Exhibit 10.27.3
ASSIGNMENT AND ASSUMPTION AGREEMENT
This ASSIGNMENT AND ASSUMPTION AGREEMENT, dated as of
December 10, 1997 (this "Agreement"), is made and entered into
by and between NRG ENERGY, INC., a Delaware corporation ("NRG
Energy"), and NRGG FUNDING INC., a Delaware corporation ("NRGG
Funding").
RECITALS
WHEREAS, NRG (Morris) Cogen, LLC (the "Borrower") entered
into the Construction and Term Loan Agreement, dated as of
September 15, 1997 (the "Credit Agreement"), with the banks
party thereto (the "Banks"), The Chase Manhattan Bank as agent
for the Banks (in such capacity, the "Agent Bank") and The
Chase Manhattan Bank as collateral agent for the Banks (in such
capacity, the "Collateral Agent"), pursuant to which the Banks
have agreed to make construction and term loans and extend
other credit to the Borrower for the purpose of financing the
cost of developing, constructing, starting-up and operating an
approximately 117 megawatt gas-fired cogeneration facility in
Morris, Illinois (the "Project");
WHEREAS, as a condition precedent to the Banks, the Agent
Bank and the Collateral Agent entering into the Credit
Agreement and the Banks extending credit to the Borrower
thereunder, NRG Energy executed and delivered the Equity
Commitment Agreement, dated as of September 15, 1997 (the
"Equity Commitment Agreement"), in favor of the Borrower and
the Collateral Agent, pursuant to which NRG Energy agreed to
make equity contributions to the Borrower from time to time;
WHEREAS, pursuant to the Membership Interest Purchase
Agreement, dated as of the date hereof (the "Purchase
Agreement"), NRG Energy is transferring all of its equity
interest in the Borrower to NRGG Funding;
WHEREAS, upon execution and delivery of the Purchase
Agreement, NRGG Funding will own 99% of the membership
interests in the Borrower and, accordingly, will derive
substantial benefit from the extension of credit by the Banks
to the Borrower under the Credit Agreement; and
WHEREAS, it is condition precedent to the Banks continuing
to extend credit to the Borrower under the Credit Agreement
that NRG Energy and NRGG Funding execute and deliver this
Agreement, the form and substance of which must be consented to
by the Required Banks;
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and for
other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties hereto hereby
agree as follows:
ARTICLE I
DEFINED TERMS; PRINCIPLES OF CONSTRUCTION
Section 1.1 Defined Terms. (a) Unless otherwise defined
herein, capitalized terms used in this Agreement shall have the
meanings given to such terms in the Equity Commitment Agreement
(including terms incorporated therein from the Credit
Agreement).
(b) The following terms shall have the following
respective meanings:
"Amended LLC Agreement" shall have the meaning given
to the term "LLC Agreement" in the Pledge Agreement.
"Equity Guarantee" shall mean the Equity Commitment
Guaranty, dated as of the date hereof, by NRG Energy in favor
of the Borrower and the Collateral Agent.
"First Amendment to the Credit Agreement" shall mean
the Amendment and Consent, dated as of the date hereof, among
the Borrower and the Banks.
"NRGG Documents" shall mean, collectively, the NRGG
Financing Documents and the NRGG Purchase Documents.
"NRGG Financing Documents" shall mean this Agreement,
the Equity Commitment Agreement, the Equity Guarantee, the
Pledge Agreement, the Subordination Agreement, the First
Amendment to the Credit Agreement and the Financing Statements
(as defined under the Pledge Agreement) filed in connection
with the Liens granted to the Collateral Agent in the Pledge
Agreement.
"NRGG Purchase Documents" shall mean the Purchase
Agreement, the Amended LLC Agreement, the Supplemental Loan
Agreement and the Subordinated Pledge Agreement.
"Pledge Agreement" shall mean the Pledge and Security
Agreement, dated as of the date hereof, among NRGG Funding, NRG
MI and the Collateral Agent.
"Purchase Agreement" shall mean the Membership
Interest Purchase Agreement, dated as of the date hereof,
between NRG Energy, NRG Generating and NRGG Funding.
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"Subordinated Pledge Agreement" shall mean the
Subordinated Pledge and Security Agreement, dated as of the
date hereof, among NRGG Funding, NRG MI and NRG Energy.
"Subordination Agreement" shall mean the
Subordination Agreement, dated as of the date hereof, between
NRG Energy and the Collateral Agent.
"Supplemental Loan Agreement" shall mean the
Supplemental Loan Agreement, dated as of the date hereof,
between NRG Energy and NRGG Funding.
Section 1.2 Principles of Construction. Unless otherwise
expressly provided herein, the principles of construction set
forth in Section 1.4 of the Credit Agreement shall apply to
this Agreement.
ARTICLE II
ASSIGNMENT AND ASSUMPTION; ACKNOWLEDGMENT
Section 2.1 Assignment and Assumption. NRG Energy hereby
assigns, conveys and transfers all of NRG Energy's estate,
right, title and interest in, to and under the Equity
Commitment Agreement to NRGG Funding and NRGG Funding hereby
assumes all liabilities, obligations and duties thereunder.
Section 2.2 Acknowledgment and Consent. By executing
this Agreement, the parties hereto acknowledge, consent and
agree that, upon the satisfaction of the conditions set forth
in Article IV of this Agreement, NRG Energy shall be released
from all liabilities, obligations and duties under the Equity
Commitment Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
NRGG Funding represents and warrants as follows, which
representations and warranties shall survive the execution and
delivery of this Agreement:
Section 3.1 Due Incorporation; Qualification. NRGG
Funding is a corporation duly organized and validly existing
under the Laws of the State of Delaware, and is qualified to
own property and transact business in every jurisdiction where
the ownership of its property and the nature of its business as
currently conducted and as contemplated to be conducted
requires it to be qualified, except where the failure to so
qualify could not reasonably be expected to result in a
Material Adverse Effect (as herein defined). For purposes of
this Agreement, "Material Adverse Effect" shall mean a material
adverse effect on any of (i) the operations, business,
financial condition or property of NRGG Funding and its
subsidiaries on a consolidated basis, (ii) the ability of NRGG
Funding to perform in a timely manner its material obligations
under the NRGG Documents to which
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it is or is intended to be a party or (iii) the rights and
interests of the Banks, the Agent Bank and the Collateral Agent
under the Transaction Documents.
Section 3.2 Authority; Authorization, Execution and
Delivery; Enforceability. NRGG Funding has full power,
authority and legal right to enter into this Agreement and the
other NRGG Documents to which it is or is intended to be a
party and to perform its obligations hereunder and thereunder.
The execution, delivery and performance of the NRGG Documents
to which NRGG Funding is or is intended to be a party have been
duly authorized by all necessary corporate action on the part
of NRGG Funding. The NRGG Documents to which NRGG Funding is
or is intended to be a party have been duly executed and
delivered by NRGG Funding and constitute legal, valid and
binding obligations of NRGG Funding enforceable against NRGG
Funding in accordance with their terms, except as
enforceability may be limited by applicable bankruptcy,
insolvency, moratorium or other similar Laws affecting
creditors' rights generally and except as enforceability may be
limited by general principles of equity (whether considered in
a suit at law or in equity).
Section 3.3 Consents; Governmental Approvals. No consent
of any other party (including, without limitation, stockholders
or creditors of NRGG Funding) and no Governmental Approval is
required which has not been obtained for the execution,
delivery and performance by NRGG Funding of the NRGG Documents
to which it is or is intended to be a party, other than any
consent or Governmental Approval not required as of the date
this representation is made or deemed made and that will be
obtained on or before the date on which such consent or
Governmental Approval is required to be obtained.
Section 3.4 No Conflicts. The execution, delivery and
performance by NRGG Funding of the NRGG Documents to which it
is or is intended to be a party will not (i) require any
consent or approval of the Board of Directors of NRGG Funding
which has not been obtained, (ii) violate the provisions of
NRGG Funding's certificate of incorporation or bylaws, (iii)
violate the provisions of any Law (including, without
limitation, any usury Laws), regulation or order of any
Governmental Authority applicable to NRGG Funding, (iv) result
in a breach of or constitute a default under any material
agreement relating to the management or affairs of NRGG
Funding, or any indenture or loan or credit agreement or any
other material agreement, lease or instrument to which NRGG
Funding is or is intended to be a party or by which NRGG
Funding or any of its material properties may be bound or (v)
result in or create any Lien (other than Permitted Liens)
under, or require any consent which has not been obtained
under, any indenture or loan or credit agreement or any other
material agreement, instrument or document, or the provisions
of any order, writ, judgment, injunction, decree, determination
or award of any Governmental Authority binding upon NRGG
Funding or any of its properties.
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Section 3.5 Litigation. No Event of Bankruptcy has
occurred with respect to NRGG Funding and there is no action,
suit or proceeding at Law or in equity or by or before any
Governmental Authority, arbitral tribunal or other body now
pending against NRGG Funding or, to the best knowledge of NRGG
Funding, threatened against NRGG Funding which questions the
validity or legality of or seeks damages in connection with the
NRGG Documents to which NRGG Funding is or is intended to be a
party.
Section 3.6 Compliance with Laws. NRGG Funding has been
in the past and is in current compliance with all Laws
applicable to it, except where failure to comply could not
reasonably be expected to result in a Material Adverse Effect
(as defined in Section 3.1 hereof).
Section 3.7 Financial Statements. The financial
statements of NRGG Funding provided or to be provided as
contemplated in Section 4.5 hereof or in any other Financing
Document are or will be true, correct and complete as of the
dates specified therein and fully and accurately present the
financial condition of NRGG Funding as of the dates and for the
periods specified. There has been no material adverse change
in the financial condition of NRGG Funding from the date of
NRGG Funding'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 NRGG
Funding).
Section 3.8 Regulation. NRGG Funding is not (a) an
"investment company" or a company "controlled" by an
"investment company," within the meaning of the ICA. NRGG
Funding is a "subsidiary company" of a "holding company," as
those terms are defined in PUHCA, but NRGG Funding is exempt
from all provisions of PUHCA except Section 9(a) thereof by
virtue of Section 3(a)(2) thereof. NRGG Funding is not a
"public utility" or similar entity under applicable federal or
state Law.
ARTICLE IV
CONDITIONS PRECEDENT
The release of NRG Energy of its liabilities, obligations
and duties under the Equity Commitment Agreement is subject to
the following conditions precedent:
Section 4.1 NRGG Financing Documents. The Agent Bank
shall have received each NRGG Financing Document (together with
all amendments, supplements, schedules and exhibits thereto),
each of which (a) shall have been duly authorized, executed and
delivered by each Person party thereto (other than the Agent
Bank, the Collateral Agent and the Banks), (ii) shall be in
form and substance reasonably satisfactory to each Bank and
(iii) shall be in full force and effect. All representations
and warranties contained in each NRGG Financing Document shall
be true and correct in all material respects and no default or
event of default shall have occurred thereunder.
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Section 4.2 NRGG Purchase Documents. The Agent Bank
shall have received copies of each NRGG Purchase Document
(together with all amendments, supplements, schedules and
exhibits thereto), each of which (a) shall have been duly
authorized, executed and delivered by each Person party thereto
(other than the Agent Bank, the Collateral Agent and the
Banks), (ii) shall be in form and substance reasonably
satisfactory to the Agent Bank and (iii) shall be in full force
and effect. All representations and warranties contained in
each NRGG Purchase Document shall be true and correct in all
material respects and no default or event of default shall have
occurred thereunder.
Section 4.3 Pledged Collateral. Pursuant to the terms of
the Pledge Agreement, the Liens on the Pledged Collateral (as
defined in the Pledge Agreement) shall have been duly created
or attached and such Liens shall have been perfected to create
a first priority security interest in and charge over the
Pledged Collateral (as defined in the Pledge Agreement) in
favor of the Collateral Agent for the benefit of itself and the
other Secured Parties. All Taxes, fees and other charges
payable in connection therewith shall have been paid in full by
NRGG Funding or the Borrower.
Section 4.4 Corporate Documents. The Agent Bank shall
have received each of the following in form and substance
satisfactory to it:
(a) a certificate of an Authorized Officer of NRGG
Funding, dated as of the date hereof, certifying as true,
complete and correct attached copies of (i) the
certificate of incorporation of NRGG Funding, (ii) the
bylaws of NRGG Funding and (iii) the resolutions of the
board of directors of NRGG Funding approving and
authorizing the execution, delivery and performance of the
NRGG Documents to which NRGG Funding is or is intended to
be a party;
(b) a certificate of an Authorized Officer of NRGG
Funding, dated as of the date hereof, certifying the names
and true signatures of the incumbent officers of NRGG
Funding authorized to sign the NRGG Documents to which
NRGG Funding is or is intended to be a party; and
(c) evidence that NRGG Funding is duly authorized to
carry on its business as now being conducted by it, and as
proposed to be conducted by it, in each jurisdiction in
which it is required to be so authorized.
Section 4.5 Financial Statements. The Agent Bank shall
have received true, correct and complete copies of the audited
financial statements for the most recently completed fiscal
year of NRGG Funding.
Section 4.6 Legal Opinions. The Agent Bank shall have
received (a) an opinion of counsel to NRGG Funding
substantially in the form of Exhibit A hereto and otherwise in
form and substance satisfactory to the Agent Bank and (b) an
opinion of counsel to
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NRG Energy substantially in the form of Exhibit B hereto and
otherwise in form and substance satisfactory to the Agent Bank.
Section 4.7 Appointment of Agent. NRGG Funding shall
have appointed an agent for service of process on terms
satisfactory to the Agent Bank and shall have paid all fees
necessary for such process agent to act as such through the
Final Maturity Date.
ARTICLE V
MISCELLANEOUS
Section 5.1 Notices. NRGG Funding's address and
telephone and telecopier numbers for the provision of notices
under each NRGG Document to which it is or is intended to be a
party are as follows:
NRGG Funding Inc.
1221 Nicollet Mall, Suite 610
Minneapolis, MN 55403
Attention: President and Chief Executive
Officer
Telephone: (612) 373-5300
Telecopier: (612) 373-5430
Section 5.2 Third Party Beneficiaries. The agreements of
the parties hereto are intended to benefit the Banks, the Agent
Bank and the Collateral Agent and their respective successors
and assigns.
Section 5.3 Severability. In case any provision in or
obligation under this Agreement shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or
of such provision or obligation in any other jurisdiction,
shall not in any way be affected or impaired thereby.
Section 5.4 Counterparts. This Agreement may be executed
in any number of counterparts and by the different parties
hereto on separate counterparts, each of which when so executed
and delivered shall be an original, but all of which shall
together constitute one and the same instrument.
Section 5.5 Headings Descriptive. The headings of the
several Sections of this Agreement are inserted for convenience
only and shall not in any way affect the meaning or
construction of any provision of this Agreement.
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Section 5.6 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).
Section 5.7 Entire Agreement. This Agreement, together
with any other agreement executed in connection herewith, is
intended by the parties as a final expression of their
agreement as to the matters covered hereby and is intended as a
complete and exclusive statement of the terms and conditions
thereof.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused
this Assignment and Assumption Agreement to be duly executed
and delivered by their officers thereunto duly authorized as of
the date first above written.
NRG ENERGY, INC.
By:/s/ David H. Peterson
Name: David H. Peterson
Title: President
NRGG FUNDING INC.
By: /s/ Timothy P. Hunstad
Name: Timothy P. Hunstad
Title: VP-CFO
Acknowledged and consented to:
THE CHASE MANHATTAN BANK,
as a Bank
By: /s/ Kevin P. O'Neill
Name: Kevin P. O'Neill
Title: Vice President
THE CHASE MANHATTAN BANK,
as Agent Bank
By: /s/ Kevin P. O'Neill
Name: Kevin P. O'Neill
Title: Vice President
THE CHASE MANHATTAN BANK,
as Collateral Agent
By: /s/ Annette M. Marsula
Name: Annette M. Marsula
Title: Assistant Vice President
Acknolwedged and consented to:
THE BANK OF NEW YORK
By: /s/ John N. Wyatt
Name: John N. Wyatt
Title: Vice President
NATEXIS BANQUE
By: /s/ D.J.R. Osten
Name: D.J.R. Osten
Title: First VP
THE SUMITOMO TRUST AND BANKING COMPANY, LTD.
By: /s/ Suraj P. Bhatia
Name: Suraj P. Bhatia
Title: Senior Vice President
Exhibit A to
Assignment and Assumption Agreement
FORM OF OPINION OF COUNSEL TO NRGG FUNDING
1. NRGG Funding Inc. (the "Company") is a
corporation duly organized and validly existing under the laws
of the State of Delaware and is qualified to do business in
each jurisdiction in which such qualification is required.
2. The Company has the corporate or other applicable
power and authority and full legal right to execute and deliver
each of the NRGG Documents to which it is a party and to
perform its obligations thereunder.
3. The execution, delivery and performance by the
Company of each NRGG Document to which it is a party have been
duly authorized by all requisite action on the part of the
Company.
4. Each of the NRGG Documents to which the Company
is a party has been duly executed and delivered by the Company.
5. Neither the execution and delivery by the Company
of each NRGG Document to which it is a party, nor the
performance by it of its obligations under each such NRGG
Document, contravenes or conflicts with (i) its Certificate of
Incorporation, or other applicable constituent documents, as
the case may be, (ii) any agreement or instrument (including,
without limitation, each other NRGG Document) to which it is a
party or by which its properties or assets are bound and (iii)
any judicial or administrative judgment, injunction, order or
decree that is binding upon it or its properties or assets.
6. No order, consent, approval, license,
authorization or validation of, or filing, recording or
registration with, or exemption by, any court, governmental
body or authority, or any subdivision thereof, is required to
authorize or is required in connection with the execution and
delivery by the Company of any NRGG Document to which it is a
party, or in connection with the performance of its obligations
thereunder or the consummation of the transactions contemplated
thereby other than those that have been obtained or made and
are in full force and effect or will be obtained or made prior
to the time the same is required and thereafter remains in full
force and effect.
7. Each of the NRGG Documents to which the Company
is a party constitutes a valid and binding obligation of the
Company enforceable against the Company in accordance with its
terms.
8. Neither the execution, delivery and performance
by the Company of each of the NRGG Documents to which it is
party, nor the consummation by the Company of the transactions
contemplated therein, violates any Applicable Laws.
9. All Government Approvals which under Applicable
Laws are required to be obtained or made by the Company in
connection with the due execution and delivery of, or
performance by the Company of its obligations under, each of
the NRGG Documents to which it is party have been obtained or
made.
This opinion may be relied upon by the Banks,
the Agent Bank, the Collateral Agent and any assignees of
or participants in the interests of the Banks under the
Credit Agreement.
Exhibit B to
Assignment and Assumption Agreement
FORM OF OPINION OF COUNSEL TO NRG ENERGY
1. NRG Energy, Inc. (the "Company") is a corporation
duly organized and validly existing under the laws of the State
of Delaware and is qualified to do business in each
jurisdiction in which such qualification is required.
2. The Company has the corporate or other applicable
power and authority and full legal right to execute and deliver
each of the NRGG Documents to which it is a party and to
perform its obligations thereunder.
3. The execution, delivery and performance by the
Company of each NRGG Document to which it is a party have been
duly authorized by all requisite action on the part of the
Company.
4. Each of the NRGG Documents to which the Company
is a party has been duly executed and delivered by the Company.
5. Neither the execution and delivery by the Company
of each NRGG Document to which it is a party, nor the
performance by it of its obligations under each such NRGG
Document, contravenes or conflicts with (i) its Certificate of
Incorporation, or other applicable constituent documents, as
the case may be, (ii) any agreement or instrument (including,
without limitation, each other NRGG Document) to which it is a
party or by which its properties or assets are bound and (iii)
any judicial or administrative judgment, injunction, order or
decree that is binding upon it or its properties or assets.
6. No order, consent, approval, license,
authorization or validation of, or filing, recording or
registration with, or exemption by, any court, governmental
body or authority, or any subdivision thereof, is required to
authorize or is required in connection with the execution and
delivery by the Company of any NRGG Document to which it is a
party, or in connection with the performance of its obligations
thereunder or the consummation of the transactions contemplated
thereby other than those that have been obtained or made and
are in full force and effect or will be obtained or made prior
to the time the same is required and thereafter remains in full
force and effect.
7. Each of the NRGG Documents to which the Company
is a party constitutes a valid and binding obligation of the
Company enforceable against the Company in accordance with its
terms.
8. Neither the execution, delivery and performance
by the Company of each of the NRGG Documents to which it is
party, nor the consummation by the Company of the transactions
contemplated therein, violates any Applicable Laws.
9. All Government Approvals which under Applicable
Laws are required to be obtained or made by the Company in
connection with the due execution and delivery of, or
performance by the Company of its obligations under, each of
the NRGG Documents to which it is party have been obtained or
made.
This opinion may be relied upon by the Banks, the
Agent Bank, the Collateral Agent and any assignees of or
participants in the interests of the Banks under the Credit
Agreement.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.27.4
<SEQUENCE>21
<DESCRIPTION>EXHIBIT 10.27.4 EQUITY COMMITMENT GUARANTY DATED AS OF
DECEMBER 10, 1997 BY NRG ENERGY IN FAVOR OF CHASE AND NRG
(MORRIS) COGEN, LLC ("COGEN LLC").
<TEXT>
Exhibit 10.27.4
EQUITY COMMITMENT GUARANTY
This EQUITY COMMITMENT GUARANTY (this "Guaranty" or this
"Agreement"), dated as of December 10, 1997, 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 that certain Membership Interest Purchase Agreement,
dated as of the date hereof, Guarantor is selling all of its membership
interests in the Borrower to NRGG Funding Inc. ("NRGG Funding").
C. Pursuant to an Assignment and Assumption Agreement, dated as of
the date hereof (the "Assignment and Assumption Agreement"), between
Guarantor and NRGG Funding, NRGG Funding is assuming all of Guarantor's
obligations under the Equity Commitment Agreement.
D. Guarantor owns 45% of the outstanding shares of capital stock of
NRG Generating and NRG Generating owns 100% of the outstanding shares
of capital stock of NRGG Funding.
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 NRGG Funding 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 NRGG Funding 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 NRGG Funding 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 NRGG Funding'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
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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 NRGG
Funding's obligations to the Collateral Agent and the
Borrower under the Equity Commitment Agreement. If NRGG
Funding 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
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 NRGG Funding
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.
(b) 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 NRGG Funding 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 there
against; (v) apply any sums by
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whomsoever paid or howsoever realized to any obligations of NRGG
Funding 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 NRGG Funding 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 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.
4
(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 consumma-
tion of the transactions contemplated hereby, will not (i) conflict
with or result in a breach or violation of any of the respective char-
ters 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 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 administra-
tive or court decree applicable to Guarantor or any of its subsid-
iaries 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 Agree-
5
ment, 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 is not an "investment company", or a company
"controlled" by an "investment company", within the meaning
of the ICA.
(j) Guarantor is a "subsidiary company" of a "holding company" as
those terms are defined in the Public Utility Holding Company
Act of 1935, as amended ("PUHCA"); however, Guarantor is
exempt from all provisions of PUHCA by virtue of Section
3(a)(2) thereof.
6
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.
(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.
7
(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 otherwise, until all of the liabilities and obligations of
NRGG Funding 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
8
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.
(d) Guarantor waives any and all notice of the creation, renewal,
extension or accrual of any of the obligations of NRGG
Funding 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 NRGG Funding 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:
9
(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
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
10
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 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).
11
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
NRGG Funding 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:/s/ David H. Peterson
Name: David H. Peterson
Title: President & CEO
Acknowledged and Accepted:
THE CHASE MANHATTAN BANK,
as Collateral Agent
By: /s/ Annette M. Marsula
Name: Annette M. Marsula
Title: Assistant Vice President
NRG (MORRIS) COGEN, LLC
By: /s/ Craig Mataczynski
Name: Craig Mataczynski
Title: President