Exhibit 10.6.1
SUPPLEMENTAL LOAN AGREEMENT
dated as of April 30, 1996
Between
NRG ENERGY, INC.
and
NRG GENERATING (U.S.) INC.
SUPPLEMENTAL LOAN AGREEMENT, dated as of April 30, 1996, between
NRG GENERATING (U.S.) INC., a Delaware corporation formerly known as
O'Brien Environmental Energy, Inc. (the "Company"), and NRG Energy, Inc., a
Delaware corporation (the "Lender").
W I T N E S S E T H:
WHEREAS, immediately prior to the execution and delivery of this
Agreement, the Company was the debtor and the debtor in possession in
Chapter 11 case number 94-26723 (the "Case") pending before the United
States Bankruptcy Court for the District of New Jersey (the "Bankruptcy
Court");
WHEREAS, pursuant to the Composite Fourth Amended and Restated
Plan of Reorganization for the Company proposed by the Company, the Lender,
Wexford Management Corp. and the Official Committee of Equity Security
Holders dated January 31, 1996 (as confirmed by order of the Bankruptcy
Court entered on February 22, 1996, the "NRG Plan"; capitalized terms used
herein without definition shall have the respective meanings assigned to
them in the NRG Plan), and subject to the terms and conditions of the
Amended and Restated Stock Purchase and Reorganization Agreement dated as
of January 31, 1996 between the Lender and the Company, the Lender is
acquiring on the date hereof 41.86% of the outstanding shares of Common
Stock of the Company and in that connection has agreed to make certain
loans to the Company;
WHEREAS, to the extent that (i) the Administrative and Cure
Claims Cash Payment exceeds the sum of the Additional Cash Amount (if any),
any Excess Cash available to be applied pursuant to Section 6.12(c) of the
NRG Plan and the Reserved Administrative and Cure Claims Cash Amount (the
amount by which the Administrative and Cure Claims Cash Payment exceeds
such sum being referred to as the "Administrative Claims Shortfall"), and
(ii) the aggregate amount of proceeds of Designated Receivables received by
the Company or any of its Subsidiaries after November 17, 1995 but before
the date hereof that is available for distribution by the Company on the
date hereof is less than $2.240,000 (the difference between $2,240,000 and
the amount of such proceeds so received by the Company or any of its
Subsidiaries and so available for distribution by the Company being
referred to as the "Designated Receivable Shortfall"), Section 6.10 of the
NRG Plan provides that the Lender shall make a loan (the "NRG Mandatory
Supplemental Loan") to the Company on the Effective Date equal to the sum
of (x) the Administrative Claims Shortfall and (y) the Designated
Receivables Shortfall;
WHEREAS, Section 10.8(b) of the NRG Plan provides that,
notwithstanding anything in Section 6.10 of the NRG Plan to the contrary,
if an Administrative Claims Shortfall exists and, therefore, the Lender is
required to make an NRG Mandatory Supplemental Loan pursuant to
Section 6.10 of the NRG Plan in an amount equal to the Administrative
Claims Shortfall (the "Administrative Shortfall Loan"), the time at which
all or
a portion of the Administrative Shortfall Loan shall be required to be made
shall be deferred until after the Effective Date, as follows: (i) the
portion of the Administrative Shortfall Loan required to be advanced on the
Effective Date shall equal the amount by which the Effective Date
Administrative and Cure Payments exceeds the sum of the Additional Cash
Amount (if any), any Excess Cash available to be applied pursuant to
Section 6.12(c) of the NRG Plan on the Effective Date and the Reserved
Administrative and Cure Claims Cash Amount (the amount of such excess being
referred to as the "Effective Date Administrative Shortfall Loan)," with
the amount of the Administrative Shortfall Loan in excess of the Effective
Date Administrative Shortfall Loan (the amount of such excess being
referred to as the "Deferred Administrative Shortfall Amount") being
deferred and potentially reduced as provided below, and (ii) at such time
or times as Unresolved Administrative and Priority Claims become Allowed by
Final Order after the Effective Date (or in the case of such Claims that
are Allowed, but not yet due and payable on the Effective Date, at such
times as such Claims become due and payable after the Effective Date), the
Lender is required, within three business days thereafter, to make an
advance to the Company in respect of the Administrative Shortfall Loan
equal to the aggregate amount at which such Unresolved Administrative and
Priority Claims have been so Allowed or becom7e due and payable, reduced by
any amount then available in the Administrative and Priority Claims Reserve
to pay such Claims, in each case subject to the maximum amount thereof
established by the Court prior to the Effective Date in connection with the
fixing of the amount of the Administrative and Priority Claims Reserve
(each such advance being referred to as a "Deferred Administrative
Shortfall Loan");
WHEREAS, the Administrative Claims Shortfall is $15,255,065.50,
the amount of the Effective Date Administrative Shortfall Loan is zero, the
amount of the Administrative and Priority Claims Reserve on the Effective
Date is $1,639,520.25, the Deferred Administrative Shortfall Amount is
$13,615,545.25 and the Designated Receivable Shortfall is $2,240,000;
WHEREAS, pursuant to Sections 6.10 and 10.8(b) of the NRG Plan,
the aggregate amount of the NRG Mandatory Supplemental Loan to be made on
the Effective Date is $2,240,000 and the aggregate amount of the NRG
Mandatory Supplemental Loan to be made following the Effective Date is up
to the Deferred Administrative Shortfall Amount of $13,615,545.25;
WHEREAS, the Lender agrees to make the NRG Mandatory Supplemental
Loan to the Company on the terms and conditions set forth below.
NOW, THEREFORE, the Company and the Lender agree as follows:
2
ARTICLE 1
Definitions
SECTION 1.01. Defined Terms. As used in this Agreement, the
terms defined in the caption hereto shall have the meanings set forth
therein, and the following terms have the following meanings:
"Acquisition" means the acquisition by the Company pursuant to
the Acquisition Agreement of 41.86% of the issued and outstanding capital
stock of the Company as reorganized under the NRG Plan and all of the
capital stock of each of certain of the Company's subsidiaries.
"Acquisition Agreement" means the Amended and Restated Stock
Purchase and Reorganization Agreement, dated as of January 31, 1996 between
the Lender and the Company.
"Administrative Claims Shortfall" shall have the meaning assigned
thereto in the recitals.
"Administrative Shortfall Loan" shall have the meaning assigned
thereto in the recitals.
"Affiliate" of any specified Person means (i) any other Person,
directly or indirectly, controlling or controlled by or under direct or
indirect common control with such specified Person or (ii) any Person who
is a director or officer (a) of such Person, (b) of any Subsidiary of such
Person or (c) of any Person described in clause (i) above. For the
purposes of this definition, "control" when used with respect to any Person
means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities,
by contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Agreement" means this Loan Agreement, as amended, supplemented
or modified from time to time.
"Base Rate" means for any day, a rate per annum equal to 9%.
"Bankruptcy Court" shall have the meaning assigned thereto in the
recitals.
"Bankruptcy Law" means Title 11 of the United States Code.
"Borrowing" means a borrowing under this Agreement consisting of
a Deferred Administrative Shortfall Loan made by the Lender to the Company.
3
"Business Day" means a day other than a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required
by law to close.
Closing Date" means the date on which the Lender is to make the
Initial Loan, which shall be the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means the party named as such in this Agreement until a
successor replaces it and, thereafter, means the successor.
"Credit Documents" means the collective reference to this
Agreement and the Note.
"Custodian" means any receiver, trustee, assignee, liquidator,
custodian or similar official under any Bankruptcy Law.
"Default" means any event which is, or after notice or passage of
time or both would be, an Event of Default.
"Deferred Administrative Shortfall Amount" shall have the meaning
assigned thereto in the recitals.
"Deferred Administrative Shortfall Loan" shall have the meaning
assigned thereto in the recitals.
"Designated Receivable Shortfall" shall have the meaning assigned
thereto in the recitals.
"Dollars" and "$" means dollars in lawful currency of the United
States of America.
"Effective Date" shall have the meaning assigned thereto in the
NRG Plan, which definition is incorporated herein by this reference.
"Effective Date Administrative Shortfall Loan" shall have the
meaning assigned thereto in the recitals.
"Event of Default" shall have the meaning assigned thereto in
Section 8.01.
"Final Maturity Date" shall have the meaning assigned thereto in
Section 2.04.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect from time to time.
"Highest Lawful Rate" shall have the meaning assigned thereto in
Section 7.09.
4
"Indemnified liabilities" shall have the meaning assigned thereto
in Section 7.04.
"Initial Loan" means the Loan to be made on the date hereof equal
to the Designated Receivable Shortfall.
"Initial Maturity Date" shall have the meaning assigned thereto
in Section 2.04.
"Interest Payment Date" means the last day of each March, June,
September and December, commencing on the first such day to occur after the
Loan is made.
"Lender" means the party named in this Agreement until one or
more successors replace it, and thereafter means the successor or
successors.
"Loan" means the Initial Loan or any Deferred Administrative
Shortfall Loan and "Loans" means, collectively, the Initial Loan and the
Deferred Administrative Shortfall Loans.
"Net Cash Flow" means for any fiscal quarter of the Company, the
following calculation: Net Income for such quarter; plus
1. non-cash charges which were deducted in computing Net
Income for such quarter, including, without limitation, depreciation and
deferred taxes; plus
2. net cash proceeds received from a sale made by the Company
or its Subsidiaries of assets (other than (a) accounts, (b) inventory or
(c) obsolete or worn out property the proceeds from the sale of which do
not exceed $10,000 in the aggregate) occurring during such quarter less any
gain or plus any loss from such sales included in the computation of Net
Income; less
3. any amounts included as an income item in the computation
of Net Income for such quarter with respect to which the Company and its
Subsidiaries have not received any cash payment or other form of cash
consideration, provided that any cash consideration received by the Company
and its Subsidiaries with respect thereto in any subsequent quarter shall
be included in Net Cash Flow for such subsequent quarter; less
4. debt amortization and other payments of principal
indebtedness of the Company and its Subsidiaries existing on the date
hereof or incurred for the period beginning on and including the first day
of such quarter and ending on and including the first Business Day of the
next succeeding quarter; less
5. capital expenditures for such quarter; less
6. any cash dividends or redemption payments paid during such
quarter to the holders of the New O'Brien Preferred Stock issued by the
Company pursuant to the NRG Plan; and less
5
7. any income of any Subsidiary included in the computation of
New Income that the Company has not actually received in the form of
dividends or similar distributions because of any limitations set forth in
any debt documents to which such Subsidiary is a party on the date hereof
or any debt documents into which such Subsidiary enters at any time during
which Lender holds in excess of 26% of the outstanding shares of Common
Stock of the Company; and less
8. any other amounts as may be agreed to in writing by the
Lender for such quarter, but the Lender shall have no obligation to so
agree.
It is the expressed intent of the Company and the Lender that in making the
foregoing computation there shall be no duplication of any item of income,
expense or otherwise. If the foregoing computation for any quarter results
in a negative number, Net Cash Flow shall be deemed to be zero for such
quarter.
"Net Income" means the consolidated net income of the Company and its
Subsidiaries for the applicable reporting period after all applicable taxes
on income and profits (and any refunds in respect thereof) and as
determined in accordance with GAAP.
"Note" means the Note substantially in the form attached hereto as
Exhibit A.
"Notice of Borrowing" means an irrevocable notice from the Company to the
Lender, executed by an officer of the Company, requesting the Lender to
make a Deferred Administrative Shortfall Loan, substantially in the form of
Exhibit B hereto, delivered by the Company to the Lender pursuant to
Section 2.07(b) hereof.
"NRG Mandatory Supplemental Loan" shall have the meaning assigned thereto
in the recitals.
"NRG Plan" shall have the meaning specified in the recitals.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof or any other
entity.
"Principal" of a Note means the principal of the Note plus the premium, if
any, payable on the Note which is due or overdue or is to become due at the
relevant time.
"Register" shall have the meaning assigned thereto in Section 2.10(b).
"Senior Indebtedness" means the indebtedness incurred by the Company to
Lender under the Loan Agreement dated the date hereof under which Lender
will loan the Company $45 million on the date hereof and any indebtedness,
the proceeds of which are used, directly or indirectly, to repay, prepay,
redeem, defease, retire, refund or refinance any such indebtedness so
incurred by the Company to Lender.
6
"Subsidiary" of any Person means any corporation, association, partnership
or other business entity of which more than 50% of the total voting power
of shares of capital stock or other interests (including partnership
interests) entitled (without regard to the occurrence of any contingency)
to vote in the election of directors, managers or trustees thereof is at
the time owned or controlled, directly or indirectly, by (i) such Person or
(ii) one or more Subsidiaries of such Person.
Transferee" shall have the meaning assigned thereto in Section 7.05(b).
"Uniform Commercial Code" means the New York Uniform Commercial Code as in
effect from time to time.
SECTION 1.02. Rules of Construction. Unless the context otherwise
requires:
1. a term has the meaning assigned to it;
2. "or" is not exclusive;
3. "including" means including without limitation;
4. words in the singular include the plural and words in the
plural include the singular;
5. unless otherwise specified therein, all terms defined in
this Agreement shall have the defined meanings when used in the Note or any
certificate or other document made or delivered pursuant hereto; and
6. the words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as
a whole and not to any particular provision of this Agreement, and section,
Section, schedule and exhibit references are to this Agreement unless
otherwise specified.
ARTICLE 2
Loan
SECTION 2.01. Loan. Subject to the terms and conditions hereof, the
Lender agrees to make the NRG Mandatory Supplemental Loan in Dollars to the
Company on or after the Closing Date, in an aggregate principal amount of
up to Fifteen Million Eight Hundred Fifty Five Thousand Five Hundred and
Forty Five Dollars and Twenty-Five Cents ($15,855,545.25), consisting of
the Initial Loan in an aggregate principal amount of Two Million Two
Hundred and Forty Thousand Dollars ($2,240,000) to be made on the Closing
Date and Deferred Administrative Shortfall Loans from time to time after
the Closing Date in
7
an aggregate amount of up to Thirteen Million Six Hundred Fifteen Thousand
Five Hundred and Forty Five Dollars and Twenty-Five Cents ($13,615,545.25).
SECTION 2.02. Use of Proceeds. The proceeds of the NRG Mandatory
Supplemental Loan shall be used for the purposes set forth in the NRG Plan
and shall be applied in accordance with the NRG Plan.
SECTION 2.03. Borrowing. The Company shall borrow the entire amount of
the Initial Loan on the Closing Date and, thereafter, shall borrow Deferred
Administrative Shortfall Loans when and as provided herein.
SECTION 2.04. Maturity. Each Loan will mature on the date that is five
years following the Closing Date (the "Maturity Date").
SECTION 2.05. Optional and Mandatory Prepayments; Repayments of Loan.
(a) The Company may at any time and from time to time prepay any Loan, in
whole or in part, without premium or penalty, upon at least five days
irrevocable notice to the Lender. If such notice is given, the Company
shall make such prepayment, and the payment amount specified in such notice
shall be due and payable, on the date specified therein.
(b) The Company shall pay in reduction of the principal amount of the
Loans then outstanding, promptly after receipt, the amount of any payments
hereafter received by the Company or any of its Subsidiaries in respect of
any Designated Receivables; provided that the Company's mandatory
prepayment obligations under this Section 2.05(b) shall cease at such time
as the Company shall have paid over in reduction of the principal amount of
the Loan under this Section 2.05(b) an aggregate amount equal to the
Designated Receivable Shortfall. The Company shall give the Lender at
least one Business Day's notice of each mandatory prepayment pursuant to
this Section 2.05(b) setting forth the date and amount thereof.
(c) On or before the 45th day after the end of each quarterly period of
each fiscal year of the Company, commencing with the fiscal quarter ending
September 30, 1996, the Company shall prepay the Loans in an amount equal
to 80% of the Net Cash Flow for such quarter.
If any annual audit of the Company prepared in conjunction with the
delivery of the financial statements required to be delivered pursuant to
subsection 5.1(a) shows that Net Cash Flow for any quarterly period of the
fiscal year of the Company covered by such audit exceeds the calculation of
Net Cash Flow previously made at the conclusion of such quarter by more
than $100,000, then the Company shall prepay the Loans in an amount equal
to 80% of such excess for each such quarter. If such audit shows that Net
Cash Flow for such quarterly period was less by more than $100,000 than the
calculation of Net Cash Flow for such quarter on which any prepayment of
the Loans pursuant to subsection 2.6(e)(i) was based, then an amount equal
to 80% of such difference shall be applied to reduce any prepayment due
pursuant to subsection 2.6(e)(i) for any subsequent fiscal quarters.
8
(d) Accrued interest on the amount of any prepayments shall be paid on the
date of such prepayment.
SECTION 2.06. Interest Rate and Payment Dates.
(a) Each Loan shall bear interest for the period from and including the
date the Loan is made to, but excluding, the maturity date thereof on the
unpaid principal thereof at a rate per annum equal to the Base Rate.
(b) If all or a portion of (i) the principal amount of any Loan or
(ii) any interest payable thereon shall not be paid when due (whether at
the stated maturity, by acceleration or otherwise), each Loan, and any such
overdue amount shall, without limiting the rights of the Lender under
Article 5, bear interest at a rate per annum which is 2.00% above the Base
Rate from the date of such non-payment until paid in full (as well after as
before judgment).
(c) Interest shall be payable in arrears on each Interest Payment Date.
SECTION 2.07 Notice of Borrowing Requirements.
(a) Each Borrowing shall be made on a Business Day.
(b) Each Borrowing shall be made upon written notice, by way of a Notice
of Borrowing, in the form of Exhibit B, attached hereto, given by telecopy,
mail, or personal service, delivered to the Lender at its office at 1221
Nicollet Mall, Minneapolis, Minnesota at least three Business Days prior to
the day on which such Borrowing is to be made and such notice shall specify
that a Borrowing is requested and state the amount thereof (subject to the
provisions of this Article 2).
SECTION 2.08. Computation of Interest and Fees. (a) Interest in respect
of the Loan, shall be calculated on the basis of a 365 (or 366 as the case
may be) day year for the actual days elapsed.
SECTION 2.09. Treatment of Payments.
(a) Whenever any payment received by the Lender under this Agreement or
the Note is insufficient to pay in full all amounts then due and payable to
the Lender under this Agreement or the Note, such payment shall be applied
by the Lender in the following order: First, to the payment of fees and
expenses due and payable to the Lender under and in connection with this
Agreement and the Note, including the payment of all expenses due and
payable under Section 7.04; Second, to the payment of interest then due and
payable on the Loans; and Third, to the payment of the principal amount of
the Loans which is then due and payable; or
(b) All payments (including prepayments) to be made by the Company on
account of principal, interest and fees shall be made without set-off or
counterclaim and shall
9
be made to the Lender, for the account of the Lender at its office located
at 1221 Nicollet Mall, Minneapolis, Minnesota, in lawful money of the
United States of America and in immediately available funds. If any
payment hereunder would become due and payable on a day other than a
Business Day, such payment shall become due and payable on the next
succeeding Business Day and, with respect to payments of principal,
interest thereon shall be payable at the then applicable rate during such
extension.
SECTION 2.10. Indemnity. The Company agrees to indemnify the Lender and
to hold the Lender harmless from any loss or expense (but without
duplication of any amounts payable as default interest) which the Lender
may sustain or incur as a consequence of default by the Company in making
any prepayment after the Company has given a notice in accordance with
Section 2.05. This covenant shall survive termination of this Agreement
and repayment of the Loan.
SECTION 2.11. Repayment of the Loan; Evidence of Debt. (a) The Company
hereby unconditionally promises to pay to the Lender the then unpaid
principal amount of the Loans in accordance with the terms hereof and the
Note. The Company hereby further agrees to pay interest on the unpaid
principal amount of the Loan from time to time outstanding from the date
hereof until payment in full thereof at the rates per annum, and on the
dates, set forth in Section 2.06.
(b) The Lender shall maintain a Register (the "Register") in which shall
be recorded (i) the amount of each Loan made hereunder, (ii) the amount of
any principal or interest due and payable or to become due and payable from
the Company to the Lender hereunder and (iii) the amount of any sum
received by the Lender hereunder from the Company.
(c) The entries made in the Register to the extent permitted by applicable
law, shall be prima facie evidence of the existence and amounts of the
obligations of the Company therein recorded; provided, however, that the
failure of the Lender to maintain the Register, or any error therein, shall
not in any manner affect the obligation of the Company to repay (with
applicable interest) the Loan made to the Company by the Lender in
accordance with the terms of this Agreement.
(d) The Company agrees that, on the Closing Date, the Company will execute
and deliver to the Lender the Note evidencing the Loan, with appropriate
insertions as to date and principal amount.
ARTICLE 3
Conditions Precedent
SECTION 3.01. Conditions to Initial Loan. The obligation of the Lender to
make the Initial Loan on the Closing Date is subject to the satisfaction,
or waiver by the
10
Lender, immediately prior to or concurrently with the making of the Initial
Loan, of the following conditions:
(a) Note. The Lender shall have received the Note conforming to the
requirements hereof and executed by a duly authorized officer of the
Company.
(b) Acquisition and NRG Plan Consummation. The Acquisition shall have
been consummated at the Closing (as defined in the Acquisition Agreement)
and concurrently therewith the NRG Plan shall have been consummated on the
Effective Date.
SECTION 3.02. Condition to Deferred Administrative Shortfall Loans. The
obligation of the Lender to make a Deferred Administrative Shortfall Loan
is subject to the satisfaction, or waiver by the Lender, immediately prior
to or concurrently with the making of such Deferred Administrative
Shortfall Loan, of the condition that Lender shall have received a Notice
of Borrowing, notifying the Lender than an Unresolved Administrative and
Priority Claim has become an Allowed Claim by Final Order (or in the case
of any such Claim that is Allowed, but not yet due and payable on the
Effective Date, has become due and payable in accordance with its terms)
and that insufficient funds are available in the Administrative and
Priority Claims Reserve to pay such Claim and requesting the Lender to make
a Deferred Administrative Shortfall Loan to the Company in the amount
necessary to fund the payment in full of such Claim through the
Administrative and Priority Claims Reserve (in each case subject to any cap
on the Allowed amount of such Claim previously established by order of the
Bankruptcy Court).
ARTICLE 4
Security Interest
SECTION 4.01. Assignment and Grant of Security. To secure the prompt and
unconditional payment, performance and discharge, when due, of all of the
Company's obligations under this Agreement and the Note (collectively, the
"Secured Obligations"), the Company hereby assigns, pledges, conveys, sets
over, delivers and transfers to the Lender and grants a security interest
to the Lender in and to all of the Company's right, title and interest in
and to each and all of the following:
(a) the Designated Receivables; and
(b) all Proceeds of any Designated Receivable; provided that, at such time
as the Lender shall have received either under Section 2.05(b) as a
mandatory reduction of the principal amount of the Loan or as a result of
collecting or otherwise realizing against the Designated Receivables or the
Proceeds hereof, an aggregate amount of payments equal to the Designated
Receivable Shortfall, the Security Interest granted under this Section 4.01
shall terminate and be of no further force and effect (the Designated
Receivables, together with the Proceeds thereof, are referred to as the
"Collateral"). As used herein, the terms
11
"Proceeds" shall refer to and include (i) whatever is now or hereafter
received by the Company upon the sale, exchange, collection or other
disposition of any of the Collateral, whether such Proceeds constitute
accounts, accounts receivable, general intangibles, instruments,
securities, credits, documents, deposit accounts, money, or contract
rights; (ii) personal property of any type or nature whatsoever which is
now or hereafter acquired by the Company with any Proceeds of the
Collateral; and (iii) any insurance now or hereafter payable by reason of
any loss, damage or destruction to or of any or all of the Collateral.
SECTION 4.02 Covenants In Respect Of Collateral.
(a) The Company shall not voluntarily, involuntarily or by operation of
law, sell, assign, hypothecate, pledge, encumber, grant any other security
interest or lien in, dispose of or otherwise transfer the Collateral, or
any portion thereof or any interest therein, or permit any of the foregoing
to occur, and shall not otherwise do, suffer or permit anything to be done
or occur that may impair the Collateral as security hereunder or the liens
and security interests therein created hereunder in favor of the Lender.
(b) The Company shall do all such other acts and things as may be
necessary or appropriate or which the Lender may from time to time
reasonably request as necessary in the opinion of the Lender to establish
and maintain a first priority perfected security interest in the
Collateral, including, without limitation, the Proceeds, subject to no
other liens, security interests or encumbrances; and the Company shall pay
the cost of all filings or recordings of this Agreement or any other
document or instrument in all public offices whenever it is reasonably
deemed by the Lender to be necessary or desirable. The Company hereby
irrevocably constitutes and appoints the Lender the attorney-in-fact of the
Company to execute, deliver and, if appropriate, to file with the
appropriate filing officer or office such security agreements, financing
statements, continuation statements, notices to the institutions or other
entities with which the Collateral or any portion thereof is maintained or
such other documents or instruments as the Lender may request or require in
order to confirm, impose, perfect or continue the perfection of the liens
and security interests created hereby. The foregoing power-of-attorney is
coupled with an interest and shall survive any dissolution, bankruptcy, or
insolvency of the Company as an entity.
(c) The Company shall provide to the Lender any information which the
Lender may at any time and from time to time hereafter require, in its sole
and absolute discretion, pertaining to the Collateral. The Company shall
promptly notify the Lender of any change of the Company's place of
business, chief executive office or mailing address.
(d) The Company has made any previous assignment, conveyance, transfer or
agreement in conflict herewith or constituting an assignment, conveyance,
transfer or encumbrance on any Designated Receivable.
12
ARTICLE 5
Defaults and Remedies
SECTION 5.01. Events of Default. An "Event of Default" occurs if:
1. the Company defaults in any payment of interest or any
other amount (other than those specified in (2) below) with respect to any
Loan when the same becomes due and payable and such default continues for a
period of 30 days;
2. the Company defaults in the payment of the principal of any
Loan when the same become due and payable on the Maturity Date, upon
mandatory prepayment, or otherwise;
3. the Company fails to comply with any of its agreements
herein (other than those referred to in (1) or (2) above) and such failure
continues for 30 days after the notice specified below;
4. indebtedness of the Company or any Subsidiary is not paid
within any applicable grace period after final maturity or is accelerated
by the holders thereof because of a default and the total amount of such
indebtedness unpaid or accelerated exceeds $2,000,000 or its foreign
currency equivalent at the time;
5. the Company or any Subsidiary pursuant to or within the
meaning of any Bankruptcy Law:
A. commences a voluntary case;
B. consents to the entry of an order for relief against it
in an involuntary case;
C. consents to the appointment of a Custodian of it or for
any substantial part of its property; or
D. makes a general assignment for the benefit of its
creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
6. a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
A. is for relief against the Company or any Subsidiary in
an involuntary case;
B. appoints a Custodian of the Company or any Subsidiary
or for any substantial part of its property; or
13
C. orders the winding up or liquidation of the Company or
any Subsidiary;
or any similar relief is granted under any foreign laws and the order
or decree remains unstayed and in effect for 60 days;
7. any judgment or decree for the payment of money in excess
of $2,000,000 or its foreign currency equivalent at the time is
entered against the Company or any Subsidiary and is not discharged
and either (A) an enforcement proceeding has been commenced by any
creditor upon such judgment or decree or (B) there is a period of 60
days following the entry of such judgment or decree during which such
judgment or decree is not discharged, waived or the execution thereof
stayed; or
8. this Agreement shall cease, for any reason, to be in full
force and effect or the Company or any of its Subsidiaries shall so
assert in writing.
The foregoing will constitute Events of Default whatever the reason for any
such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any administrative or
governmental body.
A Default under clause (6) is not an Event of Default until the Lender
notifies the Company of the Default and the Company does not cure such
Default within the time specified after receipt of such notice. Such
notice must specify the Default, demand that it be remedied and state that
such notice is a "Notice of Default".
SECTION 5.02. Acceleration. If an Event of Default (other than an Event
of Default specified in Section 5.01(5) or (6) with respect to the Company)
occurs and is continuing, the Lender by notice to the Company may declare
the principal of and accrued interest on the Loans to be due and payable.
Upon such a declaration, such principal and interest shall be due and
payable immediately. If an Event of Default specified in Section 5.01(5)
or (6) with respect to the Company (but not any Subsidiary) occurs, the
principal of and interest on the Loans shall ipso facto become and be
immediately due and payable without any declaration or other act on the
part of the Lender. the Lender by notice to the Company may rescind an
acceleration and its consequences. No such rescission shall affect any
subsequent Default or impair any right consequent thereto.
SECTION 5.03. Default and Remedies.
(a) If an Event of Default occurs and is continuing, the Lender shall have
all of the remedies of a secured party under the Uniform Commercial Code,
including, without limitation, the right, to notify the account debtors
from which the Designated Receivables are owing to pay directly to the
Lender the amount owing from such account debtors to the Company in respect
of the respective Designated Receivable. In addition to and not in
derogation of any or all of the rights and remedies granted hereunder to
the Lender or
14
otherwise available to the Lender under applicable law, following such an
Event of Default, the Lender shall have the further right and power, at its
sole option, to sell, or otherwise dispose of, the Collateral (other than
Collateral consisting of cash), or any part thereof, at any one or more
public or private sales as permitted by applicable law, and for that
purpose the Lender may take immediate and exclusive possession of such
Collateral, or any part thereof, to the extent capable of possession.
(b) To the fullest extent permitted by law, the Company irrevocably and
expressly waives any right to receive any notice of sale or notice of any
other disposition of all or any part of the Collateral that does not
consist of cash, except that to the extent the Company may be entitled by
applicable law to any notice of sale or other disposition of such
Collateral, the Company agrees that if such notice is mailed, postage
prepaid, to the Company at the Company's address hereinafter specified not
less than five (5) days before the time of the sale or other disposition
contemplated therein, such notice shall conclusively be deemed commercially
reasonable and shall fully satisfy any requirement for giving of said
notice. The Lender shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. The Lender may adjourn any
public or private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further notice, be made at
the time and place to which it was so adjourned.
(c) The proceeds realized upon any such disposition, after deduction for
the expenses of retaking, holding, preparing for sale, selling or the like
and reasonable attorneys' fees, legal expenses and costs incurred by the
Lender, shall be applied in accordance with Section 5.06.
(d) The remedies of the Lender hereunder are cumulative and the exercise
of any one or more of the remedies provided for herein, or under the
Uniform Commercial Code, shall not be construed as a waiver of any other
rights or remedies of the Lender so long as any part of the Secured
Obligations remains unsatisfied or unperformed. The making of this
Agreement shall not waive or impair any other security the Lender may have
or hereafter acquire for the payment or performance of the Secured
Obligations, nor shall the making of any such additional security waive or
impair this Agreement; but the Lender may resort to any security it may
have in the order it may deem proper.
SECTION 5.04. Other Remedies. If an Event of Default occurs and is
continuing, the Lender may pursue any available remedy to collect the
payment of principal of or interest on the Note or to enforce the
performance of any provision of the Note or this Agreement. The Lender may
maintain a proceeding even if it does not possess the Note or does not
produce it in the proceeding. A delay or omission by the Lender in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of or acquiescence in the
Event of Default. No remedy is exclusive of any other remedy. All
available remedies are cumulative.
SECTION 5.05. Waiver of Past Defaults. The Lender by notice to the
Company may waive an existing Default and its consequences. When a Default
is waived, it is
15
deemed cured, but no such waiver shall extend to any subsequent or other
Default or impair any consequent right.
SECTION 5.06. Priorities. If the Lender collects any money or property
pursuant to this Article 5, it shall pay out the money or property in the
following order:
FIRST: to itself in accordance with the priority set forth in
Section 2.08; and
SECOND: to the extent of any excess, to the Company.
SECTION 5.07. Undertaking for Costs. In any suit for the enforcement of
any right or remedy under this Agreement a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to
pay the costs of the suit, and the court in its discretion may assess
reasonable costs, including reasonable attorneys' fees, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant.
SECTION 5.08. Waiver of Stay or Extension Laws. The Company (to the
extent it may lawfully do so) shall not at any time insist upon, or plead,
or in any manner whatsoever claim or take the benefit or advantage of, any
stay or extension law wherever enacted, now or at any time hereafter in
force, which may affect the covenants or the performance of this Agreement;
and the Company (to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law, and shall not hinder,
delay or impede the execution of any power herein granted to the Lender,
but shall suffer and permit the execution of every such power as though no
such law had been enacted.
ARTICLE 6
Subordination
SECTION 6.01. Agreement To Subordinate. The Company and Lender agree
that, subject to Lender's prior rights as the holder of a security interest
in the Collateral, the indebtedness evidenced by the Note is subordinated
in right of payment, to the extent and in the manner provided in this
Article 6, to the prior payment in full of all Senior Indebtedness and that
the subordination is for the benefit of and enforceable by the holders of
Senior Indebtedness. The Note shall in all respects rank pari passu with
all other indebtedness of the Company and only indebtedness of the Company
which is Senior Indebtedness shall rank senior to the Note in accordance
with the provisions set forth herein.
SECTION 6.02. Liquidation, Dissolution, Bankruptcy. Upon any payment or
distribution of the assets of the Company to creditors upon a total or
partial liquidation or a total or partial dissolution of the Company or in
a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to the Company or its property, subject to the prior
rights of the Lender with respect to its security interest in the
Collateral:
16
1. holders of Senior Indebtedness shall be entitled to receive
payment in full of the Senior Indebtedness before Lender shall be entitled
to receive any payment of principal of, or premium, if any, or interest of
the Note; and
2. until the Senior Indebtedness is paid in full, any payment or
distribution to which Lender would be entitled but for this Article 6 shall
be made to holders of Senior Indebtedness as their interests may appear.
SECTION 6.03. Default on Senior Indebtedness. The Company may not pay the
principal of, premium, if any, or interest on, the Note or make any deposit
pursuant to any defeasance provision or otherwise purchase or retire the
Note (collectively, "pay the Note") if (i) any Senior Indebtedness is not
paid when due or (ii) any other default on Senior Indebtedness occurs and
the maturity of such Senior Indebtedness is accelerated in accordance with
its terms unless, in either case, (x) the default has been cured or waived
and any such acceleration has been rescinded or (y) such Senior
Indebtedness has been paid in full; provided, however, that the Company may
pay the Note without regard to the foregoing if Lender is then the sole
holder of Senior Indebtedness or if the Company and the Lender receive
written notice approving such payment from each of the holders of Senior
Indebtedness (or, if applicable, their indenture trustee or other
representative) with respect to which either of the events set forth in (i)
or (ii) above has occurred and is continuing. During the continuance of
any default (other than a default described in clause (i) or (ii) of the
preceding sentence) with respect to any Senior Indebtedness pursuant to
which the maturity thereof may be accelerated immediately without further
notice (except such notice as may be required to effect such acceleration)
or the expiration of any applicable grace periods, the Company may not pay
the Note for a period (a "Payment Blockage Period") commencing upon the
receipt by the Company and the Lender of written notice (a "Blockage
Notice") of such default from the holders of such Senior Indebtedness (or,
if applicable, their indenture trustee or other representative) specifying
an election to effect a Payment Blockage Period and ending 179 days
thereafter (or earlier if such Payment Blockage Period is terminated (i) by
written notice to the Lender and the Company from the Person or Persons who
gave such Blockage Notice, (ii) by repayment in full of such Senior
Indebtedness or (iii) because the default giving rise to such Blockage
Notice is no longer continuing). Notwithstanding the provisions described
in the immediately preceding sentence (but subject to the provisions
contained in the first sentence of this Section), unless the holders of
such Senior Indebtedness (or the indenture trustee or other representative
of such holders) shall have accelerated the maturity of such Senior
Indebtedness, the Company may resume payments on the Note after such
Payment Blockage Period. Not more than one Blockage Notice may be given in
any consecutive 360-day period, irrespective of the number of defaults with
respect to Senior Indebtedness during such period; provided further,
however, that in no event may the total number of days during which any
Payment Blockage Period or Periods is in effect exceed 179 days in the
aggregate during any 360 consecutive day period.
SECTION 6.04. Acceleration of Payment of Note. If payment of the Note is
accelerated because of an Event of Default, the Company or the Lender shall
promptly notify
17
the holders of the Senior Indebtedness of the acceleration. If any Senior
Indebtedness is outstanding, the Company may not pay the Note until 5
business days after the holders (or their indenture trustee or other
representative) of the Senior Indebtedness receives notice of such
acceleration and, thereafter, may pay the Note only if this Article 6
otherwise permits the payment at that time.
SECTION 6.05. When Distribution Must Be Paid Over. If a distribution is
made to the Lender that because of this Article 6 should not have been
made, the Lender shall hold such distribution in trust for holders of
Senior Indebtedness and pay it over to them as their interests may appear.
SECTION 6.06. Subrogation. After all Senior Indebtedness is paid in full
and until the Note are paid in full, the Lender shall be subrogated to the
rights of holders of Senior Indebtedness to receive distributions
applicable to Senior Indebtedness. A distribution made under this Article
6 to holders of Senior Indebtedness which otherwise would have been made to
holder of the Note is not, as between the Company and the holder of the
Note, a payment by the Company on Senior Indebtedness.
SECTION 6.07. Relative Rights. This Article 6 defines the relative rights
of the Lender (or a successor holder of the Note) and holders of Senior
Indebtedness. Nothing in this Agreement shall:
1. impair, as between the Company and the Lender, the
obligation of the Company, which is absolute and unconditional, to pay
principal of, premium, if any, and interest on the Note in accordance with
their terms; or
2. prevent the Lender from exercising its available remedies
upon a Default, subject to the rights of holders of Senior Indebtedness to
receive distributions otherwise payable to the Lender.
SECTION 6.08. Subordination May Not Be Impaired by Company. No right of
any holder of Senior Indebtedness to enforce the subordination of the
Indebtedness evidenced by the Note shall be impaired by any act or failure
to act by the Company or by its failure to comply with this Agreement.
SECTION 6.09. Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Senior
Indebtedness, the distribution may be made and the notice given to any
indenture trustee or other representative (if any) of such holders.
SECTION 6.10. Article 6 Not To Prevent Events of Default or Limit Right To
Accelerate. The failure to make a payment pursuant to the Note by reason
of any provision in this Article 6 shall not be construed as preventing the
occurrence of a Default. Nothing in this Article 6 shall have any effect
on the right of the Lender to accelerate the maturity of the Note.
18
SECTION 6.11. Lender Entitled To Rely. Upon any payment or distribution
pursuant to this Article 6, the Lender shall be entitled to rely (i) upon
any order or decree of a court of competent jurisdiction in which any
proceedings of the nature referred to in Section 6.02 are pending, (ii)
upon a certificate of the liquidating trustee or agent or other Person
making such payment or distribution to the Lender or (iii) upon the
representatives for the holders of Senior Indebtedness for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of the Senior Indebtedness and other indebtedness
of the Company, the amount thereof or payable thereon, the amount or
amounts paid or distributed thereon and all other facts pertinent thereto
or to this Article 6. In the event that the Lender determines, in good
faith, that evidence is required with respect to the right of any Person as
a holder of Senior Indebtedness to participate in any payment or
distribution pursuant to this Article 6, the Lender may request such Person
to furnish evidence to the reasonable satisfaction of the Lender as to the
amount of Senior Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and other
facts pertinent to the rights of such Person under this Article 6, and, if
such evidence is not furnished, the Lender may defer any payment to such
Person pending judicial determination as to the right of such Person to
receive such payment.
SECTION 6.12. Reliance by Holders of Senior Indebtedness on Subordination
Provisions. The Lender acknowledges and agrees that the foregoing
subordination provisions are, and are intended to be, an inducement and a
consideration to each holder of any Senior Indebtedness, whether such
Senior Indebtedness was created or acquired before or after the issuance of
the Note, to acquire and continue to hold, or to continue to hold, such
Senior Indebtedness and such holder of Senior Indebtedness shall be deemed
conclusively to have relied on such subordination provisions in acquiring
and continuing to hold, or in continuing to hold, such Senior Indebtedness.
ARTICLE 7
Miscellaneous
SECTION 7.01. Amendments and Waivers. Except as otherwise expressly set
forth in this Agreement, no Credit Document nor any terms thereof may be
amended, supplemented, waived or modified except in accordance with the
provisions of this Section 7.01.
SECTION 7.02. Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy or telex, if one is listed), and, unless otherwise expressly
provided herein, shall be deemed to have been duly given or made when
delivered by hand, or three Business Days after being deposited in the
mail, postage prepaid, or, in the case of telecopy notice, when sent,
confirmation of receipt received, or, in the case of telex notice, when
sent, answerback received, addressed as
19
follows, or to such other address as may be hereafter notified by the
respective parties hereto and any future holders of the Note:
If to the Company: NRG Generating (U.S.) Inc.
1221 Nicollet Mall, Suite 700
Minneapolis, MN 55403
Attention: President and Chief Executive Officer
Telephone: (612) 373-5300
Telecopier:(612) 373-5430
With a copy to: Troutman Sanders
NationsBank Plaza, Suite 5200
600 Peachtree Street N.E.
Atlanta, Georgia 30308
Attention: Hazen Dempster
Telephone: (404) 885-3000
Telecopier:(404) 885-3900
If to Lender NRG Energy, Inc.
1221 Nicollet Mall, Suite 700
Minneapolis, MN 55403
Attention: Vice President, Business
Development
Telephone: (612) 373-5300
Telecopier:(612) 373-5430
With copies to: NRG Energy Inc.
Legal Department
1221 Nicollet Mall, Suite 700
Minneapolis, MN 55403
Attention: Vice President and General
Counsel
Telephone: (612) 373-5300
Telecopier (612) 373-5392
provided that any notice, request or demand to or upon the Lender pursuant
to Section 2.05 shall not be effective until received.
SECTION 7.03. No Waiver; Cumulative Remedies. No failure to exercise and
no delay in exercising, on the part of the Lender, any right, remedy, power
or privilege hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or
20
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law.
SECTION 7.04. Payment of Expenses and Taxes. The Company agrees (a) to
pay or reimburse the Lender for all its reasonable out-of-pocket costs and
expenses incurred in connection with the development, preparation and
execution of any amendment, supplement or modification to the Credit
Documents, including the reasonable fees and disbursements of counsel to
the Lender, (b) to pay or reimburse the Lender for all its costs and
expenses incurred in connection with, and to pay, indemnify, and hold the
Lender harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever arising out of
or in connection with, the enforcement or preservation of any rights under
any Credit Document, including reasonable fees and disbursements of counsel
to the Lender incurred in connection with the foregoing, (c) to pay,
indemnify, and to hold the Lender harmless from any and all recording and
filing fees and any and all liabilities with respect to, or resulting from
any delay in paying, stamp, excise and other similar taxes (other than
withholding taxes), if any, which may be payable or determined to be
payable in connection with the execution and delivery of, or consummation
of any of the transactions contemplated by, or any amendment, supplement or
modification of, or any waiver or consent under or in respect of, any
Credit Document and any such other documents, and (d) to pay, indemnify,
and hold the Lender and its respective Affiliates, officers and directors
harmless from and against any and all other liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever (including reasonable fees
and disbursements of counsel) which may be incurred by or asserted against
the Lender or such Affiliates, officers or directors arising out of or in
connection with any investigation, litigation or proceeding related to this
Agreement, the other Credit Documents, the proceeds of the Loan and the
transactions contemplated by or in respect of such use of proceeds, or any
of the other transactions contemplated hereby, whether or not the Lender or
such Affiliates, officers or directors is a party thereto, including any of
the foregoing relating to the violation of, noncompliance with or liability
under, any environmental law or regulation applicable to the operations of
the Company, any of its Subsidiaries or any of the facilities and
properties owned, leased or operated by the Company or any of its
Subsidiaries (all the foregoing, collectively, the "indemnified
liabilities"); provided that the Company shall have no obligation hereunder
with respect to indemnified liabilities of the Lender or any of its
respective Affiliates, officers and directors arising from (i) the gross
negligence or willful misconduct of the Lender or its directors or officers
or (ii) legal proceedings commenced against the Lender by any security
holder or creditor thereof arising out of and based upon rights afforded
any such security holder or creditor solely in its capacity as such or
(iii) legal proceedings commenced against the Lender by any Transferee.
The agreements in this Section 7.04 shall survive repayment of the Note and
all other amounts payable hereunder.
SECTION 7.05. Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of the
Company, the
21
Lender, all future holders of the Note and the Loans, and their respective
successors and assigns, except that the Company may not assign or transfer
any of its rights or obligations under this Agreement without the prior
written consent of the Lender.
(b) The Company hereby agrees that the Lender may, in accordance with
applicable law, at any time and from time to time assign all or any part of
its rights and interest under this Agreement and the Note to any Person (a
"Transferee").
(c) The Company authorizes the Lender to disclose to any prospective or
Transferee any and all financial information in the Lender's possession
concerning the Company and its Subsidiaries and Affiliates which has been
delivered to the Lender by or on behalf of the Company.
SECTION 7.06. Counterparts. This Agreement may be executed by one or more
of the parties to this Agreement on any number of separate counterparts and
all of said counterparts taken together shall be deemed to constitute one
and the same instrument.
SECTION 7.07. Governing Law; No Third Party Rights. This Agreement and
the Note and the rights and obligations of the parties under this Agreement
and the Note shall be governed by, and construed and interpreted in
accordance with, the law of the State of New York and applicable laws of
the United States of America. This Agreement is solely for the benefit of
the parties hereto and their respective successors and assigns, and, except
as set forth in Article 7, no other Persons shall have any right, benefit,
priority or interest under, or because of the existence of, this Agreement.
SECTION 7.08. Submission to Jurisdiction; Waivers. (a) Each party to
this Agreement hereby irrevocably and unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Agreement or any of the other Credit
Documents, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the
courts of the State of New York, the courts of the United States of
America for the Southern District of New York, and appellate courts
from any thereof;
(ii) consents that any such action or proceeding may be brought
in such courts, and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court
or that such action or proceeding was brought in an inconvenient court
and agrees not to plead or claim the same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to such party at its address set forth in Section 7.02; and
22
(iv) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction.
(b) Each party hereto unconditionally waives trial by jury in any legal
action or proceeding referred to in paragraph (a) above and any
counterclaim therein.
SECTION 7.09. Interest. Each provision in this Agreement and each other
Credit Document is expressly limited so that in no event whatsoever shall
the amount paid, or otherwise agreed to be paid, by the Company for the
use, forbearance or detention of the money to be loaned under this
Agreement or any other Credit Document or otherwise (including any sums
paid as required by any covenant or obligation contained herein or in any
other Credit Document which is for the use, forbearance or detention of
such money), exceed that amount of money which would cause the effective
rate of interest to exceed the highest lawful rate permitted by applicable
law (the "Highest Lawful Rate"), and all amounts owed under this Agreement
and each other Credit Document shall be held to be subject to reduction to
the effect that such amounts so paid or agreed to be paid which are for the
use, forbearance or detention of money under this Agreement or such Credit
Document shall in no event exceed that amount of money which would cause
the effective rate of interest to exceed the Highest Lawful Rate.
Notwithstanding any provision in this Agreement or any other Credit
Document to the contrary, if the maturity of the Loans or the obligations
in respect of the other Credit Documents are accelerated for any reason, or
in the event of any prepayment of all or any portion of the Loan or the
obligations in respect of the other Credit Documents by the Company or in
any other event, earned interest on the Loan and such other obligations of
the Company may never exceed the Highest Lawful Rate, and any unearned
interest otherwise payable on the Loans or the obligations in respect of
the other Credit Documents that is in excess of the Highest Lawful Rate
shall be cancelled automatically as of the date of such acceleration or
prepayment or other such event and (if theretofore paid) shall, at the
option of the holder of the Loan or such other obligations, be either
refunded to the Company or credited on the principal of the Loans. In
determining whether or not the interest paid or payable, under any specific
contingency, exceeds the Highest Lawful Rate, the Company and the Lender
shall, to the maximum extent permitted by applicable law, amortize,
prorate, allocate and spread, in equal parts during the period of the
actual term of this Agreement, all interest at any time contracted for,
charged, received or reserved in connection with this Agreement.
23
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
NRG GENERATING (U.S.) INC.
by: /s/ Leonard Bluhm
Name: Leonard A. Bluhm
Title: President and Chief Executive Officer
NRG ENERGY, INC.
by: /s/ Craig A. Mataczynski
Name: Craig A. Mataczynski
Title: Vice President, Domestic Business
Deveopment
24
EXHIBIT A
New York, New York
April 30, 1996
NOTE
FOR VALUE RECEIVED, the undersigned, NRG GENERATING (U.S.) INC., a
Delaware corporation (the "Company"), hereby promises to pay to the order
of NRG ENERGY, INC., a Delaware corporation, or registered assigns (the
"Lender"), at the office of the Lender at 1221 Nicollet Mall, Suite 700,
Minneapolis, MN 55403, in lawful money of the United States of America and
in immediately available funds, the principal amount of up to Fifteen
Million Eight Hundred Fifty Five Thousand Five Hundred and Forty Five
Dollars and Twenty-Five Cents ($15,855,545.25), or, if less, the aggregate
unpaid principal amount of the Loans made by the Lender pursuant to Section
2.01 of the Loan Agreement referred to below (in either case, to be paid
together with any accrued interest not required to be paid currently in
cash), which sum shall be due and payable in such amounts and on such dates
as are set forth in the Supplemental Loan Agreement, dated as of April 30,
1996 between the Company and the Lender (the "Loan Agreement"; terms
defined therein being used herein as so defined). The undersigned further
agrees to pay interest at said office, in like money, from the date hereof
on the unpaid principally amount hereof from time to time outstanding at
the rates and on the dates specified in Section 2.06 of the Loan Agreement.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
diligence, presentment, demand, protest and notice of any kind whatsoever.
The nonexercise by the holder of this Note of any of its rights hereunder
in any particular instance shall not constitute a waiver thereof in that or
any subsequent instance.
This Note is the Note referred to in the Loan Agreement, which Loan
Agreement, among other things, contains provisions for the acceleration of
the maturity hereof upon the happening of certain events, for optional and
mandatory prepayment of the principal hereof prior to the maturity hereof
and for the amendment or waiver of certain provisions of the Loan
Agreement, all upon the terms and conditions therein specified.
This Note shall be construed in accordance with and governed by the laws of
the State of New York and any applicable laws of the United States of
America.
THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS OF THE
LOAN AGREEMENT. TRANSFERS OF THIS NOTE MUST BE RECORDED IN THE REGISTER
MAINTAINED BY THE LENDER PURSUANT TO THE TERMS OF THE LOAN AGREEMENT.
NRG GENERATING (U.S.) INC.,
by:
Name: Leonard A. Bluhm
Title: President and Chief Executive Officer
2