Exhibit 10.9.1
$10,000,000
LOAN AGREEMENT
Dated as of March 8, 1996
Between
NRG ENERGY, INC.
And
O'BRIEN (SCHUYLKILL) COGENERATION, INC.
LOAN AGREEMENT, dated as of March 8, 1996, between O'BRIEN
(SCHUYKILL) COGENERATION, INC., a Delaware corporation (the "Company") and
NRG ENERGY, INC., a Delaware corporation (the "Lender").
W I T N E S S E T H:
WHEREAS, all the outstanding capital stock of the Company is
owned by O'Brien Environmental Energy, Inc., a Delaware corporation (the
"Parent");
WHEREAS, the Parent is 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 Parent proposed by the Lender, Wexford
Management Corp. and the official Committee of Equity Security Holders
dated January 31, 1995 (as amended and 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 Parent, the Lender has the
right, subject to the fulfillment of certain conditions precedent by the
Parent and the Lender, to acquire 41.86% of the outstanding shares of
common Stock of the Parent;
WHEREAS, the Company is a partner in the Grays Ferry Cogeneration
Partnership (the "Partnership") established under the law of the State of
Pennsylvania pursuant to an Amended and Restated Partnership Agreement,
dated as of March 1, 1996 (as amended, supplemented or otherwise modified,
the "Partnership Agreement"), among the Company, Adwin (Schuykill)
Cogeneration, Inc., a Pennsylvania corporation, and Trigen-Schuylkill
Cogeneration, Inc., a Pennsylvania corporation;
WHEREAS, the Partnership is developing a cogeneration facility
(the "Facility") to be constructed in Philadelphia, Pennsylvania;
WHEREAS, it is a condition of the construction financing for the
Facility being obtained as of March 1, 1996 by the Partnership from a
syndicate of lenders (the "Banks") for whom The Chase Manhattan Bank, N.A.
is acting as agent (the "Agent") that the Partnership pay $30,000,000 (the
"Partnership Equity Contribution") to the Agent on the terms and conditions
set forth in the Credit Agreement, dated as of
March 1, 1996 (the "Partnership Credit Agreement"), among the Partnership,
the Banks and Chase;
WHEREAS, pursuant to the Partnership Credit Agreement and the
Partnership Agreement, the Partnership Equity Contribution has been
subdivided into three $10,000,000 tranches -- A, B and C, and the Company
is responsible for contributing $10,000,000 (the "Required Equity
Contribution") to the Partnership so that the Partnership may make the
$10,000,000 Tranche A portion (the "Tranche A Obligation") of the
Partnership Equity contribution to the Agent;
WHEREAS, in order to provide assurance to the Banks and the Agent
that the Company will make the Required Equity Contribution and that the
Partnership will make the payment of the Tranche C Obligation, the Company
has requested that the Lender enter into a Guarantee, dated as of March 1,
1996 (the "Chase Guarantee"), in favor of the Agent pursuant to which the
Lender guarantees the payment by the Partnership of Tranche A obligation;
WHEREAS, the Company has agreed to reimburse the Lender for any
drawings under the Chase Guarantee;
WHEREAS, the Company has requested that the Lender agree to
provide the Company, with a loan in a principal amount of up to $10,000,000
on the terms and conditions set forth herein to fund the Required Equity
contribution;
WHEREAS, the Lender is willing to enter into the Chase Guarantee and to
lend up to $10,000,000 to the Company an the terms and conditions
set forth herein;
WHEREAS, the Parent is willing to guarantee to the Lender the
repayment by the Company of such reimbursement obligations and/or such loan
and to secure its guarantee obligations with a pledge of the shares of the
Company;
WHEREAS, the Lender and the Parent have agreed that upon the
effectiveness of the NRG Plan, the Lender shall have the option under its
agreement with the Parent to forgive $3 million of any loan-outstanding
hereunder in exchange for 5.767% of the equity of the Parent;
NOW, THEREFORE, the Company and the Lender agree as follows:
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A. ARTICLE 1
B. 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:
"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 Parson 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. For purposes of Sections 11.04 and
11.05 of the Guaranty only, "Affiliate,, shall also mean any beneficial
owner of shares representing 5% or more of the total voting power of the
Voting Stock (on a fully diluted basis) of the Parent or of rights or
warrants to purchase such Voting Stock (whether or not currently
exercisable) and any Person who would be an Affiliate of any such
beneficial owner pursuant to the first sentence hereof.
"Agent" shall have the meaning assigned thereto in the Recitals.
"Agreement" means this Loan Agreement, as amended, supplemented
or Modified from time to time.
"Asset Disposition" means, with respect to any Person, any sale,
lease, transfer or other disposition of shares of Capital Stock of a
Restricted Subsidiary (as defined in the Parent Guaranty) (other than
directors, qualifying shares), property or other assets (each referred to
for the purposes of this definition as a "disposition") by such Person or
any of its Restricted Subsidiaries (including any disposition by means of a
merger, consolidation or similar transaction).
"Bank Pledge Agreement" means a pledge agreement to be made by
the Parent in favor of the Agent for the ratable benefit of the Banks with
respect to the Pledged Shares.
"Bankruptcy Court" shall have the meaning assigned thereto in the
Recitals.
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"Bankruptcy Law" shall have the meaning assigned thereto in
Section 8.01.
"Banks" shall have the meaning assigned thereto in the Recitals.
"Board of Directors" means, with respect to any Person, the Board
of Directors of such Person or any committee thereof duly authorized to act
on behalf of such Board.
"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.
"Capital Stock" of any Person means any and all shares,
interests, rights to purchase, Warrants, options, participations or other
equivalents of or interests in (however designated) equity of such Person,
including any Preferred Stock, but excluding any debt securities
convertible into such equity.
"Capitalized Lease obligations" means an obligation that is
required to be classified and accounted for as a capitalized lease for
financial reporting purposes in accordance with GAAP, and the amount of
Indebtedness represented by such obligation shall be the capitalized amount
of such obligation determined in accordance with GAAP; and the Stated
Maturity thereof shall be the date of the last payment of rent or any other
amount due under such lease.
"Case" shall have the meaning assigned thereto in the Recitals.
"Chase Guarantee" shall have the meaning assigned thereto in the
Recitals.
"Closing Date" means the date on which the Lender makes the Loan.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commercial L/C" means a commercial documentary letter of credit
under which the issuer agrees to make payments in Dollars for the account
of the Parent, on behalf of the Parent or a Subsidiary thereof, in respect
of obligations of the Parent or such Subsidiary in connection with the
purchase of goods or services in the ordinary course of business.
"Commonly Controlled Entity" means, with respect to any Person,
an entity, whether or not incorporated, which is
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under Common Control with such Person within the meaning of Section 414(b)
or (c) of the Code.
"Company" means the party named as such in this Agreement until a
successor replaces it and, thereafter, means the successor.
"Contingent obligation" means as to any Person, any obligation of
such Person guaranteeing or in effect guaranteeing any Indebtedness,
dividends or other obligations ("primary obligations") of any other Person
(the "primary obligor") in any manner, whether directly or indirectly,
including any obligation of such Person, whether or not contingent (a) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (b) to advance or supply funds (i) for the
purchase or payment of any such primary obligation or (ii) to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency of the primary obligor, (c) to purchase
property, securities or services primarily for the purpose of assuring the
owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (d) otherwise to assure or
hold harmless the owner of any such primary obligation against loss in
respect thereof; provided, however, that the term contingent obligation
shall not include endorsements of instruments for deposit or collection in
the ordinary course of business. The amount of any Contingent obligation
shall be deemed to be an amount equal to the stated or determinable amount
(based upon the maximum reasonably anticipated net liability in respect
thereof as determined by the Company in good faith) of the primary
obligation or portion thereof in respect of which such Contingent
obligation is made or, if not stated or determinable, the maximum
reasonably anticipated net liability in respect thereof (assuming such
Person is required to perform thereunder) as determined by the Company in
good faith.
"Contractual Obligation" means as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of the
property owned by it is bound.
"Credit Documents" means the collective reference to this
Agreement, the Note, the Parent Guarantee, the Parent option Agreement and
the Parent Pledge Agreement.
"Currency Agreement" means in respect of a Person any foreign
exchange contract, currency swap agreement or other similar agreement as to
which such Person is a party or a beneficiary.
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"Custodian" shall have the meaning assigned thereto in Section
8.01.
6. "Default means any event which is, or after notice or passage of
time or both would be, an Event of Default.
"Disqualified Stock" means, with respect to any Person, any
Capital Stock which by its terms (or by the terms of any security into
which it is convertible or for which it is exchangeable or exercisable) or
upon the happening of any event (i) matures or is mandatorily redeemable
pursuant to a sinking fund obligation or otherwise, (ii) is convertible or
exchangeable for Indebtedness or Disqualified Stock or (iii) is redeemable
at the option of the holder thereof, in whole or in part, in each case an
or prior to the first anniversary of the Stated Maturity of the Note.
"Dollars" and "$" means dollars in lawful currency of the United
States of America.
7. "Effective Date" shall have the meaning assigned thereto in
Section 4.01.
"Equity Contribution Agreement" shall have the meaning assigned
thereto in the Recitals.
"Event of Default" shall have the meaning assigned thereto in
Section 8.01.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Facility" shall have the meaning assigned thereto in the
Recitals.
"Final Order" shall have the meaning assigned thereto in Section
4.01.
"Fiscal Date" means the Saturday closest to February 1, May 1,
August 1 or November 1, as the case may be, in any calendar year.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect from time to time.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof or any entity exercising
executive, legislative, judicial, regulatory or administrative functions of
or pertaining to government.
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"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness or other
obligation of any other Person and any obligation, direct or indirect,
contingent or otherwise, of such Person (i) to purchase or pay (or advance
or supply funds for the purchase or payment of) such Indebtedness or other
obligation of such other Person (whether arising by virtue of partnership
arrangements, or by agreement to keepwell, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) entered into for purposes of assuring in
any other manner the obligee of such Indebtedness or other obligation of
the payment thereof or to protect such obligee against loss in respect
thereof (in whole or in part) ; provided, however, that the term
"Guarantee" shall not include endorsements for collection or deposit in the
ordinary course of business. The term "Guarantee" used as a verb has a
corresponding meaning.
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any Interest Rate Agreement or Currency Agreement.
"Highest Lawful Rate" shall have the meaning assigned thereto in
section 9.10.
"Incur" means issue, assume, Guarantee, incur or otherwise become
liable for; Provided, however, that any Indebtedness or Capital Stock of a
Person existing at the time such person becomes a Subsidiary (whether by
merger, consolidation, acquisition or otherwise) shall be deemed to be
Incurred by such Subsidiary at the time it becomes a Subsidiary.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication) :
(i) the principal of and premium (if any) in respect of indebtedness
of such Person for borrowed money,
(ii) the principal of and premium (if any) in respect of obligations
of such Person evidenced by bonds, debentures, notes or other
similar instruments,
(iii) all obligations of such Person in respect of letters of credit or
other similar instruments (including reimbursement obligations
with respect thereto) ,
(iv) all obligations of such Person to pay the deferred and unpaid
purchase price of property or services (except Trade Payables) ,
which purchase price is
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due more that six months after the date of placing such property in service
or taking delivery and title thereto or the completion of such services,
(v) all Capitalized Lease Obligations of such Person,
(vi) the amount of all obligations of such Person with respect to the
redemption, repayment or other repurchase of any Disqualified
Stock or, with respect to any Subsidiary of the Company, any
Preferred Stock (but excluding, in each case, any accrued
dividends),
(vii) all Indebtedness of other Persons secured by a Lien on any asset
of such Person, whether or not such Indebtedness is assumed by
such Person; provided, however, that the amount of Indebtedness
of such Person shall be the lesser of (A) the fair market value
of such asset at such date of determination and (B) the amount of
such Indebtedness of such other Persons,
(viii) all Indebtedness of other Persons to the extent Guaranteed by
such Person, and
(ix) to the extent not otherwise included in this definition, Hedging
Obligations of such Person.
The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as
described above and the maximum liability, upon the occurrence of the
contingency giving rise to the obligation, of any contingent obligations at
such date.
"Indemnified Liabilities" shall have the meaning assigned thereto
in Section 9.05(c).
"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.
"Interest Period:
(i) initially, the period commencing on the Closing Date and ending
one month thereafter; and
(ii) thereafter, each period commencing on the last day of the next
preceding Interest Period and ending one month thereafter;
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Provided that, all of the foregoing Provisions relating to Interest Periods
are subject to the following:
(1) if any Interest Period would otherwise and on a day that is
not a Business Day, such Interest Period shall be extended to the
next succeeding Business Day unless the result of such extension
would be to carry such interest Period into another calendar
month in which event such Interest Period shall end on the
immediately preceding Business Day;
(2) any Interest Period that would otherwise extend beyond the
Maturity Date shall end an the Maturity Date; and
(3) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of
such Interest Period) shall end on the last Business Day of a
calendar month.
"Interest Rate Agreement" means with respect to any Person any
interest rate protection agreement, interest rate future agreement,
interest rate option agreement, interest rate swap agreement, interest rate
cap agreement, interest rate collar agreement, interest rate hedge
agreement or other similar agreement or arrangement as to which such Person
is party or a beneficiary.
"Investment" in any Person means any direct or indirect advance,
loan (other than advances to customers in the ordinary course of business
that are recorded as accounts receivable an the balance sheet of such
Person) or other extension of credit (including by way of Guarantee or
similar arrangement) or capital contribution to (by means of any transfer
of cash or other property to others or any payment for property or services
for the account or use of others), or any purchase or acquisition of
Capital Stock, Indebtedness or other similar instruments issued by such
Person.
"Leased Properties" shall have the meaning assigned thereto in
Section 3.10.
"Lender" means the party named in this Agreement, until one or
more successors replace it, and thereafter means the successor or
successors.
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"LIBOR": with respect to each day during each Interest Period,
the rate per annum equal to arithmetic mean of quotations provided by four
major banks in the London interbank market selected by the Servicer as such
quotations appear an Telerate Page 3875 of the Dow Jones Telerate Service
(or such other page as may replace Telerate Page 3875 on that service for
the purpose of displaying London interbank offered rates of major banks) as
of 11:00 a.m. (London time) two Business Days prior to the beginning of
such Interest Period.
"Lien" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any conditional sale or
other title retention agreement or lease in the nature thereof).
"Loan" shall have the meaning set forth in Section 2.01.
"Maturity Date's shall have the meaning assigned thereto in
Section 2.04.
"Note" means the Note substantially in the form attached hereto
as Exhibit A.
"Notice Event" shall have the meaning assigned thereto in section
5.08.
"INRG Plan" shall have the meaning assigned thereto in the
Recitals.
"NRG Plan Effective Date" shall have mean the date on which the
NRG Plan shall become effective.
"Officer" means the Chairman of the Board, the President, any
Vice President, the Treasurer or the Secretary or Clerk of the Company.
"Officers, Certificate" means a certificate signed by two
Officers.
"Outside Date" means May 15, 1996, as the same may extended in
writing by the Company and the Lender.
"Parent" shall have the meaning assigned thereto in the Recitals.
"Parent Guarantee" means a guarantee, substantially in the form
of Exhibit B, to be made by the Parent in favor of the Lender.
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"Parent option Agreement" means an agreement, substantially in
the form of Exhibit D, to be made by the Parent in favor of the Lender.
"Parent Pledge Agreement" means a pledge substantially in the
form of Exhibit C, to be made Parent in favor of the Lender.
"Partnership" shall have the meaning assigned thereto in the
Recitals.
"Partnership credit Agreement" shall have the meaning assigned
thereto in the Recitals.
"Partnership Equity Contribution" shall have the meaning assigned
thereto in the Recitals.
"Partnership interest" shall have the meaning assigned thereto in
Section 7.01.
"Permitted Liens" means, with respect to any Person:
(a) Liens for taxes, assessments or other governmental charges not
yet delinquent or which are being contested in good faith and by
appropriate proceedings if adequate reserves with respect thereto
are maintained on the books of the such Person in accordance with
GAAP;
(b) carriers', warehousemen's, mechanics', landlords', materialmen's,
repairman's or other like Liens arising in the ordinary course of
business in respect of obligations which are not yet due or which
are bonded or which are being contested in good faith and by
appropriate proceedings if adequate reserves with respect thereto
are maintained on the books of such Person in accordance with
GAAP;
(c) pledges or deposits in connection with workmen's compensation,
unemployment insurance and other social security legislation;
(d) deposits to secure the performance of bids, tenders, trade or
government contracts (other than for borrowed money), leases,
licenses, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred
in the ordinary course of business;
(e) easements (including reciprocal easement agreements), rights-of-
way, building, zoning and similar restrictions, utility
agreements, covenants,
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reservations, restrictions, encroachments, changes, and other similar
encumbrances or title defects incurred, or leases or subleases granted to
others, in the ordinary course of business, which do not in the aggregate
materially detract from the aggregate value of the properties of such
Person or in the aggregate materially interfere with or adversely affect in
any material respect the ordinary conduct of the business of such person or
the properties subject thereto;
(f) Bankers' liens arising by operation of law;
(g) With respect to the Parent, Liens on documents of title and the
property covered thereby securing Indebtedness in respect of any
Commercial L/Cs;
(h) (i) mortgages, liens, security interests, restrictions or
encumbrances that have been placed by any developer, landlord or
other third party on property over which such Person has easement
rights or on any Leased Property and subordination or similar
agreements relating thereto and (ii) any condemnation or eminent
domain proceedings affecting any real property;
(i) Liens an goods (and Proceeds thereof) held by such Person to be
sold on a consignment basis in the ordinary course of business;
(j) Leases or subleases to third parties;
(k) Liens in connection with workmen's compensation obligations and
general liability exposure of such Person; and
(l) Liens securing Indebtedness Incurred by the Company under Section
6.01(b)(ii) or (iii) or by the Parent under Section 11.01(b)(ii)
or (iii) of the Parent Guarantee.
"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.
"Pledged Shares" shall have the meaning assigned thereto in the
Parent Pledge Agreement.
"Preferred Stock" as applied to the Capital Stock of any
corporation means Capital Stock of any class or classes (however
designated) which is preferred as to the payment of dividends, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such
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corporation, over shares of capital Stock of any other class of such
corporation.
"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.
a. "Register" shall have the meaning assigned thereto in Section 2.10(b).
"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System, as from time to time in effect.
"Reimbursement Obligation" means the obligation of the Company to
reimburse the Lender pursuant to Section 2.02 for amounts paid by the
Lender under the Chase Guarantee.
"Related Business" means, with respect to any Person, those
businesses in which such Person or any of its Subsidiaries is engaged on
the date of this Agreement, or which are directly related thereto.
"Required Equity Contribution" shall have the meaning assigned
thereto in the Recitals.
"Requirement of Law" means, as to any Person, the Articles or
Certificate of Incorporation and By-Laws or other organizational or
governing documents of such Person, and any law, treaty, rule or
regulation, order, or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such
Person or any of its property, or to which such Person or any of its
property is subject.
"Responsible officer" means, with respect to any Person, the
president, chief executive officer, the chief operating officer, the chief
financial officer, treasurer, controller or any vice president of such
Person.
"Restricted Payment" shall have the meaning assigned thereto in
Section 6.02(a).
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for
the repurchase of such security at the option of the holder thereof upon
the happening of any contingency beyond the control of the issuer unless
such contingency has occurred).
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"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.
"Trade Payables" means, with respect to any Person, any accounts
payable or any indebtedness or monetary obligation to trade creditors
created, assumed or Guaranteed by such Person arising in the ordinary
course of business in connection with the acquisition of goods or services.
"Tranche A Obligation" shall have the meaning assigned thereto in
the Recitals.
"Transferee', shall have the meaning set forth in Section
9.06(b).
"Uniform Commercial Code" means the New York Uniform Commercial
Code as in effect from time to time.
"Voting Stock" of a corporation means all classes of Capital
Stock of such corporation then outstanding and normally entitled to vote in
the election of directors.
SECTION 1.02. Rules of Construction. Unless the context
otherwise requires:
(1) a term has the meaning assigned to it;
(2) as used herein and in the Note and any certificate or other
document made or delivered pursuant hereto, accounting terms relating to
the company and its Subsidiaries not defined in Section 1.01 and accounting
terms partly d6fined in Section 1.01 to the extent not defined shall have
the respective meanings given to them under GAAP. All computations
determining compliance with financial covenants or terms, including
definitions used therein, shall be prepared in accordance with generally
accepted accounting principles in effect at the time of the preparation of,
and in conformity with those used to prepare, the historical financial
statements of the Company;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
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(5) words in the singular include the plural and words in the plural
include the singular;
(6) unsecured Indebtedness shall not be deemed to be subordinate or
junior to secured indebtedness merely by virtue of its nature as unsecured
indebtedness;
(7) the principal amount of any noninterest bearing or other
discount security at any date shall be the principal amount thereof that
would be shown on a balance sheet of the issuer dated such date prepared in
accordance with GAAP and accretion of principal on such security shall be
deemed to be the Incurrence of Indebtedness;
(8) the principal amount of any Preferred Stock shall be (i) the
maximum liquidation value of such Preferred Stock or (ii) the maximum
mandatory redemption or mandatory repurchase price with respect to such
Preferred stock, whichever is greater;
(9) 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;
(10) 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; and
(11) as used in this Agreement, references to a fiscal year of the
Company identified only by a year refer to the fiscal year of the Company
ended on the Fiscal Date at the end of the fourth fiscal quarter of the
Company which falls in the immediately succeeding calendar year.
References to the last day of any fiscal year or fiscal quarter of the
Company, or to a fiscal year or quarter ended on a certain date, shall be
deemed to refer to the Fiscal Date at the end of such fiscal year or
quarter.
B. ARTICLE 2
C. Loan and Reimbursement Obligation
SECTION 2.01. Loan. (a) Subject to the terms and conditions
hereof, the Lender agrees to make a loan in Dollars (the "Loan") to the
Company on the Closing Date, in
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aggregate principal amount not in excess of ten million dollars
($10,ooo,ooo).
(b) The proceeds of the Loan shall be used solely to make the
Required Equity Contribution to the Partnership.
SECTION 2.02. Chase Guarantee and Reimbursement Obligation. (a)
Subject to the terms and conditions hereof, the Lender, in reliance on the
agreement of the Company set forth in paragraph (b), agrees to enter into
the Chase Guarantee on the Effective Date.
(b) (i) The Company agrees to reimburse the Lender on each
date on which the Lender notifies the Company of the date and amount of
demand for payment presented under the Chase Guarantee and paid by the
Lender for the amount of such demand so paid and any taxes, fees, charges
or other costs or expenses incurred by the Lender in connection with such
payment. Each such payment shall be made to the Lender at the office of
the Lender located at 1221 Nicollet Mall, Minneapolis, Minnesota in Dollars
and in immediately available funds.
(ii) Interest shall be payable on any and all amounts remaining
unpaid by the Company under this section 2.02(b) from the date such amounts
become payable (whether at stated maturity, by acceleration or otherwise)
until payment in full at LIBOR plus 4.00%.
(iii) The Company's obligations under this Section 2.02 shall
be absolute and unconditional under any and all circumstances and
irrespective of any set-off, counterclaim or defense to payment which the
Company may have or have had against the Lender or any beneficiary of the
Chase Guarantee.
(iv) The Company also agrees with the Lender that the Lender
shall not be responsible for, and the Reimbursement Obligations of the
Company hereunder shall not be affected by, among other things, the
validity or genuineness of documents or of any endorsements thereon, even
though such documents shall in fact prove to be invalid, fraudulent or
forged, or any dispute between or among the Company and any beneficiary of
the Chase Guarantee or any claims whatsoever of the Company against any
beneficiary of the Chase Guarantee.
(v) The Company agrees that any action taken or omitted by the
Lender under or in connection with the Chase Guarantee, if done in the
absence of gross negligence of willful misconduct, shall be binding on the
Company and shall not result in any liability of the Lender to the Company.
SECTION 2.03. Borrowing. The Company shall borrow the entire
amount of the Loan on the Closing Date. The
16
company shall give the Lender not less than three Business Days' prior
written notice of the Closing Date, specifying the principal amount of the
Loan it is requesting.
SECTION 2.04. Maturity. The Loan will mature on the date that is
eight years following the closing Data (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
the 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.
Partial prepayments of the Loan shall be in an aggregate principal amount
equal to the lesser of (A) $500,000, or a whole multiple of $100,000 in
excess thereof and (B) the aggregate unpaid principal amount of the Loan.
(b) (i) If, subsequent to the Closing Date, the Company or any
of its Subsidiaries shall obtain any dividend or other distributions from
the Partnership, 100% of the cash proceeds thereof less (A) appropriate
reserves for any taxes or other charges imposed by any Governmental
Authority an the Company or its property, or allocable to the Company, and
(B) appropriate reserves for any other operating expenses of the Company
shall be promptly applied toward the prepayment of the Loan.
(ii) The Company shall give the Lender at least one Business
Day's notice of each prepayment or mandatory reduction pursuant to this
Section 2.05(b) setting forth the date and amount thereof.
(c) 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) The Loan shall bear interest for each day during each
Interest Period on the unpaid principal thereof at a rate per annum equal
to LIBOR determined for such day plus 4.00%.
(b) If all or a portion of (i) the principal amount of the
Loan or (ii) any interest payable thereon shall not be paid when due
(whether at the stated maturity, by acceleration or otherwise) the Loan,
and-any such overdue amount shall, without limiting the rights of the
Lender under Section 8,
17
bear interest at a rate per annum which is 2.00% above the rate of interest
otherwise applicable to the Loan 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. Computation of Interest and Fees.
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 2.08. 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 9.05; second, to the payment of
interest then due and payable on the Loan; and third, to the payment of the
principal amount of the Loan 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 be made to the Lender at the office of
the Lender 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 2.09. 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.
18
SECTION 2.10. 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 Loan 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 aX0unt of the 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 Effective Date, the
Company will execute and deliver to the Lender the Note evidencing the
Loan: The parties hereto acknowledge and agree that the "issue price" of
the Note, within the meaning of Section 1273(b) of the Internal Revenue
code of 1986, as .amended, is $10 million, that for purposes of Treasury
Regulation S 1.1273-2(h) no amount is allocated to the right granted to the
Lender by the Guarantor pursuant to that certain letter agreement dated
February 28, 1996 from the Guarantor to the Lender, and that, consistent
with Treasury Regulation S 1. 1273-2 (j) , no amount will be allocated to
the option to convert a portion of the Note into stock of the Parent
pursuant to the Parent option Agreement for purposes of determining the
issue price of the Note.
SECTION 2.11. Termination of the Commitment. The Company shall
have the right at any time prior to the making of the Loan, upon prior
written notice to the Lender, to terminate this Agreement and the
obligation of the Lender to make the Loan.
19
ARTICLE 3
Representations and Warranties
In order to induce the Lender to enter into this Agreement and to
make the Loan, the Company hereby represents and warrants to the Lender, as
follows (all representations and warranties are made as of the Effective
Date, as of the Closing Date and with respect to the entire period
following the Effective Date, as if made at any time during such period):
SECTION 3.01. Corporate Existence. The Company is a corporation
duly organized and validly existing under the laws of the jurisdiction of
its incorporation.
SECTION 3.02, Corporate Power; Authorization. The Company has
the corporate power and authority to make, deliver and perform each of the
Credit Documents to which it is a party, and the Company has the corporate
power and authority and legal right to borrow hereunder. The Company has
taken all necessary corporate action to authorize the execution, delivery
and performance of each of the Credit Documents to which it is or will be a
party and the Company has taken all necessary corporate action to authorize
the borrowings hereunder. No consent or authorization of, or filing with,
any Person (including any Governmental Authority) is required in connection
with the execution, delivery or performance by the Company, or for the
validity or enforceability against the Company, of any credit Document
except for consents, authorizations and filings (a) which have been
obtained or made and are in full force and effect, and except such
consents, authorizations and filings, the failure to obtain or perform (i)
which would not have a material adverse effect on the business, assets,
condition (financial or otherwise) or results of operations of the Company
and (ii) which would not adversely affect the validity or enforceability of
any of the Credit Documents or the rights or remedies of the Lender
thereunder.
SECTION 3.03. Enforceable Obligations. This Agreement, and each
of the other Credit Documents has been, duly executed and delivered on
behalf of the Company. This Agreement and each of the other Credit
Documents constitutes the legal, valid and binding obligation of the
Company, and is enforceable against the Company in accordance with its
terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting creditors, rights
generally and by general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).
20
SECTION 3.04. No Legal Bar. The execution, delivery and
performance of each credit Document and the incurrence or issuance of and
use of the proceeds of the Loan do not violate any Requirement of Law or
any Contractual Obligation applicable to or binding upon the Company or any
of its properties or assets, in any manner which, individually or in the
aggregate, (i) would have a material adverse effect on the ability of the
Company to perform its obligations under the Credit Documents to which it
is a party or (ii) would have a material adverse effect on the business,
assets, condition (financial or otherwise) or results of operations of the
Company, and do not result in the creation or imposition of any Lien on any
of its properties or assets pursuant to any Requirement of Law applicable
to it, as the case may be, or any of its Contractual Obligations, except
for Permitted Liens.
D. ARTICLE 4
Conditions Precedent
SECTION 4:01. conditions to Effectiveness. This Agreement shall
become effective on the date (the "Effective Date") on which the following
conditions are satisfied to the satisfaction of the Lender:
(a) Credit Documents. The Lender shall have received (i) this
Agreement and the Note, each executed and delivered by a duly
authorized officer of the Company and(ii) each of the Parent
Guarantee, the Parent Option Agreement and the Parent Pledge
Agreement, each executed and delivered by a duly authorized
officer of the Parent.
(b) Corporate Proceedings of the Company. The Lender shall have
received a copy of the resolutions, in form and substance
reasonably satisfactory to the Lender, of the Board of Directors
of the Company authorizing (i) the execution, delivery and
performance of this Agreement, the Note and the other credit
Documents to which it is a party and (ii) the borrowings
contemplated hereunder, certified by the Secretary or an
Assistant Secretary of the Company as of the Effective Date,
which certificate shall be in form and substance reasonably
satisfactory to the Lender and shall state that the resolutions
thereby certified have not been amended, modified, revoked or
rescinded.
21
(c) Company Incumbency Certificate. The Lender shall have received a
Certificate of the Company, dated the Effective Date, as to the
incumbency and signature of the officers of the Company executing
any credit Document reasonably satisfactory in form and substance
to the Lender, executed by the President or any Vice President
and the Secretary or any Assistant Secretary of the Company.
(d) Corporate Documents. The Lender shall have received true and
complete copies Of the certificate of incorporation and by-laws
of the Company, certified as of the Effective Date as complete
and correct copies thereof by the Secretary or an Assistant
Secretary of the Company.
(e) Pledged Stock: Stock Powers. The Agent shall have received the
certificates representing the shares pledged pursuant to the
Parent Pledge Agreement, together with an undated stock power for
each such certificate executed in blank by a duly authorized
officer of the pledgor thereof.
(f) Final order. The Lender shall have received a certified copy of
an order of the Bankruptcy court in form and substance reasonably
satisfactory to the Lender (the "Final order") which (i) shall be
in full force and effect, (ii) shall have been entered no later
than March 8, 1996, and (iii) shall not have been reversed,
modified or amended in any respect.
SECTION 4.02. Condition to Loan. The obligation of the Lender to
make the Loan on the Closing Date is subject to the satisfaction, or waiver
by the Lender, immediately prior to or concurrently with the making of the
Loan, of the following conditions:
(a) Representations and Warranties. Each of the representations and
warranties made by the Company in or pursuant to the Credit
Documents shall be true and correct in all material respects on
and as of such date as if made on and as of such date.
(b) No Default. No Default or Event of Default shall have occurred
and be continuing
22
on such date or after giving effect to the Loan requested to be
made on such date.
ARTICLE 5
Affirmative Covenants
The company hereby agrees that, so long as this Agreement remains
in effect, so long an (A) the Loan or the Chase Guarantee remains
outstanding and unpaid, or any other amount is owing to the Lender
hereunder or under any of the other credit Documents and (B) either (I) the
closing of the transactions contemplated by the Acquisition Agreement (as
defined in the NRG Plan) has occurred or (II) the Acquisition Agreement has
been terminated in accordance with its terms, except if the Guarantor has
or had (as mutually agreed by the parties hereto in writing or as finally
determined by a court) the right to terminate the Acquisition Agreement in
accordance with Section 7.2(b) or 7.2(d) of thereof, it shall:
SECTION 5.01. Notices. Subject to the last sentence of this
section promptly give notice to the Lender of any of the following (a
"Notice Event") :
(a) of the occurrence of any Default or Event of Default; and
(b) of a material adverse change known to the Company in the
business, assets, condition (financial or otherwise) or results of
operations of the Company.
Each notice pursuant to this Section 5.0a shall be accompanied by a
statement of a Responsible Officer setting forth details of the occurrence
referred to therein and (in the cases of clauses (a) through (b)) stating
what action the Company proposes to take with respect thereto. The Company
shall not be deemed in breach or default of its obligations under this
Section 5.01 due to the failure to notify the Lender of any Notice Event of
which the Lender shall have had actual knowledge as of the date notice of
such Notice Event was to have been provided.
SECTION 5.02. Maintenance of Books and Records. Maintain its
books and records in accordance with generally accepted accounting
principles and, during reasonable business hours and upon reasonable
notice, make available to the Lender the Company's books and records. The
Lender shall be entitled to make such investigation of the business of the
Company as the Lender reasonably requests; provided, however, that (i) the
Company shall not be required to provide its books and records to the
extent disclosure of them would compromise any attorney-client privilege
between the Company and its counsel
23
and (ii) other than as any be provided in any order entered by the
Bankruptcy court, the Lender shall not be entitled to receive any document
or information concerning bids for the Guarantor or its assets submitted by
entities other than the Lender and its affiliates; and, provided, further,
that the Lender will continue to comply with the confidentiality agreement
previously entered into by the Lender with the Guarantor.
ARTICLE 6
So long as (A) this Agreement remains in effect or the Loan or
the Chase Guarantee remains outstanding and unpaid, or any other amount is
owing to the Lender hereunder or under any other Credit Document (it being
understood that each of the permitted exceptions to each of the covenants
in this Article 6 is in addition to, and not overlapping with, any other of
such permitted exceptions except to the extent expressly provided) and (B)
either (I) the closing of the transactions contemplated by the Acquisition
Agreement has occurred or (11) the Acquisition Agreement has been
terminated in accordance with its terms, except if the Guarantor has or had
(as mutually agreed by the parties hereto in writing or as finally
determined by a court) the right to terminate the Acquisition Agreement in
accordance with Section 7.2(b) or 7.2(d) of thereof:
SECTION 6.01. Limitation on Indebtedness.
(a) The Company shall not Incur any Indebtedness.
(b) Notwithstanding Section 6.01(a), the Company may Incur the
following Indebtedness:
(i) Indebtedness to the Banks or other Indebtedness incurred by the
Partnership to finance the construction or operation of the
Facility;
(ii) Indebtedness represented by the Loan;
(iii) Indebtedness of the Company in an aggregate principal amount at
any one time outstanding (excluding Indebtedness that is
permitted to be incurred pursuant to clause (ii) of this Section
6.01(b)) not in excess of $250,000; and
(iv) Indebtedness in connection with workmen's compensation
obligations and related general liability exposure of the
company.
24
SECTION 6.02. Limitation on Sales of Assets. The Company shall
not make any Asset Disposition.
SECTION 6.03. Limitation on Liens. The Company shall not,
directly or indirectly, create or permit to exist any Lien an any of its
property or assets, whether owned on the date of this Agreement or
thereafter acquired, securing any obligation other than Permitted Liens.
SECTION 6.04. Limitation on Lines of Business. The Company shall
not engage in any business other than the construction, management and
ownership of the Facility or the ownership of an interest in the
Partnership.
SECTION 6.05. Limitation on Merger, Etc. The Company shall not
consolidate with or merge with or into, or convey, transfer or lease all or
substantially all its assets to, any Person.
ARTICLE 7
[RESERVED)
ARTICLE 8
Defaults and Remedies
SECTION 8.01. 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 the Loan
or the Reimbursement obligations when the same becomes due and payable and
such default continues for a period of 10 days and the Guarantor fails to
make payment with respect thereto under the Guarantee;
(2) the Company (i) defaults in the payment of the principal of the
Loan or the Reimbursement Obligations when the same become due and payable
at its Stated Maturity, upon redemption, upon declaration or otherwise or
(ii) fails to redeem or purchase the Note when required pursuant to this
Agreement or the Note and, in either case, the Guarantor fails to make
payment with respect thereto under the Guarantee;
(3) at any time during which (A) either (1) the Lender shall
beneficially own (as such term is defined in the Securities Exchange Act of
1924, as amended) less than 26% of the equity securities (including,
without limitation, all capital Stock and any securities
25
convertible into Capital Stock) of the Parent on a fully diluted basis or
(II) the Lender, directly or indirectly (e.g., through any Person that
"controls" (as defined in the Securities Exchange Act of 1934, as amended)
or is "controlled by" the Lender), shall have the right to appoint one-half
or more of the members of the Board of Directors of the Parent and (B)
either (I) the closing of the transactions contemplated by the Acquisition
Agreement has occurred or (11) the Acquisition Agreement has been
terminated in accordance with its terms, except if the Guarantor has or had
(as mutually agreed by the parties hereto in writing or as finally
determined by a court) the right to terminate the Acquisition Agreement in
accordance with Section 7.2(b) or 7.2(d) of thereof: (i) any representation
or warranty made or deemed made by the Company or the Parent in any Credit
Document shall prove to have been incorrect in any material respect on or
as of the date, or at any time during the period, that such representation
or warranty is made or deemed made; (ii) the facts or circumstances giving
rise to such incorrect representation or warranty would have a material
adverse effect on the Company's or the Parent's ability to pay the amounts
outstanding under the Loan (including principal and interest) as they
become due and payable; and (iii) both of the conditions in preceding
subclauses (i) and (ii) continue for 30 days after the notice specified
below;
(4) [RESERVED];
(5) at any time during which (A) either (1) the Lender shall
beneficially own (as such term is defined in the Securities Exchange Act of
1934, as amended) less than 26% of the equity securities (including,
without limitation, all Capital Stock and any securities convertible into
Capital Stock) of the Parent on a fully diluted basis or (11) the Lender,
directly or indirectly (e.g., through any Person that "controls" (as
defined in the securities Exchange Act of 1934, as amended) or is
"controlled by" the Lender), shall have the right to appoint one-half or
more of the members of the Board of Directors of the Parent and (B) either
(I) the closing of the transactions contemplated by the Acquisition
Agreement has occurred or (II) the Acquisition Agreement has been
terminated in accordance with its terms, except if the Guarantor has or had
(as mutually agreed by the parties hereto in writing or as finally
determined by a court) the right to terminate the Acquisition Agreement in
accordance with Section 7.2(b) or 7.2(d) of thereof: the Company shall
default in the observance or performance of any agreement contained in
Section 5.01(a) or Article 6 of this Agreement or the Parent shall
26
default in the observance or performance of any agreement contained in
Section 11 or Section 12 of the Guaranty;
(6) the Company or the Parent fails to comply with any of its
agreements in the Credit Documents (other than those referred to in (1)
through (5) above) and such failure continues for 30 days after the notice
specified below, provided that in the case of Sections 11 and 12 of the
Parent Guarantee, (A) either (I) the Lender shall beneficially own (as such
term is defined in the Securities Exchange Act of 1934, as amended) less
than 264 of the equity securities (including, without limitation, all
Capital Stock and any securities convertible into Capital Stock) of the
Parent on a fully diluted basis or (11) the Lender, directly or indirectly
(e.g., through any Person that "controls" (as defined in the Securities
Exchange Act of 1934, as amended) or is "controlled by" the Lender), shall
have the right to appoint one-half or more of the members of the Board of
Directors of the Parent and (B) either (I) the closing of the transactions
contemplated by the Acquisition Agreement has occurred or (11) the
Acquisition Agreement has been terminated in accordance with its terms,
except if the Guarantor has or had (as mutually agreed by the parties
hereto in writing or as finally determined by a court) the right to
terminate the Acquisition Agreement in accordance with Section 7.2(b) or
7.2(d) of thereof;
(7) [Reserved];
(8) the Company 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;
(9) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
27
(A) is for relief against the company in an involuntary case;
(B) M appoints a Custodian of the Company or for any substantial
part of its property; or
(C) orders the winding up or liquidation of the Company;
or any similar relief is granted under any foreign laws and the order or
decree remains unstayed and in effect for 60 days;
(10) at any time during which (A) either (I) the Lender shall
beneficially own (as such term is defined in the Securities Exchange Act of
1934, as amended) less than 261 of the equity securities (including,
without limitation, all Capital stock and any securities convertible into
Capital Stock) of the Parent on a fully diluted basis or (II) the Lender,
directly or indirectly (e.g., through any Person that "controls" (as
defined in the Securities Exchange Act of 1934, as amended) or is
"controlled by" the Lender), shall have the right to appoint one-half or
more of the members of the Board of Directors of the Parent and (B) either
(I) the closing of the transactions contemplated by the Acquisition
Agreement has occurred or (II) the Acquisition Agreement has been
terminated in accordance with its terms, except if the Guarantor has or had
(as mutually agreed by the parties hereto in writing or as finally
determined by a court) the right to terminate the Acquisition Agreement in
accordance with Section 7.2(b) or 7.2(d) of thereof: any judgment or decree
for the payment of money in excess of $3,000,000 or its foreign currency
equivalent at the time is entered against the Company, the Parent or any
Subsidiary of the Parent 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;
(11) any Credit Document shall cease, for any reason, to be in full
force and affect or the Company or the Parent shall so assert in writing;
(12) the Bankruptcy Court shall enter an order (i) dismissing the
case, (ii) converting the Case to a case under Chapter 7 of the Bankruptcy
Code, (iii) appointing a trustee or examiner in the case or (iv) the
Guarantor shall make an application to the Bankruptcy Court in respect of
clauses (i), (ii) or (iii); or an application
28
shall be made for the approval of, or there shall arise, any claim in the
Case having a priority superior to that of the Lender;
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 affected 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.
The term "Bankruptcy Law" means Title 11, United States Code, or
any similar Federal or state law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.
A Default under clauses (3) and (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 8.02. Acceleration. If an Event of Default (other than an
Event of Default specified in section 8.01(a) or (9) 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 Loan (including,
without limitation, all amounts of Reimbursement Obligations, whether or
not the beneficiaries of the chase Guarantee shall have demanded payment
thereunder) 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 8.01(s) or (9) with respect to the Company (but not
any Subsidiary) occurs, the principal of and interest an the Loan
(including, without limitation, all amounts of Reimbursement obligations,
whether or not the beneficiaries of the Chase Guarantee shall have demanded
payment thereunder) 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 8.03. 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 (including, without
limitation, all amounts of Reimbursement Obligations, whether or not the
beneficiaries of the Chase Guarantee shall have demanded payment
29
thereunder) 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 8.04. 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 deemed cured, but no such waiver shall extend to
any subsequent or other Default or impair any consequent right.
SECTTON 8.05. Priorities. If the Lender collects any money or
property pursuant to this Article a, 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 8.06. 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 8.07. Waiver of Stay of 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.
30
ARTICLE 9
E. Miscellaneous
SECTION 9.01. 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 a
writing signed by the Company and the Lender.
SECTION 9.02. Notices. All noticed, 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)t 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 follows, or to such other address
as may be hereafter notified by the respective parties hereto and any
future holders of the Note:
The Company: O'Brien (Schuykill)
Cogeneration, Inc.
225 South 8th Street
Philadelphia, PA 19106
Attention:
President or Chief
Executive Officer
Telephone: (215) 627-5500
Telecopier: (215) 922-5227
if to Lender NRG Energy, Inc.
1221 Nicollet Mail, 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 Mail, Suite 700
Minneapolis, MN 55403
Attention: Vice President and
General Counsel
Telephone: (612) 373-5300
Telecopier: (612) 373-5392
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provided that any notice, request or demand to or upon the Lender pursuant
to Section 2.05 shall not be effective until received.
SECTION 9.03. 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, rarely, power or
privilege hereunder preclude any other or further exercise thereof or 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 9.04. Survival of Representations and Warranties. All
representations and warranties made hereunder and in any document,
certificate or statement delivered pursuant hereto or in connection
herewith shall survive the execution and delivery of this Agreement and the
Note.
SECTION 9.05. Payment of Expenses and Taxes. The Company agrees
(a) 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 and any such other documents, including reasonable fees and
disbursements of counsel to the Lender incurred in connection with the
foregoing, (b) to pay, indemnify, and to hold the Lender harmless from any
and all recording and filin4 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 (c) 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
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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 applicable to the operations of the Company 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 respective directors
or officers; (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; (iii) legal proceedings commenced against the Lender by any
Transferee; or (iv) actions taken by the Company either at the direction of
the Board of Directors of the Company or pursuant to the Management
Agreement at such time as persons designated by the Lender or which the
Lender shall have the right to appoint shall constitute at least one-half
of the Board. The agreements in this Section 9.05 shall survive repayment
of the Note and all other amounts payable hereunder.
SECTION 9.06. Successors and Assigns; Participations and
Assignments.
(a) This Agreement shall be binding upon and inure to the
benefit of the Company, the Lender all future holders of the Note and the
Loan, 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 obligations under this Agreement and the
Note to any Person (a "Transferee").
(c) The Company authorizes the Lender to disclose to any
prospective 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, subject to
receipt of a confidentiality agreement from such Prospective Transferee in
form and substance reasonably satisfactory to the Company.
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SECTION 9.07. 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 9.08. Governing Law, 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.
SECTION 9.09. Submission to Jurisdiction; Waivers.
(a) Each party to this Agreement hereby irrevocably and unconditionally:
(i) submits of or 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 9.02; and
(iv) agrees that nothing herein shall affect the right to affect
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 9.10. 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
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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 in 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 subje6t to reduction to the affect 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 Loan 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 Loan 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 Loan. 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.
SECTION 9.11. Termination. This Agreement shall terminate on the
first date on Which the chase Guarantee shall be returned to the Lender or
otherwise terminated and all principal of and interest on the Loan, the
Note, the Reimbursement Obligations, and all other obligations and
liabilities of the Borrower to the Lender, whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses or
otherwise, shall have been indefeasibly paid in full.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered in New York,
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New York by their proper and duly authorized officers as of the day and
year first above written.
O'BRIEN (Schuylkill)
COGENERATION, INC.
By /s/ Sanders D. Newman
Name: Sanders D. Newman
Title: V. P. & Secretary
NRG ENERGY, INC.
by /s/ Craig A. Mataczynski
Name: Craig A. Mataczynski
Title: Vice President
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