EXHIBIT 10.19
BARGE AND TUG OPTION AGREEMENT
This Barge and Tug Option Agreement ("AGREEMENT") is made and entered into
by and between American Commercial Lines LLC ("ACL") and NRG New Roads Holdings
LLC("NRG").
RECITALS
WHEREAS, ACL, American Commercial Barge Line LLC ("ACBL"), American
Commercial Terminals LLC ("ACT") (collectively, "AMERICAN") Louisiana
Generating, LLC ("LG"), and NRG have entered into a Security Side Letter
Agreement ("SECURITY SIDE LETTER AGREEMENT") dated as of December 10, 2004 by
which ACL, ACBL, and ACT have agreed to provide certain security for such
parties' respective obligations under the Transportation Contract that may be
entered into by such parties in the manner described in Section 2 below; and
WHEREAS, the parties to this Agreement desire to incorporate the recitals
to the Security Side Letter Agreement into the recitals of this Agreement by
reference and hereby incorporate such recitals into these recitals; and
WHEREAS, NRG Power Marketing Inc. ("NRGPM") and LG are collectively
referred to herein as the "AFFILATES"; and
WHEREAS, the parties acknowledge and agree that they have negotiated, and
this Agreement sets forth, the definitive terms and conditions of the "Barge
Option" set forth in Section 3.D. of the Security Side Letter Agreement, and
that this Agreement shall become binding and effective upon the parties hereto
if and when a definitive Transportation Contract is entered into by all of the
parties thereto (including BNSF) as set forth above, and as further set forth in
Section 2 below.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt, adequacy and sufficiency of which is hereby
acknowledged by ACL and NRG, the parties hereto hereby agree as follows.
AGREEMENT
1. RECITALS. The parties hereby incorporate the above Recitals as part of
this Agreement as if the same were fully set forth herein.
2. TRANSPORTATION CONTRACT/EFFECTIVE DATE. This Agreement does not
obligate American, NRG or any of their affiliates to enter into and execute a
final Transportation Contract or any other agreement with each other, their
respective affiliates or any other parties. This Agreement shall become binding
upon and enforceable against the parties hereto only in the event that a
definitive Transportation Contract is entered into by all parties (including
BNSF) on or before the "DEADLINE DATE" (as defined in the Security Side Letter
Agreement), and is to become effective on the "EFFECTIVE DATE" (as defined in
the Security Side Letter Agreement). If prior thereto, any party contemplated to
be a party to the Transportation Contract shall deliver notice to another
contemplated party thereto terminating any further negotiations with respect to
the Transportation Contract, then this Agreement shall expire and be deemed void
ab initio; provided, however that the terms of Section 14 regarding the
confidentiality of this Agreement shall in any event remain in full force and
effect.
3. GRANT OF OPTIONS.
A. ACL, for and in consideration of the terms of the Transportation
Contract and subject to the terms of this Agreement, does hereby grant to NRG
the sole and exclusive right and option (the "BARGE OPTION"), to purchase from
ACL not more than two hundred (200) barges (collectively the "BARGES," and each
individually a "BARGE"), which Barges shall be identified as set forth in
Section 7 below, together with respective tackle, necessaries, apparel, spare
parts, cordage, general outfit and all other appurtenances and appliances
belonging aboard said Barges, whether aboard the Barges or on shore at the time
of delivery of the Barges to NRG.
B. ACL, for and in consideration of the terms of the Transportation
Contract and subject to the terms of this Agreement, does hereby grant to NRG
the sole and exclusive right and option (the "TUGS OPTION"), to purchase from
ACL the M/V CEPCO I and/or the M/V CEPCO II and the associated spares and
supplies (the "TUGS," and each, individually, a "Tug"), together with the sole
and exclusive right and option (the "HARBOR BARGES OPTION") to purchase from ACL
the Harbor Barges (as defined in the Operations Side Letter). ACL (or ACT) may
be required to purchase the Tugs and Harbor Barges pursuant to that certain
Operations Side Letter Agreement dated as of December 10, 2004 by and between
ACT and LG (the "OPERATIONS SIDE LETTER AGREEMENT"). The Tugs Option and the
Harbor Barges Option are collectively referred to herein as the "HARBOR TUGS AND
BARGES OPTION". The grant of the Harbor Tugs and Barges Option by ACL is
conditioned upon completion of such purchase by ACL (the "ACL PURCHASE").
C. The Barge Option and the Harbor Tugs and Barges Option are
referred to herein as the "OPTIONS" and each, individually, is referred to
herein as the Option.
4. CONDITIONS NECESSARY FOR EXERCISE OF THE OPTIONS. Each of the Barge
Option and the Harbor Tugs and Barges Option shall be exercisable only upon the
occurrence of a Trigger Event (as defined in the Security Side Letter
Agreement). NRG may exercise the Barge Option and/or the Harbor Tugs and Barges
Option only by written notice (the "OPTION NOTICE") delivered to ACL but only
together with either: (a) timely exercise the Terminal Option (as defined in the
Terminal Option Agreement) and consummation of the purchase of the Property
pursuant to the Terminal Option Agreement, or (b) timely taking possession of
the Property under Section 3.2 of the Lease, and pursuant to which NRG elects to
commence operation of the Property pursuant to the Lease. If NRG elects to
exercise any of its Options hereunder it agrees to also provide written notice
thereof to the "COLLATERAL AGENTS" (as defined in that certain Intercreditor and
Subordination Agreement entered into by and among NRG, the Affiliates and said
Collateral Agents dated_______________________), but failure to timely notify
said Collateral Agents within the time frames set forth herein shall not serve
to invalidate an otherwise properly delivered Option Notice to ACL as required
hereby.
5. PURCHASE PRICE.
A. If NRG exercises the Barge Option, the purchase price for the
Barges shall be the NAFMV of the Barges (the "BARGE PURCHASE PRICE") as
determined pursuant to the procedure set forth in Section 3.E. of the Security
Side Letter Agreement. Notwithstanding anything to the contrary, pursuant to
Section 4 of the Security Side Letter, NRG may for purposes of closing set off
any claimed damages (as defined therein) against the Barge Purchase Price
payable by it to ACL, to the extent that the claimed damages have not been
otherwise paid to NRG or its Affiliates or set off elsewhere, subject to the
final dispute resolution procedures and reconciliation and disposition of the
disputed amount pursuant to the terms of Section 4 of the Security Side Letter
Agreement.
B. If NRG exercises the Harbor Tugs and Barges Option, the purchase
price for the Tugs shall be the NAFMV of the Tugs being purchased (the "TUG
PURCHASE PRICE") as determined
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pursuant to the procedure set forth in Section 3.E. of the Security Side Letter
Agreement. NRG may not set off any claimed damages arising under any of the
Ancillary Agreements or the Transportation Contract, with respect to American,
against the Tug Purchase Price payable by it to ACL.
C. If NRG exercises the Harbor Tugs and Barges Option, the purchase
price for the Harbor Barges shall be the NAFMV of the Harbor Barges being
purchased (the "HARBOR BARGES PURCHASE PRICE") as determined pursuant to the
procedure set forth in Section 3.E of the Security Side Letter Agreement,
provided further however, that NRG shall also be entitled to a credit against
the Harbor Barges Purchase Price at the closing in an amount equal to the
product of one cent (1cent) multiplied by the "REMAINING COAL TONNAGE NOT
DELIVERED." For purposes hereof, the term "Remaining Coal Tonnage Not Delivered"
shall be determined by calculating the average number of tons of coal delivered
on an annual basis by American to NRG or its Affiliates from commencement of the
Transportation Contract through the date of the Trigger Event (the "AVERAGE").
The Average shall then be multiplied by the number of years (as prorated to
account for any partial year) then remaining in the term of the Transportation
Contract following the date of the Trigger Event (the "REMAINING TERM"). The
product of the Average and the Remaining Term is the "Remaining Coal Tonnage Not
Delivered", which shall form the basis for calculating the amount of the credit
to the Harbor Barges Purchase Price to which NRG may be entitled as aforesaid.
NRG may not set off any claimed damages arising under any of the Ancillary
Agreements or the Transportation Contract, with respect to American, against the
Harbor Barges Purchase Price payable by it to ACL.
6. TERMINATION. Subject to the terms of Section 2 above, this Agreement,
the Options and all further rights and obligations of the parties hereunder,
excepting only as may be expressly set forth herein, shall terminate
automatically, if not exercised or terminated sooner, upon the earliest to occur
of: (i) the Option Deadline, or (ii) the expiration of the Transportation
Contract.
7. IDENTIFICATION OF BARGES. The parties acknowledge that as part of its
management information and record keeping systems, ACL can determine the total
number of all and specific identity of each barge then dedicated to servicing
the Transportation Contract, and that the total number and composition of such
dedicated barges constantly and continuously fluctuate as part of its normal
business operations, but averages approximately 200 at any given time. Upon
receipt of the Barge Option Notice, ACL shall then cause to be promptly
prepared, an inventory list which shall identify by barge serial numbers, ACL's
barges that are then dedicated to servicing the Transportation Contract (the
"TRANSPORTATION BARGES"). The Barges to be purchased by NRG pursuant to the
Barge Option shall first consist of the Transportation Barges. If the total
number of Transportation Barges equals or exceeds 200 barges, then NRG shall
provide to ACL, within thirty (30) days after its receipt of ACL's original
inventory list, a redacted list identifying the Transportation Barges (not more
than 200) which NRG has elected to purchase through its exercise of the Barge
Option. If the total number of Transportation Barges is less than 200 barges,
then ACL shall provide NRG with an inventory list identifying the Transportation
Barges, along with a separate list identifying ACL barges previously assigned to
perform services under the Transportation Contract, or if no such barges have
been previously assigned, by a method that is consistent with ACL's customary
method of assigning barges for the performance of services similar to those to
be performed under the Transportation Contract (the "OTHER BARGES") in an amount
equal to the number by which the number of active dedicated Transportation
Barges identified by ACL is less than 200. The Other Barges shall be similar in
age and quality to the Transportation Barges. NRG shall, within fifteen (15)
days after its receipt of ACL's list of Other Barges, provide to ACL a redacted
list identifying the Other Barges which NRG has elected to purchase through its
exercise of the Barge Options, such that the Transportation Barges and Other
Barges identified by ACL will total 200 barges.
8. CLOSING.
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A. If NRG elects to exercise its Barge Option and/or the Harbor Tugs
and Barges Option, the closing of the sale and transfer of the Barges and/or the
Tugs and Harbor Barges ("CLOSING") shall be held on the day and time designated
by NRG in the Barge Option Notice and/or the Harbor Tugs and Barges Option
Notice, which day must be a business day and must be no sooner than ten (10)
days following the date that each of the Barge Purchase Price, the Tug Purchase
Price and the Harbor Barges Purchase Price (or if only one Option is exercised,
the relevant purchase price(s)) have been determined, and no later than thirty
(30) days following the date that the relevant purchase price(s) have been
determined.
B. Closing of the sale and purchase of the Barges and/or Tugs and
Harbor Barges shall occur at the offices of First American Title Company in St.
Louis County, Missouri (the "TITLE COMPANY") or such other location mutually
acceptable to the parties, and may occur via escrow without the parties being
physically present. ACL shall deliver to NRG, at Closing, Bills of Sale in
duplicate on Department of Transportation U.S. Coast Guard Form CG-1340
transferring title to each Barge and/or Tug and Harbor Barge to NRG together
with such other documentation as may be reasonably be required by NRG and/or the
Title Company and which is reasonably available to ACL in order for the Title
Company to insure that title to each Barge and/or Tug and Harbor Barge has been
vested in NRG. NRG shall deliver to ACL, at Closing, the relevant purchase
price(s) as determined in accordance with Section 5 above, in immediately
available funds, wire transferred to such account as ACL shall designate or such
other account as agreed upon by the parties. Each Barge and/or each Tug and
Harbor Barge shall be considered fully delivered to NRG, regardless of the then
actual location of each such Barge or Tug and Harbor Barge simultaneously with
Closing.
C. Effective as of Closing, any and all written and oral charters by
and among ACL and its subsidiaries, ACT and ACBL, as applicable (together with
the Operations Side Letter), shall be terminated and of no further force and
effect to the extent they govern or affect the operation or towing of any or all
of the Barges.
9. ACL'S USE OF THE BARGES AND TUGS. From and after the date NRG exercises
the Barge Option, ACL will not knowingly damage the Barges or perform any act
which would result in a material reduction in the value of the Barges. From and
after the date NRG exercises the Harbor Tugs and Barges Option, ACL will not
knowingly damage the Tugs or Harbor Barges, or perform any act which would
result in a material reduction in the value of the Tugs or Harbor Barges. The
parties agree that the current use of the Barges will not be deemed to cause
damage to the Barges and that the intended use of the Tugs and Harbor Barges (as
set forth in the Operations Side Letter Agreement) will not be deemed to cause
damage to the Tugs or Harbor Barges. ACL further agrees that for so long as the
applicable Option(s) remain in effect (and except as may be necessary in
connection with the financing of the ACL Purchase or its existing financing
arrangements as contemplated by the Plan of Reorganization and credit facilities
which replace or refinance such financing arrangements) it may further encumber
the Barges or Tugs or Harbor Barges, only with NRG's prior written consent,
which consent will not be unreasonably withheld, conditioned or delayed. Any
encumbrance without NRG's prior written consent shall be null and void. For
purposes of this subsection, encumbrance includes, for instance, the grant of
liens, licenses or security interests, but does not include matters which expire
or will be terminated on or before Closing.
10. INSPECTION RIGHTS.
A. At any time after the Trigger Event and prior to NRG's exercise
of the Barge Option, NRG and its agents, employees, contractors and
representatives shall have the right, privilege and license of entering upon the
Barges for the purpose of inspecting the same, at such times and under such
supervision as reasonably agreed to by ACL, and in any event, in such a manner
so as not to unreasonably interfere with their existing use and continuing
operations. NRG agrees to defend and indemnify and hold American, its
affiliates, successors and assigns, harmless from and against all loss, cost
liability and
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expense suffered by them as a result of the foregoing inspections of the Barges.
NRG's indemnification obligations hereunder shall survive the termination of
this Agreement or Closing, as applicable.
B. NRG shall have no obligation to purchase any Barge which is
damaged after its inspection and prior to Closing. In the event that any Barge
suffers damage which does not constitute a total loss or constructive total
loss, NRG may, at its sole option elect to purchase the Barge, in which case,
any insurance proceeds payable with respect to such accident shall be used to
repair the Barge. In order to assist in having such repairs accomplished, ACL
shall assign to NRG all of its rights under any insurance policies covering such
loss with respect to a damaged Barge that has been purchased by NRG hereunder.
11. RISK OF LOSS. All risk of loss whether total loss, constructive total
loss or less than total loss or constructive total loss shall be borne by ACL
prior to the Closing and any insurance proceeds for events occurring prior to
the Closing shall be for ACL's account. Subject to the terms of Section 10.B.
above, all insurance proceeds for such loss shall be paid to and solely for the
account of ACL.
12. ASSIGNMENT. NRG may assign all or any portion of NRG's rights and
interest in and to this Agreement without the prior written consent of ACL to:
(a) an affiliate, subsidiary or parent entity; (b) any entity it controls, is
controlled by, or is under common control with; (c) any entity in which it has a
majority interest or of which it is manager; (d) any entity that succeeds to or
obtains all or substantially all of its assets, whether by merger,
consolidation, reorganization, sale or otherwise; or (e) any entity that
succeeds to NRG's or the Affiliates' rights under the Transportation Contract.
NRG shall promptly inform ACL and the Collateral Agents of any assignment.
Otherwise, NRG may not assign all or any portion of NRG's rights and interest in
and to this Agreement without the prior written consent of ACL, which consent
shall not be unreasonably withheld or delayed. In the event of any assignment by
NRG, NRG shall continue to be liable for all of the obligations of NRG
hereunder.
13. REMEDIES FOR BREACH. If either party breaches any of the obligations,
representations, warranties or covenants set forth in this Agreement, the
non-breaching party shall be entitled to exercise any remedies in law or equity,
including the right of specific performance and injunctive relief, subject to
the limitations provided in the Transportation Contract.
14. CONFIDENTIALITY. Subject to Section 15, this Agreement is confidential
and shall not be disclosed by any of the parties or their agents, affiliates,
consultants or counsel to any other party without the prior express written
consent of American and NRG, provided however, the parties agree that this
Agreement may be attached to American's proposed Plan of Reorganization (as
defined in the Security Side Letter Agreement) with appropriate measures taken
to attempt to ensure confidentiality of the economic terms and conditions of
this Agreement.
15. RECORDING. NRG and ACL shall each have the right at all times to
record a memorandum of this Agreement, in such form as is reasonably acceptable
to the parties, but in any event which does not disclose the financial terms
hereof. The parties shall fully cooperate with such recording, including without
limitation providing notarized signatures of authorized signatories upon
reasonable advance notice. Upon the termination or expiration of this Agreement,
any such memorandum shall be promptly released of record by NRG at NRG's sole
cost and expense. If NRG shall fail to do so, NRG hereby appoints ACL as its
agent, with power of attorney, to do so on its behalf, which power of attorney
shall be deemed to be coupled with an interest.
16. GOVERNING LAW. This Agreement shall be constructed and interpreted
according to the laws of the State of Missouri, and where applicable, the
maritime laws of the United States.
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17. COMPUTATION OF TIME. In computing any period of time under this
Agreement, the day of the act, event or default from which the designated period
time begins to run will not be included. The last day of the period so computed
will be included, unless it is a Saturday, Sunday or legal holiday, and, if so,
the period will run until the end of the next day not a Saturday, Sunday or
legal holiday.
18. INABILITY TO PERFORM. Each party will be excused from performing any
term of this Agreement, if, and for so long as, such performance is prevented,
delayed, or hindered by reason of any event of Force Majeure (as defined in the
Transportation Contract).
19. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, and the signature pages combined to form a fully-executed
Agreement, provided that each party hereto has executed a signature page. The
fact that this Agreement may have been executed at different times by different
parties will not affect its validity.
20. FACSIMILE SIGNATURES. The parties may transmit this Agreement between
them by facsimile machine. The parties intend that faxed signatures constitute
original signatures and that a faxed Agreement containing the signatures
(original or faxed) of all the parties is binding. At the request of either
party, the parties will confirm facsimile transmitted signatures by signing an
original Agreement.
21. ENTIRE AGREEMENT. All prior negotiations and agreements between the
parties hereto are superseded by this Agreement, and except as may be set forth
in the Transportation Contract or Ancillary Agreements, there are no
representations, warranties, understandings or agreements other than those
expressly set forth herein.
22. EXPENSES OF PREVAILING PARTY. In the case of any legal or equitable
action taken by either party in connection with the default of the other party,
the prevailing party will be entitled to recover from the other party all costs
and reasonable legal fees incurred in connection therewith. A prevailing party
is a party who recovers at least three-quarters of its total claims in the
action or who is required to pay no more than one-quarter of the other party's
total claims in the action.
23. BINDING EFFECT; AUTHORITY. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their successors and assigns. The
persons executing this Agreement on behalf of each party hereby represent and
warrant to the other party that such person has the full authority to enter into
this Agreement and such party is able to faithfully and timely perform each and
every term of this Agreement, without the necessity of the consent, joinder or
approval of any other party.
24. MODIFICATIONS. This Agreement may not be amended, modified or changed,
nor shall any waiver of any provision hereof be effective, except by an
instrument in writing and signed by the party against whom enforcement of any
such waiver, amendment, modification, change or discharge is sought.
25. HEADINGS. The headings in the sections of this Agreement are inserted
for convenience only and in no way alter, amend, modify, limit or restrict the
contractual obligations of the parties.
26. INVALID PROVISIONS. If any provision in this Agreement is or will
become invalid, illegal or unenforceable in any respect, the validity, legality
or enforceabiliry of the remaining provisions of this Agreement and any other
application thereof will not in any way be affected or impaired thereby;
provided that if permitted by applicable law, any invalid, illegal, or
unenforceable provision may be considered in determining the intent of the
parties with respect to other provisions of this Agreement.
27. JOINT PREPARATION. This Agreement is to be deemed to have been
prepared jointly by the parties hereto, and any uncertainty or ambiguity
existing herein, if any, will not be interpreted against any
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party, but will be interpreted according to the application of the rules of
interpretation for arm's length agreements.
28. NOTICES. A party may effect a valid notice pursuant to this Agreement
only by giving such notice in writing and delivering it, postage or charges
prepaid, in person, by certified mail, by overnight delivery service, or by
facsimile transmission to the parties respective addresses set forth below:
ACT: American Commercial Terminals LLC
1701 East Market Street
Jeffersonville, IN 47130
Attn: Director of Sales
Facsimile No. (812) 288-0256
NRG: NRG New Roads Holdings LLC
112 Telly Street
New Roads, LA 70760
Attn: John Brewster, President
Facsimile No. (225) 618-4481
or to such substituted address or facsimile number as designated by notice to
the other party. Same day delivery by messenger will constitute personal
delivery. Such notice will be deemed effective two (2) days after properly
mailed; one (1) day after properly consigned to an overnight delivery service;
upon receipt of personal delivery; or, in the case of notice via facsimile
transmission, on the day the sender receives electronic confirmation of
delivery, provided that if the confirmation does not occur before 4 p.m.,
recipient's local time, on a business day, the notice will take effect on the
next business day.
29. REASONABLE COSTS, EXPENSES, AND FEES. The word "reasonable" will be
deemed to precede each reference to "costs", "expenses", "fees", or similar
items for which any party may seek reimbursement from any other party to this
Agreement.
30. TIME IS OF ESSENCE. Time is of the essence in this Agreement.
(SIGNATURE PAGE TO FOLLOW)
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IN WITNESS WHEREOF, the parties have affixed their signatures hereto as
of the date set forth below its signature.
NRG NEW ROADS HOLDINGS LLC AMERICAN COMMERCIAL LINES LLC
BY: /s/ John P. Brewster BY: /s/ W N Whitlock
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Name: John P. Brewster Name: W N Whitlock
Title: President Title: President
Date: 12/10/04 Date: 12-10-04
SIGNATURE PAGE TO BARGE AND TUG OPTION AGREEMENT
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