 

11.4                        Urgent Relief

 

Nothing in this Article 11 will prejudice the right of a Party to seek urgent injunctive or declaratory relief from a court pursuant to Section 12.8.2.

 

ARTICLE 12
GENERAL PROVISIONS

 

12.1                        Amendment, Waiver

 

12.1.1              NYLD is entitled to amend the scope of the Services, including by reducing the number of Service Recipients or the nature or description of the Services or otherwise, by providing 90 days’ prior written notice to the Manager; provided, however, that NYLD may not increase the scope of the Services without the Manager’s prior written consent (not to be unreasonably withheld, conditioned or delayed); provided, further, however, that prior to such modification, NYLD and the Manager shall agree in writing to any modification of the Annual Fee resulting from such change in scope. Subject to Section 10.2.3, in the event that NYLD and the Manager are unable to agree on a modified Annual Fee, NYLD may terminate this Agreement after the end of such 90-day period by providing 30 days’ prior written notice to the Manager. Notwithstanding the notice period set forth in this Section 12.1.1, in the event of an assignment pursuant to

 

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Section 12.2.1(ii) below, NYLD may amend the scope of Services as set forth in this Section 12.1.1 by providing 30 days’ prior written notice to the Manager.

 

12.1.2              Except as expressly provided in this Agreement, no amendment or waiver of this Agreement, except pursuant to the first sentence of Section 12.1.1 above, will be binding unless the prior approval of a majority of the members of the Conflicts Committee is obtained and the amendment or waiver is executed in writing by the Party to be bound thereby. No waiver of any provision of this Agreement will constitute a waiver of any other provision nor will any waiver of any provision of this Agreement constitute a continuing waiver unless otherwise expressly provided. A Party’s failure or delay in exercising any right under this Agreement will not operate as a waiver of that right. A single or partial exercise of any right will not preclude a Party from any other or further exercise of that right or the exercise of any other right.

 

12.2                        Assignment

 

12.2.1              This Agreement shall not be assigned by the Manager without the prior written consent of NYLD, except (i) pursuant to Section 2.3, (ii) in the case of assignment to a Person that is the Manager’s successor by merger, consolidation or purchase of assets, in which case the successor shall be bound under this Agreement and by the terms of the assignment in the same manner as the Manager is bound under this Agreement or (iii) to an Affiliate of the Manager or a Person that is, in the reasonable and good faith determination of the Conflicts Committee, an experienced and reputable manager, in which case the Affiliate or assignee shall be bound under this Agreement and by the terms of the assignment in the same manner as the Manager is bound under this Agreement. In addition, provided, that the Manager provides prior written notice to the Service Recipients for informational purposes only, nothing contained in this Agreement shall preclude any pledge, hypothecation or other transfer or assignment of the Manager’ rights under this Agreement, including any amounts payable to the Manager under this Agreement, to a bona fide lender as security.

 

12.2.2              This Agreement shall not be assigned by any of the Service Recipients without the prior written consent of the Manager, except in the case of assignment by any such Service Recipient to a Person that is its successor by merger, consolidation or purchase of assets, in which case the successor shall be bound under this Agreement and by the terms of the assignment in the same manner as such Service Recipient is bound under this Agreement.

 

12.2.3              Any purported assignment of this Agreement in violation of this Article 12 shall be null and void.

 

12.3                        Failure to Pay When Due

 

Any amount payable by any Service Recipient to any member of the Manager Group hereunder which is not remitted when so due will remain due (whether on demand or otherwise) and interest will accrue on such overdue amounts (both before and after judgment) at a rate per annum equal to the Interest Rate.

 

21



 

12.4                        Invalidity of Provisions

 

Each of the provisions contained in this Agreement is distinct and severable and a declaration of invalidity or unenforceability of any such provision or part thereof by a court of competent jurisdiction will not affect the validity or enforceability of any other provision hereof. To the extent permitted by applicable law, the Parties waive any provision of law which renders any provision of this Agreement invalid or unenforceable in any respect. The Parties will engage in good faith negotiations to replace any provision which is declared invalid or unenforceable with a valid and enforceable provision, the economic effect of which comes as close as possible to that of the invalid or unenforceable provision which it replaces.

 

12.5                        Entire Agreement

 

This Agreement constitutes the entire agreement between the Parties pertaining to the subject matter of this Agreement. There are no warranties, conditions, or representations (including any that may be implied by statute) and there are no agreements in connection with such subject matter except as specifically set forth or referred to in this Agreement. No reliance is placed on any warranty, representation, opinion, advice or assertion of fact made either prior to, contemporaneous with, or after entering into this Agreement, by any Party or its directors, officers, employees or agents, to any other Party or its directors, officers, employees or agents, except to the extent that the same has been reduced to writing and included as a term of this Agreement, and none of the Parties has been induced to enter into this Agreement by reason of any such warranty, representation, opinion, advice or assertion of fact. Accordingly, there will be no liability, either in tort or in contract, assessed in relation to any such warranty, representation, opinion, advice or assertion of fact, except to the extent contemplated above.

 

For the avoidance of doubt, nothing in this Agreement should be construed or interpreted as an amendment, modification or termination of, or conflict with, any of the Operating and Administrative Agreements. Each such agreement, and all its terms, including payments to be made thereunder, shall survive the entry into this Agreement and shall terminate in accordance with its terms.

 

12.6                        Mutual Waiver of Jury Trial

 

AS A SPECIFICALLY BARGAINED FOR INDUCEMENT FOR EACH OF THE PARTIES TO ENTER INTO THIS AGREEMENT (AFTER HAVING THE OPPORTUNITY TO CONSULT WITH COUNSEL), EACH PARTY EXPRESSLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY LAWSUIT OR PROCEEDING RELATING TO OR ARISING IN ANY WAY FROM THIS AGREEMENT OR THE MATTERS CONTEMPLATED HEREBY.

 

12.7                        Consent to Jurisdiction

 

EACH OF THE PARTIES IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE DELAWARE COURT OF CHANCERY OR, TO THE EXTENT SUCH COURT DECLINES TO ACCEPT JURISDICTION OVER A PARTICULAR MATTER, ANY FEDERAL COURT OF THE UNITED STATES OF AMERICA LOCATED IN THE STATE OF DELAWARE, FOR THE PURPOSES OF ANY SUIT, ACTION OR OTHER PROCEEDING TO ENFORCE THE ARBITRATION PROVISION IN ARTICLE 11

 

22



 

OR TO SPECIFICALLY ENFORCE THE TERMS OF THIS AGREEMENT PURSUANT TO SECTION 12.8.2. THE DECISION IN ANY ARBITRATION SHALL BE FINAL AND BINDING AND MAY BE ENTERED IN ANY COURT HAVING JURISDICTION THEREOF. IF ANY PARTY FAILS TO APPEAR AT ANY PROPERLY NOTICED ARBITRATION PROCEEDING, AN AWARD MAY BE ENTERED AGAINST THAT PARTY IN A COURT HAVING JURISDICTION THEREOF.

 

12.8                        Governing Law

 

12.8.1              The internal law of the State of Delaware will govern and be used to construe this Agreement without giving effect to applicable principles of conflicts of law to the extent that the application of the laws of another jurisdiction would be required thereby.

 

12.8.2              The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement and the transactions contemplated hereby were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the Parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and the transactions contemplated hereby and to enforce specifically the terms and provisions of this Agreement and the transactions contemplated hereby in the courts of Delaware, this being in addition to any other remedy to which such Party is entitled at law or in equity.

 

12.9                        Enurement

 

This Agreement will enure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns.

 

12.10                 Notices

 

Any notice, demand or other communication to be given under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given (i) when delivered personally to the recipient, (ii) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient; but if not, then on the next Business Day, (iii) one Business Day after it is sent to the recipient by reputable overnight courier service (charges prepaid) or (iv) three Business Days after it is mailed to the recipient by first class mail, return receipt requested. Such notices, demands and other communications shall be sent to the addresses specified below, or at such address or to the attention of such other Person as the recipient party has specified by prior written notice to the sending party. Any Party may change such Party’s address for receipt of notice by giving prior written notice of the change to the sending Party as provided herein. Notices and other communications will be addressed as follows:

 

23



 

If to the Service Recipients:

 

NRG Yield, Inc.
300 Carnegie Center, Suite 300
Princeton, NJ 08540
Attn: Chad Plotkin, Chief Financial Officer
Email:
              chad.plotkin@nrg.com

ogc@nrgyield.com

 

If to the Manager:

 

Zephyr Renewables LLC
100 California Street
Suite 200
Carlsbad, CA 92008
Attn: Alicia Stevenson
Email: Alicia.stevenson@nrg.com

 

With a copy (which shall not constitute notice) to:

 

Zephyr Renewables LLC
5790 Fleet Street
Suite 200
Carlsbad, CA 92008
Attn: General Counsel
Email: Jennifer.hein@nrg.com

 

12.11                 Further Assurances

 

Each of the Parties will promptly do, make, execute or deliver, or cause to be done, made, executed or delivered, all such further acts, documents and things as the other Party may reasonably require from time to time for the purpose of giving effect to this Agreement and will use reasonable efforts and take all such steps as may be reasonably within its power to implement to their full extent the provisions of this Agreement.

 

12.12                 Counterparts

 

This Agreement may be signed in counterparts and each of such counterparts will constitute an original document and such counterparts, taken together, will constitute one and the same instrument.

 

(Signature pages follow)

 

24



 

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first above written.

 

 

NRG YIELD, INC.

 

 

 

 

 

By:

/s/ Chad Plotkin

 

 

Name:

Chad Plotkin

 

 

Title:

Senior Vice President & CFO

 

 

 

 

 

NRG YIELD LLC

 

 

 

 

 

By:

/s/ Chad Plotkin

 

 

Name:

Chad Plotkin

 

 

Title:

Senior Vice President, CFO & Treasurer

 

 

 

 

 

NRG YIELD OPERATING LLC

 

 

 

 

 

By:

/s/ Chad Plotkin

 

 

Name:

Chad Plotkin

 

 

Title:

Senior Vice President, CFO & Treasurer

 

[Signature Page to Master Services Agreement]

 



 

 

ZEPHYR RENEWABLES LLC, as Manager

 

 

 

 

 

By:

/s/ Craig Cornelius

 

 

Name:

Craig Cornelius

 

 

Title:

President

 

[Signature Page to Master Services Agreement]

 


EX-10.2 5 a18-24111_1ex10d2.htm EX-10.2

Exhibit 10.2

 

MASTER SERVICES AGREEMENT

 

by and among

 

ZEPHYR RENEWABLES LLC

 

and

 

NRG YIELD, INC.,

 

NRG YIELD LLC

 

and

 

NRG YIELD OPERATING LLC

 

collectively, as Manager

 

Dated as of August 31, 2018

 



 

TABLE OF CONTENTS

 

ARTICLE 1 INTERPRETATION

1

 

 

 

1.1

Definitions

1

 

1.2

Headings and Table of Contents

5

 

1.3

Interpretation

5

 

1.4

Service Recipients Third Party Beneficiaries

6

 

1.5

Actions by the Manager or the Service Recipients

6

 

 

 

 

ARTICLE 2 APPOINTMENT OF THE MANAGER

7

 

 

 

2.1

Appointment and Acceptance

7

 

2.2

Other Service Recipients

7

 

2.3

Subcontracting and Other Arrangements

7

 

 

 

 

ARTICLE 3 SERVICES AND POWERS OF THE MANAGER

7

 

 

 

3.1

Services

7

 

3.2

Supervision of Manager’s Activities

7

 

3.3

Restrictions on the Manager

7

 

3.4

Errors and Omissions Insurance

8

 

 

 

 

ARTICLE 4 RELATIONSHIP BETWEEN THE MANAGER AND THE SERVICE RECIPIENTS

8

 

 

 

4.1

Other Activities

8

 

4.2

Independent Contractor, No Partnership or Joint Venture

8

 

 

 

 

ARTICLE 5 MANAGEMENT AND EMPLOYEES

9

 

 

 

5.1

Management and Employees

9

 

 

 

 

ARTICLE 6 INFORMATION AND RECORDS

9

 

 

 

6.1

Books and Records

9

 

6.2

Examination of Records by the Service Recipients

9

 

6.3

Access to Information by Manager Group

10

 

6.4

Additional Information

10

 

6.5

Confidential Information

10

 

 

 

 

ARTICLE 7 FEES AND EXPENSES

11

 

 

 

7.1

Annual Fee

11

 

7.2

Computation and Payment of Quarterly Annual Fee

11

 

7.3

Governmental Charges

12

 

7.4

Computation and Payment of Governmental Charges

12

 

 

 

 

ARTICLE 8 REPRESENTATIONS AND WARRANTIES OF THE MANAGER AND THE SERVICE RECIPIENTS

12

 

 

 

8.1

Representations and Warranties of the Manager

12

 

8.2

Representations and Warranties of the Service Recipients

13

 

i



 

ARTICLE 9 LIABILITY AND INDEMNIFICATION

14

 

 

 

 

 

9.1

Indemnity

14

 

9.2

Limitation of Liability

15

 

9.3

Benefit to all Manager Indemnified Parties

16

 

 

 

 

ARTICLE 10 TERM AND TERMINATION

16

 

 

 

10.1

Term

16

 

10.2

Termination by the Service Recipients

16

 

10.3

Termination by the Manager

17

 

10.4

Survival Upon Termination

17

 

10.5

Action Upon Termination

17

 

10.6

Release of Money or other Property Upon Written Request

18

 

 

 

 

ARTICLE 11 ARBITRATION

19

 

 

 

11.1

Dispute

19

 

11.2

Arbitration

19

 

11.3

Continued Performance

20

 

11.4

Urgent Relief

20

 

 

 

 

ARTICLE 12 GENERAL PROVISIONS

20

 

 

 

12.1

Amendment, Waiver

20

 

12.2

Assignment

21

 

12.3

Failure to Pay When Due

21

 

12.4

Invalidity of Provisions

21

 

12.5

Entire Agreement

22

 

12.6

Mutual Waiver of Jury Trial

22

 

12.7

Consent to Jurisdiction

22

 

12.8

Governing Law

22

 

12.9

Enurement

23

 

12.10

Notices

23

 

12.11

Further Assurances

24

 

12.12

Counterparts

24

 

Appendices

Appendix A        Services

 

ii



 

MASTER SERVICES AGREEMENT

 

This MASTER SERVICES AGREEMENT is made as of August 31, 2018 (the “Effective Date”), by and among Zephyr Renewables LLC, a Delaware limited liability company (“Zephyr”), and NRG Yield, Inc., a Delaware corporation (“NYLD”), NRG Yield LLC, a Delaware limited liability company (“NYLD LLC”), and NRG Yield Operating LLC, a Delaware limited liability company (“NYLD Op” and together with NYLD and NYLD LLC, the “Manager”). Each of Zephyr and Manager is referred to herein as a “Party”, and together as the “Parties”.

 

RECITALS

 

A.            Zephyr directly and indirectly, as applicable, holds interests in the Service Recipients (as defined below).

 

B.            Zephyr wishes to engage the Manager to provide or arrange for other Service Providers (as defined below) to provide the services set forth in this Agreement to the Service Recipients, subject to the terms and conditions of this Agreement, and the Manager wishes to accept such engagement.

 

C.            Zephyr and Manager have also entered into a Master Services Agreement, dated as of August 31, 2018 (the “Corresponding MSA”), pursuant to which Zephyr has agreed to provide, or cause to be provided, services to Manager on the terms and conditions set forth therein.

 

NOW THEREFORE in consideration of the mutual representations, warranties, covenants and agreements contained in this Agreement and other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the Parties agree as follows:

 

ARTICLE 1
INTERPRETATION

 

1.1          Definitions

 

In this Agreement, except where the context otherwise requires, the following terms will have the following meanings:

 

AAA” has the meaning assigned thereto in Section 11.2.1.

 

Acquired Assets” means any renewable infrastructure asset acquired after the date hereof by any member of the Zephyr Group.

 

Affiliate” means with respect to any Person, any other Person that, directly or indirectly, through one or more intermediaries, Controls or is Controlled by, or is in common Control with, such Person.

 

Agreement” means this Master Services Agreement, and “herein,” “hereof,” “hereby,”

 

1



 

“hereunder” and similar expressions refer to this Agreement and include every instrument supplemental or ancillary to this Agreement and, except where the context otherwise requires, not to any particular article or section thereof.

 

Annual Fee” means the Management Group’s Cost of providing the Services for any calendar year; provided, that the Annual Fee for the first full calendar year following the Effective Date shall not exceed the amount set forth on Appendix A under the heading of “Effective Date Cost” or “Post-Transition Cost”, as applicable. The Annual Fee may be increased or decreased from time to time by an agreed upon amount resulting from the amendment of the scope of the Services pursuant to Section 12.1.1.

 

Arbitration” has the meaning assigned thereto in Section 11.2.1.

 

Arbitrators” has the meaning assigned thereto in Section 11.2.4.

 

Board of Directors” means the Board of Directors of Zephyr.

 

Business” means the business carried on from time to time by the Zephyr Group.

 

Business Day” means every day except a Saturday or Sunday, or a legal holiday in the City of New York on which banking institutions are authorized or required by law, regulation or executive order to close.

 

Claims” has the meaning assigned thereto in Section 9.1.1.

 

Control” or “control” (including the terms “controlled by” and “under common control with”), with respect to the relationship between or among two or more Persons, means the possession, directly or indirectly, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities, by contract or otherwise.

 

Corresponding MSA” has the meaning assigned thereto in the recitals.

 

Costs” means all costs and expenses incurred by the Manager Group in connection with the provision of the Services. Without limiting the generality of the foregoing, Costs are expected to include, among other things: (a) fees, costs and expenses incurred in connection the calculation and payment of taxes and the preparation and filing of tax returns; (b) fees, costs and expenses in connection with the procurement and allocation of insurance; (c) fees, costs and expenses incurred in connection with acquisition of information technology assets and implementation of information technology systems; and (d) any other fees, costs and expenses incurred by the relevant member of the Manager Group that are reasonably necessary for the performance by the relevant member of the Manager Group of its duties and functions under this Agreement.

 

Dispute” has the meaning assigned thereto in Section 11.1.

 

Effective Date” has the meaning assigned thereto in the preamble.

 

2



 

Expense Statement” has the meaning assigned thereto in Section 7.4.

 

GAAP” means generally accepted accounting principles in the United States used by Zephyr in preparing its financial statements from time to time.

 

Governing Body” means (i) with respect to a corporation, the board of directors of such corporation, (ii) with respect to a limited liability company, the manager(s) or managing member(s) of such limited liability company, (iii) with respect to a limited partnership, the board, committee or other body of the general partner of such partnership that serves a similar function or the general partner itself (or if any such general partner is itself a limited partnership, the board, committee or other body of such general partner’s general partner that serves a similar function or such general partner’s partner) and (iv) with respect to any other Person, the body of such Person that serves a similar function, and in the case of each of (i) through (iv) includes any committee or other subdivision of such body and any Person to whom such body has delegated any power or authority, including any officer and managing director.

 

Governing Instruments” means (i) the certificate of incorporation and bylaws in the case of a corporation, (ii) the articles of formation and operating agreement in the case of a limited liability company (iii) the partnership agreement in the case of a partnership, and (iv) any other similar governing document under which an entity was organized, formed or created and/or operates.

 

Governmental Authority” means any (i) international, national, multinational, federal, state, regional, municipal, local or other government, governmental or public department, central bank, court, tribunal, arbitral body, commission, board, bureau, agency or instrumentality, domestic or foreign, including ISO/RTOs, (ii) self-regulatory organization or stock exchange, (iii) subdivision, agent, commission, board, or authority of any of the foregoing, or (iv) quasi-governmental or private body exercising any regulatory, expropriation or taxing authority under or for the account of any of the foregoing.

 

Governmental Charges” has the meaning assigned thereto in Section 7.3.

 

Indemnifying Party” means a Person against whom a claim for indemnification is asserted pursuant to Article 9.

 

Interest Rate” means, for any day, the rate of interest equal to the (a) overnight U.S. dollar London interbank offered rate on such day, and if such rate is unavailable, (b) the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day by the Federal Reserve Bank of New York.

 

ISO/RTO” means an independent electricity system operator, a regional transmission organization, national system operator or any other similar organization overseeing the transmission of energy in any jurisdiction in which the Zephyr Group owns assets or operates.

 

3



 

Laws” means any and all applicable (i) laws, constitutions, treaties, statutes, codes, ordinances, principles of common law and equity, rules, regulations and municipal bylaws whether domestic, foreign or international, (ii) judicial, arbitral, administrative, ministerial, departmental and regulatory judgments, orders, writs, injunctions, decisions, and awards of any Governmental Authority, and (iii) policies, practices and guidelines of any Governmental Authority which, although not actually having the force of law, are considered by such Governmental Authority as requiring compliance as if having the force of law, and the term “applicable,” with respect to such Laws and in the context that refers to one or more Persons, means such Laws that apply to such Person or Persons or its or their business, undertaking, property or securities at the relevant time and that emanate from a Governmental Authority having jurisdiction over the Person or Persons or its or their business, undertaking, property or securities.

 

Liabilities” has the meaning assigned thereto in Section 9.1.1.

 

Manager Group” means the Manager and its direct and indirect Subsidiaries (other than any member of the Zephyr Group).

 

Manager Indemnified Parties” has the meaning assigned thereto in Section 9.1.1.

 

Manager” has the meaning assigned thereto in the preamble.

 

NYLD” has the meaning assigned thereto in the preamble.

 

NYLD LLC” has the meaning assigned thereto in the preamble.

 

NYLD Op” has the meaning assigned thereto in the preamble.

 

Operating and Administrative Agreements” means the operating and administrative agreements in effect as of the Effective Date between certain members of the Zephyr Group and Affiliates of the Manager for such Zephyr Group members’ operating and administrative needs and, with respect to any Acquired Assets any operating and administrative agreements between any of the Acquired Assets and Affiliates of the Manager for such asset’s operating and administrative needs in effect as of the date of acquisition of the Acquired Asset by a member of the Zephyr Group.

 

Operational and Other Services” means any services provided by any member of the Manager Group to any member of the Zephyr Group, including financial advisory, operations and maintenance, marketing, agency, development, operating management and other services, including services provided under any Operating and Administrative Agreement.

 

Party” has the meaning assigned thereto in the preamble.

 

Permit” means any consent, license, approval, registration, permit or other authorization granted by any Governmental Authority.

 

Person” means any natural person, partnership, limited partnership, limited liability

 

4



 

partnership, joint venture, syndicate, sole proprietorship, company or corporation (with or without share capital), limited liability corporation, unlimited liability company, joint stock company, unincorporated association, trust, trustee, executor, administrator or other legal personal representative, regulatory body or agency, government or Governmental Authority, authority or entity however designated or constituted and pronouns have a similarly extended meaning.

 

Quarter” means a calendar quarter ending on the last day of March, June, September or December.

 

Rules” has the meaning assigned thereto in Section 11.2.1.

 

Service Providers” means the Manager, any member of the Manager Group and any other entity or individual that the Manager has arranged to provide the Services to any Service Recipient.

 

Service Recipient” means Zephyr and their Subsidiaries as of the Effective Date, as well as any other direct and indirect Subsidiary of Zephyr acquired or formed after the date hereof that receives Services from a Service Provider pursuant to this Agreement.

 

Services” has the meaning assigned thereto in Section 3.1.

 

Subsidiary” means, with respect to any Person, (i) any other Person that is directly or indirectly Controlled by such Person, (ii) any trust in which such Person holds all of the beneficial interests or (iii) any partnership, limited liability company or similar entity in which such Person holds all of the interests other than the interests of any general partner, managing member or similar Person.

 

Third Party Claim” has the meaning assigned thereto in Section 9.1.2.

 

Transaction Fees” means fees paid or payable by the Service Recipients, which are on market terms, with respect to financial advisory services ordinarily carried out by investment banks in the context of mergers and acquisitions transactions.

 

Zephyr” has the meaning assigned thereto in the preamble.

 

Zephyr Group” means Zephyr and its direct and indirect Subsidiaries.

 

1.2          Headings and Table of Contents

 

The inclusion of headings and a table of contents in this Agreement are for convenience of reference only and will not affect the construction or interpretation hereof.

 

1.3          Interpretation

 

In this Agreement, unless the context otherwise requires:

 

1.3.1       words importing the singular shall include the plural and vice versa, words

 

5



 

importing gender shall include all genders or the neuter, and words importing the neuter shall include all genders;

 

1.3.2       the words “include”, “includes”, “including”, or any variations thereof, when following any general term or statement, are not to be construed as limiting the general term or statement to the specific items or matters set forth or to similar items or matters, but rather as referring to all other items or matters that could reasonably fall within the broadest possible scope of the general term or statement;

 

1.3.3       references to any Person include such Person’s successors and permitted assigns;

 

1.3.4       any reference to a statute, regulation, policy, rule or instrument shall include, and shall be deemed to be a reference also to, all amendments made to such statute, regulation, policy, rule or instrument and to any statute, regulation, policy, rule or instrument that may be passed which has the effect of supplementing or superseding the statute, regulation, policy, rule or instrument so referred to;

 

1.3.5       any reference to this Agreement or any other agreement, document or instrument shall be construed as a reference to this Agreement or, as the case may be, such other agreement, document or instrument as the same may have been, or may from time to time be, amended, varied, replaced, amended and restated, supplemented or otherwise modified;

 

1.3.6       where a reference in this Agreement is made to a Section or Schedule, such reference shall be to a Section or Schedule to this Agreement unless otherwise indicated;

 

1.3.7       in the event that any day on which any amount is to be determined or any action is required to be taken hereunder is not a Business Day, then such amount shall be determined or such action shall be required to be taken at or before the requisite time on the next succeeding day that is a Business Day; and

 

1.3.8       except where otherwise expressly provided, all amounts in this Agreement are stated and shall be paid in U.S. currency.

 

1.4          Service Recipients Third Party Beneficiaries

 

The Manager agrees that each of the Service Recipients, including any Service Recipient formed or acquired after the Effective Date in accordance with Section 2.2, shall be, and is hereby, named as express third-party beneficiaries of this Agreement entitled to all the benefits conferred under this Agreement.

 

1.5          Actions by the Manager or the Service Recipients

 

Unless the context requires otherwise, where the consent of or a determination is required by the Manager or Service Recipient hereunder, the Parties shall be entitled to conclusively rely upon it having been given or taken, as applicable, if, the Manager or such Service Recipient, as applicable, has communicated the same in writing.

 

6



 

ARTICLE 2
APPOINTMENT OF THE MANAGER

 

2.1          Appointment and Acceptance

 

2.1.1       Subject to and in accordance with the terms, conditions and limitations in this Agreement, Zephyr hereby appoints the Manager to provide or arrange for other Service Providers to provide the Services to the Service Recipients.

 

2.1.2       The Manager hereby accepts the appointment provided for in Section 2.1.1 and agrees to act in such capacity and to provide or arrange for other Service Providers to provide the Services to the Service Recipients upon the terms, conditions and limitations in this Agreement.

 

2.2          Other Service Recipients

 

The Parties acknowledge that any Subsidiary of Zephyr formed or acquired in the future that is not a Service Recipient on the date hereof may become a Service Recipient under this Agreement. In the event that any such addition results in an amendment of the scope of the Services, such amendment shall be effectuated as provided by Section 12.1.1.

 

2.3          Subcontracting and Other Arrangements

 

The Manager may subcontract to any other member of the Manager Group or any of its Affiliates, or arrange for the provision of any or all of the Services to be provided by it under this Agreement by any other member of the Manager Group or any of its Affiliates, and Zephyr hereby consents to any such subcontracting or arrangement; provided that the Manager shall remain responsible to the Service Recipients for any Services provided by such Person. Any such subcontracting will be subject to the terms of this Agreement and covered by the fees payable under this Agreement.

 

ARTICLE 3
SERVICES AND POWERS OF THE MANAGER

 

3.1          Services

 

The Manager will provide, or arrange for the provision by other Service Providers of, and will have the exclusive power and authority to provide or arrange for the provision by other Service Providers of, the services set forth on Appendix A, as such Appendix A may be updated from time to time in accordance with this Agreement (the “Services”), to the Service Recipients.

 

3.2          Supervision of Manager’s Activities

 

The Manager shall, at all times, be subject to the supervision of the relevant Service Recipient’s Governing Body and shall only provide or arrange for the provision of such Services as such Governing Body may request from time to time.

 

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3.3          Restrictions on the Manager

 

3.3.1       The Manager shall, and shall cause any other Service Provider to, refrain from taking any action that is not in compliance with or would violate any Laws or that otherwise would not be permitted by the Governing Instruments of the Service Recipients. If the Manager or any Service Provider is instructed to take any action that is not in such compliance by a Service Recipient’s Governing Body, such person will promptly notify such Governing Body of its judgment that such action would not comply with or violate any such Laws or otherwise would not be permitted by such Governing Instrument.

 

3.3.2       In performing its duties under this Agreement, each member of the Manager Group shall be entitled to rely in good faith on qualified experts, professionals and other agents (including on accountants, appraisers, consultants, legal counsel and other professional advisors) and shall be permitted to rely in good faith upon the direction of a Service Recipient’s Governing Body to evidence any approvals or authorizations that are required under this Agreement. All references in this Agreement to the Service Recipients or Governing Body for the purposes of instructions, approvals and requests to the Manager will refer to the Governing Body.

 

3.4          Errors and Omissions Insurance

 

The Manager shall, and shall cause any other Service Provider to, at all times during the term of this Agreement maintain “errors and omissions” insurance coverage and other insurance coverage which is customarily carried by Persons performing functions that are similar to those performed by the Service Providers under this Agreement with reputable insurance companies and in an amount which is comparable to that which is customarily maintained by such other Persons. In each case, the relevant Service Recipients shall be included as additional insured or loss payees under the relevant policies.

 

ARTICLE 4
RELATIONSHIP BETWEEN THE MANAGER AND THE SERVICE RECIPIENTS

 

4.1          Other Activities

 

No member of the Manager Group (and no Affiliate, director, officer, member, partner, shareholder or employee of any member of the Manager Group) shall be prohibited from engaging in other business activities or sponsoring, or providing services to, third parties that compete directly or indirectly with the Service Recipients.

 

4.2          Independent Contractor, No Partnership or Joint Venture

 

The Parties acknowledge that the Manager is providing or arranging for the provision of the Services hereunder as an independent contractor and that the Service Recipients and the Manager are not partners or joint venturers with or agents of each other, and nothing herein will be construed so as to make them partners, joint venturers or agents or impose any liability for that reason on any of them as a result of this Agreement; provided, however, that nothing herein will be construed so as to prohibit the Service Recipients and the Manager from embarking upon an investment together as partners, joint venturers or in any other manner whatsoever.

 

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ARTICLE 5
MANAGEMENT AND EMPLOYEES

 

5.1          Management and Employees

 

5.1.1       The Manager shall arrange, or shall cause another member of the Manager Group to arrange, for such qualified personnel and support staff to be available to carry out the Services. Such personnel and support staff shall devote such of their time to the provision of the Services to the Service Recipients as the relevant member of the Manager Group reasonably deems necessary and appropriate in order to fulfill its obligations hereunder. Such personnel and support staff need not have as their primary responsibility the provision of the Services to the Service Recipients or be dedicated exclusively to the provision of the Services to the Service Recipients.

 

5.1.2       Zephyr shall, and shall cause each of the other Service Recipients to, do all things reasonably necessary on its part as requested by any member of the Manager Group consistent with the terms of this Agreement to enable such member of the Manager Group to fulfill its obligations, covenants and responsibilities hereunder, including making available to such member of the Manager Group, and granting such member of the Manager Group access to, the employees and contractors of the Service Recipients as any member of the Manager Group may from time to time reasonably request.

 

5.1.3       The Manager agrees, and agrees to cause the Manager Group, to exercise the power and discharge the duties conferred under this Agreement honestly and in good faith, and to exercise the degree of care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. Manager shall be responsible for any member of the Manager Group’s failure to exercise such power and duties in accordance with the standards set forth in this Section 5.1.3.

 

ARTICLE 6
INFORMATION AND RECORDS

 

6.1          Books and Records

 

The Manager shall, or shall cause any other member of the Manager Group to, as applicable, maintain proper books, records and documents on behalf of each Service Recipient, in which complete, true and correct entries, in conformity in all material respects with GAAP and all requirements of applicable Laws, will be made.

 

6.2          Examination of Records by the Service Recipients

 

Upon reasonable prior notice by the Service Recipients to the relevant member of the Manager Group, the relevant member of the Manager Group will make available to the Service Recipients and their authorized representatives, for examination during normal business hours on any Business Day, all books, records and documents required to be maintained under Section 6.1. In addition, the applicable member of the Manager Group will make available to the Service Recipients or their authorized representatives such financial and operating data in respect of the performance of the Services under this Agreement as may be in existence and as the

 

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Service Recipients or their authorized representatives will from time to time reasonably request, including for the purposes of conducting any audit in respect of expenses of the Service Recipients or other matters necessary or advisable to be audited in order to conduct an audit of the financial affairs of the Service Recipients. Any examination of records will be conducted in a manner which will not unduly interfere with the conduct of the business of any member of the Manager Group in the ordinary course.

 

6.3          Access to Information by Manager Group

 

6.3.1       Zephyr shall, and shall cause the other Service Recipients to:

 

6.3.1.1        grant, or cause to be granted, to the Manager Group full access to all documentation and information reasonably necessary in order for the Manager Group to perform its obligations, covenants and responsibilities pursuant to the terms hereof and to enable the Manager Group to provide the Services; and

 

6.3.1.2        provide, or cause to be provided, all documentation and information as may be reasonably requested by any member of the Manager Group, and promptly notify the appropriate member of the Manager Group of any material facts or information of which the Service Recipients are aware, including any known, pending or threatened suits, actions, claims, proceedings or orders by or against any member of the Zephyr Group before any Governmental Authority, that may affect the performance of the obligations, covenants or responsibilities of the Manager Group pursuant to this Agreement, including maintenance of proper financial records.

 

6.4          Additional Information

 

The Parties acknowledge and agree that conducting the activities and providing the Services contemplated herein may have the incidental effect of providing additional information which may be utilized with respect to, or may augment the value of, business interests and related assets in which any of the Service Providers or any of its Affiliates has an interest and that, subject to compliance with this Agreement, none of the Service Providers or any of their respective Affiliates will be liable to account to the Service Recipients with respect to such activities or results; provided, however, that the relevant Service Provider will not (and will cause its Affiliates not to), in making any use of such additional information, do so in any manner that the relevant Service Provider or its Affiliates knows, or ought reasonably to know, would cause or result in a breach of any confidentiality provision of agreements to which any Service Recipient is a party or is bound.

 

6.5          Confidential Information

 

Manager shall not, and shall cause the other members of the Management Group not to, without the prior written consent of Zephyr, publicly disclose any information it may have or obtain, in Manager’s capacity as a manager under this Agreement, concerning the Service Recipients and their respective assets, business, operations or prospects (the “Confidential Information”); provided, however, that Confidential Information shall not include information that (a) becomes generally available to the public other than as a result of a disclosure by a

 

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member of the Manager Group or any of its directors, officers, agents, or other representatives, (b) becomes available to a member of the Manager Group or any of its directors, officers, agents, or other representatives on a nonconfidential basis prior to its disclosure by the Service Recipients or their respective Affiliates, or their respective directors, officers, agents, or other representatives (and is not received in any other capacity of the members of the Manager Group) or (c) is required or requested to be disclosed by a member of the Manager Group as a result of any applicable legal or regulatory requirement or rule or regulation of any stock exchange, or other regulatory authority having jurisdiction over such member of the Manager Group. Notwithstanding the foregoing, the members of the Manager Group may disclose Confidential Information received by them to their employees, consultants, legal counsel, or other agents involved in providing services under this Agreement; provided, that Manager informs each such Person who has access to the Confidential Information of the confidential nature of such Confidential Information, the terms of this Agreement, and that such terms apply to them. If any member of the Manager Group is required to disclose information pursuant to clause (c) or (d) above, such member of the Manager Group will provide the Zephyr with prompt written notice so that the Zephyr may seek a protective order or other appropriate remedy or waive compliance with the non-disclosure provisions of this Section 6.5 with respect to the information required to be disclosed. If such protective order or other remedy is not obtained, Manager will furnish only that portion of such information that counsel advises is legally required to be furnished and will exercise reasonable efforts, at Zephyr’s expense, to obtain reliable assurance that confidential treatment will be accorded such information. Notwithstanding anything contained in this Agreement to the contrary, the obligations of Manager set forth in this Section 6.5 shall survive any termination of this Agreement for a period of 12 months after such termination.

 

ARTICLE 7
FEES AND EXPENSES

 

7.1                               Annual Fee

 

7.1.1                     Zephyr, on behalf of the Service Recipients, hereby agrees to pay, during the term of this Agreement, the Annual Fee. The Annual Fee shall be pro-rated and paid quarterly in arrears. For purposes of the initial payment hereunder, the Annual Fee will accrue commencing on the Effective Date and will be pro-rated based on the actual number of days during the first Quarter in which this Agreement is in effect.

 

7.1.2                     The Annual Fee will not be reduced by operation of this Agreement by the amount of (i) any fees for Operational and Other Services that are paid or payable by any member of the Zephyr Group to any member of the Manager Group or (ii) any Transaction Fees.

 

7.1.3                     Notwithstanding Section 7.1.2, the Annual Fee will be offset against the Annual Fee (as defined in the Corresponding MSA) payable under the Corresponding MSA.

 

7.2                               Computation and Payment of Quarterly Annual Fee

 

7.2.1                     Following the end of each Quarter, Manager shall prepare and deliver to Zephyr the accrued quarterly installment of the Annual Fee for such Quarter. Zephyr will, subject

 

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to any offset as contemplated by Section 7.1.3, pay the quarterly installment of the Annual Fee for each Quarter as soon as practicable following the end of the Quarter with respect to which such payment is due, but in any event no later than 30 days following the end of such Quarter.

 

7.3                               Governmental Charges

 

Zephyr, on behalf of the Service Recipients, shall pay or reimburse the relevant member of the Manager Group for all sales taxes, use taxes, value added taxes, withholding taxes or other similar taxes, customs duties or other governmental charges (“Governmental Charges”) that are levied or imposed by any Governmental Authority on such member of the Manager Group by reason of the provision of the Services by such member of the Manager Group in connection with this Agreement or any other agreement contemplated by this Agreement, or the fees or other amounts payable in connection therewith, except for any income taxes, corporation taxes, capital taxes or other similar taxes payable by any member of the Manager Group which are personal to such member of the Manager Group. Any failure by any member of the Manager Group to collect monies on account of these Governmental Charges shall not constitute a waiver of the right to do so. Governmental Charges will be offset against Governmental Charges (as defined in the Corresponding MSA) payable under the Corresponding MSA.

 

7.4                               Computation and Payment of Governmental Charges

 

From time to time the Manager shall, or shall cause the other Service Providers to, prepare statements (each an “Expense Statement”) documenting the Governmental Charges to be reimbursed pursuant to this Article 7 and shall deliver such statements to the relevant Service Recipient. All Governmental Charges reimbursable pursuant to this Article 7 shall, subject to any offset as contemplated by Section 7.3, be reimbursed by Zephyr, on behalf of the Service Recipients, no later than the date which is 30 days after receipt of an Expense Statement. The provisions of this Section 7.4 shall survive the termination of this Agreement.

 

ARTICLE 8
REPRESENTATIONS AND WARRANTIES
OF THE MANAGER AND THE SERVICE RECIPIENTS

 

8.1                               Representations and Warranties of the Manager

 

The Manager hereby represents and warrants to the Service Recipients that:

 

8.1.1                     it is validly organized and existing under the laws of the State of Delaware;

 

8.1.2                     it, or any another Service Provider, as applicable, holds, and shall hold, such Permits as are necessary to perform its obligations hereunder and is not aware of, or shall inform the Service Recipients promptly upon knowledge of, any reason why such Permits might be cancelled;

 

8.1.3                     it has the power, capacity and authority to enter into this Agreement and to perform its obligations hereunder;

 

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8.1.4                     it has taken all necessary action to authorize the execution, delivery and performance of this Agreement;

 

8.1.5                     the execution and delivery of this Agreement by it and the performance by it of its obligations hereunder do not and will not contravene, breach or result in any default under its Governing Instruments, or under any mortgage, lease, agreement or other legally binding instrument, Permit or applicable Law to which it is a party or by which it or any of its properties or assets may be bound, except for any such contravention, breach or default which would not have a material adverse effect on the business, assets, financial condition or results of operations of the Manager;

 

8.1.6                     no authorization, consent or approval, or filing with or notice to any Person is required in connection with the execution, delivery or performance by it of this Agreement; and

 

8.1.7                     this Agreement constitutes its valid and legally binding obligation, enforceable against it in accordance with its terms, subject to (i) applicable bankruptcy, insolvency, moratorium, fraudulent conveyance, reorganization and other laws of general application limiting the enforcement of creditors’ rights and remedies generally and (ii) general principles of equity, including standards of materiality, good faith, fair dealing and reasonableness, equitable defenses and limits as to the availability of equitable remedies, whether such principles are considered in a proceeding at law or in equity.

 

8.2                               Representations and Warranties of the Service Recipients

 

Zephyr hereby represents and warrants, on its behalf and on behalf of each of the other Service Recipients, to the Manager that:

 

8.2.1                     it is validly organized and existing under the Laws governing its formation and organization;

 

8.2.2                     it, or the relevant Service Recipient, holds such Permits necessary to own and operate the projects and entities that it directly or indirectly owns or operates from time to time and is not aware of any reason why such Permits might be cancelled;

 

8.2.3                     it has the power, capacity and authority to enter into this Agreement and to perform its duties and obligations hereunder;

 

8.2.4                     it has taken all necessary action to authorize the execution, delivery and performance of this Agreement;

 

8.2.5                     the execution and delivery of this Agreement by it and the performance by it of its obligations hereunder do not and will not contravene, breach or result in any default under its Governing Instruments, or under any mortgage, lease, agreement or other legally binding instrument, Permit or applicable Law to which it is a party or by which any of its properties or assets may be bound, except for any such contravention, breach or default which would not have a material adverse effect on the business, assets, financial condition or results of operations of the Service Recipients as a whole;

 

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8.2.6                     no authorization, consent or approval, or filing with or notice to any Person is required in connection with the execution, delivery or performance by it of this Agreement; and

 

8.2.7                     this Agreement constitutes its valid and legally binding obligation, enforceable against it in accordance with its terms, subject to: (i) applicable bankruptcy, insolvency, moratorium, fraudulent conveyance, reorganization and other laws of general application limiting the enforcement of creditors’ rights and remedies generally; and (ii) general principles of equity, including standards of materiality, good faith, fair dealing and reasonableness, equitable defenses and limits as to the availability of equitable remedies, whether such principles are considered in a proceeding at law or in equity.

 

ARTICLE 9
LIABILITY AND INDEMNIFICATION

 

9.1                               Indemnity

 

9.1.1                     Zephyr hereby agrees, to the fullest extent permitted by applicable Laws, to indemnify and hold harmless, and to cause each other Service Recipient to indemnify and hold harmless, each member of the Manager Group, any of its Affiliates (other than any member of the Zephyr Group) and any directors, officers, agents, members, partners, stockholders and employees and other representatives of each of the foregoing (each, a “Manager Indemnified Party”) from and against any claims, liabilities, losses, damages (but expressly excluding any consequential damages that were not reasonably foreseeable and punitive damages, except to the extent awarded in a final judgment in respect of a Third Party Claim), costs or expenses (including legal fees) (“Liabilities”) incurred by them or threatened in connection with any and all actions, suits, investigations, proceedings or claims of any kind whatsoever, whether arising under statute or action of a Governmental Authority or otherwise or in connection with the business, investments and activities of the Service Recipients or in respect of or arising from this Agreement or the Services provided hereunder (“Claims”), including any Claims arising on account of the Governmental Charges contemplated by Section 7.3; provided, that no Manager Indemnified Party shall be so indemnified with respect to any Claim to the extent that such Claim is finally determined by a final and non-appealable judgment entered by a court of competent jurisdiction, or pursuant to a settlement agreement agreed to by such Manager Indemnified Party, to have resulted from such Manager Indemnified Party’s bad faith, fraud, willful misconduct or gross negligence or, in the case of a criminal matter, conduct undertaken with knowledge that the conduct was unlawful.

 

9.1.2                     If any action, suit, investigation, proceeding or claim is made or brought by any third party with respect to which an Indemnifying Party is obligated to provide indemnification under this Agreement (a “Third Party Claim”), the Manager Indemnified Party will have the right to employ its own counsel in connection therewith, and the reasonable fees and expenses of such counsel, as well as the reasonable costs (excluding an amount reimbursed to such Manager Indemnified Party for the time spent in connection therewith) and out-of-pocket expenses incurred in connection therewith

 

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will be paid by the Indemnifying Party in such case, as incurred but subject to recoupment by the Indemnifying Party if ultimately it is not liable to pay indemnification hereunder.

 

9.1.3                     The Manager Indemnified Party and the Indemnifying Party agree that, promptly after the receipt of notice of the commencement of any Third Party Claim, the Manager Indemnified Party will notify the Indemnifying Party in writing of the commencement of such Third Party Claim (provided, that any accidental failure to provide any such notice will not prejudice the right of any such Manager Indemnified Party hereunder) and, throughout the course of such Third Party Claim, such Manager Indemnified Party will use its reasonable best efforts to provide copies of all relevant documentation to such Indemnifying Party, and to keep the Indemnifying Party apprised of the progress thereof, and to discuss with the Indemnifying Party all significant actions proposed.

 

9.1.4                     The Parties expressly acknowledge and agree that the right to indemnity provided in this Section 9.1 shall be in addition to and not in derogation of any other liability which the Indemnifying Party in any particular case may have or of any other right to indemnity or contribution which any Manager Indemnified Party may have by statute or otherwise at law.

 

9.1.5                     The indemnity provided in this Section 9.1 shall survive the completion of Services rendered under, or any termination or purported termination of, this Agreement.

 

9.2                               Limitation of Liability

 

9.2.1                     The Manager assumes no responsibility under this Agreement other than to render the Services in good faith and will not be responsible for any action of a Service Recipient’s Governing Body in following or declining to follow any advice or recommendations of the relevant Service Provider.

 

9.2.2                     The Service Recipients hereby agree that no Manager Indemnified Party will be liable to a Service Recipient, a Service Recipient’s Governing Body (including, for greater certainty, a director or officer of a Service Recipient or another individual with similar function or capacity) or any security holder or partner of a Service Recipient for any Liabilities that may occur as a result of any acts or omissions by the Manager Indemnified Party pursuant to or in accordance with this Agreement, except to the extent that such Liabilities are finally determined by a final and non-appealable judgment entered by a court of competent jurisdiction to have resulted from the Manager Indemnified Party’s bad faith, fraud, willful misconduct or gross negligence, or in the case of a criminal matter, conduct undertaken with knowledge that the conduct was unlawful.

 

9.2.3                     The maximum amount of the aggregate liability of the Manager Indemnified Parties pursuant to this Agreement will be equal to the amounts previously payable (not taking into account any offset contemplated by Article 7) in respect of Services pursuant to this Agreement in the two most recent calendar years by the Service Recipients pursuant to Article 7.

 

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9.2.4                     For the avoidance of doubt, the provisions of this Section 9.2 shall survive the completion of the Services rendered under, or any termination or purported termination of, this Agreement.

 

9.3                               Benefit to all Manager Indemnified Parties

 

9.3.1                     Zephyr on behalf of itself and the other Service Recipients, hereby constitute the Manager as trustee for each of the Manager Indemnified Parties of the covenants of the Service Recipients under this Article 9 with respect to such Manager Indemnified Parties and the Manager hereby accepts such trust and agrees to hold and enforce such covenants on behalf of the Manager Indemnified Parties.

 

9.3.2                     The Manager hereby constitutes the Service Recipients as trustees for each Service Recipient’s Governing Body (including, for greater certainty, a director or officer of a Service Recipient or another individual with similar function or capacity) or any security holder or partner of a Service Recipient, of the covenants of the Manager under this Article 9 with respect to such parties and the Service Recipients hereby accept such trust and agree to hold and enforce such covenants on behalf of such parties.

 

ARTICLE 10
TERM AND TERMINATION

 

10.1                        Term

 

This Agreement shall continue in full force and effect in perpetuity until terminated in accordance with Section 10.2, Section 10.3 or Section 12.1.1.

 

10.2                        Termination by the Service Recipients

 

10.2.1              Zephyr, on behalf of the Service Recipients, may, subject to Section 10.2.2, terminate this Agreement effective upon 30 days’ prior written notice of termination to the Manager without payment of any termination fee if:

 

10.2.1.1                  any member of the Manager Group defaults in the performance or observance of any material term, condition or agreement contained in this Agreement in a manner that results in material harm to the Service Recipients and such default continues for a period of 30 days after written notice thereof specifying such default and requesting that the same be remedied in such 30-day period;

 

10.2.1.2                  any member of the Manager Group engages in fraud, misappropriation of funds or embezzlement against any Service Recipient;

 

10.2.1.3                  any member of the Manager Group is grossly negligent in the performance of its obligations under this Agreement, and such gross negligence results in material harm to the Service Recipients;

 

10.2.1.4                  the Manager or Zephyr makes a general assignment for the benefit of its

 

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creditors, institutes proceedings to be adjudicated voluntarily bankrupt, consents to the filing of a petition of bankruptcy against it, is adjudicated by a court of competent jurisdiction as being bankrupt or insolvent, seeks reorganization under any bankruptcy law or consents to the filing of a petition seeking such reorganization or has a decree entered against it by a court of competent jurisdiction appointing a receiver liquidator, trustee or assignee in bankruptcy or in insolvency.

 

10.2.2              This Agreement may only be terminated pursuant to Section 10.2.1 above by Zephyr with the prior approval of a majority of the members of the Board of Directors.

 

10.2.3              This Agreement may also be terminated by Zephyr pursuant to Section 12.1.1 with the prior approval of a majority of the members of the Board of Directors.

 

10.2.4              Zephyr hereby agrees and confirms that this Agreement may not be terminated due solely to the poor performance or underperformance of any of their Subsidiaries or the Business or any investment made by any member of the Zephyr Group on the recommendation of any member of the Manager Group.

 

10.3                        Termination by the Manager

 

10.3.1              The Manager may terminate this Agreement effective upon 180 days’ prior written notice of termination to Zephyr without payment of any termination fee if:

 

10.3.1.1                  any Service Recipient defaults in the performance or observance of any material term, condition or agreement contained in this Agreement in a manner that results in material harm to the Manager and such default continues for a period of 30 days after written notice thereof specifying such default and requesting that the same be remedied in such 30-day period; or

 

10.3.1.2                  any Service Recipient makes a general assignment for the benefit of its creditors, institutes proceedings to be adjudicated voluntarily bankrupt, consents to the filing of a petition of bankruptcy against it, is adjudicated by a court of competent jurisdiction as being bankrupt or insolvent, seeks reorganization under any bankruptcy law or consents to the filing of a petition seeking such reorganization or has a decree entered against it by a court of competent jurisdiction appointing a receiver liquidator, trustee or assignee in bankruptcy or in insolvency.

 

10.4                        Survival Upon Termination

 

If this Agreement is terminated pursuant to this Article 10 or Article 12, such termination will be without any further liability or obligation of any Party, except as provided in Section 1.3, Section 6.4, Section 6.5, Article 9, this Section 10.4, Section 10.6, Article 11, Section 12.3, Section 12.4, Section 12.5, Section 12.6, Section 12.7, Section 12.8, Section 12.9 and Section 12.10.

 

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10.5                        Action Upon Termination

 

10.5.1              From and after the effective date of the termination of this Agreement, the Manager shall not be entitled to receive the Annual Fee for further Services under this Agreement, but will be paid all compensation accruing to and including the date of termination (including such day).

 

10.5.2              Upon any termination of this Agreement, the Manager shall promptly:

 

10.5.2.1                  after deducting any accrued compensation and reimbursements to which it is then entitled, pay to the Service Recipients all money collected and held for the account of the Service Recipients pursuant to this Agreement;

 

10.5.2.2                  deliver to the Service Recipients’ Governing Bodies a full accounting, including a statement showing all payments collected by it and a statement of all money held by it, covering the period following the date of the last accounting furnished to the Governing Bodies with respect to the Service Recipients; and

 

10.5.2.3                  deliver to the Service Recipients’ Governing Bodies all property and documents of the Service Recipients then in the custody of the Manager Group.

 

10.6                        Release of Money or other Property Upon Written Request

 

The Manager hereby agrees that any money or other property of the Service Recipients or their Subsidiaries held by the Manager Group under this Agreement shall be held by the relevant member of the Manager Group as custodian for such Person, and the relevant member of the Manager Group’s records shall be appropriately marked clearly to reflect the ownership of such money or other property by such Person. Upon the receipt by the relevant member of the Manager Group of a written request signed by a duly authorized representative of a Service Recipient requesting the relevant member of the Manager Group to release to the Service Recipient any money or other property then held by the relevant member of the Manager Group for the account of such Service Recipient under this Agreement, the relevant member of the Manager Group shall release such money or other property to the Service Recipient promptly, but in no event later than 7 days following such request. The relevant member of the Manager Group shall not be liable to any Service Recipient, a Service Recipient’s Governing Body or any other Person for any acts performed or omissions to act by a Service Recipient in connection with the money or other property released to the Service Recipient in accordance with the second sentence of this Section 10.6. Each Service Recipient shall indemnify and hold harmless the relevant member of the Manager Group, any of its Affiliates (other than any member of the Zephyr Group) and any directors, officers, agents, members, partners, shareholders and employees and other representatives of each of the foregoing from and against any and all Liabilities which arise in connection with the relevant member of the Manager Group’s release of such money or other property to such Service Recipient in accordance with the terms of this Section 10.6. Indemnification pursuant to this provision shall be in addition to any right of such Persons to indemnification under Section 10.1. For the avoidance of doubt, the provisions of this Section 10.6 shall survive termination of this Agreement. The Service Recipients hereby constitute the Manager as trustee for each Person entitled to indemnification pursuant to this Section 10.6 of the covenants of the Service Recipients under this Section 10.6 with respect to such Persons and the Manager hereby accepts such trust and agrees to hold and enforce such

 

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covenants on behalf of such Persons.

 

ARTICLE 11
ARBITRATION

 

11.1                        Dispute

 

Any dispute or disagreement of any kind or nature between the Parties arising out of or in connection with this Agreement (a “Dispute”) shall be resolved in accordance with this Article 11.

 

11.2                        Arbitration

 

11.2.1              Any Dispute shall be submitted to arbitration (the “Arbitration”) by three (3) Arbitrators pursuant to the procedure set forth in this Section 11.2 and pursuant to the then current Commercial Arbitration Rules (the “Rules”) of the American Arbitration Association (“AAA”). If the provisions of this Section 11.2 are inconsistent with the provisions of the Rules and to the extent of such inconsistency, the provisions of this Section 11.2 shall prevail in any Arbitration.

 

11.2.2              Any Party may make a demand for Arbitration by sending a notice in writing to any other Party, setting forth the nature of the Dispute, the amount involved and the name of one arbitrator appointed by such Party. The demand for Arbitration shall be made no later than thirty (30) days after the event giving rise to the Dispute.

 

11.2.3              Within thirty (30) days after any demand for Arbitration under Section 11.2.2, the other Party shall send a responding statement, which shall contain the name of one arbitrator appointed by the responding Party.

 

11.2.4              Within thirty (30) days of the appointment of the second arbitrator, the two party-appointed arbitrators shall appoint the third arbitrator, who shall act as the chair of the arbitration panel. The third arbitrator shall be appointed from the AAA National Roster (collectively with the two party-appointed arbitrators, the “Arbitrators”).

 

11.2.5              In connection with any Arbitration, the Arbitrators shall allow reasonable requests for (i) the production of documents relevant to the dispute and (ii) taking of depositions.

 

11.2.6              The seat of the arbitration will be the State of Delaware and the language of the arbitration will be English. The Arbitration hearings shall be held in a location in the State of Delaware specified in the demand for Arbitration and shall commence no later than thirty (30) days after the determination of the Arbitrator under Section 11.2.4.

 

11.2.7              The decision of the Arbitrators shall be made not later than sixty (60) days after its appointment. The decision of the Arbitrators shall be final without appeal and binding on the Parties, and may be enforced in any court of competent jurisdiction.

 

11.2.8              Each Party involved in the Dispute shall bear the costs and expenses of all lawyers, consultants, advisors, witnesses and employees retained by it in any Arbitration. The expenses of the Arbitrators shall be paid equally by the Parties unless the Arbitrators

 

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otherwise provides in its award.

 

11.2.9              Notwithstanding any conflicting choice of law provisions in this Agreement or any applicable principles of conflicts of law, the arbitration provisions set forth herein, and any Arbitration conducted hereunder, shall be governed exclusively by the Federal Arbitration Act, 9 U.S.C. § 1, et seq.

 

11.2.10       Judgment on the award rendered by the Arbitrators may be entered in any court having jurisdiction thereof.

 

11.3                        Continued Performance

 

During the conduct of Dispute resolution procedures pursuant to this Article 11, the Parties shall continue to perform their respective obligations under this Agreement and neither Party shall exercise any other remedies to resolve a Dispute.

 

11.4                        Urgent Relief

 

Nothing in this Article 11 will prejudice the right of a Party to seek urgent injunctive or declaratory relief from a court pursuant to Section 12.8.2.

 

ARTICLE 12
GENERAL PROVISIONS

 

12.1                        Amendment, Waiver

 

12.1.1              Zephyr is entitled to amend the scope of the Services, including by reducing the number of Service Recipients or the nature or description of the Services or otherwise, by providing 90 days’ prior written notice to the Manager; provided, however, that Zephyr may not increase the scope of the Services without the Manager’s prior written consent (not to be unreasonably withheld, conditioned or delayed); provided, further, however, that prior to such modification, Zephyr and the Manager shall agree in writing to any modification of the Annual Fee resulting from such change in scope. Subject to Section 10.2.3, in the event that Zephyr and the Manager are unable to agree on a modified Annual Fee, Zephyr may terminate this Agreement after the end of such 90-day period by providing 30 days’ prior written notice to the Manager. Notwithstanding the notice period set forth in this Section 12.1.1, in the event of an assignment pursuant to Section 12.2.1(ii) below, Zephyr may amend the scope of Services as set forth in this Section 12.1.1 by providing 30 days’ prior written notice to the Manager.

 

12.1.2              Except as expressly provided in this Agreement, no amendment or waiver of this Agreement, except pursuant to the first sentence of Section 12.1.1 above, will be binding unless the prior approval of a majority of the members of the Board of Directors is obtained and the amendment or waiver is executed in writing by the Party to be bound thereby. No waiver of any provision of this Agreement will constitute a waiver of any other provision nor will any waiver of any provision of this Agreement constitute a continuing waiver unless otherwise expressly provided. A Party’s failure or delay in exercising any right under this Agreement will not operate as a waiver of that right. A

 

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single or partial exercise of any right will not preclude a Party from any other or further exercise of that right or the exercise of any other right.

 

12.2                        Assignment

 

12.2.1              This Agreement shall not be assigned by the Manager without the prior written consent of Zephyr, except (i) pursuant to Section 2.3, (ii) in the case of assignment to a Person that is the Manager’s successor by merger, consolidation or purchase of assets, in which case the successor shall be bound under this Agreement and by the terms of the assignment in the same manner as the Manager is bound under this Agreement or (iii) to an Affiliate of the Manager or a Person that is, in the reasonable and good faith determination of the Board of Directors, an experienced and reputable manager, in which case the Affiliate or assignee shall be bound under this Agreement and by the terms of the assignment in the same manner as the Manager is bound under this Agreement. In addition, provided, that the Manager provides prior written notice to the Service Recipients for informational purposes only, nothing contained in this Agreement shall preclude any pledge, hypothecation or other transfer or assignment of the Manager’ rights under this Agreement, including any amounts payable to the Manager under this Agreement, to a bona fide lender as security.

 

12.2.2              This Agreement shall not be assigned by any of the Service Recipients without the prior written consent of the Manager, except in the case of assignment by any such Service Recipient to a Person that is its successor by merger, consolidation or purchase of assets, in which case the successor shall be bound under this Agreement and by the terms of the assignment in the same manner as such Service Recipient is bound under this Agreement.

 

12.2.3              Any purported assignment of this Agreement in violation of this Article 12 shall be null and void.

 

12.3                        Failure to Pay When Due

 

Any amount payable by any Service Recipient to any member of the Manager Group hereunder which is not remitted when so due will remain due (whether on demand or otherwise) and interest will accrue on such overdue amounts (both before and after judgment) at a rate per annum equal to the Interest Rate.

 

12.4                        Invalidity of Provisions

 

Each of the provisions contained in this Agreement is distinct and severable and a declaration of invalidity or unenforceability of any such provision or part thereof by a court of competent jurisdiction will not affect the validity or enforceability of any other provision hereof. To the extent permitted by applicable law, the Parties waive any provision of law which renders any provision of this Agreement invalid or unenforceable in any respect. The Parties will engage in good faith negotiations to replace any provision which is declared invalid or unenforceable with a valid and enforceable provision, the economic effect of which comes as close as possible to that of the invalid or unenforceable provision which it replaces.

 

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12.5                        Entire Agreement

 

This Agreement constitutes the entire agreement between the Parties pertaining to the subject matter of this Agreement. There are no warranties, conditions, or representations (including any that may be implied by statute) and there are no agreements in connection with such subject matter except as specifically set forth or referred to in this Agreement. No reliance is placed on any warranty, representation, opinion, advice or assertion of fact made either prior to, contemporaneous with, or after entering into this Agreement, by any Party or its directors, officers, employees or agents, to any other Party or its directors, officers, employees or agents, except to the extent that the same has been reduced to writing and included as a term of this Agreement, and none of the Parties has been induced to enter into this Agreement by reason of any such warranty, representation, opinion, advice or assertion of fact. Accordingly, there will be no liability, either in tort or in contract, assessed in relation to any such warranty, representation, opinion, advice or assertion of fact, except to the extent contemplated above.

 

For the avoidance of doubt, nothing in this Agreement should be construed or interpreted as an amendment, modification or termination of, or conflict with, any of the Operating and Administrative Agreements. Each such agreement, and all its terms, including payments to be made thereunder, shall survive the entry into this Agreement and shall terminate in accordance with its terms.

 

12.6                        Mutual Waiver of Jury Trial

 

AS A SPECIFICALLY BARGAINED FOR INDUCEMENT FOR EACH OF THE PARTIES TO ENTER INTO THIS AGREEMENT (AFTER HAVING THE OPPORTUNITY TO CONSULT WITH COUNSEL), EACH PARTY EXPRESSLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY LAWSUIT OR PROCEEDING RELATING TO OR ARISING IN ANY WAY FROM THIS AGREEMENT OR THE MATTERS CONTEMPLATED HEREBY.

 

12.7                        Consent to Jurisdiction

 

EACH OF THE PARTIES IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE DELAWARE COURT OF CHANCERY OR, TO THE EXTENT SUCH COURT DECLINES TO ACCEPT JURISDICTION OVER A PARTICULAR MATTER, ANY FEDERAL COURT OF THE UNITED STATES OF AMERICA LOCATED IN THE STATE OF DELAWARE, FOR THE PURPOSES OF ANY SUIT, ACTION OR OTHER PROCEEDING TO ENFORCE THE ARBITRATION PROVISION IN ARTICLE 11 OR TO SPECIFICALLY ENFORCE THE TERMS OF THIS AGREEMENT PURSUANT TO SECTION 12.8.2. THE DECISION IN ANY ARBITRATION SHALL BE FINAL AND BINDING AND MAY BE ENTERED IN ANY COURT HAVING JURISDICTION THEREOF. IF ANY PARTY FAILS TO APPEAR AT ANY PROPERLY NOTICED ARBITRATION PROCEEDING, AN AWARD MAY BE ENTERED AGAINST THAT PARTY IN A COURT HAVING JURISDICTION THEREOF.

 

12.8                        Governing Law

 

12.8.1              The internal law of the State of Delaware will govern and be used to construe this Agreement without giving effect to applicable principles of conflicts of law to the extent

 

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that the application of the laws of another jurisdiction would be required thereby.

 

12.8.2              The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement and the transactions contemplated hereby were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the Parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and the transactions contemplated hereby and to enforce specifically the terms and provisions of this Agreement and the transactions contemplated hereby in the courts of Delaware, this being in addition to any other remedy to which such Party is entitled at law or in equity.

 

12.9                        Enurement

 

This Agreement will enure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns.

 

12.10                 Notices

 

Any notice, demand or other communication to be given under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given (i) when delivered personally to the recipient, (ii) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient; but if not, then on the next Business Day, (iii) one Business Day after it is sent to the recipient by reputable overnight courier service (charges prepaid) or (iv) three Business Days after it is mailed to the recipient by first class mail, return receipt requested. Such notices, demands and other communications shall be sent to the addresses specified below, or at such address or to the attention of such other Person as the recipient party has specified by prior written notice to the sending party. Any Party may change such Party’s address for receipt of notice by giving prior written notice of the change to the sending Party as provided herein. Notices and other communications will be addressed as follows:

 

If to the Service Recipients:

 

Zephyr Renewables LLC
100 California Street
Suite 200
Carlsbad, CA 92008
Attn: Alicia Stevenson
Email: Alicia.stevenson@nrg.com

 

With a copy (which shall not constitute notice) to:

 

Zephyr Renewables LLC
5790 Fleet Street
Suite 200
Carlsbad, CA 92008
Attn: General Counsel
Email: Jennifer.hein@nrg.com

 

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If to the Manager:

 

NRG Yield, Inc.
300 Carnegie Center, Suite 300
Princeton, NJ 08540
Attn: Chad Plotkin, Chief Financial Officer
Email:
            chad.plotkin@nrg.com

ogc@nrgyield.com

 

12.11                 Further Assurances

 

Each of the Parties will promptly do, make, execute or deliver, or cause to be done, made, executed or delivered, all such further acts, documents and things as the other Party may reasonably require from time to time for the purpose of giving effect to this Agreement and will use reasonable efforts and take all such steps as may be reasonably within its power to implement to their full extent the provisions of this Agreement.

 

12.12                 Counterparts

 

This Agreement may be signed in counterparts and each of such counterparts will constitute an original document and such counterparts, taken together, will constitute one and the same instrument.

 

(Signature pages follow)

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first above written.

 

 

ZEPHYR RENEWABLES LLC

 

 

 

By:

/s/ Craig Cornelius

 

 

Name:

Craig Cornelius

 

 

Title:

President

 

[Signature Page to Master Services Agreement]

 



 

 

NRG YIELD, INC., as Manager

 

 

 

By:

/s/ Chad Plotkin

 

 

Name:

Chad Plotkin

 

 

Title:

Senior Vice President & CFO

 

 

NRG YIELD LLC, as Manager

 

 

 

By:

/s/ Chad Plotkin

 

 

Name:

Chad Plotkin

 

 

Title:

Senior Vice President, CFO & Treasurer

 

 

NRG YIELD OPERATING LLC, as Manager

 

 

 

By:

/s/ Chad Plotkin

 

 

Name:

Chad Plotkin

 

 

Title:

Senior Vice President, CFO & Treasurer

 

[Signature Page to Master Services Agreement]

 


EX-10.3 6 a18-24111_1ex10d3.htm EX-10.3

Exhibit 10.3

 

Execution Version

 

RIGHT OF FIRST OFFER AGREEMENT

 

THIS RIGHT OF FIRST OFFER AGREEMENT (this “Agreement”) is made and entered into as of August 31, 2018 (the “Effective Date”), by and between ZEPHYR RENEWABLES LLC, a Delaware limited liability company (“Zephyr”), and NRG YIELD, INC., a Delaware corporation (“Yield”), and solely for purposes of Section 2.4, GIP III Zephyr Acquisition Partners, L.P., a Delaware limited partnership (“Zephyr Parent”). Zephyr and Yield are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”

 

RECITALS

 

WHEREAS, Yield expects to increase its cash available for distribution and dividend per share by acquiring additional assets, including assets acquired from Zephyr; and

 

WHEREAS, Zephyr desires to grant Yield an exclusive right of first offer to acquire certain assets owned by Zephyr and its Subsidiaries (as hereinafter defined) on the terms and conditions set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the mutual covenants set forth in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Zephyr and Yield hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.1                                    Definitions. In addition to the terms defined above in the introduction and Recitals to this Agreement, the following terms when used in this Agreement shall have the meanings set forth in this Section 1.1.

 

Affiliate” means, with respect to the Person in question, any other Person that, directly or indirectly, Controls, is Controlled by or is under common Control with, such Person.

 

Applicable Law” means all statutes, laws, common law, rules, regulations, ordinances, codes or other legal requirements of any Governmental Authority or quasi-governmental agencies or entities, and any judgment, injunction, order, directive, decree or other judicial or regulatory requirement of any court or Governmental Authority of competent jurisdiction affecting or relating to the Person or property in question.

 

Business Day” means any day other than Saturday, Sunday or any federal legal holiday.

 

Carlsbad” consists of 100% of the membership interest in Carlsbad Energy Holdings LLC.

 

Carlsbad Accrual Adjustment” means the amount equal to (a) the Final Purchase Price (as defined in the Carlsbad Drop Down PSA), multiplied by (b) the Adjusted Trading CAFD Yield (as defined in the Carlsbad Drop Down PSA) as was used to determine the Final Purchase Price under the Carlsbad Drop Down PSA, multiplied by (c) the number of days between the

 

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Closing Date under the Carlsbad Drop Down PSA and the closing of the purchase of Carlsbad under the Carlsbad Purchase Option, divided by (d) 365.

 

Carlsbad Drop Down PSA” means that certain Purchase and Sale Agreement, dated as of February 6, 2018, by and between NRG Gas Development Company, LLC, as Seller and NRG Yield Operating LLC, as Purchaser.

 

Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of the Person in question, whether by the ownership of voting securities, contract or otherwise.

 

Governmental Authority” means any federal, state or local government or political subdivision thereof, including any agency or entity exercising executive, legislative, judicial, regulatory or administrative governmental powers or functions, in each case to the extent the same has jurisdiction over the Person or property in question.

 

Kawailoa” consists of 100% of the membership interests in Kawailoa Renewables, LLC, which in turn owns 100% of the membership interests in Kawailoa Solar Portfolio, LLC, which in turn owns 100% of the membership interests in Kawailoa Solar Holdings, LLC which in turn owns 100% of the membership interests in Kawailoa Solar, LLC.

 

Langford” consists of 100% of the membership interest in Langford Wind Power, LLC.

 

Losses” means, with respect to the Person in question, any actual liabilities, damages (but expressly excluding any consequential damages that were not reasonably foreseeable and punitive damages), losses, costs or expenses, including reasonable attorneys’ fees and expenses and court costs, incurred by such Person, as a result of the act, omission or occurrence in question.

 

Mesquite Star” consists of 100% of the membership interests in Mesquite Star Special, LLC.

 

Negotiation Period” has the meaning set forth in Section 2.2.

 

Notice” has the meaning set forth in Section 5.1.

 

NYLD Op” means NRG Yield Operating LLC, a Delaware limited liability company.

 

Oahu” consists of 100% of the membership interests in Oahu Renewables, LLC, which in turn owns 100% of the membership interests in NRG Oahu Solar Holdings LLC, which in turn owns 100% of the membership interests in NRG Oahu Solar LLC, which in turn owns 100% of the membership interest in (i) Lanikuhana Solar, LLC and (ii) Waipio PV, LLC.

 

Permitted Back-Leverage Financing” means in respect of any Zephyr ROFO Asset, a debt financing structure pursuant to which Zephyr causes an entity that is a part of such Zephyr ROFO Asset to monetize its investment and cash flow in a project owned by the Zephyr ROFO Asset.

 

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Permitted Tax Equity Financing” means a tax equity financing entered into in connection with the acquisition, financing or refinancing by any Zephyr ROFO Asset (or any Subsidiary thereof) of any energy generating, transmission or distribution assets (or any assets related thereto).

 

Person” means any natural person, corporation, general or limited partnership, limited liability company, association, joint venture, trust, estate, Governmental Authority or other legal entity, in each case whether in its own or a representative capacity.

 

Required Securities Disclosure” has the meaning set forth in Section 4.1.

 

ROFO Termination Date” has the meaning set forth in Section 2.3.

 

Solar Portfolio” means one or more distributed generation portfolios developed or owned by Zephyr or its Subsidiaries after the Effective Date.

 

Subsidiary” means, with respect to any Person, any corporation, limited liability company, general partnership or limited partnership Controlled by such Person.

 

Term” has the meaning set forth in Section 3.1.

 

Third Party” means any Person other than a Party or an Affiliate of a Party.

 

Transaction Notice” has the meaning set forth in Section 2.2.

 

Transfer” means, other than in connection with any granting of liens permitted under any indebtedness of any Zephyr ROFO Asset or any disposition of assets resulting from the enforcement of such liens, any Permitted Tax Equity Financing or any Permitted Back-Leverage Financing, in each case, in respect of any Zephyr ROFO Asset, any assignment, sale, offer to sell, pledge, mortgage, hypothecation, encumbrance, disposition of or any other like transfer or encumbering (whether with or without consideration, directly or indirectly, voluntarily or involuntarily or by operation of law or otherwise); provided, that this definition shall not include any (i) merger with or into, or sale of all or substantially all of Zephyr’s assets to, an unaffiliated third-party or (ii) internal restructuring involving any Zephyr ROFO Assets, so long as the terms of any such restructuring will not limit, delay or hinder the ability of Yield or any of its Subsidiaries to acquire such Zephyr ROFO Assets from Zephyr in accordance with the terms of this Agreement when Zephyr elects to sell, transfer or otherwise dispose of such Zephyr ROFO Assets.

 

Zephyr Confidential Information” has the meaning set forth in Section 4.1.

 

Zephyr Indemnitees” means Zephyr and its Affiliates, and each of their respective shareholders, members, partners, trustees, beneficiaries, directors, officers, employees, attorneys, accountants, consultants and agents, and the successors, assigns, legal representatives, heirs, devisees and donees of each of the foregoing.

 

Zephyr ROFO Assets” has the meaning set forth in Section 2.1.

 

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ARTICLE II

 

RIGHT OF FIRST OFFER ON ZEPHYR ROFO ASSETS

 

Section 2.1                                    Zephyr ROFO Assets. During the Term, Zephyr hereby grants to Yield and its Subsidiaries a right of first offer on any proposed Transfer of each of Kawailoa, Oahu, Langford, Mesquite Star, Carlsbad (but only if Zephyr or one of its Subsidiaries has acquired Carlsbad following the assignment of NYLD Op’s rights and obligations under the Carlsbad Drop Down PSA pursuant to Section 6.04 of the Carlsbad Drop Down PSA) and the Solar Portfolio (the “Zephyr ROFO Assets”). In connection with the right of first offer on any proposed Transfer of the Solar Portfolio, Zephyr hereby grants Yield the right to make an equity investment of up to $190,000,000 in the Solar Portfolio.

 

Section 2.2                                    Notice of Transaction Related to Zephyr ROFO Assets and Negotiation of Definitive Terms for Transaction. Zephyr must deliver a written notice to Yield no later than forty-five (45) days prior to engaging in any negotiation regarding any proposed Transfer of any Zephyr ROFO Asset (or any portion thereof), setting forth in reasonable detail the material terms and conditions of the proposed transaction (such offer notice, a “Transaction Notice”). If Zephyr delivers a Transaction Notice to Yield, then Zephyr and Yield shall enter non-binding discussions and negotiate in good faith to attempt to agree on definitive terms that are acceptable to both Parties, in their sole and absolute discretion, for the Transfer of the applicable Zephyr ROFO Asset to Yield or any of its Subsidiaries. If, within thirty (30) calendar days after the delivery of such Transaction Notice (the “Negotiation Period”), the Parties have not agreed to definitive terms for the Transfer of such Zephyr ROFO Asset to Yield, Zephyr will be able, within the next one hundred eighty (180) calendar days, to Transfer such Zephyr ROFO Asset to a Third Party (or enter into a definitive agreement to undertake such transaction with a Third Party) in accordance with the terms of Section 2.3.

 

Section 2.3                                    Negotiations with Third Parties. Neither Zephyr nor any of its representatives, agents or Subsidiaries shall solicit offers from, or negotiate or enter into any agreement with, any Third Party for the Transfer of any Zephyr ROFO Asset (or any portion thereof) until the expiration of the Negotiation Period related to such Zephyr ROFO Asset and the proposed Transfer (the “ROFO Termination Date”). Yield agrees and acknowledges that for a period of one hundred eighty (180) calendar days from and after the ROFO Termination Date for any Zephyr ROFO Asset and the applicable proposed Transfer: (a) Zephyr shall have the absolute right to solicit offers from, negotiate with, and enter into agreements with, any Third Party to Transfer such Zephyr ROFO Asset, on terms generally no less favorable to Zephyr than those offered to Yield pursuant to the Transaction Notice, and (b) Zephyr shall have no further obligation to negotiate with Yield regarding, or offer Yield the opportunity to acquire any interest in, such Zephyr ROFO Asset; provided, that the final terms of the Transfer of any Zephyr ROFO Asset to any Third Party be on terms generally no less favorable to Zephyr than those offered to Yield pursuant to the Transaction Notice; provided, further, that if after such one hundred eighty (180) calendar day period Zephyr has not Transferred such Zephyr ROFO Asset to a Third Party, such Zephyr ROFO Asset shall again be subject to this Agreement.

 

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Section 2.4                                    Carlsbad Purchase Option.

 

(a)                                 If Zephyr Parent or one of its Subsidiaries (other than Yield or one of its Subsidiaries) acquires Carlsbad pursuant to the Carlsbad Drop Down PSA following the assignment of NYLD Op’s rights and obligations under the Carlsbad Drop Down PSA pursuant to Section 6.04 of the Carlsbad Drop Down PSA, then for a period of eighteen (18) months following the Closing Date (as defined in the Carlsbad Drop Down PSA), Yield shall have the right to purchase Carlsbad from Zephyr Parent or its applicable Subsidiary (other than Yield and its Subsidiaries), and Zephyr Parent or its applicable Subsidiary (other than Yield and its Subsidiaries) shall be required to sell Carlsbad to Yield (the “Carlsbad Purchase Option”). The purchase price payable by Yield to purchase Carlsbad upon exercising its purchase right shall be equal to (a) the Final Purchase Price (as defined in the Carlsbad Drop Down PSA) plus (b) the Carlsbad Accrual Adjustment,  less (c) the amount of distributions received by Zephyr Parent or its applicable Subsidiary (other than Yield and its Subsidiaries) from Carlsbad following the Closing Date under the Carlsbad Drop Down PSA. If upon the closing of the purchase of Carlsbad by Yield pursuant to the Carlsbad Purchase Option, all parts of the Final Purchase Price under the Carlsbad Drop Down PSA have not been finally determined, the portion of the purchase price payable at the closing of the purchase of Carlsbad pursuant to the Carlsbad Purchase Option under clause (a) above shall instead be equal to the amount paid by Zephyr Parent or its applicable Subsidiary (other than Yield and its Subsidiaries) on the Closing Date under the Carlsbad Drop Down PSA pursuant to Section 2.03(b)(i) of the Carlsbad Drop Down PSA, and the purchase agreement for the Carlsbad Purchase Option shall include a purchase price adjustment to place the parties in the same economic position as they would have been in had the Final Purchase Price under the Carlsbad Drop Down PSA been known at the closing of the purchase of Carlsbad pursuant to the Carlsbad Purchase Option. The purchase agreement for the Carlsbad Purchase Option shall otherwise be substantially consistent with the Carlsbad Drop Down PSA with such modifications thereto as shall be reasonably agreed by Zephyr Parent and Yield.

 

(b)                                 If Yield does not exercise the Carlsbad Purchase Option during the eighteen (18)-month period following the Closing Date, the Carlsbad Purchase Option shall expire, but Carlsbad shall continue to constitute a Zephyr ROFO Asset.

 

ARTICLE III

 

TERM; TERMINATION RIGHTS

 

Section 3.1                                    Term. Unless earlier terminated in accordance with this Article III, the term of this Agreement (the “Term”) shall commence on the Effective Date and shall continue in effect until the fifth (5th) anniversary of the Effective Date, at which time this Agreement shall terminate and the Parties shall have no further rights or obligations under this Agreement, except those that expressly survive the termination of this Agreement.

 

Section 3.2                                    Termination Rights. This Agreement may be terminated at any time (a) by mutual written consent of Zephyr and Yield or (b) by Zephyr or Yield, as the case may be, with written notice to the other Party, if the other Party materially breaches or defaults in the performance of its obligations under this Agreement or under any transaction agreement entered into by the Parties in connection with any Zephyr ROFO Assets, and such breach or default is continuing for thirty (30) days after such breaching Party has been given a written notice

 

5



 

specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder. Upon any such termination the Parties shall have no further rights or obligations under this Agreement, except those that expressly survive the termination of this Agreement.

 

ARTICLE IV

 

CONFIDENTIALITY

 

Section 4.1                                    Zephyr Confidential Information. Yield shall keep confidential and not make any public announcement or disclose to any Person any terms of any documents, materials, data or other information with respect to any Zephyr ROFO Asset which is not generally known to the public (the “Zephyr Confidential Information”); provided, however, that Zephyr Confidential Information shall not include (a) the terms and conditions of this Agreement or (b) information that becomes available to Yield on a non-confidential basis from a source other than the Zephyr, its Affiliates or their directors, officers or employees; provided, that, to Yield’s knowledge, such source was not prohibited from disclosing such information to Yield by any legal, contractual or fiduciary duty. Notwithstanding the foregoing, Yield shall be permitted to (A) disclose any Zephyr Confidential Information to the extent required by court order or under Applicable Law, (B) make a public announcement regarding such matters (1) as agreed to in writing by Zephyr or (2) as required by the provisions of any securities laws or the requirements of any exchange on which Yield securities may be listed (a “Required Securities Disclosure”), or (C) disclose any Zephyr Confidential Information to any Person on a “need-to-know” basis, such as its shareholders, partners, members, trustees, beneficiaries, directors, officers, employees, attorneys, consultants, lenders or other advisors; provided, however, that, other than in connection with a Required Securities Disclosure, Yield shall (x) advise such Person of the confidential nature of such Zephyr Confidential Information, and (y) cause such Person to be bound by obligations of confidentiality pursuant to the terms hereof that are no less stringent than the obligations set forth herein. Yield shall indemnify and hold harmless the Zephyr Indemnitees for any Losses incurred by any of the Zephyr Indemnitees for a breach or default of Yield’s obligations under this Section 4.1. This Section 4.1 shall survive the termination of this Agreement. If Yield purchases any Zephyr ROFO Asset pursuant to the terms of this Agreement, the confidentiality obligations of Yield with respect to such Zephyr ROFO Asset shall terminate upon the consummation of such purchase.

 

ARTICLE V

 

MISCELLANEOUS PROVISIONS

 

Section 5.1                                    Notices.

 

(a)                                 Method of Delivery. All notices, requests, demands and other communications (each, a “Notice”) required to be provided to the other Party pursuant to this Agreement shall be in writing and shall be delivered (i) in person, (ii) by certified U.S. mail, with postage prepaid and return receipt requested, (iii) by overnight courier service, (iv) by facsimile transmittal or (v) by email (which requires an acknowledgement by the recipient, it being understood that the recipient shall be obligated to confirm receipt if requested); provided, that in

 

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the case of clauses (iv) and (v), a verification copy is sent on the same day by any of the methods set forth in clauses (i), (ii) and (iii), to the other Party to this Agreement at the following address, facsimile number or email address (or to such other address, facsimile number or email address as Zephyr or Yield may designate from time to time pursuant to this Section 5.1):

 

If to Zephyr:

 

Zephyr Renewables LLC
100 California Street
Suite 200
Carlsbad, CA 92008
Attn: Alicia Stevenson
Email: Alicia.stevenson@nrg.com

 

With a copy (which shall not constitute notice) to:

 

Zephyr Renewables LLC
5790 Fleet Street
Suite 200
Carlsbad, CA 92008
Attn: General Counsel
Email: Jennifer.hein@nrg.com

 

If to Zephyr Parent:

 

c/o Global Infrastructure Management, LLC
1345 Avenue of the Americas, 30th Floor
New York, New York 10105
Attention: Jonathan Bram
Fax: +1 646 282 1500
Email: jonathan.bram@global-infra.com

 

With a copy to:

 

c/o Global Infrastructure Management, LLP
The Peak
5 Wilton Road, 6th Floor
London, SW1V 1AN
United Kingdom
Attention: Joseph Blum
Fax: +44 207 798 0530
Email: joe.blum@global-infra.com

 

With a copy to:

 

Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, New York 10017

 

7



 

Attn: David Lieberman
Fax: +1 212 455 2502
Email: dlieberman@stblaw.com

 

If to Yield:

 

NRG Yield, Inc.
300 Carnegie Center, Suite 300
Princeton, NJ 08540

Attn:                    Christopher Sotos

Chad Plotkin

Email:            christopher.sotos@nrgyield.com

chad.plotkin@nrg.com

 

With a copy to:

 

Crowell & Moring LLP

1001 Pennsylvania Avenue, N.W.

Washington, D.C. 20004-2595

Attn: Patrick W. Lynch

E-mail: plynch@crowell.com

Fax: (202) 628-5116

 

(b)                                 Receipt of Notices. All Notices sent by the Parties under this Agreement shall be deemed to have been received by the Party to whom such Notice is sent (i) in the case of delivery by hand, when delivered; (ii) in the case of delivery by first class certified mail, receipt requested, five (5) Business Days after being deposited in the mail, (iii) in the case of overnight courier service guaranteeing next day delivery, on the next Business Day after timely delivery to the courier (iv) in the case of facsimile, on acknowledgement of the addressee’s facsimile receiving equipment if received prior to 5 p.m., recipient’s time, on the Business Day of such transmittal, or on the next Business Day if received later than 5 p.m., recipient’s time or (v) in the case of an email, which requires an acknowledgement of receipt to be sent to the sender, at the time such acknowledgement is received by the sender if received prior to 5 p.m., recipient’s time, on the Business Day of such transmittal, or on the next Business Day if received later than 5 p.m., recipient’s time. If any Party attempts to deliver Notice and such recipient Party refuses delivery of such Notice or such recipient Party is no longer at such address, facsimile number or email address, and such recipient Party failed to provide the sending Party with its current address, facsimile number or email address pursuant to this Section 5.1, then such Notice shall be deemed to have been received by the recipient Party upon the sending Party’s attempted delivery.

 

(c)                                  Change of Address. Zephyr and Yield and their respective counsel shall have the right to change their respective address, facsimile number and/or email address for the purposes of this Section 5.1 by providing a Notice of such change in address, facsimile number and/or email address as required under this Section 5.1.

 

8



 

Section 5.2                                    Time is of the Essence. Time is of the essence of this Agreement; provided, however, that notwithstanding anything to the contrary in this Agreement, if the time period for the performance of any covenant or obligation, satisfaction of any condition or delivery of any notice or item required under this Agreement shall expire on a day other than a Business Day, such time period shall be extended automatically to the next Business Day.

 

Section 5.3                                    Assignment. Neither Party shall assign this Agreement or any interest therein to any Person, without the prior written consent of the other Party, which consent may be withheld in such Party’s sole discretion.

 

Section 5.4                                    Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of Zephyr and Yield and their respective successors and permitted assigns.

 

Section 5.5                                    Third Party Beneficiaries. This Agreement shall not confer any rights or remedies on any Person other than (i) the Parties and their respective successors and permitted assigns, and (ii) the Zephyr Indemnitees to the extent such Zephyr Indemnitees are expressly granted certain rights of indemnification in this Agreement.

 

Section 5.6                                    Other Activities. No Party shall be prohibited from engaging in or holding an interest in any other business ventures of any kind or description, or any responsibility to account to the other for the income or profits of any such enterprises or have this Agreement be deemed to constitute any agreement not to compete. This Agreement shall not be deemed to create a partnership, joint venture, association or any other similar relationship between the Parties.

 

Section 5.7                                    Governing Law; Consent to Jurisdiction; Waiver of Jury Trial.

 

(a)                                 This Agreement and the transactions contemplated hereby shall be governed by the laws of the State of Delaware, without giving effect to any principles regarding conflict of laws. Any litigation or other court proceeding with respect to any matter arising from or in connection with this Agreement shall be conducted in the courts of record in the State of Delaware of the United States District Court for the District of Delaware, and Zephyr and Yield hereby submit to jurisdiction and consent to venue in such courts.

 

(b)                                 Zephyr and Yield hereby waive their right to a trial by jury in any litigation or other court proceeding by either Party against the other Party with respect to any matter arising from or in connection with this Agreement or the transactions contemplated hereby.

 

(c)                                  If any litigation or other court action, arbitration or similar adjudicatory proceeding is sought, taken, instituted or brought by Zephyr or Yield to enforce its rights under this Agreement, all fees, costs and expenses, including, without limitation, reasonable attorney’s fees and court costs, of the prevailing Party in such action, suit or proceeding shall be borne by the Party against whose interest the judgment or decision is rendered.

 

(d)                                 The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement and the transactions contemplated hereby were not performed in accordance with their specific terms or were otherwise breached. It is accordingly

 

9



 

agreed that the Parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and the transactions contemplated hereby and to enforce specifically the terms and provisions of this Agreement and the transactions contemplated hereby in the courts of Delaware, this being in addition to any other remedy to which such Party is entitled at law or in equity.

 

Section 5.8                                    Rules of Construction. The following rules shall apply to the construction and interpretation of this Agreement:

 

(a)                                 Singular words shall connote the plural as well as the singular, and plural words shall connote the singular as well as the plural, and the masculine shall include the feminine and the neuter.

 

(b)                                 All references in this Agreement to particular articles, sections, subsections or clauses (whether in upper or lower case) are references to articles, sections, subsections or clauses of this Agreement. All references in this Agreement to particular exhibits or schedules (whether in upper or lower case) are references to the exhibits and schedules attached to this Agreement, unless otherwise expressly stated or clearly apparent from the context of such reference.

 

(c)                                  The headings contained herein are solely for convenience of reference and shall not constitute a part of this Agreement nor shall they affect its meaning, construction or effect.

 

(d)                                 Each Party and its counsel have reviewed and revised (or requested revisions of) this Agreement and have participated in the preparation of this Agreement, and therefore any usual rules of construction requiring that ambiguities are to be resolved against any Party shall not be applicable in the construction and interpretation of this Agreement or any exhibits hereto.

 

(e)                                  The terms “hereby,” “hereof,” “hereto,” “herein,” “hereunder” and any similar terms shall refer to this Agreement, and not solely to the provision in which such term is used.

 

(f)                                   The terms “include,” “including” and similar terms shall be construed as if followed by the phrase “without limitation.”

 

(g)                                  The term “sole discretion” with respect to any determination to be made by a Party under this Agreement shall mean the sole and absolute discretion of such Party, without regard to any standard of reasonableness or other standard by which the determination of such Party might be challenged.

 

Section 5.9                                    Severability. If any term or provision of this Agreement is held to be or rendered invalid or unenforceable at any time in any jurisdiction, such term or provision shall not affect the validity or enforceability of any other terms or provisions of this Agreement, or the validity or enforceability of such affected terms or provisions at any other time or in any other jurisdiction.

 

10



 

Section 5.10                             Recitals, Exhibits and Schedules. The recitals to this Agreement, and all exhibits and schedules referred to in this Agreement are incorporated herein by such reference and made a part of this Agreement. Any matter disclosed in any schedule to this Agreement shall be deemed to be incorporated in all other schedules to this Agreement.

 

Section 5.11                             Entire Agreement. This Agreement sets forth the entire understanding and agreement of the Parties hereto, and shall supersede any other agreements and understandings (written or oral) between Zephyr and Yield on or prior to the date of this Agreement with respect to the matters contemplated in this Agreement.

 

Section 5.12                             Amendments to Agreement. No amendment, supplement or other modification to any terms of this Agreement shall be valid unless in writing and executed and delivered by Zephyr and Yield.

 

Section 5.13                             Facsimile; Counterparts. Zephyr and Yield may deliver executed signature pages to this Agreement by facsimile or electronic transmission to the other Party, which facsimile or electronic copy shall be deemed to be an original executed signature page. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which counterparts together shall constitute one agreement with the same effect as if the Parties had signed the same signature page.

 

[Signature Page Follows]

 

11



 

IN WITNESS WHEREOF, Zephyr and Yield each have caused this Agreement to be executed and delivered in their names by their respective duly authorized officers or representatives as of the date first above written.

 

 

Zephyr:

 

 

 

ZEPHYR RENEWABLES LLC,
a Delaware limited liability company

 

 

 

 

 

 

 

By:

/s/ Craig Cornelius

 

 

Name:

Craig Cornelius

 

 

Title:

President

 

 

 

 

 

 

 

 

 

Yield:

 

 

 

NRG YIELD, INC.,
a Delaware Corporation

 

 

 

 

 

 

 

By:

/s/ Chad Plotkin

 

 

Name:

Chad Plotkin

 

 

Title:

Senior Vice President & CFO

 

[Signature Page to ROFO Agreement]

 



 

 

Zephyr Parent:

 

 

 

GIP III ZEPHYR ACQUISITION PARTNERS, L.P.,
a Delaware limited partnership

 

 

 

By:

Global Infrastructure GP III, L.P., its general partner

 

 

 

 

By:

Global Infrastructure Investors III, LLC, its general partner

 

 

 

 

 

 

 

By:

/s/ Jonathan Bram

 

Name:

Jonathan Bram

 

Title:

Partner

 

[Signature Page to ROFO Agreement]

 


EX-10.4 7 a18-24111_1ex10d4.htm EX-10.4

Exhibit 10.4

 

 

ZEPHYR VOTING AND GOVERNANCE AGREEMENT

 

by and between

 

NRG YIELD, INC.

 

and

 

ZEPHYR RENEWABLES LLC

 

Dated as of August 31, 2018

 

 



 

TABLE OF CONTENTS

 

 

 

Page

 

 

 

 

ARTICLE I

 

 

DEFINITIONS

 

 

 

 

Section 1.1.

Certain Defined Terms

1

Section 1.2.

Interpretation

4

 

 

 

 

ARTICLE II

 

 

CORPORATE GOVERNANCE

 

 

 

 

Section 2.1.

Board Size and Composition

5

Section 2.2.

Implementation of Staggered Board

5

Section 2.3.

CEO

5

Section 2.4.

Future Dispositions by Sponsor

5

 

 

 

 

ARTICLE III

 

 

EFFECTIVENESS AND TERMINATION

 

 

 

 

Section 3.1.

Term

6

Section 3.2.

Effect of Termination

6

 

 

 

 

ARTICLE IV

 

 

MISCELLANEOUS

 

 

 

 

Section 4.1.

Amendments and Modifications

6

Section 4.2.

Waivers, Delays or Omissions

6

Section 4.3.

Successors, Assigns and Transferees

6

Section 4.4.

Notices

7

Section 4.5.

Entire Agreement

10

Section 4.6.

Governing Law

10

Section 4.7.

Submission to Jurisdiction

10

Section 4.8.

Waiver of Jury Trial

10

Section 4.9.

Severability

11

Section 4.10.

Third-Party Beneficiaries

11

Section 4.11.

Enforcement

11

Section 4.12.

Titles and Subtitles

12

Section 4.13.

Counterparts

12

 

i



 

VOTING AND GOVERNANCE AGREEMENT

 

This VOTING AND GOVERNANCE AGREEMENT (this “Agreement”), dated as of August 31, 2018 (the “Effective Date”), is entered into by and between NRG Yield, Inc., a Delaware corporation (“NYLD”), Zephyr Renewables LLC, a Delaware limited liability company (“Sponsor”), and each other member of the Sponsor Group that becomes party to this Agreement from time to time pursuant to Section 4.3 (collectively with Sponsor, the “Sponsor Parties”). Each of NYLD and the Sponsor Parties is referred to herein as a “Party”, and together as the “Parties”.

 

RECITALS

 

WHEREAS, NRG Energy, Inc., a Delaware corporation, NRG Repowering Holdings LLC, a Delaware limited liability company, and GIP III Zephyr Acquisition Partners, L.P. (“Purchaser”), a Delaware limited partnership, have entered into that certain Purchase and Sale Agreement, dated as of February 6, 2018 (the “PSA”), pursuant to which, among other things, Purchaser purchased, as of the Effective Date, one hundred percent (100%) of the outstanding membership interests of Sponsor, which owns, among other assets, (a) one hundred percent (100%) of the Class B shares and one hundred percent (100%) of the Class D shares of NYLD, and (b) one hundred percent (100%) of the Class B membership units and one hundred percent (100%) of the Class D membership units of NRG Yield LLC, a Delaware limited liability company (“NYLD LLC”); and

 

WHEREAS, the Parties desire to establish herein certain rights and obligations with respect to the governance of NYLD and the relationship between the Sponsor Parties (as defined below) and NYLD at and following the Effective Date.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, the Parties agree as follows:

 

ARTICLE I
DEFINITIONS

 

Section 1.1.                                Certain Defined Terms.

 

As used herein, the following terms shall have the following meanings:

 

Affiliate” means, with respect to any Person, any other Person that, directly or indirectly, through one or more intermediaries, controls or is controlled by, or is in common control with, such Person.

 

Agreement” has the meaning assigned to such term in the preamble.

 

Beneficial owner” or “beneficially own” has the meaning given such term in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as amended, and a Person’s beneficial ownership of Voting Securities shall be calculated in accordance with the provisions of such rules; provided, however, that for purposes of determining beneficial ownership, (a) a

 

1



 

Person shall be deemed to be the beneficial owner of any security which may be acquired by such Person, whether within sixty (60) days or thereafter, upon the conversion, exchange or exercise of any warrants, options, rights or other securities and (b) no Person shall be deemed beneficially to own any security solely as a result of this Agreement.

 

Board” means the board of directors of NYLD.

 

Business Day” means any day that is not a Saturday, a Sunday or a day which is a statutory or civic holiday in the State of New York.

 

Bylaws” means the third amended and restated bylaws of NYLD, as amended and restated as of February 23, 2016, and as the same may be amended, supplemented or otherwise modified from time to time in accordance with the terms thereof and the terms of the Charter or this Agreement.

 

CEO” means the Chief Executive Officer of NYLD.

 

Charter” means the restated certificate of incorporation of NYLD, as restated as of May 2, 2016, and as the same may be amended, supplemented or otherwise modified from time to time in accordance with the terms thereof or this Agreement.

 

Common Stock” means, collectively (a) the Class A common stock, par value $0.01 per share, (b) the Class B common stock, par value $0.01 per share, (c) the Class C common stock, par value $0.01 per share, and (d) the Class D common stock, par value $0.01 per share, in each case, of NYLD.

 

Conflicts Committee” means the committee of the Board designated as the “Corporate Governance, Conflicts and Nominating Committee”.

 

Conflicts Committee Charter” means the charter of the Conflicts Committee, adopted on July 16, 2013, as amended on September 28, 2017, and as the same may be amended, supplemented or otherwise modified from time to time in accordance with the terms thereof.

 

Control” or “control” (including the terms “controlled by” and “under common control with”), with respect to the relationship between or among two or more Persons, means the possession, directly or indirectly, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities, by contract or otherwise.

 

Controlled Affiliate” means, with respect to any Person, any other Person controlled by

 

2



 

such Person.

 

Director” means any director of the Board.

 

Effective Date” has the meaning assigned to such term in the preamble.

 

Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.

 

Governmental Authority” means any (a) international, national, multinational, federal, provincial, state, regional, municipal, local or other government, governmental or public department, central bank, court, tribunal, arbitral body, commission, board, bureau, agency or instrumentality, domestic or foreign, including any independent electricity system operator, a regional transmission organization, national system operator or any other similar organization overseeing the transmission of electricity, (b) self-regulatory organization or stock exchange, (c) subdivision, agent, commission, board or authority of any of the foregoing, or (d) quasi-governmental or private body exercising any regulatory, expropriation or taxing authority under or for the account of any of the foregoing.

 

Independent” means, with respect to any person that serves as a Director or is nominated or designated to serve as a Director at any time, the satisfaction by such person of the requirements to be “independent” under the Stock Exchange Rules and any applicable rules and regulations of the Securities and Exchange Commission (or any successor agency).

 

Initial Sponsor Directors” means Nathaniel Anschuetz, Jonathan Bram, Bruce MacLennan, E. Stanley O’Neal and Scott Stanley.

 

Independent Directors” means the Directors who are Independent.

 

Law” means any (a) law, constitution, treaty, statute, code, ordinance, principle of common and civil law and equity, rule, regulation and municipal bylaw, whether domestic, foreign or international, (b) judicial, arbitral, administrative, ministerial, departmental and regulatory judgment, order, writ, injunction, decision and award of any Governmental Authority, and (c) policy, practice and guideline of any Governmental Authority which, although not actually having the force of law, is considered by such Governmental Authority as requiring compliance as if having the force of law, and the term “applicable”, with respect to such Law and in the context that refers to one or more Persons, means such Law that applies to such Person or Persons or its or their business, undertaking, property or securities at the relevant time and that emanates from a Governmental Authority having jurisdiction over the Person or Persons or its or

 

3



 

their business, undertaking, property or securities.

 

Notice” has the meaning assigned to such term in Section 4.4(a).

 

NYLD” has the meaning assigned to such term in the preamble.

 

NYLD LLC” has the meaning assigned to such term in the recitals.

 

Party” has the meaning assigned to such term in the preamble.

 

Person” means any individual, partnership, corporation, limited liability company, joint venture, trust, association or other unincorporated organization or other entity, including any government or any agency or political subdivision thereof.

 

PSA” has the meaning assigned to such term in the recitals.

 

Sponsor” has the meaning assigned to such term in the preamble.

 

Sponsor Directors” means (a) as of the Effective Date, the Initial Sponsor Directors, (b) following the Effective Date (as the case may be), the Initial Sponsor Directors or the Directors designated by the Sponsor and either elected or appointed to the Board pursuant to this Agreement.

 

Sponsor Group” means Sponsor and its Affiliates (other than NYLD and its Controlled Affiliates).

 

Sponsor Party” has the meaning assigned to such term in the preamble.

 

Stock Exchange Rules” means the rules and regulations of the New York Stock Exchange or, if the shares of Common Stock are listed on another primary securities exchange, of the securities exchange on which the shares of Common Stock are listed at such time.

 

Voting Securities” means, at any time, (a) the Common Stock and (b) shares of any other class of capital stock of NYLD then entitled to vote generally in the election of Directors.

 

Section 1.2.                                Interpretation.

 

(a)                                 The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Article and Section references are to this Agreement unless otherwise specified. The words “include”, “includes” and “including” are not words of limitation and shall be deemed to be followed by the words “without limitation”.

 

(b)                                 The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.

 

(c)                                  References to a party to this Agreement include its successors and

 

4



 

permitted assigns.

 

ARTICLE II
CORPORATE GOVERNANCE

 

Section 2.1.                                Board Size and Composition.

 

At the Effective Date, the Board shall be comprised of nine (9) Directors, which shall include:

 

(a)                                 three (3) Independent Directors;

 

(b)                                 five (5) Sponsor Directors; and

 

(c)                                  the CEO.

 

Section 2.2.                                Implementation of Staggered Board.

 

(a)                                 Following the Effective Date, the Parties shall use their respective commercially reasonable efforts to cause to be considered at the first annual meeting of NYLD stockholders following the Effective Date a proposal for an amendment to the Charter to provide for a classified Board consisting of two (2) classes, each with a two (2)-year term (other than the initial term of the Class I Directors) and which shall be designated as Class I and Class II. Class I shall include two (2) Sponsor Directors, two (2) Independent Directors and the CEO, and Class II shall include three (3) Sponsor Directors and one (1) Independent Director. The initial term of the Class I Directors shall be one (1) year, and the initial term of the Class II Directors shall be two (2) years. Thereafter, each class of Directors shall serve for a two (2)-year term.  The Charter amendment proposal shall also provide that Article Ten, Section 1 of the Charter is revised to provide that NYLD stockholders may remove Directors before the end of their respective terms only for cause.

 

(b)                                 Each Sponsor Party shall vote all Voting Securities owned by it in favor of the proposal to approve an amendment to the Charter to create a classified Board as described in Section 2.2(a)

 

(c)                                  Each Sponsor Party agrees that it will not seek to remove any Independent Director from the Board prior to the first annual meeting of NYLD stockholders following the Effective Date (other than for cause).

 

Section 2.3.                                CEO. Following the Effective Date, the CEO shall be employed by NYLD and shall devote his or her full professional time and energy to NYLD. The CEO shall not be required to provide services to any Person other than NYLD and its Controlled Affiliates.

 

Section 2.4.                                Future Dispositions by Sponsor. In connection with any proposed sale, assignment or other transfer (in each case, directly or indirectly, by operation of law or otherwise) by a member of the Sponsor Group of record or beneficial ownership of any Voting Securities or of any membership interests of NYLD LLC (any such transaction, a “Disposition”), NYLD shall provide all cooperation and assistance and take such customary actions as may be

 

5



 

reasonably requested by Sponsor to effectuate the Disposition, including, without limitation, making available to a potential transferee of Sponsor or such member of the Sponsor Group information concerning NYLD and its subsidiaries that may be reasonably requested by Sponsor (subject to customary confidentiality arrangements). If NYLD consent to such Disposition is required or is requested by the Sponsor, NYLD will not unreasonably withhold, condition or delay such consent.

 

ARTICLE III
EFFECTIVENESS AND TERMINATION

 

Section 3.1.                                Term. This Agreement shall take effect immediately upon the Effective Date and, subject to Section 4.3(d), shall terminate upon the Sponsor Parties collectively owning less than 50% of the voting interest of NYLD.

 

Section 3.2.                                Effect of Termination. Upon the termination of this Agreement, all provisions of this Agreement, other than this Article III and Section 1.2, Section 2.4, Section 4.4, Section 4.5, Section 4.6, Section 4.7, Section 4.8, Section 4.9, Section 4.10, Section 4.11 and Section 4.12, shall terminate and be of no further force and effect.

 

ARTICLE IV
MISCELLANEOUS

 

Section 4.1.                                Amendments and Modifications. This Agreement may not be amended, modified or supplemented in any manner, whether by course of conduct or otherwise, except by an instrument in writing specifically designated as an amendment hereto, signed on behalf of each Party. The approval by NYLD of any such amendment, modification or supplement shall be subject to approval by a majority of the Board and a majority of the Conflicts Committee.

 

Section 4.2.                                Waivers, Delays or Omissions. It is agreed that no delay or omission to exercise any right, power or remedy accruing to any Party, upon any breach, default or noncompliance by another Party under this Agreement, shall impair any such right, power or remedy, nor shall it be construed to be a waiver of any such breach, default or noncompliance, or any acquiescence therein, or of or in any similar breach, default or noncompliance thereafter occurring. It is further agreed that any waiver, permit, consent or approval of any kind or character on the part of any Party of any breach, default or noncompliance under this Agreement or any waiver on such Party’s part of any provisions or conditions of this Agreement, must be in writing and executed and delivered by a duly authorized officer on behalf of such Party and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement, by law or otherwise afforded to any party, will be deemed cumulative with and not exclusive of any other remedy, and the exercise by a Party of any one remedy will not preclude the exercise of any other remedy.

 

Section 4.3.                                Successors, Assigns and Transferees.

 

(a)                                 This Agreement shall bind and inure to the benefit of and be enforceable

 

6



 

by the Parties and their respective successors and permitted assigns.

 

(b)                                 Upon any sale, assignment or other transfer by a Sponsor Party of record and beneficial ownership of any Voting Securities held by it to a member of the Sponsor Group that is not then a Sponsor Party, the transferor Sponsor Party shall cause the transferee member of the Sponsor Group to become a party to this Agreement by executing and delivering to NYLD a joinder to this Agreement substantially in the form of Exhibit A, which execution and delivery shall be a condition to the effectiveness of the transfer of such Voting Securities to the transferee member of the Sponsor Group. Any sale, assignment or other transfer of record and beneficial ownership of Voting Securities by a Sponsor Party to a member of the Sponsor Group that is not then a Sponsor Party that does not include the execution and delivery to NYLD of such joinder prior to or concurrently with such sale, assignment or transfer shall be void ab initio and the Voting Securities that otherwise would have been transferred to such Person shall be deemed to be held or returned to the Sponsor Party that last held such Voting Securities.

 

(c)                                  Upon the acquisition by any member of the Sponsor Group that is not then a Sponsor Party of record and beneficial ownership of Voting Securities from a Person that is not a Sponsor Party, each Sponsor Party shall cause such acquiring member of the Sponsor Group to become a party to this Agreement by executing and delivering to NYLD a joinder to this Agreement substantially in the form of Exhibit A as promptly as practicable following such acquisition (but in no event later than ten (10) Business Days thereafter).

 

(d)                                 Notwithstanding Section 3.1 and subject to the acquiror or acquirors executing and delivering to NYLD a joinder to this Agreement substantially in the form of Exhibit A, the Sponsor Parties shall have the right to assign this Agreement to and for the benefit of any Person or group (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) that acquires more than 50% of the voting interest of NYLD. Following such assignment, the definitions of “Sponsor”, “Sponsor Group” and “Sponsor Party” shall be deemed to have been amended as appropriate to refer to such acquiror or acquirors.

 

(e)                                  Subject to Section 4.3(b), a Sponsor Party shall cease to be a party to this Agreement and shall automatically be released from all obligations hereunder in the event that such Sponsor Party is no longer a record or beneficial owner of any Voting Securities.

 

(f)                                   Except as set forth in Section 4.3(b), Section 4.3(c) and Section 4.3(d) above, this Agreement shall not be assigned, by operation of law or otherwise, without the prior written consent of the Parties and any such assignment or attempted assignment without such consent shall be void.

 

(g)                                  All Sponsor Parties at any time may, by written notice to NYLD, designate any individual Sponsor Party among them as their representative for purposes of this Agreement and such representative shall be referred to as the “Sponsor.” The Sponsor designated as of the Effective Date is Zephyr Renewables LLC.

 

Section 4.4.                                Notices.

 

(a)                                 Method of Delivery. All notices, requests, demands and other communications (each, a “Notice”) required to be provided to the other Party pursuant to this

 

7



 

Agreement shall be in writing and shall be delivered (i) in person, (ii) by certified U.S. mail, with postage prepaid and return receipt requested, (iii) by overnight courier service, (iv) by facsimile transmittal or (v) by email (which requires an acknowledgement by the recipient, it being understood that the recipient shall be obligated to confirm receipt if requested); provided, that in the case of clauses (iv) and (v), a verification copy is sent on the same day by any of the methods set forth in clauses (i), (ii) and (iii), to the other Party to this Agreement at the following address, facsimile number or email address (or to such other address, facsimile number or email address as Zephyr or Yield may designate from time to time pursuant to this Section 4.4):

 

If to the Sponsor Parties:

 

c/o Global Infrastructure Management, LLC

1345 Avenue of the Americas, 30th Floor

New York, New York 10105

Attention: Jonathan Bram

Fax: +1 646 282 1500

Email: jonathan.bram@global-infra.com

 

With a copy to:

 

c/o Global Infrastructure Management, LLP

The Peak

5 Wilton Road, 6th Floor

London, SW1V 1AN

United Kingdom

Attention: Joseph Blum

Fax: +44 207 798 0530

Email: joe.blum@global-infra.com

 

With a copy to:

 

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017

Attn: David Lieberman

Fax: +1 212 455 2502

Email: dlieberman@stblaw.com

 

If to NYLD:

 

NRG Yield, Inc.

300 Carnegie Center, Suite 300

Princeton, NJ 08540

Attention:       Christopher Sotos

Chad Plotkin

Email:            christopher.sotos@nrgyield.com

chad.plotkin@nrg.com

 

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With a copy to:

 

Crowell & Moring LLP

1001 Pennsylvania Avenue, N.W.

Washington, D.C. 20004-2595

Attn: Patrick W. Lynch

E-mail: plynch@crowell.com

Fax: (202) 628-5116

 

If to the Conflicts Committee:

 

NRG Yield, Inc.

300 Carnegie Center, Suite 300

Princeton, NJ 08540

Attention:       Christopher Sotos

Chad Plotkin

Email:            christopher.sotos@nrgyield.com

chad.plotkin@nrg.com

 

With a copy to:

 

Sullivan & Cromwell LLP

125 Broad Street

New York, NY 10004

Attn: Joseph B. Frumkin

Brian E. Hamilton

Fax: (212) 558-3588

E-mail:        frumkinj@sullcrom.com

hamiltonb@sullcrom.com

 

(b)                                 Receipt of Notices. All Notices sent by the Parties under this Agreement shall be deemed to have been received by the Party to whom such Notice is sent (i) in the case of delivery by hand, when delivered; (ii) in the case of delivery by first class certified mail, receipt requested, five (5) Business Days after being deposited in the mail, (iii) in the case of overnight courier service guaranteeing next day delivery, on the next Business Day after timely delivery to the courier (iv) in the case of facsimile, on acknowledgement of the addressee’s facsimile receiving equipment if received prior to 5 p.m., recipient’s time, on the Business Day of such transmittal, or on the next Business Day if received later than 5 p.m., recipient’s time or (v) in the case of an email, which requires an acknowledgement of receipt to be sent to the sender, at the time such acknowledgement is received by the sender if received prior to 5 p.m., recipient’s time, on the Business Day of such transmittal, or on the next Business Day if received later than 5 p.m., recipient’s time. If any Party attempts to deliver Notice and such recipient Party refuses delivery of such Notice or such recipient Party is no longer at such address, facsimile number or email address, and such recipient Party failed to provide the sending Party with its current address, facsimile number or email address pursuant to this Section 4.4, then such Notice shall be deemed to have been received by the recipient Party upon the sending Party’s attempted

 

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delivery.

 

(c)                                  Change of Address. Zephyr and Yield and their respective counsel shall have the right to change their respective address, facsimile number and/or email address for the purposes of this Section 4.4 by providing a Notice of such change in address, facsimile number and/or email address as required under this Section 4.4.

 

Section 4.5.                                Entire Agreement. This Agreement, the Charter, the Bylaws and the Conflicts Committee Charter constitute the entire agreement, and supersede all prior written agreements, arrangements, communications, understandings, representations and warranties, both written and oral, among the Parties with respect to the subject matter hereof and thereof.

 

Section 4.6.                                Governing Law. This Agreement and all disputes or controversies arising out of or relating to this Agreement or the transactions contemplated hereby shall be deemed to be made in and in all respects shall be interpreted, governed by and construed in accordance with, the internal laws of the State of Delaware, without giving effect to applicable principles of conflicts of law to the extent that the application of the laws of another jurisdiction would be required thereby.

 

Section 4.7.                                Submission to Jurisdiction. EACH OF THE PARTIES EXPRESSLY, IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE EXCLUSIVE PERSONAL JURISDICTION OF THE DELAWARE COURT OF CHANCERY OR, TO THE EXTENT SUCH COURT DECLINES TO ACCEPT JURISDICTION OVER A PARTICULAR MATTER, ANY FEDERAL COURT OF THE UNITED STATES OF AMERICA LOCATED IN THE STATE OF DELAWARE SOLELY IN RESPECT OF THE INTERPRETATION AND ENFORCEMENT OF THE PROVISIONS OF THIS AGREEMENT AND IN RESPECT OF THE TRANSACTIONS CONTEMPLATED HEREBY, AND HEREBY WAIVES, AND AGREES NOT TO ASSERT, AS A DEFENSE IN ANY ACTION, SUIT OR PROCEEDING FOR THE INTERPRETATION OR ENFORCEMENT HEREOF OR OF ANY SUCH DOCUMENT, THAT IT IS NOT SUBJECT THERETO OR THAT SUCH ACTION, SUIT OR PROCEEDING MAY NOT BE BROUGHT OR IS NOT MAINTAINABLE IN SUCH COURTS OR THAT SUCH COURTS ARE AN INCONVENIENT FORUM, OR THAT THE VENUE OF SUCH COURTS MAY NOT BE APPROPRIATE OR THAT THIS AGREEMENT OR ANY SUCH DOCUMENT MAY NOT BE ENFORCED IN OR BY SUCH COURTS, AND THE PARTIES IRREVOCABLY AGREE THAT ALL CLAIMS WITH RESPECT TO SUCH ACTION, SUIT OR PROCEEDING SHALL BE HEARD AND DETERMINED IN SUCH A DELAWARE COURT OF CHANCERY OR FEDERAL COURT. EACH OF THE PARTIES FURTHER AGREES THAT SERVICE OF ANY PROCESS, SUMMONS, NOTICE OR DOCUMENT BY U.S. REGISTERED MAIL TO SUCH PARTY’S RESPECTIVE ADDRESS SET FORTH IN SECTION 4.4 SHALL BE EFFECTIVE SERVICE OF PROCESS FOR ANY ACTION, SUIT OR PROCEEDING WITH RESPECT TO ANY MATTERS TO WHICH IT HAS SUBMITTED TO JURISDICTION IN THIS SECTION.

 

Section 4.8.                                Waiver of Jury Trial. AS A SPECIFICALLY BARGAINED-FOR INDUCEMENT FOR EACH OF THE PARTIES TO ENTER INTO THIS AGREEMENT (AFTER HAVING THE OPPORTUNITY TO CONSULT WITH COUNSEL), EACH PARTY

 

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EXPRESSLY, IRREVOCABLY AND UNCONDITIONALLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE MATTERS CONTEMPLATED HEREBY. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (a) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF ANY ACTION, SUIT OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER, (b) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (c) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (d) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 4.8.

 

Section 4.9.                                Severability. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. If any provision of this Agreement, or the application of such provision to any Person or any circumstance, is invalid or unenforceable, (a) a suitable and equitable provision shall be substituted therefor in order to carry out, so far as may be valid and enforceable, the intent and purpose of such invalid or unenforceable provision and (b) the remainder of this Agreement and the application of such provision to other Persons or circumstances shall not be affected by such invalidity or unenforceability, nor shall such invalidity or unenforceability affect the validity or enforceability of such provision, or the application of such provision, in any other jurisdiction.

 

Section 4.10.                         Third-Party Beneficiaries. This Agreement is for the sole benefit of the parties hereto and their permitted assigns and nothing herein expressed or implied shall give or be construed to give to any person, other than the parties hereto and such assigns, any legal or equitable rights hereunder.

 

Section 4.11.                         Enforcement. THE PARTIES ACKNOWLEDGE AND AGREE THAT IRREPARABLE DAMAGE WOULD OCCUR IN THE EVENT THAT ANY OF THE PROVISIONS OF THIS AGREEMENT WERE NOT PERFORMED IN ACCORDANCE WITH THEIR SPECIFIC TERMS OR WERE OTHERWISE BREACHED AND THAT MONETARY DAMAGES WOULD NOT BE AN ADEQUATE REMEDY THEREFOR. IT IS ACCORDINGLY AGREED THAT THE PARTIES SHALL BE ENTITLED TO AN INJUNCTION OR INJUNCTIONS TO PREVENT BREACHES OR THREATENED BREACHES OF THIS AGREEMENT AND TO ENFORCE SPECIFICALLY THE TERMS AND PROVISIONS OF THIS AGREEMENT IN ANY COURT OF COMPETENT JURISDICTION, IN EACH CASE WITHOUT PROOF OF DAMAGES OR OTHERWISE (AND EACH PARTY HEREBY WAIVES ANY REQUIREMENT FOR THE SECURING OR POSTING OF ANY BOND IN CONNECTION WITH SUCH REMEDY), THIS BEING IN ADDITION TO ANY OTHER REMEDY TO WHICH THEY ARE ENTITLED AT LAW OR IN EQUITY. THE PARTIES AGREE NOT TO ASSERT THAT A REMEDY OF SPECIFIC ENFORCEMENT IS UNENFORCEABLE, INVALID, CONTRARY TO LAW OR INEQUITABLE FOR ANY REASON, NOR TO ASSERT THAT A REMEDY OF

 

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MONETARY DAMAGES WOULD PROVIDE AN ADEQUATE REMEDY.

 

Section 4.12.                         Titles and Subtitles. The titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.

 

Section 4.13.                         Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto on separate counterparts, each of which shall be deemed an original, but all the counterparts shall together constitute one and the same instrument. This Agreement and any signed agreement or instrument entered into in connection with this Agreement, and any amendments or waivers hereto and thereto, to the extent signed and delivered by facsimile or in electronic format (e.g., “pdf” or “tif”) shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person.

 

[The remainder of this page is intentionally left blank]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Voting and Governance Agreement as of the date first written above.

 

 

NRG YIELD, INC.

 

 

 

By:

/s/ Chad Plotkin

 

 

Name:

Chad Plotkin

 

 

Title:

Senior Vice President & CFO

 

 

 

ZEPHYR RENEWABLES LLC

 

 

 

By:

/s/ Craig Cornelius

 

 

Name:

Craig Cornelius

 

 

Title:

President

 

[Signature Page to Voting and Governance Agreement]

 



 

EXHIBIT A

 

Form of Joinder

 

JOINDER AGREEMENT

 

This Joinder Agreement, dated as of [·] (this “Joinder Agreement”), is a joinder to the Voting and Governance Agreement, dated as of August 31, 2018, by and among NRG Yield, Inc. (the “Company”), Zephyr Renewables LLC (the “Sponsor”) and the other parties party thereto from time to time (the “Voting and Governance Agreement”). Capitalized terms used but not defined herein shall have the meaning given to such terms in the Voting and Governance Agreement.

 

1.                                      [Each of] [t]he undersigned, having received and reviewed a copy of the Voting and Governance Agreement, hereby agrees to be bound by the terms, conditions and other provisions of the Voting and Governance Agreement as though it is a “Sponsor Party” under the Voting and Governance Agreement, with all attendant rights, duties and obligations stated therein applicable to the “Sponsor Parties” in the same manner as if the undersigned were party to the Voting and Governance Agreement as of the date on which it was originally executed.

 

2.                                      This Joinder Agreement shall be deemed to be made in and in all respects shall be interpreted, governed by and construed in accordance with, the internal laws of the State of Delaware, without giving effect to applicable principles of conflicts of law to the extent that the application of the laws of another jurisdiction would be required thereby.

 

3.                                      This Joinder Agreement may be executed in any number of counterparts and by the parties hereto on separate counterparts, each of which shall be deemed an original, but all the counterparts shall together constitute one and the same instrument. This Joinder Agreement and any signed agreement or instrument entered into in connection with this Joinder Agreement, and any amendments or waivers hereto and thereto, to the extent signed and delivered by facsimile or in electronic format (e.g., “pdf” or “tif”) shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person.

 

[The remainder of this page is intentionally left blank]

 

A-1



 

IN WITNESS WHEREOF, each of the undersigned has executed and delivered this Joinder Agreement as of the date first written above.

 

 

 

[NEW PARTY]

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

[NEW PARTY]

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

 

AGREED AND ACKNOWLEDGED:

 

 

 

 

 

NRG YIELD, INC.

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

A-2


EX-10.5 8 a18-24111_1ex10d5.htm EX-10.5

EXHIBIT 10.5

 

THIRD AMENDED AND RESTATED

 

RIGHT OF FIRST OFFER AGREEMENT

 

THIS THIRD AMENDED AND RESTATED RIGHT OF FIRST OFFER AGREEMENT (this “Agreement”) is made and entered into as of the 31st day of August, 2018 (the “Effective Date”), by and between NRG ENERGY, INC., a Delaware corporation (“NRG”), and NRG YIELD, INC., a Delaware corporation  (“Yield”).  NRG and Yield are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”

 

RECITALS:

 

WHEREAS, Yield expects to increase its cash available for distribution and dividend per share by acquiring additional assets, including assets acquired from NRG;

 

WHEREAS, in connection with the formation of Yield, NRG granted Yield an exclusive right of first offer to acquire certain assets owned by NRG and certain of its Affiliates (as hereinafter defined) pursuant to that certain Right of First Offer Agreement, dated July 22, 2013, by and between NRG and Yield (“2013 ROFO Agreement”);

 

WHEREAS, the 2013 ROFO Agreement was subsequently amended and restated by that certain Amended and Restated Right of First Offer Agreement dated March 12, 2015, by and between NRG and Yield (“2015 ROFO Agreement”) and that certain Second Amended and Restated Right of First Offer Agreement, dated February 24, 2017, by and between NRG and Yield (“2017 ROFO Agreement”); and

 

WHEREAS, the Parties desire to amend and restate the 2017 ROFO Agreement to address changes to the assets owned by NRG in connection with NRG’s sale of substantially all of its renewables platform.

 

NOW, THEREFORE, in consideration of the mutual covenants set forth in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, NRG and Yield hereby agree as follows:

 

ARTICLE I.

 

DEFINITIONS

 

Section 1.1                                    Definitions.  In addition to the terms defined above in the introduction and Recitals to this Agreement, the following terms when used in this Agreement shall have the meanings set forth in this Section 1.1.

 

Affiliate” means, with respect to the Person in question, any other Person that, directly or indirectly, Controls, is Controlled by or is under common Control with, such Person.

 

Agua Caliente” consists of (i) 100% of the membership interests in Agua Caliente Borrower 1 LLC, which in turn owns; (ii) 35% of the membership interests in Solar Holdings,

 

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which in turn owns; (iii) 100% of the membership interests in Agua Caliente Solar Holdings LLC, which in turn owns; (iv) 100% of the membership interests in Agua Caliente Solar LLC.

 

Applicable Law” means all statutes, laws, common law, rules, regulations, ordinances, codes or other legal requirements of any Governmental Authority or quasi-governmental agencies or entities, and any judgment, injunction, order, directive, decree or other judicial or regulatory requirement of any court or Governmental Authority of competent jurisdiction affecting or relating to the Person or property in question.

 

Business Day” means any day other than Saturday, Sunday or any federal legal holiday.

 

CAFD” means Yield’s cash available for distribution as calculated in accordance with the accounting policies and procedures used for the calculation of cash available for distribution in Yield’s most recent quarterly financial filings with the U.S. Securities and Exchange Commission.

 

Common Stock” means the shares of Class C common stock of Yield.

 

Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of the Person in question, whether by the ownership of voting securities, contract or otherwise.

 

Governmental Authority” means any federal, state or local government or political subdivision thereof, including any agency or entity exercising executive, legislative, judicial, regulatory or administrative governmental powers or functions, in each case to the extent the same has jurisdiction over the Person or property in question.

 

Losses” means, with respect to the Person in question, any actual liabilities, damages (but expressly excluding consequential damages and punitive damages), losses, costs or expenses, including reasonable attorneys’ fees and expenses and court costs, incurred by such Person, as a result of the act, omission or occurrence in question.

 

Negotiation Period” has the meaning set forth in Section 2.2.

 

Notice” has the meaning set forth in Section 5.1.

 

NRG Confidential Information” has the meaning set forth in Section 4.1.

 

NRG Indemnitees” means NRG and its Affiliates, and each of their respective shareholders, members, partners, trustees, beneficiaries, directors, officers, employees, attorneys, accountants, consultants and agents, and the successors, assigns, legal representatives, heirs, devisees and donees of each of the foregoing.

 

NRG ROFO Asset” has the meaning set forth in Section 2.1.

 

Person” means any natural person, corporation, general or limited partnership, limited liability company, association, joint venture, trust, estate, Governmental Authority or other legal entity, in each case whether in its own or a representative capacity.

 

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Project CAFD Yield” means the average projected annual CAFD for the NRG ROFO Asset for the 5 year period commencing after the acquisition date of such asset divided by the proposed purchase price (excluding the assumption of any project level debt or other financings) for the NRG ROFO Asset.

 

Required Securities Disclosure” has the meaning set forth in Section 4.1.

 

ROFO Termination Date” has the meaning set forth in Section 2.3.

 

Solar Holdings” means AC Solar Holdings LLC, a Delaware limited liability company.

 

Subsidiary” means any corporation, limited liability company, general partnership or limited partnership Controlled by Yield.

 

Term” has the meaning set forth in Section 3.1.

 

Third Party” means any Person other than a Party or an Affiliate of a Party.

 

Trading Day” means a day on which the principal Trading Market is open for trading.

 

Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the New York Stock Exchange, the Nasdaq Capital Market, the Nasdaq Global Market or the Nasdaq Global Select Market (or any successors to any of the foregoing).

 

Transaction Notice” has the meaning set forth in Section 2.2.

 

Transfer” means, other than in connection with any granting of liens permitted under any indebtedness of the NRG ROFO Asset or any disposition of assets resulting from the enforcement of such liens, any assignment, sale, offer to sell, pledge, mortgage, hypothecation, encumbrance, disposition of or any other like transfer or encumbering (whether with or without consideration, directly or indirectly, voluntarily or involuntarily or by operation of law or otherwise); provided, that this definition shall not include any (i) merger with or into, or sale of all or substantially all of NRG’s assets to, an unaffiliated third-party, so long as following the consummation of such merger or sale, NRG maintains Control over the NRG ROFO Asset and the terms of any such merger or sale will not limit, delay or hinder the ability of Yield or any of its Subsidiaries to acquire the NRG ROFO Asset from NRG in accordance with the terms of this Agreement when NRG elects to sell, transfer or otherwise dispose of the NRG ROFO Asset, or (ii) internal restructuring involving the NRG ROFO Asset, so long as the terms of any such restructuring will not limit, delay or hinder the ability of Yield or any of its Subsidiaries to acquire the NRG ROFO Asset from NRG in accordance with the terms of this Agreement when NRG elects to sell, transfer or otherwise dispose of the NRG ROFO Asset.

 

VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New

 

3



 

York City time)), (b) if the Common Stock is not then listed or quoted for trading on any Trading Market and if prices for the Common Stock are then reported on the OTC Bulletin Board or in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (c) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser mutually selected in good faith by NRG and Yield.

 

Yield’s CAFD Yield” means Yield’s CAFD guidance as provided to the financial community divided by Yield’s Equity Market Capitalization.

 

Yield’s Equity Market Capitalization” means the product of the number of shares of Yield outstanding as of the Transaction Notice date multiplied by the VWAP for the 60 Trading Days prior to the Transaction Notice.

 

ARTICLE II.

 

RIGHT OF FIRST OFFER ON THE NRG ROFO ASSET

 

Section 2.1                                    NRG ROFO Asset.

 

(a)                                 During the Term, NRG hereby grants to Yield and its Subsidiaries a right of first offer on any proposed Transfer of Agua Caliente (or any portion thereof) (an “NRG ROFO Asset”).

 

(b)                                 NRG shall offer the NRG ROFO Asset to Yield and its Subsidiaries no later than June 30, 2019.

 

Section 2.2                                    Notice of Transaction Related to the NRG ROFO Asset and Negotiation of Definitive Terms for Transaction.  NRG must deliver a written notice to Yield no later than forty-five (45) days prior to engaging in any negotiation regarding any proposed Transfer of the NRG ROFO Asset (or any portion thereof), setting forth in reasonable detail the material terms and conditions of its offer of the NRG ROFO Asset to Yield (such offer notice, a “Transaction Notice”).  The Transaction Notice must include a price for the NRG ROFO Asset that results in a Project CAFD Yield for such asset of at least two hundred and seventy-five (275) basis points over Yield’s CAFD Yield (the “Minimum Spread”); provided, that (a) if the Minimum Spread results in such asset’s Project CAFD Yield exceeding eleven percent (11%), the price for the NRG ROFO Asset in the Transaction Notice shall equate to a Project CAFD Yield of eleven percent (11%), and (b) if the Minimum Spread results in such asset’s Project CAFD Yield to be less than nine and one-half percent (9.5%), the price for the NRG ROFO Asset in the Transaction Notice shall equate to a Project CAFD Yield of nine and one-half percent (9.5%) (the “Prescribed Price”); provided, further, that NRG shall promptly provide Yield all materials and information in connection therewith that are reasonably necessary for Yield to confirm the validity of the terms, including price and spread to CAFD yield, in such Transaction Notice.  If NRG delivers a Transaction Notice to Yield, and Yield offers to purchase the NRG ROFO Asset at the Prescribed Price, then NRG and Yield shall enter into a definitive agreement for the Transfer of the NRG ROFO Asset to Yield or any of its Subsidiaries at the Prescribed Price and such other customary and reasonable terms

 

4



 

to be agreed by NRG and Yield.  If, within sixty (60) calendar days after the delivery of such Transaction Notice (the “Negotiation Period”), Yield has not offered to purchase the NRG ROFO Asset at the Prescribed Price, NRG will be able to Transfer the NRG ROFO Asset to a Third Party (or enter into a definitive agreement to undertake such transaction with a Third Party) in accordance with the terms of Section 2.3.

 

Section 2.3                                    Negotiations with Third Parties.  Neither NRG nor any of its representatives, agents or Affiliates shall solicit offers from, or negotiate or enter into any agreement with, any Third Party for the Transfer of the NRG ROFO Asset (or any portion thereof) until the expiration of the Negotiation Period related to the NRG ROFO Asset and the proposed Transfer (the “ROFO Termination Date”).  If Yield does not agree to purchase the NRG ROFO Asset from NRG at the Prescribed Price during the Negotiation Period, then (a) NRG shall have the absolute right to solicit offers from, negotiate with, and enter into agreements with, any Third Party to Transfer the NRG ROFO Asset on any terms agreed to by NRG and such Third Party, and (b) NRG shall have no further obligation to negotiate with Yield regarding, or offer Yield the opportunity to acquire any interest in, the NRG ROFO Asset and this Agreement shall expire and be of no further force and effect with respect to the NRG ROFO Asset.

 

ARTICLE III.

 

TERM; TERMINATION RIGHTS

 

Section 3.1                                    Term.  Unless earlier terminated in accordance with this Article III, the term of this Agreement (the “Term”) shall commence on the Effective Date and shall continue in effect until the earlier of (a) the fifth (5th) anniversary of the Effective Date, (b) the consummation of NRG’s sale of Agua Caliente and (c) the ROFO Termination Date, at which time this Agreement shall terminate and the Parties shall have no further rights or obligations under this Agreement, except those that expressly survive the termination of this Agreement; provided, that in the event the Term ends during any Negotiation Period, then the Term shall extend, and this Agreement shall remain in full force and effect, until the expiration of such Negotiation Period.

 

Section 3.2                                    Termination Rights.  NRG or Yield, as the case may be, shall have the right to terminate this Agreement, with written notice to the other Party, if the other Party materially breaches or defaults in the performance of its obligations under this Agreement or under any transaction agreement entered into by the Parties in connection with the NRG ROFO Asset, and such breach or default is continuing for thirty (30) days after such breaching Party has been given a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder. Upon any such termination the Parties shall have no further rights or obligations under this Agreement, except those that expressly survive the termination of this Agreement.

 

ARTICLE IV.

 

CONFIDENTIALITY

 

Section 4.1                                    NRG Confidential Information.  Yield shall keep confidential and not make any public announcement or disclose to any Person any terms of any other documents, materials,

 

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data or other information with respect to the NRG ROFO Asset which is not generally known to the public (the “NRG Confidential Information”); provided, however, that NRG Confidential Information shall not include (a) the terms and conditions of this Agreement or (b) information that becomes available to Yield on a non-confidential basis from a source other than the NRG, its Affiliates or their directors, officers or employees, provided, that, to Yield’s knowledge, such source was not prohibited from disclosing such information to Yield by any legal, contractual or fiduciary duty.  Notwithstanding the foregoing, Yield shall be permitted to (A) disclose any NRG Confidential Information to the extent required by court order or under Applicable Law, (B) make a public announcement regarding such matters (1) as agreed to in writing by NRG or (2) as required by the provisions of any securities laws or the requirements of any exchange on which Yield securities may be listed (a “Required Securities Disclosure”), or (C) disclose any NRG Confidential Information to any Person on a “need-to-know” basis, such as its shareholders, partners, members, trustees, beneficiaries, directors, officers, employees, attorneys, consultants, lenders or other advisors; provided, however, that, other than in connection with a Required Securities Disclosure, Yield shall (x) advise such Person of the confidential nature of such NRG Confidential Information, and (y) instruct such Person to keep the NRG Confidential Information confidential pursuant to the terms hereof.  Yield shall indemnify and hold harmless the NRG Indemnitees for any Losses incurred by any of the NRG Indemnitees for a breach or default of Yield’s obligations under this Section 4.1.  This Section 4.1 shall survive the termination of this Agreement.  If Yield purchases the NRG ROFO Asset pursuant to the terms of this Agreement, the confidentiality obligations of Yield with respect to the NRG ROFO Asset shall terminate upon the consummation of such purchase except as otherwise provided in the applicable transaction documentation.

 

ARTICLE V.

 

MISCELLANEOUS PROVISIONS

 

Section 5.1                                    Notices

 

(a)                                 Method of Delivery.  All notices, requests, demands and other communications (each, a “Notice”) required to be provided to the other Party pursuant to this Agreement shall be in writing and shall be delivered (i) in person, (ii) by certified U.S. mail, with postage prepaid and return receipt requested, (iii) by overnight courier service, (iv) by facsimile transmittal or (v) by email (which requires an acknowledgement by the recipient), provided, that in the case of clauses (iv) and (v), a verification copy is sent on the same day by any of the methods set forth in clauses (i), (ii) and (iii), to the other Party to this Agreement at the following address, facsimile number or email address (or to such other address, facsimile number or email address as NRG or Yield may designate from time to time pursuant to this Section 5.1):

 

If to NRG:

 

NRG Energy, Inc.
804 Carnegie Center 
Princeton, New Jersey 08540
Attention: General Counsel
Facsimile No.: (609) 524-4501

 

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With a copy to:

 

Jones Day
51 Louisiana Avenue, NW
Washington, DC 20001
Attn: Gerald P. Farano
Fax: (202) 626-1700

 

If to Yield:

 

NRG Yield, Inc.
804 Carnegie Center
Princeton, New Jersey 08540
Attention: General Counsel

 

With a copy to:

 

Crowell & Moring LLP
1001 Pennsylvania Avenue, N.W.
Washington, D.C. 20004-2595
Attn: Patrick W. Lynch
Fax: (202) 628-5116

 

(b)                                 Receipt of Notices.  All Notices sent by the Parties under this Agreement shall be deemed to have been received by the Party to whom such Notice is sent (i) in the case of delivery by hand, when delivered; (ii) in the case of delivery by first class certified mail, receipt requested, five (5) Business Days after being deposited in the mail, (iii) in the case of overnight courier service guaranteeing next day delivery, on the next Business Day after timely delivery to the courier (iv) in the case of facsimile, on acknowledgement of the addressee’s facsimile receiving equipment if received prior to 5 p.m., recipient’s time, on the Business Day of such transmittal, or on the next Business Day if received later than 5 p.m., recipient’s time or (v) in the case of an email, which requires an acknowledgement of receipt to be sent to the sender, at the time such acknowledgement is received by the sender if received prior to 5 p.m., recipient’s time, on the Business Day of such transmittal, or on the next Business Day if received later than 5 p.m., recipient’s time.  If any Party attempts to deliver Notice and such recipient Party refuses delivery of such Notice or such recipient Party is no longer at such address, facsimile number or email address, and such recipient Party failed to provide the sending Party with its current address, facsimile number or email address pursuant to this Section 5.1, then such Notice shall be deemed to have been received by the recipient Party upon the sending Party’s attempted delivery.

 

(c)                                  Change of Address.  NRG and Yield and their respective counsel shall have the right to change their respective address, facsimile number and/or email address for the purposes of this Section 5.1 by providing a Notice of such change in address, facsimile number and/or email address as required under this Section 5.1.

 

Section 5.2                                    Time is of the Essence.  Time is of the essence of this Agreement; provided, however, that notwithstanding anything to the contrary in this Agreement, if the time period for the performance of any covenant or obligation, satisfaction of any condition or delivery of any

 

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notice or item required under this Agreement shall expire on a day other than a Business Day, such time period shall be extended automatically to the next Business Day.

 

Section 5.3                                    Assignment.  Neither Party shall assign this Agreement or any interest therein to any Person, without the prior written consent of the other Party, which consent may be withheld in such Party’s sole discretion.

 

Section 5.4                                    Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of NRG and Yield and their respective successors and permitted assigns.

 

Section 5.5                                    Third Party Beneficiaries.  This Agreement shall not confer any rights or remedies on any Person other than (i) the Parties and their respective successors and permitted assigns, and (ii) the NRG Indemnitees to the extent such NRG Indemnitees are expressly granted certain rights of indemnification in this Agreement.

 

Section 5.6                                    Other Activities.  No Party shall be prohibited from engaging in or holding an interest in any other business ventures of any kind or description, or any responsibility to account to the other for the income or profits of any such enterprises or have this Agreement be deemed to constitute any agreement not to compete. This Agreement shall not be deemed to create a partnership, joint venture, association or any other similar relationship between the Parties.

 

Section 5.7                                    Governing Law.

 

(a)                                 This Agreement and the transactions contemplated hereby shall be governed by the laws of the State of Delaware, without giving effect to any principles regarding conflict of laws.  Any litigation or other court proceeding with respect to any matter arising from or in connection with this Agreement shall be conducted in the courts of record in the State of Delaware of the United States District Court for the District of Delaware, and NRG and Yield hereby submit to jurisdiction and consent to venue in such courts.

 

(b)                                 NRG and Yield hereby waive their right to a trial by jury in any litigation or other court proceeding by either Party against the other Party with respect to any matter arising from or in connection with this Agreement or the transactions contemplated hereby.

 

(c)                                  If any litigation or other court action, arbitration or similar adjudicatory proceeding is sought, taken, instituted or brought by NRG or Yield to enforce its rights under this Agreement, all fees, costs and expenses, including, without limitation, reasonable attorneys fees and court costs, of the prevailing Party in such action, suit or proceeding shall be borne by the Party against whose interest the judgment or decision is rendered.

 

(d)                                 The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement and the transactions contemplated hereby were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the Parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and the transactions contemplated hereby and to enforce specifically the terms and provisions of this Agreement and the transactions contemplated hereby in the courts of Delaware, this being in addition to any other remedy to which such Party is entitled at law or in equity.

 

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Section 5.8                                    Rules of Construction.  The following rules shall apply to the construction and interpretation of this Agreement:

 

(a)                                 Singular words shall connote the plural as well as the singular, and plural words shall connote the singular as well as the plural, and the masculine shall include the feminine and the neuter.

 

(b)                                 All references in this Agreement to particular articles, sections, subsections or clauses (whether in upper or lower case) are references to articles, sections, subsections or clauses of this Agreement.  All references in this Agreement to particular exhibits or schedules (whether in upper or lower case) are references to the exhibits and schedules attached to this Agreement, unless otherwise expressly stated or clearly apparent from the context of such reference.

 

(c)                                  The headings contained herein are solely for convenience of reference and shall not constitute a part of this Agreement nor shall they affect its meaning, construction or effect.

 

(d)                                 Each Party and its counsel have reviewed and revised (or requested revisions of) this Agreement and have participated in the preparation of this Agreement, and therefore any usual rules of construction requiring that ambiguities are to be resolved against any Party shall not be applicable in the construction and interpretation of this Agreement or any exhibits hereto.

 

(e)                                  The terms “hereby,” “hereof,” “hereto,” “herein,” “hereunder” and any similar terms shall refer to this Agreement, and not solely to the provision in which such term is used.

 

(f)                                   The terms “include,” “including” and similar terms shall be construed as if followed by the phrase “without limitation.”

 

(g)                                  The term “sole discretion” with respect to any determination to be made by a Party under this Agreement shall mean the sole and absolute discretion of such Party, without regard to any standard of reasonableness or other standard by which the determination of such Party might be challenged.

 

Section 5.9                                    Severability.  If any term or provision of this Agreement is held to be or rendered invalid or unenforceable at any time in any jurisdiction, such term or provision shall not affect the validity or enforceability of any other terms or provisions of this Agreement, or the validity or enforceability of such affected terms or provisions at any other time or in any other jurisdiction.

 

Section 5.10                             Recitals, Exhibits and Schedules.  The recitals to this Agreement, and all exhibits and schedules referred to in this Agreement are incorporated herein by such reference and made a part of this Agreement.  Any matter disclosed in any schedule to this Agreement shall be deemed to be incorporated in all other schedules to this Agreement.

 

Section 5.11                             Entire Agreement.  This Agreement sets forth the entire understanding and agreement of the Parties hereto, and shall supersede any other agreements and understandings

 

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(written or oral) between NRG and Yield on or prior to the date of this Agreement with respect to the matters contemplated in this Agreement.

 

Section 5.12                             Amendments to Agreement.  No amendment, supplement or other modification to any terms of this Agreement shall be valid unless in writing and executed and delivered by NRG and Yield.

 

Section 5.13                             Facsimile; Counterparts.  NRG and Yield may deliver executed signature pages to this Agreement by facsimile or electronic transmission to the other Party, which facsimile or electronic copy shall be deemed to be an original executed signature page; provided, however, that such Party shall deliver an original signature page to the other Party promptly thereafter.  This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which counterparts together shall constitute one agreement with the same effect as if the Parties had signed the same signature page.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, NRG and Yield each have caused this Agreement to be executed and delivered in their names by their respective duly authorized officers or representatives as of the date first above written.

 

 

NRG:

 

 

 

 

 

NRG ENERGY, INC.,

 

a Delaware Corporation

 

 

 

 

 

 

 

 

 

By:

/s/ Gaetan Frotte

 

 

Name:

Gaetan Frotte

 

 

Title:

Senior Vice President & Treasurer