GUARANTEE,
dated as of February 28, 2009 (this “ Guarantee
”), by NRG Energy, Inc., a Delaware corporation (the “
Guarantor ”), in favor of Reliant Energy, Inc., a
Delaware corporation (the “ Guaranteed Party ”
and together with the Guarantor, the “ Parties
”, and each a “ Party ”). Capitalized
terms used but not defined herein shall have the meaning ascribed
to them in the Purchase Agreement (as hereinafter
defined).
1.
GUARANTEE . To induce the Guaranteed Party to
(i) enter into (x) an LLC Membership Interest Purchase
Agreement, dated as of the date hereof (as amended, restated,
supplemented or otherwise modified from time to time, the “
Purchase Agreement ”; capitalized terms used but not
defined herein shall have the meaning ascribed to them in the
Purchase Agreement) by and among NRG Retail LLC, a Delaware limited
liability company and a wholly-owned subsidiary of the Guarantor
(“ Acquisition Sub ”), and the Guaranteed Party,
pursuant to which Acquisition Sub will purchase and take assignment
and delivery from the Guaranteed Party of the Company Interests,(y)
the Transition Services Agreement and (z) the Integration
Planning Agreement and (ii) cause Reliant Energy Corporate
Services, LLC to enter into the Sublease Agreement referred to in
Section 3.2(k) of the Purchase Agreement with RERR (all such
documents and agreements, together with the Purchase Agreement,
collectively, the “ Guaranteed Agreements ”)
Guarantor, intending to be legally bound, and for sufficient and
appropriate consideration, the receipt of which is hereby
acknowledged, hereby absolutely, irrevocably and unconditionally,
guarantees to the Guaranteed Party the due and punctual observance,
payment, performance and discharge of payment when due of any and
all obligations of Acquisition Sub to the Guaranteed Party that may
arise, from time to time, pursuant to the terms and conditions set
forth in the Guaranteed Agreements (each, an “
Obligation ” and collectively, the “
Obligations ”). Without limiting the foregoing,
Guarantor hereby agrees to (A) cause Acquisition Sub to comply
with the Guaranteed Agreements and (B) pay and perform each
and every Obligation, and further agrees that if Acquisition Sub
shall in any respect commit any breach of, or fail to timely
fulfill any of the terms of, any Guaranteed Agreement, then
Guarantor shall promptly perform and fulfill each and every term of
the Guaranteed Agreements which has not been performed and
fulfilled by the Acquisition Sub. All payments hereunder shall be
made in lawful money of the United States, in immediately available
funds. The Guarantor promises and undertakes to make all payments
hereunder free and clear of any deduction, offset, defense, claim
or counterclaim of any kind (other than defenses to the payment of
the Obligations that are available to Acquisition Sub or its
Affiliates under the applicable terms of the Guaranteed Agreements
) . From and after the Closing for the purposes of
this Guarantee, (A) with respect to the Obligations pursuant to the
Transition Services Agreement, the term “Acquisition
Sub” shall also be deemed to mean Reliant Energy Retail
Holdings, LLC and (B) with respect to the Obligations pursuant
to the Sublease Agreement referred to in Section 3.2(k) of the
Purchase Agreement, the term “Acquisition Sub” shall
also be deemed to mean RERR.
If Acquisition Sub
is in breach of its Obligations beyond any applicable cure or grace
periods, then the Guaranteed Party may at any time and from time to
time, at the Guaranteed Party’s option, and so long as
Acquisition Sub remains in breach of its Obligations, take any and
all actions available hereunder or under applicable Law to collect
on and enforce the Guarantor’s liabilities and obligations
hereunder in respect of such Obligations.
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Subject to and in
furtherance of the foregoing, the Guarantor acknowledges that the
Guaranteed Party may, in its sole discretion, bring and prosecute a
separate action or actions against the Guarantor for the full
amount of the Obligations then due and owing pursuant to the terms
hereof, regardless of whether any action is brought against
Acquisition Sub or whether Acquisition Sub is joined in any such
action or actions.
2.
NATURE OF GUARANTEE . The Guarantor’s liability
hereunder is absolute, unconditional, irrevocable and continuing
irrespective, without limitation, of (a) any lack of validity
or enforceability of any Guaranteed Agreement or (b) any
modification, amendment or waiver of, or any consent to departure
from, any Guaranteed Agreement that may be agreed to by Acquisition
Sub (even if the Obligations are expanded or extended thereby).
Without limiting the foregoing, the Guaranteed Party shall not be
obligated to file any claim relating to the Obligations in the
event that Acquisition Sub becomes subject to a bankruptcy,
reorganization or similar proceeding, and the failure of the
Guaranteed Party to so file shall not affect the Guarantor’s
obligations hereunder. In the event that any payment to the
Guaranteed Party in respect of the Obligations is rescinded or must
otherwise be returned for any reason whatsoever, the Guarantor
shall remain liable hereunder with respect to such Obligations as
if such payment had not been made. This Guarantee is an
unconditional and continuing guarantee of payment and performance
of the Obligations and not of collection of the
Obligations.
3.
CHANGES IN OBLIGATIONS, CERTAIN WAIVERS .
(a) The
Guarantor agrees that the Guaranteed Party may at any time and from
time to time, without notice to or further consent of the
Guarantor, extend the time of payment or performance of any of the
Obligations (provided that any amendment to any Guaranteed
Agreement shall be subject to the written consent of Acquisition
Sub), and may also make any agreement with Acquisition Sub for the
extension, renewal, payment, compromise, discharge or release
thereof, in whole or in part, without in any way impairing or
affecting such Guarantor’s obligations under this Guarantee.
The Guarantor agrees that the obligations of the Guarantor
hereunder shall not be released or discharged, in whole or in part,
or otherwise affected by (i) the failure or delay on the part
of the Guaranteed Party to assert any claim or demand or to enforce
any right or remedy against Acquisition Sub; (ii) any change
in the time, place or manner of payment of any of the Obligations
or any rescission, waiver, compromise, consolidation or other
amendment or modification of any of the terms or provisions of any
Guaranteed Agreement that may be agreed to by Acquisition Sub or
any agreement evidencing, securing or otherwise executed in
connection with any of the Obligations (even if the Obligations are
expanded or extended thereby); (iii) any change in the time,
place or manner of payment of any of the Obligations or any
rescission, waiver, compromise, consolidation, forbearance or other
similar modification of any of the terms or provisions of any
Guaranteed Agreement that may be granted by the Guaranteed Party
(even if the Obligations are extended thereby); (iv) the
addition, substitution or release of any entity or other Person
interested in the transactions contemplated by any Guaranteed
Agreement; (v) any change in the corporate existence,
structure or ownership of Acquisition Sub or any other Person
interested in the transactions contemplated by any Guaranteed
Agreement; (vi) any insolvency, bankruptcy, reorganization or
other similar proceeding affecting Acquisition Sub or any other
Person interested in the transactions
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contemplated by
any Guaranteed Agreement; (vii) the existence of any claim,
set-off or other right which the Guarantor may have at any time
against Acquisition Sub or the Guaranteed Party, whether in
connection with the Obligations or otherwise (other than defenses
to the payment of the Obligations that are available to Acquisition
Sub) under any Guaranteed Agreement); (viii) the adequacy of
any means the Guaranteed Party may have of obtaining payment or
performance related to the Obligations; (ix) any termination
of or change in any relationship between the Guarantor and the
Acquisition Sub, including any such termination or change resulting
from a change in the ownership of the Guarantor or the Acquisition
Sub, or from the cessation of any commercial or legal relationship
between the Guarantor and the Acquisition Sub; (x) any failure
to notify the Guarantor of any events or circumstances relating to
or arising from the Guaranteed Agreements or (xi) any other
defense relating to the obligations of a surety or guarantor. To
the fullest extent permitted by Law the Guarantor hereby expressly
waives any and all rights or defenses arising by reason of any Law
which would otherwise require any election of remedies by the
Guaranteed Party. The Guarantor waives promptness, diligence,
notice of the acceptance of this Guar
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