EXHIBIT 10.12
UNDERTAKING TO COMPLY WITH CERTAIN PROVISIONS OF OPTION AGREEMENT
This Undertaking (this "Undertaking") is entered into as of August 31, 2002
by Texas Genco Holdings, Inc., a Texas corporation ("Genco").
WHEREAS, Reliant Energy, Incorporated, a Texas corporation ("REI"), and
Reliant Resources, Inc., a Delaware corporation ("Resources"), are parties to
the Texas Genco Option Agreement dated as of December 31, 2000 and the First
Amendment to Texas Genco Option Agreement dated as of January __, 2002
(collectively, the "Option Agreement") (capitalized terms used and not defined
herein have the meanings assigned to them in the Option Agreement);
WHEREAS, pursuant to an Agreement and Plan of Merger dated as of October
19, 2001, among REI, CenterPoint Energy, Inc., a Texas corporation ("CenterPoint
Energy"), and Reliant Energy MergerCo, Inc., a Texas corporation and an indirect
wholly owned subsidiary of CenterPoint Energy ("MergerCo"), MergerCo will be
merged with and into REI (the "Merger"), with REI to be the surviving
corporation, as a result of which, at the effective time of the Merger each
share of common stock, without par value, of REI will be converted into one
share of CenterPoint Energy's common stock and REI will become an indirect
wholly owned subsidiary of CenterPoint Energy;
WHEREAS, concurrently with the Merger, REI will (i) distribute the capital
stock of all of its subsidiaries, other than certain financing subsidiaries, to
CenterPoint Energy (the "Stock Distribution") and (ii) convey the Genco Assets
to Texas Xxxxx, XX, a Texas limited partnership;
WHEREAS, pursuant to the Option Agreement, REI has granted to Resources the
Genco Option;
WHEREAS, Article VII of the Option Agreement provides that REI shall cause
Genco to execute and deliver an undertaking in favor of Resources to observe and
comply with the covenants set forth in that Article;
NOW, THEREFORE, in consideration of the foregoing, and for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Genco hereby agrees as follows:
1. Undertaking. Genco undertakes, on and after the Genco Organization
Date, to observe and comply with the covenants expressed as obligations of
Genco set forth in:
a. Sections 3.6 (regarding prohibitions on market activity in
Genco Common Stock), 3.7 (regarding dividends and other distributions
with respect to Genco
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Common Stock) and 3.8 (regarding certain prohibited commitments without prior
consultation with and the consent of Resources) of the Option Agreement; and
b. Article VII of the Option Agreement, each as it may be amended
from time to time in accordance therewith.
2. Miscellaneous. THIS UNDERTAKING SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD FOR THE
CONFLICTS OF LAWS PRINCIPLES THEREOF. This Undertaking is made in favor of
Resources and is entered into by Genco for the express benefit of
Resources.
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IN WITNESS WHEREOF, the undersigned has caused this Undertaking to be
executed by its duly authorized officer as of the date first above written.
TEXAS GENCO HOLDINGS, INC.
By: /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title: Vice President
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