Exhibit 10.26.4
GUARANTEE
in favor of
MEESPIERSON CAPITAL CORP.,
as Security Trustee
December 17, 1997
GUARANTEE
THIS GUARANTEE, dated as of December 17, 1997, is made by
O'BRIEN (PHILADELPHIA) COGENERATION INC., a Delaware corporation, (the
"Guarantor"), in favor of MEESPIERSON CAPITAL CORP., a corporation
organized under the laws of the State of Delaware, in its capacity as
security trustee under the Credit Agreement referred to in Recital (A)
below.
WITNESSETH THAT:
WHEREAS:
(A) By a Credit Agreement dated as of December 17, 1997 (the
"Credit Agreement") and made by and among (i) NRG Generating (U.S.)
Inc., a Delaware corporation (the "Borrower"), (ii) MeesPierson Capital
Corp. ("MPCC"), as arranger (the "Arranger"), (iii) the Lenders (as
such term is defined in the Credit Agreement) and (iv) MPCC, as agent
(the "Agent") and security trustee (the "Security Trustee") for the
Lenders, the Lenders have agreed to make available to the Borrower upon
the terms and conditions therein described a three year revolving
credit facility in the maximum principal amount not to exceed at any
one time outstanding Thirty Million United States Dollars ($30,000,000)
(the "Credit Facility"). Words and expressions used herein as defined
terms but not defined herein shall have the meanings ascribed thereto
in the Credit Agreement.
(B) It is a condition precedent to the Lenders making the Credit
Facility available to the Borrower that the Guarantor enter into this
Guarantee and otherwise agree to be bound by the terms of this
Guarantee.
NOW, THEREFORE, in consideration of the premises and for
other valuable consideration, the receipt and adequacy of which the
Guarantor hereby acknowledges, the Guarantor hereby agrees as follows:
1. GUARANTEE
(a) The Guarantor hereby unconditionally and irrevocably
guarantees as primary obligor and not merely as surety to the Security
Trustee, for the account of the Agent, the Security Trustee, the
Arranger and the Lenders (together, the "Creditors") on first demand
the due and punctual payment, when due, whether by acceleration or
otherwise, of all sums owing by the Borrower to any of the Creditors
under the Credit Agreement, the Note and the Security Documents,
together with any and all reasonable out-of-pocket legal costs and
other reasonable expenses incurred in connection therewith by any of
the Creditors and, in case of extension of time of payment or renewal
in whole or in part of the said obligations of the Borrower, the prompt
payment when due of all said sums according to such extension or
extensions or renewal or renewals, whether by acceleration or
otherwise.
(b) The Guarantor makes this guarantee (hereinafter, this
"Guarantee") irrespective of the validity, regularity or enforceability
of the Credit Agreement, the Note or any of the Security Documents or
any of the obligations under the Credit Agreement, the Note and the
Security Documents and irrespective of any present or future law or
order of any government (whether of right or in fact) or of any agency
thereof purporting to reduce, amend or otherwise affect any obligation
of the Borrower or to vary the terms of payment or to restrict the
right or power of the Borrower or of the Guarantor to make payment of
any of their respective obligations to any of the Creditors. This
Guarantee is a guarantee of payment and performance and not of
collection.
2. REPRESENTATIONS AND WARRANTIES
The Guarantor hereby represents and warrants to the Security
Trustee on behalf of the Creditors (which representations and
warranties shall survive the execution and delivery of this Guarantee)
that the representations set forth in Section 2 of the Credit Agreement
insofar as they relate to the Guarantor are true and correct and hereby
incorporate, repeat and represent, on its own behalf, without
limitation, such representations as though they were set forth herein
at length.
3. COVENANTS
(a) The Guarantor hereby covenants and undertakes with the
Security Trustee, on behalf of the Creditors, that from the date hereof
and so long as any principal, interest or other monies are owing by the
Borrower under or in connection with the Credit Agreement, the Note,
the Security Documents, or any of them, it will:
(i) duly perform and observe the terms of this
Guarantee;
(ii) promptly upon obtaining knowledge thereof, inform
the Agent of the occurrence of (a) any Event of Default (as such term
is defined in the Credit Agreement) or of any event which, with the
giving of notice or lapse of time, or both, would constitute an Event
of
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Default, (b) any litigation or governmental
proceeding pending or threatened against it which could reasonably be
expected to have a material adverse effect on its business, assets,
operations, property or financial condition and (c) any other event or
condition which is reasonably likely to have a material adverse effect
on its ability to perform its obligations under this Guarantee;
(iii) obtain every consent and do all other acts and
things which may from time to time be necessary or advisable for the
continued due performance of all its obligations under this Guarantee;
and
(iv) perform each and every covenant and
undertaking in the Credit Agreement applicable to it
or procure the performance thereof as though such
covenants and undertakings were set forth at length
herein.
(b) The Guarantor hereby covenants and undertakes with the
Security Trustee on behalf of the Creditors that, from the date hereof
and so long as any principal, interest or other monies are owing by the
Borrower under or in connection with the Credit Agreement, the Note,
the Security Documents or any of them, it will not, without the prior
written consent of the Majority Lenders (or all of the Lenders if
required by Section 16.7(b) of the Credit Agreement) other than as
expressly permitted by the terms of the Credit Agreement and the
Security Documents:
(i) sell, assign, transfer, pledge or otherwise
convey or dispose of or issue any of the shares of its
capital stock to anyone other than the Borrower,
except as permitted under clause (iii) below;
(ii) sell, or otherwise dispose of, or grant any
security interest in, lien on or encumbrance over any
of its assets which constitute Collateral, except for
sales and dispositions of obsolete, worn or replaced
property not used or useful in Guarantor's business
provided that the proceeds thereof (to the extent not
used to replace such obsolete, worn or replaced
property) shall be deposited in the Collection
Account; or
(iii) consolidate with, or merge into, any
corporation, or merge any corporation into it;
provided, however, that the Guarantor shall be
permitted to merge with or consolidate with any other
Security Party so long as no Event of Default would
result therefrom and
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the Guarantor is the surviving entity in such
merger or consolidation.
4. PAYMENTS
4.1 Payment. (a) All payments by the Guarantor under this
Guarantee shall be made in the same manner as the Borrower is required
to make payments under the Loan Agreement as specifically set forth
therein.
(b) On all sum or sums for which the Guarantor is
liable hereunder interest shall be due at the Default Rate specified in
Section 1.1 in the Credit Agreement from the date of the demand made
hereunder until the date of payment of such amount by the Guarantor.
4.2 Taxes; Withholdings. Subject to such Creditor's
compliance with Section 4.3 below, if the Guarantor shall at any time
be compelled by law to withhold or deduct any Taxes from any amounts
payable to the Creditor hereunder, then the Guarantor shall pay such
additional amounts in Dollars as may be necessary in order that the net
amounts received after withholding or deduction shall equal the amounts
which would have been received if such withholding or deduction were
not required and, in the event any withholding or deduction is made,
whether for Taxes or otherwise, the Guarantor shall promptly send to
the Agent such documentary evidence with respect to such withholding or
deduction as may be required from time to time by the Creditors.
4.3 Tax Forms. Each Creditor shall promptly provide the
Guarantor with two duly completed copies of Internal Revenue Service
Form 1001 or 4224, as appropriate, or any successor form prescribed by
the Internal Revenue Service, certifying that such Creditor is entitled
to benefits under an income tax treaty to which the United States is a
party that exempts withholding tax on payments under this Guarantee or
the Note or certifying that the income receivable pursuant to this
Guarantee or the Note is effectively connected with the conduct of a
trade or business in the United States.
4.4 Tax Credits. If any Creditor obtains the benefit of a
credit against the liability thereof for federal income taxes imposed
by any taxing authority for all or part of the Taxes as to which the
Guarantor has paid additional amounts as aforesaid (and each Creditor
agrees to use its best efforts to obtain the benefit of any such credit
which may be available to it, provided it has knowledge that such
credit is in fact available to it), then such Creditor shall reimburse
the Guarantor for the amount of the credit so obtained.
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5. PRESERVATION OF RIGHTS
(a) The Guarantor hereby consents that from time to time,
the time for the performance and/or observance by the Borrower of any
of the agreements, covenants or conditions in the Credit Agreement, the
Note or the Security Documents, or any of them, on the part of the
Borrower to be performed and/or observed may be waived or the time of
performance thereof extended by the Creditors and payment of any sums
owing or payable under any such document may be extended or any such
document may be renewed in whole or in part or modified in any respect
or any collateral or arrangement provided for by any such document as
security for any obligation contemplated by any such document may be
exchanged, surrendered, released or otherwise dealt with as the
Creditors may determine, that the time for the making of any payment of
any obligation hereby guaranteed may be accelerated in accordance with
any agreement between any of the Creditors and the Borrower, and that
any of the acts mentioned in any of said documents may be done and that
any other guarantor of any of the obligations hereby guaranteed and/or
any document or security therefor may be released in whole or in part
without affecting the obligations of the Guarantor hereunder.
(b) The Guarantor hereby waives any presentment, demand of
payment, protest and notice of nonpayment or protest thereof or of any
exchange, sale, surrender, release or other handling or disposition of
such collateral or arrangement. The obligations of the Guarantor
hereunder shall not be affected by receipt by any Creditor of any
proceeds of any security at any time held by any of the Creditors.
(c) The Guarantor agrees that so long as the Borrower
remains under any actual or contingent liability under the Credit
Agreement and the Security Documents any rights which the Guarantor may
at any time have by reason of the performance by the Guarantor of its
obligations hereunder (a) to be indemnified by the Borrower and/or
(b) to claim any contribution from any other guarantor or Security
Party of the Borrower's obligations under the Credit Agreement or the
Security Documents and/or (c) to take the benefit (in whole or in part)
of any security taken pursuant to this Guarantee or the Credit
Agreement or the Security Documents by, all or any of the persons to
whom the benefit of the Guarantor's obligations are given, shall be
exercised by the Guarantor in such manner and upon such terms as the
Creditors may require and further agrees to hold any monies at any time
received by it as a result of the exercise of any such rights or
otherwise for and on behalf of and to the order of the Creditors for
application in or towards payment of any sums at any time owed by the
Borrower under the Credit Agreement or the Security Documents.
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(d) The Guarantor further agrees that its liabilities
hereunder shall be unconditional irrespective of any other circumstance
which might otherwise constitute a discharge at law or in equity of a
guarantor or surety. The Guarantor further guarantees that all
payments made by the Borrower, the Guarantor, or either of them, to any
of the Creditors on any obligation hereby guaranteed will, when made,
be final and agrees that, if any such payment is recovered from, or
repaid by, any of the Creditors in whole or in part in any bankruptcy,
insolvency or similar proceeding instituted by or against the Borrower,
or the Guarantor, or either of them, this Guarantee shall continue to
be fully applicable to such obligation to the same extent as though the
payment so recovered or repaid had never been originally made on such
obligation.
(e) The Creditors may enforce the Guarantor's obligations
hereunder without in any way first pursuing or exhausting any other
rights or remedies which any of the Creditors may have against the
Borrower, or against any other person, firm or corporation, or against
any security any of the Creditors may hold.
(f) The Guarantor hereby irrevocably waives all rights of
subrogation (whether contractual, under Section 509 of Title 11 of the
United States Code entitled "Bankruptcy" as now or hereafter in effect,
or any successor thereto (herein called the "Bankruptcy Code"), under
common law, or otherwise) to the claims of any of the Creditors against
the Borrower and all contractual, statutory or common law rights of
contribution, reimbursement, indemnification and similar rights and
"claims" (as such term is defined in the Bankruptcy Code) against the
Borrower which arise in connection with, or as a result of, this
Guarantee, until such time as the obligations of the Borrower under or
in connection with the Credit Agreement, the Note and the Security
Documents have been indefeasibly paid in full.
(g) The Guarantor shall not assign, transfer, hypothecate or
dispose of any claim that it has or may have against the Borrower while
any indebtedness of the Borrower to the Creditors remains unpaid,
without the written consent of each of the Creditors.
(h) Any delay in or failure to exercise any right or remedy
of any of the Creditors shall not be deemed a waiver of any obligation
of Guarantor or right of any of the Creditors. This Agreement may be
modified, and any of the Creditors' rights hereunder waived, only by an
agreement in writing signed by all of the Lenders.
(i) Notice of acceptance by the Security Trustee on behalf
of the Creditors of this Guarantee and of the incurring of any or all
of the obligations hereby guaranteed is hereby waived by the Guarantor,
and this Guarantee and all of the terms
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and provisions hereof shall immediately be binding upon the Guarantor
from the date of execution hereof.
6. BENEFIT OF GUARANTEE; ASSIGNMENT
This Guarantee shall inure to the benefit of the Creditors,
their successors and permitted assigns, and shall bind the successors
and assigns of the Guarantor.
7. WAIVER OF JURY TRIAL; GOVERNING LAW; JURISDICTION
THE GUARANTOR AND, BY ITS ACCEPTANCE HEREOF, EACH OF THE
SECURITY TRUSTEE AND THE CREDITORS, HEREBY WAIVES TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY HERETO OR
BENEFICIARY HEREOF ON ANY MATTER WHATSOEVER ARISING OUT OF OR IN ANY
WAY CONNECTED WITH THIS GUARANTEE.
THIS GUARANTEE AND ALL RIGHTS, OBLIGATIONS AND LIABILITIES
ARISING HEREUNDER SHALL BE CONSTRUED ACCORDING TO THE LAWS OF THE STATE
OF NEW YORK.
Unless the context otherwise requires, all terms used herein
which are defined in the New York Uniform Commercial Code shall have
the meanings therein stated.
The Guarantor hereby irrevocably submits to the jurisdiction
of the courts of the State of New York and of the United States
District Court for the Southern District of New York in any action or
proceeding brought against it by any of the Creditors under this
Guarantee or under any document delivered hereunder and hereby
irrevocably agrees that valid service of summons or other legal process
on it may be effected by serving a copy of the summons and other legal
process in any such action or proceeding on the Guarantor by mailing
(certified or registered mail) or delivering the same by hand to the
Guarantor at the address indicated for notices in Section 9. The
service, as herein provided, of such summons or other legal process in
any such action or proceeding shall be deemed personal service and
accepted by the Guarantor as such, and shall be legal and binding upon
the Guarantor for all the purposes of any such action or proceeding. A
judgment (a certified or exemplified copy of which shall be conclusive
evidence of the fact and of the amount of any indebtedness of the
Guarantor to the Creditors) after exhaustion of any appeals taken
against the Guarantor in any such legal action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the
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judgment. The Guarantor will advise the Agent promptly of any change
of address for the purpose of service of process. Notwithstanding
anything herein to the contrary, the Creditors may bring any legal
action or proceeding in any other appropriate jurisdiction.
8. FRAUDULENT CONVEYANCES; FRAUDULENT TRANSFERS
Notwithstanding anything to the contrary contained in the
Credit Agreement, the Note, this Guarantee or any of the other Security
Documents, in the event that any court or other judicial body of
competent jurisdiction determines that legal principles of fraudulent
conveyances, fraudulent transfers or similar concepts are applicable in
evaluating the enforceability against the Guarantor or its assets of
the Credit Agreement, the Note, this Guarantee or any other Security
Document granted by the Guarantor as security for its obligations
hereunder and that under such principles, this Guarantee or such other
Security Documents would not be enforceable against the Guarantor or
its assets unless the following provisions of this Section 8 had
effect, then, the maximum liability of the Guarantor hereunder (the
``Maximum Liability Amount'') shall be limited so that in no event
shall such amount exceed the lesser of (i) the Indebtedness and (ii) an
amount equal to the aggregate, without double counting, of (a) ninety-
five percent (95%) of the Guarantor's Adjusted Net Worth (as
hereinafter defined) on the date hereof, or on the date enforcement of
this Guarantee is sought (the ``Determination Date''), whichever is
greater, (b) the aggregate fair value of the Guarantor's Subrogation
and Contribution Rights (as hereinafter defined) and (c) the amount of
any Valuable Transfer (as hereinafter defined) to the Guarantor,
provided that the Guarantor's liability under this Guarantee shall be
further limited to the extent, if any, required so that the obligations
of the Guarantor under this Guarantee shall not be subject to being set
aside or annulled under any applicable law relating to fraudulent
transfers or fraudulent conveyances. In determining the limitations,
if any, on the amount of any of the Guarantor's obligations hereunder
pursuant to the preceding sentence, any rights of subrogation or
contribution (collectively the ``Subrogation and Contribution Rights'')
which the Guarantor may have on the Determination Date with respect to
any other guarantor of the Indebtedness under applicable law shall be
taken into account. As used in Section 8, ``Indebtedness'' of the
Guarantor shall mean, all of the Guarantor's present or future
indebtedness whether for principal, interest, fees, expenses or
otherwise, to the Creditors under the Credit Agreement, the Note and
the Security Documents. As used herein ``Adjusted Net Worth'' of the
Guarantor shall mean, as of any date of determination thereof, an
amount equal to the lesser of (a) an amount equal to the excess of
(i) the amount of the present fair salable value of the assets of the
Guarantor over (ii) the amount that will be required to pay the
Guarantor's probable liability on its then existing debts, including
contingent liabilities, as they become absolute and matured, and (b) an
amount equal to (i) the excess of the sum of the Guarantor's property
at a fair valuation over (ii) the amount of all liabilities of the
Guarantor, contingent or otherwise,
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as such terms are construed in accordance with applicable laws
governing determinations of the insolvency of debtors. In determining
the Adjusted Net Worth of the Guarantor for purposes of calculating the
Maximum Liability Amount for the Guarantor, the liabilities of the
Guarantor to be used in such determination pursuant to each section
(ii) of the preceding sentence shall in any event exclude (a) the
liability of the Guarantor under this Guarantee and the other Security
Documents to which it is a party, (b) the liabilities of the Guarantor
subordinated in right of payment to this Guarantee and (c) any
liabilities of the Guarantor for Subrogation and Contribution Rights to
any of the other guarantors. As used herein ``Valuable Transfer''
shall mean, in respect of the Guarantor, (a) all loans, advances or
capital contributions made to the Guarantor with proceeds of the Credit
Facility, (b) all debt securities or other obligations of the Guarantor
acquired from the Guarantor or retired by the Guarantor with proceeds
of the Credit Facility, (c) the fair market value of all property
acquired with proceeds of the Loan and transferred, absolutely and not
as collateral, to the Guarantor, (d) all equity securities of the
Guarantor acquired from the Guarantor with proceeds of the Credit
Facility, and (e) the value of any other economic benefits in
accordance with applicable laws governing determinations of the
insolvency of debtors, in each such case accruing to the Guarantor as a
result of the Credit Facility and this Guarantee.
9. NOTICES
Notices and other communications hereunder shall be in
writing and may be given at the address or telecopy number set forth
below:
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If to the Guarantor:
O'Brien (Philadelphia) Cogeneration Inc.
1221 Nicollet Mall, Suite 610
Minneapolis, Minnesota 55403
Attention: Vice President-CFO
Telecopy No. (612) 373-8833
with a copy to:
Troutman Sanders LLP
600 Peachtree Street, N.W.
Suite 5200
Atlanta, Georgia 30308-2216
Attention: M. Stuart Sutherland, Esq.
Telecopy No. (404) 885-3900
If to the Security Trustee:
MeesPierson Capital Corp.
445 Park Avenue
New York, New York 10022
Attn: Mr. Hendrick Vroege
Telecopy No. (212) 801-0420
or to such other address as any party shall from time to time specify
in writing. Any notice sent by telecopy shall be confirmed by letter
dispatched as soon as practicable thereafter.
Every notice or demand shall, except so far as otherwise
expressly provided by this Guarantee, be deemed to have been received
(provided that it is received prior to 2 p.m. New York time), in the
case of a telecopy, on the date of dispatch thereof (provided that if
the date of dispatch is not a Banking Day in the locality of the party
to whom such notice or communication is sent it shall be deemed to have
been received on the next following Banking Day in such locality), and,
in the case of a letter, at the time of receipt thereof.
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10. HEADINGS
In this Guarantee, Section headings are inserted for
convenience of reference only and shall be ignored in the
interpretation hereof.
IN WITNESS WHEREOF, this Guarantee has been duly executed by
the Guarantor as of this 17 day of December, 1997.
O'BRIEN (PHILADELPHIA) COGENERATION
INC.
By /s/ Timothy P. Hunstad
Name: Timothy P. Hunstad
Title: Vice President-CFO
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