Exhibit 10.9.2
EXHIBIT D
OPTION AGREEMENT
OPTION AGREEMENT, dated as of March 8, 1996 (this "Agreement"), made by
O'BRIEN ENVIRONMENTAL ENERGY, INC.. a Delaware corporation, as a Debtor and
a Debtor-in-Possession under Chapter 11 of the Bankruptcy Code (the
"Parent"), in favor of NRG ENERGY, INC., a Delaware corporation (the
"Lender").
WITNESSETH
WHEREAS, Pursuant to the Loan Agreement, dated as of the date hereof
(as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), between O'BRIEN (SCHUYLKILL) COGENERATION, INC. (the
"Borrower") and the Lender, the Lender has agreed to make a Loan to the
Borrower upon the terms and subject to the conditions set forth therein, to
be evidenced by the Note issued by the Borrower under the Credit Agreement,
WHEREAS, pursuant to the Guarantee, dated as of the date hereof (as
amended, supplemented or otherwise modified from time to time, the
("Guarantee") made by the Parent in favor of the Lender, the Parent has
guaranteed the obligations of the Borrower to the Lender,
WHEREAS, it is a condition precedent to the obligation of the Lender
to make the Loan to the Borrower under the Credit Agreement that the Parent
shall have executed and delivered this Agreement to the Lender; and
WHEREAS, the Parent is the parent of the Borrower, and it is to the
advantage of Parent that the Lender make the Loan to the Borrower.
NOW, THEREFORE, in consideration of the premises and to induce the
Lender to enter into the Credit Agreement and to induce the Lender to make
the loan to the Borrower under the Credit Agreement, the Parent hereby
agrees with the Lender as follows:
1. Defined Terms. (a) Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings
given to them in the Credit Agreement.
2. Option to Convert Portion of Loan to Common Stock. The Parent
hereby grants to the Lender, at any time after both (a) the NRG Plan
Effective Date and (b) the date on which the Lender shall have made the
Loan, the right, upon not less then fifteen Business Days' prior written
notice to the Parent, to exchange the Note for (1) a new promissory Note in
a principal amount which is $3 million less than the previously outstanding
principal amount of the Note for which it is exchanged and (2) that number
of shares of common stock of the Parent which would equal, on a fully
diluted basis, 5,767% of the shares of common stock of the Company (the
"Conversion Shares") as of the NRG Plan Effective Date. On the day
specified in the notice delivered pursuant to the preceding sentence, the
Lender shall deliver the Note to the Company in exchange for (1) the
delivery by the Company to the Lender of a new Note in a principal amount
which is $3 million less than the previously outstanding principal amount
of the old Note (and the Parent agrees to cause the Company to deliver such
new Note) and (2) the delivery by the Parent to the Lender of the
Conversion Shares.
3. Notices. All notices, requests and demands to or upon the Lender
or the Parent to be effective shall be in writing (or by telex, fax or
similar electronic transfer confirmed in writing) and
shall be deemed to have been duly given or made (1) when delivered by hand
or (2) if given by mail, when deposited in the mails by certified m4 return
receipt requested, or (3) if by telex, fox or similar electronic transfer,
when sent and receipt his been confirmed, addressed as se forth in the
Agreement.
4. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
5. Amendments in Writing; No Waiver: Cumulative Remedies. None of
the terms or provisions of Ws Agreement may be waived, amended,
supplemented or otherwise modified except by a written instrument executed
by the Parent and the Lender.
6. Section Headings. The section headings used in this Agreement
are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation
hereof
7. Successors and Assigns. This Agreement shall be binding upon the
successors and assigns of the Parent and shall inure to the benefit of the
Lender and its successors and assigns.
8. Governing Law. This Agreement shall be governed by, and
construed and interpreted in accordance with, the law of the State of New
York.
IN WITNESS WHEREOF, the undersigned has caused this Agreement to be
duly executed and delivered by its duly authorized officer as of the day
and year first above written.
O'BRIEN ENVIRONMENTAL ENERGY, INC.
By /s/ John B. Kelly
Name: John B. Kelly
Title: Chief Administrative Officer
2
April 30, 1996
Craig A. Mataczynski
Vice President
NRG Energy, Inc.
1221 Nicollet Mail, Suite 700
Minneapolis, NN 55403-2445
Dear Craig:
I am writing to confirm our calculations for the number of shares of
NRG Generating (U.S.) Inc. ("Generating") that will be issuable to NRG
Energy, Inc. ("NRG") upon exercise of its $3 million dollar option granted
in connection with the Grey's Ferry project. As you know, on the closing
of the Plan of Reorganization, a total of 6,474,814 shares of Generating
Common Stock will be issued, 2,710,357 of which shares will be issued to
NRG or its designated affiliate. Based upon these numbers, and the terms
of the option (a copy of which is attached), the number of Generating
shares that NRG Energy is entitled to receive upon exercise of its option
in full is 396,301 shares of Generating Common Stock, and the exercise
price per share is $7.57. Attached is a chart showing how we calculated
these numbers. Please confirm your concurrence with our calculations by
countersigning this letter in the space provided below.
The Official Committee of
Equity Security Holders of
O'Brien Environmental Energy
By: /s/ Lawrence Littman
Lawrence Littman
Committee Chair
AGREED TO:
NRG ENERGY, INC.
By: /s/ Craig A. Mataczynski