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EXHIBIT 10.4
INDEMNIFICATION CONSENT AGREEMENT
This Indemnification Consent Agreement (this "Agreement") is made as of
this 22nd day of February, 2000, among NRG Energy, Inc. (the "Company"), NRG
Northeast Generating LLC (the "Issuer"), Chase Securities Inc. and Salomon Smith
Barney Inc., as representatives of the several Initial Purchasers (as defined
below) (collectively the "Representatives"), The Chase Manhattan Bank (in its
capacity as trustee under the Indenture (as defined below), the "Trustee", in
its capacity as collateral agent under the Collateral Agency and Intercreditor
Agreement, the "Collateral Agent", and in its capacity as administrative agent
under the working capital revolving loan facility, a "Working Capital
Administrative Agent") and Citibank, N.A. (in its capacity as administrative
agent under the working capital revolving loan facility, a "Working Capital
Administrative Agent", and together with The Chase Manhattan Bank, the "Working
Capital Administrative Agents") in connection with (i) the issuance and sale by
the Issuer of $320,000,000 aggregate principal amount of its 8.065% Series A
Senior Secured Bonds due 2004, $130,000,000 aggregate principal amount of its
8.842% Series B Senior Secured Bonds due 2015 and $300,000,000 aggregate
principal amount of its 9.292% Series C Senior Secured Bonds due 2024
(collectively, the "Bonds"), guaranteed by Arthur Kill Power LLC, Astoria Gas
Turbine Power LLC, Connecticut Jet Power LLC, Devon Power LLC, Dunkirk Power
LLC, Huntley Power LLC, Middletown Power LLC, Montville Power LLC, Norwalk
Harbor Power LLC, Oswego Harbor Power LLC and Somerset Power LLC (each a
"Guarantor" and collectively the "Guarantors") and (ii) the execution and
delivery of a working capital revolving loan facility with an aggregate
principal amount of up to $50,000,000 provided by the lenders named therein (the
"Working Capital Facility").
RECITALS
A. The Issuer, the Guarantors party thereto, the Administrative Agents
party thereto, The Chase Manhattan Bank as the collateral agent, Citibank, N.A.
as the paying agent and the lenders referred to therein (the "Lenders") have
entered into a Loan Agreement dated as of June 4, 1999 (the "Loan Agreement"),
pursuant to which the Lenders agreed subject to the terms and conditions
thereof, to lend to the Issuer in an aggregate principal amount not exceeding
$686,564,000 including a loan in the principal amount of $68,440,000 (the
"Tranche D Term Loan") the proceeds of which the Issuer used, inter alia, to
lend to its affiliate, Oswego Harbor Power LLC ("Oswego Harbor Power") to enable
Oswego Harbor Power to purchase the Oswego facility from Niagara Mohawk Power
Corporation, and revolving loans in an aggregate principal amount not to exceed
$4,234,000 (the "Tranche D Revolver Amount") for working capital purposes of the
Issuer and its subsidiaries.
B. Before the completion of the acquisition of Oswego facility, on or
about July 12, 1999, suit was filed by Fortistar Capital, Inc. in District
Court, Fourth Judicial District, in Hennepin County, Minnesota against the
Company (together with any other actions or claims relating to or arising out of
such suit, the "Litigation"), as a result of
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which the Issuer was unable to make certain representations under the Loan
Agreement.
C. In order to draw-down the Tranche D Term Loan and the Tranche D
Revolver Amount, the Issuer requested that the Lenders waive certain conditions
precedent to the Loan Agreement that required the Issuer to make representations
concerning legal actions, suits and proceedings.
D. As a condition to agreeing to such waiver, the Administrative Agents
and the Lenders required that the Company indemnify each of them and certain
other persons for any losses, damages and expenses that might be incurred by any
of them or such persons with respect to the Litigation in accordance with the
Indemnification Agreement dated December 23, 1999 (the "Indemnification
Agreement").
E. Pursuant to the Indemnification Agreement, the Administrative Agents
and the Lenders required the Company to indemnify any bank, financing
institution or other institutional investor providing for any credit agreement,
bond indenture, note purchase agreement or similar document or documents
pursuant to which the Issuer obtains financing to refinance, refund or otherwise
replace its indebtedness under the Loan Agreement or any subsequent refinancing
refunding or replacement of the current financing.
F. In order to refinance the loans under the Loan Agreement, the Issuer
now desires to enter into an indenture among the Issuer, the Guarantors and the
Trustee (the "Indenture") and desires to sell the Bonds to Chase Securities
Inc., Salomon Smith Barney Inc., ABN AMRO Incorporated, CIBC World Markets and
Dresdner Kleinwort Benson N.A. LLC (each an "Initial Purchaser" and
collectively, the "Initial Purchasers") pursuant to a purchase agreement among
the Issuer, the Guarantors and the Representatives on behalf of the Initial
Purchasers (the "Purchase Agreement").
G. As a condition to agreeing to enter into the Indenture, the Trustee
has, and as a condition to agreeing to enter into the Purchase Agreement, the
Initial Purchasers have, and as a condition to agreeing to enter into the
Working Capital Facility, the Working Capital Administration Agents have
requested that the Company and the Issuer enter into this Indemnification
Consent Agreement.
Section 1. Definitions. All terms not defined herein shall have the same
meaning set forth in the Indemnification Agreement.
Section 2. Acknowledgement.
(a) The Company and the Issuer hereby acknowledge that the Working
Capital Administrative Agents, the Collateral Agent, the Trustee and the Initial
Purchasers are Lender Representatives within the meaning of the Indemnification
Agreement and each would be entitled to the benefits of the Indemnification
Agreement.
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(b) The Company and the Issuer hereby acknowledge that the Working
Capital Lenders, the holders of the Bonds at any time and the Initial Purchasers
are each Financing Parties within the meaning of the Indemnification Agreement
and each would be entitled to the benefits of the Indemnification Agreement.
Section 3. Notice. This Agreement constitutes written notice to the
Company and to the Issuer required to be delivered by successor Lender
Representatives of the Company and the Issuer as required by section 5(b) of the
Indemnification Agreement.
Section 4. Miscellaneous.
(a) Waivers, Etc. The terms of this Agreement may be waived, altered or
amended only by an instrument in writing duly executed by the parties hereto.
(b) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the respective successors and assigns of each of the
Company, the Working Capital Administrative Agents, the Working Capital Lenders,
the Issuer, the Guarantors, the Trustee, the Initial Purchasers and the holders
of the Bonds.
(c) Counterparts; Integration; Effectiveness. This Agreement may be
executed in any number of counterparts, all of which when taken together shall
constitute one and the same instrument, and any of the parties hereto may
execute this Agreement by signing any such counterpart. This Agreement
constitutes the entire agreement and understanding among the parties hereto and
supersedes any and all prior agreements and understandings, written or oral,
relating to the subject matter hereof.
(d) Severability. If any provision hereof is invalid or unenforceable in
any jurisdiction, then, to the fullest extent permitted by applicable law (a)
the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in order to carry out the
intentions of the parties hereto as nearly as may be possible and (b) the
invalidity or unenforceability of any provision hereof in any jurisdiction shall
not affect the validity or enforceability of such provision in any other
jurisdiction.
(e) Headings. Headings appearing herein are used solely for convenience
of reference and are not intended to affect the interpretation of any provision
of this Agreement.
(f) No Third Party Beneficiaries. This Agreement is solely for the
benefit of the Working Capital Administrative Agents, the Working Capital
Lenders, the Issuer, the Guarantors, the Trustee, the Initial Purchasers and the
holders of the Bonds and no other person shall have any rights hereunder.
(g) Governing Law; Submission to Jurisdiction. This Agreement shall be
governed by, and construed in accordance with, the laws of the State of New York
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without regard to principles of conflicts of laws thereof to the extent the
application of such principles would cause the application of the laws of any
other jurisdiction. The Company hereby submits to the non-exclusive jurisdiction
of the United States District Court for the Southern District of New York and of
the Supreme Court of the State of New York sitting in New York County (including
its Appellate Division) and of any other appellate court in the State of New
York for the purposes of all legal proceedings arising out of or relating to
this Agreement or the transactions contemplated hereby. The Company hereby
irrevocably waives, to the fullest extent permitted by applicable law, any
objection that it may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.
(h) EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION.
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IN WITNESS WHEREOF, the undersigned has caused this Agreement to
be duly executed by its duly authorized officer as of the date first written
above.
NRG ENERGY, INC.
By: /s/ David H. Peterson
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Name: David H. Peterson
Title: Chairman, President & CEO
NRG NORTHEAST GENERATING LLC.
By: /s/ Craig Mataczynski
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Name: Craig Mataczynski
Title: Chairman, President & CEO
CHASE SECURITIES INC.
as Representative of the Initial
Purchasers
By: /s/ Christopher Lowe
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Name: Christopher Lowe
Title: Vice President
SALOMON SMITH BARNEY INC.
as Representative of the Initial
Purchasers
By: /s/ Barry P. Gold
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Name: Barry P. Gold
Title: Director
THE CHASE MANHATTAN BANK
as Trustee
By: /s/ Annette M. Marsula
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Name: Annette M. Marsula
Title: Vice President
THE CHASE MANHATTAN BANK
as Collateral Agent
By: /s/ Annette M. Marsula
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Name: Annette M. Marsula
Title: Vice President
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THE CHASE MANHATTAN BANK
as an Administrative Agent
By: /s/ Robert M. Bowen II
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Name: Robert M. Bowen II
Title: Managing Director
CITIBANK, N.A.
as an Administrative Agent
By: /s/ Jonathan B. Lindenberg
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Name: Jonathan B. Lindenberg
Title: Managing Director
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