Exhibit 10.27.2
Execution Version
EQUITY COMMITMENT AGREEMENT
dated as of September 15, 1997
among
NRG ENERGY, INC.
NRG (MORRIS) COGEN, LLC
and
THE CHASE MANHATTAN BANK,
as Collateral Agent
EQUITY COMMITMENT AGREEMENT
This EQUITY COMMITMENT AGREEMENT, dated as of September 15, 1997
(this "Agreement"), is made and entered into by and among NRG Energy,
Inc., a Delaware corporation ("NRG"), NRG (Morris) Cogen, LLC, a
Delaware limited liability company (the "Borrower"), and The Chase
Manhattan Bank, a banking corporation organized and existing under the
laws of the State of New York, in its capacity as Collateral Agent
under the Loan Agreement referred to below for the benefit of the Banks
hereinafter described.
WITNESSETH:
WHEREAS, the Borrower proposes to develop, construct, own and
operate an approximately 117 megawatt gas-fired cogeneration plant,
producing electricity and steam together with related facilities (the
"Project") at the Morris, Illinois complex of Millennium Petrochemicals
Inc. (formerly Quantum Chemical Corporation), a Virginia corporation;
and
WHEREAS, the Borrower and The Chase Manhattan Bank, as collateral
agent (together with its successors in such capacity, the "Collateral
Agent") for the banks that are or may from time to time become parties
to the Loan Agreement (as defined below), have entered into a
Construction and Term Loan Agreement, dated as of September 15, 1997
(the "Loan Agreement"), with the banks party thereto (the "Banks") and
The Chase Manhattan Bank, in its capacity as agent for the Banks (in
such capacity, the "Agent Bank"), pursuant to which the Banks will make
construction loans and term loans and extend other credit to the
Borrower for the purpose of financing the cost of developing,
constructing, starting up and operating the Project and certain related
expenses (the "Loans"); and
WHEREAS, pursuant to the Loan Agreement, the Borrower is
obligated to maintain a Construction Account; and
WHEREAS, on the date hereof, NRG and NRG Morris Inc., a Delaware
corporation and a wholly-owned subsidiary of NRG ("NRGMI"),
beneficially own 99% and 1%, respectively, of the issued and
outstanding membership interests in the Borrower; and
WHEREAS, it is a condition precedent to the making of Loans by
the Banks that this Agreement shall have been entered into by the
parties hereto and shall have become unconditionally and fully
effective in accordance with it terms; and
WHEREAS, NRG will derive substantial benefit from the making of
the Loans by the Banks to the Borrower.
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NOW, THEREFORE, in consideration of the above recited premises and
in order to induce the Banks to make the Loans to the Borrower, and for
other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto hereby agree as follows. Capitalized
terms used but not otherwise defined herein shall have the meanings
given to them in the Loan Agreement.
1. Equity Contributions. The Borrower and NRG each hereby
acknowledge and agree:
a. Subject to the terms of Section 1.b below, NRG shall make
cash equity contributions (each an "Equity Contribution") to
the Borrower by payment to the Construction Account on the
date and in the amount specified in any Equity Requisition
Certificate, in the form of Exhibit A attached hereto (each
an "Equity Requisition Certificate"), delivered by the
Borrower to NRG. All such amounts in the Construction
Account shall be used in accordance with, and for the
purposes expressly set forth in, the Loan Agreement.
b. From time to time, but not more frequently than once per
month, the Borrower may execute and submit to NRG an Equity
Requisition Certificate requesting a Equity Contribution;
provided, however, that no Equity Contribution shall be made,
and the Borrower may not request such a Equity Contribution,
if:
(i) subject to Section 2 below, as of the date on which
such Equity Contribution is requested, the Dollar amount of
all Construction Loan Borrowings is less than Eighty-Four
Million Dollars ($84,000,000); or
(ii) the total amount of the requested Equity
Contribution, plus the amount of all prior Equity
Contributions, shall be greater than the lesser of (y) twenty
percent (20%) of the total Project Costs (as set forth in
the then current Construction Budget) or (z) Twenty-Two
Million Dollars ($22,000,000) (the lesser of such amounts
being hereinafter referred to as the "Maximum Equity
Commitment"); provided, however, that if any requested Equity
Contribution, together with the aggregate of all previous
Equity Contributions, exceeds the Maximum Equity Commitment,
NRG shall make an Equity Contribution equal to the Maximum
Equity Commitment less the amount of all previous Equity
Contributions; or
(iii) such Equity Contribution is requested on or
after the Construction Loan Maturity Date.
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2. Event of Default. Notwithstanding any other provision of
this Agreement, if (i) an Event of Default shall occur and be
continuing, or (ii) the Date Certain shall occur and the Construction
Loans shall not have converted to Term Loans pursuant to the Credit
Agreement, NRG shall, upon the occurrence of such Event of Default or
on the Date Certain, as the case may be, make a cash equity
contribution (a "Default Equity Contribution") to the Borrower by
payment to the Proceeds Account of an amount equal to the Maximum
Equity Commitment less the aggregate of all previous Equity
Contributions.
3. New Member Equity Commitment; Release of NRG Equity
Commitment.
a. If, at any time when NRG has continuing obligations under
this Agreement, NRG sells or otherwise transfers its entire
membership interest in the Borrower to NRG Generating (U.S.)
Inc., a Delaware corporation ("NRG Generating"), in
accordance with Section 4.1 of the Pledge Agreement, then the
Borrower and the Collateral Agent, for and on behalf of the
Agent Bank and the Banks, shall release NRG from its
obligations under this Agreement provided NRG has delivered
or caused to be delivered to the Collateral Agent the
following:
(i) a written assumption agreement, in form and
substance satisfactory to the Required Banks, pursuant to
which NRG Generating assumes all of the then unperformed
obligations of NRG under this Agreement, duly executed by NRG
Generating; and
(ii) a written guaranty by NRG in favor of the
Collateral Agent and the Borrower guarantying the obligations
of NRG Generating under this Agreement, as assumed pursuant
to clause (i) immediately above, substantially in the form of
Exhibit B attached hereto or otherwise approved by Agent
Bank, and duly executed by NRG.
b. If any Person (other than NRG Generating) shall be added as a
new member of the Borrower with the prior written consent of
the Required Banks pursuant to Section 4.1 of the Pledge
Agreement (any such Person, a "New Member"), the equity
commitment obligations of NRG (or NRG Generating, as
applicable) under Sections 1 and 2 hereof shall be reduced by
the amount of any equity commitment granted by such New
Member to the Collateral Agent for the benefit of the Banks,
which equity commitment and any credit support provided
therefor shall be in form and substance acceptable to each
Bank.
4. Representations and Warranties. NRG represents and warrants
to the Borrower and the Collateral Agent, for its own benefit and for
the benefit of the other
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Secured Parties, which representations and warranties shall survive the
execution and delivery of this Agreement that:
a. NRG is a corporation duly organized and validly existing
under the Laws of the Sate of Delaware, and is duly
qualified, authorized to do business and in good standing as
a foreign corporation in every jurisdiction in which it owns
or leases real property or in which the nature of its
business requires it to be so qualified except to the extent
the failure to be so qualified would not reasonably be
expected to result in a Material Adverse Effect. As used in
this Section 4.a and otherwise in this Agreement, the term
"Material Adverse Effect" shall mean a material adverse
effect on either (i) the operations, business, financial
condition or property of NRG and its subsidiaries on a
consolidated basis, or (ii) the ability of NRG to perform in
a timely manner its material obligations under this
Agreement.
b. The execution, delivery and performance of this Agreement,
the compliance by NRG with the provisions hereof, and the
consummation of the transactions contemplated hereby, will
not (i) conflict with or result in a breach or violation of
any of the respective charters or bylaws of NRG or any of its
subsidiaries or any material franchise or license of NRG or
any of the terms or provisions thereof, (ii) constitute a
default or cause an acceleration of any obligation under, or
result in the imposition or creation of (or the obligation to
create or impose) a Lien with respect to, any bond, note,
debenture or other evidence of Indebtedness or any indenture,
mortgage, deed of trust or other agreement or instrument to
which NRG or any of its subsidiaries is a party or by which
it or any of them is bound, or to which any properties of NRG
or any of its subsidiaries is or may be subject, (iii)
contravene any order of any court or Governmental Authority
or body having jurisdiction over NRG or any of its
subsidiaries or any of their properties, or (iv) violate or
conflict with any statute, rule or regulation or
administrative or court decree applicable to NRG or any of
its subsidiaries or any of their respective properties, in
the case of clauses (ii), (iii) and (iv) which conflict,
breach, violation, default or contravention, singly or in the
aggregate with each other conflict, breach, violation,
default or contravention, could reasonably be expected to
result in a Material Adverse Effect.
c. NRG has all necessary corporate power and authority to
execute and deliver this Agreement and to perform its
obligations under this Agreement.
d. The execution, delivery and performance by NRG of this Agreement
have been duly authorized by all necessary corporate action on the
part of NRG
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and do not require any approval or consent of any holder (or any
trustee for any holder) of any Indebtedness or other obligation of NRG
or any other Person or entity, except approvals or consents which have
previously been obtained and which are in full force and effect.
e. This Agreement has been duly authorized, executed and
delivered by NRG and constitutes a legally valid and binding
agreement, enforceable against NRG in accordance with its
terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar
Laws affecting creditors' rights and remedies generally and
to principles of equity (regardless of whether enforcement is
sought at law or in equity).
f. There is no legislation, litigation, action, suit, proceeding
or investigation pending or (to the best of NRG's knowledge
after due inquiry) threatened against NRG before or by any
court, administrative agency, arbitrator or Governmental
Authority which if adversely determined individually or in
the aggregate, (i) could reasonably be expected to result in
a Material Adverse Effect or (ii) questions the validity,
binding effect or enforceability hereof, any action taken or
to be taken pursuant hereto or any of the transactions
contemplated hereby.
g. The financial statements of NRG provided or to be provided as
contemplated in the Credit Agreement and the other Financing
Documents are or will be true, correct and complete as of the
dates specified therein and fully and accurately present the
financial condition of NRG as of the dates and for the
periods specified. There has been no material adverse change
in the financial condition of NRG from the date of NRG's most
recent audited financial statements delivered to the Agent
Bank (except as heretofore disclosed to the Agent Bank in a
writing delivered by or on behalf of NRG).
h. NRG is in compliance with all Laws applicable to it except to
the extent that the failure to comply therewith could
reasonably be expected to result in a Material Adverse
Effect.
5. Covenants and Agreements. NRG hereby covenants and agrees
that it shall faithfully observe and fulfill, and shall cause to be
observed and fulfilled, each and all of the following covenants:
a. NRG shall not merge or consolidate with or into any other
entity unless the surviving entity (if other than NRG)
expressly agrees to assume all the obligations of NRG under
this Agreement and each other Transaction
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Document to which NRG is a party and expressly agrees to
otherwise be subject to the terms of this Agreement and each
other Transaction Document to which NRG is a party.
b. Neither NRG nor any of its Affiliates shall commence or join
with any other Person (other than the Agent Bank, the
Collateral Agent or any of the Banks) in commencing any Event
of Bankruptcy against the Borrower.
c. NRG agrees that it will not, and that it will cause its
subsidiaries not to, enter into any bond, note, debenture or
other evidence of Indebtedness or any indenture, mortgage,
deed of trust or other agreement or instrument which would
conflict with the performance by NRG of its obligations
pursuant to this Agreement or compliance by NRG with the
provisions hereof or pursuant to which this Agreement would
constitute a default or cause an acceleration of any
obligation under, or result in the imposition or creation of
(or the obligation to create or impose) a Lien.
6. Action by Collateral Agent. The Collateral Agent shall be
entitled to rely on any notice received by it from the Agent Bank, any
Bank or the Borrower stating that any Event of Default shall have
occurred and shall not be under any duty or responsibility to make any
independent verification of such statement.
7. Enforcement. NRG hereby agrees that the Collateral Agent
shall have the right to directly enforce the provisions hereof which
are binding upon NRG against NRG and NRG hereby agrees to pay all
costs, including reasonable attorneys' fees, incurred with respect to
the enforcement of such provisions of this Agreement against NRG, which
enforcement costs, regardless of when incurred, shall be payable by NRG
on the earlier of (a) the date on which a final judgment shall be
obtained against NRG with respect to this Agreement and any and all
applicable appeal periods with respect thereto shall have expired and
(b) the date on which NRG and the Collateral Agent shall have otherwise
resolved (including by way of settlement) any dispute with respect to
the enforcement of this Agreement against NRG.
8. Assignment and Consent. NRG consents to the terms and
provisions of the Security Documents, including the assignment of this
Agreement to the Collateral Agent for the benefit of the Banks. NRG
agrees that the Collateral Agent (acting for the benefit of the Banks)
and any assignee thereof shall be entitled to exercise any and all
rights of the Borrower under this Agreement in accordance with the
terms thereof (in its own name or in the name of the Borrower), and NRG
shall comply in all respects with such exercise. Without limiting the
generality of the foregoing, the Collateral Agent and any assignee
thereof shall have the full right and power to enforce directly against
NRG and its assignees any and all obligations of NRG under this
Agreement and otherwise to exercise any and all remedies hereunder and
under the Security Documents and to make
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any and all requests required or permitted to be made by the Borrower
(in its own name or in the name of the Borrower) under this Agreement.
9. Limitation of Liability. Notwithstanding anything else in
this Agreement or any other Transaction Document, NRG's liability in
respect of this Agreement is limited to the equity contributions
specified in Sections 1 and 2 of this Agreement. Neither NRG nor any
shareholder, officer, employee, controlling Person, executive,
director, agent or Affiliate (other than the Borrower) of NRG (herein
referred to as "operatives") shall be liable for payments or other
obligations due by the Borrower under the Loan Agreement or any other
Transaction Document or for the payment or performance by the Borrower
of any other Obligation. In the event of foreclosure or other sale or
disposition of properties, no judgment for any deficiency upon the
obligations of the Borrower under any Financing Document shall be
obtainable by the Banks against NRG or any of such operatives except,
in the case of each of such parties and their respective operatives,
with respect to any then-remaining collateral pledged by such parties
and their respective operatives, respectively. Notwithstanding the
foregoing, nothing in this Section 9 shall be deemed to affect or
diminish the obligations of NRG or any operative under this Agreement
or any other Transaction Document to which NRG or any such operative is
a party.
10. Payment Absolute.
a. Subrogation. Notwithstanding any payment or payments made or
caused to be made by NRG hereunder, NRG shall not be entitled
to be subrogated to any of the rights of the Secured Parties
or any collateral security or guaranty held by the Secured
Parties in connection with the Borrower's Obligations, nor
shall NRG seek any reimbursement from the Borrower in respect
of payments made or caused to be made by NRG hereunder. If
any amount shall be paid to NRG as a result of such
subrogation rights at any time prior to the Loan Agreement
Termination Date, such amount shall be held by NRG in trust
for the Secured Parties, segregated from other funds of NRG,
and shall be turned over to the Collateral Agent for the
benefit of the Secured Parties, in the exact form received by
NRG (duly endorsed by NRG to the Collateral Agent for the
benefit of itself and the other Secured Parties, if
required), to be applied against Obligations in such order as
the Collateral Agent (as directed by the Agent Bank, acting
pursuant to the Credit Agreement) may elect.
b. Unconditional Obligation. The obligations of NRG under
Sections 1 and 2 hereof shall be absolute, unconditional and
irrevocable under any and all circumstances and shall be
performed by NRG regardless of any circumstance whatsoever
which might otherwise constitute an excuse for nonperformance
of the obligations of NRG under Sections 1 and 2. Without
limiting the generality of the foregoing, NRG shall remain
obligated to
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the extent provided hereunder, notwithstanding that, without
any reservation of rights by or against NRG and without
notice to or further assent by NRG, any demand for payment of
any amount due pursuant to the Loan Agreement or any other
Financing Document may be rescinded by the Secured Parties
and any of the Loans or other extensions of credit thereunder
continued and such amounts, or the liability of any other
Person upon or for any part thereof, or any collateral
security or guaranty therefor or right of offset with respect
thereto may, form time to time, in whole or part, be renewed,
extended, amended, modified, accelerated, compromised,
waived, surrendered or released by the Secured Parties, and
the Loan Agreement or any other Financing Document or any
other document executed in connection therewith may be
amended, modified, supplemented or terminated, in whole or in
part, as the Secured Parties may deem advisable from time to
time, and any collateral security or guaranty or right of
offset at any time held by the Secured Parties for the
payment of such amounts may be sold or exchanged, waived,
surrendered or released. None of the Secured Parties shall
have any obligation to protect, secure, perfect or inquire as
to any Lien at any time held by any of them as security for
any amount due under the Loan Agreement or any other
Financing Document or any property subject to any such Lien
and the failure of any of the Secured Parties to do any of
the foregoing shall have no effect on the obligations of NRG
hereunder and none of the Secured Parties shall have any
liability for the performance or observance of any of the
obligations or duties of the Borrower under the Loan
Agreement or under any other Transaction Document and the
Borrower's failure to perform any such obligations or duties
shall not impair the obligations of NRG hereunder.
c. Continuing Obligations. The obligations set forth herein
shall continue to be effective or shall be reinstated, as the
case may be, if at any time and for any reason, any payment
made hereunder by NRG is rescinded or must otherwise be
returned by the Secured Parties, all as though such payment
had not been made.
11. No Setoff. NRG shall not have the right to withhold or
offset against any payment due for any reason including, without
limitation, any dispute between the Borrower and NRG.
12. Third Party Beneficiaries. The agreements of the parties
hereto are intended to benefit the Secured Parties and their respective
successors and assigns.
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13. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same
instrument.
14. Survival. The terms of this Agreement shall be binding upon,
and inure to the benefit of, the parties hereto and their respective
successors and assigns. All representations, warranties and
indemnities contained herein or made in writing by NRG in connection
herewith shall survive the execution and delivery of this Agreement and
the performance of the obligations contained herein until the
Conversion Date.
15. Notices. Except as otherwise expressly provided herein,
(a) all notices and other communications provided for hereunder shall
be provided in writing and shall be sent by personal delivery,
telecopy, overnight courier or, if such courier service is not
available, by certified mail with postage prepaid to any party at the
address set forth below its signature on this Agreement, or at such
other address as shall be designated by a party in a written notice to
the other parties hereto and (b) all such notices and communications
shall be effective seven (7) days after being deposited in the mails in
the manner as aforesaid, when delivered by personal delivery, one (1)
day after delivery to the courier in the manner as aforesaid, or when
sent by telecopier, upon confirmation of receipt.
16. Successors and Assigns. This Agreement shall inure to the
benefit of the parties hereto, the Agent Bank and each of the Banks, as
third party beneficiaries, and their successors and assigns, and shall
bind the heirs, executors, administrators, personal representatives,
successors and assigns of such Persons. NRG shall not assign or
otherwise transfer all or any of its obligations hereunder other than
in accordance with Section 3 hereof.
17. Bankruptcy. NRG hereby irrevocably waives any protection it
may be entitled to under Section 365(c)(1) and (2) and Section
365(e)(1) and (2) of the Bankruptcy Code upon the occurrence of an
Event of Bankruptcy with respect to the Borrower (a "Proceeding"). In
the event the trustee in bankruptcy or the debtor-in-possession takes
any action (including, without limitation, the institution of any
action, suit or other proceeding) in a Proceeding for the purpose of
enforcing the obligations of NRG under Section 1 or 2 hereof, NRG
agrees (a) not to assert any defense, claim or counterclaim denying
liability under Section 1 or 2 hereof on the basis that this Agreement
is either (i) not an executory contract or (ii) an executory contract
that cannot be assumed, assigned or enforced, or on any other theory
directly or indirectly based on Section 365(c)(1) and (2) or Section
365(e)(1) and (2) of the Bankruptcy Code or any successor provision of
law and (b) to make all payments hereunder regardless of any rejection
or termination (by operation of law or otherwise) of this Agreement by
the Borrower. If a Proceeding shall occur, NRG agrees after the
occurrence of such Proceeding to reconfirm its prepetition waiver of
any protection it may be entitled to under Section 365(c)(1) and (2)
and Section 365(e)(1) and (2) of the Bankruptcy Code and, to give
effect to such waiver, NRG consents to the
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assumption and enforcement of each provision of this Agreement by the
debtor-in-possession or the Borrower's trustee in bankruptcy, as the
case may be.
18. Amendments. This Agreement or any provision hereof may not
be rescinded, canceled, modified, changed or waived by any party hereto
without the prior written consent of the Collateral Agent (as directed
by the Agent Bank, acting upon the instructions of the Required Banks).
19. Governing Law. This Agreement is a contract made under the
Laws of the State of New York of the United States and shall for all
purposes be governed by and construed in accordance with the Laws of
such State without regard to the conflict of law rules thereof (other
than Section 5-1401 of the New York General Obligations Law).
20. Consent to Jurisdiction.
a. Any legal action or proceeding against either NRG or the
Borrower with respect to this Agreement may be brought in the
courts of the State of New York in the County of New York or
of the United States for the Southern District of New York
and, by execution and delivery of this Agreement, each of NRG
and the Borrower hereby irrevocably accepts for itself and in
respect of its property, generally and unconditionally, the
non-exclusive jurisdiction of the aforesaid courts. NRG and
the Borrower each agrees that a judgment, after exhaustion of
all available appeals, in any such action or proceeding shall
be conclusive and binding upon such party, and may be
enforced in any other jurisdiction by a suit upon such
judgment, a certified copy of which shall be conclusive
evidence of the judgment. NRG and the Borrower each hereby
irrevocably designates, appoints and empowers CT Corporation
System, with offices on the date hereof at 1633 Broadway, New
York, New York 10019, as its designee, appointee and agent of
any to receive, accept and acknowledge for and on its behalf,
and in respect of its property, service of any and all legal
process, summons, notices and documents which may be served
in any such action or proceeding. If for any reason such
designee, appointee and agent shall cease to be available to
act as such, NRG and the Borrower each agrees to designate a
new designee, appointee and agent in New York City on the
terms and for the purposes of this provision satisfactory to
the Collateral Agent. NRG and the Borrower each further
irrevocably consents to the service of process out of any of
the aforementioned courts in any such action or proceeding by
the mailing of copies thereof by registered or certified
mail, postage prepaid, to such party, at its address referred
to in Section 15 hereof, such service to become effective
thirty (30) days after such mailing. Nothing herein shall
affect the right of the Collateral Agent or any other Person
to serve process in any other manner permitted by
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Law or to commence legal proceedings or otherwise proceed
against either party in any other jurisdiction.
b. NRG and the Borrower each hereby irrevocably waives any
objection which it may now or hereafter have to the laying of
venue of any of the aforesaid actions or proceedings arising
out of or in connection with this Agreement brought in the
courts referred to in clause (a) above and hereby further
irrevocably waives and agrees not to plead or claim in any
such court that any such action or proceeding brought in any
such court has been brought in an inconvenient forum.
c. WITH REGARD TO THIS AGREEMENT AND EACH OTHER TRANSACTION
DOCUMENT TO WHICH EITHER NRG OR THE BORROWER IS A PARTY, EACH
OF NRG, THE BORROWER, THE AGENT BANK, THE BANKS (BY ACCEPTING
THE BENEFITS OF THIS AGREEMENT) AND THE COLLATERAL AGENT
HEREBY WAIVE THE RIGHT TO A TRIAL BY JURY.
21. No Waiver. No failure to exercise and no delay in exercise,
on the part of the Collateral Agent, of any right, remedy, power or
privilege provided herein or by statute or at law or in equity shall
operate as a waiver thereof; nor shall any single or partial exercise
of any thereof preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the undersigned has executed this Equity
Commitment Agreement as of the date first above written.
NRG Energy, Inc.
By: /s/ James J. Bender
Name: James J. Bender
Title: Vice President
Address for Notices:
1221 Nicollet Mall, Suite 700
Minneapolis, MN 55403-2445
Attn: Chief Financial Officer
(with a copy to General Counsel at the same ad
dress)
NRG (Morris) Cogen, LLC
By: /s/ James J. Bender
Name: James J. Bender
Title: Management Committee Member
Address for Notices:
1221 Nicollet Mall, Suite 700
Minneapolis, MN 55403-2445
Attn: President
THE CHASE MANHATTAN BANK,
as Collateral Agent
By: /s/ Annette M. Marsula
Name: Annette M. Marsula
Title: Assistant Vice President
Address for Notices:
450 West 33 Street
15th Floor
New York, New York 10001
Attn: Annette M. Marsula
[Signature page to Equity Commitment Agreement among NRG Energy, Inc.,
NRG (Morris) Cogen, LLC and The Chase Manhattan Bank, as Collateral
Agent]
EXHIBIT A
FORM OF EQUITY REQUISITION CERTIFICATE
[DATE]
NRG Energy, Inc.
1221 Nicollet Mall, Suite 700
Minneapolis, MN 55403-2445
Attn:
Ladies and Gentlemen:
This Equity Requisition Certificate is delivered to you pursuant
to Section 1 of that certain Equity Commitment Agreement, dated as of
September 15, 1997 (the "Equity Commitment Agreement"), by and among
you ("NRG"), the undersigned (the "Borrower") and The Chase Manhattan
Bank, in its capacity as Collateral Agent (the "Collateral Agent").
Capitalized terms used but not otherwise defined herein shall have the
meanings assigned thereto in the Equity Commitment Agreement.
The Borrower hereby requests that NRG make an Equity Contribution
to the Borrower on the date and in the amount requested below (the
"Requested Equity Contribution"), which amount is to be paid to the
Construction Account:
Date of funding: ___________________
Amount of
Contribution: $__________________
The Borrower hereby certifies that as of the date of funding:
(1) the Dollar amount of all Construction Loan Borrowings made to
or for the benefit of the Borrower under the Loan Agreement is equal to
or greater than $84,000,000;
(2) the total amount of the Requested Equity Contribution, plus
the amount of all prior Equity Contributions, is equal to $
, which amount is less than or equal to the lesser of (y) $
representing twenty percent (20%) of the total
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Project Costs (as set forth in the current Construction Budget), or (z)
Twenty-Two Million Dollars ($22,000,000); and
(3) the Construction Loan Maturity Date has not occurred.
Very truly yours,
NRG (MORRIS) COGEN, LLC
By: _______________________
Name:
Title:
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EXHIBIT B
FORM OF EQUITY COMMITMENT GUARANTY
This EQUITY COMMITMENT GUARANTY (this "Guaranty" or this
"Agreement"), dated as of [INSERT DATE], by NRG ENERGY, INC., a
Delaware corporation ("Guarantor"), in favor of NRG (MORRIS) COGEN, LLC
(the "Borrower") and THE CHASE MANHATTAN BANK, as collateral agent for
the Banks (as defined below) (in such capacity, the "Collateral Agent")
under the Construction and Term Loan Agreement, dated as of September
15, 1997 (the "Credit Agreement"), among the Borrower, the Collateral
Agent, the banks party thereto (the "Banks") and The Chase Manhattan
Bank, as agent for the Banks (in such capacity, the "Agent Bank").
RECITALS
A. As a condition precedent to the Agent Bank, the
Collateral Agent and the Banks entering into the Credit Agreement and
the Banks making the Loans and extending other credit to the Borrower
thereunder, Guarantor executed an Equity Commitment Agreement, dated as
of September 15, 1997 (the "Equity Commitment Agreement"), in favor of
the Borrower and the Collateral Agent.
B. Pursuant to an [INSERT NAME OF AGREEMENT], dated as of
the date hereof, Guarantor is selling all of its membership interests
in the Borrower to NRG Generating (U.S.) Inc. ("NRG Generating").
C. Pursuant to an Assignment and Assumption Agreement, dated
as of the date hereof (the "Assignment and Assumption Agreement"),
between Guarantor and NRG Generating, NRG Generating is assuming all of
Guarantor's obligations under the Equity Commitment Agreement.
D. Guarantor owns [INSERT PERCENTAGE] of the outstanding
shares of capital stock of NRG Generating.
E. It is a condition to the Banks' willingness to continue
to make Loans and extend other credit to the Borrower under the Credit
Agreement that Guarantor enter into this Agreement.
F. Guarantor acknowledges that it will obtain substantial
benefit if the Banks continue to make Loans and extend other credit to
the Borrower under the Credit Agreement.
G. The obligations of Guarantor hereunder are being incurred
concurrently with the assumption by NRG Generating of Guarantor's
obligations under the Equity Commitment Agreement pursuant to the
Assignment and Assumption Agreement.
H. Capitalized terms used but not otherwise defined herein
shall have the respective meanings given them in the Equity Commitment
Agreement (including terms incorporated therein from the Credit
Agreement).
AGREEMENT
NOW, THEREFORE, in consideration of the premises set forth
above and other good and valuable consideration, receipt of which is
hereby acknowledged, Guarantor hereby agrees as follows:
1. Guaranty by Guarantor of NRG Generating Obligation.
Guarantor unconditionally and irrevocably guarantees payment to the
Borrower and to the Collateral Agent, for the benefit of the Agent Bank
and the Banks, when due of any and all amounts payable by NRG
Generating to the Borrower from time to time pursuant to Sections 1 and
2 of the Equity Commitment Agreement and performance in full of all of
NRG Generating's obligations under Sections 1 and 2 of the Equity
Commitment Agreement.
2. Additional Provisions to Guarantor Obligations.
(a) In addition to the obligations under Section 1 of
this Agreement, Guarantor agrees to pay upon demand all fees and
expenses incurred by the Collateral Agent and the Borrower in
successfully enforcing against Guarantor any of its obligations
and liabilities hereunder or the terms hereof, including, without
limitation, reasonable fees and expenses of legal counsel.
Guarantor waives notice of acceptance of this Agreement and of any
obligation to which it applies or may apply under the terms
hereof, and waives diligence, presentment, demand of payment,
notice of dishonor or non-payment, protest, notice of protest, of
any such obligations, suit or taking other action by the
Collateral Agent or the Borrower against, and giving any notice of
default or other notice to, or making any demand on, any party
liable thereon (including Guarantor).
(b) Guarantor's obligation under this Agreement is an
absolute, unconditional, continuing and irrevocable guaranty of
payment and performance and is in no way conditioned on or
contingent upon any attempt to enforce in whole or in part NRG
Generating's obligations to the Collateral Agent and the Borrower
under the Equity Commitment Agreement. If NRG Generating fails to
pay or perform any liabilities or obligations to the Collateral
Agent or the Borrower under Section 1 or 2 of the Equity
Commitment Agreement as and when
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they are due, Guarantor shall forthwith pay and perform such
liabilities or obligations, with any such payment to be made in
immediately available funds. Each failure by NRG Generating to
pay or perform any liabilities or obligations arising under
Section 1 or 2 of the Equity Commitment Agreement shall give rise
to a separate cause of action hereunder, and separate suits may be
brought hereunder as each cause of action arises.
(c) The Collateral Agent and the Borrower may, at any
time and from time to time without the consent of or notice to
Guarantor, except such notice as may be required by applicable Law
which cannot be waived, without incurring responsibility to
Guarantor or impairing or releasing the obligations of Guarantor
hereunder, upon or without any terms or conditions and in whole or
in part, (i) exercise or refrain from exercising any rights
against NRG Generating or others (including Guarantor) or
otherwise act or refrain from acting; (ii) release any other
guarantor from its obligations without obtaining the consent of
Guarantor and without affecting or impairing the obligations of
Guarantor hereunder; (iii) settle or compromise any obligations
hereby guaranteed and/or any obligations incurred directly or
indirectly in respect thereof or hereof, and may subordinate the
payment of all or any part thereof to the payment of any
obligations which may be due to the Collateral Agent, the Borrower
or others; (iv) sell, exchange, release, surrender, realize upon
or otherwise deal with in any manner or in any order any property
by whomsoever pledged or mortgaged to secure or howsoever securing
the liabilities or obligations hereby guaranteed or any
liabilities or obligations incurred directly or indirectly in
respect thereof or hereof and/or any offset thereagainst; (v)
apply any sums by whomsoever paid or howsoever realized to any
obligations of NRG Generating to the Collateral Agent or the
Borrower regardless of what obligations remain unpaid; (vi)
consent to or waive any breach of, or any act, omission or default
under, the Equity Commitment Agreement or otherwise amend, modify
or supplement the Equity Commitment Agreement or any of such other
instruments or agreements; and/or (vii) act or fail to act in any
manner referred to in this Agreement which may deprive Guarantor
of its right, if any, to subrogation or reimbursement against NRG
Generating or any other Person to recover full indemnity for any
payments made pursuant to this Agreement or of its right of
contribution against any other party.
(d) No invalidity, irregularity or unenforceability of
the obligations hereby guaranteed shall affect, impair or be a
defense to this Agreement.
(e) In the event that, notwithstanding the provisions
of Section 2(b) hereof, this Agreement shall be deemed revocable
in accordance with applicable Law, then any such revocation shall
become effective only upon actual receipt by the Collateral Agent
and the Borrower of written notice of revocation
3
signed by Guarantor. No revocation or termination hereof shall
affect in any manner rights arising under this Agreement with
respect to obligations and liabilities outstanding on the date of
receipt by the Collateral Agent and the Borrower of written notice
of such revocation or termination and the sole effect of any
revocation and termination hereof shall be to exclude from this
Agreement obligations and liabilities thereafter arising which are
unconnected with obligations and liabilities theretofore arising
or transactions theretofore entered into (Guarantor shall remain
liable for all obligations incurred hereunder prior to such
revocation or termination).
3. Representations and Warranties. Guarantor makes the
representations and warranties set forth below to the Borrower and to
the Collateral Agent, acting for its own benefit and for the benefit of
the other Secured Parties, which representations and warranties shall
survive the execution and delivery of this Agreement:
(a) Guarantor is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware and has the corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder.
(b) Guarantor has taken all necessary corporate action
to authorize its execution and delivery of this Agreement and the
performance of its obligations hereunder.
(c) This Agreement has been duly executed and delivered
by Guarantor and constitutes the legal, valid and binding
obligation of Guarantor, enforceable against Guarantor in
accordance with its terms, subject to applicable bankruptcy,
insolvency and other similar Laws affecting creditors' rights
generally and subject to general equitable principles.
(d) All Governmental Approvals and actions necessary in
connection with the execution and delivery by Guarantor of this
Agreement and the performance of its obligations hereunder have
been obtained or performed and remain valid and in full force and
effect.
(e) The execution, delivery and performance of this
Agreement, the compliance by Guarantor with the provisions hereof
and the consummation of the transactions contemplated hereby, will
not (i) conflict with or result in a breach or violation of any of
the respective charters or bylaws of Guarantor or any of its
subsidiaries or any material franchise or license of Guarantor or
any of the terms or provisions thereof, (ii) constitute a default
or cause an acceleration of any obligation under, or result in the
imposition or creation of (or the obligation to create or impose)
any Lien with respect to, any bond, note, debenture or other
4
evidence of Indebtedness or any indenture, mortgage, deed of trust
or other agreement or instrument to which Guarantor or any of its
subsidiaries is a party or by which it or any of them is bound, or
to which any properties of Guarantor or any of its subsidiaries is
or may be subject, (iii) contravene any order of any court or
Governmental Authority or body having jurisdiction over Guarantor
or any of its subsidiaries or any of their properties or (iv) or
conflict with any statute, rule or regulation or administrative or
court decree applicable to Guarantor or any of its subsidiaries or
any of their respective properties, in the case of clauses (ii),
(iii) and (iv) which conflict, breach, violation, default or
contravention, singly or in the aggregate with each other
conflict, breach, violation, default or contravention, could
reasonably be expected to result in a Material Adverse Effect. As
used in this clause (e) and otherwise in this Agreement, the term
"Material Adverse Effect" shall mean a material adverse effect on
either (A) the operations, business, financial condition or
property of Guarantor or any of its subsidiaries on a consolidated
basis or (B) the ability of Guarantor to perform in a timely
manner its obligations under this Agreement.
(f) There is no legislation, litigation, action, suit,
proceeding or investigation pending or (to the best of Guarantor's
knowledge after due inquiry) threatened against Guarantor before
or by any court, administrative agency, arbitrator or Governmental
Authority which if adversely determined individually or in the
aggregate, (i) could reasonably be expected to result in a
Material Adverse Effect or (ii) questions the validity, binding
effect or enforceability hereof, any action taken or to be taken
pursuant hereto or any of the transactions contemplated hereby.
(g) All quarterly and annual financial statements
heretofore delivered by or in respect of Guarantor to the
Collateral Agent, the Agent Bank, the Banks or the Borrower are
true, correct and complete as of the dates referred to therein, do
not fail to disclose any material liabilities, whether direct or
contingent, fairly present the financial condition of Guarantor as
of the date thereof and are prepared in accordance with GAAP.
(h) Guarantor possesses all franchises, certificates,
licenses, permits and other Governmental Approvals necessary for
it to own its properties, conduct its business and perform its
obligations under this Agreement.
(i) Guarantor (i) is not an "investment company", or a
company "controlled" by an "investment company", within the
meaning of the ICA, and (ii) is not subject to regulation as a
"holding company," a "public utility company," or an "affiliate"
or a "subsidiary company" of a "registered holding company" as
defined in PUHCA.
5
4. Covenants: Guarantor agrees that:
(a) Guarantor shall maintain in full force and effect
all consents of any governmental or other authority that are
required to be obtained by it with respect to this Agreement and
will obtain any that may become necessary in the future.
(b) Guarantor shall comply in all material respects
with all applicable Laws and orders to which it may be subject if
failure so to comply would materially impair its ability to
perform its obligations under this Agreement.
(c) (i) Annual Financial Statements. Guarantor shall
deliver to the Collateral Agent and the Borrower, within one
hundred twenty (120) days after the close of each fiscal year
of Guarantor, the consolidated and consolidating balance
sheets of Guarantor and its consolidated Affiliates as at the
end of such fiscal year and the related consolidated and
consolidating statements of income, retained earnings and
cash flows for such fiscal year, in each case setting forth
comparative figures for the preceding fiscal year and
certified, in the case of the consolidated financial
statements, by independent certified public accountants of
recognized national standing in the United States.
(ii) Notice of Default or Litigation. Promptly,
and in any event within two (2) Business Days after an
Authorized Officer of Guarantor obtains knowledge thereof,
Guarantor shall give to the Collateral Agent and the Borrower
notice of the occurrence of any event or of any litigation or
governmental proceeding pending (a) against Guarantor or any
of its Affiliates which could affect the business,
operations, property, assets, condition (financial or
otherwise) or prospects of Guarantor so as to materially and
adversely affect the ability of Guarantor to perform its
obligations hereunder or (b) with respect to this Agreement,
which event or pending proceeding is likely to materially and
adversely affect the business, operations, property, assets,
condition (financial or otherwise) or prospects of Guarantor
and its Affiliates taken as a whole.
(iii) Other Information. From time to time,
Guarantor shall provide to the Collateral Agent and the
Borrower such other information or documents (financial or
otherwise) regarding Guarantor as the Collateral Agent or the
Borrower may reasonably request and as may be available to
Guarantor without undue cost or effort.
5. Subrogation. Guarantor shall not exercise any rights
which it may acquire by way of subrogation under this Agreement, by any
payment made hereunder or
6
otherwise, until all of the liabilities and obligations of NRG
Generating to the Collateral Agent and the Borrower under the Equity
Commitment Agreement shall have indefeasibly been paid in full in cash
or cash equivalents. If any amount shall be paid to Guarantor on
account of such subrogation rights at any time when all such
liabilities and obligations shall not have been indefeasibly paid in
full in cash or cash equivalents, such amount shall be held in trust
for the benefit of the Collateral Agent and the Borrower and shall
forthwith be paid to the Collateral Agent or the Borrower, as
applicable, and applied to such liabilities and obligations, whether
matured or unmatured.
6. Successions or Assignments.
(a) This Agreement shall inure to the benefit of the
respective successors or assigns of the Collateral Agent and the
Borrower who shall have, to the extent of their interest, the
rights of the Collateral Agent and the Borrower hereunder.
(b) This Agreement is binding upon Guarantor and its
successors and assigns. Guarantor is not entitled to assign its
obligations hereunder to any other Person without the written
consent of the Collateral Agent and the Borrower, which may be
granted or withheld in the Collateral Agent's or the Borrower's
sole discretion (in the case of the Collateral Agent, as directed
by the Agent Bank, acting in accordance with the Credit
Agreement), and any purported assignment in violation of this
provision shall be void.
7. Waivers.
(a) No delay on the part of the Collateral Agent or the
Borrower in exercising any of its rights (including those
hereunder) and no partial or single exercise thereof and no action
or non-action by the Collateral Agent or the Borrower, with or
without notice to Guarantor or anyone else, shall constitute a
waiver of any rights or shall affect or impair this Agreement.
(b) Guarantor agrees that, if the Collateral Agent or
the Borrower bring any judicial proceedings in relation to any
such matter, Guarantor will not interpose any counterclaim or
setoff of any nature.
(c) If any amount payable by Guarantor hereunder is not
paid as and when due, then Guarantor authorizes the Collateral
Agent and the Borrower to proceed, without prior notice, by right
of set-off, counterclaim or otherwise, against any assets of
Guarantor that may at any time be in the possession of the
Collateral Agent or the Borrower or any branch or office thereof,
to the full extent of all amounts payable to the Collateral Agent
and the Borrower hereunder.
7
(d) Guarantor waives any and all notice of the
creation, renewal, extension or accrual of any of the obligations
of NRG Generating under Sections 1 and 2 of the Equity Commitment
Agreement and notice of or proof of reliance by the Collateral
Agent or the Borrower upon this Agreement.
(e) Guarantor waives diligence, presentment, protest,
demand for payment and notice of default to or upon NRG Generating
with respect to the obligations under Sections 1 and 2 of the
Equity Commitment Agreement.
8. Interpretation. The Section headings in this Agreement
are for the convenience of reference only and shall not affect the
meaning or construction of any provision hereof.
9. Notices. All notices in connection with this Agreement
shall be given by notice in writing, hand-delivered or sent by
facsimile transmission, or by certified mail return-receipt requested
(airmail, if overseas), postage prepaid. All such notices shall be
sent to the appropriate telecopier number or address, as the case may
be, set forth below or to such other number or address as shall have
been subsequently specified by written notice to each other party
hereto, and shall be sent with copies, if any, as indicated below. All
such notices shall be effective upon receipt. The addresses for notice
shall be as follows:
(a) The address of Guarantor is:
NRG ENERGY, INC.
1221 Nicollet Mall, Suite 700
Minneapolis, MN 55403-2445
Attention: President
Telephone No.: (612) 373-5400
Telecopier No.: (612) 373-5430
With a copy to:
NRG ENERGY, INC.
1221 Nicollet Mall, Suite 700
Minneapolis, MN 55403-2445
Attention: General Counsel
(b) The address of the Collateral Agent is:
THE CHASE MANHATTAN BANK
450 West 33rd Street, 15th Floor
New York, NY 10001
8
Attention: A. Marsula, Assistant Vice President,
International Project Finance, Global Trust
Services
Telephone No.: (212) 946-7557
Telecopier No.: (212) 946-8177/8178
(c) The address of the Borrower is:
NRG (MORRIS) COGEN, LLC
1221 Nicollet Mall, Suite 700
Minneapolis, MN 55403-2445
Attention: President
Telephone No.: (612) 373-5400
Telecopier No.: (612) 373-5430
With a copy to:
NRG (MORRIS) COGEN, LLC
1221 Nicollet Mall, Suite 700
Minneapolis, MN 55403-2445
Attention: General Counsel
10. Amendments. Notwithstanding anything contained herein
that may be construed to the contrary, as between Guarantor, the
Collateral Agent and the Borrower, this Agreement may be amended only
with the written consent of the Collateral Agent, the Borrower and
Guarantor, with the Collateral Agent acting as directed by the Agent
Bank (acting upon the instructions of the Required Banks).
11. Jurisdiction; Governing Law.
(a) Any action or proceeding relating in any way to
this Agreement may be brought and enforced in the courts of the
State of New York. Any such process or summons in connection with
any such action or proceeding may be served by mailing a copy
thereof by certified or registered mail, or any substantially
similar form of mail, addressed to the applicable party as
provided for notices hereunder. By execution and delivery of this
Agreement, Guarantor irrevocably agrees to designate, appoint and
empower CT Corporation System, with its offices as of the date
hereof at 1633 Broadway, New York, New York 10019, to receive for
an on its behalf service of process in the State of New York and
further irrevocably consents to the service of process outside the
territorial jurisdiction of said courts by mailing copies thereof
in accordance with the immediately preceding sentence. Guarantor
represents and warrants that it has taken, and will continue to
take, all actions necessary to retain CT Corporation
9
System as its registered agent for service of process in the State
of New York for the term hereof.
(b) This Agreement and the rights and obligations of
the parties hereto shall be governed by and construed in
accordance with the Laws of the State of New York without
reference to principles of conflict of laws (other than Section 5-
1401 of the New York General Obligations Law).
12. Integration of Terms. This Agreement contains the
entire agreement among the parties hereto relating to the subject
matter hereof and supersedes all oral statements and prior writings
with respect thereto.
13. Termination; Reinstatement of Guaranty.
(a) Subject to the provisions of Section 13(b) hereof,
this Agreement shall terminate following the payment in full of
all amounts due hereunder or under Sections 1 and 2 of the Equity
Commitment Agreement.
(b) Notwithstanding the provisions of Section 13(a)
hereof, this Agreement shall be reinstated if at any time
following the termination of this Agreement under Section 13(a)
hereof, any payment or performance by Guarantor under this
Agreement or NRG Generating under Section 1 or 2 of the Equity
Commitment Agreement is rescinded or must otherwise be returned by
the Collateral Agent, the Borrower or any other Person upon the
insolvency, bankruptcy, reorganization, dissolution or liquidation
of NRG Generating or Guarantor and is so rescinded or returned to
the party or parties making such payment or performance, all as
though such payment had not been made. Such period of
reinstatement shall continue until satisfaction of the conditions
contained in, and shall continue to be subject to, the provisions
of this Section 13.
14. Waiver of Jury Trial. THE COLLATERAL AGENT (AND THE
AGENT BANK AND THE BANKS AS THIRD PARTY BENEFICIARIES HEREUNDER), THE
BORROWER AND GUARANTOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION
WITH, THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE COLLATERAL
AGENT, THE BORROWER, GUARANTOR OR NRG GENERATING. THIS PROVISION IS
MATERIAL INDUCEMENT FOR THE COLLATERAL AGENT, THE BORROWER AND
GUARANTOR TO ENTER INTO THIS AGREEMENT.
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IN WITNESS WHEREOF, Guarantor has caused this Equity
Commitment Guaranty to be duly executed and delivered as of the day and
year first written above.
NRG ENERGY, INC.
By:__________________________
Name:
Title:
Acknowledged and Accepted:
THE CHASE MANHATTAN BANK,
as Collateral Agent
By: __________________________
Name:
Title:
NRG (MORRIS) COGEN, LLC
By: ___________________________
Name:
Title:
S-1