EXHIBIT 10.2
 
Contribution Agreement
(Toshiba)
By and Between
Toshiba Corporation
And
NRG Nuclear Development Company LLC
**
 

      **   This Portion has been redacted pursuant to a confidential treatment
request.

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

                 
ARTICLE I
           
DEFINITIONS
           
 
        1.1  
Definitions
    1   1.2  
Construction
    1      
 
           
ARTICLE II
           
CONTRIBUTION
           
 
        2.1  
Contribution by Toshiba
    2      
 
           
ARTICLE III
           
CLOSING
           
 
        3.1  
Closing
    2   3.2  
Closing Conditions
    2   3.3  
Closing Deliveries
    4   3.4  
Completion of Due Diligence
    6      
 
           
ARTICLE IV
           
REPRESENTATIONS AND WARRANTIES OF TOSHIBA
           
 
        4.1  
Organization; Power of Authority
    6   4.2  
Execution and Delivery
    6   4.3  
Non-Contravention
    6   4.4  
Brokers, Finders and Investment Bankers
    7      
 
           
ARTICLE V
           
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
           
 
        5.1  
Organization; Power of Authority
    7   5.2  
Execution and Delivery
    7   5.3  
Non-Contravention
    7   5.4  
Brokers, Finders and Investment Bankers
    8   5.5  
Legal Proceedings
    8   5.6  
NRG Contribution Agreement
    8      
 
           
ARTICLE VI
           
ADDITIONAL AGREEMENTS AND COVENANTS
           
 
        6.1  
Capital Calls
    8   6.2  
Transaction Costs
    8   6.3  
Indemnifications by Toshiba
    8   6.4  
Indemnifications by the Company
    9   6.5  
Indemnification Procedure
    9   6.6  
Liability Limits
    11   6.7  
Exclusive Remedy
    11   6.8  
Consequential Damages
    11   6.9  
Termination
    12  

Contribution Agreement
(Toshiba)
Table of Contents

i 

--------------------------------------------------------------------------------

 

                 
 
           
ARTICLE VII
           
GENERAL
           
 
        7.1  
Successors and Assigns
    12   7.2  
Amendments
    12   7.3  
No Merger
    13   7.4  
Further Assurances
    13   7.5  
Notices
    13   7.6  
Entire Agreement
    14   7.7  
Governing Law
    14   7.8  
Dispute Resolution
    14   7.9  
Severability
    14   7.10  
Counterparts
    14   7.11  
Remedies
    15  

EXHIBITS

         
A
  -   Defined Terms
B
  -   Company LLC Agreement
C
  -   Arbitration Procedures

Contribution Agreement
(Toshiba)
Table of Contents

ii 

--------------------------------------------------------------------------------

 

SCHEDULES

     
Schedule 4.3
  Toshiba Non-Contravention
Schedule 5.3
  Company Non-Contravention
Schedule 5.5
  Legal Proceedings

Contribution Agreement
(Toshiba)
Table of Contents

iii 

--------------------------------------------------------------------------------

 

GLOSSARY OF DEFINED TERMS
The page or Exhibit location of the definition of each capitalized term used in
this Agreement is set forth in this Glossary:

      Affiliate  
Exhibit A
Agreement  
1
Arbitration Notice  
Exhibit C
Arbitrator  
Exhibit C
Basket Amount  
11
Business Day  
Exhibit A
CFIUS  
4
Charter Documents  
Exhibit A
Claim  
9
Closing  
2
Closing Date  
2
Company  
1
Company LLC Agreement  
5
Company Parties  
8
Contributing Parties  
9
CPR  
Exhibit C
Dispute  
Exhibit C
Disputing Party  
Exhibit C
Effective Date  
1
Exon-Florio  
4
Genco  
1
Governmental Authority  
Exhibit A
Indemnified Party  
9
Indemnifying Party  
9
Knowledge of the Company  
Exhibit A
Law  
Exhibit A
Litigation Counsel  
9
Losses  
Exhibit A
NRC  
Exhibit A
NRG  
2
NRG Contribution Agreement  
1
Participation Agreement  
Exhibit A
Parties  
1
Party  
1
Person  
Exhibit A
Project Land  
Exhibit A
Rules  
Exhibit C
SEO  
Exhibit C
South Texas  
1
South Texas Plant Site  
Exhibit A
South Texas Project  
Exhibit A
ST3&4 Project  
Exhibit A
Toshiba  
1
Toshiba Member  
Exhibit A
Transaction Documents  
Exhibit A
Tribunal  
Exhibit C

Contribution Agreement
(Toshiba)
Table of Contents

 

--------------------------------------------------------------------------------

 

CONTRIBUTION AGREEMENT
(Toshiba)
     This CONTRIBUTION AGREEMENT (Toshiba) (this “Agreement”) is made as of **
(the "Effective Date”), by and between Toshiba Corporation, a Japanese
corporation (“Toshiba”) and NRG Nuclear Development Company LLC, a Delaware
limited liability company (the “Company”). Toshiba and the Company are
individually referred to herein as a “Party” and collectively as the “Parties.”
RECITALS
     WHEREAS, Texas Genco Holdings, Inc. (“Genco”), a Texas corporation, and NRG
South Texas LP, a Texas limited partnership (“South Texas”) pursuant to a
Contribution Agreement (NRG) ** (the “NRG Contribution Agreement”) have agreed
to contribute to the Company certain development rights related to the
development of additional nuclear generation facilities on the Project Land, as
well as certain intangibles related to the nuclear energy generation industry
and other rights and assets, as more fully described in the NRG Contribution
Agreement (the “Contributed Assets”); and
     WHEREAS, the Parties desire to enter into this Agreement to evidence the
agreement of Toshiba to contribute (directly or indirectly through the Toshiba
Member) cash to the Company on the terms hereof.
     NOW, THEREFORE, in consideration of the premises, the agreements and mutual
covenants contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties agree as
follows:
AGREEMENTS
ARTICLE I
DEFINITIONS
     1.1 Definitions. In addition to the terms defined in the body of this
Agreement, capitalized terms used herein shall have the meanings given to them
in Exhibit A. The Glossary of Defined Terms, which follows the Table of
Contents, sets forth the location in this Agreement of the definition for each
capitalized term used herein.
     1.2 Construction. Unless the context requires otherwise: (a) the gender (or
lack of gender) of all words used in this Agreement includes the masculine,
feminine, and neuter; (b) each reference to an Article or Section refers to such
Article or Section of this Agreement; (c) each reference to a Schedule or an
Exhibit refers to such Schedule or Exhibit attached to this Agreement, which is
made a part hereof for all purposes; (d) each reference to a Law refers to
 

**   This Portion has been redacted pursuant to a confidential treatment
request.

Contribution Agreement
(Toshiba)

1

--------------------------------------------------------------------------------

 

such Law as it may be amended from time to time, and each reference to a
particular provision of a Law includes any corresponding provision of any
succeeding Law; (e) the word “including” means “including, but not limited to”;
and (f) each reference to money refers to the legal currency of the United
States of America.
ARTICLE II
CONTRIBUTION
     2.1 Contribution by Toshiba. Subject to and in accordance with the terms
and conditions of this Agreement, at the Closing, Toshiba shall (a) contribute
to the Company the Toshiba Initial Contribution (as defined in the Company LLC
Agreement) of $50,000,000 and (b) be committed to contribute the subsequent cash
investments of an additional $250,000,000 (for an aggregate investment of
$300,000,000) described in Section 6.1 in exchange for 12% of the “Class A
Membership Units” and 12% of the “Class B Membership Units” of the Company to be
obtained by Toshiba or the Toshiba Member (as applicable) on execution of, and
pursuant to the terms of, the Company LLC Agreement.
ARTICLE III
CLOSING
     3.1 Closing. The consummation of the actions described in Article II (the
“Closing”) shall be held at a location selected by the Parties, or if not
otherwise selected at the offices of South Texas at 1301 McKinney, Suite 2300,
Houston, Texas 77010 on a date that is five (5) Business Days after satisfaction
of the conditions set forth in Section 3.2, other than those that can only be
satisfied as of the Closing Date (or such other date as the Parties may agree in
writing) (the “Closing Date”) and shall be deemed to have occurred at
11:59 p.m., central daylight time.
     3.2 Closing Conditions. The obligation of each of the Parties to proceed
with the Closing is subject to the following:

  (a)   Toshiba shall have completed its review and due diligence of the ST3&4
Project and the Contributed Assets and confirm the valuations implied by the
transactions contemplated by this Agreement and shall not have timely provided
to the Company in writing the notice contemplated by Section 3.4 that the
foregoing conditions have not been satisfied;     (b)   the Contributed Assets
shall have been contributed to the Company in accordance with the terms of the
NRG Contribution Agreement and there shall:

  (i)   be no then existing defaults by any party to the NRG Contribution
Agreement, or     (ii)   have been no breaches of any of the representations and
warranties of any party to the NRG Contribution Agreement;

Contribution Agreement
(Toshiba)

2

--------------------------------------------------------------------------------

 

  (c)   there shall exist no agreements between (i) the Company and (ii) NRG
Energy, Inc. (“NRG”) or any Affiliates of NRG, other than this Agreement, the
NRG Contribution Agreement and any other agreement expressly consented to by
Toshiba in writing;     (d)   Toshiba and the Toshiba Member (if applicable)
shall have received a certificate, dated as of the Closing Date and duly
executed by an officer of each of NRG and the Company as to the foregoing
Section 3.2(c);     (e)   Toshiba and the Toshiba Member (if applicable) shall
have received a certificate, dated as of the Closing Date and duly executed by
an officer of each of NRG and the Company that there:

  (i)   have been no amendments or modifications to the NRG Contribution
Agreement by the parties thereto that would represent a breach of the
representation and warranty set forth in Section 5.6 of this Agreement; and    
(ii)   have been no express or implied waivers of the NRG Contribution Agreement
by any party thereto,

      except in each case of (i) and (ii) those consented to by Toshiba;     (f)
  the accuracy in all material respects of the representations and warranties
hereunder of the other Party hereto and the compliance by such other Party with
its material obligations hereunder;     (g)   the obtaining of all approvals and
consents set forth on Schedule 4.3 or 5.3, or with respect to such matters that
under the applicable Law do not require consent but require that the Parties
wait an amount of time prior to the Closing, the passage of the applicable
amount of time;     (h)   there shall be no effective injunction, writ or
preliminary restraining order or any order of any nature issued by a
Governmental Authority of competent jurisdiction to the effect that the
transactions contemplated hereby may not be consummated, no proceeding or
lawsuit shall have been commenced by any Governmental Authority for the purpose
of obtaining any such injunction, writ or preliminary restraining order and no
written notice shall have been received from any Governmental Authority
indicating an intent to restrain, prevent, materially delay or restructure the
transactions contemplated hereby, in each case where the Closing would (or would
be reasonably likely to) result in a material fine or penalty payable by a Party
or a material restriction on a Party’s operations as a result of such matter;

Contribution Agreement
(Toshiba)

3

--------------------------------------------------------------------------------

 

  (i)   The Company and Toshiba shall have agreed on the provisions of, and the
Company shall have adopted, a management and employee profit participation
incentive plan;     (j)   The Company ** shall have agreed with Toshiba in
writing on an interest **rate for the **;     (k)   The Parties shall have
submitted to the Committee on Foreign Investment in the United States of America
(“CFIUS”) a joint notification under the Exon-Florio Amendment to the Defense
Production Act of 1950 (“Exon-Florio”) and any other submissions under
Exon-Florio that are required to be made in connection with this Agreement and
the transactions contemplated hereby as soon as practicable following the
execution of this Agreement, and CFIUS shall have notified the Parties in
writing that a determination has been made that there are no issues of national
security sufficient to warrant investigation under Exon-Florio, or, if
applicable, the President of the United States of America shall have made a
decision not to block the transaction;     (l)   no fewer than 31 calendar days
shall have elapsed from the Effective Date; and     (m)   NRG and Toshiba shall
have agreed on:

  (i)   with respect to the budget for the Company for the twenty-four
(24) months following the Closing, to be attached as Exhibit D to the Company
LLC Agreement, (A) prior to March 31, 2008, the general and administrative
portion of such budget and (B) the remaining portion of such budget; and    
(ii)   the percentage margin over project costs (other than profit, contingency
and general and administrative costs) that will cover collectively profit and
contingency in the EPC contract for the ST3&4 Project no later than May 2, 2008;
provided, however, the parties will work in good faith to reach agreement as
early as March 31, 2008. For the avoidance of doubt, the percentage margin will
not cover general and administrative costs.

  3.3   Closing Deliveries. (a) At the Closing, Toshiba or the Toshiba Member
(as applicable) shall execute and deliver, as applicable, to the Company the
following documents, where the execution or delivery of documents is

 

**   This portion has been redacted pursuant to a confidential treatment
request.

Contribution Agreement
(Toshiba)

4

--------------------------------------------------------------------------------

 

      contemplated, and shall take or cause to be taken the following actions,
where the taking of action is contemplated:

  (i)   The Toshiba Initial Contribution paid to the Company by wire transfer of
immediately available funds to an account of the Company specified in writing by
the Company at least 5 Business Days prior to the Closing Date;     (ii)   The
Amended and Restated Operating Agreement of the Company in the form of Exhibit B
(the “Company LLC Agreement”), duly executed by Toshiba or the Toshiba Member
(as applicable);     (iii)   A certificate, duly executed by authorized officer
of Toshiba, certifying to the Company the truth as of the Closing of the
representations and warranties of such entity as set forth in Article IV hereof;
and     (iv)   Such other instruments and documents as are reasonably necessary
to effect the transactions contemplated hereby to occur at Closing.

  (b)   At the Closing, the Company shall execute and deliver, as applicable, to
Toshiba the following documents, where the execution or delivery of documents is
contemplated, and shall take or cause to be taken the following actions, where
the taking of action is contemplated:

  (i)   The Company LLC Agreement, duly executed by each member of the Company
that is an Affiliate of Genco;     (ii)   A certificate, duly executed by
authorized officer of the Company, certifying to Toshiba the truth as of the
Closing of the representations and warranties of such entity as set forth in
Article V hereof; and     (iii)   Such other instruments and documents as are
reasonably deemed necessary to effect the transactions contemplated hereby to
occur at Closing.

Contribution Agreement
(Toshiba)

5

--------------------------------------------------------------------------------

 

     3.4 Completion of Due Diligence. Toshiba shall undertake and complete its
review of the matters described in Section 3.2(a) such that it shall provide to
the Company on or before March 31, 2008 either (a) a notice in writing that the
condition in Section 3.2(a) has been satisfied, or (b) a notice that it is not
satisfied, in Toshiba’s sole discretion, with the results of its review of the
materials. If a notice is not timely sent under (a) or (b) above, then Toshiba
will be deemed to have given the notice under (b) above.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF TOSHIBA
     Toshiba hereby represents and warrants to the Company as of the date hereto
and as of the Closing as follows (provided that such representations and
warranties regarding the Toshiba Member shall only be made and deemed given if
Toshiba invests in the Company through the Toshiba Member):
     4.1 Organization; Power of Authority. Each of Toshiba and the Toshiba
Member is (or, in the case of the Toshiba Member, shall be prior to Closing)
duly formed (as applicable), validly existing, and (if applicable) in good
standing under the Law of the jurisdiction of its formation. If required by
applicable Law, each of Toshiba and the Toshiba Member is (or, in the case of
the Toshiba Member, shall be prior to Closing) duly qualified and (if
applicable) in good standing in the jurisdiction of its principal place of
business, if different from its jurisdiction of formation, and Toshiba and the
Toshiba Member has (or, in the case of the Toshiba Member, shall have prior to
Closing) full power and authority to execute and deliver this Agreement and the
other Transaction Documents, in each case to which it is contemplated to be a
party, and to perform its obligations hereunder and thereunder, and all
necessary actions by the board of directors, shareholders, managers, members,
partners, trustees, or beneficiaries, necessary for the due authorization,
execution, delivery, and performance of this Agreement and the other Transaction
Documents (in each case to which it is contemplated to be a party) have been
duly taken.
     4.2 Execution and Delivery. Toshiba has duly executed and delivered this
Agreement, and it constitutes the legal, valid and binding obligation of Toshiba
enforceable against it in accordance with its terms (except as may be limited by
bankruptcy, insolvency or similar Laws of general application and by the effect
of general principles of equity, regardless of whether considered at law or in
equity).
     4.3 Non-Contravention. Each of Toshiba’s and the Toshiba Member’s
authorization, execution, delivery, and performance of this Agreement and the
other Transaction Documents to which it is contemplated to be a party does not
and will not (a) conflict with, or result in a breach, default or violation of,
(i) the Charter Documents of Toshiba or the Toshiba Member, (ii) any contract or
agreement to which Toshiba or the Toshiba Member is a party or is otherwise
subject or (iii) any Law to which Toshiba or the Toshiba Member is subject or
(b) require any consent, approval or authorization from, filing or registration
with, or notice to, any Governmental Authority or other Person, unless in each
case such requirement has already been satisfied or such matter is set forth in
Schedule 4.3, except (other than with respect to clause
Contribution Agreement
(Toshiba)

6

--------------------------------------------------------------------------------

 

(a)(i)) any conflict, breach, default or violation that could not reasonably be
expected to have a material adverse effect on the ability of Toshiba or the
Toshiba Member to perform its obligations under this Agreement or any
Transaction Document to which it is contemplated to be a party.
     4.4 Brokers, Finders and Investment Bankers. Neither Toshiba nor any of its
Affiliates, nor any of their respective partners, members, shareholders,
directors, officers or employees has employed or retained any broker, finder or
investment banker or incurred any liability for any investment banking fees,
financial advisory fees, brokerage fees or finders’ fees in connection with the
transactions contemplated hereby, in each case for which the Company has
liability.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
     The Company hereby represents and warrants to Toshiba as of the date hereof
and as of the Closing as follows:
     5.1 Organization; Power of Authority. The Company is duly formed, validly
existing, and in good standing under the Law of the jurisdiction of its
formation. If required by applicable Law, the Company is duly qualified and in
good standing in the jurisdiction of its principal place of business, if
different from its jurisdiction of formation, and the Company has full power and
authority to execute and deliver this Agreement and the other Transaction
Documents and to perform its obligations hereunder and thereunder, and all
necessary actions by the board of directors, shareholders, managers, members,
partners, trustees, or beneficiaries, necessary for the due authorization,
execution, delivery, and performance of this Agreement and the other Transaction
Documents by the Company have been duly taken.
     5.2 Execution and Delivery. The Company has duly executed and delivered
this Agreement, and it constitutes the legal, valid and binding obligation of
the Company enforceable against it in accordance with its terms (except as may
be limited by bankruptcy, insolvency or similar Laws of general application and
by the effect of general principles of equity, regardless of whether considered
at law or in equity).
     5.3 Non-Contravention. The Company’s authorization, execution, delivery,
and performance of this Agreement and the other Transaction Documents does not
and will not (a) conflict with, or result in a breach, default or violation of,
(i) the Charter Documents of the Company, (ii) any contract or agreement to
which the Company is a party or is otherwise subject or (iii) any Law to which
the Company is subject or (b) require any consent, approval or authorization
from, filing or registration with, or notice to, any Governmental Authority or
other Person, unless in each case such requirement has already been satisfied or
such matter is set forth in Schedule 5.3, except, with respect to clause
(a)(ii), any conflict, breach, default or violation that could not reasonably be
expected to have a material adverse effect on the ability of the Company to
perform its obligations under this Agreement or any Transaction Document to
which it is contemplated to be a party.
Contribution Agreement
(Toshiba)

7

--------------------------------------------------------------------------------

 

     5.4 Brokers, Finders and Investment Bankers. Neither the Company nor any of
its Affiliates, nor any of their respective partners, members, shareholders,
directors, officers or employees has employed or retained any broker, finder or
investment banker or incurred any liability for any investment banking fees,
financial advisory fees, brokerage fees or finders’ fees in connection with the
transactions contemplated hereby for which either of the Parties hereto has
liability.
     5.5 Legal Proceedings. Except as set forth on Schedule 5.5, there are no
proceedings pending or, to the Knowledge of the Company, threatened seeking to
restrain, prohibit, or obtain damages or other relief in connection with this
Agreement or the transactions contemplated hereby.
     5.6 NRG Contribution Agreement. A true and current copy of the fully
executed NRG Contribution Agreement and all exhibits and schedules thereto has
been provided to Toshiba. Except for the supplementing or amendment of the
schedules thereto pursuant to Section 7.11 of the NRG Contribution Agreement
that does not result in a Material Adverse Effect (as defined in the NRG
Contribution Agreement), and except for waivers or amendments that have been
provided to, and consented to by, Toshiba prior to the date of the satisfaction
of the conditions set forth in Section 3.2, since such date there has been no
amendment to, or waiver by the Company of, the obligations of Genco and South
Texas under the NRG Contribution Agreement.
ARTICLE VI
ADDITIONAL AGREEMENTS AND COVENANTS
     6.1 Capital Calls. Toshiba shall cause the Toshiba Member to contribute to
the Company the Toshiba Committed Contributions in accordance with the Company
LLC Agreement; provided, however, that the Toshiba Member shall not be obligated
to make aggregate Capital Contributions pursuant to Section 6.2(b) of the
Company LLC Agreement in excess of $150,000,000.00 until the following
conditions are satisfied:

  (a)   Toshiba’s receipt of task orders for layout work on additional ABWR
units on fair market terms; and     (b)   the Company having submitted to the
NRC a written statement of intent to develop additional units using Toshiba ABWR
technology and Toshiba as the EPC contractor.

     6.2 Transaction Costs. Each Party shall bear and pay all of its own costs,
fees and expenses, including any legal fees, brokerage commissions or finders’
fees, if any, incurred by or on its behalf in connection with the transactions
contemplated by this Agreement and the other Transaction Documents.
     6.3 Indemnifications by Toshiba. Subject to the other terms of this
Article VI, Toshiba shall indemnify, defend and hold harmless the Company and
its directors, officers, employees, successors, assigns and representatives
(collectively, “Company Parties”) from and
Contribution Agreement
(Toshiba)

8

--------------------------------------------------------------------------------

 

against any and all Losses arising out of or resulting from (a) the failure of
any of Toshiba’s representations or warranties contained in this Agreement or
the certificates to be delivered at Closing to be true and correct and (b) the
failure of Toshiba to perform any of its covenants or obligations under this
Agreement.
     6.4 Indemnifications by the Company. Subject to the other terms of this
Article VI, the Company shall indemnify, defend and hold harmless Toshiba and
its directors, officers, employees, successors, assigns, and representatives
(collectively, the “Contributing Parties”) from and against any and all Losses
arising out of or resulting from (a) the failure of any of the Company’s
representations or warranties contained in this Agreement or the certificates to
be delivered at Closing to be true and correct or (b) the failure of the Company
to perform any of its covenants or obligations under this Agreement.
     6.5 Indemnification Procedure.

  (a)   Promptly following receipt by either the Company Parties or the
Contributing Parties (each an “Indemnified Party”) of notice by a third party
(including any Governmental Authority) of any complaint or the commencement of
any audit, investigation, action or proceeding (in each case, a “Claim”) with
respect to which such Indemnified Party may be entitled to receive payment from
the other Party for any Loss, such Indemnified Party shall notify Toshiba or the
Company, as the case may be (the “Indemnifying Party”); provided, however, that
the failure to so notify the Indemnifying Party shall relieve the Indemnifying
Party from liability hereunder with respect to such Claim only if, and only to
the extent that, such failure to so notify the Indemnifying Party results in the
loss by the Indemnifying Party of (or other limitations to) rights and defenses
otherwise available to the Indemnifying Party or the Indemnified Party with
respect to such Claim. The Indemnifying Party shall have the right, upon written
notice delivered to the Indemnified Party within twenty (20) days thereafter, to
assume the defense of such Claim (which may be with a reservation of rights to
deny liability under an indemnity), including the employment of counsel hired in
consultation with the Indemnified Party (“Litigation Counsel”) and the payment
of the fees and disbursements of such Litigation Counsel and other costs of such
defense. In the event, however, that the Indemnifying Party declines or fails to
assume the defense of such Claim as provided above or to employ Litigation
Counsel, in either case within such twenty (20) day period, then such
Indemnified Party may employ counsel to represent or defend the Indemnified
Party in any such Claim, and the Indemnifying Party shall promptly reimburse the
Indemnified Party for all reasonable fees and disbursements of such counsel and
other reasonable costs of such defense (which reimbursement obligation shall
accrue from the first dollar of such costs as incurred by the Indemnified
Party). In any event, the Indemnifying Party shall not be required to pay the
fees and disbursements

Contribution Agreement
(Toshiba)

9

--------------------------------------------------------------------------------

 

    of more than one counsel for all Indemnified Parties in any jurisdiction in
connection with such Claim, unless Litigation Counsel determines that continued
representation of the Indemnified Party is inappropriate due to a conflict of
interest under applicable ethical rules resulting from its representation of
both the Indemnifying Party and such Indemnified Party, in which case, the
Indemnifying Party shall have the option of (i) appointing substitute counsel
that does not believe it is subject to such a conflict of interest or
(ii) employing and paying the fees and disbursements of different counsel to
represent such Indemnified Party. Notwithstanding the Indemnifying Party’s
election to assume the defense of any third party Claim, the Indemnified Party
shall have the right at its cost to employ separate counsel (including local
counsel) to monitor (but not control) such defense. The Indemnifying Party or
the Indemnified Party (as the case may be) shall at all times use commercially
reasonable efforts to keep the Indemnifying Party or Indemnified Party (as the
case may be) reasonably apprised of the status of the defense of any matter the
defense of which it is maintaining and to cooperate in good faith with each
other with respect to the defense of any such matter.     (b)   No Indemnified
Party may settle or compromise any Claim or consent to the entry of any judgment
with respect to which indemnification is being sought hereunder without the
prior written consent of the Indemnifying Party, unless (i) the Indemnifying
Party fails to assume and maintain the defense of such Claim pursuant to
Section 6.5(a), (ii) such settlement, compromise or consent does not contain any
admission or statement suggesting any wrongdoing or liability on behalf of the
Indemnifying Party and (iii) such settlement, compromise or consent includes an
unconditional release of the Indemnifying Party and its directors, officers,
employees, successors, assigns and representatives from all liability arising
out of such Claim. An Indemnifying Party may not, without the prior written
consent of the Indemnified Party, settle or compromise any claim or consent to
the entry of any judgment with respect to which indemnification is being sought
hereunder unless such settlement, compromise or consent (x) includes an
unconditional release of the Indemnified Party and its directors, officers,
employees, successors, assigns and representatives from all liability arising
out of such Claim, (y) does not contain any admission or statement suggesting
any wrongdoing or liability on behalf of the Indemnified Party and (z) does not
contain any equitable order, judgment or term that in any material manner
affects, restrains or interferes with the business of the Indemnified Party or
any of the Indemnified Party’s Affiliates.     (c)   If an Indemnified Party
claims a right to payment pursuant hereto, such Indemnified Party shall send
written notice of such Claim to the appropriate Indemnifying Party. Such notice
shall specify the basis for

Contribution Agreement
(Toshiba)

10

--------------------------------------------------------------------------------

 

      such Claim. The failure by any Indemnified Party so to notify the
Indemnifying Party shall not relieve the Indemnifying Party from any liability
that it may have to such Indemnified Party with respect to any Claim made
pursuant to this Section 6.5(c). If the Indemnifying Party agrees it is liable
for such Claim, it shall pay the amount of such liability to the Indemnified
Party **, or, in the case of any notice in which the amount of the Claim (or any
portion of the Claim) is estimated, ** after such later date when the amount of
such Claim (or such portion of such Claim) becomes finally determined. In the
event the Indemnifying Party does not respond to such Claim or disputes its
liability with respect to such Claim, such Indemnified Party and the appropriate
Indemnifying Party shall, as promptly as possible, establish the merits and
amount of such Claim by making good faith efforts to come to an agreement or,
failing** mutual agreement, by the exercise of such legal remedies as may be
available, subject to Sections 6.6, 6.7 and 6.8.

     6.6 Liability Limits. Except as expressly provided in the third sentence of
Section 6.5(a), notwithstanding anything to the contrary set forth herein, in no
event shall there be any liability under Section 6.3(a) or 6.4(a) until the
aggregate amount of all Losses suffered arising from matters covered by the
indemnity contained such Section exceeds ** (the “Basket Amount”). In no event
shall any Company Party or Contributing Party be entitled to assert a claim
under Section 6.3(a) or 6.4(a) (as applicable) unless such Claim is submitted in
compliance with the other procedures of Section 6.5. The liability of the
Indemnifying Party under Section 6.3(a) or 6.4(a) shall not exceed ** No claim
for indemnification may be made under Section 6.3(a) or 6.4(a) if the
Indemnified Party making the claim had actual knowledge of such breach prior to
Closing and elected to consummate the Closing. In determining the amount of any
Losses entitled to indemnification under Article VI, the gross amount thereof
will be reduced by any insurance proceeds actually received by the claimant with
respect to such Losses (net of any related deductibles and self insurance
amounts).
     6.7 Exclusive Remedy. Notwithstanding any other provision of this Agreement
to the contrary or any remedies that might otherwise be available under Law
(other than claims based on fraud), the remedies set forth in this Article VI
and the specific performance remedy referenced in Section 7.11 shall constitute
the sole and exclusive remedies of the Parties hereto (or any assignee of a
Party to which conveyance is made as contemplated in connection herewith) for
any claims arising under this Agreement, the certificates or any other documents
executed pursuant to this Agreement to be delivered at Closing.
     6.8 Consequential Damages. NOTWITHSTANDING ANY PROVISION OF THIS AGREEMENT,
IN NO EVENT SHALL ANY PARTY EVER BE LIABLE TO ANY OTHER PARTY OR THIRD PARTY
WITH RESPECT TO ANY CLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT FOR ANY
LOST OR PROSPECTIVE PROFITS OR ANY OTHER SPECIAL, PUNITIVE, EXEMPLARY,
CONSEQUENTIAL, INCIDENTAL, OR INDIRECT LOSSES OR DAMAGES FROM ITS PERFORMANCE
UNDER THIS AGREEMENT
 

**   This portion has been redacted pursuant to a confidential treatment
request.

Contribution Agreement
(Toshiba)

11

--------------------------------------------------------------------------------

 

OR FOR ANY FAILURE OR PERFORMANCE HEREUNDER OR RELATED HERETO, WHETHER ARISING
OUT OF BREACH OF CONTRACT, NEGLIGENCE, TORT, STRICT LIABILITY, OR OTHERWISE AND
WHETHER OR NOT ARISING FROM ANY OTHER PARTY’S SOLE, JOINT OR CONCURRENT
NEGLIGENCE, STRICT LIABILITY OR OTHER FAULT.
     6.9 Termination. This Agreement may be terminated:

  (a)   by mutual consent in writing of the Parties;     (b)   automatically if
a notice is given pursuant to Section 3.4(b) or such notice is deemed to have
been given;     (c)   by Toshiba at any time on or prior to the date that is 31
calendar days after the Effective Date for any reason or no reason, and in its
sole and absolute discretion;     (d)   by written notice by any Party to the
other Party, as the case may be, in the event the matters described in
Section 3.2(m) have not been agreed in writing on or prior to May 2, 2008; and  
  (e)   by written notice by any Party to the other Party, as the case may be,
in the event the Closing has not occurred on or prior to ** (but such
termination shall not relieve a Party of any default under this Agreement
arising prior thereto).

ARTICLE VII
GENERAL
     7.1 Successors and Assigns. All of the terms, covenants, representations,
warranties and conditions of this Agreement shall be binding upon, and inure to
the benefit of, and be enforceable by, the Parties hereto and their respective
successors and permitted assigns (and in the case of indemnities to the benefit
of all Persons indemnified). This Agreement and the rights and obligations
hereunder shall not be assigned by either Party hereto without the prior written
consent of the other Party, except that either Party may assign an interest in
all of its rights and obligations hereunder to any Affiliate; provided that no
assignment shall relieve a Party of its obligations hereunder. Nothing herein
expressed or implied is intended or shall be construed to confer upon or to give
any Person not a Party any rights or remedies under or by reason of this
Agreement, except for (i) the Company, where so identified in this Agreement,
and (ii) the indemnified parties expressly identified in this Agreement.
     7.2 Amendments. This Agreement may be amended, modified or superseded, and
any of the terms, covenants, representations, warranties or conditions hereof
may be waived, only by a written instrument executed by each of the Parties. No
waiver by either Party of any breach of any term, covenant, representation or
warranty contained in this Agreement, in any one or more instances, shall be
deemed to be or construed as a further or continuing waiver of any
Contribution Agreement
(Toshiba)

12

--------------------------------------------------------------------------------

 

such breach or a waiver of any other breach of any other term, covenant,
representation or warranty.
     7.3 No Merger. Notwithstanding the fact that the Transaction Documents are
not intended to, and do not, contain representations and warranties beyond those
made in this Agreement, the Parties agree that the representations and
warranties of the Parties in this Agreement shall not be extinguished or limited
in any respect by, or be merged into, the Transaction Documents.
     7.4 Further Assurances. Each Party agrees to execute such further
instruments or documents as the other Party may from time to time reasonably
request in order to confirm or carry out the transactions contemplated in this
Agreement; provided that no such instrument or document shall expand a Party’s
liability beyond that contemplated in this Agreement.**
     7.5 Notices. Unless otherwise provided herein, all notices, requests,
consents, approvals, demands and other communications to be given hereunder
shall be in writing and shall be deemed given upon (a) confirmation of receipt
of a facsimile transmission, (b) confirmed delivery by a standard overnight
carrier or when delivered by hand, (c) actual receipt or (d) the expiration of
four Business Days after the day when mailed by registered or certified mail
(postage prepaid, return receipt requested), addressed to the respective Parties
at the following addresses (or such other address for a party hereto as shall be
specified by like notice):
          If to Toshiba, to:
          **
               and to:
               **
          If to the Company, to:
          **
               with a copy to:
               **
Either Party may change its Notice address by giving written notice to the other
in the manner specified above.
 

**   This portion has been redacted pursuant to a confidential treatment
request.

Contribution Agreement
(Toshiba)

13

--------------------------------------------------------------------------------

 

     7.6 Entire Agreement. This Agreement, the other Transaction Documents, the
attached schedules and exhibits and the agreements and documents to be executed
pursuant to this Agreement constitute the entire agreement between the Parties
as of the date of this Agreement and supersede any prior understandings,
agreements, or representations by or between the Parties, written or oral, to
the extent they have related in any way to the subject matter hereof.
     7.7 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF NEW YORK. The foregoing shall not apply
to the conveyance instruments delivered pursuant to this Agreement to the extent
the law of any state in which any particular asset or property is located
mandates that the law of that state apply to the conveyance of the asset or
property located there.
     7.8 Dispute Resolution.

  (a)   Each Party hereby agrees that any dispute, controversy or claim between
the Parties arises under this Agreement or is connected with or related in any
way to this Agreement or any right, duty or obligation arising hereunder or the
relationship of the Parties hereunder may be so submitted to binding arbitration
hereunder and pursuant to the procedures set forth in Exhibit C, and if so
submitted, shall be resolved exclusively and finally through such binding
arbitration. This Section 7.8 and Exhibit C constitute a written agreement by
the Parties to submit to arbitration any Dispute arising under or in connection
with this Agreement within the meaning of the Federal Arbitration Act, 9 U.S.C.
§§ 1, et. seq.     (b)   Prior to the appointment of the arbitration tribunal,
either Party may seek provisional relief, including provisional injunctive
relief, from any court of competent jurisdiction, and the application for such
relief shall not be deemed inconsistent with, or a waiver of, the right to
arbitrate the Dispute. With respect to any such application for provisional
relief, the Parties irrevocably submit to the personal jurisdiction of the state
and federal courts located in Washington, D.C., and waive objection to venue.
Once the arbitration tribunal is appointed, all subsequent applications for
provisional relief shall be made to the arbitration tribunal.

     7.9 Severability. In the event any of the provisions hereof are held to be
invalid or unenforceable under any Law, the remaining provisions hereof shall
not be affected thereby. In such event, the Parties hereto agree and consent
that such provisions and this Agreement shall be modified and reformed so as to
effect the original intent of the Parties as closely as possible with respect to
those provisions which were held to be invalid or unenforceable.
     7.10 Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
shall constitute but one agreement.
Contribution Agreement
(Toshiba)

14

--------------------------------------------------------------------------------

 

     7.11 Remedies. Each Party acknowledges that the remedies at law of the
Parties for a breach or threatened breach of this Agreement would be inadequate
and, in recognition of this fact, either Party, without posting any bond, and in
addition to all other remedies that may be available, shall be entitled to
obtain equitable relief in the form of specific performance, a temporary
restraining order, a temporary or permanent injunction or any other equitable
remedy that may then be available. Notwithstanding Section 7.8, either Party may
seek a temporary restraining order or preliminary injunction from a court of
competent jurisdiction pending mediation or arbitration.
[Remainder of this page intentionally left blank.]
Contribution Agreement
(Toshiba)

15

--------------------------------------------------------------------------------

 

     IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the
date first written above.

            TOSHIBA CORPORATION
      By:   /s/ Hideo Kitamura       Name:   Hideo Kitamura        Title:  
Executive Officer Corporate Vice President President and CEO Power Systems
Company        NRG NUCLEAR DEVELOPMENT COMPANY LLC
      By:   /s/ Steve Winn       Name:   Steve Winn        Title:   President   

Contribution Agreement
(Toshiba)

Signature Page

--------------------------------------------------------------------------------

 

         

EXHIBIT A
Definitions
     “Affiliate” means with respect to an entity, any other entity controlling,
controlled by or under common control with such entity. As used in this
definition, the term “control,” including the correlative terms “controlling,”
“controlled by” and “under common control with,” shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of an entity, whether through ownership of voting
securities, by contract or otherwise.
     “Business Day” means any day other than a Saturday, a Sunday or a day on
which banks in New York, New York or Tokyo, Japan are authorized or required by
law to be closed.
     “Charter Documents” means, with respect to any Person, the articles of
incorporation or association and by-laws, the limited liability company
agreement, or limited partnership agreement or other agreement or agreements
that establish the legal personality of such Person.
     “Governmental Authority” means any federal, state or local governmental
entity, authority or agency, court, tribunal, regulatory commission or other
body, whether legislative, judicial or executive (or a combination or
permutation thereof).
     “Knowledge of the Company” means the actual knowledge of the following
individuals: **
     “Law” means any statute, law, treaty, rule, code, ordinance, regulation,
permit, or certificate of any Governmental Authority, any interpretation of any
of the foregoing by any Governmental Authority, or any binding judgment,
decision, decree, injunction, writ, order or like action of any court,
arbitrator or other Governmental Authority.
     “Losses” means damages, claims, liabilities, losses, costs and expenses
(including reasonable fees and expenses of counsel and court costs).
     “NRC” means the US Nuclear Regulatory Commission.
     “Participation Agreement” means that Amended and Restated South Texas
Project Participation Agreement, effective as of November 17, 1997, between City
of San Antonio, City of Austin and South Texas (as successor in interest to
Central Power and Light Company and Houston Lighting & Power Company).
     “Person” means any natural person, corporation, company, partnership
(general or limited), limited liability company, trust or other entity.
 

**   This portion has been redacted pursuant to a confidential treatment
request.

Contribution Agreement
(Toshiba)

A-1

--------------------------------------------------------------------------------

 

     “Project Land” means the portion of the South Texas Plant Site, which shall
be allocated for the exclusive use of the ST3&4 Project.
     “South Texas Plant Site” has the meaning given such term in the
Participation Agreement.
     “South Texas Project” has the meaning given such term in the Participation
Agreement.
     “ST3&4 Project” means the units 3 and 4 of the South Texas Project
contemplated to be developed by the Company.
     “Toshiba Member” means a wholly-owned direct or indirect subsidiary of
Toshiba through which Toshiba will hold its membership interest in the Company.
     “Transaction Documents” means, collectively, this Agreement, the Company
LLC Agreement, and the Contribution and Assumption Agreement (as defined in the
NRG Contribution Agreement), in each case, as amended, and all certificates and
other documents required to be delivered by the Parties at the Closing.
Contribution Agreement
(Toshiba)

A-2

--------------------------------------------------------------------------------

 

EXHIBIT B
Form of Company LLC Agreement
 

**   This portion has been redacted pursuant to a confidential treatment
request.

Contribution Agreement
(Toshiba)

B-1

--------------------------------------------------------------------------------

 

EXHIBIT C
Arbitration Procedures
     1.1 Disputes. Any and all claims, counterclaims, demands, causes of action,
disputes, controversies, and other matters in question arising out of or
relating to this Agreement, or to the alleged breach hereof, or in any way
relating to the subject matter of this Agreement or the relationship between the
Parties created by this Agreement (whether extra-contractual in nature, sounding
in contract, tort or otherwise, or provided for by federal or state statute,
common law or otherwise) (hereafter a “Dispute”) shall be finally resolved by
binding arbitration under the Non-Administered Arbitration Rules of the
International Institute for Conflict Prevention and Resolution (the “Rules”)
then in force to the extent such Rules are not inconsistent with the provisions
of this Agreement.
     1.2 Negotiation to Resolve Disputes. If a Dispute arises out of or relates
to this Agreement, a Party may give notice to all other Parties that it intends
to initiate the dispute resolution procedures set forth herein. Promptly upon
receipt of such notice, each Party that is a party to the Dispute (each, a
“Disputing Party”) shall refer such Dispute to a senior executive officer
(“SEO”) of each Disputing Party (or of Toshiba’s Power Systems Company, in the
case of Toshiba). The SEOs will meet in person or by teleconference as soon as
mutually practicable in order to try and resolve the Dispute. If the SEOs are
unable to resolve the Dispute on or before the 30th Day after such notice, any
Disputing Party may commence an arbitration under this Appendix B by notifying
each Party (an “Arbitration Notice”).
     1.3 Selection of Arbitrators.
     (a) Three Arbitrators. Any arbitration conducted under this Appendix B
shall be heard by three arbitrators (each an “Arbitrator” and collectively the
“Tribunal”) selected in accordance with this Section 1.3. Each Disputing Party
and any proposed Arbitrator shall, as soon as practicable, disclose to the other
Disputing Parties any business, personal or other relationship or affiliation
that may exist between any Party and the proposed Arbitrators. The Disputing
Parties may then object to any of the proposed Arbitrators on the basis of such
relationship or affiliation. The validity of any such objection shall be
determined according to the Rules.
          (b) Selection of Arbitrators. Except as provided for in this
Section 1.3, the Tribunal shall be appointed according to the Rules. In the
Arbitration Notice, the Disputing Party requesting arbitration shall nominate
one Arbitrator. The Disputing Party named as respondent by the claimant shall
nominate one Arbitrator. Within 30 Days of the appointment of the second
Arbitrator, the two party-appointed Arbitrators shall appoint a third Arbitrator
who shall chair the arbitration. Where the Dispute at issue involves more than
two Disputing Parties, the International Institute for Conflict Prevention and
Resolution (“CPR”) shall provide a list of potential Arbitrators. Within seven
(7) days of receiving this list, each Disputing Party shall provide to CPR a
ranking of the potential Arbitrators on such list showing such Disputing Party’s
order of preference among such proposed Arbitrators, with any one or more
Disputing Parties who are Affiliates of one another submitting one common ranked
list. The CPR shall then
Contribution Agreement
(Toshiba)

C-1

--------------------------------------------------------------------------------

 

appoint all three Arbitrators as it shall determine in its discretion but taking
into account to the extent practical the Disputing Parties’ preferences.
     1.4 Conduct of Arbitration. The Tribunal shall expeditiously (and, if
practicable, consistent with the Tribunal’s primary responsibility to justly
adjudicate the dispute before it, within 180 Days after the appointment of the
third Arbitrator) hear and decide all matters concerning the Dispute. Any
arbitration hearing shall be held in Washington, D.C. The arbitration shall be
governed by the Federal Arbitration Act, 9 U.S.C. §§1 et. seq. Except as
expressly provided to the contrary in this Agreement, the Tribunal shall have
the power to gather such materials, information, testimony and evidence as it
deems relevant to the dispute before it (and each Party will provide such
materials, information, testimony and evidence requested by the Tribunal,
subject to such protective orders as the Tribunal determines necessary for the
protection of any information so requested that is proprietary, subject to a
third-party confidentiality restriction or to an attorney-client or other
privilege) and to grant injunctive relief and enforce specific performance. The
Tribunal shall not have the power to award punitive or any other form of
indirect or non-compensatory damages, even if such are available under the
governing law and even if a court would otherwise be empowered to avoid this
limitation on damages to make such an award. If it deems necessary, the Tribunal
may propose to the Disputing Parties that one or more other experts be retained
to assist it in resolving the Dispute. The retention of such other experts shall
require the unanimous consent of the Disputing Parties, which shall not be
unreasonably withheld. The decision of the Tribunal (which shall be rendered in
writing) shall be final, nonappealable and binding upon the Parties and may be
enforced in any court of competent jurisdiction. Each Party hereby consents to
the non-exclusive personal jurisdiction and venue of the Washington D.C. courts
for any proceedings in aid of arbitration under this Section, including any
request for interim or injunctive relief. Notwithstanding the foregoing consent,
the Parties may nevertheless seek interim or injunctive relief from any court of
competent jurisdiction.
     1.5 Arbitration Costs and Expenses. The responsibility for paying the costs
and expenses of the arbitration, including compensation to the Tribunal and any
experts retained by the Tribunal, shall be borne by the Disputing Party or
Disputing Parties who is or are the least successful in such process, which
shall be determined by the Tribunal by comparing the position asserted by each
Disputing Party on all disputed matters taken together to the final decision of
the Tribunal on all disputed matters taken together, provided however, that each
Disputing Party shall be responsible for the fees and expenses of its respective
counsel, consultants and witnesses, unless the Tribunal determines that
compelling reasons exist for allocating all or a portion of such costs and
expenses to the other Disputing Parties.
Contribution Agreement
(Toshiba)

C-2