GUARANTY AGREEMENT
Exhibit 10.43
THIS GUARANTY AGREEMENT (this Guaranty Agreement, together with the exhibits and schedules
hereto and all extensions, renewals, amendments, substitutions and replacements hereto and hereof,
is hereinafter referred to as the “Guaranty Agreement”) is dated as of the 28th day of
September, 2007, by Xxxxxxxxxxxx Coal Company, a Delaware corporation (“WCC”) and each
person or entity now or hereafter executing a guaranty assumption agreement in the form of Annex 1
attached hereto (each of the foregoing being a “Guarantor” and collectively, the
“Guarantors”) to and for the benefit of NRG Texas Power LLC, a Delaware limited liability
company (together with its successors and assigns, the “Beneficiary”).
WITNESSETH
WHEREAS, Texas Xxxxxxxxxxxx Coal Co. (“TWCC”) has entered into that certain Lignite
Supply Agreement dated as of the date hereof between TWCC and Beneficiary (the “Supply
Agreement”);
WHEREAS, TWCC is a direct or indirect subsidiary of the Guarantors; and
WHEREAS, it is a condition precedent under the Supply Agreement that WCC provide this Guaranty
Agreement in favor of Beneficiary.
AGREEMENT
NOW, THEREFORE, as inducement to the Beneficiary to enter into the Supply Agreement and for
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each of the Guarantors agrees as follows:
1. Defined Terms. Capitalized terms used herein but not defined herein shall have the meaning
ascribed to them in the Supply Agreement.
2. Guaranty. Each of the Guarantors unconditionally and irrevocably guarantees to
Beneficiary, the full and punctual payment when due of all TWCC’s obligations under the Supply
Agreement to the extent arising from any event that would constitute a TWCC Event of Default (and
including such obligations, liabilities, and indebtedness described above arising or accruing after
the commencement of any bankruptcy, insolvency, reorganization, or similar proceeding with respect
to TWCC, or any Guarantor or which would have not arisen or accrued but for the commencement of
such proceeding, even if the claim for such obligation, liability, or indebtedness is not
enforceable or allowable in such proceeding) (all of the foregoing obligations, liabilities and
indebtedness described in this Section 2, are referred to herein collectively as the
“Guaranteed Obligations” and each as a “Guaranteed Obligation”). In the event of a
default in performance of any of the Guaranteed Obligations, Guarantor shall promptly pay and
perform or cause to be paid and performed such Guaranteed Obligations upon receiving written notice
of such default from the Beneficiary.
Signature Page to Guaranty Agreement
3. Obligations Absolute and Unconditional.
(a) This Guaranty is, to the maximum extent permitted by law, a primary obligation of
Guarantor and shall be irrevocable, absolute and unconditional and shall remain in full
force and effect until such time as all Guaranteed Obligations shall have been absolutely
and completely discharged and performed.
(b) Notwithstanding the foregoing or any other provision in this Guaranty to the
contrary, (i) each Guarantor shall have the full benefit of all defenses (including any
defense of non-performance due to Force Majeure (as defined in the Supply Agreement)),
setoffs, counterclaims, reductions, diminution or limitations available to TWCC pursuant to
or arising from the Supply Agreement or otherwise, except for those arising out of (A) any
legal limitation, lack of authority, disability or incapacity of TWCC, or (B) any
bankruptcy, insolvency, dissolution or liquidation of TWCC, or (C) any invalidity or
illegality of the Supply Agreement due to the status of TWCC, and (ii) each Guarantor shall
have the full benefit of, and does not waive or relinquish its rights and remedies accorded
under, applicable statutes of limitation and repose.
4. Waiver. To the maximum extent permitted by law, and except as expressly provided in this
Guaranty or rights of notice provided in the Supply Agreement, each of the Guarantors hereby
expressly waives: (a) notice of acceptance of this Guaranty by Beneficiary (which acceptance is
conclusively presumed by delivery hereof to Beneficiary); (b) grace, demand, presentment and
protest with respect to the Guaranteed Obligations or to any instrument, Supply Agreement or
document evidencing or creating same; (c) notice of grace, demand, presentment and protest; (d)
notice of non-payment or other defaults, of intention to accelerate and of acceleration of the
Guaranteed Obligations; and (e) the renewal, extension, amendment and/or modification of any of the
terms and provisions of the Supply Agreement.
5. Ultimate Liability of the Guarantor. This is a guaranty of payment and performance, and
not merely of collection, and Guarantor agrees that this Guaranty may be enforced by Beneficiary
without resorting to or exhausting any other security, party (including, without limitation, TWCC),
or collateral. Guarantor hereby expressly waives any right or claim to force Beneficiary to
proceed first against TWCC or any other guarantor or any other party as to any of the Guaranteed
Obligations, and agrees that no delay or refusal (subject to applicable statutes of limitation and
repose) of Beneficiary to exercise any right or privilege which Beneficiary has or may have against
TWCC, arising from the Supply Agreement, shall operate to impair the liability of Guarantor
hereunder.
6. Term of Guaranty Agreement. This Guaranty shall remain in full force and effect until the
later of termination of the Supply Agreement and fulfillment by TWCC of its obligations under the
Supply Agreement.
7. Reinstatement. The Guaranteed Obligations shall be automatically reinstated if, and to the
extent that, for any reason any payment by or on behalf of Guarantor in respect of the Guaranteed
Obligations is rescinded as required by law or judicial decision or must be otherwise
restored by any holder of any of the Guaranteed Obligations, whether as a result of any
proceedings in bankruptcy or reorganization, or otherwise.
Signature Page to Guaranty Agreement
8. Payment. Guarantor agrees that all amounts payable by Guarantor to Beneficiary under this
Guaranty shall be paid free and clear of, and without deduction for, withholding on account of
taxes, levies, imposts, duties or other charges of whatever nature, other than based upon the net
income, gross receipts, assets or operations of Beneficiary, except as provided for in the Supply
Agreement. Beneficiary may apply any payments received from any source against that portion of the
Guaranteed Obligations in such priority and fashion as Beneficiary may deem appropriate, except to
the extent required under the Supply Agreement.
9. Representations and Warranties. Each Guarantor represents and warrants to Beneficiary
that:
(a) it is duly organized and validly existing under the laws of the jurisdiction of its
incorporation and has full power and legal right to execute and deliver this Guaranty
Agreement and to perform, or cause to be performed, the provisions of this Guaranty
Agreement on its part to be performed;
(b) its execution, delivery and performance of this Guaranty Agreement have been and
remain duly authorized by all necessary corporate action and do not contravene any provision
of its certificate of incorporation or bylaws or any law, regulation or contractual
restriction binding on it or its assets;
(c) neither the execution and delivery of this Guaranty Agreement nor the performance
by Guarantor of the terms of this Guaranty Agreement (i) will conflict with or result in a
breach, default or violation of (A) the charter or bylaws of Guarantor or (B) any material
contract, permit or judgment to which Guarantor is a party or to which it is subject or by
which any of its assets is bound, or (ii) will result in the creation of any lien on any
material asset of Guarantor;
(d) all consents, authorizations, approvals and clearances and notifications, reports
and registrations requisite for the due execution, delivery and performance of this Guaranty
Agreement have been obtained from or, as the case may be, filed with the relevant
governmental authorities having jurisdiction and remain in full force and effect and all
conditions have been duly complied with and no other action by, and no notice to or filing
with, any governmental authority having jurisdiction is required for such execution,
delivery or performance;
(e) this Guaranty Agreement constitutes a legal, valid and binding obligation of
Guarantor, enforceable against it in accordance with its terms, except (a) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general
application affecting enforcement of creditors rights against Guarantor and (b) general
principles of equity that restrict the availability of equitable remedies; and
(f) The Guarantor has no intent (i) to file a voluntary petition under any chapter of
the Bankruptcy Code, Title 11 U.S.C. or in any manner seek relief, protection,
reorganization, liquidation, dissolution or similar relief for debtors under any other
state, local, federal or other insolvency laws, either at the present time or at any time
hereafter, (ii) directly or indirectly to cause any involuntary petition to be filed against
the
Signature Page to Guaranty Agreement
Guarantor or directly or indirectly to cause the Guarantor to become the subject of any
proceedings pursuant to any state, federal or other insolvency law providing for the relief
of debtors, either at the present time or at any time hereafter, or (iii) directly or
indirectly to cause any interest of the Guarantor to become the property of any bankrupt
estate or the subject of any state, federal or other bankruptcy, dissolution, liquidation or
insolvency proceedings, either at the present time or at any time hereafter.
(g) Immediately after giving effect to the execution of this Guaranty Agreement, the
Guarantor (i) is not and will not be insolvent, (ii) has and will have assets having a fair
salable value in excess of the amount required to pay its liabilities on its existing debts
as they become absolute and matured, and (iii) is not and will not be left with unreasonably
small capital with which to engage in its anticipated business.
10. Subrogation. Upon making any payment hereunder, Guarantor shall be subrogated to the
rights of Beneficiary against TWCC with respect to such payment; provided that Guarantor shall not
enforce any right or receive any payment by way of subrogation until all of the Guaranteed
Obligations shall have been paid in full, and Beneficiary agrees to take such steps as Guarantor
may reasonably request to implement such subrogation.
11. Assignment. Neither this Guaranty Agreement nor any right hereunder may be assigned by
Guarantor without the prior written consent of Beneficiary, and any attempt to do so will be void,
except for assignments and transfers by operation of law. This Guaranty Agreement shall be binding
upon, and inure to the benefit of, the parties hereto and their respective successors and permitted
assigns.
12. Cumulative Rights. Except as otherwise set forth herein, all rights of Beneficiary
hereunder or otherwise arising under any documents executed in connection with the Guaranteed
Obligations are separate and cumulative and may be pursued separately, successively or
concurrently, or not pursued, without affecting or limiting any other right of Beneficiary and
without affecting or impairing the liability of Guarantor.
13. Governing Law; Jurisdiction and Forum; Resolution of Issues. This Guaranty Agreement
shall be governed by and construed in accordance with the laws of the State of Delaware, without
giving effect to principles of conflicts of law that may be waived. Each party hereto irrevocably
submits to the non-exclusive jurisdiction of any Texas state court or any federal court sitting in
the State of Delaware in any action arising out of or relating to this Guaranty Agreement. Each
party hereto hereby irrevocably waives, to the fullest extent it may effectively do so, the defense
of an inconvenient forum to the maintenance of such action or proceeding in such Delaware state or
federal court. Each party to this Guaranty Agreement irrevocably consents to service of process in
the manner provided for notices in Section 15 of this Guaranty Agreement. Nothing in this
Guaranty Agreement will affect the right of any party to this Guaranty Agreement to serve process
in any other manner permitted by law. The parties hereto further agree, to the extent permitted by
law, that final and unappealable judgment against any of them in any action or proceeding
contemplated above shall be conclusive and may be enforced in any other jurisdiction within or
outside the United States by suit on the judgment, a certified copy of which shall be conclusive evidence of the fact and amount of such judgment.
Any arbitration conducted under the Supply Agreement shall include, if requested by
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Beneficiary, a
determination by the arbitrator(s) whether the payment obligation of TWCC thereunder constitutes a
Guaranteed Obligation hereunder and the determination of such arbitrator(s) shall be binding on the
Guarantors regardless of whether the Guarantors participated in the arbitration and without any
right of such Guarantors to appeal or obtain a reevaluation of such factual determination;
provided, however, that Beneficiary will affirmatively consent to any request by Guarantor to
intervene in any arbitration proceeding for the limited purpose of presenting arguments on the
issue of whether an obligation of TWCC is a Guaranteed Obligation.
14. Integration of Terms. This Guaranty Agreement contains the entire agreement between
Guarantors and Beneficiary relating to the subject matter hereof and supersedes all oral statements
and prior writings with respect hereto. This Guaranty Agreement may not be amended, supplemented
or modified, nor any terms and conditions hereof waived, except by a written instrument executed by
Guarantors and Beneficiary.
15. Addresses.
(a) Unless this Guaranty Agreement specifically requires otherwise, any notice, demand,
process or request provided for in this Guaranty Agreement, or served, given or made in
connection with it, shall be in writing and shall be deemed properly served, given or made
if delivered in person or sent by facsimile or sent by registered or certified mail, postage
prepaid and return receipt requested, or by a nationally recognized overnight courier
service that provides a receipt of delivery, in each case, to the parties at the addresses
specified below:
If to Beneficiary:
NRG Texas Power LLC
Attn: Lignite Manager, Limestone Xxxxxxx
Xxxxx 0, Xxx 00
Xxxxxx, XX 00000
Fax: (000) 000-0000
Attn: Lignite Manager, Limestone Xxxxxxx
Xxxxx 0, Xxx 00
Xxxxxx, XX 00000
Fax: (000) 000-0000
With a copy to:
NRG Texas Power LLC
Attn: General Counsel
0000 XxXxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Fax: (000) 000-0000
Attn: General Counsel
0000 XxXxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Fax: (000) 000-0000
Signature Page to Guaranty Agreement
If to Guarantor:
Xxxxxxxxxxxx Coal Company
0 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attn: General Counsel
Fax: (000) 000-0000
0 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attn: General Counsel
Fax: (000) 000-0000
With a copy to:
Texas Xxxxxxxxxxxx Coal Co.
0000 XX 00 Xxxxx
X.X. Xxx 000
Xxxxxx, Xxxxx 00000
Attn: President/General Manager
Fax: (000) 000-0000
0000 XX 00 Xxxxx
X.X. Xxx 000
Xxxxxx, Xxxxx 00000
Attn: President/General Manager
Fax: (000) 000-0000
(b) Notice given by personal delivery, mail or overnight courier pursuant to this
Section 15 shall be effective upon physical receipt. Notice given by facsimile pursuant to
this Section 15 shall be effective as of (i) the date of confirmed delivery if delivered
before 5:00 p.m. local time of recipient on any day that is not a Saturday, Sunday or Texas
state or federal holiday (“Business Day”) or (ii) the next succeeding Business Day
if confirmed delivery is after 5:00 p.m. local time of recipient on any Business Day or
during any non-Business Day.
16. Invalid Provisions. If any provision of this Guaranty Agreement is held to be illegal,
invalid or unenforceable under any present or future law, and if the rights or obligations of any
party under this Guaranty Agreement will not be materially and adversely affected thereby, (a) such
provision will be fully severable, (b) this Guaranty Agreement will be construed and enforced as if
such illegal, invalid or unenforceable provision had never comprised a part hereof, and (c) the
remaining provisions of this Guaranty Agreement will remain in full force and effect and will not
be affected by the illegal, invalid or unenforceable provision or by its severance herefrom.
17. Counterparts. This Guaranty Agreement may be executed in any number of counterparts, each
of which will be deemed an original, but all of which together will constitute one and the same
instrument.
18. Amendment; Waiver; Requirement of Writing. This Guaranty Agreement cannot be amended,
changed, modified, released or discharged except by a writing signed by the party against whom
enforcement of the amendment, change, modification or waiver is sought. Furthermore, no delay or
omission to exercise any right, remedy, power or privilege accruing upon any default, omission or
failure of performance hereunder shall impair any such right,
remedy, power or privilege or be construed to be waiver thereof, but any such right, remedy,
power or privilege may be exercised from time to time and as often as may be deemed expedient. In
the event any provision contained in this Guaranty shall be breached by the Guarantor and
thereafter duly waived in writing by Beneficiary, such waiver shall be limited to the particular
Signature Page to Guaranty Agreement
breach so waived and shall not be deemed to waive any other breach hereunder. No waiver,
amendment, release or modification of this Guaranty shall be established by conduct, custom or
course of dealing, but solely by an instrument in writing duly executed by Beneficiary.
19. Waiver of Suretyship Rights. By signing this Guaranty Agreement, Guarantor waives each
and every right to which it may be entitled by virtue of any suretyship law, including any rights
it may have pursuant to Rule 31 and 32 of the Texas Rules of Civil Procedure, § 17.001 of the Texas
Civil Practice and Remedies Code and Chapter 34 of the Texas Business and Commerce Code, as the
same may be amended from time to time.
20. No Third Party Beneficiaries. This Guaranty Agreement is solely for the benefit of the
Beneficiary and no other person or entity shall acquire or be deemed to acquire or have any rights
under or by virtue of this Guaranty Agreement against any person, including Guarantor.
IN WITNESS WHEREOF, intending to be legally bound hereby, the undersigned Guarantor has caused
this Guaranty Agreement to be executed by its duly authorized officer as of the date first written
above.
XXXXXXXXXXXX COAL COMPANY |
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By: | /s/ Xxxxx X. Xxxxxx | |||
Name: | Xxxxx X. Xxxxxx | |||
Title: | President | |||
Signature Page to Guaranty Agreement
Annex I
Assumption Agreement
ASSUMPTION AGREEMENT, dated as of [ ], 2007, made by __________, (the
“Additional Grantor”), in favor of the Beneficiary. All capitalized terms not defined
herein shall have the meaning ascribed to them in the Guaranty Agreement referred to below.
WITNESSETH:
WHEREAS, the Additional Grantor has agreed to execute and deliver this Assumption Agreement in
order to become a party to the Guaranty Agreement;
NOW, THEREFORE, IT IS AGREED:
1. Guaranty Agreement. By executing and delivering this Assumption Agreement, the
Additional Grantor hereby becomes a party to the Guaranty Agreement as a Guarantor thereunder with
the same force and effect as if originally named therein as a Guarantor and, without limiting the
generality of the foregoing, hereby expressly assumes all obligations and liabilities of a
Guarantor thereunder. The information set forth on the signature page hereof is hereby added to the
notice information set forth in the Guaranty Agreement. The Additional Grantor hereby represents
and warrants that each of the representations and warranties contained in Section 9 of the Guaranty
Agreement is true and correct on and as the date hereof (after giving effect to this Assumption
Agreement) as if made on and as of such date.
2. Governing Law. This Assumption Agreement shall be governed by, and construed in
accordance with, the laws of the State of Texas.
3. Miscellaneous. This Assumption Agreement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall constitute an original,
but all of which when taken together shall constitute a single contract. Any provision of this
Assumption Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining provisions hereof; and
the invalidity of a particular provision in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction.
Annex I
IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to be duly executed
and delivered as of the date first above written.
NAME |
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By: | ||||
Name: | ||||
Title: | ||||
Annex I