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Limited Guaranty Dated September

This is an actual contract between Cogeneration Corp. of America and NRG Energy,.

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Sectors: Utilities, Services
Governing Law: Minnesota, View Minnesota State Laws
Effective Date: September 19, 1997
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Exhibit 10.27.17


Limited Guaranty


This Limited Guaranty (this "Guaranty") is made on this 19th day of September, 1997, by NRG Energy, Inc., a Delaware corporation, with its principal offices located at 1221 Nicollet Mall, Minneapolis, Minnesota (the "Guarantor") for the benefit of NRG (Morris) Cogen, LLC, a Delaware limited liability company with its principal offices located at 1221 Nicollet Mall, Minneapolis, Minnesota (the "Principal"). Guarantor and Principal are sometimes collectively referred to as the "Parties" and individually as a "Party."


R E C I T A L S


WHEREAS, Principal is in the process of developing a nominal 117 megawatt gas-fired cogeneration project (the "Project") at the Morris, Illinois, chemical production facility owned by Millennium Petrochemicals Inc.; and


WHEREAS, Principal intends to contract with NRG Morris Operations Inc. (the "Operator"), an affiliate of Guarantor, pursuant to that certain Operation and Maintenance Agreement dated as of September 19, 1997 (the "O&M Agreement") for the operation and maintenance of the Project; and


WHEREAS, in order to induce Principal to enter into the Operation and Maintenance Agreement with Operator, Guarantor is prepared to provide a limited guaranty of certain of Operator's obligations thereunder; and


WHEREAS, Principal acknowledges that this is a limited guaranty of Operator's obligations based on the terms set out herein; and


WHEREAS, unless otherwise defined, capitalized terms used herein shall have the meanings ascribed to such terms in the O&M Agreement;


NOW, THEREFORE, in consideration of the O&M Agreement between Principal and Operator and the covenants of the Parties contained herein, Guarantor hereby covenants with Principal as follows:


1. Scope and Effective Date of Guaranty. Guarantor hereby
guaranties to Principal the payment by Operator when
due of up to a maximum of one million two hundred
thousand dollars ($1,200,000) in liquidated damages
potentially owed by Operator to Principal under
Sections 8.1 and/or 8.2 of the O&M Agreement (the
"Guarantied Obligations"). No more than four hundred
thousand dollars ($400,000) of such damages shall be
guarantied by Guarantor in any Operating Year. No
other obligations of Operator under the O&M Agreement
are covered by this Guaranty. This Guaranty shall
become effective and enforceable upon the Effective
Date under the O&M Agreement.


2. Failure of Operator to pay Liquidated Damages. If
Operator (unless relieved from its obligation to pay
liquidated damages under Sections 8.1 and/or 8.2 of the
O&M Agreement by statute or by the decision of an
arbitration panel or tribunal of competent
jurisdiction) shall in any respect fail to pay
liquidated damages owed to Principal under Sections 8.1
and/or 8.2 of the O&M Agreement, then Guarantor will,
upon receipt of notice that such damages are due and of
Operator's failure to pay same, pay such amounts, up to
a maximum of four hundred thousand dollars ($400,000)
in any Operating Year, and up to a maximum of one
million two hundred thousand dollars ($1,200,000)
during the term of the O&M Agreement. Payment shall be
by wire transfer in immediately available funds to an
account designated by Principal, or Principal's Lender.
Payment will be made within ten (10) Business Days of
receipt of notice by Guarantor or in the event that
Operator disputes such damages, within ten (10)
Business Days of a final decision of the arbitration
panel established pursuant to Article XIII of the O&M
Agreement. In the event Operator disputes such
damages, and pursues dispute resolution proceedings
pursuant to such Article XIII with due diligence,
Guarantor shall have no obligation to Principal until
the final decision of the arbitration panel is issued.


3. Modifications to the O&M Agreement. The Guarantor
shall not be discharged or released from, and its
liability shall not be affected under this Guaranty, by
any arrangement which may be made between Operator and
the Principal or by any forbearance by the Principal
whether as to payment, time of performance or by
anything else which might otherwise have any such
effect at law or in equity. Operator is expressly
authorized to amend, supplement, or otherwise modify
the O&M Agreement, waive compliance by the Principal
with the terms thereof, and settle or compromise any of
the Guarantied Obligations without notice to the
Guarantor, and without in any manner affecting the
absolute liabilities of the Guarantor hereunder.


4. Nature of Guaranty. This Guaranty is an absolute,
unconditional, irrevocable and continuing guaranty of
payment of the Guarantied Obligations, and the
obligations of the Guarantor hereunder shall not be
released, in whole or in part, by any action or thing
which might, but for this provision of this Guaranty,
be deemed a legal or equitable discharge of a surety or
guarantor, other than irrevocable payment in full of
the Guarantied Obligations. No notice of the
Guarantied Obligations to which this Guaranty may
apply, or any renewal or extension thereof, need be
given to the Guarantor, and none of the foregoing acts
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