Exhibit 10.25.4
INDEMNIFICATION AGREEMENT
This INDEMNIFICATION AGREEMENT, dated as of March 21, 1997, to be
effective as of January 1, 1997, (this "Agreement"), is made by and
among (i) NRG GENERATING (PARLIN) COGENERATION INC., a Delaware
corporation ("NRGG Parlin"), (ii) NRG GENERATING (NEWARK) COGENERATION
INC., a Delaware corporation ("NRGG Newark"; NRGG Newark and NRGG
Parlin, collectively, the "Borrowers"), (iii) NRG ENERGY, INC., a
Delaware corporation ("NRG"), (iv) NRG GENERATING (U.S.) INC., a
Delaware corporation ("NRGG") and (v) CREDIT SUISSE FIRST BOSTON
(formerly known as Credit Suisse, as agent ("Agent") on behalf of and
for the benefit of the Secured Parties (as defined in the Credit
Agreement referred to below).
W I T N E S S E T H
WHEREAS, the Borrowers and Agent have previously entered into the
Credit Agreement, dated as of May 17, 1996, by and among (i) the
Borrowers, (ii) Credit Suisse First Boston and each purchasing lender
(the "Lenders") and (iii) Agent (as the same may be amended, modified
or supplemented from time to time, the "Credit Agreement"), pursuant to
which the Lenders have provided the Loans and the Commitments to
Borrowers on the terms and conditions set forth in the Credit
Agreement;
WHEREAS, NRGG Parlin and Stewart & Stevenson Operations, Inc., a
Delaware corporation ("SSOI"), entered into that certain Operations and
Maintenance Agreement (the "Parlin SSOI Agreement"), dated as of May 1,
1996;
WHEREAS, NRGG Newark and SSOI entered into that certain Operations
and Maintenance Agreement (the "Newark SSOI Agreement"; the Parlin SSOI
Agreement and the Newark SSOI Agreement, collectively, the "SSOI
Agreements") dated as of May 1, 1996;
WHEREAS, on October 28, 1996, NRGG Newark terminated the Newark
SSOI Agreement pursuant to and in accordance with Section XII(1)(e)
thereof;
WHEREAS, on December 20, 1996, NRGG Parlin terminated the Parlin
SSOI Agreement pursuant to and in accordance with Section XII(1)(e)
thereof;
WHEREAS, NRGG Newark has entered into that certain Operating and
Maintenance Agreement (the "POI Newark Agreement") dated November 8,
1996 between NRGG Newark and Power Operations Inc. ("POI") pursuant to
which the POI agreed to operate and maintain NRGG Newark's electric
generation facility;
WHEREAS, NRGG Parlin has entered into that certain Operating and
Maintenance Agreement (the "POI Parlin Agreement") dated December 31,
1996 between NRGG Parlin and POI pursuant to which POI agreed to
operate and maintain NRGG Parlin's electric generation facility;
WHEREAS, NRG owns 100% of the issued and outstanding capital stock
of POI, and NRG and is willing to indemnify the Borrowers for certain
costs and expenses incurred in connection with the termination of the
SSOI Agreements;
WHEREAS, the Borrowers are subsidiaries of NRGG, and NRGG is also
willing to indemnify the Borrowers for certain costs and expenses
incurred in connection with the termination of the SSOI Agreements
NOW THEREFORE, for and in consideration of the premises and the
aforesaid loan, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties
hereto hereby agree as follows:
1. Definitions.
Capitalized terms used herein and not otherwise defined shall have
the meanings ascribed to such terms in the Credit Agreement, to the
extent defined therein.
2. Indemnity.
NRGG and NRG, as set forth in the following sentence, hereby
indemnify and agree to save and hold NRGG Newark and NRGG Parlin
harmless from and against any and all losses, liabilities, claims,
demands, assessments, actions, suits, proceedings, damages, costs and
expenses including without limitation, reasonable attorneys' fees and
disbursements (including costs, expenses and legal fees incurred by
NRGG Newark and NRGG Parlin, or their respective officers, directors,
agents and employees (each of which is herein referred to as an
"Indemnified Person") incident to the foregoing or to enforcing said
rights of defense and indemnity), arising out of or in connection with
NRGG Newark's and NRGG Parlin's termination of (i) the Newark SSOI
Agreement (the "SSOI Newark Losses") and (ii) the Parlin SSOI Agreement
(the "SSOI Parlin Losses"; with SSOI Newark Losses and SSOI Parlin
Losses, being collectively referred to as the "SSOI Losses"),
respectively. As between each other, NRGG and NRG agree that they
shall allocate SSOI Losses as follows: (1) NRGG shall pay the first
$200,000 of SSOI Losses; and (2) NRG shall pay all SSOI Losses in
excess of $200,000 to Borrowers. NRGG and NRG agree to reimburse each
other as required to achieve the above result, provided that NRG, its
officers, directors, agents and employees (each of which is herein
referred to as a "NRG Indemnified Person") shall not be entitled to
receive an amount of indemnity pursuant to this Section 2 for the
amount of any SSOI Losses as and to the extent such amount, when added
to all amounts previously paid or reimbursed to a NRG Indemnified
Person pursuant to this Section 2 would exceed $200,000.
NRG shall indemnify, defend and hold harmless NRGG, its
officers, directors, agents and employees and NRGG shall indemnify,
defend and hold harmless NRG Indemnified Persons promptly upon demand
at any time and from time to time, against any and all SSOI Losses as
provided in this Section 2.
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If any action, suit or proceeding shall be commenced against
or any claim, demand or assessment be asserted against an Indemnified
Person in respect of which an Indemnified Person proposes to demand
defense and indemnification pursuant to this Section 2, and the total
amount sought in all such actions, suits, proceedings, claims, demands
and assessments is estimated by the applicable Borrower to be $200,000
or less, then NRGG shall be notified to that affect with reasonable
promptness and shall have the right, but not the obligation, to assume
the entire control of the defense, compromise or settlement thereof,
including, at NRGG's expense, employment of counsel satisfactory to the
Indemnified Person and in connection therewith, the Indemnified Person
shall cooperate fully to make available to NRGG all pertinent
information under its control; provided, that failure to provide such
notice shall not relieve NRG or NRGG of their obligation to indemnify
hereunder.
If any action, suit or proceeding shall be commenced against or
any claim, demand or assessment be asserted against an Indemnified
Person in respect of which an Indemnified Person proposes to demand
defense and indemnification pursuant to this Section 2, the control of
which action, suit, proceeding, claim, demand, or assessment is not
assigned pursuant to the immediately preceding paragraph, NRG shall be
notified to that affect with reasonable promptness and shall have the
right, but not the obligation, to assume the entire control of the
defense, compromise or settlement thereof, including, at NRG's expense,
employment of counsel satisfactory to the Indemnified Person and in
connection therewith, the Indemnified Person shall cooperate fully to
make available to NRG all pertinent information under its control;
provided, that failure to provide such notice shall not relieve NRG or
NRGG of their obligation to indemnify hereunder.
3. Notice; Contest or Dispute of Charges
Borrowers shall provide NRG and NRGG with prompt written notice of
any claim for which indemnification is or may be sought pursuant to
Section 2 hereof; provided, that failure to provide such notice shall
not relieve NRG or NRGG of their obligation to indemnify hereunder,
except to the extent that the delay in provision of such notice is
prejudicial to NRG or NRGG.
If Borrowers shall obtain a repayment from a third party of any
claim paid by NRG or NRGG pursuant to Section 2, Borrowers shall
promptly pay to NRG or NRGG as the case may be (i) the amount of such
repayment, together with any interest (other than interest for the
period, if any, after such claim was paid by Borrowers until such claim
was paid or reimbursed by NRG or NRGG) received by Borrowers on account
of such repayment net of expenses and (ii) the net amount, after taking
into account any taxes actually payable as a result of the receipt of
such refund or associated interest, of any Federal, state or local
income taxes saved by Borrowers in respect of its payment to NRG or
NRGG of amounts referred to in clause (i) above and its payment to NRG
or NRGG of amounts pursuant to this clause (ii). In no event shall
Borrowers be obligated to pay to either NRG or NRGG more than the
amount actually received by Borrowers.
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4. Method of Payment.
Any payment required to be made pursuant to Section 2 hereof shall
be paid in immediately available funds within 10 Business Days after
Borrowers or Agent makes written demand upon NRG and/or NRGG, together
with reasonable documentation of the liability of expense to be
indemnified pursuant to Section 2. Any such payment shall be made
directly to Agent for deposit in the Project Account.
5. No Setoff.
The payment obligations of NRG and NRGG hereunder shall be
satisfied in all events at the times and in the amounts set forth
herein without offset, abatement, withholding or reduction of any kind.
6. Enforcement.
Both NRG and NRGG hereby agree that Agent on behalf of the Secured
Parties and/or Borrowers shall have the right to directly enforce the
provisions hereof against each of them and NRG and NRGG agree to pay
all costs, including reasonable attorneys' fees, actually incurred by
Agent with respect to any such enforcement in accordance with Section 2
hereof.
7. Notices.
All notices, demands, requests and other communications required
or permitted hereunder shall be in writing, and shall be given and
deemed to have been given in accordance with Section 8.1 of the Credit
Agreement and the information set forth immediately below shall apply
to NRG and NRGG:
If to NRG:
1221 Nicollet Mall
Suite 700
Minneapolis, Minnesota 55403
Attention: President
Telecopy:
If to NRGG:
NRG Generating (U.S.) Inc.
1221 Nicollet Mall
Suite 610
Minneapolis, Minnesota 55403
Attention: President
Telecopy: (612) 373-8833
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8. Survival of Representations and Warranties.
All agreements, representations and warranties made herein or made
in writing by NRG and/or NRGG in connection herewith shall survive the
execution and delivery of this Agreement and the performance of the
obligations contained herein, and shall be deemed to be material and to
have been relied upon by Agent and the Secured Parties, regardless of
any investigation made by or on behalf of Agent or the Secured Parties.
9. Prior Agreements.
The parties hereto hereby agree this Agreement supersedes (i) that
certain Indemnification Agreement (the "NRGG Newark Indemnification
Agreement") dated as of November 8, 1996, among NRG Newark, NRGG and
Agent and (ii) that certain Indemnification Agreement (the "Parlin
Indemnification Agreement") dated as of ____________, 199__ among NRG
Parlin, NRGG and Agent.
10. Severability.
Any provision of this Agreement which is prohibited, unenforceable
or not authorized in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition, unenforceability or
non-authorization, without invalidating the remaining provisions hereof
or affecting the validity, enforceability or legality of such provision
in any other jurisdiction. Where provisions of any law or regulation
resulting in such prohibition or unenforceability may be waived they
are hereby waived by NRG, NRGG and Agent to the full extent permitted
by law so that this Agreement shall be deemed a valid, binding
agreement, enforceable in accordance with its terms.
11. Amendment.
This Agreement may be amended, modified or rescinded only by a
writing expressly referring to this Agreement and signed by all the
parties hereto.
12. Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and permitted
assigns. In the event of any assignment or transfer by any Secured
Party of any instrument evidencing all or any part of the Obligations,
the holder of such instrument shall, subject to the Credit Agreement,
be entitled to the benefits of this Agreement.
13. Number and Gender.
Whenever used in this Agreement, the singular number shall include
the plural and the plural the singular, and the use of any gender shall
be applicable to all genders.
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14. Headings Descriptive.
The captions or headings of the several sections an subsections
and the table of contents 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.
15. Governing Law; Jurisdiction; Waiver of Trial by Jury.
(a) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without
regard to the conflict of law rules thereof.
(b) Jurisdiction. With respect to any legal action or proceeding
brought by Agent or the Secured Parties against NRG or NRGG arising out
of or in connection with this Agreement, NRG and NRGG hereby
irrevocably (i) consent to the jurisdiction of any state or federal
court located in the State of New York, (ii) consent to the service of
process outside the territorial jurisdiction of said courts in any such
action or proceeding by mailing copies thereof by registered United
States mail, postage prepaid, to the address specified by NRG or NRGG,
as applicable, for the receipt of notices if such address is outside
such territorial jurisdiction and (iii) waives any objection to the
venue of the aforesaid courts. NRG and NRGG hereby irrevocably
designate, appoint and empower CT Corporation System (the "Process
Agent", which has consented thereto) as agent to receive for and on
behalf of NRG and NRGG service of process in the State of New York.
Both NRG and NRGG agree they will at all times continuously maintain
either a registered office or an agent to receive service of process in
the State of New York on behalf of themselves and their properties
with respect to this Agreement.
(c) Waiver of Trial by Jury. WITH REGARD TO THIS AGREEMENT, EACH
OF THE PARTIES HEREBY WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION
OR PROCEEDING AND FOR ANY COUNTERCLAIM THEREIN.
16. Counterparts.
This Agreement may be executed in several counterparts, each of
which shall be an original, but all of which together shall constitute
one and the same agreement.
17. Effective Date.
The parties hereto agree that the effective date of this agreement
shall be January 1, 1997.
18. Term.
This Agreement shall continue in effect until repayment in full of
all Obligations.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement through their duly authorized representatives as of
the date first written above.
NRG GENERATING (PARLIN) COGENERATION INC.
By:/s/ Timothy P. Hunstad
Name: Timothy P. Hunstad
Title: VP & CFO
NRG GENERATING (NEWARK) COGENERATION INC.
By:/s/ Timothy P. Hunstad
Name: Timothy P. Hunstad
Title: VP & CFO
NRG ENERGY, INC.
By:/s/ Ronald J. Will
Name: Ronald J. Will
Title: Vice President
NRG GENERATING (U.S.) INC.
By:/s/ Timothy P. Hunstad
Name: Timothy P. Hunstad
Title: VP & CFO
CREDIT SUISSE FIRST BOSTON, as Agent
By:/s/ Guy Cirincione
Name: Guy Cirincione
Title: Director
By:/s/ Andrew B. Leon
Name: Andrew B. Leon
Title: Associate
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