Exhibit 10.26.6
GENERAL SECURITY AGREEMENT
of
NRG GENERATING (U.S.) INC.
in favor of
MEESPIERSON CAPITAL CORP.
December 17, 1997
GENERAL SECURITY AGREEMENT
THIS GENERAL SECURITY AGREEMENT ("this Agreement") dated as
of December 17, 1997, is entered into by and between NRG GENERATING
(U.S.) INC., a corporation incorporated under the laws of the State of
Delaware, having offices at 1221 Nicollet Mall, Suite 610, Minneapolis,
Minnesota 55403 (the "Grantor"), and MEESPIERSON CAPITAL CORP., a
corporation incorporated under the laws of the State of Delaware, with
offices at 445 Park Avenue, New York, New York (the "Security
Trustee").
W I T N E S S E T H T H A T :
WHEREAS:
A. By a Credit Agreement dated as of December 17, 1997 (the
"Credit Agreement") made among the Security Trustee, as Agent and
Security Trustee, the banks and financial institutions whose names and
addresses are set out in Schedule 1 thereto (the "Lenders"), and
Grantor, the Lenders, subject to the terms thereof, have agreed to make
advances to the Grantor of up to Thirty Million United States Dollars
(US$30,000,000) outstanding at any time (the "Credit Facility");
B. Pursuant to the Credit Agreement it is a condition
precedent to the availability of the Credit Facility that the Grantor
execute and deliver to the Security Trustee this Agreement and grant
the security interests contemplated hereby in order to create in favor
of the Security Trustee a valid and perfected security interest, as
that term is defined in the Uniform Commercial Code of New York (the
"Code"), in the Collateral (as such term is hereinafter defined), as
security for the payment and performance of all the obligations of the
Grantor under and in connection with the Credit Agreement and the Note
(as such term is defined in the Credit Agreement) now or hereafter
existing whether for principal, interest, fees, expenses or otherwise
and all secured obligations of the Grantor now or hereafter existing
under this Agreement (all such obligations of the Grantor are
hereinafter collectively referred to as the "Secured Obligations").
NOW, THEREFORE, in consideration of the premises, the parties
hereby agree as follows:
1. Definitions. All capitalized terms not otherwise defined
herein shall have the meanings ascribed to them in the Credit
Agreement.
2. Grant of Security. The Grantor, as legal and beneficial
owner, as security for the Secured Obligations, hereby assigns,
pledges, transfers and sets over unto the Security Trustee and its
successors and assigns, and hereby grants to the Security Trustee a
security interest in, all of the Grantor's right, title and interest in
and to the following property (hereinafter referred to as the
"Collateral"):
(a) Any and all equipment (as defined in the Code) of the
Grantor, or in which it has rights, whether now owned or hereafter
acquired, which is used in connection with, or located at, the
Northeast Facility or the Southwest Facility of the Philadelphia
Cogeneration Project owned and operated by O'Brien (Philadelphia)
Cogeneration Inc., together with all present and future improvements or
products of, accessions, attachments and other additions to and
substitutes and replacements for, all or any part of the foregoing (all
of the foregoing types or items of property and interests described in
this paragraph are hereinafter collectively referred to in this
Agreement as the "Equipment"); and
(b) Any and all proceeds of, and all other profits, rentals
or receipts, in whatever form, arising from the collection, sale,
lease, exchange, assignment, licensing or other disposition of, or
realization upon, the Equipment, including without limitation (i) all
claims of the Grantor against third parties for loss of, damage to or
destruction of, or of proceeds payable under, or unearned premiums with
respect to policies of insurance in respect of, any of the Equipment;
(ii) any condemnation payments with respect to any of the Equipment,
whether now existing or hereafter arising; and (iii) any and all other
amounts from time to time paid or payable under or in connection with
any of the Equipment, including, without limitation, all other rights,
claims and benefits of the Grantor against any person arising out of,
relating to or in connection with, any of the Equipment.
The security interest of the Security Trustee contained
herein shall cover, and shall include a continuing general assignment
in favor of the Security Trustee in, any and all documents, contracts,
liens and security instruments, guarantees, books and records
evidencing, securing or relating to the Collateral and the insurance to
be secured to cover same in accordance with Section 5 hereof.
3. Security for Secured Obligations. This Agreement secures
the payment and performance of all of the Secured Obligations.
4. Representations and Warranties. The Grantor represents
and warrants as follows:
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(a) The Grantor owns the Collateral free and clear of any
lien, security interest, charge or encumbrance except for any Permitted
Liens. Except with respect to Permitted Liens, no effective financing
statement or other instrument similar in effect covering all or any
part of the Collateral is on file in any recording office.
(b) Appropriate financing statements and mortgages have been
or are concurrently herewith being filed at all governmental offices in
each jurisdiction where such filing is necessary to perfect the
security interest intended to be covered hereby and such security
interest shall, upon such filing, constitute a perfected security
interest in the Collateral in favor of the Security Trustee (to the
extent that such security interest can be perfected in the Collateral
by filing a financing statement or mortgage under the Code or
applicable state or foreign law) which are enforceable as such against
all creditors of and purchasers from the Grantor (other than purchasers
who take free of such liens, encumbrances or security interests under
the Code) and against any owner or purchaser of the real property where
any of the equipment is located and any present or future creditor
obtaining any lien, encumbrance or security interest on such real
property. All other filings and other actions requested by the
Security Trustee to perfect and protect the security interest granted
herein have been duly made or taken.
(c) No authorization, approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body
(other than as contemplated by sub-clause (c) immediately preceding
this sub-clause) is required either (i) for the grant by the Grantor of
the security interest granted hereby or for the execution, delivery or
performance of this Agreement by the Grantor or (ii) for the perfection
of or the exercise by the Security Trustee of its right and remedies
hereunder.
5. Further Assurances. (a) The Grantor agrees that from
time to time, at the expense of the Grantor, the Grantor will promptly
execute and deliver all further instruments and documents, and take all
further action, that may be necessary or advisable, or that the
Security Trustee may reasonably request, in order to perfect and
protect any security interest granted or purported to be granted hereby
or to enable the Security Trustee to exercise and enforce its rights
and remedies hereunder with respect to the Collateral. Without
limiting the generality of the foregoing, the Grantor shall execute and
file such financing or continuation statements, or amendments thereto,
and such other instruments or notices, as may be necessary or
advisable, or as the Security Trustee may reasonably request, whether
in a jurisdiction where the Code has been adopted or any other
jurisdiction, in order to perfect and preserve the security interests
granted or purported to be granted hereby.
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(b) The Grantor hereby authorizes the Security Trustee to
file one or more financing or continuation statements, and amendments
thereto, relative to all or any part of the Collateral without the
signature of the Grantor where permitted by law. In the event that the
Security Trustee files any such financing statements or renewals
without the signature of the Grantor, it shall provide the Grantor with
notice thereof as soon as practicable after such filing.
(c) The Grantor will furnish to the Security Trustee from
time to time as the Security Trustee may reasonably request statements
and schedules further identifying and describing the Collateral and
such other reports in connection therewith, all in reasonable detail.
(d) Upon reasonable notice without materially interfering
with the ordinary course or conduct of the Grantor's business, the
Security Trustee shall at all times have full and free access during
normal business hours to all the books, correspondence and records of
the Grantor, and the Security Trustee or its representatives may
examine the same, take extracts therefrom and make photocopies thereof,
and the Grantor agrees to render to the Security Trustee, at the
Grantor's cost and expense, such clerical and other assistance as may
be reasonably requested with regard thereto. The Security Trustee and
its representatives shall at all times, upon reasonable notice, without
materially interfering with the ordinary course or conduct of the
Grantor's business, also have the right to enter into and upon any
premises where any of the Collateral is located for the purpose of
inspecting the same, observing its use or otherwise protecting its
interests therein.
(e) The Grantor will comply with all requirements of law
applicable to the Collateral or any part thereof other than those
requirements with which the failure to comply would not have a material
adverse effect on the existence, condition or value of the Collateral
or the security interests granted hereunder; provided, however, that
the Grantor may contest any requirement of law in any reasonable manner
which shall not, in the reasonable opinion of the Security Trustee,
materially adversely affect the Security Trustee's rights or the
priority of their security interests in the Collateral.
(f) Without thirty (30) days' prior written notice to the
Security Trustee, the Grantor shall not (i) change its chief executive
office or principal place of business, (ii) change the location at
which it maintains its records relating to the Equipment, and (iii)
except as permitted under the Credit Agreement, remove the Equipment
from any of the counties in which such Equipment is presently located.
Grantor shall furnish to the Security Trustee from time to time, as the
Security Trustee may reasonably request, reports identifying the
locations where the Collateral is located.
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(g) The Grantor shall not change its corporate name,
identity or corporate structure, nor carry on business under any name
other than its corporate name, unless (i) it has given to the Security
Trustee not less than thirty days prior written notice of its intention
to do so, specifying such new corporate name, identity or corporate
structure, and providing such other information in connection therewith
as the Security Trustee may reasonably request, and (ii) with respect
to such new corporate name, identity or corporate structure, it shall
have taken all action, requested by the Security Trustee in its
reasonable discretion, to maintain the security interest of the
Security Trustee in the Collateral intended to be granted hereby at all
times fully perfected and in full force and effect.
(h) The Grantor shall pay promptly, or cause to be paid
promptly, when due all property and other material taxes, assessments
and governmental charges or levies imposed upon, and all claims
(including claims for labor, materials and supplies) against, the
Collateral, except to the extent the validity thereof is being
contested in good faith and adequate reserves have been maintained
therefor.
(i) The Grantor will maintain all Collateral necessary in
the Grantor's business in good operating condition, ordinary wear and
tear and immaterial impairments of value and damage by the elements
excepted, and will provide maintenance, service and repairs necessary
for such purpose.
(j) The Grantor shall, within ten days of acquiring an
ownership interest in any Collateral having a value in excess of Twenty-
Five Thousand Dollars ($25,000) on which a security interest under the
Code can only be perfected by appropriate notations on the certificate
of title relating to such Collateral, deliver to the Security Trustee
any and all certificates of title, applications for title or similar
evidence of ownership of such Collateral and shall cause the Security
Trustee to be named as lienholder on any such certificate of title or
other evidence of ownership.
(k) The Grantor will, promptly upon request, provide to the
Security Trustee all information and evidence it may reasonably request
concerning the Collateral to enable the Security Trustee to enforce the
provisions of this Agreement.
6. Security Trustee Appointed Attorney-in-Fact. The
Grantor hereby irrevocably appoints the Security Trustee as the
Grantor's attorney-in-fact, with full authority in the name, place and
stead of the Grantor, from time to time in the Security Trustee's
discretion, should an Event of Default (as such term is defined in the
Credit Agreement) have occurred and be continuing to take any action
and to execute any
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document which the Security Trustee may deem necessary or advisable to
accomplish the purposes of this Agreement, including, without
limitation:
(i) to ask, demand, collect, sue for, recover,
compound, receive and give acquittance and receipts for
moneys due and to become due under or in respect of any
of the Collateral,
(ii) to receive, endorse, and collect any drafts or
other instruments, documents and chattel paper in
connection with clause (i) above, and
(iii) to file any claims or take any action or
institute any proceedings which the Security Trustee may
deem necessary or advisable for the recovery of any of
the Collateral or otherwise to enforce the rights of the
Security Trustee with respect thereto created by this
Agreement.
7. Security Trustee May Perform. If the Grantor fails to
perform any agreement contained herein, the Security Trustee may itself
perform, or cause to be performed, such agreement, and the expenses of
the Security Trustee incurred in connection therewith shall be payable
by the Grantor.
8. The Security Trustee's Duties. The powers conferred on
the Security Trustee hereunder are solely to protect its interest in
the Collateral and shall not impose any duty upon the Security Trustee
to exercise any such powers. Except for the safe custody of any of the
Collateral which, from time to time, may come into its possession and
the accounting for moneys actually received by it hereunder, the
Security Trustee shall have no duty as to the Collateral or as to the
taking of any necessary steps to preserve rights against prior parties
or any other rights pertaining to the Collateral.
9. Remedies. The security constituted by this Agreement
shall be enforceable if an Event of Default shall have occurred and be
continuing:
(a) The Security Trustee may exercise, in respect of the
Collateral, in addition to other rights and remedies provided for
herein or otherwise available to it, all the rights and remedies of a
secured party on default under the Code (whether or not the Code shall
be applied by the court in the jurisdiction in which enforcement of the
security interest contained herein is sought) and also may (i) require
the Grantor to, and the Grantor hereby agrees that it will at its
expense and upon request of the Security Trustee forthwith, assemble
all or any part of the Collateral as directed by the Security Trustee
and make it available to the Security Trustee, at a place to be
designated by the Security Trustee which is reasonably convenient to
both parties, and (ii) without notice, except as
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specified below, sell the Collateral or any part thereof in one or more
parcels at public or private sale, at any of the Security Trustee's
offices or elsewhere, for cash, and at such price or prices and upon
such other terms as the Security Trustee may deem commercially
reasonable. The Security Trustee shall give the Grantor at least ten
days' notice of the time and place of any public sale. The Grantor
agrees that ten days' notice of any such sale is commercially
reasonable notification. The Security Trustee shall not be obligated
to make any sale of the Collateral regardless of notice of sale having
been given. The Security Trustee 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.
(b) All cash proceeds received by the Security Trustee in
respect of any sale of, or other realization upon, all or any part of
the Collateral shall be applied (after payment of any amounts payable
to the Security Trustee pursuant to Section 11 of this Agreement) in
whole or in part by the Security Trustee as set forth in Section 9 of
the Credit Agreement.
10. Non-Interference with Remedies; Specific Performance.
(a) The Grantor agrees that following the occurrence and during the
continuance of an Event of Default it will not at any time pledge,
claim or take the benefit of any appraisal, valuation, stay, extension,
moratorium or redemption law now or hereafter in force in order to
prevent or delay the enforcement of this Agreement, or the absolute
sale of the whole or any part of the Collateral or the possession
thereof by any purchaser at any sale hereunder, and the Grantor waives
the benefit of all such laws to the extent it lawfully may do so. The
Grantor agrees it will not interfere with any right, power or remedy of
the Security Trustee provided for in this Agreement now or hereafter
existing at law or in equity or by statute or otherwise, or with the
exercise or beginning of the exercise by the Security Trustee of any
one or more of such rights, powers or remedies.
(b) The Grantor agrees that a breach of any of the
agreements or covenants contained in this Agreement will cause
irreparable injury to the Security Trustee, that the Security Trustee
has no adequate remedy at law in respect of such breach and, as a
consequence, agrees that each and every agreement and covenant
contained in this Agreement shall be specifically enforceable against
the Grantor, and the Grantor hereby waives and agrees not to assert any
defenses against an action for specific performance of such agreements
or covenants except for a defense that the Secured Obligations are not
then due and payable in accordance with the agreements and instruments
governing and evidencing such Secured Obligations.
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11. Indemnity, Expenses and Interest. (a) The Grantor
shall on demand of the Security Trustee pay to the Security Trustee (on
a full indemnity basis) all costs, charges, losses, liabilities and
expenses expended, paid or incurred by the Security Trustee (whether
before or after this Agreement becomes enforceable), including any tax
thereon and reasonable professional fees including attorneys' fees, in
connection with any breach of the covenants or undertakings herein or
the exercise of any rights exercisable under it or the recovery of any
of the Secured Obligations by the Security Trustee, including, without
limitation, any remuneration and other sums at any time payable to the
Security Trustee and all costs, charges, losses, liabilities and
expenses connected with the protection, realization, enforcement or
release of any provision of this Agreement, except to the extent the
same results from the Security Trustee's gross negligence or willful
misconduct.
(b) The Grantor shall after demand by the Security Trustee
pay to the Security Trustee interest at a rate per annum equal to the
Default Rate on all of the costs, charges, losses, liabilities and
expenses referred to this clause. So long as no Event of Default has
occurred and is continuing, such interest shall accrue and be payable
from the date on which the Grantor receives notice from the Security
Trustee, otherwise, such interest shall accrue and be payable from the
date such cost, charge, loss, liability or expense was incurred by the
Security Trustee.
12. Security Interest Absolute. All rights of the Security
Trustee and the security interest granted hereunder, and all Secured
Obligations, shall be absolute and unconditional, irrespective of:
(i) any lack of validity or enforceability of the
Credit Agreement or the Note, or any other agreement or
instrument relating thereto;
(ii) any change in the time, manner or place of payment
of, or in any other term of, all or any of the
obligations of the Grantor or any other person under or
in connection with the Credit Agreement or any other
amendment or waiver of or any consent to any departure
from the Credit Agreement, the Note or the terms of any
thereto; or
(iii) any other circumstances which might otherwise
constitute a defense available to, or a discharge of,
the Grantor in respect of the Secured Obligations or
this Agreement.
12. Amendments. No amendment or waiver of any provision of
this Agreement, nor consent to any departure therefrom by the Grantor,
shall be effective
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unless the same shall be in writing and signed by the parties hereto,
and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
13. Successors and Assigns. Whenever in this Agreement
reference is made to any person, such reference shall be deemed to
include the successors and assigns of such person.
14. Notices. Every notice or other communication under this
Agreement shall be in writing and may be given by telex or telecopy as
follows:
If to the Grantor:
NRG Generating (U.S.) Inc.
1221 Nicollet Mall, Suite 610
Minneapolis, Minnesota 55403
Attention: Vice President-CFO
Telecopy No.: (612) 373-8833
with a copy to:
Troutman Sanders LLP
600 Peachtree Street, N.W.
Suite 5200
Atlanta, Georgia 30308-2216
Attention: M. Stuart Sutherland, Esq.
Telecopy No.: (404) 885-3900
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If to the Security Trustee:
MeesPierson Capital Corporation
445 Park Avenue
New York, New York 10022
Attention: Hendrik Vroege
Telecopy No.: (212) 801-0420
or to such other address as either party shall from time to time
specify in writing to the other. Any notice sent by telex or telecopy
shall be confirmed by letter dispatched as soon as practicable
thereafter.
Every notice or other communication as shall, except so far
as otherwise expressly provided by this Agreement, be deemed to have
been received (provided it is received prior to 2 p.m. New York time;
otherwise it shall be deemed to have been received on the next
following Banking Day (as such term is defined in the Credit
Agreement)) in the case of a telex or telecopy at the time the
transmitting machine provides confirmation of dispatch thereof
(provided further that if the date of dispatch is not a Banking Day in
the locality of the party to whom such notice or demand is sent it
shall be deemed to have been received on the next following Banking Day
in such locality) and, in the case of a letter, at the time of receipt
thereof.
15. Continuing Security Interest. This Agreement shall
create a continuing security interest in the Collateral and shall
(i) remain in full force and effect until payment in full of the
Secured Obligations, (ii) be binding upon the Grantor, its successors
and assigns, and (iii) inure to the benefit of the Security Trustee and
its respective successors, transferees and assigns. Upon the payment
in full of the Secured Obligations, the security interest granted
hereby shall terminate and all rights in and to the Collateral shall
revert to the Grantor. Upon any such termination, the Security Trustee
will, at the Grantor's expense, execute and deliver to the Grantor such
documents as the Grantor shall reasonably request to evidence such
termination.
16. Headings. In this Agreement, clause headings are
inserted for convenience of reference only and shall not be considered
in the interpretation of this Agreement.
17. Waiver of Jury Trial. IT IS MUTUALLY AGREED BY AND
BETWEEN THE PARTIES HERETO THAT EACH OF THEM HEREBY
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WAIVES TRAIL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT
BY EITHER PARTY HERETO AGAINST THE OTHER PARTY HERETO ON ANY MATTER
WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT
AND ANY SECURITY DOCUMENT TO WHICH THE GRANTOR OR THE ASSIGNEE MAY BE A
PARTY OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
18. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
ANY REFERENCE TO CONFLICTS OF LAWS PRINCIPLES OF THAT STATE.
19. Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be deemed to be duplicate
originals and which shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed by their respective officers thereunto duly authorized
on the day and year first above written.
NRG GENERATING (U.S.) INC.
By:/s/ Timothy P. Hunstad
Name: Timothy P. Hunstad
Title: Vice President-CFO
MEESPIERSON CAPITAL CORP.
By:/s/ Hendrik J. Vroege
Name: Hendrik J. Vroege
Title: Vice President
By:/s/ John O'Connor
Name: John O'Connor
Title: Senior Vice President
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