FIRST AMENDMENT TO AMENDED AND RESTATED LIGNITE SUPPLY AGREEMENT
Exhibit 10.9
Execution Version
This First Amendment (this “Amendment”) is made and entered into as of June 26, 2008 (the
“First Amendment Execution Date”) by and between Texas Xxxxxxxxxxxx Coal Co., a Montana corporation
(“TWCC”) with address at X.X. Xxx 000, Xxxxxx, XX 00000 and NRG Texas Power LLC, a Delaware limited
liability company (“NRG”) with offices at 0000 XxXxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000.
Xxxxxxxxxxxx Coal Company, a Delaware corporation (“WCC”) with offices at 0 X. Xxxxxxx Xxxxxx, 0xx
Xxxxx, Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000 and Xxxxxxxxxxxx Mining LLC, a Delaware limited liability
company (“WML”) with offices at 0 X. Xxxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000,
join in the execution hereof for the purposes set forth below. TWCC and NRG may individually be
referred to as a “Party” or collectively as the “Parties”.
RECITALS
Whereas, WCC is the parent company of WML and WML is the parent company of TWCC;
Whereas, NRG and TWCC have entered into that certain Amended and Restated Lignite Supply
Agreement dated as of September 28, 2007 (the “Supply Agreement”) whereby NRG would purchase from
TWCC, and TWCC would mine, produce and sell to NRG certain volumes of lignite from TWCC’s Jewett
Mine located at Jewett, Texas for use by NRG at its Limestone Electric Generating Station, located
adjacent to the Mine;
Whereas, as of September 28, 2007, WCC executed and delivered to NRG a Guaranty Agreement (the
“WCC Guaranty Agreement”) whereby upon certain terms and conditions WCC guaranteed the obligations
of TWCC arising under the terms of the Supply Agreement;
Whereas, the assets of and equity interests in WML and TWCC are currently pledged as
collateral security for certain indebtedness (the “Existing Senior Indebtedness”) to certain
institutional lenders (the “Existing WML Lenders”) incurred by WML and guaranteed by TWCC;
Whereas, on or after the First Amendment Execution Date, WML is refinancing the Existing
Senior Indebtedness by obtaining financing (the “New Senior Indebtedness”) from certain
institutional lenders (the “New WML Lenders”) and, in connection therewith, the Existing WML
Lenders will release their security interest in the assets of and equity interests in TWCC and
release TWCC from its guaranty of the Existing Senior Indebtedness;
Whereas, pursuant to a Letter Agreement dated September 28, 2007 (“the Letter Agreement”), WCC
and NRG have agreed upon certain terms and conditions that if WCC could gain the consent and
approval of the Existing WML Lenders, WML and TWCC agreed to provide to NRG certain security
documents to secure TWCC’s performance under the Supply Agreement; and
Whereas, the Parties wish to set forth herein their understanding and agreement as to certain
matters and amend the Supply Agreement, and WML and WCC wish to join in the execution hereof.
NOW, THEREFORE, in consideration of the foregoing, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
AGREEMENT
1. Amendment of Definitions. All terms used in this Amendment and not defined herein
shall have the meaning set forth in the Supply Agreement.
(a) The following definitions in the Supply Agreement are hereby amended to read as follows:
“Guaranty” shall mean the Guaranty dated September 28, 2007 executed by
Xxxxxxxxxxxx Coal Company guaranteeing the obligations of TWCC under this LSA.
“Mortgage and Security Agreements” shall mean the documents described
in (b) and (c) of the definition of NRG Security Documents, and as provided in
Section 18.
“Security Document Delivery” shall be deemed to have occurred upon the
execution and delivery of the Release Documents in recordable form and the execution
and delivery by Xxxxxxxxxxxx Mining LLC and TWCC of the items reflected in (a)
through (d) of the definition of the NRG Security Documents.
“Xxxxxxxxxxxx Pledge Agreement” shall be deemed to refer to the
document described in (a) of the definition of NRG Security Documents, and as
provided in Section 18.
(b) The following new definitions are hereby added to the Supply Agreement:
“Existing Senior Indebtedness” shall mean the indebtedness existing as
of June 25, 2008, under any secured loan facility of Xxxxxxxxxxxx Mining LLC,
including under (i) that certain Term Loan Agreement, dated April 27, 2001, as
amended and in effect by and among Xxxxxxxxxxxx Mining LLC, the guarantors party
thereto, and the lenders and agents party thereto, and (ii) that certain Credit
Agreement, dated April 27, 2001, as amended and in effect, by and among Xxxxxxxxxxxx
Mining LLC, and the lenders and agents party thereto.
“First Amendment Effective Date” shall mean the date the First
Amendment of this LSA becomes effective, which shall be deemed to have occurred on
the execution and delivery of such document.
“NRG Security Documents” shall mean the following:
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| (a) | the Pledge Agreement from Xxxxxxxxxxxx Mining LLC to NRG in the form attached as Exhibit 21 hereto; | ||
| (b) | the Security Agreement from TWCC to NRG in the form attached as Exhibit 22 hereto; | ||
| (c) | the Deed of Trust, Security Agreement, Fixture Filing, and Assignment of Rents to Secure Performance from TWCC to NRG in the form attached as Exhibit 23 hereto; and | ||
| (d) | UCC-1 financing statements in the form of Exhibit 24 attached hereto, |
and as provided in Section 18.
“Release Documents” shall mean (i) document(s) in the form of Exhibit
25 attached hereto releasing the liens and security interests securing the Existing
Senior Indebtedness, to the extent they cover property of TWCC, and (ii) document(s)
in a form reasonably satisfactory to NRG evidencing the release of TWCC from its
obligations under any guaranty given by it with respect to the Existing Senior
Indebtedness.”
2. Obligation to Provide Security. A new Section 15.13 shall be added to the Supply
Agreement as follows:
“15.13 Security. In order to secure the performance by TWCC under this LSA,
TWCC shall cause the items reflected in clauses (a) through (d) of the definition of
the NRG Security Documents to be executed (including in recordable form as
contemplated by the NRG Security Documents) and delivered to NRG as of the First
Amendment Effective Date and the obligation under that certain Letter Agreement,
dated as of September 28, 2007, between Xxxxxxxxxxxx Coal Company and NRG, to
deliver a guaranty agreement from Xxxxxxxxxxxx Mining LLC to NRG shall be
terminated. The Parties acknowledge that the Guaranty has been executed and
delivered.”
3. Offset Right. A new Section 7.5 is hereby added to the Supply Agreement as
follows:
“7.5 Offset. NRG shall have the express right, after a TWCC Event of Default,
to from time to time net out of, recoup from, or offset against any amount owed to
TWCC under this LSA any damages of NRG arising as a result of such TWCC Event of
Default (including damages for failure of future performance by TWCC incurred by NRG
as a result of such TWCC Event of Default (including damages of the type described
in Section 15.3 and 15.5, but otherwise subject to the limitation on the recovery
set out in Article 14 or otherwise set out in this LSA)).”
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4. TWCC Event of Default. Sections 15.4(f), (g) and (h) are hereby amended to read as
follows:
“(f) Any failure by TWCC to perform any of its obligations hereunder (including
operating the Mine in material violation of permit requirements or applicable
governmental requirements) or under the Mortgage and Security Agreements not
specifically referred to in the other provisions of Section 15.1 or this Section
15.4, or any failure by Xxxxxxxxxxxx Coal Company to perform any of its obligations
under the Guaranty or by Xxxxxxxxxxxx Mining LLC to perform its obligations under
the Xxxxxxxxxxxx Pledge Agreement, unless in any such case such failure has been
cured on or before the 20th day after notice thereof by NRG or such cure
has been initiated and is being diligently pursued; provided that such cure is
effected within forty-five (45) days from the receipt of such notice by TWCC,
Xxxxxxxxxxxx Coal Company, or Xxxxxxxxxxxx Mining LLC, as applicable (or,
notwithstanding the foregoing, such shorter period of time as may be necessary to
avoid the payment of penalties or the loss of any permit, authorization, license, or
concession);
(g) Failure of the Guaranty, the Mortgage and Security Agreements, or the
Xxxxxxxxxxxx Pledge Agreement to be in full force and effect after the date
executed, or TWCC, Xxxxxxxxxxxx Coal Company or Xxxxxxxxxxxx Mining LLC repudiates
or denies liability under or seeks to terminate any of the Guaranty, the Mortgage
and Security Agreements, or the Xxxxxxxxxxxx Pledge Agreement or seeks to have any
thereof found to be, or claims that any thereof is, void or of no force and effect;
(h) Bankruptcy of TWCC, Xxxxxxxxxxxx Mining LLC, or Xxxxxxxxxxxx Coal Company, or
the rejection of this LSA by the debtor in any such Bankruptcy;”
5. Calculation of Damages. Section 15.8 of the Supply Agreement is hereby amended to
read as follows:
“15.8 Payment and Calculation. Damages determined under this Section 15 shall be
payable within thirty (30) days after the terminating Party calculates and submits
the calculations, including workpapers and documentation, to the other Party. Upon
a TWCC Event of Default where NRG elects to exercise remedies under the NRG Security
Documents, NRG may make a credit bid at any foreclosure or other sale in exercise of
its remedies hereunder or under the NRG Security Documents in the amount of the
damages it reasonably calculates are due as a result of such breach (and may include
in such calculations any damages it expects to incur in the future as a result of
such breach, subject to the limitation set forth in Article 14). While TWCC and
Xxxxxxxxxxxx Mining LLC accept that NRG may make a credit bid on such basis, neither
TWCC nor Xxxxxxxxxxxx Mining LLC acknowledge, admit or otherwise agree that such
damages are necessarily owed and each of TWCC and Xxxxxxxxxxxx Mining LLC reserves
the right to contest the amount of damages owed hereunder, other than for purposes
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of calculating an amount which may be used for a credit bid as contemplated by this
Section 15.8.”
6. Assumption by Assignee. The following is added to Section 18 of the Supply
Agreement at the end of such Section:
“Without limiting the generality of the foregoing, any assignee of TWCC under this LSA that
succeeds to any of the assets that are covered by the NRG Security Documents (including any
assignee pursuant to any sale carried out pursuant to the federal bankruptcy code or any
other bankruptcy, insolvency, or debtor’s relief law) shall prior to or concurrent with such
assignment execute and deliver at NRG’s election, (i) a written joinder to NRG Security
Documents in form reasonably acceptable to NRG whereby such assignee agrees to assume the
obligations under and be bound by the terms of the NRG Security Documents or (ii) new
security documents substantially in the form of the NRG Security Documents covering such
assets. The documents when executed shall be part of the NRG Security Documents, and as
applicable, the Mortgage and Security Agreements and the Xxxxxxxxxxxx Pledge Agreement.”
7. NRG Security Documents. The Supply Agreement is hereby amended by (i) adding
Exhibit A hereto to the Supply Agreement as Exhibit 21, (ii) adding Exhibit B hereto to the Supply
Agreement as Exhibit 22, (iii) adding Exhibit C hereto to the Supply Agreement as Exhibit 23, and
(iv) adding Exhibit D hereto to the Supply Agreement as Exhibit 24.
8. Farm Road 39. In exchange for the agreement of NRG to amend the definition of
Security Document Delivery, TWCC agrees that it will pay the cost of the contemplated relocation of
Texas farm-to-market road FM 39 and related construction and materials costs. NRG agrees that if
for a period of 95 days after Security Document Delivery no Bankruptcy of TWCC, Xxxxxxxxxxxx Mining
LLC or Xxxxxxxxxxxx Coal Company has occurred, then NRG shall reimburse TWCC for such cost as Mine
Costs as part of the first invoice for Mine Costs delivered by TWCC after the end of such 95 day
period, provided such costs otherwise qualify under the Supply Agreement as Mine Costs and,
thereafter, NRG shall pay all such costs that qualify under the Supply Agreement as Mine Costs
pursuant to the Supply Agreement.
9. Guaranty and Effect of Security Document Delivery.
(a) The Guaranty shall remain in full force and effect and WCC hereby confirms and ratifies
its obligations thereunder. For the avoidance of doubt, (i) NRG hereby waives any obligation of
TWCC and/or WCC to obtain a Guaranty (as defined in the Supply Agreement) from WML of TWCC’s
obligations under the Supply Agreement and (ii) notwithstanding paragraph 4 of the Letter
Agreement, the WCC Guaranty Agreement shall continue in full force and effect.
(b) Upon the occurrence of Security Document Delivery all consequences of “Security Document
Delivery” under the Supply Agreement shall occur, including, without limitation, that the final
sentence of Section 12.1(b) shall no longer apply.
(c) Upon the occurrence of Security Document Delivery, NRG hereby agrees that the rights of
NRG to terminate the Supply Agreement under Sections 3.2(d) and (e) of the Supply
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Agreement shall be, and shall be deemed to have been, irrevocably waived, and NRG shall no
longer have any right to terminate the Supply Agreement pursuant to the aforesaid Sections 3.2(d)
or (e).
(d) Upon the occurrence of Security Document Delivery, that certain Letter Agreement, dated
September 28, 2007, by and among WCC and NRG, shall be deemed terminated and of no further force
and effect.
10. General Provisions.
(a) This Amendment may not be assigned or subcontracted by any Party without the prior written
consent of the other Parties.
(b) This Amendment shall be construed in accordance with and be governed by the laws of Texas.
(c) In the event that any provision of this Amendment is held by a court of competent
jurisdiction to be unenforceable or void in any jurisdiction, the other provisions of this
Amendment shall remain in full force and applicable law shall be construed in order to effectuate
the purpose and intent of this Amendment.
(d) This Amendment may be executed simultaneously in counterparts, each of which shall be
considered to be an original, but all of which taken together shall constitute one and the same
instrument. Signatures sent by facsimile transmission shall have the same legal effect as
original signatures.
(e) The Supply Agreement, other than as modified hereby, is hereby ratified and confirmed in
all respects, and all references in the Supply Agreement to “this LSA” shall be deemed to refer to
the Supply Agreement, as modified by this Amendment.
[Signature page follows.]
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IN WITNESS WHEREOF, this Amendment is duly executed as of the date first set forth above by
the authorized representatives of the Parties.
| Texas Xxxxxxxxxxxx Coal Co. | NRG Texas Power LLC | |||||||||
By:
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/s/ Xxxxxxx X. Xxxxxx
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By: | /s/ Xxxx Xxxx
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|||||||
Name:
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Xxxxxxx X. Xxxxxx | Name: | Xxxx Xxxx | |||||||
Title:
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Vice President | Title: | President | |||||||
The following entities join in the foregoing Amendment to agree to and acknowledge the terms
thereof:
| Xxxxxxxxxxxx Coal Company | Xxxxxxxxxxxx Mining LLC | |||||||||
By:
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/s/ Xxxxxxx X. Xxxxxx
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By: | /s/ Xxxxxxx X. Xxxxxx
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|||||||
Name:
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Xxxxxxx X. Xxxxxx | Name: | Xxxxxxx X. Xxxxxx | |||||||
Title:
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Vice President-Development and Treasurer | Title: | Vice President | |||||||
[Signature Page to First Amendment to
Amended and Restated Lignite Supply Agreement]
Amended and Restated Lignite Supply Agreement]
