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EXHIBIT 10.15a
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CONEMAUGH FACILITY
SUBSIDIARY GUARANTY
Dated as of August 24, 2000
made by
Each of the SUBSIDIARY GUARANTORS listed on Schedule I hereto
in favor of
each of the Beneficiaries named herein
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SUBSIDIARY GUARANTY
This SUBSIDIARY GUARANTY, dated as of August 24, 2000 (this "Subsidiary
Guaranty"), among each of the subsidiaries listed on Schedule I (each such
subsidiary individually, a "Subsidiary Guarantor" and collectively, the
"Subsidiary Guarantors") of RELIANT ENERGY MID-ATLANTIC POWER HOLDINGS, LLC, a
Delaware limited liability company (the "Facility Lessee") in favor of each of
the Beneficiaries (as defined in Section 4 below).
WITNESSETH:
WHEREAS, the Facility Lessee is a party to the Participation Agreement,
dated as of the date hereof (as amended, restated, supplemented or otherwise
modified from time to time, the "Participation Agreement"), among (i) the
Facility Lessee, (ii) Conemaugh Lessor Genco LLC, as the Owner Lessor, (iii)
Wilmington Trust Company, not in its individual capacity but as the Lessor
Manager under the LLC Agreement, (iv) Wilmington Trust Company, in its
individual capacity, (v) PSEGR Conemaugh Generation, LLC, as Owner Participant,
(vi) Bankers Trust Company, not in its individual capacity but as the Lease
Indenture Trustee under the Lease Indenture, and in its individual capacity and
(vii) Bankers Trust Company, in its individual capacity and as the Pass Through
Trustee under the Pass Through Trust Agreement.
WHEREAS, the Participation Agreement contemplate the execution, delivery
and the implementation of this Subsidiary Guaranty.
WHEREAS, it is a condition precedent to entering into the Operative
Documents that this Subsidiary Guaranty shall have been entered into by the
parties hereto and shall have become unconditionally and fully effective in
accordance with the terms hereof.
WHEREAS, each Subsidiary Guarantor has duly authorized the execution,
delivery and performance of this Subsidiary Guaranty and will receive direct
and indirect benefits of the transactions contemplated by the Operative
Documents.
NOW, THEREFORE, in consideration of the foregoing premises, the mutual
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, each Subsidiary
Guarantor agrees as follows:
SECTION 1. DEFINITIONS
Unless the context shall otherwise requires, capitalized terms used in
this Subsidiary Guaranty, including the recitals, and not otherwise defined
herein shall have the respective meanings set forth in Appendix A to the
Participation Agreement including terms defined herein by reference to other
documents; and the rules of interpretation set forth in Appendix A to the
Participation Agreement shall apply to this Subsidiary Guaranty.
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SECTION 2. COVENANTS
Section 2.1. Guaranty. Each Subsidiary Guarantor hereby absolutely,
unconditionally and irrevocably guarantees, jointly and severally with the other
Subsidiary Guarantors, as a primary obligor and not merely as a surety, to each
of the Beneficiaries and their successors and assigns (A) the full and punctual
payment to the Person entitled to such payment when due and payable (whether at
stated maturity, upon acceleration or otherwise) of (i) each payment required to
be made by the Facility Lessee under the Operative Documents, when and as due,
including without limitation payments in respect of Periodic Lease Rent,
Supplemental Lease Rent (including without limitation to pay as Supplemental
Rent an amount equal to interest at the applicable Overdue Rate on any Rent not
paid when due) and Termination Value and (ii) all other monetary obligations,
including fees, costs, expenses and indemnities, whether primary, secondary,
direct, contingent, fixed or otherwise (including without limitations monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), of the Facility Lessee to the Beneficiaries under
the Operative Documents, as applicable, in each case strictly in accordance with
the terms thereof, by acceleration or otherwise without offset or deduction and
(B) to the extent permitted by Applicable Law, the full and prompt performance
of all agreements and undertakings of the Facility Lessee under the Operative
Documents, in each case strictly in accordance with the terms of the Operative
Documents, together with all claims for damages arising from the failure to
perform such obligations (including all reasonable costs of collection and
enforcement thereof and interest thereon) which would be owing by the Facility
Lessee (all such obligations referred to in the preceding clauses (A) and (B)
being collectively called the "OBLIGATIONS"). Each Subsidiary Guarantor further
agrees that any Obligation may be extended or renewed, in whole or in part,
without notice to or further assent from it, and that it will remain bound upon
its guarantee notwithstanding any extension or renewal of any Obligation.
Anything contained in this Subsidiary Guaranty to the contrary
notwithstanding, the obligations of each Subsidiary Guarantor hereunder shall be
limited to a maximum aggregate amount equal to the greatest amount that would
not render such Subsidiary Guarantor's obligations hereunder subject to
avoidance as a fraudulent transfer or conveyance under Section 548 of Title 11
of the United States Code or any provisions of applicable state law
(collectively, the "FRAUDULENT TRANSFER LAWS"), in each case after giving effect
to all other liabilities of such Subsidiary Guarantor, contingent or otherwise,
that are relevant under the Fraudulent Transfer Laws (specifically excluding,
however, any liabilities of such Subsidiary Guarantor (a) in respect of
intercompany indebtedness to the Facility Lessee or Affiliates of the Facility
Lessee to the extent that such indebtedness would be discharged in an amount
equal to the amount paid by such Subsidiary Guarantor hereunder and (b) under
any guaranty of senior unsecured indebtedness or Indebtedness subordinated in
right of payment to the Obligations which guaranty contains a limitation as to
maximum amount similar to that set forth in this paragraph, pursuant to which
the liability of such Subsidiary Guarantor hereunder is included in the
liabilities taken into account in determining such maximum amount) and after
giving effect as assets to the value (as determined under the applicable
provisions of the Fraudulent Transfer Laws) of any rights to subrogation,
contribution, reimbursement, indemnity or similar rights of such Subsidiary
Guarantor pursuant to (i) Applicable Law or (ii) any agreement providing for an
equitable allocation among such Subsidiary Guarantor and other Affiliates of the
Facility Lessee of obligations arising under guarantees by such parties.
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Section 2.2. Payment and Performance of Obligations. Each Subsidiary
Guarantor does hereby agree that, if for any reason whatsoever the Facility
Lessee fails or is unable to perform any Obligation as and when the same shall
become due and payable (by acceleration or otherwise), each Subsidiary
Guarantor shall immediately be and become obligated to make such payment
immediately or, to the extent permitted by Applicable Law, promptly cause the
performance and discharge of such Obligation and, in addition, to pay such
further amounts, if any, as shall be sufficient to cover the reasonable costs
and expenses of collection incurred hereunder; provided, that no provision of
this Subsidiary Guaranty shall expand the aforesaid obligations of the
Subsidiary Guarantors beyond those obligations of the Facility Lessee under the
Operative Documents guaranteed hereunder. Notwithstanding any provision of this
Subsidiary Guaranty to the contrary, all rights of each Subsidiary Guarantor
for subrogation under Applicable Law or otherwise shall be fully subordinated
to the indefeasible payment in full in cash of the Obligations and to the full
performance and discharge of the other Obligations.
Each Subsidiary Guarantor hereby acknowledges and agrees that this
Subsidiary Guaranty constitutes a continuing guaranty and shall remain in full
force and effect until such time as all of the Obligations are finally paid,
performed and observed in full. Each Subsidiary Guarantor hereby further
acknowledges and agrees that this Subsidiary Guaranty constitutes a guaranty of
payment and performance when due and not of collection and waives any right to
require that any resort be had by any Beneficiary against any other obligor, to
any of the security held for payment of the Obligations or to any balance of
any deposit account or credit on the books of any Beneficiary in favor of the
Facility Lessee or any other person or against any guarantor under any other
guarantee covering the Obligations.
Section 2.3. Primary Obligor. The obligations of each Subsidiary Guarantor
contained herein are direct, independent, and primary obligations of each such
Subsidiary Guarantor and are absolute, present, unconditional and continuing
obligations and are not conditioned in any way upon the institution of suit or
the taking of any other action or any attempt to enforce performance of or
compliance with the obligations, covenants or undertakings (including any
payment obligations) of the Facility Lessee and shall constitute a guaranty of
payment and performance and not of collection, binding upon such Subsidiary
Guarantor and its respective successors and assigns and shall remain in full
force and effect and irrevocable without regard to the genuineness, validity,
legality or enforceability of any of the Operative Documents to which the
Facility Lessee is a party or the lack of power or authority of the Facility
Lessee to enter into any of the Operative Documents to which the Facility
Lessee is a party or any substitution, release or exchange of any other
guaranty or any other security for any of the Obligations or any other
circumstance whatsoever (other than payment or performance as provided therein)
that might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor and shall not be subject to any right of set-off,
recoupment or counterclaim and is in no way conditioned or contingent upon any
attempt to collect from the Facility Lessee or any other entity or to perfect
or enforce any security or upon any other condition or contingency or upon any
other action, occurrence or circumstance whatsoever. Without limiting the
generality of the foregoing, no Subsidiary Guarantor shall have any right to
terminate this Subsidiary Guaranty, or to be released, relieved or discharged
from its obligations hereunder, and such obligations shall be neither affected
nor diminished for any reason whatsoever, including without limitation
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(i) any amendment or supplement to or modification of any of the Operative
Documents to which the Facility Lessee is a party, any extension or renewal of
the Facility Lessee's obligations under any Operative Document, or any
subletting, assignment or transfer of the Facility Lessee's or any Beneficiary's
interest in the Operative Documents, (ii) any bankruptcy, insolvency,
readjustment, composition, liquidation or other change in the legal status of
the Facility Lessee or any other Person or any rejection or modification of the
Obligations of the Facility Lessee or any Beneficiary as a result of any
bankruptcy, reorganization, insolvency or similar proceeding, (iii) any
furnishing or acceptance of additional security or any exchange, substitution,
surrender or release of any security, (iv) any waiver, consent, or any
settlement, compromise or release (except to the extent payment is actually
received with respect thereto and applied to the repayment of the Obligations),
or other action or inaction or any exercise or nonexercise of any right, remedy
or power with respect to the Obligations or any of the Operative Documents to
which the Facility Lessee is a party, (v) any merger or consolidation of the
Facility Lessee or any Subsidiary Guarantor into or with any other Person, any
change in the structure of the Facility Lessee, any change in the ownership of
the Facility Lessee or any Subsidiary Guarantor or any sale, lease or transfer
of any or all of the assets of the Facility Lessee or any Subsidiary Guarantor
to any other Person, (vi) any default, misrepresentation, negligence, misconduct
or other action or inaction of any kind by any Beneficiary under or in
connection with any Operative Document or any other agreement relating to this
Subsidiary Guaranty, except to the extent that any such default,
misrepresentation, negligence, misconduct or other action or inaction would
limit the Obligations, (vii) any action or inaction by any Beneficiary as
contemplated in Section 5 of this Subsidiary Guaranty, (viii) the
unenforceability, lack of genuineness, irregularity or invalidity of the
Obligations or any part thereof or of any security therefor or the
unenforceability, lack of genuineness, irregularity or invalidity of any
agreement relating thereto including, without limitation, the unenforceability
of any remedy contained in Section 17 of the Facility Lease, and any invalidity
or unenforceability relating to or against the Facility Lessee for any reason of
any Operative Document, or any provision of Applicable Law purporting to
prohibit the payment or performance by the Facility Lessee of any Obligation,
(ix) the existence of any claim, set-off or other rights which any Subsidiary
Guarantor may have at any time against the Facility Lessee, any Beneficiary or
any other Person, whether in connection herewith or with any unrelated
transactions, (x) any change in the manner or place of payment or performance
of, or in any other term of, all or any of the Obligations, (xi) whether any
Subsidiary Guarantor is related or unrelated to the Facility Lessee or (xii) any
other circumstance whatsoever (except the complete payment and performance of
the Obligations), including, without limitation, any act or omission of the
Facility Lessee or any Beneficiary which changes the scope of the Subsidiary
Guarantors' risk.
Section 2.4 Obligations Not Waived. To the fullest extent permitted by
Applicable Law, each Subsidiary Guarantor waives presentment to, demand of
payment from and protest to the Facility Lessee of any of the Obligations, and
also waives notice of acceptance of its guarantee and notice of protest for
nonpayment. To the fullest extent permitted by Applicable law, the obligations
of each Subsidiary Guarantor hereunder shall not be affected by (a) the failure
of any Beneficiary to assert any claim or demand or to enforce or exercise any
right or remedy against the Facility Lessee or any other Subsidiary Guarantor
under the provisions of any Operative Document or otherwise, (b) any rescission,
waiver, amendment or modification of, or any release from any of the terms or
provisions of this Subsidiary Guaranty, any other Operative Document, any
guarantee or any other agreement, including with respect to any other Subsidiary
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Guarantor under this Subsidiary Guaranty or (c) the failure to perfect any
security interest in, or the release of, any of the security held by or on
behalf of any Beneficiary.
Section 2.5 Security. Each of the Subsidiary Guarantors authorizes each of
the other Beneficiaries, to (a) take and hold security for the payment of this
Subsidiary Guaranty and the Obligations and exchange, enforce, waive and release
any such security, (b) apply such security and direct the order or manner of
sale thereof as they in their sole discretion may determine and (c) release or
substitute any Subsidiary Guarantor.
Section 2.6 No Discharge or Diminishment of Guaranty. The obligations of
each Subsidiary Guarantor hereunder shall not be subject to any limitation,
impairment or termination for any reason (other than the indefeasible payment in
full in cash of the Obligations and the full performance and discharge of the
other Obligations), including any claim or waiver, release, surrender,
alteration or compromise of any of the Obligations, and shall not be subject to
any defense or setoff, counterclaim, recoupment or termination whatsoever by
reason of the invalidity, illegality or unenforceability of the Obligations or
otherwise. Without limiting the generality of the foregoing, the obligations of
each Subsidiary Guarantor hereunder shall not be discharged or impaired or
otherwise affected by the failure of any Beneficiary to assert any claim or
demand or to enforce any remedy under any Operative Document or any other
agreement, by any waiver or modification of any provision of any thereof, by any
default, failure or delay, willful or otherwise, in the performance of the
Obligations, or by any other act or omission that may or might in any manner or
to any extent vary the risk of any Subsidiary Guarantor or that would otherwise
operate as a discharge of each Subsidiary Guarantor as a matter of law or equity
(other than the indefeasible payment in full in cash of all the Obligations and
the full performance and discharge of the other Obligations). Each Subsidiary
Guarantor's obligations hereunder shall remain in full force and effect until
the Obligations shall have been paid and performed in full.
Section 2.7 Defenses Waived. To the fullest extent permitted by Applicable
Law, each of Subsidiary Guarantor waives any defense based on or arising out of
any defense of the Facility Lessee or the unenforceability of the Obligations or
any part thereof from any cause, or the cessation from any cause of the
liability of the Facility Lessee, other than the final and indefeasible payment
in full in cash of the Obligations and the performance and discharge of the
other Obligations. The Beneficiaries may, at their election, foreclose on any
security held by one or more of them by one or more judicial or nonjudicial
sales, accept an assignment of any such security in lieu of foreclosure,
compromise or adjust any part of the Obligations, make any other accommodation
with the Facility Lessee or any other guarantor or exercise any other right or
remedy available to them against the Facility Lessee or any other guarantor,
without affecting or impairing in any way the liability of any Subsidiary
Guarantor hereunder except to the extent the Obligations have been fully,
finally and indefeasibly paid in cash and all other Obligations have been fully
performed and discharged. Pursuant to Applicable Law, each of the Subsidiary
Guarantors waives any defense arising out of any such election even though such
election operates, pursuant to Applicable Law, to impair or to extinguish any
right of reimbursement or subrogation or other right or remedy of such
Subsidiary Guarantor against the Facility Lessee or any other Subsidiary
Guarantor or guarantor, as the case may be, or any security.
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Section 2.8 Acceleration etc. Each Subsidiary Guarantor agrees
that, as between such Subsidiary Guarantor, on the one hand, and the
Beneficiaries, on the other hand, (a) the maturity of the Obligations guaranteed
hereby may be accelerated as provided in any of the Operative Documents, for the
purposes of such Subsidiary Guarantor's guaranty herein, notwithstanding any
stay, injunction or other prohibition preventing such acceleration in respect of
the Obligations guaranteed hereby, and (b) in the event of any declaration of
acceleration of such Obligations as provided therein, such Obligations (whether
or not due and payable) shall forthwith become due and payable in full by such
Subsidiary Guarantor for purposes of this Subsidiary Guaranty.
Section 2.9 Information. Each Subsidiary Guarantor does hereby
acknowledge that it is aware of the terms and conditions of the Operative
Documents and the transactions and the other documents contemplated thereby.
Each of the Subsidiary Guarantors assumes all responsibility for being and
keeping itself informed of the Facility Lessee's financial condition and assets,
and of all other circumstances bearing upon the risk of nonpayment of the
Obligations and the nature, scope and extent of the risks that such Subsidiary
Guarantor assumes and incurs hereunder, and agrees that none of the
Beneficiaries will have any duty to advise any of the Subsidiary Guarantors of
information known to it or any of them regarding such circumstances or risks.
each Subsidiary Guarantor hereby unconditionally waives and releases, to the
extent permitted by Applicable Law, promptness, diligence and notice as to the
Obligations guaranteed hereby and acceptance of this Subsidiary Guaranty, and
waives any other circumstance which might otherwise constitute a defense
available to, or a discharge of, such Subsidiary Guarantor other than the full
payment and performance of the Obligations, including, without limitation,
notice of default or any failure on the part of the Facility Lessee to perform
and comply with any Obligation that agrees that, except as otherwise provided
herein, it shall not be required to consent to or receive any notice of any
amendment or modification of, or waiver, consent or extension with respect to,
the Operative Documents.
Section 2.10 Payment. All payments to be made by any Subsidiary
Guarantor hereunder shall be made in immediately available funds and in Dollars
to the Beneficiary to which such payment is to be made (in the case of the Owner
Lessor, subject to the provisions of Section 4) and shall be free and clear of
any deduction or withholding. All such payments shall be paid to such
Beneficiary in the manner and at the place required by the Operative Documents
or, if no such address is provided, at the address and to the account specified
in the notice demanding payment be made by the Subsidiary Guarantor.
SECTION 3. SUBSIDIARY GUARANTOR'S REPRESENTATIONS AND WARRANTIES
Each Subsidiary Guarantor represents and warrants, as of the date
hereof, as follows:
Section 3.1. It is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization and has full power,
authority and the legal right to execute, deliver and perform this Subsidiary
Guaranty.
Section 3.2 Its execution, delivery and performance of this Subsidiary
Guaranty has been duly authorized by all necessary corporate (or other
organizational) action. This Subsidiary
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Guaranty constitutes its legal, valid and binding obligation enforceable
against such Subsidiary Guarantor in accordance with its terms, except as such
enforcement may be affected by applicable bankruptcy, insolvency, moratorium
and other similar laws affecting creditors' rights generally.
Section 3.3. The execution, delivery and performance of this Subsidiary
Guaranty will not contravene any provision of law, rule or regulation to which
it is subject or any judgment, decree or order applicable to such Subsidiary
Guarantor nor conflict or be inconsistent with or result in any breach of any
terms, covenants, conditions or provisions of, or constitute a default under,
or result in the creation or imposition of (or the obligation to create or
impose) any Lien or other encumbrance upon any of the property or assets of
such Subsidiary Guarantor pursuant to the terms of any agreement or other
instrument to which such Subsidiary Guarantor is a party or by which it or its
property is bound or to which it or its property may be subject to the
violation or which has a material adverse effect on the financial condition of
such Subsidiary Guarantor, nor violate any provision of the articles of
incorporation or by-laws (or other organizational documents) of such Subsidiary
Guarantor.
Section 3.4. No pending or, to its knowledge, threatened action, suit,
investigation or proceedings against such Subsidiary Guarantor before any
Governmental Entity exists which, if determined adversely to such Subsidiary
Guarantor, would materially adversely affect such Subsidiary Guarantor's
ability to perform its obligations under this Subsidiary Guaranty.
Section 3.5. No consent or approval from any Person is required for the
execution, delivery and performance by each Subsidiary Guarantor of this
Subsidiary Guaranty except that which has been given and is in full force and
effect.
SECTION 4. BENEFICIARIES
The Owner Lessor, the Owner Participant, the Equity Subsidiary, the Equity
Invesptor, the Owner Trustee, the Trust Company and, so long as the Lien of the
Lease Indenture has not been terminated or discharged, the Lease Indenture
Trustee (on behalf of itself and the Noteholders), the Lease Indenture Company,
the Pass Through Trustee and the Pass Through Company, in each case, together
with their respective successors and permitted assigns, are each beneficiaries
of this Subsidiary Guaranty (each, a "Beneficiary" or, together, the
"Beneficiaries").
In order to secure the Notes, the Owner Lessor will assign and grant a
first priority security interest in favor of the Lease Indenture Trustee in and
to all of the Owner Lessor's right, title and interest in, to and under the
Facility Lease (including all Obligations constituting Periodic Lease Rent,
Supplemental Lease Rent (other than Excepted Payments) and Termination Value)
in accordance with the Lease Indenture. In furtherance thereof and in order to
secure the Notes, the Owner Lessor will assign and grant a first priority
security interest in favor of the Lease Indenture Trustee in and to all of the
Owner Lessor's right, title and interest in, to and under this Subsidiary
Guaranty (other than those relating to the Excluded Property) in accordance
with the Lease Indenture. Each Subsidiary Guarantor hereby acknowledges notice
of and consents to such assignments and to the creation of such Lien and
security interest and acknowledges receipt of copies of the Lease Indenture.
Unless and until the Subsidiary Guarantors shall have received written notice
from the Lease Indenture Trustee that the Lien of
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the Lease Indenture been fully terminated, the Lease Indenture Trustee shall
have the right, but shall not be obligated, to exercise any and all rights of
the Owner Lessor under this Subsidiary Guaranty to the extent set forth in and
in accordance with the Lease Indenture. So long as the Lien of the Lease
Indenture has not been discharged, the Owner Lessor hereby irrevocably directs,
and the Subsidiary Guarantors agree, that all payments hereunder (other than
those relating to Expected Payments) payable to the Owner Lessor shall be paid
by wire transfer directly to the Lease Indenture Trustee's Account or to such
other place as the Lease Indenture Trustee shall notify the Subsidiary
Guarantors in writing pursuant to the Lease Indenture.
SECTION 5. BENEFICIARIES' RIGHTS
Each Beneficiary may at any time and from time to time without the consent
of, or notice to any Subsidiary Guarantor (or any other Beneficiary except as
may be required pursuant to the terms of any Operative Document), without
incurring responsibility to any Subsidiary Guarantor and without impairing or
releasing any of the obligations of the Subsidiary Guarantors hereunder, upon
or without any terms or conditions and in whole or in part:
(a) change the manner, place or terms of payment of, and/or change or
extend the time of payment of, renew or alter, any of the Obligations due to
it, any security therefor, or any liability incurred directly or indirectly in
respect thereof, and, subject to clause (d) below, the guaranty herein made
shall apply to such Obligations as so changed, extended, renewed or altered;
(b) sell, exchange, release, surrender, realize upon or otherwise deal
with in any manner and in any order any property by whomsoever at any time
pledged or mortgaged to secure, or howsoever securing, the Obligations due to
it or any liabilities (including any of those hereunder) incurred directly or
indirectly in respect thereof or hereof, and/or any offset thereagainst due to
it;
(c) exercise or refrain from exercising any rights against the Facility
Lessee, any Subsidiary Guarantor or any other Person or others or otherwise act
or refrain from acting;
(d) settle or compromise any of the Obligations due to it, any security
therefor or any liability (including any of those hereunder) 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 liability (whether due or not) of
the Facility Lessee to its creditors other than the Subsidiary Guarantors,
provided that any settlement or compromise with respect to, or other reduction
(by operation of law or negotiation) of, any of the Obligations (or amounts
underlying such Obligations) due to it (whether occurring before or after the
occurrence of a Lease Event of Default) shall not alter the amount of the
original Obligations due to it guaranteed hereby and the Subsidiary Guarantors
acknowledge and agree that their obligations hereunder shall be for the full
amount of the Obligations due to it without giving effect to any such
settlement, compromise or other reduction (except to the extent payment is
actually received with respect thereto and applied to the repayment of the
Obligations);
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(e) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Facility Lessee to the Beneficiaries regardless
of what liabilities or liabilities of the Facility Lessee remain unpaid;
(f) consent to or waive any breach of, or any act, omission or default
under, the Facility Lease or any other Operative Document, or otherwise amend,
modify or supplement any of the Facility Lease or any other Operative Document;
(g) act or fail to act in any manner referred to in this Subsidiary
Guaranty which may deprive the Subsidiary Guarantors of their respective rights
to subrogation against the Facility Lessee to recover full indemnity for any
payments made pursuant to this Subsidiary Guaranty; and/or
(h) upon the occurrence and during the continuance of any event of
default (under the applicable agreement), to the fullest extent permitted by
law, to set-off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by such Beneficiary to or for the credit or for the account of the
Subsidiary Guarantors against any and all of the obligations of the Subsidiary
Guarantors now or hereafter existing under this Subsidiary Guaranty, provided,
that such Beneficiary agrees to promptly notify the Subsidiary Guarantors after
any such set-off and application made by the Beneficiary, provided further that
the failure to give such notice shall not affect the validity of such set-off
and application.
The Subsidiary Guarantors acknowledge and agree that each Beneficiary (in the
case of the Owner Lessor, subject to Section 4 hereof) shall have the
independent and exclusive right to enforce the obligations of the Subsidiary
Guarantors hereunder with respect to the Obligations due to such Beneficiary.
Anything herein to the contrary notwithstanding, any exercise of rights or
remedies by any Beneficiary hereunder or under any other agreement or
instrument, or the failure of any Beneficiary to exercise any rights or
remedies hereunder or thereunder, shall not in any way adversely affect the
ability of any other Beneficiary to exercise its rights or remedies hereunder
nor, to the extent permitted by Applicable Law, shall any single or partial
exercise by any Beneficiary of any right, power or remedy hereunder preclude
any other or further exercise thereof or the exercise of any other right, power
or remedy.
SECTION 6. ADDITIONAL SUBSIDIARY GUARANTORS
Except as otherwise permitted under Section 5.11 of the Participation
Agreement, each Subsidiary of the Facility Lessee that was not in existence on
the date of this Subsidiary Guaranty is required to enter into this Subsidiary
Guaranty as a Subsidiary Guarantor upon becoming a Subsidiary of the Facility
Lessee. Upon execution after the date hereof by such a Subsidiary of an
instrument in the form of Annex A hereto and delivery thereof to each
Beneficiary, such Subsidiary shall become a Subsidiary Guarantor hereunder with
the same force and effect as if originally named as a Subsidiary Guarantor
herein. The execution and delivery of any instrument adding an additional
Subsidiary Guarantor as a party to this Subsidiary Guaranty shall not require
the consent of any other Subsidiary Guarantor hereunder. The rights and
obligations of each Subsidiary Guarantor hereunder shall remain in full force
and effect notwithstanding the addition of any new Subsidiary Guarantor as a
party to this Subsidiary Guaranty.
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SECTION 7. SURVIVAL OF GUARANTY
Notwithstanding anything to the contrary herein, this Subsidiary
Guaranty shall continue to be effective or be reinstated, as the case may be,
if at any time any of the amounts paid to any of Beneficiaries, in whole or in
part, is required to be repaid upon the insolvency, bankruptcy, dissolution,
liquidation, or reorganization of any Subsidiary Guarantor or the Facility
Lessee or any other Person, or as a result of the appointment of a custodian,
interviewer, receiver, trustee or other officer with similar powers with
respect to any Subsidiary Guarantor or the Facility Lessee or any other Person
or any substantial part of the property of any Subsidiary Guarantor or the
Facility Lessee or such other Person, all as if such payments had not been made.
SECTION 8. REMEDIES; SUBROGATION
Section 8.1. Remedies. In the event any Subsidiary Guarantor shall fail
to pay immediately any amounts due under this Subsidiary Guaranty, or to comply
with any other term of this Subsidiary Guaranty, each Beneficiary shall be
entitled to all rights and remedies to which it may be entitled hereunder or at
law, in equity or by statute and may proceed by appropriate court action to
enforce the terms hereof and to recover damages for the breach hereof. Each and
every remedy of the Beneficiaries shall, to the extent permitted by law, be
cumulative and shall be in addition to any other remedy now or hereafter
exiting at law or in equity. At the option of each Beneficiary and upon notice
to any Subsidiary Guarantor, such Subsidiary Guarantor may be joined in any
action or proceeding commenced by such Beneficiary against the Facility Lessee
in respect of any Obligation and recovery may be had against any Subsidiary
Guarantor in such action or proceeding or in any independent action or
proceeding against any Subsidiary Guarantor, without any requirement that such
Beneficiary first assert, prosecute or exhaust any remedy or claim against the
Facility Lessee.
Section 8.2. Subrogation. Each Subsidiary Guarantor agrees that it will
not exercise any rights that it may acquire by way of subrogation under this
Subsidiary Guaranty, by any payment or performance made hereunder or otherwise,
until all of the Obligations shall have been indefeasibly paid in full and all
other Obligations shall have been fully performed and discharged. If any amount
shall be paid to any Subsidiary Guarantor on account of such subrogation rights
at any time when all of the Obligations shall not have been paid in full or any
other Obligations shall not have been fully performed and discharged, such
amount shall be held in trust for the benefit of the Beneficiary to whom such
Obligation is payable and shall forthwith be paid to such Beneficiary to be
credited and applied to such Obligation, whether matured or unmatured, in
accordance with the terms of the Operative Document under which such Obligation
arose. If (i) any Subsidiary Guarantor shall make payment to any Beneficiary of
all or any part of the Obligations and (ii) all the Obligations shall be paid
in full and all other Obligations shall be fully performed and discharged, such
Beneficiary will, at such Subsidiary Guarantor's request and expense, execute
and deliver to such Subsidiary Guarantor appropriate documents, without
recourse and with representation or warranty, necessary to evidence the
transfer by subrogation to such Subsidiary Guarantor of an interest in the
Obligations resulting from such payment by such Subsidiary Guarantor.
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Section 8.3. Waiver of Demands, Notices, Etc.
(a) Each Subsidiary Guarantor hereby unconditionally waives (i)
notice of any of the matters referred to in Section 2.3 hereof; (ii) all notices
which may be required by statute, rule of law or otherwise, now or hereafter in
effect, to preserve any rights against each Subsidiary Guarantor hereunder,
including, without limitation, any demand, proof or notice of non-payment of any
Obligation; (iii) any right to the enforcement, assertion or exercise of any
right, remedy, power or privilege under or in respect of any Operative Document;
(iv) notice of acceptance of this Subsidiary Guaranty, demand, protest,
presentment, notice of default and any requirement of diligence; (v) any
requirement to exhaust any remedies or to mitigate any damages resulting from
default by the Facility Lessee or any Person under any Operative Document; and
(vi) any other circumstance (other than full payment and performance of the
Obligations) whatsoever which might otherwise constitute a legal or equitable
discharge, release or defense of a guarantor or surety, or which might otherwise
limit recourse against the Subsidiary Guarantors.
(b) This Subsidiary Guaranty is a continuing one and all liabilities to
which it applies or may apply under the terms hereof shall be conclusively
presumed to have been created in reliance hereon. No failure or delay on the
part of any Beneficiary in exercising any right, power or privilege hereunder
and no course of dealing among the Subsidiary Guarantors, the Beneficiaries or
the Facility Lessee shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege. The rights, powers and remedies herein expressly provided are
cumulative and not exclusive of any rights, powers or remedies which the
Beneficiary would otherwise have. No notice to or demand on any Subsidiary
Guarantor in any case shall entitle such Subsidiary Guarantor to any other
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the Beneficiary to any other or further action in any
circumstances without notice or demand.
(c) If claim is ever made upon any Beneficiary for repayment or recovery
of any amount or amounts received in payment or on account of any of the
Obligations and any of the aforesaid payees repays all or part of said amount
by reason of (a) any judgment, decree or order of any court or administrative
body having jurisdiction over such payee or any of its property or (b) any
settlement or compromise of any such claim effected by such payee with any such
claimant (including the Facility Lessee), then and in such event each Subsidiary
Guarantor agrees that any such judgment, decree, order, settlement or
compromise shall be binding upon it, notwithstanding any revocation hereof or
the cancellation of the Participation Agreement, Facility Lease or other
instrument evidencing any liability of the Facility Lessee, and the Subsidiary
Guarantors shall be and remain liable to the aforesaid payees hereunder for the
amount so repaid or recovered to the same extent as if such amount had never
originally been received by any such payee.
Section 8.4 Costs and Expenses. Each Subsidiary Guarantor agrees,
jointly and severally, to pay on an After-Tax Basis any and all reasonable
costs and expenses (including reasonable legal fees) incurred by an Beneficiary
in enforcing its rights or collecting under this Subsidiary Guaranty.
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Section 8.5. Survival of Remedies and Subrogation Rights. The provisions
of this Section 8 shall survive the term of this Subsidiary Guaranty and the
payment in full of the Obligations and the termination of the Operative
Documents.
SECTION 9. MISCELLANEOUS
Section 9.1. Amendments and Waivers. No term, covenant, agreement or
condition of this Subsidiary Guaranty may be terminated, amended, supplemented,
modified or compliance therewith waived (either generally or in a particular
instance, retroactively or prospectively) except by an instrument or
instruments in writing executed by the Subsidiary Guarantors and expressly
consented to in writing by the Beneficiaries.
Section 9.2. Notices. Unless otherwise specifically provided herein, all
notices, consents, directions, approvals, instructions, requests and other
communications required or permitted by the terms hereof shall be in writing
and shall be made or given in accordance with Section 17.6 of the
Participation Agreement; provided that notices to each Subsidiary Guarantor
shall be addressed to its address set forth in Schedule I hereto, or at such
other address as such Subsidiary Guarantor may from time to time designate by
written notice to the Beneficiaries and the other Subsidiary Guarantors.
Section 9.3. Survival. Except as expressly set forth herein, the
warranties and covenants made by each Subsidiary Guarantor shall not survive
the expiration or termination of this Subsidiary Guaranty.
Section 9.4. Assignment and Assumption. This Subsidiary Guaranty shall
be binding upon and inure to the benefit of the respective successors and
assigns of the Subsidiary Guarantors and the Beneficiaries; provided, that no
Subsidiary Guarantor shall assign or transfer its rights or obligations
hereunder without the prior written consent of each Beneficiary or as provided
in Section 5.5 or 5.6 of the Participation Agreement.
Section 9.5. Governing Law. Each Subsidiary Guarantor (i) hereby
irrevocably submits to the nonexclusive jurisdiction of the Supreme Court of
the State of New York, New York County (without prejudice to the right of any
party to remove to the United States District Court for the Southern District
of New York) and to the nonexclusive jurisdiction of the United States
District Court for the Southern District of New York for the purposes of any
suit, action or other proceeding arising out of this Subsidiary Guaranty, the
other Operative Documents, or the subject matter hereof or thereof or any of
the transactions contemplated hereby or thereby brought by any of the parties
hereto or their successors or assigns; (ii) hereby irrevocably agrees that all
claims in respect of such action or proceeding may be heard and determined in
such New York State court, or in such federal court; and (iii) to the extent
permitted by Applicable Law, hereby irrevocably waives, and agrees not to
assert, by way of motion, as a defense, or otherwise, in any such suit, action
or proceeding any claim that it is not personally subject to the jurisdiction
of the above-named courts, that the suit, action or proceeding is brought in an
inconvenient forum, that the venue of the suit, action or proceeding is
improper or that this Subsidiary Guaranty, the other Operative Documents, or
the subject matter hereof or thereof may not be enforced in or by such court.
TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE SUBSIDIARY GUARANTORS
AND, BY THEIR ACCEPTANCE
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HEREOF, EACH OF THE BENEFICIARIES HEREBY IRREVOCABLY WAIVES THE RIGHT TO DEMAND
A TRIAL BY JURY, IN ANY SUCH SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF
THIS AGREEMENT, THE OTHER OPERATIVE DOCUMENTS, OR THE SUBJECT MATTER HEREOF OR
THEREOF OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY BROUGHT BY ANY
OF THE PARTIES HERETO OR THEIR SUCCESSORS OR ASSIGNS. This Subsidiary Guaranty
shall be in all respects governed by and construed in accordance with the laws
of the State of New York, including all matters of construction, validity and
performance (without giving effect to the conflicts of laws provisions, other
than New York General Obligations Law Section 5-1401).
Section 9.6. Severability. Any provision of this Subsidiary Guaranty 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 hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. To the fullest
extent permitted by Applicable Law, each Subsidiary Guarantor hereby waives any
provision of Applicable Law that renders any provision hereof prohibited or
unenforceable in any respect.
Section 9.7. Headings. The headings of the sections of this Subsidiary
Guaranty are inserted for purposes of convenience only and shall not be
construed to affect the meaning or construction of any of the provisions hereof.
Section 9.8. Further Assurances. Each Subsidiary Guarantor shall promptly
and duly execute and deliver such further documents, make such further
assurances, and take such further action reasonably requested by any of the
Beneficiaries, all as may be reasonably necessary to carry out more effectively
the intent and purpose of this Subsidiary Guaranty.
Section 9.9. Effectiveness of Guaranty. This Subsidiary Guaranty has been
dated as of the date first above written for convenience only. This Subsidiary
Guaranty shall be effective on the date of execution and delivery by the
Subsidiary Guarantors.
[Signature Page Follows]
15
IN WITNESS WHEREOF, each Subsidiary Guarantor has caused this
Subsidiary Guaranty to be duly executed and delivered by its officer thereunto
duly authorized.
RELIANT ENERGY NORTHEAST MANAGEMENT
COMPANY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Treasurer
RELIANT ENERGY MARYLAND HOLDINGS, LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Treasurer
RELIANT ENERGY NEW JERSEY HOLDINGS, LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Treasurer
RELIANT ENERGY MID-ATLANTIC POWER
SERVICES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Treasurer
Signature Page to
Conemaugh Subsidiary Guaranty
16
SCHEDULE I
to the Subsidiary Guaranty
SUBSIDIARY GUARANTORS
Reliant Energy Northeast Management Company
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Reliant Energy Maryland Holdings, LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Reliant Energy New Jersey Holdings, LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Reliant Energy Mid-Atlantic Power Services, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
HOU01:587917.11
17
ANNEX A
to Subsidiary Guaranty
JOINDER AGREEMENT
JOINDER AGREEMENT NO. _____ dated as of _______________,_____, to the
SUBSIDIARY GUARANTY, dated as of August 24, 2000 (as the same may be amended,
supplemented or otherwise modified from time to time, the "Conemaugh Subsidiary
Guaranty"), among each of the Subsidiaries of RELIANT ENERGY MID-ATLANTIC POWER
HOLDINGS, LLC, a Delaware limited liability company (the "Facility Lessee")
(each such subsidiary individually a "Subsidiary Guarantor" and collectively,
the "Subsidiary Guarantors") in favor of the Beneficiaries named therein.
A. Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Conemaugh Subsidiary
Guaranty.
B. The Subsidiary Guarantors have entered into the Conemaugh
Subsidiary Guaranty in order to induce the Beneficiaries to enter into the
transactions contemplated by the Operative Documents. Pursuant to Section 6 of
the Conemaugh Subsidiary Guaranty and except as otherwise permitted under
Section 5.11 of the Participation Agreement, each Subsidiary of the Facility
Lessee that was not in existence or not a Subsidiary on the date of the
Participation Agreement is required to enter into the Conemaugh Subsidiary
Guaranty as a Subsidiary Guarantor upon becoming a Subsidiary. Section 6 of the
Conemaugh Subsidiary Guaranty further provides that such Subsidiaries may become
Subsidiary Guarantors under the Conemaugh Subsidiary Guaranty by execution and
delivery of an instrument in the form of this Joinder Agreement. The undersigned
Subsidiary (the "New Subsidiary Guarantor") is executing this Joinder Agreement
in accordance with the requirements of the Conemaugh Subsidiary Guaranty to
become a Subsidiary Guarantor under the Conemaugh Subsidiary Guaranty.
Accordingly, the New Subsidiary Guarantor agrees as follows:
Section 1. In accordance with Section 6 of the Conemaugh Subsidiary
Guaranty, the New Subsidiary Guarantor by its signature below becomes a
Subsidiary Guarantor under the Conemaugh Subsidiary Guaranty with the same force
and effect as if originally named therein as a Subsidiary Guarantor and the New
Subsidiary Guarantor hereby agrees to all terms and provisions of the Conemaugh
Subsidiary Guaranty applicable to it as a Subsidiary Guarantor thereunder. Each
reference to a "Subsidiary Guarantor" in the Conemaugh Subsidiary Guaranty shall
be deemed to include the New Subsidiary Guarantor. The Conemaugh Subsidiary
Guaranty is hereby incorporated herein by reference.
Section 2. The New Subsidiary Guarantor represents and warrants to the
Beneficiaries that this Joinder Agreement has been duly authorized, executed and
delivered by it and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms, subject, as to enforcement
of remedies, to applicable bankruptcy, insolvency, reorganization, moratorium
and other similar laws affecting the enforcement of creditor's rights generally,
from time to time in effect.
HOU01:587917.11
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Section 3. Without limiting the generality of the foregoing, the New
Subsidiary Guarantor acknowledges that the Owner Lessor has assigned and granted
a first priority security interest in favor of the Lease Indenture Trustee in
and to all of the Owner Lessor's right, title and interest in, to and under the
Facility Lease (including all Obligations constituting Periodic Lease Rent,
Supplemental Lease Rent (other than with respect to Excluded Property) and
Termination Value) in accordance with the Lease Indenture and the Conemaugh
Subsidiary Guaranty and agrees to be bound by the terms of Section 4 of the
Conemaugh Subsidiary Guaranty.
Section 4. This Joinder Agreement shall become effective when the
Owner Lessor shall have received a counterpart of this Joinder Agreement that
bears the signature of the New Subsidiary Guarantor. Delivery of an executed
signature page of this Joinder Agreement by facsimile transmission shall be as
effective as delivery of a manually signed counterpart of this Joinder
Agreement. The New Subsidiary Guarantor shall promptly deliver an original
counterpart to each Beneficiary.
Section 5. This Joinder Agreement shall be in all respects governed by
and construed in accordance with the laws of the State of New York, including
all matters of construction, validity and performance (without giving effect to
the conflicts of laws provisions, other than New York General Obligations Law
Section 5-1401).
Section 6. All communications and notices hereunder shall be in
writing and given as provided in Section 9.2 of the Conemaugh Subsidiary
Guaranty. All communications and notices hereunder to the New Subsidiary
Guarantor shall be given to it at the address set forth under its signature
hereto.
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IN WITNESS WHEREOF, the New Subsidiary Guarantor has duly executed this
Joinder Agreement to the Conemaugh Subsidiary Guaranty as of the day and year
first above written.
[Name of New Subsidiary Guarantor],
By:
-----------------------------------
Name:
Title:
Address:
3
