Exhibit 10.27.4
EQUITY COMMITMENT GUARANTY
This EQUITY COMMITMENT GUARANTY (this "Guaranty" or this
"Agreement"), dated as of December 10, 1997, by NRG ENERGY, INC., a
Delaware corporation ("Guarantor"), in favor of NRG (XXXXXX) XXXXX, LLC
(the "Borrower") and THE CHASE MANHATTAN BANK, as collateral agent for
the Banks (as defined below) (in such capacity, the "Collateral Agent")
under the Construction and Term Loan Agreement, dated as of September
15, 1997 (the "Credit Agreement"), among the Borrower, the Collateral
Agent, the banks party thereto (the "Banks") and The Chase Manhattan
Bank, as agent for the Banks (in such capacity, the "Agent Bank").
RECITALS
A. As a condition precedent to the Agent Bank, the Collateral Agent
and the Banks entering into the Credit Agreement and the Banks making
the Loans and extending other credit to the Borrower thereunder,
Guarantor executed an Equity Commitment Agreement, dated as of
September 15, 1997 (the "Equity Commitment Agreement"), in favor of the
Borrower and the Collateral Agent.
B. Pursuant to that certain Membership Interest Purchase Agreement,
dated as of the date hereof, Guarantor is selling all of its membership
interests in the Borrower to NRGG Funding Inc. ("NRGG Funding").
C. Pursuant to an Assignment and Assumption Agreement, dated as of
the date hereof (the "Assignment and Assumption Agreement"), between
Guarantor and NRGG Funding, NRGG Funding is assuming all of Guarantor's
obligations under the Equity Commitment Agreement.
D. Guarantor owns 45% of the outstanding shares of capital stock of
NRG Generating and NRG Generating owns 100% of the outstanding shares
of capital stock of NRGG Funding.
E. It is a condition to the Banks' willingness to continue to make
Loans and extend other credit to the Borrower under the Credit
Agreement that Guarantor enter into this Agreement.
F. Guarantor acknowledges that it will obtain substantial benefit if
the Banks continue to make Loans and extend other credit to the
Borrower under the Credit Agreement.
G. The obligations of Guarantor hereunder are being incurred
concurrently with the assumption by NRGG Funding of Guarantor's
obligations under the Equity Commitment Agreement pursuant to the
Assignment and Assumption Agreement.
H. Capitalized terms used but not otherwise defined herein shall have
the respective meanings given them in the Equity Commitment Agreement
(including terms incorporated therein from the Credit Agreement).
AGREEMENT
NOW, THEREFORE, in consideration of the premises set forth above
and other good and valuable consideration, receipt of which is hereby
acknowledged, Guarantor hereby agrees as follows:
1. Guaranty by Guarantor of NRGG Funding Obligation. Guarantor
unconditionally and irrevocably guarantees payment to the Borrower and
to the Collateral Agent, for the benefit of the Agent Bank and the
Banks, when due of any and all amounts payable by NRGG Funding to the
Borrower from time to time pursuant to Sections 1 and 2 of the Equity
Commitment Agreement and performance in full of all of NRGG Funding's
obligations under Sections 1 and 2 of the Equity Commitment Agreement.
2. Additional Provisions to Guarantor Obligations.
(a) In addition to the obligations under Section 1 of this Agreement,
Guarantor agrees to pay upon demand all fees and expenses incurred by
the Collateral Agent and the Borrower in successfully enforcing against
Guarantor any of its obligations and liabilities hereunder or the terms
hereof, including, without limitation, reasonable fees and expenses of
legal counsel. Guarantor waives notice of acceptance of this Agreement
and of any obligation to which it applies or may apply under the terms
hereof, and waives diligence, presentment, demand of payment, notice of
dishonor or non-payment, protest, notice of protest, of any such
obligations, suit or taking other action by the Collateral Agent or the
Borrower against, and giving any notice of default or other notice
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to, or making any demand on, any party liable thereon (including
Guarantor).
(b) Guarantor's obligation under this Agreement is an absolute,
unconditional, continuing and irrevocable guaranty of payment
and performance and is in no way conditioned on or contingent
upon any attempt to enforce in whole or in part NRGG
Funding's obligations to the Collateral Agent and the
Borrower under the Equity Commitment Agreement. If NRGG
Funding fails to pay or perform any liabilities or
obligations to the Collateral Agent or the Borrower under
Section 1 or 2 of the Equity Commitment Agreement as and when
they are due, Guarantor shall forthwith pay and perform such
liabilities or obligations, with any such payment to be made
in immediately available funds. Each failure by NRGG Funding
to pay or perform any liabilities or obligations arising
under Section 1 or 2 of the Equity Commitment Agreement shall
give rise to a separate cause of action hereunder, and
separate suits may be brought hereunder as each cause of
action arises.
(b) The Collateral Agent and the Borrower may, at any time and from
time to time without the consent of or notice to Guarantor, except
such notice as may be required by applicable Law which cannot be
waived, without incurring responsibility to Guarantor or impairing
or releasing the obligations of Guarantor hereunder, upon or without
any terms or conditions and in whole or in part, (i) exercise or
refrain from exercising any rights against NRGG Funding or others
(including Guarantor) or otherwise act or refrain from acting; (ii)
release any other guarantor from its obligations without obtaining
the consent of Guarantor and without affecting or impairing the
obligations of Guarantor hereunder; (iii) settle or compromise any
obligations hereby guaranteed and/or any obligations incurred
directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment
of any obligations which may be due to the Collateral Agent, the
Borrower or others; (iv) sell, exchange, release, surrender,
realize upon or otherwise deal with in any manner
or in any order any property by whomsoever pledged or mortgaged to
secure or howsoever securing the liabilities or obligations hereby
guaranteed or any liabilities or obligations incurred directly or
indirectly in respect thereof or hereof and/or any offset there
against; (v) apply any sums by
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whomsoever paid or howsoever realized to any obligations of NRGG
Funding to the Collateral Agent or the Borrower regardless of what
obligations remain unpaid; (vi) consent to or waive any breach of, or
any act, omission or default under, the Equity Commitment Agreement or
otherwise amend, modify or supplement the Equity Commitment Agreement
or any of such other instruments or agreements; and/or (vii) act or
fail to act in any manner referred to in this Agreement which may
deprive Guarantor of its right, if any, to subrogation or reimbursement
against NRGG Funding or any other Person to recover full indemnity for
any payments made pursuant to this Agreement or of its right of
contribution against any other party.
(d) No invalidity, irregularity or unenforceability of the
obligations hereby guaranteed shall affect, impair or be a
defense to this Agreement.
(e) In the event that, notwithstanding the provisions of Section
2(b) hereof, this Agreement shall be deemed revocable in
accordance with applicable Law, then any such revocation
shall become effective only upon actual receipt by the
Collateral Agent and the Borrower of written notice of
revocation signed by Guarantor. No revocation or termination
hereof shall affect in any manner rights arising under this
Agreement with respect to obligations and liabilities
outstanding on the date of receipt by the Collateral Agent
and the Borrower of written notice of such revocation or
termination and the sole effect of any revocation and
termination hereof shall be to exclude from this Agreement
obligations and liabilities thereafter arising which are
unconnected with obligations and liabilities theretofore
arising or transactions theretofore entered into (Guarantor
shall remain liable for all obligations incurred hereunder
prior to such revocation or termination).
3. Representations and Warranties. Guarantor makes the
representations and warranties set forth below to the Borrower and to
the Collateral Agent, acting for its own benefit and for the benefit of
the other Secured Parties, which representations and warranties shall
survive the execution and delivery of this Agreement:
(a) Guarantor is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware
and has the corporate power and authority to execute and
deliver this Agreement and to perform its obligations
hereunder.
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(b) Guarantor has taken all necessary corporate action to
authorize its execution and delivery of this Agreement and
the performance of its obligations hereunder.
(c) This Agreement has been duly executed and delivered by
Guarantor and constitutes the legal, valid and binding
obligation of Guarantor, enforceable against Guarantor in
accordance with its terms, subject to applicable bankruptcy,
insolvency and other similar Laws affecting creditors' rights
generally and subject to general equitable principles.
(d) All Governmental Approvals and actions necessary in
connection with the execution and delivery by Guarantor of
this Agreement and the performance of its obligations
hereunder have been obtained or performed and remain valid
and in full force and effect.
(e) The execution, delivery and performance of this Agreement, the
compliance by Guarantor with the provisions hereof and the consumma-
tion of the transactions contemplated hereby, will not (i) conflict
with or result in a breach or violation of any of the respective char-
ters or bylaws of Guarantor or any of its subsidiaries or any material
franchise or license of Guarantor or any of the terms or provisions
thereof, (ii) constitute a default or cause an acceleration of any
obligation under, or result in the imposition or creation of (or the
obligation to create or impose) any Lien with respect to, any bond,
note, debenture or other evidence of Indebtedness or any indenture,
mortgage, deed of trust or other agreement or instrument to which
Guarantor or any of its subsidiaries is a party or by which it or any
of them is bound, or to which any properties of Guarantor or any of
its subsidiaries is or may be subject, (iii) contravene any order of
any court or Governmental Authority or body having jurisdiction over
Guarantor or any of its subsidiaries or any of their properties or
(iv) or conflict with any statute, rule or regulation or administra-
tive or court decree applicable to Guarantor or any of its subsid-
iaries or any of their respective properties, in the case of
clauses (ii), (iii) and (iv) which conflict, breach, violation,
default or contravention, singly or in the aggregate with each other
conflict, breach, violation, default or contravention, could
reasonably be expected to result in a Material Adverse Effect.
As used in this clause (e) and otherwise in this Agree-
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ment, the term "Material Adverse Effect" shall mean a material
adverse effect on either (A) the operations, business, financial
condition or property of Guarantor or any of its subsidiaries on a
consolidated basis or (B) the ability of Guarantor to perform in a
timely manner its obligations under this Agreement.
(f) There is no legislation, litigation, action, suit, proceeding
or investigation pending or (to the best of Guarantor's
knowledge after due inquiry) threatened against Guarantor
before or by any court, administrative agency, arbitrator or
Governmental Authority which if adversely determined
individually or in the aggregate, (i) could reasonably be
expected to result in a Material Adverse Effect or (ii)
questions the validity, binding effect or enforceability
hereof, any action taken or to be taken pursuant hereto or
any of the transactions contemplated hereby.
(g) All quarterly and annual financial statements heretofore
delivered by or in respect of Guarantor to the Collateral
Agent, the Agent Bank, the Banks or the Borrower are true,
correct and complete as of the dates referred to therein, do
not fail to disclose any material liabilities, whether direct
or contingent, fairly present the financial condition of
Guarantor as of the date thereof and are prepared in
accordance with GAAP.
(h) Guarantor possesses all franchises, certificates, licenses,
permits and other Governmental Approvals necessary for it to
own its properties, conduct its business and perform its
obligations under this Agreement.
(i) Guarantor is not an "investment company", or a company
"controlled" by an "investment company", within the meaning
of the ICA.
(j) Guarantor is a "subsidiary company" of a "holding company" as
those terms are defined in the Public Utility Holding Company
Act of 1935, as amended ("PUHCA"); however, Guarantor is
exempt from all provisions of PUHCA by virtue of Section
3(a)(2) thereof.
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4. Covenants: Guarantor agrees that:
(a) Guarantor shall maintain in full force and effect all
consents of any governmental or other authority that are
required to be obtained by it with respect to this Agreement
and will obtain any that may become necessary in the future.
(b) Guarantor shall comply in all material respects with all
applicable Laws and orders to which it may be subject if
failure so to comply would materially impair its ability to
perform its obligations under this Agreement.
(i) Annual Financial Statements. Guarantor shall deliver to
the Collateral Agent and the Borrower, within one
hundred twenty (120) days after the close of each fiscal
year of Guarantor, the consolidated and consolidating
balance sheets of Guarantor and its consolidated
Affiliates as at the end of such fiscal year and the
related consolidated and consolidating statements of
income, retained earnings and cash flows for such fiscal
year, in each case setting forth comparative figures for
the preceding fiscal year and certified, in the case of
the consolidated financial statements, by independent
certified public accountants of recognized national
standing in the United States.
(ii) Notice of Default or Litigation. Promptly, and in any
event within two (2) Business Days after an Authorized
Officer of Guarantor obtains knowledge thereof,
Guarantor shall give to the Collateral Agent and the
Borrower notice of the occurrence of any event or of any
litigation or governmental proceeding pending (a)
against Guarantor or any of its Affiliates which could
affect the business, operations, property, assets,
condition (financial or otherwise) or prospects of
Guarantor so as to materially and adversely affect the
ability of Guarantor to perform its obligations
hereunder or (b) with respect to this Agreement, which
event or pending proceeding is likely to materially and
adversely affect the business, operations, property,
assets, condition (financial or otherwise) or prospects
of Guarantor and its Affiliates taken as a whole.
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(iii) Other Information. From time to time, Guarantor
shall provide to the Collateral Agent and the Borrower
such other information or documents (financial or
otherwise) regarding Guarantor as the Collateral Agent
or the Borrower may reasonably request and as may be
available to Guarantor without undue cost or effort.
5. Subrogation. Guarantor shall not exercise any rights which it may
acquire by way of subrogation under this Agreement, by any payment made
hereunder or otherwise, until all of the liabilities and obligations of
NRGG Funding to the Collateral Agent and the Borrower under the Equity
Commitment Agreement shall have indefeasibly been paid in full in cash
or cash equivalents. If any amount shall be paid to Guarantor on
account of such subrogation rights at any time when all such
liabilities and obligations shall not have been indefeasibly paid in
full in cash or cash equivalents, such amount shall be held in trust
for the benefit of the Collateral Agent and the Borrower and shall
forthwith be paid to the Collateral Agent or the Borrower, as
applicable, and applied to such liabilities and obligations, whether
matured or unmatured.
6. Successions or Assignments.
(a) This Agreement shall inure to the benefit of the respective
successors or assigns of the Collateral Agent and the
Borrower who shall have, to the extent of their interest, the
rights of the Collateral Agent and the Borrower hereunder.
(b) This Agreement is binding upon Guarantor and its successors
and assigns. Guarantor is not entitled to assign its
obligations hereunder to any other Person without the written
consent of the Collateral Agent and the Borrower, which may
be granted or withheld in the Collateral Agent's or the
Borrower's sole discretion (in the case of the Collateral
Agent, as directed by the Agent Bank, acting in accordance
with the Credit Agreement), and any purported assignment in
violation of this provision shall be void.
7. Waivers.
(a) No delay on the part of the Collateral Agent or the Borrower in
exercising any of its rights (including those hereunder) and no
partial or single
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exercise thereof and no action or non-action by the Collateral
Agent or the Borrower, with or without notice to Guarantor or anyone
else, shall constitute a waiver of any rights or shall affect or impair
this Agreement.
(b) Guarantor agrees that, if the Collateral Agent or the
Borrower bring any judicial proceedings in relation to any
such matter, Guarantor will not interpose any counterclaim or
setoff of any nature.
(c) If any amount payable by Guarantor hereunder is not paid as
and when due, then Guarantor authorizes the Collateral Agent
and the Borrower to proceed, without prior notice, by right
of set-off, counterclaim or otherwise, against any assets of
Guarantor that may at any time be in the possession of the
Collateral Agent or the Borrower or any branch or office
thereof, to the full extent of all amounts payable to the
Collateral Agent and the Borrower hereunder.
(d) Guarantor waives any and all notice of the creation, renewal,
extension or accrual of any of the obligations of NRGG
Funding under Sections 1 and 2 of the Equity Commitment
Agreement and notice of or proof of reliance by the
Collateral Agent or the Borrower upon this Agreement.
(e) Guarantor waives diligence, presentment, protest, demand for
payment and notice of default to or upon NRGG Funding with
respect to the obligations under Sections 1 and 2 of the
Equity Commitment Agreement.
8. Interpretation. The Section headings in this Agreement are for
the convenience of reference only and shall not affect the meaning or
construction of any provision hereof.
9. Notices. All notices in connection with this Agreement shall be
given by notice in writing, hand-delivered or sent by facsimile
transmission, or by certified mail return-receipt requested (airmail,
if overseas), postage prepaid. All such notices shall be sent to the
appropriate telecopier number or address, as the case may be, set forth
below or to such other number or address as shall have been
subsequently specified by written notice to each other party hereto,
and shall be sent with copies, if any, as indicated below. All such
notices shall be effective upon receipt. The addresses for notice
shall be as follows:
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(a) The address of Guarantor is:
NRG ENERGY, INC.
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxxx, XX 00000-0000
Attention: President
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
With a copy to:
NRG ENERGY, INC.
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxxx, XX 00000-0000
Attention: General Counsel
(b) The address of the Collateral Agent is:
THE CHASE MANHATTAN BANK
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: X. Xxxxxxx, Assistant Vice President,
International Project Finance,
Global Trust Services
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000/8178
(c) The address of the Borrower is:
NRG (XXXXXX) COGEN, LLC
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxxx, XX 00000-0000
Attention: President
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
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With a copy to:
NRG (XXXXXX) XXXXX, LLC
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxxx, XX 00000-0000
Attention: General Counsel
10. Amendments. Notwithstanding anything contained herein that may be
construed to the contrary, as between Guarantor, the Collateral Agent
and the Borrower, this Agreement may be amended only with the written
consent of the Collateral Agent, the Borrower and Guarantor, with the
Collateral Agent acting as directed by the Agent Bank (acting upon the
instructions of the Required Banks).
11. Jurisdiction; Governing Law.
(a) Any action or proceeding relating in any way to this
Agreement may be brought and enforced in the courts of the
State of New York. Any such process or summons in connection
with any such action or proceeding may be served by mailing a
copy thereof by certified or registered mail, or any
substantially similar form of mail, addressed to the
applicable party as provided for notices hereunder. By
execution and delivery of this Agreement, Guarantor
irrevocably agrees to designate, appoint and empower CT
Corporation System, with its offices as of the date hereof at
0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, to receive for an on
its behalf service of process in the State of New York and
further irrevocably consents to the service of process
outside the territorial jurisdiction of said courts by
mailing copies thereof in accordance with the immediately
preceding sentence. Guarantor represents and warrants that
it has taken, and will continue to take, all actions
necessary to retain CT Corporation System as its registered
agent for service of process in the State of New York for the
term hereof.
(b) This Agreement and the rights and obligations of the parties
hereto shall be governed by and construed in accordance with
the Laws of the State of New York without reference to
principles of conflict of laws (other than Section 5-1401 of
the New York General Obligations Law).
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12. Integration of Terms. This Agreement contains the entire
agreement among the parties hereto relating to the subject matter
hereof and supersedes all oral statements and prior writings with
respect thereto.
13. Termination; Reinstatement of Guaranty.
(a) Subject to the provisions of Section 13(b) hereof, this
Agreement shall terminate following the payment in full of
all amounts due hereunder or under Sections 1 and 2 of the
Equity Commitment Agreement.
(b) Notwithstanding the provisions of Section 13(a) hereof, this
Agreement shall be reinstated if at any time following the
termination of this Agreement under Section 13(a) hereof, any
payment or performance by Guarantor under this Agreement or
NRGG Funding under Section 1 or 2 of the Equity Commitment
Agreement is rescinded or must otherwise be returned by the
Collateral Agent, the Borrower or any other Person upon the
insolvency, bankruptcy, reorganization, dissolution or
liquidation of NRG Generating or Guarantor and is so
rescinded or returned to the party or parties making such
payment or performance, all as though such payment had not
been made. Such period of reinstatement shall continue until
satisfaction of the conditions contained in, and shall
continue to be subject to, the provisions of this Section 13.
14. Waiver of Jury Trial. THE COLLATERAL AGENT (AND THE AGENT BANK
AND THE BANKS AS THIRD PARTY BENEFICIARIES HEREUNDER), THE BORROWER AND
GUARANTOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY
RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH, THIS
AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE COLLATERAL AGENT, THE
BORROWER, GUARANTOR OR NRG GENERATING. THIS PROVISION IS MATERIAL
INDUCEMENT FOR THE COLLATERAL AGENT, THE BORROWER AND GUARANTOR TO
ENTER INTO THIS AGREEMENT.
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IN WITNESS WHEREOF, Guarantor has caused this Equity Commitment
Guaranty to be duly executed and delivered as of the day and year first
written above.
NRG ENERGY, INC.
By:/s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: President & CEO
Acknowledged and Accepted:
THE CHASE MANHATTAN BANK,
as Collateral Agent
By: /s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: Assistant Vice President
NRG (XXXXXX) XXXXX, LLC
By: /s/ Xxxxx Xxxxxxxxxxx
Name: Xxxxx Xxxxxxxxxxx
Title: President
