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Exhibit 10.11
FUNDING AGREEMENT
This FUNDING AGREEMENT (this "Agreement"), dated as of
August 24, 2000, is between RELIANT ENERGY RESOURCES CORP., a Delaware
corporation ("RERC"), and RELIANT ENERGY NORTHEAST HOLDINGS, INC., a Delaware
corporation ("RENH").
RECITALS
A. RENH indirectly owns all of the member interests in Reliant
Energy Mid-Atlantic Power Holdings, LLC, a Delaware limited liability company
("REMA"). REMA has leased certain interests in generating stations (the
"Transaction").
B. In connection with the Transaction, RENH and REMA have
entered into the Subordinated Working Capital Facility and Revolving Promissory
Note of even date herewith (as such agreement and note may be amended or
modified from time to time, the "Subordinated Working Capital Facility"), which
obligates RENH to make loans to REMA on certain specified terms and conditions.
C. RERC, an affiliate of RENH, expects to benefit directly or
indirectly from RENH's loans to REMA and has agreed, in accordance with and
subject to the terms of this Agreement, to fund equity contributions or advances
to RENH to finance RENH's advances to REMA under the Subordinated Working
Capital Facility.
NOW, THEREFORE, for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
SECTION 1. Definitions. Unless otherwise defined herein,
capitalized terms used herein have the meanings assigned thereto in the
Subordinated Working Capital Facility. As used herein the following terms shall
have the following meanings (all terms in this Agreement in the singular have
the same meanings when used in the plural and vice versa):
"Capital Contribution" means a contribution to the
equity capital of RENH by means of a cash contribution pursuant to
Section 2.
"Capital Stock" means shares of capital stock of
RENH.
"Commitment" means the amount required to be funded
by RERC to RENH in accordance with and subject to the terms of this
Agreement which, shall equal the amount of the Commitment (as defined
in the Subordinated Working Capital Facility) as such amount reduces
and terminates in accordance with the terms thereof and Section 2(f)
hereof.
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"Funding" means a Capital Contribution or Loan to
RENH under Section 2.
"Issue Price" means a price per share of Capital
Stock to be reasonably agreed by RERC and RENH.
"Loan" means a loan to RENH in cash pursuant to
Section 2.
"Person" means any individual, corporation,
cooperative, partnership, joint venture, association, joint-stock
company, limited liability company, trust, unincorporated organization
or government or any agency or subdivision thereof.
"Put Price" means for any Capital Stock, an amount
equal to the Issue Price of such Capital Stock, plus interest thereon
at the rate applicable to a Loan accrued during the period from the
date of the issuance of such Capital Stock to RERC to but excluding the
date of the payment of such Put Price.
Section 2. Funding Obligation and Procedure.
(a) Funding. RERC hereby irrevocably agrees to make Fundings
to RENH in the amount that RENH is obligated to advance to REMA under the
Subordinated Working Capital Facility on or before (i) the first Rent Payment
Date after its receipt of a Cash Flow Coverage Certificate specifying a Cash
Deficiency Amount and (ii) ten Business Days after its receipt of a Cash Flow
Coverage Certificate specifying an Interim Cash Deficiency Amount but, in each
case, in no event in excess of the undrawn amount of the Commitment. RERC shall
make all Fundings in U.S. Dollars. All Fundings shall be in immediately
available funds paid directly to RENH. The obligation of RENH in respect of each
Funding shall be evidenced by, at the sole option of RERC, (x) a note in the
form of Exhibit A attached hereto in the principal amount of such Funding or (y)
Capital Stock in the number shares equal to the aggregate amount of such Funding
divided by the Issue Price.
(b) Delivery of Evidence of Funding. REHN agrees to deliver to
RERC promptly after receipt of the Funding an appropriately completed note or
stock certificate, as applicable, evidencing the Funding.
(c) Proceeds. The proceeds of a Fundings Loan shall be used
solely to make advances to REMA under the Subordinated Working Capital Facility.
(d) Payments and Reborrowing. RENH shall make payments to RERC
to be applied to RENH's obligation respecting the Fundings in an amount equal to
any amounts paid or prepaid to RENH by REMA in respect of the Subordinated
Working Capital Facility upon RENH's receipt of such payment. Any payment or
prepayment on a Funding constituting a Loan shall be applied to first to the
accrued and unpaid interest on such Loan and then to principal of such Loan. Any
payment or prepayment on a Funding constituting Capital Stock shall be applied
in redemption of such Capital Stock at a price equal to the Put Price.
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(e) Within the limits of the foregoing, RENH may borrow, repay
and reborrow the Loans and put (at the Put Price) and reissue (at the Issue
Price) the Capital Stock to RENH.
(f) Notwithstanding anything to the contrary contained herein
or the Subordinated Working Capital (and in addition to the Commitment
termination provisions thereof) the Commitment shall terminate if any other
Person having a senior unsecured long-term debt rating of at least Baa2 by
Moody's and BBB by S&P agrees to irrevocably provide equity and/or debt
financing to RENH to finance REMA's borrowings under the Subordinated Working
Capital Facility.
SECTION 3. Obligations Absolute. RERC further covenants and
agrees that: RERC's obligation to fund in accordance with the terms of this
Agreement is and shall be absolute and unconditional and is not, and shall not
be, subject to any defense or right of set-off, counterclaim, deduction,
diminution, abatement, recoupment, defense, suspension, deferment or reduction
or any other legal or equitable defense that RERC has, or hereafter may have,
against any other Person for any reason whatsoever.
SECTION 4. Reinstatement. RERC and RENH agree that this
Agreement shall be automatically reinstated with respect to any Funding made by
RERC pursuant to this Agreement if and to the extent such Funding is rescinded
or must otherwise be restored, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise.
SECTION 5. Waiver of Demands, Notices, Etc. Each party hereby
unconditionally waives, to the extent permitted by applicable law, (a) all
notices which may be required by statute, rule of law or otherwise, now or
hereafter in effect, to preserve any rights against RERC hereunder, including,
without limitation, any demand, proof or notice of non-payment or
non-performance of any of the Funding; (b) notice of acceptance of this
Agreement, demand, protest, presentment, notice of default and any requirement
of diligence; and (c) any requirement to exhaust any remedies or to mitigate any
damages resulting from default by any other Person under this Agreement.
SECTION 6. Miscellaneous.
(a) Waiver. No failure on the part of any party hereto to
exercise and no delay in exercising, and no course of dealing with respect to,
any right, remedy, power or privilege under this Agreement or under applicable
law shall operate as a waiver of such right, remedy, power or privilege, nor
shall any single or partial exercise of any right, remedy, power or privilege
under this Agreement or under applicable law preclude any other or further
exercise of any such right, remedy, power or privilege or the exercise of any
other right, remedy, power or privilege.
(b) Notices. All notices and communications to be given under
this Agreement shall be given or made in writing and delivered by hand or an
overnight courier service, mailed by certified or registered mail, or sent by
telecopy, to the intended recipient at the address specified below or, as to any
party, at such other address as shall be designated by such
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party in a notice to each other party. Except as otherwise provided in this
Agreement, all such communications shall be deemed to have been duly given when
transmitted by telecopier, or personally delivered or, in the case of a mailed
notice or notice by courier, upon receipt, in each case, given or addressed as
provided in this Section 6(b):
To RERC:
Reliant Energy Resources Corp.
1111 Louisiana
Houston, Texas 77002
Attention: Marc Kilbride
Telecopy No.: 713-207-3301
Telephone No.: 713-207-5782
To RENH:
Belfint, Lyons & Shuman
200 West Ninth Street Plaza
Wilmington, DE 19899
Attention: Patricia F. Genzel, President and Secretary
Telecopy No.: 302-658-0468
Telephone No.: 302-655-8894
(c) Amendments, Etc. Any provision of this Agreement may be
modified, supplemented or waived only by an instrument in writing duly executed
by each party hereto. Any such modification, supplement or waiver shall be for
such period and subject to such conditions as shall be specified in the
instrument effecting the same and shall be binding upon each party hereto, and
any such waiver shall be effective only in the specific instance and for the
purposes for which given.
(d) Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of RERC and RENH and their respective successors
and permitted assigns. Neither party may assign or transfer its rights or
obligations under this Agreement without the prior written consent of the other
party.
(e) Survival. All representations and warranties made in this
Agreement shall survive the execution and delivery of this Agreement.
(f) Agreements Superseded. This Agreement supersedes all prior
agreements and understandings, written or oral, among the parties with respect
to the subject matter of this Agreement.
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(g) Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Agreement, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
(h) Captions. The table of contents and captions and section
headings appearing in this Agreement are included solely for convenience of
reference and are not intended to affect the interpretation of any provision of
this Agreement.
(i) Counterparts. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties to this Agreement may execute this Agreement
by signing any such counterpart.
(j) WAIVER OF JURY TRIAL. 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 IN ANY JURISDICTION 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
(i) 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 (ii) 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.
(k) Governing Law; Jurisdiction.
(i) Governing Law. This Agreement shall be construed in
accordance with and governed by the law of the State of New York.
(ii) Submission to Jurisdiction. Each party hereto hereby
irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of the United States
District Court for the Southern District of New York and any New
York State Court acting in New York City and any appellate courts
from any thereof, in any action or proceeding arising out of or
relating to this Agreement, or for recognition or enforcement of
any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in such New York
State or, to the extent permitted by law, in such Federal court.
Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced
in other jurisdictions by suit on the judgment or in any other
manner provided by law.
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(iii) Waiver of Venue. Each party hereto hereby irrevocably
and unconditionally waives, to the fullest extent it may legally
and effectively do so, any objection which it may now or
hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in any
court referred to in paragraph (ii) of this Section 6(k). Each of
the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to
the maintenance of such action or proceeding in any such court.
(l) Limitation of Liability; Waiver of Consequential Damages.
Notwithstanding anything herein to the contrary, RERC's liability hereunder
shall be limited to the Commitment. To the extent permitted by applicable law,
no party hereto shall assert, and each party hereto hereby waives, any claim
against any other party, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement or the
transactions contemplated herein.
IN WITNESS WHEREOF, the parties hereto have caused this
Funding Agreement to be duly executed and delivered as of the day and year first
above written.
RELIANT ENERGY RESOURCES CORP.
By:
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Marc Kilbride
Treasurer
RELIANT ENERGY NORTHEAST HOLDINGS, INC.
By:
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Patricia F. Genzel
President and Secretary
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