Exhibit 10.27.8
Execution Version
CONSTRUCTION AND TERM LOAN AGREEMENT
dated as of September 15, 1997
among
NRG (MORRIS) COGEN, LLC,
as Borrower
THE BANKS, as herein defined
THE CHASE MANHATTAN BANK,
as Agent Bank
and
THE CHASE MANHATTAN BANK,
as Collateral Agent
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS; PRINCIPLES OF CONSTRUCTION 1
Section 1.1 . Definitions 1
Section 1.2. Accounting Terms and Determinations 29
Section 1.3. Types of Loans 30
Section I.4. Certain Principles of Interpretation 30
ARTICLE II. AMOUNT AND TERMS OF CREDIT FACILITIES 31
Section 2.1. Construction Loans 31
Section 2.2. Letters of Credit 32
Section 2.3. Term Loans 35
Section 2.4. Notice of Borrowing 36
Section 2.5. Disbursement of Funds 37
Section 2.6. Notes 39
Section 2.7. Interest 39
Section 2.8. Interest Periods 41
Section 2.9. Minimum Amount and Maximum Number of
LIBOR Rate Loans 42
Section 2.10. Conversion or Continuation 42
Section 2.11. Reduction of Commitments 43
Section 2.12. Optional Prepayments 43
Section 2.13. Mandatory Prepayments 43
Section 2.14. Method and Place of Payment 45
Section 2.15. Fees 45
Section 2.16. Interest Rate Unascertainable; Increased Costs;
Illegality 46
Section 2.17. Funding Losses 48
Section 2.18. Increased Capital 49
Section 2.19. Taxes 49
Section 2.20. Notice of Increased Amounts 51
Section 2.21. Use of Proceeds 51
Section 2.22. Sharing of Payments, Etc. 51
ARTICLE III. CONDITIONS PRECEDENT 52
Section 3.1. Conditions Precedent to Initial Construction Loans 52
Section 3.2. Conditions Precedent to the Making of All Loans and
Issuance of Letters of Credit 60
Section 3.3. Conditions Precedent to Conversion to Term Loans 62
Section 3.4. Conditions; General Principles 65
ARTICLE IV. REPRESENTATIONS AND WARRANTIES 65
Section 4.1. Status; Power and Authority; Due Authorization;
Enforceability 66
Section 4.2. No Violation 67
Section 4.3. Litigation 67
Section 4.4. Financial Statements; Financial Condition; Etc 67
Section 4.5. Material Adverse Change 67
Section 4.6. Use of Proceeds; Margin Regulations 67
Section 4.7. Governmental Approvals 67
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Section 4.8. Compliance with Applicable Laws 68
Section 4.9. Sole Purpose Nature; Business 68
Section 4.10. Collateral 69
Section 4.11. Security Interests and Liens 69
Section 4.12. Patents, Trademarks, Etc. 69
Section 4.13. Investment Company Act; Public Utility Holding
Company Act 69
Section 4.14. Governmental Regulation 69
Section 4.15. Sufficient Rights 70
Section 4.16. Property Rights, Utilities, Etc. 70
Section 4.17. No Defaults 70
Section 4.18. Payment of Taxes 71
Section 4.19. ERISA 71
Section 4.20. Transaction Documents 71
Section 4.21. True and Complete Disclosure; Assumptions 71
Section 4.22. Ownership and Related Matters 72
Section 4.23. Environmental Matters 72
Section 4.24. Other Filings 73
Section 4.25. Qualifying Facility Status 73
Section 4.26. Subsidiaries, Etc. 73
ARTICLE V. AFFIRMATIVE COVENANTS 73
Section 5.1. Information Covenants 73
Section 5.2. Maintenance of Existence 76
Section 5.3. Books, Records and Inspections 76
Section 5.4. Taxes and Claims 77
Section 5.5. Governmental Approvals 77
Section 5.7. Insurance 77
Section 5.8. Mobilization Budget; Operating Budget; Major
Maintenance Budget; Spare Parts List; Heat Rate 78
Section 5.9. Project Implementation 81
Section 5.10. Further Assurances 81
Section 5.11. Use of Proceeds 82
Section 5.12. Title 82
Section 5.13. Project Documents 82
Section 5.14. Qualifying Facility Status 82
Section 5.15. Application of Revenues 82
Section 5.16. Interest Rate Protection Agreements 82
Section 5.17. Long Term Service Agreement 82
Section 5.18. RO EPC Contract 83
Section 5.19. Payment 83
Section 5.20. ERISA 83
Section 5.21. Punch List 83
Section 5.22. Operator Termination 83
Section 5.23. Minor Punch List Items 84
Section 5.24. Gas Agreement 84
Section 5.25. Millennium Letter of Credit 84
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ARTICLE VI. NEGATIVE COVENANTS 84
Section 6.1. Distributions 84
Section 6.2. Indebtedness 84
Section 6.3. Liens 86
Section 6.4. Restriction on Fundamental Changes 86
Section 6.5. Subsidiaries; Advances, Investments and Loans 87
Section 6.6. Arm's Length Transactions 87
Section 6.7. Sole Purpose Nature 87
Section 6.8. Certain Restrictions 87
Section 6.9. Sale of Assets 87
Section 6.10. Amendment of Project Documents 87
Section 6.11. Change Orders; Budgets 87
Section 6.12. Margin Regulations 88
Section 6.13. Additional Project Agreements 88
Section 6.14. Expenditures 88
Section 6.15. Amendments to Construction Schedule or Progress
Payment Schedule; Test Procedures 88
Section 6.16. Restricted Uses 89
Section 6.17. NGC Agreement 89
ARTICLE VII. ACCOUNTS AND CASH FLOWS 89
Section 7.1. Establishment and Maintenance of Project Accounts 89
Section 7.2 Permitted Investments 90
Section 7.3. Funding of the Construction Account 91
Section 7.4. Funding of the Revenue Account and Payment of
Operation and Maintenance Expenses 91
Section 7.5. Debt Payment Account 92
Section 7.7. Funding of the Maintenance Reserve Account 93
Section 7.8. Funding of the Debt Service Reserve Account 93
Section 7.8. Funding of the NGC Reserve Account 94
Section 7.9. Funding of the Distribution Retention Account;
Distributions 94
Section 7.10. Funding of the Proceeds Account; Application of
Proceeds 95
Section 7.11. Letter of Credit Account 100
Section 7.12. Event of Default 101
ARTICLE VIII. EVENTS OF DEFAULT; REMEDIES 101
Section 8.1. Events of Default 101
Section 8.2. Rights and Remedies 104
Section 8.3. Application of Proceeds 105
ARTICLE IX. THE AGENT BANK 106
Section 9.1. Appointment 106
Section 9.2. Delegation of Duties 106
Section 9.3. Exculpatory Provisions 107
Section 9.4. Reliance by Agent Bank 107
Section 9.5. Notice of Default 107
Section 9.6. Non-Reliance on Agent Bank and Other Banks 108
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Section 9.7. Bank Indemnification 108
Section 9.8. Agent Bank in its Individual Capacity 109
Section 9.9. Successor Agent Bank 109
ARTICLE X. THE COLLATERAL AGENT 109
Section 10.1. Appointment 109
Section 10.2. Delegation of Duties 110
Section 10.3. Exculpatory Provisions 110
Section 10.4. Reliance by Collateral Agent 110
Section 10.5. Notice of Default 111
Section 10.6. Non-Reliance on Collateral Agent and Other Banks 111
Section 10.7. Bank Indemnification 112
Section 10.8. Collateral Agent in its Individual Capacity 112
Section 10.9. Successor Collateral Agent 112
Section 10.10. Administration of the Collateral 113
ARTICLE XI. MISCELLANEOUS 113
Section 11.1. Payment of Expenses and Indemnity 113
Section 11.2. Right of Set-off 116
Section 11.3. Notices 117
Section 11.4. Successors and Assigns; Participation; Assignments 117
Section 11.5. Amendments and Waivers 120
Section 11.6. No Waiver; Remedies Cumulative 121
Section 11.7. No Third Party Beneficiaries 121
Section 11.8. Counterparts 121
Section 11.9. Effectiveness 122
Section 11.10. Headings Descriptive 122
Section 11.11. Marshalling; Recapture 122
Section 11.12. Severability 122
Section 11.13. Survival 122
Section 11.14. Domicile of Loans 122
Section 11.15. Independence of Covenants 122
Section 11.16. Limitation of Liability 123
Section 11.17. Governing Law; Submission to Jurisdiction; Waiver
of Jury Trial 123
Section 11.18. Confidentiality 124
Section 11.19. Removal by Assignment of Banks 125
Section 11.20. Change of Lending Office 126
SCHEDULES
Schedule 1.1: Accounts
Schedule 1.1(A): Banks and Commitments
Schedule 1.1(B): Maintenance Reserve Amounts
Schedule 1.1(C): Site Description
Schedule 1.1(D): Sample Debt Service
Coverage Ratio and Excess Cash Flow
Calculations
Schedule 3.1(g)(i)(A): Filing Jurisdictions
Schedule 3.1(g)(i)(B): Results of Lien Searches
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Schedule 3.1(o): Governmental Approvals
Schedule 4.20: Material Contracts
Schedule 4.23: Environmental Matters
Schedule 5.7: Required Insurance
EXHIBITS
Exhibit A: Form of Consent and Agreement
Exhibit B: Form of Construction Note
Exhibit C: Form of Term Note
Exhibit D: Form of Notice of Borrowing
Exhibit E: Form of Request for Issuance
Exhibit F: Form of Notice of Conversion or
Continuation
Exhibit G: Form of Restoration Requisition
Exhibit H: Form of Independent Engineer's
Initial Drawing Certificate
Exhibit I: Form of Independent
Engineer's Subsequent Drawing Certificate
Exhibit J: Form of Independent Engineer's Conversion
Certificate
Exhibit K: Form of Transfer Supplement
Exhibit L: Form of Confidentiality Agreement
Exhibit M: Form of Disbursement Certificate
Exhibit N: Form of NGC Letter of Credit
Exhibit O: Form of Millennium Letter of Credit
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CONSTRUCTION AND TERM LOAN AGREEMENT, dated as
of September 15, 1997, among NRG (MORRIS) COGEN, LLC, a
Delaware limited liability company (the "Borrower"), the
Banks (as hereinafter defined), THE CHASE MANHATTAN BANK,
acting in its capacity as agent for the Banks (together
with its successors in such capacity, the "Agent Bank"),
and THE CHASE MANHATTAN BANK, acting in its capacity as
collateral agent for the Banks (together with its
successors in such capacity, the "Collateral Agent").
W I T N E S S E T H:
WHEREAS, the Borrower wishes to obtain funds to
finance the ownership, development, engineering, construction,
start-up, testing, operation and maintenance of the Project (as
hereinafter defined) in Grundy County, located at the Energy
Purchaser's (as hereinafter defined) Morris Plant (as
hereinafter defined) complex in the State of Illinois; and
WHEREAS, subject to and upon the terms and conditions
herein set forth, the Banks are willing to provide financing to
the Borrower as provided for herein;
NOW, THEREFORE, it is agreed:
ARTICLE I. DEFINITIONS; PRINCIPLES OF CONSTRUCTION.
Section 1.1 . Definitions. As used herein, the
following terms shall have the meanings herein specified unless
the context otherwise requires.
"Acceptance" shall have the meaning provided in
Section 2.4 of the EPC Contract or in a similar provision of
the RO EPC Contract, as applicable.
"Acceptance Date" shall mean the first date on which
all of the conditions which must be satisfied in order to
achieve Acceptance shall have been satisfied.
"Additional Project Documents" shall mean any
contract, agreement, letter of intent, understanding or
instrument entered into by or on behalf of the Borrower after
the Closing Date in connection with the development,
construction, testing, operation, maintenance or repair of the
Project and/or the use of the Site, including, without
limitation, the RO EPC Contract, the Long Term Service
Agreement and the NGC Guarantee.
"Additional Project Party" shall mean each Person
(other than the Agent Bank, the Collateral Agent and the Banks)
party to an Additional Project Document.
"Affiliate" shall mean, with respect to any Person,
any other Person directly or indirectly controlling (including
but not limited to all directors and officers of such Person),
controlled by or under direct or indirect common control with
such Person. A Person shall be deemed to "control" another
Person if such Person possesses, directly or indirectly, the
power to (i) vote fifteen percent (15%) or more of the
securities having ordinary voting power for the election of
directors of such other Person or (ii) direct or cause the
direction of the management and policies of such other Person,
whether through the ownership of voting securities, by contract
or otherwise.
"Agent Bank" shall have the meaning set forth in the
preamble hereof, and shall include any successor agent bank
appointed in accordance with Section 9.9.
"Agent Bank's Office" shall mean One Chase Manhattan
Plaza, New York, New York 10081, or such other office as the
Agent Bank may hereafter designate in writing as such to the
other parties hereto.
"Agreement" shall mean this Construction and Term
Loan Agreement.
"Ancillary Documents" shall mean, with respect to
each Additional Project Document, (i) each security instrument
(which may consist of an amendment to a Security Document)
necessary or desirable to grant to the Collateral Agent a first
priority perfected Lien in such Additional Project Document and
all property interests received by the Borrower in connection
therewith, (ii) all recorded financing statements and other
filings required to perfect such Liens, (iii) opinions of
counsel for the Borrower and the other parties to such
Additional Project Document, (iv) a Consent with respect to
such Additional Project Document from such other parties, (v)
formation documents and similar documents for such other
parties and (vi) evidence of the Borrower's and such other
parties' authorization of such Additional Project Document, all
of the items described in clauses (i) through (vi) immediately
above in form and substance reasonably satisfactory to the
Required Banks.
"Applicable Margin" shall mean:
(i) at all times with respect to the Base Rate Loans,
0.000%; and
(ii) with respect to the LIBOR Rate Loans, (a) 0.750%
from the Closing Date to but excluding the Conversion Date, (b)
1.000% from and including the Conversion Date to but excluding
the second anniversary thereof, (c) 1.125% from and including
the second anniversary of the Conversion Date to but excluding
the fourth anniversary thereof and (d) 1.250% from and
including the fourth anniversary of the Conversion Date to and
including the Final Maturity Date.
2
"Approved Restoration Plan" shall mean a plan
(including details as to budget, schedule and sources of funds)
submitted to and approved in writing by the Agent Bank (in
consultation with the Independent Engineer), which approval
shall not be unreasonably withheld or delayed, relating to the
rebuilding, repairing, restoring or replacing of the Project
upon damage to or destruction of, or upon condemnation or
appropriation or any similar event with respect to, all or a
portion of the Project.
"Asset Sale Proceeds" shall have the meaning provided
in Section 7.10(a)(v).
"Assignee" shall have the meaning provided in Section
11.4(c).
"Auditors" shall mean Price Waterhouse LLP or such
other firm of independent public accountants as the Borrower
may, with the prior written consent of the Agent Bank, from
time to time appoint as its auditors.
"Authorized Officer" shall mean, (i) with respect to
any Person that is a corporation or a limited liability
company, the president, any vice president, the treasurer, the
chief financial officer or, for any limited liability company,
the manager of such Person, (ii) with respect to any Person
that is a partnership, an Authorized Officer of a general
partner of such Person, or (iii) with respect to any Person,
such other representative of such Person that is approved by
the Agent Bank in writing. No Person shall be deemed to be an
Authorized Officer unless named on a certificate of incumbency
of such Person delivered to the Agent Bank on or after the
Closing Date.
"Bankruptcy Code" shall mean Title 11, Section 101 et
seq. of the United States Code titled "Bankruptcy", as amended
from time to time, and any successor statute thereto.
"Banks" shall mean the Persons listed on Schedule
1.1(A) and the Purchasing Banks which from time to time become
parties hereto in accordance with Section 11.4(d).
"Base Case Forecasts" shall mean the financial
projections relating to the operation of the Project which
satisfy the requirements of Section 3.1(t).
"Base Rate" shall mean, for any day, the higher of
(i) the rate of interest from time to time announced by the
Agent Bank at the Agent Bank's Office as its prime commercial
lending rate (which rate is not intended to be the lowest rate
of interest charged by the Agent Bank in connection with
extensions of credit to debtors) or (ii) the Federal Funds Rate
for such day plus 0.500% per annum.
3
"Base Rate Loans" shall mean Loans made and/or being
maintained at a rate of interest based upon the Base Rate.
"Borrower" shall have the meaning set forth in the
preamble hereof.
"Borrowing" shall mean the incurrence of one Type of
Loan on a given date (or resulting from conversions or
continuations on a given date), having, in the case of LIBOR
Rate Loans, the same Interest Period.
"Business Day" shall mean (i) for all purposes other
than as covered by clause (ii) below, any day that is not a
Saturday or a Sunday in the United States or a day on which
banking institutions chartered by the State of New York or the
United States are required or authorized by Law or other
government actions to be closed and (ii) with respect to all
notices and determinations in connection with, and payments of
principal of and interest on, LIBOR Rate Loans, any date which
is a Business Day described in clause (i) and which is also a
day for trading by and between banks for United States Dollar
deposits in the London interbank market.
"Capital Lease" shall mean any lease which in
accordance with GAAP is required to be capitalized on the
balance sheet of the Borrower, and for purposes of this
Agreement, the amount of obligations of the Borrower under any
Capital Lease shall be the amount so capitalized.
"Cash Flow" shall mean, for any period, the sum of
the following: (i) all cash paid to the Borrower during such
period in connection with the Energy Services Agreement; (ii)
all interest and investment earnings paid to the Borrower or
the Project Accounts during such period on amounts on deposit
in the Project Accounts; (iii) all cash paid to the Borrower
during such period under any insurance policy as business
interruption insurance proceeds; and (iv) all other cash paid
to the Borrower during such period; provided, however, that,
notwithstanding the foregoing, Cash Flow shall not include any
amounts received by the Borrower as Liquidated Performance
Damages, as Liquidated Delay Damages, as Loss Proceeds, as
Condemnation Proceeds, as Asset Sale Proceeds, as Other
Proceeds, as Loans, under any Interest Rate Protection
Agreement or as an Equity Contribution (including any Default
Equity Contribution).
"Change Orders" shall have the meaning provided in
Section 2.4 of the EPC Contract or in a similar provision of
the RO EPC Contract, as applicable.
"Chase" shall mean The Chase Manhattan Bank, a New
York banking corporation.
"Claim" shall have the meaning provided in Section
11.1(d).
4
"Closing Date" shall mean the date on which the
initial Construction Loans are advanced hereunder.
"Code" shall mean the Internal Revenue Code of 1986,
as amended from time to time, and any successor statute.
"Collateral" shall mean all property and interests in
property now owned or hereafter acquired by the Borrower,
including any property or interest in or upon which a Lien has
been or is purported to have been granted to the Collateral
Agent or any other Secured Party under any of the Security
Documents, including without limitation, the Mortgaged
Property.
"Collateral Agent" shall have the meaning set forth
in the preamble hereof, and shall include any successor
collateral agent appointed in accordance with Section 10.9.
"Collateral Agent's Office" shall mean 450 West 33rd
Street, 15th Floor, New York, New York 10001, or such other
office as the Collateral Agent may hereafter designate in
writing as such to the other parties hereto.
"Commercial Operation" shall have the meaning
provided in Section 1 of the Energy Services Agreement.
"Commercial Operation Date" shall mean the date on
which the Project shall have achieved Commercial Operation in
accordance with the terms of the Energy Services Agreement.
"Commitment Fee" shall have the meaning provided in
Section 2.15(a).
"Commitments" shall mean, the Construction Loan
Commitments, the Letter of Credit Commitments and the Term Loan
Commitments, each as in effect at the time to which such
reference relates.
"Condemnation Proceeds" shall have the meaning
provided in Section 7.10(a)(ii).
"Confidential Information" shall have the meaning
provided in each Confidentiality Agreement.
"Confidentiality Agreement" shall have the meaning
provided in Section 11.18.
5
"Consent" shall mean any of the Millennium Consent,
the Kiewit Indus trial Consent, the Kiewit Construction
Consent, the NRG Morris Consent, the NRG Energy Consent, the
NGC Consent or, with respect to any Additional Project
Document, a consent and agreement of each party to such
Additional Project Document (other than the Borrower),
substantially in the form of Exhibit A, with such modifications
as may be approved in writing by the Agent Bank.
"Construction Account" shall mean the account of such
name described on Schedule 1.1 established at the Collateral
Agent's Office, or any other account at the Collateral Agent's
Office designated by the Borrower with the consent of the
Collateral Agent to serve as the Construction Account.
"Construction Budget" shall mean a budget, in form
and substance satisfactory to the Agent Bank and certified as
true and correct by an Authorized Officer of the Borrower,
which sets forth all costs anticipated to be incurred for the
development, construction, start-up and testing of the Project
(including items set forth on the Progress Payment Schedule),
as the same may be modified from time to time in accordance
with Section 6.11.
"Construction Guarantor" shall mean Kiewit
Construction Company, a Delaware corporation.
"Construction Loan Commitment" shall mean at any
time, for any Bank, the amount set forth opposite such Bank's
name on Schedule 1.1(A) under the heading "Construction Loan
Commitment", as such amount may be reduced from time to time
pursuant to Section 2.11 and Section 11.4(d) or increased
pursuant to Section 11.4(c) in the case of an assignment
thereunder of Credit Exposure to such Bank from another Bank.
"Construction Loan Maturity Date" shall mean the
earliest to occur of (i) the Conversion Date, (ii) the Date
Certain and (iii) the date on which all outstanding Loans shall
have become due and payable pursuant to Section 8.2 .
"Construction Loans" shall have the meaning provided
in Section 2.1(a).
"Construction Schedule" shall have the meaning
provided in Section 2.4 of the EPC Contract or in a similar
provision of the RO EPC Contract, as applicable, each as the
same may be modified from time to time in accordance with
Section 6.15.
"Construction Note" shall mean a promissory note of
the Borrower dated the Closing Date in the form of Exhibit B.
"Contest" shall mean, with respect to any Tax, Lien
or claim, a contest pursued in good faith and by appropriate
proceedings diligently conducted, so long as (i)
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adequate reserves have been established with respect thereto in
accordance with GAAP, (ii) any Lien filed in connection
therewith shall have been removed from the record by the
bonding of such Lien by a reputable surety company satisfactory
to the Required Banks, or security satisfactory to the Required
Banks is otherwise provided to assure the discharge of the
obligation thereunder and of any additional charge, penalty or
expense arising from or incurred as a result of such contest,
(iii) if it becomes necessary to prevent the delivery of a tax
deed or other similar instrument conveying the Mortgaged
Property or any portion thereof because of non-payment of any
such Tax, Lien or claim being contested, then the Borrower
shall pay the same in sufficient time to prevent the delivery
of such tax deed or other similar instrument, (iv) the failure
to pay any such Tax, Lien or claim during the pendency of such
contest would not otherwise result in a material adverse effect
on the Person subject to any such Tax, Lien or claim and (v)
the Person subject to any such Tax, Lien or claim has no
knowledge of any actual or proposed additional deficiency or
additional assessment in connection therewith that is not
provided for in any of clauses (i) through (iv) immediately
above.
"Contingent Obligation" shall mean, with respect to
any Person, (i) any indemnity or similar obligation of such
Person under any agreement or instrument and (ii) any
obligation of such Person guaranteeing or intended to guarantee
any Indebtedness, leases, dividends or other obligations
("primary obligations") of any other Person (the "primary
obligor") in any manner, whether directly or indirectly,
including, without limitation, 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 (1) for the
purchase or payment of any such primary obligation or (2) 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 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.
"Contractor Parent Company Guarantee" shall mean the
Contractor Parent Company Guarantee, dated July 10, 1997,
between the Construction Guarantor and the Borrower.
"Control Agreement" shall mean the Securities Account
Control Agreement, dated as of September 15, 1997, among the
Borrower, the Collateral Agent and The Chase Manhattan Bank as
Securities Intermediary.
"Controlled Group" means all members of a controlled
group of corporations and all trades and businesses (whether or
not incorporated) under common control
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that together with the Borrower or any of its Subsidiaries, are
treated as a single employer under Section 414 of the Code.
"Conversion Date" shall mean the date, occurring on
or before the Construction Loan Maturity Date, on which all of
the conditions precedent to the making of the Term Loans set
forth in Section 3.2 and Section 3.3 are satisfied or waived by
the Banks and the Construction Loans then outstanding (after
giving effect to any prepayment made on such date) are
converted to Term Loans.
"Credit Exposure" shall have the meaning provided in
Section 11.4(b).
"Date Certain" shall mean the date which is twenty
(20) months from the Closing Date; provided that such date may
be extended at the written request of the Borrower and subject
to the prior written consent of each Bank.
"Date of Issuance" shall mean, with respect to any
Letter of Credit, the date on which such Letter of Credit is
issued for the account of the Borrower.
"Debt Payment Account" shall mean the account of such
name described on Schedule 1.1 established at the Collateral
Agent's Office, or any other account at the Collateral Agent's
Office designated by the Borrower with the consent of the
Collateral Agent to serve as the Debt Payment Account.
"Debt Service Coverage Ratio" shall mean, for any
period of four (4) consecutive fiscal quarters ending on a
Quarterly Date (provided that in the event that all or any part
of one or more of such fiscal quarters is prior to the
Acceptance Date, there shall be substituted for such fiscal
quarter or quarters, the Base Case Forecasts for an equal
number of fiscal quarters commencing immediately after such
Quarterly Date), the ratio of (i) (a) Cash Flow, minus (b) the
aggregate amount of Operation and Maintenance Expenses paid or
payable during such period (other than those funded by a
transfer from the Maintenance Reserve Account), minus (c) any
deposit into the Maintenance Reserve Account for such period,
to (ii) the sum of Mandatory Debt Service (after adjustment for
any net Interest Rate Protection Payments by or to the
Borrower) payable by the Borrower with respect to such period
and the aggregate amount of overdue Mandatory Debt Service
(after adjustment for any net Interest Rate Protection Payments
by or to the Borrower) from previous periods, all as determined
on a cash basis, but otherwise in accordance with GAAP;
provided that principal of the Term Loans due on the Final
Maturity Date will be excluded from any calculation of the Debt
Service Coverage Ratio. As an example and without limiting the
foregoing, a sample calculation of the Debt Service Coverage
Ratio is set forth on Schedule 1.1(D).
"Debt Service Reserve Account" shall mean the account
of such name described on Schedule 1.1 established at the
Collateral Agent's Office, or any other ac-
8
count at the Collateral Agent's Office designated by the
Borrower with the consent of the Collateral Agent to serve as
the Debt Service Reserve Account.
"Debt Service Reserve Letter of Credit" shall mean
any letter of credit in form and substance satisfactory to the
Agent Bank issued by a bank rated at least "A" by S&P and "A2"
by Moody's, credited to the Debt Service Reserve Account and
naming the Collateral Agent as beneficiary thereunder.
"Debt Service Reserve Required Balance" shall mean an
amount equal to the sum of the next two (2) quarterly principal
and interest payments coming due on the Loans.
"Default" shall mean any event, act or condition
which with notice or lapse of time, or both, would constitute
an Event of Default.
"Default Equity Contribution" shall have the meaning
given to such term in Section 2 of each Equity Commitment
Agreement.
"Default Equity Proceeds" shall mean the proceeds of
any Default Equity Contribution.
"Default Rate" shall have the meaning provided in
Section 2.7(c).
"Defaulted Amount" shall have the meaning provided in
Section 2.5(c).
"Defaulting Bank" shall have the meaning provided in
Section 2.5(c).
"Deferred Approvals" shall have the meaning provided
in Section 4.7.
"Development Fee" shall have the meaning provided in
clause (ii) of the definition of Project Costs.
"Disbursement Certificate" shall mean a certificate,
signed by an Authorized Officer of the Borrower, in the form of
Exhibit M.
"Distribution Conditions" shall have the meaning
provided in Section 7.9.
"Distribution Retention Account" shall mean the
account of such name described on Schedule 1.1 established at
the Collateral Agent's Office, or any other account at the
Collateral Agent's Office designated by the Borrower with the
consent of the Collateral Agent to serve as the Distribution
Retention Account.
"Distributions" shall have the meaning provided in
Section 6.1.
9
"Dollars" shall mean the lawful currency of the
United States.
"Domestic Lending Office" shall mean, with respect to
any Bank, the office designated to the Agent Bank and the
Borrower by such Bank from time to time as its Domestic Lending
Office.
"Energy Adjustment Payments" shall have the meaning
provided in Section 1 of the Energy Services Agreement.
"Energy Purchaser" shall mean Millennium
Petrochemicals Inc., a Virginia corporation.
"Energy Services Agreement" shall mean the Energy
Services Agreement, dated June 3, 1997, between the Borrower
and the Energy Purchaser, as amended by the Letter Agreement
and the Second Letter Agreement.
"Environmental Approvals" shall mean any Governmental
Approval required under any applicable Environmental Law.
"Environmental Claim" shall mean any written notice,
claim, demand or similar communication by any Person alleging
potential liability (including, without limitation, potential
liability for investigatory costs, cleanup costs, governmental
response costs, natural resources damages, property damages,
personal injuries, fines or penalties) arising out of, based on
or resulting from (i) the presence, or release into the
environment, of any Material of Environmental Concern at any
location, whether or not owned by such Person or (ii)
circumstances forming the basis of any violation, or alleged
violation, of any Environmental Law or Environmental Approval.
"Environmental Laws" shall mean all Laws relating to
pollution or protection of human health or the environment
(including, without limitation, ambient air, surface water,
ground water, land surface or subsurface strata), including
without limitation, Laws relating to emissions, discharges,
releases or threatened releases of Materials of Environmental
Concern, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or
handling of Materials of Environmental Concern.
"EPC Contract" shall mean the EPC Contract for an
Approximately 118 mW Cogeneration Plant in Aux Sable Township,
Grundy County, Illinois, dated as of July 7, 1997, between the
Borrower and the EPC Contractor.
"EPC Contractor" shall mean Kiewit Industrial, Co., a
Delaware corporation.
10
"Equipment Lease" shall mean the Equipment Lease
Agreement, dated June 3, 1997, between the Borrower and the
Energy Purchaser, as amended by Amendment No. 1 to Equipment
Lease, dated September 13, 1997, between the Borrower and the
Energy Purchaser.
"Equity Contribution" shall mean the proceeds
received by the Borrower pursuant to any Equity Commitment
Agreement,
"Equity Contributor" shall mean any Person (other
than the Borrower or the Collateral Agent) party to any Equity
Commitment Agreement.
"Equity Commitment Agreement" shall mean (i) the
Equity Commitment Agreement, dated as of September 15, 1997,
among NRG Energy, the Borrower and the Collateral Agent, and
(ii) any equity commitment agreement in form and substance
satisfactory to the Agent Bank entered into by any future
Equity Contributor.
"Equity Holder" shall mean any Person holding a
membership interest in the Borrower.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time. Section
references to ERISA are to ERISA as in effect at the date of
this Agreement and any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted
therefor.
"Event of Bankruptcy" shall mean, with respect to any
Person, the occurrence of any of the following events:
(i) the commencement by such Person of a
voluntary case concerning itself under the Bankruptcy Code
or similar Law;
(ii) an involuntary case is commenced
against such Person and the petition is not
controverted within ten (10) days, or is not
dismissed within sixty (60) days, after commencement
of the case;
(iii) a custodian (as defined in the
Bankruptcy Code) is appointed for, or takes charge
of, all or substantially all of the property of such
Person or such Person commences any other proceedings
under any reorganization, arrangement, adjustment of
debt, relief of debtors, dissolution, insolvency or
liquidation or similar Law of any jurisdiction
whether now or hereafter in effect relating to such
Person or there is commenced against such Person any
such proceeding which remains undismissed for a
period of sixty (60) days;
11
(iv) the entrance of any order of
relief or other order approving any such case or
proceeding involving such Person;
(v) such Person is adjudicated
insolvent or bankrupt;
(vi) such Person suffers any
appointment of any custodian or the like for it or
any substantial part of its property to continue
undischarged or unstayed for a period of sixty (60)
days;
(vii) such Person makes a general
assignment for the benefit of creditors;
(viii) such Person shall fail to pay,
or shall state that it is unable to pay, or shall be
unable to pay, its debts generally as they become
due;
(ix) such Person shall by any act or
failure to act consent to, approve of or acquiesce in
any of the foregoing; or
(x) any partnership, corporate or
limited liability company action, as the case may be,
is taken by such Person for the purpose of effecting
any of the foregoing.
"Event of Condemnation" shall have the meaning
provided in Section 7.10(a)(ii).
"Event of Default" shall mean the occurrence of any
of the events described in Section 8.1.
"Event of Loss" shall have the meaning provided in
Section 7.10(a)(i).
"Excess Cash Flow" shall mean, for any period, the
excess of (i) (a) all Cash Flow for such period, plus (b) any
excess amount redeposited into the Revenue Account from the
other Project Accounts pursuant to Article VII, minus (ii) the
sum of (a) all Operation and Maintenance Expenses with respect
to such period which are not funded by a transfer from the
Maintenance Reserve Account, (b) Mandatory Secured Debt Service
(after adjustment for any net Interest Rate Protection Payments
by or to the Borrower) payable by the Borrower with respect to
such period, (c) the aggregate amount of overdue Mandatory
Secured Debt Service (after adjustment for any net Interest
Rate Protection Payments by or to the Borrower) from previous
periods, (d) Mandatory Unsecured Debt Service (after adjustment
for any net Interest Rate Protection Payments by or to the
Borrower) payable by the Borrower with respect to such period,
(e) the aggregate
12
amount of overdue Mandatory Unsecured Debt Service (after
adjustment for any net Interest Rate Protection Payments by or
to the Borrower) from previous periods, (f) all deposits made
into the Maintenance Reserve Account, the Debt Service Reserve
Account and the NGC Reserve Account during such period and (g)
all other required payments and prepayment of obligations
during such period, all as determined on a cash basis, but
otherwise in accordance with GAAP. As an example and without
limiting the foregoing, a sample calculation of Excess Cash
Flow is set forth on Schedule 1.1(D).
"Expiration Date" shall mean the expiration date of
the relevant Letter of Credit as set forth therein.
"Federal Funds Rate" shall mean, for any day, the
rate per annum, rounded upwards, if necessary, to the nearest
1/100th of one percent (1%), equal to the weighted average of
the rates on overnight federal funds transactions with members
of the Federal Reserve System arranged by federal funds brokers
on such day, as published by the Federal Reserve Bank of New
York on the Business Day next succeeding such day; provided
that (i) if such day is not a Business Day, the Federal Funds
Rate for such day shall be the rate on such transactions on the
immediately preceding Business Day as so published on the next
succeeding Business Day and (ii) if no such rate is so
published on the next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate charged to
the Agent Bank on such day on such transactions as determined
by the Agent Bank.
"Federal Reserve Board" shall mean the Board of
Governors of the Federal Reserve System as constituted from
time to time, or any successor thereto.
"Fees" shall mean all fees payable from time to time
pursuant to Section 2.15.
"Final Maturity Date" shall mean the earlier of (i)
the date which is five (5) years after the Conversion Date and
(ii) the date on which all outstanding Loans shall become due
and payable pursuant to Section 8.2.
"Financing Documents" shall mean the Loan Documents,
the Security Documents, the Consents and the Equity Commitment
Agreements.
"Force Majeure" shall mean any event or circumstance
that constitutes "force majeure" or an "uncontrollable
circumstance" under any Project Document.
"Forward Market Price" shall have the meaning given
to such term in Section 1.16 of the NGC Agreement.
13
"Fuel Consultant" shall mean Reed Consulting Group or
any other Person from time to time appointed by the Agent Bank
(at the direction of the Required Banks) to act as fuel
consultant for the purposes of this Agreement and as notified
to the Borrower.
"Fuel Expenses" shall mean, for any period, the cost
of supply and transportation for all fuel delivered to the
Project.
"GAAP" shall mean generally accepted accounting
principles in the United States as in effect from time to time,
consistently applied.
"Gas Contracts" shall mean collectively, the NIGAS
Agreement, the NIGAS Letter Agreement and the NGC Agreement.
"Governmental Approval" shall mean any action, order,
authorization, consent, approval, license, lease, ruling,
permit, tariff, rate, certification, exemption, filing or
registration by or with any Governmental Authority.
"Governmental Authority" shall mean any United States
government, governmental department, commission, board, bureau,
agency, regulatory authority, instrumentality, judicial or
administrative body, federal, state or local, having
jurisdiction over the matter or matters in question.
"Ground Lease" shall mean the Ground Lease and
Easement Agreement, dated June 3, 1997, between the Borrower
and the Energy Purchaser, as amended by Amendment No. 1 to
Ground Lease and Easement Agreement, dated September 13, 1997,
between the Borrower and the Energy Purchaser.
"Guaranteed Heat Rate" shall have the meaning set
forth for such term in the Operation and Maintenance Agreement.
"Heat Rate Formula" shall have the meaning provided
in Section 5.8(f).
"ICA" shall mean the Investment Company Act of 1940,
as amended.
"Indebtedness" shall mean, with respect to any
Person, without duplication, (i) all obligations of such Person
for borrowed money or for the deferred purchase price of
property or services (other than trade payables on terms of
sixty (60) days or less incurred in the ordinary course of
business of such Person but only to the extent paid on such
terms), (ii) all obligations of such Person evidenced by a
note, bond, debenture or similar instrument, (iii) all
obligations of such Person under Capital Leases, (iv) the
stated amount of all letters of credit issued for the account
of such Person and, without duplication, all unreimbursed
amounts drawn thereunder, (v) all Indebtedness of any other
Person secured by any Lien on any property owned by such
Person, whether or not such
14
Indebtedness has been assumed, (vi) all obligations of such
Person under any Interest Rate Protection Agreement and any
currency swap or similar agreement and (vii) all Contingent
Obligations of such Person.
"Indemnitee" shall have the meaning provided in
Section 11.1(d).
"Independent Engineer" shall mean R.W. Beck, Inc. or
any other Person from time to time appointed by the Agent Bank
(at the direction of the Required Banks) to act as independent
engineer for the purposes of this Agreement and as notified to
the Borrower.
"Insurance Consultant" shall mean Aon Risk Services
or any other person from time to time appointed by the Agent
Bank (at the direction of the Required Banks) to act as
insurance consultant for the purposes of this Agreement and as
notified to the Borrower.
"Interest Period" shall have the meaning provided in
Section 2.8(a).
"Interest Rate Protection Agreement" shall mean any
interest rate ex change, collar, cap or similar agreement
providing interest rate protection entered into by the
Borrower.
"Interest Rate Protection Payment" shall mean any net
payment made in respect of any Interest Rate Protection
Agreement.
"Investment Grade Rating" shall mean a rating of "BBB-
" or higher from S&P or a rating of "Baa3" or higher from
Moody's.
"Issuing Bank" shall mean Chase, as a Bank and in its
capacity as issuer of the Letters of Credit, or such other Bank
as the Agent Bank may select from time to time.
"Kiewit Construction Consent" shall mean the Consent
and Agreement, dated as of September 15, 1997, between the
Construction Guarantor and the Collateral Agent.
"Kiewit Industrial Consent" shall mean the Consent
and Agreement, dated as of September 15, 1997, between the EPC
Contractor and the Collateral Agent.
"Law" shall mean, with respect to any Governmental
Authority, any constitutional provision, law, statute, rule,
regulation, ordinance, treaty, order, decree, judgment,
decision, certificate, holding, injunction, Governmental
Approval or requirement of such Governmental Authority along
with the interpretation and administration thereof by any
Governmental Authority charged with the interpretation or
administration
15
thereof. Unless the context clearly requires otherwise, the
term "Law" shall include each of the foregoing (and each
provision thereof) as in effect at the time in question,
including any amendments, supplements, replacements or other
modifications thereto or thereof, and whether or not in effect
at the date of this Agreement.
"Letter Agreement" shall mean the letter agreement,
dated August 28, 1997, between the Borrower and the Energy
Purchaser.
"Letter of Credit" shall have the meaning provided in
Section 2.2(a).
"Letter of Credit Account" shall mean the account of
such name described on Schedule 1.1 established at the
Collateral Agent's Office and designated as the Letter of
Credit Account or any other account at the Collateral Agent's
Office designated by the Borrower with the consent of the
Collateral Agent to serve as the Letter of Credit Account.
"Letter of Credit Availability Date" shall have the
meaning provided in Section 2.2(a).
"Letter of Credit Commitment" shall mean at any time,
for any Bank, the amount set forth opposite such Bank's name on
Schedule 1.1(A) hereto under the heading "Letter of Credit
Commitment", as such amount may be reduced from time to time
pursuant to Section 2.11 or 11.4(d), or increased pursuant to
Section 11.4(c) in the case of an assignment thereunder of
Credit Exposure to such Bank from another Bank.
"Letter of Credit Fee" shall have the meaning
provided in Section 2.15(d).
"Letter of Credit Termination Date" shall mean the
Final Maturity Date.
"LIBOR" shall mean the London Interbank Offered Rate.
"LIBOR Rate" shall mean with respect to each day
during each Interest Period pertaining to any LIBOR Rate Loan,
the rate per annum equal to (i) the rate (rounded upwards to
the nearest 1/16th of one percent (1%)) for one, two, three or
six months (at the election of the Borrower) Dollar deposits as
it appears on the display designated as "Telerate British
Bankers Assoc. Interest Settlement Rates Page" on Telerate
System Incorporated, or such other page as may replace such
page on that service, at or about 11:00 a.m. London time, two
London Banking Days prior to the beginning of such Interest
Period for delivery on the first day of such Interest Period or
(ii) if such service is not available, the rate at which one,
two, three or six months (at the election of the Borrower)
Dollar deposits offered by the principal London office of the
Agent Bank at or about 11:00 a.m. London time in the London
interbank market two (2) London Banking Days prior to the
beginning of such Interest Period for delivery on the first day
of such
16
Interest Period in an aggregate amount comparable to the
principal amount of the relevant LIBOR Rate Loan.
"LIBOR Rate Lending Office" shall mean, with respect
to any Bank, the office designated to the Agent Bank and the
Borrower by such Bank from time to time as its LIBOR Rate
Lending Office.
"LIBOR Rate Loans" shall mean Loans made and/or being
maintained at a rate of interest based upon the LIBOR Rate.
"Lien" shall mean any mortgage, pledge,
hypothecation, assignment, mandatory deposit arrangement with
any party owning Indebtedness of the Borrower, encumbrance,
lien (statutory or other), or preference, priority or other
security agreement of any kind or nature whatsoever, including,
without limitation, any conditional sale or other title
retention agreement, any financing lease having substantially
the same effect as any of the foregoing and the filing of any
financing statement or similar instrument under the Uniform
Commercial Code or comparable Law.
"Liquidated Damages" shall mean any Liquidated Delay
Damages or Liquidated Performance Damages.
"Liquidated Delay Damages" shall mean any amount
payable to or for the account of the Borrower under Section
12.1 of the EPC Contract or any other agreement as a result of
delayed delivery or performance with respect to the Project or
any goods or services supplied in connection with the Project.
"Liquidated Performance Damages" shall mean any
amount payable to or for the account of the Borrower under (i)
Section 12.2, 12.3, 12.4 or 12.5 of the EPC Contract, (ii)
Section 8.2 or 8.3 of the Operation and Maintenance Agreement,
(iii) Section 2 of the O&M Guarantee, (iv) a similar provision
of the RO EPC Contract or (v) any other agreement as a result
of failure, diminished performance or efficiency with respect
to the Project or any goods or services supplied in connection
with the Project.
"Loan Agreement Termination Date" shall mean the date
on which all of the Commitments have been terminated and the
Obligations (other than amounts in respect of indemnities
hereunder that are not then due) are indefeasibly paid in full.
"Loan Documents" shall mean this Agreement and the
Notes.
"Loans" shall mean the Construction Loans and/or the
Term Loans, as applicable.
17
"London Banking Days" shall mean (i) for all purposes
other than as covered by clause (ii) below, any day that is not
a Saturday or a Sunday in London, England or on which banking
institutions in London, England are required or authorized by
Law or other government actions to be closed and (ii) with
respect to all notices and determinations in connection with,
and payments of principal of and interest on, LIBOR Rate Loans,
any day which is a London Banking Day described in clause (i)
and which is also a day for trading by and between banks for
United States Dollar deposits in the London interbank market.
"Long-Term Service Agreement" shall mean the long
term service program to be entered into between the Borrower
and the Maintenance Contractor in accordance with Section 5.17
to provide for major maintenance to the Project's combustion
turbines.
"Loss Proceeds" shall have the meaning provided in
Section 7.10(a)(i).
"Maintenance Contractor" shall mean a third party
provider of gas turbine overhaul and service maintenance with
recognized industry experience and standing which is reasonably
acceptable to the Agent Bank (in consultation with the
Independent Engineer).
"Maintenance Reserve Account" shall mean the account
of such name described on Schedule 1.1 established at the
Collateral Agent's Office, or any other ac count at the
Collateral Agent's Office designated by the Borrower with the
consent of the Collateral Agent to serve as the Maintenance
Reserve Account.
"Maintenance Reserve Amount" shall mean, for any
calendar year, the amount set forth opposite such calendar year
on Schedule 1.1(B), as the same may be modified from time to
time with the prior written consent of the Agent Bank (in
consultation with the Independent Engineer), such consent not
to be unreasonably withheld.
"Major Maintenance Budget" shall have the meaning
provided in Section 5.8(b).
"Major Maintenance Expenses" shall mean all
expenditures by the Borrower on regularly scheduled (or
reasonably anticipated) maintenance of the Project in
accordance with good utility practice and vendor and supplier
requirements constituting major maintenance (including, without
limitation, teardowns, overhauls, capital improvements,
replacements and/or refurbishment of major components of the
Project).
"Make-up Amount" shall have the meaning provided in
Section 2.5(c).
18
"Mandatory Debt Service" shall mean Mandatory Secured
Debt Service and/or Mandatory Unsecured Debt Service, as
applicable.
"Mandatory Secured Debt Service" shall mean, without
duplication, all payments of principal, interest and other
amounts due with respect to the Loans and any other senior
secured Permitted Debt of the Borrower.
"Mandatory Unsecured Debt Service" shall mean,
without duplication, all payments of principal, interest and
other amounts due with respect to any senior unsecured
Permitted Debt of the Borrower.
"Margin Stock" shall have the meaning provided in
Regulation U and Regulation G.
"Material Adverse Effect" shall mean a material
adverse effect on one or more of the following: (i) the
operations, business, financial condition or property of the
Borrower; (ii) the ability of the Borrower to perform in a
timely manner its material obligations under the Transaction
Documents to which it is a party; (iii) the rights and
interests of the Banks, the Agent Bank and the Collateral Agent
under the Transaction Documents; or (iv) the value of the
Collateral or the validity or priority of the security
interests therein granted to the Collateral Agent.
"Materials of Environmental Concern" shall mean
chemicals, pollutants, contaminants, wastes, toxic substances,
petroleum and petroleum products.
"Millennium Consent" shall mean the Consent and
Agreement, dated as of September 15, 1997, between the Energy
Purchaser and the Collateral Agent.
"Minimum Performance Standards" shall have the
meaning provided in Section 2.4 of the EPC Contract.
"Minor Punch List Items" shall mean any Punch List
item which is not necessary for completion of the Performance
Tests or Acceptance and for which the Borrower has retained two
hundred percent (200%) of the cost thereof (as approved by the
Independent Engineer) as provided in Section 10.3 of the EPC
Contract.
"Monthly Progress Invoice" shall mean any monthly
progress invoice delivered to the Borrower by the EPC
Contractor pursuant to Section 5.2.2 of the EPC Contract.
"Moody's" shall mean Moody's Investors Services, Inc.
or any successor thereto which is a nationally recognized
rating agency.
19
"Morris Plant" shall have the meaning provided in
Section 1 of the Energy Services Agreement.
"Mortgage" shall mean the Leasehold Construction and
Term Mortgage, Security Agreement and Fixture Financing
Statement in the Aggregate Principal Amount of up to
$91,000,000, dated as of September 15, 1997, from the Borrower
to the Collateral Agent.
"Mortgaged Property" shall mean the property and
interests that the Mortgage purports to encumber.
"MW" shall mean megawatt.
"Necessary Project Approvals" shall have the meaning
provided in Section 4.7.
"NGC" shall mean Natural Gas Clearinghouse, a
Colorado general partnership.
"NGC Agreement" shall mean the Natural Gas Purchase
and Sale Agreement, dated as of September 12, 1997, by and
between the Borrower and NGC.
"NGC Consent" shall mean the Consent and Agreement,
dated as of September 15, 1997, between NGC and the Collateral
Agent.
"NGC Guarantee" shall mean the corporate guarantee by
NGC Corporation in favor of the Borrower required to be
provided by NGC on or before August 1, 1998 pursuant to Section
6.1(a) of the NGC Agreement.
"NGC Reserve Account" shall mean the account of such
name described on Schedule 1.1 established at the Collateral
Agent's Office, or any other account at the Collateral Agent's
Office designated by the Borrower with the consent of the
Collateral Agent to serve as the NGC Reserve Account.
"NGC Reserve Required Balance" shall have the meaning
provided in Section 7.8.
"NIGAS" shall mean the Northern Illinois Gas Company,
an Illinois corporation.
"NIGAS Agreement" shall mean the Agreement, dated as
of August 26, 1997, between the Borrower and NIGAS.
20
"NIGAS Letter Agreement" shall mean the Letter
Agreement, dated September 18, 1997, among the Collateral
Agent, the Borrower and NIGAS.
"Non-Defaulting Bank" shall have the meaning provided
in Section 2.5(c).
"Note" shall mean any Construction Note and/or any
Term Note, as applicable.
"Notice of Borrowing" shall mean a Notice of
Borrowing substantially in the form of Exhibit D.
"Notice of Conversion or Continuation" shall mean a
Notice of Conversion or Continuation in the form of Exhibit F.
"Notice to Proceed" shall have the meaning provided
in Section 2.4 of the EPC Contract.
"NRG Energy" shall mean NRG Energy, Inc., a Delaware
corporation.
"NRG Energy Consent" shall mean the Consent and
Agreement, dated as of September 15, 1997, between the O&M
Guarantor and the Collateral Agent.
"NRG Generating" shall mean NRG Generating (U.S.)
Inc., a Delaware corporation.
"NRG MI" shall mean NRG Morris Inc., a Delaware
corporation.
"NRG Morris Consent" shall mean the Consent and
Agreement, dated as of September 15, 1997, between the Operator
and the Collateral Agent.
"O&M Change Order" shall have the meaning provided
for the term "Change Order" in the Operation and Maintenance
Agreement.
"O&M Deliverable" shall mean any of the following:
(i) any safety plan developed pursuant to
Section 4.1.2 of the Operation and Maintenance Agreement;
(ii) any procedures for handling hazardous
substances developed pursuant to Section 4.1.3 of the
Operation and Maintenance Agreement;
21
(iii) any administrative procedures, reporting
procedures or other procedures developed pursuant to
Section 4.1.4 of the Operation and Maintenance Agreement;
or
(iv) any management plan developed pursuant to
Section 4.1.18 of the Operation and Maintenance Agreement.
"O&M Guarantee" shall mean the Limited Guaranty,
dated September 19, 1997, by the O&M Guarantor for the benefit
of the Borrower.
"O&M Guarantor" shall mean NRG Energy.
"Obligations" shall mean all obligations, liabilities
and Indebtedness of every nature of the Borrower from time to
time owing to any Secured Party under any Financing Document
including, without limitation, (i) all principal, interest and
fees, (ii) any amounts (including, without limitation,
insurance premiums, licensing fees, recording and filing fees
and taxes) which the Secured Parties expend on behalf of the
Borrower because the Borrower fails to make any such payment
when required under the terms of any Transaction Document,
(iii) all amounts required to be paid under any indemnification
or similar provision, (iv) all fees and expenses required to be
paid by or on behalf of the Borrower pursuant to Section 11.1
and similar sections of the other Financing Documents and (v)
any obligations under any Secured Interest Rate Protection
Agreement.
"Operating Budget" shall have the meaning provided in
Section 5.8(a).
"Operating Year" shall have the meaning provided for
such term in the Operation and Maintenance Agreement.
"Operation and Maintenance Account" shall mean the
account of such name described on Schedule 1.1 established at
the Collateral Agent's Office, or any other account at the
Collateral Agent's Office designated by the Borrower with the
consent of the Collateral Agent to serve as the Operation and
Maintenance Account.
"Operation and Maintenance Agreement" shall mean the
Operation and Maintenance Agreement, dated September 19, 1997,
between the Borrower and the Operator.
"Operation and Maintenance Expenses" shall mean, for
any period, the sum without duplication of (i) payments due
under the Operation and Maintenance Agreement, (ii) Fuel
Expenses, (iii) reasonable and necessary insurance costs, (iv)
property, sales and franchise taxes (other than taxes imposed
on or measured by income or receipts) to which the Project may
be subject (or payments in lieu of such taxes to which the
Project may be subject), (v) reasonable and necessary costs and
fees incurred in connection with
22
obtaining and maintaining in effect the Necessary Project
Approvals (including the Deferred Approvals), (vi) reasonable
and necessary legal, accounting and other professional fees
incurred in connection with any of the foregoing items, (vii)
the reasonable costs of administration and enforcement of the
Transaction Documents and (viii) any other expenses approved in
writing by the Required Banks (it being understood that the
reasonableness and necessity of all such expenses shall be
determined by the Required Banks after consultation with the
Independent Engineer and the Insurance Consultant or the
Banks', the Agent Bank's or the Collateral Agent's other
advisors or counsel, as appropriate). In no event shall
Project Costs be considered Operation and Maintenance Expenses.
"Operator" shall mean NRG Morris Operations Inc., a
Delaware corporation.
"Other Proceeds" shall have the meaning provided in
Section 7.10(a)(vi).
"Participant" shall have the meaning provided in
Section 11.4(b).
"Payment Date" shall mean the last Business Day of
any calendar month.
"PBGC" shall mean the Pension Benefit Guaranty
Corporation established under ERISA, or any successor thereto.
"Performance Tests" shall have the meaning provided
in Section 2.4 of the EPC Contract.
"Permitted Debt" shall have the meaning provided in
Section 6.2.
"Permitted Investments" shall mean any of the
following: (i) marketable direct obligations of the United
States; (ii) marketable obligations directly and fully
guaranteed as to interest and principal by the United States;
(iii) demand deposits with the Collateral Agent and time
deposits, certificates of deposit and banker's acceptances
issued by any member bank of the Federal Reserve System which
is organized under the Laws of the United States or any state
thereof or any United States branch of a foreign bank; (iv)
commercial paper or tax-exempt obligations given the highest
rating by each of S&P and Moody's; (v) obligations of the
Collateral Agent or any bank described in clause (iii)
immediately above in respect of the repurchase of obligations
of the type as described in clauses (i) and (ii) immediately
above, provided that such repurchase obligations shall be fully
secured by obligations of the type described in said clauses
(i) and (ii) and the possession of such obligations shall be
owned by the Collateral Agent; (vi) instruments issued by
investment companies having a portfolio consisting ninety-five
percent (95%) or more of obligations of the type described in
clauses (i), (ii) and (v) immediately above and
23
having a maturity of ninety (90) days or less; and (vii)
eurodollar certificates of deposit issued by the Collateral
Agent or any bank described in clause (iii) above.
"Permitted Liens" shall have the meaning provided in
Section 6.3.
"Person" shall mean any individual, partnership,
joint venture, firm, limited liability company, corporation,
association, trust or other enterprise or any Governmental
Authority.
"Petrochemical Industry Consultant" shall mean Chem
Systems Inc. or any other Person from time to time appointed by
the Agent Bank (at the direction of the Required Banks) to act
as petrochemical industry consultant for the purposes of this
Agreement and as notified to the Borrower.
"Plan" shall mean at any time an employee pension
benefit plan covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Code that is
either (i) maintained by a member of the Controlled Group or
(ii) maintained pursuant to a collective bargaining agreement
or any other arrangement under which more than one employer
makes contributions and to which a member of the Controlled
Group is then making or accruing an obligation to make
contributions or has within the preceding five (5) plan years
made contributions.
"Planned Date Certain" shall have the meaning
provided in Section 2.3(c).
"Pledge Agreement" shall mean the Pledge Agreement,
dated as of September 15, 1997, among NRG Energy, NRG MI and
the Collateral Agent.
"Preliminary Operating Budget" shall have the meaning
provided in Section 3.3(h).
"Proceeds Account" shall mean the account of such
name described on Schedule 1.1 established at the Collateral
Agent's Office, or any other account at the Collateral Agent's
Office designated by the Borrower with the consent of the
Collateral Agent to serve as the Proceeds Account.
"Progress Payment Schedule" shall mean the Work
Breakdown Schedule and the Guaranteed Maximum Drawdown Schedule
set forth in Schedule E to the EPC Contract, or any similar
schedule (or schedules) contained in the RO EPC Contract, as
applicable.
"Project" shall mean, at all times, the Site and the
facilities constructed or being constructed pursuant to the EPC
Contract and the RO EPC Contract.
24
"Project Accounts" shall have the meaning provided in
Section 7.1.
"Project Costs" shall mean the following costs and
expenses incurred by the Borrower and approved by the Agent
Bank (in consultation with the Independent Engineer) in the
Construction Budget or otherwise in writing:
(i) costs incurred by the Borrower under
the EPC Contract and the RO EPC Contract (except for
Change Orders and O&M Change Orders not approved in
accordance with Section 6.11) and other costs directly
related to the design, engineering, permitting,
construction, installation, testing, start-up and
operation and maintenance during start-up of the Project;
(ii) fees and expenses incurred by or on
behalf of the Borrower in connection with the development
of the Project and the consummation of the transactions
contemplated by this Agreement, including, without
limitation, financial, accounting, legal, surveying and
consulting fees, the costs of preliminary engineering, the
costs of obtaining the Necessary Project Approvals
(including the Deferred Approvals), security deposits or
other amounts payable under the Project Documents, the
Energy Adjustment Payments to the Energy Purchaser and a
development fee (the "Development Fee") payable to NRG
Energy not to exceed $5,000,000 in the aggregate; provided
that (i) no more than $4,000,000 of the Development Fee
shall be paid prior to the Conversion Date and (ii) the
remaining $1,000,000 of the Development Fee shall be paid
on or after the Conversion Date to the extent, and only to
the extent, that all other Project Costs have been paid in
full;
(iii) interest on the Construction Loans;
(iv) financing fees and expenses in
connection with the Commitments, including, without
limitation, Fees payable prior to the Conversion Date,
fees and expenses associated with any Interest Rate
Protection Agreement and the fees and expenses of the
Agent Bank's and the Collateral Agent's counsel, the
Independent Engineer, the Fuel Consultant, the
Petrochemical Industry Consultant and the Insurance
Consultant;
(v) taxes incurred in connection with the
Project;
(vi) insurance premiums with respect to the
Title Insurance Policy and the insurance required pursuant
to Section 5.7; and
(vii) initial funding requirements of the
Debt Service Reserve Account and Maintenance Reserve
Account up to their respective initial required balances.
25
"Project Documents" shall mean the Energy Services
Agreement, the EPC Contract, the Contractor Parent Company
Guarantee, the Operation and Maintenance Agreement, the O&M
Guarantee, the Gas Contracts, the Ground Lease and the
Equipment Lease.
"Project Equity Amount" shall mean twenty percent
(20%) of the aggregate amount of all Project Costs; provided,
however, that the Project Equity Amount shall not at any time
exceed $22,000,000.
"Project Party" shall mean each Person (other than
the Agent Bank, the Collateral Agent and the Banks) that is a
party to any Transaction Document (including any Additional
Project Party).
"Pro Rata Share" shall mean, as to any Bank, a
fraction (expressed as a percentage), the numerator of which
shall be the aggregate amount of such Bank's outstanding Loans
and Letters of Credit (or Commitments (x) if no Loans are then
outstanding and (y) for any application of such term pursuant
to Section 2.4(c), 2.5(a), 2.5(c), 2.11 or 11.19), and the
denominator of which shall be the aggregate amount of
outstanding Loans and Letters of Credit for all Banks (or the
total Commitments if no Loans are then outstanding).
"PUHCA" shall mean the Public Utility Holding Company
Act of 1935, as amended from time to time.
"Punch List" shall have the meaning provided in
Section 2.4 of the EPC Contract or in a similar provision of
the RO EPC Contract, as applicable.
"Purchasing Banks" shall have the meaning provided in
Section 11.4(d).
"Qualifying Facility" shall mean a "small power
production facility" or a "qualifying cogeneration facility" in
accordance with the Public Utility Regulatory Policies Act of
1978, as amended from time to time.
"Quarterly Dates" shall mean the last Business Day of
each March, June, September and December of each fiscal year of
the Borrower, the first of which shall be the first such day
after the Conversion Date.
"Regulations D, G, T, U and X" shall mean such
regulations of the Federal Reserve Board as may be from time to
time in effect and any successor to all or any portion thereof.
"Regulatory Counsel" shall mean Troutman Sanders LLP.
26
"Reimbursement Obligation" shall have the meaning
provided in Section 2.2(d).
"Request for Issuance" shall have the meaning
provided in Section 2.2(b).
"Required Banks" shall mean Banks holding more than
sixty-six and two thirds percent (66_%) of the principal amount
of Loans outstanding, or, if no Loans are outstanding,
Commitments.
"Restoration Requisition" shall mean a certificate,
signed by an Authorized Officer of the Borrower, in the form of
Exhibit G.
"Revenue Account" shall mean the account of such name
described on Schedule 1.1 established at the Collateral Agent's
Office, or any other account at the Collateral Agent's Office
designated by the Borrower with the consent of the Collateral
Agent to serve as the Revenue Account.
"RO EPC Contract" shall mean an agreement to be
entered into between the Borrower and the supplier of the
reverse osmosis water purification system in accordance with
Section 5.18 to provide for the engineering, procurement and
construction of such system.
"RO EPC Contractor" shall mean the party which enters
into the RO EPC Contract with the Borrower and provides
services thereunder.
"Second Letter Agreement" shall mean the letter
agreement, dated September 19, 1997, between the Borrower and
the Energy Purchaser.
"Secured Interest Rate Protection Agreement" shall
mean any Interest Rate Protection Agreement entered into by the
Borrower with a Bank in accordance with Section 6.2.
"Secured Party" shall mean any of the Agent Bank, the
Collateral Agent or any of the Banks.
"Security Agreement" shall mean the Assignment and
Security Agreement, dated as of September 15, 1997, between the
Borrower and the Collateral Agent.
"Security Documents" shall mean all documents under
which a security interest is granted to the Collateral Agent to
secure the Borrower's obligations under the Financing
Documents, including, without limitation, the Security
Agreement, the Pledge Agreement, the Mortgage and the Control
Agreement.
27
"Site" shall mean those certain parcels described on
Schedule 1.1(C) and all easements, licenses and other rights
necessary for access to and enjoyment of the Project site for
the purposes contemplated in the Transaction Documents.
"Spare Parts List" shall have the meaning provided in
Section 5.8(d).
"S&P" shall mean Standard & Poor's Corporation or any
successor thereto which is a nationally recognized rating
agency.
"Stated Amount" shall mean the face amount of the
relevant Letter of Credit as set forth therein.
"Subsidiary" shall mean, with respect to any Person,
(i) any corporation fifty percent (50%) or more of whose stock
of any class or classes having by the terms thereof ordinary
voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time stock
of any class or classes of such corporation shall have or might
have voting power by reason of the happening of any
contingency) is at the time owned by such Person directly or
indirectly through Subsidiaries, and (ii) any partnership,
association, joint venture or other entity in which such
Person, directly or indirectly through Subsidiaries, is either
a general partner or has a fifty percent (50%) or greater
equity interest at the time.
"Taxes" shall have the meaning provided in Section
4.18.
"Technical Specifications" shall have the meaning
provided in Section 2.4 of the EPC Contract or in a similar
provision of the RO EPC Contract, as applicable.
"Term Loan" shall have the meaning provided in
Section 2.3(a).
"Term Loan Commitment" shall mean, at any time, for
any Bank, the lesser of (i) the amount set forth opposite such
Bank's name in Schedule 1.1(A) under the heading "Term Loan
Commitment", as the same may be reduced from time to time
pursuant to Sections 2.11 and 11.4(d) or increased pursuant to
Section 11.4(c) in the case of an assignment thereunder of
Credit Exposure to such Bank from another Bank and (ii) the
outstanding principal amount of such Bank's Construction Loans
(prior to giving effect to any payment of Construction Loans on
the Conversion Date), together with accrued and unpaid interest
and Commitment Fees and Letter of Credit Fees thereon.
"Term Note" shall mean a promissory note of the
Borrower dated the Conversion Date in the form of Exhibit C.
"Title Insurance Policy" shall have the meaning
provided in Section 3.1(l)(ii).
28
"Total Construction Loan Commitment" shall mean the
sum of the Construction Loan Commitments of all of the Banks.
"Total Letter of Credit Commitment" shall mean the
sum of the Letter of Credit Commitments of all of the Banks.
"Total Term Loan Commitment" shall mean the sum of
the Term Loan Commitments of all of the Banks.
"Transaction Documents" shall mean the Financing
Documents and the Project Documents.
"Transferee" shall have the meaning provided in
Section 11.4(f).
"Transfer Supplement" shall have the meaning provided
in Section 11.4(d).
"Type" shall have the meaning provided in Section
1.3.
"Uniform Commercial Code" shall mean the Uniform
Commercial Code as in effect from time to time in the State of
New York or in any other relevant jurisdiction.
"United States" shall mean the United States of
America.
"Welfare Plan" shall mean a "welfare plan," as
defined in Section 3(1) of ERISA.
"Withholding Taxes" shall have the meaning provided
in Section 2.19(a).
Section 1.2. Accounting Terms and Determinations.
(a) Except as otherwise expressly provided
herein, all accounting terms used herein shall be interpreted,
and all financial statements and certificates and reports as to
financial matters required to be delivered to the Agent Bank,
the Collateral Agent or the Banks hereunder shall (unless
otherwise disclosed to the Agent Bank, the Collateral Agent or
the Banks, as the case may be, in writing at the time of
delivery thereof in the manner described in subsection (b)
below) be prepared in accordance with GAAP (other than, in the
case of interim financial statements, the absence of normally
recurring year-end adjustments and notes) applied on a basis
consistent with that used in the preparation of the latest
financial statements furnished to the Agent Bank, the
Collateral Agent or the Banks, as the case may be, hereunder
(which, prior to the first financial statements delivered under
Section 5.1, shall mean the financial statements referred to in
Section 3.1(n)). All calculations made for the purposes of
determining compliance with the terms
29
of this Agreement shall (except as otherwise expressly provided
herein) be made by application of GAAP applied on a basis
consistent with that used in the preparation of the annual or
quarterly financial statements furnished to the Agent Bank
pursuant to Section 5.1 unless (i) the Borrower shall have
objected to determining such compliance on such basis at the
time of delivery of such financial statements or (ii) the
Required Banks shall so object in writing within thirty (30)
days after delivery of such financial statements, in either of
which events such calculations shall be made on a basis
consistent with those used in the preparation of the latest
financial statements as to which such objection shall not have
been made (which, if objection is made in respect of the first
financial statements delivered under Section 5.1, shall mean
the financial statements referred to in Section 3.1(n)).
(b) The Borrower shall deliver to the Agent
Bank at the same time as the delivery of any annual or
quarterly financial statement under Section 5.1 a description
in reasonable detail of any material variation between the
application of accounting principles employed in the
preparation of such statement and the application of accounting
principles employed in the preparation of the next preceding
annual or quarterly financial statements as to which no
objection has been made in accordance with the last sentence of
subsection (a) above, and reasonable estimates of the
differences between such statements arising as a consequence
thereof.
(c) To enable the ready and consistent
determination of compliance with the covenants set forth in
Section 5.1, the Borrower shall not change the last day of its
fiscal year from December 31 of each year, or the last days of
the first three (3) fiscal quarters in each of its fiscal years
from March 31, June 30 and September 30 of each year,
respectively, each except with the prior written consent of the
Required Banks.
Section 1.3. Types of Loans. Loans hereunder are
distinguished by "Type". The "Type" of a Loan refers to
whether such Loan is a Base Rate Loan or a LIBOR Rate Loan,
each of which constitutes a Type.
Section I.4. Certain Principles of Interpretation.
(a) Unless otherwise expressly specified
herein, any agreement, contract or document defined or referred
to herein shall mean such agreement, contract or document in
the form (including all amendments and letter agreements
relating thereto) delivered to the Agent Bank and the Banks on
the Closing Date as the same may thereafter be amended,
supplemented or otherwise modified (including, without
limitation, in the case of the EPC Contract or the RO EPC
Contract, Change Orders, and in the case of the Operation and
Maintenance Agreement, O&M Change Orders) from time to time in
accordance with the terms of this Agreement and of the other
Loan Documents. Unless otherwise stated, any reference in this
Agreement to any Person shall include its permitted
30
successors and assigns and, in the case of any Government
Authority, any Person succeeding to its functions and
capacities.
(b) Defined terms in this Agreement shall
include in the singular number the plural and in the plural
number the singular.
(c) The words "hereof", "herein" and
"hereunder" and words of similar import when used in this
Agreement shall, unless otherwise expressly specified herein,
refer to this Agreement as a whole and not to any particular
provision of this Agreement and all references to Sections,
Schedules or Exhibits shall be references to Sections of or
Schedules or Exhibits to, as the case may be, this Agreement
unless otherwise expressly specified herein.
ARTICLE II. AMOUNT AND TERMS OF CREDIT FACILITIES.
Section 2.1. Construction Loans.
(a) Subject to and upon the terms and
conditions herein set forth, each Bank severally and not
jointly agrees, at any time and from time to time on and after
the Closing Date and prior to the Construction Loan Maturity
Date, to make loans, including any amounts to refinance
drawings under any Letter of Credit issued pursuant to Section
2.2(a) (collectively, "Construction Loans"), to the Borrower,
which Construction Loans shall not exceed in aggregate
principal amount at any time the outstanding Construction Loan
Commitment of such Bank. The Total Construction Loan
Commitment shall expire, and each Construction Loan shall
either be converted to a Term Loan upon satisfaction of the
terms and conditions set forth herein or shall mature and be
due and payable, on the Construction Loan Maturity Date,
without further action on the part of any Bank, the Agent Bank
or the Collateral Agent. Once repaid, Construction Loans may
not be reborrowed. Construction Loans converted into Term
Loans shall not be deemed to be repaid or discharged, but shall
be deemed to be continued as Term Loans as provided herein.
(b) The requested amount of any Borrowing of
Construction Loans to pay interest on the Construction Loans
arising after the Commercial Operation Date shall be reduced by
any amount then on deposit in the Revenue Account to the extent
not reasonably anticipated by the Borrower to be needed to pay
Operation and Maintenance Expenses on the Business Day
immediately prior to the day on which the Borrowing request was
made. Each Borrowing of Construction Loans shall, after giving
effect to the reduction provided for in the preceding sentence,
be in the aggregate minimum amount of $1,000,000 or any
integral multiple of $500,000 in excess thereof, except for the
final Construction Loan Borrowing which may be in the amount of
the Project Costs remaining at the time of such Borrowing.
31
(c) The Borrower shall not be required to make
scheduled principal payments on the Construction Loans. The
outstanding principal amount of any Construction Loan which
shall not have converted to a Term Loan pursuant to Section 3.3
on or prior to the Date Certain, together with interest accrued
thereon, shall be due and payable on the Date Certain. If the
Borrower does not repay such amounts within five (5) days after
the Date Certain, the Collateral Agent, if directed by the
Agent Bank (acting upon the instructions of the Required Banks)
and without prejudice to any other remedies available to the
Banks hereunder or under any other Financing Document
including, without limitation, the declaration of an Event of
Default, acceleration of the Obligations and the exercise of
remedies in respect thereof, shall thereafter apply all Excess
Cash Flow to the repayment of outstanding Construction Loans.
All such Excess Cash Flow shall be applied first to any
interest or Fees that are then due on any such Construction
Loans and then to the unpaid principal amount of such
Construction Loans in the inverse order of maturity.
Section 2.2. Letters of Credit.
(a) Subject to and upon the terms and
conditions hereof, the Letter of Credit Commitments may be
utilized, upon the written request of the Borrower, by the
issuance by the Issuing Bank of (i) an irrevocable stand-by
letter of credit substantially in the form of Exhibit N for the
account of the Borrower and naming NGC as the beneficiary
thereof to secure the Borrower's obligations under Section
6.1(b) of the NGC Agreement or (ii) an irrevocable stand-by
letter of credit substantially in the form of Exhibit O for the
account of the Borrower and naming the Energy Purchaser as
beneficiary to satisfy the Borrower's obligations under Section
32.1 of the Energy Services Agreement (the letters of credit
described in clauses (i) and (ii) are herein collectively
referred to as "Letters of Credit"); provided that in no event
shall (i) the aggregate Stated Amount of all Letters of Credit,
including all unreimbursed drawings thereon, exceed the Total
Letter of Credit Commitment as in effect from time to time or
(ii) the expiration date of any Letter of Credit extend beyond
the Letter of Credit Termination Date. The Letters of Credit
shall, subject to the satisfaction of the terms and conditions
set forth herein, be available on and after the date which is
twelve (12) months after the Closing Date (such date, the
"Letter of Credit Availability Date").
(b) The Borrower shall give the Agent Bank at
least four (4) Business Days irrevocable prior written notice,
substantially in the form of Exhibit E (effective upon
receipt), specifying the date (which shall be no later than
ninety (90) days preceding the Letter of Credit Termination
Date) each Letter of Credit is to be issued, describing in
reasonable detail the proposed terms of such Letter of Credit
(including the Stated Amount thereof) and the nature of the
transactions or obligations proposed to be supported thereby
(such notice, a "Request for Issuance"); provided that the
expiration date of any Letter of Credit shall be on or prior to
the Letter of Credit Termination Date. Upon receipt of any
Request for Issuance, the Agent Bank shall advise the Issuing
Bank of
32
the contents thereof. The Total Letter of Credit Commitment
shall expire on the Letter of Credit Termination Date.
(c) On each day during the period commencing
with the issuance by the Issuing Bank of any Letter of Credit
and until such Letter of Credit shall have expired or been
terminated, the Letter of Credit Commitment of each Bank shall
be deemed to be utilized for all purposes hereof in an amount
equal to such Bank's Pro Rata Share of the then undrawn face
amount of such Letter of Credit. Each Bank (other than the
Issuing Bank) agrees that, upon the issuance of any Letter of
Credit hereunder, it shall automatically acquire a
participation in the Issuing Bank's liability under such Letter
of Credit in an amount equal to such Bank's Pro Rata Share of
such liability, and each Bank (other than the Issuing Bank)
thereby shall absolutely, unconditionally and irrevocably
assume, as primary obligor and not as surety, and shall be
unconditionally obligated to the Issuing Bank to pay and
discharge when due, its Pro Rata Share of the Issuing Bank's
liability under such Letter of Credit.
(d) Upon any drawing under any Letter of
Credit, the Borrower hereby unconditionally agrees to pay and
reimburse the Agent Bank for the account of the Issuing Bank
for the amount of such drawing (the "Reimbursement Obligation")
at or prior to the date on which payment is to be made by the
Issuing Bank in accordance with the terms of such Letter of
Credit to the beneficiary thereunder, without further action on
the part of the Issuing Bank, the Agent Bank, the Collateral
Agent or any Bank, and without presentment, demand, notice,
protest or other formalities of any kind. In the event that
the Borrower does not pay the full amount of any proposed
drawing with respect to any such Letter of Credit referred to
in the preceding sentence on or prior to the date payment is to
be made by the Issuing Bank, the Borrower shall also pay, to
the Agent Bank for the account of the Banks, interest on such
amount at a rate per annum equal to the Base Rate plus the
Applicable Margin for Base Rate Loans plus two percent (2%).
(e) If the Borrower fails to reimburse the
Issuing Bank for a demand for payment under any Letter of
Credit by the date of payment by the Issuing Bank thereunder,
the Agent Bank shall give each Bank prompt notice of the amount
of the demand for payment, specifying such Bank's Pro Rata
Share of the amount of the related demand for payment.
(f) Each Bank (other than the Issuing Bank)
shall pay to the Agent Bank for account of the Issuing Bank at
the Agent Bank's Office in dollars and in immediately available
funds, the amount of such Bank's Pro Rata Share of any payment
under any Letter of Credit upon notice by the Issuing Bank
(through the Agent Bank) to such Bank requesting such payment
and specifying such amount. Each such Bank's obligation to
make such payments to the Agent Bank for account of the Issuing
Bank under this clause (f), and the Issuing Bank's right to
receive the same, shall be absolute and unconditional and shall
not be affected by any circumstance whatsoever, including,
without limitation,
33
the failure of any other Bank to make its payment under this
clause (f), the financial condition of the Borrower (or any
other account party), the existence of any Default or Event of
Default or the termination of the Commitments. Each such
payment to the Issuing Bank shall be made without any offset,
abatement, withholding or reduction whatsoever.
(g) Upon the making of each payment by a Bank
to the Issuing Bank pursuant to clause (f) above in respect of
any Letter of Credit, such Bank shall, automatically and
without any further action on the part of the Agent Bank, the
Collateral Agent, the Issuing Bank or such Bank, acquire (i) a
participation in an amount equal to such payment in the
Reimbursement Obligation owing to the Issuing Bank by the
Borrower hereunder and (ii) a participation in a percentage
equal to such Bank's Pro Rata Share in any interest or other
amounts payable by the Borrower hereunder in respect of such
Reimbursement Obligation. Upon receipt by the Issuing Bank
from or for the account of the Borrower of any payment in
respect of any Reimbursement Obligation or any such interest or
other amount (including by way of set-off or application of
proceeds of any collateral security), the Issuing Bank shall
promptly pay to the Agent Bank for the account of each Bank
entitled thereto, such Bank's Pro Rata Share of such payment,
each such payment by the Issuing Bank to be made in the same
money and funds in which received by the Issuing Bank. In the
event any payment received by the Issuing Bank and so paid to
the Banks hereunder is rescinded or must otherwise be returned
by the Issuing Bank, each Bank shall, upon the request of the
Issuing Bank (through the Agent Bank) repay to the Issuing Bank
(through the Agent Bank) the amount of such payment paid to
such Bank, with interest from the date of such request at the
rate specified in clause (j) of this Section 2.2.
(h) Promptly following the end of each calendar
month, the Issuing Bank shall deliver (through the Agent Bank)
to each Bank and the Borrower a notice describing the aggregate
amount of all Letters of Credit outstanding at the end of such
month. Upon the request of any Bank from time to time, the
Issuing Bank shall deliver any other information reasonably
requested by such Bank with respect to each Letter of Credit
then outstanding.
(i) The issuance by the Issuing Bank of each
Letter of Credit shall, in addition to the conditions precedent
set forth in Section 3, be subject to the conditions precedent
that (i) such Letter of Credit shall be in such form and
contain such terms as shall be satisfactory to the Issuing Bank
consistent with its then current practices and procedures with
respect to letters of credit of the same type, (ii) such Letter
of Credit shall be posted in connection with the Borrower's
obligations under Section 6.1(b) of the NGC Agreement or
Section 32.1 of the Energy Services Agreement, as applicable,
and (iii) the Borrower shall have executed and delivered such
other instruments and agreements relating to such Letter of
Credit as the Issuing Bank shall have reasonably requested
34
consistent with its then current practices and procedures with
respect to letters of credit of the same type.
(j) To the extent that any Bank fails to pay
any amount required to be paid pursuant to clause (f) or (g) of
this Section 2.2 on the due date therefor, such Bank shall pay
interest to the Issuing Bank (through the Agent Bank) on such
amount from and including such due date to but excluding the
date such payment is made (i) during the period from and
including such due date to but excluding the date three (3)
Business Days thereafter, at a rate per annum equal to the Base
Rate and (ii) thereafter, at a rate per annum equal to the
Default Rate.
(k) The Borrower hereby indemnifies and holds
harmless each Bank, the Agent Bank and the Collateral Agent
from and against any and all claims and damages, losses,
liabilities, costs or expenses which such Bank, the Agent Bank
or the Collateral Agent may incur (or which may be claimed
against such Bank, the Agent Bank or the Collateral Agent by
any Person whatsoever) by reason of or in connection with the
execution and delivery or transfer of or payment or refusal to
pay by the Issuing Bank under any Letter of Credit; provided
that the Borrower shall not be required to indemnify any Bank,
the Agent Bank or the Collateral Agent for any claims, damages,
losses, liabilities, costs or expenses to the extent, but only
to the extent, caused by (i) the willful misconduct or gross
negligence of the Issuing Bank in determining whether a request
presented under any Letter of Credit complies with the terms of
such Letter of Credit or (ii) in the case of the Issuing Bank,
such Bank's failure to pay under any Letter of Credit after the
presentation to it of a request strictly complying with the
terms and conditions of such Letter of Credit. Nothing in this
Section 2.2(k) is intended to limit the other rights and
obligations of the Borrower, any Bank, the Agent Bank or the
Collateral Agent under this Agreement or under applicable Law.
(l) If an Event of Default shall have occurred
and be continuing, the Borrower shall, immediately upon the
request of the Agent Bank, make a deposit into the Letter of
Credit Account in accordance with the provisions of Section
7.11; provided, however, that if an Event of Bankruptcy with
respect to the Borrower has occurred, the request described in
this clause (l) shall not be required and shall be deemed to
have been made upon the occurrence of the subject Event of
Default.
Section 2.3. Term Loans.
(a) Subject to and upon the terms and
conditions herein set forth, each Bank severally and not
jointly agrees on the Conversion Date to convert all or a
portion of the Construction Loans outstanding on such date,
after giving effect to any prepayment of Construction Loans
made on such date, to term loans (collectively, "Term Loans").
No Bank shall be obligated to make Term Loans in excess of the
Term Loan Commitment of such Bank. Each Term Loan shall mature
and be due and payable on the
36
Final Maturity Date without further action on the part of any
Bank, the Agent Bank or the Collateral Agent. Once repaid,
Term Loans may not be reborrowed.
(b) Each Term Loan shall be repaid by the
Borrower, without premium or penalty, in amounts equal to the
following percentages of the aggregate amount of such Term
Loan, on the Quarterly Dates specified below:
Quarterly % of Term Quarterly % of Term
Date Loan Date Loan
1 0.000% 11 0.720%
2 0.000% 12 0.720%
3 0.000% 13 0.852%
4 0.000% 14 0.852%
5 0.000% 15 0.852%
6 0.000% 16 0.852%
7 0.000% 17 0.944%
8 0.000% 18 0.944%
9 0.720% 19 0.944%
10 0.720% 20 90.880%
Any remaining outstandings shall be due and payable at the
Final Maturity Date.
(c) The schedule set forth in clause (b) of
this Section 2.3 assumes that the Conversion Date shall occur
on or prior to the date (the "Planned Date Certain") which is
twenty (20) months after the Closing Date. If the Conversion
Date occurs after the Planned Date Certain, such schedule will
be adjusted accordingly by eliminating the applicable Quarterly
Dates(s) (in direct order of maturity) and increasing the
percentages set forth opposite the remaining Quarterly Dates,
on a pro rata basis, by the percentage attributable to such
eliminated Quarterly Date.
Section 2.4. Notice of Borrowing.
(a) Whenever the Borrower desires to borrow
Loans hereunder, it shall submit a Notice of Borrowing to the
Agent Bank at the Agent Bank's Office prior to 10:00 A.M., New
York City time, at least one (1) Business Day prior to each
Base Rate Loan and at least three (3) Business Days prior to
each LIBOR Rate Loan to be made hereunder. Each such Notice of
Borrowing shall be irrevocable, shall be signed by an
36
Authorized Officer of the Borrower and shall specify (i) the
aggregate principal amount of the requested Loans, (ii) the
date of Borrowing (which shall be a Business Day) and (iii)
whether such Loans shall consist of Base Rate Loans or LIBOR
Rate Loans and, if LIBOR Rate Loans, the initial Interest
Period to be applicable thereto.
(b) No more than one (1) Notice of Borrowing
may be submitted in any calendar month.
(c) Promptly but in any event on the same day
as the Agent Bank's receipt of such Notice of Borrowing
pursuant to Section 2.4(a), the Agent Bank shall provide each
Bank with a copy thereof and inform each Bank as to its Pro
Rata Share of the Loans requested thereunder after giving
effect to any reduction in the requested amount thereof
pursuant to Section 2.1(b).
Section 2.5. Disbursement of Funds.
(a) No later than 1:00 P.M., New York City
time, on the date specified in each Notice of Borrowing, each
Bank will make available its Pro Rata Share of the Construction
Loans requested to be made on such date, in Dollars and
immediately available funds, at the Agent Bank's Office. After
the Agent Bank's receipt of the proceeds of any Construction
Loans (including, without limitation, any Make-up Amounts), the
Agent Bank will promptly thereafter make available to the
Borrower, in the manner specified in Article VII, the aggregate
of the amounts so made available in the type of funds actually
received plus the amount then on deposit in the Revenue Account
by virtue of which the requested amount of Construction Loans
was reduced pursuant to Section 2.1(b).
(b) Unless the Agent Bank shall have been
notified by any Bank prior to the date of a Borrowing that such
Bank does not intend to make available to the Agent Bank its
portion of the Construction Loans to be made on such date, the
Agent Bank may assume that such Bank has made such amount
available to the Agent Bank on such date and the Agent Bank in
its sole discretion may, in reliance upon such assumption, make
available to the Borrower a corresponding amount. If such
corresponding amount is not in fact made available to the Agent
Bank by such Bank, or provided to the Agent Bank pursuant to
clause (c) of this Section 2.5, and the Agent Bank has made
such amount available to the Borrower, the Agent Bank shall be
entitled to recover such corresponding amount on demand from
such Bank. If the Agent Bank notifies the Borrower at the time
of any disbursement that the Agent Bank has made an amount
available upon the failure of a Bank to do so, then if such
Bank does not pay such corresponding amount forthwith upon the
Agent Bank's demand therefor, and the Agent Bank has not
received such amount pursuant to clause (c) of this Section
2.5, the Agent Bank may notify the Borrower and the Borrower
shall immediately thereupon repay such corresponding amount to
the Agent Bank. The Agent Bank shall also be entitled to
recover from such Bank or the
37
Borrower, without duplication, interest on such corresponding
amount in respect of each day from the date such corresponding
amount was made available by the Agent Bank to the Borrower to
the date such corresponding amount is recovered by the Agent
Bank, at a rate per annum equal to the then applicable rate of
interest, calculated in accordance with Section 2.7, for the
respective Type of Loans. Nothing herein shall be construed to
relieve any Bank from its obligation to fulfill its commitments
hereunder or to prejudice any rights which the Borrower may
have against any Bank as a result of any default by such Bank
hereunder. Notwithstanding anything contained herein or in any
other Loan Document to the contrary, the Agent Bank may apply
all funds and the proceeds of Collateral available for the
payment of any Obligations first to repay any amount owing by
any Bank or the Borrower to the Agent Bank as a result of any
Bank's failure to fund its Loans hereunder.
(c) If the Agent Bank determines that any Bank
(a "Defaulting Bank") will not make available to the Agent Bank
its portion (the "Defaulted Amount") of Construction Loans to
be made on the date specified in the relevant Notice of
Borrowing, the Agent Bank shall promptly notify each other Bank
(each a "Non-Defaulting Bank") of the Defaulted Amount and
provide each Non-Defaulting Bank the opportunity to fund all or
a portion of the Defaulted Amount by providing such Non-
Defaulting Bank's Make-up Amount (as defined below) to the
Agent Bank in Dollars and immediately available funds at the
Agent Bank's Office on the date specified in the relevant
Notice of Borrowing; provided, however, that notwithstanding
anything in this clause (c) to the contrary, (i) neither the
Agent Bank nor any Non-Defaulting Bank shall in any way be
obligated to fund any portion of the Defaulted Amount and (ii)
any funding by any Non-Defaulting Bank of all or any portion of
a Defaulted Amount shall not increase the Commitments of such
Non-Defaulting Bank or obligate such Non-Defaulting Bank to
fund all or any portion of further Defaulted Amounts. Any Non-
Defaulting Bank which intends to fund all or a portion of the
Defaulted Amount shall promptly provide written notice to the
Agent Bank indicating such intention and specifying the portion
of the Defaulted Amount which such Non-Defaulting Bank intends
to fund (such Bank's "Make-up Amount"). If the aggregate of
the Make-up Amounts specified in the notices received by the
Agent Bank from the Non-Defaulting Banks pursuant to the
preceding sentence exceeds the Defaulted Amount, the Agent Bank
shall (x) determine each Non-Defaulting Bank's Make-up Amount
on a pro rata basis with reference to such Non-Defaulting
Bank's Commitment divided by the aggregate of the Commitments
of all Non-Defaulting Banks and (y) notify such Non-Defaulting
Bank thereof. Any Non-Defaulting Bank funding all or any
portion of a Defaulted Amount shall agree with the Borrower on
the fees, if any, such Non-Defaulting Bank shall charge with
respect to such funding. Nothing in this clause (c) shall
alter or modify any rights the Borrower may have against a
Defaulting Bank.
38
Section 2.6. Notes.
(a) The Borrower's obligation to pay the
principal of and interest on each Bank's Construction Loans
shall be evidenced by a Construction Note and the Borrower's
obligation to pay principal of and interest on each Bank's Term
Loans shall be evidenced by a Term Note. Each such Note shall
be duly executed and delivered by the Borrower in favor of the
appropriate Bank in a principal amount equal to such Bank's
Construction Loan Commitment or Term Loan Commitment, as
applicable, with blanks appropriately completed in conformity
herewith. On the date on which the Construction Loans are
converted to Term Loans in accordance with Section 3, or, if
the Construction Loans are not so converted, on the date all of
the Obligations are indefeasibly paid in full in cash or cash
equivalents, each Bank shall return its Construction Note to
the Borrower, which Construction Note shall be marked "Paid in
Full."
(b) Each Bank is hereby authorized, at its
option, either (i) to endorse on the schedule attached to each
of its Notes (or on a continuation of such schedule attached to
such Note and made a part thereof) an appropriate notation
evidencing the date and amount of each Loan evidenced thereby
and the date and amount of each principal and interest payment
in respect thereof, or (ii) to record such Loans and such
payments in its books and records. Such schedule or such books
and records, as the case may be, shall constitute prima facie
evidence of the accuracy of the information contained therein.
Section 2.7. Interest.
(a) Base Rate. The Borrower agrees to pay
interest in respect of the unpaid principal amount of each Base
Rate Loan from the date of the making of such Base Rate Loan
until such Base Rate Loan shall be paid in full or converted to
a LIBOR Rate Loan at a rate per annum which shall be equal to
the sum of the Applicable Margin plus the Base Rate in effect
from time to time. Interest accruing at the Base Rate will be
calculated on the basis of the actual number of days elapsed in
a year of three hundred sixty-five (365) or three hundred sixty-
six (366) days, as appropriate.
(b) LIBOR Rate. The Borrower agrees to pay
interest in respect of the unpaid principal amount of each
LIBOR Rate Loan from the date of the making of such LIBOR Rate
Loan until such LIBOR Rate Loan shall be paid in full or
converted to a Base Rate Loan at a rate per annum which shall
be equal to the sum of the Applicable Margin plus the relevant
LIBOR Rate. The Agent Bank shall determine the LIBOR Rate at
the beginning of each Interest Period. Interest accruing at
the LIBOR Rate will be calculated on the basis of the actual
number of days elapsed in a year of three hundred sixty (360)
days.
39
(c) Default Rate. In the event that, and for
so long as, an Event of Default specified in Section 8.1 shall
have occurred and be continuing, the outstanding principal
amount of all Loans and, to the extent permitted by Law,
accrued interest in respect of all Loans, shall bear interest
at a rate per annum (the "Default Rate") equal to the sum of
two percent (2%) plus the interest rate otherwise applicable
hereunder to such principal amount in effect from time to time
until such Loan has been paid in full or such Event of Default
has ceased to exist.
(d) Payments. Interest on each Loan shall
accrue from and including the date of the Borrowing thereof to
but excluding the date of any repayment thereof and shall be
payable (i) in respect of each Base Rate Loan, quarterly in
arrears on each Payment Date, (ii) in respect of each LIBOR
Rate Loan, on the last day of each Interest Period applicable
to such Loan and, in the case of an Interest Period for LIBOR
Rate Loans of six (6) months, on the date occurring three (3)
months from the first day of such Interest Period and on the
last day of such Interest Period, and (iii) in the case of all
Loans, on any prepayment or conversion (on the amount prepaid
or converted), at maturity (whether by acceleration or
otherwise) and, after such maturity, on demand.
(e) Notification of Rates. The Agent Bank
shall, upon deter mining a LIBOR Rate for any Interest Period,
promptly notify the Borrower and the Banks thereof.
(f) Excessive Interest. It is the intention of
the parties hereto to conform strictly to applicable usury Laws
and, anything herein or elsewhere to the contrary
notwithstanding, the Obligations shall be subject to the
limitation that the Borrower shall not be required to pay, and
the Secured Parties shall not be entitled to charge or receive,
any interest to the extent that such interest exceeds the
maximum rate of interest which the Secured Parties are
permitted by applicable Law to contract for, charge or receive
and which would not give rise to any claim or defense of usury.
If, as a result of any circumstances whatsoever, performance of
any provision hereof or of any of the Loan Documents shall, at
the time performance of such provision is due, violate
applicable usury Law, then, ipso facto, the obligation to be
performed shall be reduced to the highest lawful rate, and if,
from any such circumstance, the Secured Parties shall ever
receive interest or anything which might be deemed interest
under applicable Law which would exceed the highest lawful
rate, the amount of such excess interest shall be applied to
the reduction of the principal amount owing on account of the
Notes or the amounts owing on other Obligations and not to the
payment of interest, or if such excessive interest exceeds the
unpaid principal balance of the Obligations, such excess shall
be refunded to the Borrower.
40
Section 2.8. Interest Periods.
(a) The Borrower shall, in each Notice of
Borrowing or Notice of Conversion or Continuation in respect of
the making of, conversion into or continuation of a LIBOR Rate
Loan, select the interest period (each an "Interest Period")
applicable to such LIBOR Rate Loan, which Interest Period
shall, at the option of the Borrower, be either a one-month,
two-month, three-month or six-month period; provided, that:
(i) the initial Interest Period for
any LIBOR Rate Loan shall commence on the date of the
making of such LIBOR Rate Loan (including the date of
any conversion from a Base Rate Loan) and each
Interest Period occurring thereafter in respect of
such LIBOR Rate Loan shall commence on the date on
which the immediately preceding Interest Period, if
any, expires;
(ii) if any Interest Period would
otherwise expire on a day which is not a Business
Day, such Interest Period shall expire on the next
succeeding Business Day; provided, however, that if
any Interest Period applicable to a Borrowing of
LIBOR Rate Loans would otherwise expire on a day
which is not a Business Day but is a day of the month
after which no further Business Day occurs in such
month, such Interest Period shall expire on the
Business Day preceding the day of scheduled
expiration;
(iii) if any Interest Period
applicable to a Borrowing of LIBOR Rate Loans begins
on a day for which there is no numerically
corresponding day in the calendar month at the end of
such Interest Period, such Interest Period shall end
on the last Business Day of such calendar month;
(iv) no Interest Period in respect of
any Construction Loan or Term Loan shall extend (A)
in the case of any Construction Loan, beyond the
Construction Loan Maturity Date to the extent that
Construction Loans are not to be converted on the
Construction Loan Maturity Date to Term Loans, or (B)
in the case of any Term Loan, beyond the Final
Maturity Date; and
(v) no Interest Period in respect of
a Term Loan shall extend beyond any date upon which a
repayment of the Term Loans is required to be made
pursuant to Section 2.13 unless the aggregate
principal amount of Term Loans which are Base Rate
Loans or which have Interest Periods which will
expire on or before such date is equal to or in
41
excess of the amount of the Term Loan repayment
required to be made on such date.
(b) If upon the expiration of any Interest
Period, the Borrower shall have failed to elect a new Interest
Period to be applicable to the respective LIBOR Rate Loan as
provided above, the Borrower shall be deemed to have elected to
convert such LIBOR Rate Loan into a Base Rate Loan effective as
of the expiration date of such current Interest Period.
Section 2.9. Minimum Amount and Maximum Number of
LIBOR Rate Loans. All borrowings, conversions, continuations,
payments, prepayments and selection of Interest Periods
hereunder shall be made or selected so that, after giving
effect thereto, (i) the aggregate principal amount of any
Borrowing comprised of LIBOR Rate Loans shall not be less than
$1,000,000 or an integral multiple of $500,000 in excess
thereof, and (ii) there shall be no more than six (6)
Borrowings comprised of LIBOR Rate Loans outstanding at any
time.
Section 2.10. Conversion or Continuation.
(a) The Borrower shall have the option (i) to
convert at any time all or any part of outstanding Base Rate
Loans to LIBOR Rate Loans, (ii) to convert all or any part of
outstanding LIBOR Rate Loans to Base Rate Loans on the
expiration date of the Interest Period applicable to such LIBOR
Rate Loans or (iii) to continue all or any part of outstanding
LIBOR Rate Loans as LIBOR Rate Loans for an additional Interest
Period on the expiration of the Interest Period applicable to
such outstanding LIBOR Rate Loans; provided that no Loan may be
continued at the end of an Interest Period as, or converted
into, a LIBOR Rate Loan when any Default or Event of Default
has occurred and is continuing if the Required Banks shall have
notified the Borrower through the Agent Bank that LIBOR Rate
Loans shall not be available during such period.
(b) In order to elect to convert or continue a
Loan under this Section 2.10, the Borrower shall deliver an
irrevocable Notice of Conversion or Continuation to the Agent
Bank no later than 10:00 A.M., New York City time, (i) at least
one (1) Business Day in advance of the proposed conversion date
in the case of a conversion to a Base Rate Loan, and (ii) at
least three (3) Business Days in advance of the proposed
conversion or continuation date in the case of a conversion to,
or a continuation of, a LIBOR Rate Loan. A Notice of
Conversion or Continuation shall specify (w) the requested
conversion or continuation date (which shall be a Business
Day), (x) the amount and Type of the Loan to be converted or
continued, (y) whether a conversion or continuation is
requested, and if a conversion, into what Type of Loan and (z)
in the case of a conversion to, or a continuation of, a LIBOR
Rate Loan, the requested Interest Period. Promptly after
receipt of a Notice of Conversion or Continuation under this
Section 2.10, the Agent Bank shall provide each Bank with a
copy thereof.
42
Section 2.11. Reduction of Commitments. Upon at
least five (5) Business Days' prior irrevocable written notice
(or telephonic notice promptly confirmed in writing) to the
Agent Bank (which notice the Agent Bank shall promptly transmit
to each of the Banks), the Borrower shall have the right,
without premium or penalty, to permanently reduce each Bank's
Pro Rata Share of all or part of the unused Total Construction
Loan Commitment or Total Letter of Credit Commitment; provided
that any partial reduction shall be in a minimum aggregate
amount of $1,000,000; and provided, further that the Borrower
shall have the right to reduce the amount of the unused Total
Construction Loan Commitment pursuant to this Section 2.11 only
if the sum of the Total Construction Loan Commitment remaining
after such reduction, together with the Project Equity Amount,
is sufficient, in the judgment of the Required Banks, for the
Project to achieve Final Completion (as defined in the EPC
Contract) and for the Borrower to pay all obligations due and
owing or to become due and owing with respect thereto. The
Total Term Loan Commitment shall be automatically reduced pro
rata with any reduction of the Total Construction Loan
Commitment.
Section 2.12. Optional Prepayments. The Borrower
shall have the right to prepay outstanding Loans in whole or in
part from time to time without penalty or premium on the
following terms and conditions: (i) the Borrower shall give
the Agent Bank written notice, which notice shall be
irrevocable, of its intent to prepay Loans, at least five (5)
Business Days prior to the prepayment, which notice shall
specify the amount of such prepayment and what Types of Loans
are to be prepaid, and, in the case of LIBOR Rate Loans, the
specific Borrowing(s) of LIBOR Rate Loans which are to be
prepaid, and which notice the Agent Bank shall promptly
transmit to each of the Banks; (ii) each prepayment shall be in
an aggregate principal amount of $1,000,000 or any integral
multiple of $500,000 in excess thereof; and (iii) prepayments
of LIBOR Rate Loans made pursuant to this Section 2.12 may be
made only on the last day of the Interest Period applicable
thereto unless accompanied by a payment for all funding losses
in accordance with Section 2.17. All prepayments shall be
applied first to any interest or Fees accrued in respect of the
Loans designated to be prepaid, and then to the unpaid
principal of such Loans on a pro rata basis among all Loans of
the same Type.
Section 2.13. Mandatory Prepayments.
(a) Unless converted to Term Loans, the
Borrower shall repay all outstanding Construction Loans on the
Construction Loan Maturity Date. On the Final Maturity Date,
the Borrower shall pay the entire amount of the Loans.
(b) The Borrower shall repay outstanding
Construction Loans in accordance with Section 2.1(c).
(c) If an Event of Loss shall occur, the
Borrower shall prepay the Loans to the extent required and at
the times specified in Section 7.10(b) and in an amount
43
equal to the amount, if any, that the Collateral Agent is
required to withdraw from the Proceeds Account for such
purpose.
(d) If an Event of Condemnation shall occur,
the Borrower shall prepay the Loans to the extent required and
at the times specified in Section 7.10(c) and in an amount
equal to the amount, if any, that the Collateral Agent is
required to withdraw from the Proceeds Account for such
purpose.
(e) If any Liquidated Performance Damages are
received by or on behalf of the Borrower, the Borrower shall
prepay the Loans to the extent required and at the times
specified in Section 7.10(d) and in an amount equal to the
amount, if any, that the Collateral Agent is required to
withdraw from the Proceeds Account for such purpose.
(f) If any Liquidated Delay Damages are
received by or on behalf of the Borrower, the Borrower shall
prepay the Loans to the extent required and at the times
specified in Section 7.10(e) and in an amount equal to the
amount, if any, that the Collateral Agent is required to
withdraw from the Proceeds Account for such purpose.
(g) If any Asset Sale Proceeds are received by
or on behalf of the Borrower, the Borrower shall prepay the
Loans to the extent required and at the times specified in
Section 7.10(f) and in an amount equal to the amount, if any,
that the Collateral Agent is required to withdraw from the
Proceeds Account for such purpose.
(h) If any Other Proceeds are received by or on
behalf of the Borrower, the Borrower shall prepay the Loans to
the extent required and at the times specified in Section
7.10(g) and in an amount equal to the amount, if any, that the
Collateral Agent is required to withdraw from the Proceeds
Account for such purpose.
(i) If on any Quarterly Date the Debt Service
Coverage Ratio for the previous four fiscal quarters is less
than 1.1 to 1, the Borrower shall prepay the Loans with all
Excess Cash Flow available on each Payment Date following such
Quarterly Date until the next Quarterly Date on which the Debt
Service Coverage Ratio for the then previous four fiscal
quarters is at least 1.1 to 1.
(j) If any Default Equity Proceeds are received
by or on behalf of the Borrower, the Borrower shall prepay the
Loans to the extent required and at the times specified in
Section 7.10(h) and in an amount equal to the amount, if any,
that the Collateral Agent is required to withdraw from the
Proceeds Account for such purpose.
(k) All prepayments of Loans made pursuant to
any of clauses (c) through (j) of this Section 2.13 shall be
applied first to any interest or Fees that are due on any Loan,
next to interest or Fees accrued in respect of the Loans to be
prepaid, and then to the unpaid principal of Loans to be
prepaid in the inverse order of maturity.
44
(l) With respect to each prepayment required to
be made pursuant to any of clauses (c) through (j) of this
Section 2.13, the Borrower may designate, by written notice to
the Agent Bank on or before the date of such prepayment, the
Types of Loans which are to be prepaid and, in the case of
LIBOR Rate Loans, the specific Borrowing(s) of LIBOR Rate Loans
which are to be prepaid; provided that (i) if the Borrower
fails to make any such designation on or before any date on
which Loans are to be prepaid pursuant to this Section 2.13,
all outstanding Base Rate Loans shall be repaid in full prior
to the prepayment of any LIBOR Rate Loans; (ii) prepayments of
LIBOR Rate Loans may only be made on the last day of an
Interest Period applicable thereto unless all Base Rate Loans
have been repaid in full; and (iii) if any prepayment of LIBOR
Rate Loans made pursuant to a single Borrowing shall reduce the
outstanding Loans made pursuant to such Borrowing to an amount
less than $1,000,000, such Borrowing shall immediately be
converted into Base Rate Loans.
Section 2.14. Method and Place of Payment.
(a) Except as otherwise specifically provided
therein, all payments and prepayments under the Loan Documents
shall be made to the Agent Bank for the account of the Banks
entitled thereto not later than 12:00 Noon, New York City time,
on the date when due and shall be made in Dollars and
immediately available funds at the Agent Bank's Office, and any
funds received by the Agent Bank after such time shall, for all
purposes hereof (including the following sentence), be deemed
to have been paid on the next succeeding Business Day. Except
as otherwise specifically provided herein, the Agent Bank shall
thereafter cause to be distributed on the date of receipt
thereof to each Bank in like funds its Pro Rata Share of the
payments so received.
(b) Unless otherwise provided herein, whenever
any payment to be made hereunder or under any Note shall be
stated to be due on a day which is not a Business Day, the due
date thereof shall be extended to the next succeeding Business
Day and the amount of such payment shall bear interest at the
applicable rate during such extension.
(c) All payments made by the Borrower hereunder
and under the other Financing Documents shall be made
irrespective of, and without any reduction for, any set-offs or
counterclaims.
Section 2.15. Fees.
(a) The Borrower agrees to pay to the Agent
Bank for the account of each Bank a commitment fee (the
"Commitment Fee") of 0.375% per annum on each Bank's Pro Rata
Share of the daily average unutilized portion of the Total
Construction Loan Commitment during the period from the date
hereof through and including the Final Maturity Date. The
accrued and unpaid Commitment Fee shall be payable in arrears
for
45
the period from and including the Closing Date through and
including the Final Maturity Date, quarterly on each Payment
Date. The Commitment Fee shall be calculated on the actual
number of days elapsed in a year of three hundred sixty (360)
days.
(b) The Borrower shall pay to the Agent Bank
for account of the Issuing Bank all charges, costs, fees and
expenses in the amounts customarily charged by the Issuing Bank
from time to time in like circumstances with respect to the
issuance of each Letter of Credit, drawings thereunder and
other transactions relating thereto.
(c) The Borrower shall pay when due to the
Agent Bank and the Collateral Agent such other fees as shall
have been separately agreed to by the Agent Bank and/or the
Collateral Agent and the Borrower in writing.
(d) On the last Business Day in each calendar
quarter (or portion thereof) commencing on the Closing Date and
ending on the Letter of Credit Termination Date and on the
Expiration Date of each Letter of Credit, the Borrower shall
pay to the Agent Bank for the benefit of the Banks a letter of
credit fee (the "Letter of Credit Fee") for such quarter then
ending and such Expiration Date, as applicable, at the rates
per annum described below and computed in the following manner.
From and including the Closing Date to but excluding the Letter
of Credit Availability Date, the Letter of Credit Fee shall be
equal to the Total Letter of Credit Commitment multiplied by
0.375%. On and after the Letter of Credit Availability Date,
the Letter of Credit Fee shall be equal to the sum of: (i) for
each outstanding Letter of Credit, the product of (A) (1) from
and including the date of issuance of such Letter of Credit to
but excluding the Conversion Date, 0.750% (2) from and
including the Conversion Date to but excluding the date which
is two (2) years after the Conversion Date, 1.000%, (3) from
and including the date which is two years after the Conversion
Date to but excluding the date which is four (4) years after
the Conversion Date, 1.125%, and (4) from and including the
date which is four (4) years after the Conversion Date to and
including the date which is five (5) years after the Conversion
Date, 1.250%, multiplied by (B) the daily average Stated Amount
of such Letter of Credit multiplied by (C) a fraction the
numerator of which is the number of days in such quarter (or
portion thereof) or the number of days in the period beginning
on the last day of the previous quarter and ending on the
Expiration Date of such Letter of Credit, as applicable, and
the denominator of which is three hundred sixty (360); plus
(ii) (A) the daily average for such quarter of the excess of
(1) the Total Letter of Credit Commitment over (2) the
aggregate of the Stated Amounts of all outstanding Letters of
Credit, multiplied by (B) 0.375%.
Section 2.16. Interest Rate Unascertainable;
Increased Costs; Illegality.
(a) In the event that the Agent Bank, in the
case of clause (i) below, or any Bank, in the case of clauses
(ii) and (iii) below, shall have reasonably
46
determined (which determination shall, absent manifest error,
be final and conclusive and binding upon all parties hereto):
(i) on any date for determining a
LIBOR Rate for any Interest Period, that by reason of
any changes arising after the date of this Agreement
affecting the London interbank market, adequate and
fair means do not exist for ascertaining the
applicable interest rate on the basis provided for in
the definition of the LIBOR Rate; or
(ii) at any time, that the relevant
LIBOR Rate shall not represent the effective cost to
such Bank of funding or maintaining a LIBOR Rate
Loan, or such Bank shall incur increased costs or
reductions in the amounts received or receivable
hereunder in respect of any LIBOR Rate Loan, in any
such case because of (x) any change since the later
of (1) the date of this Agreement or (2) the date
upon which such Bank became a Bank pursuant to
Section 11.4(d) (such date, the "Bank Effective
Date") in any applicable Law and including the
introduction of any new Law (such as but not limited
to a change in official reserve requirements) whether
or not having the force of Law and whether or not
failure to comply therewith would be unlawful, and/or
(y) other circumstances arising after the applicable
Bank Effective Date affecting such Bank or the London
interbank market or the position of such Bank in such
market; or
(iii) at any time, that the making or
continuance by it of any LIBOR Rate Loan has become
unlawful by compliance by such Bank in good faith
with any Law (whether or not having the force of Law
and whether or not failure to comply therewith would
be unlawful) in place as of the applicable Bank
Effective Date or has become impracticable as a
result of a contingency occurring after the
applicable Bank Effective Date which materially and
adversely affects the London interbank market;
then, and in any such event, the Agent Bank or such Bank shall,
promptly after making such determination, give notice (by
telephone promptly confirmed in writing) to the Borrower and
(if applicable) the Agent Bank of such determination (which
notice the Agent Bank shall promptly transmit to each of the
other Banks). Thereafter (A) in the case of clause (i) above,
the Borrower's right to request LIBOR Rate Loans of the Type
affected shall be suspended, and any Notice of Borrowing or
Notice of Conversion or Continuation given by the Borrower with
respect to any Borrowing of such LIBOR Rate Loans which has not
yet been made, converted or continued (as the case may be)
shall be deemed canceled and rescinded by the Borrower, (B) in
the case of clause (ii) above, the Borrower shall pay to such
Bank, upon such Bank's delivery of a written demand therefor
48
to the Borrower, with a copy to the Agent Bank, such additional
amounts (in the form of an increased rate of interest, or a
different method of calculating interest, or otherwise, as such
Bank in its sole discretion shall determine) as shall be
required to compensate such Bank for such increased costs or
reduction in amounts received or receivable hereunder and (C)
in the case of clause (iii) above, the Borrower shall take one
of the actions specified in clause (b) below as promptly as
possible and, in any event, within the time period required by
Law. The written demand provided for in clause (B) immediately
above shall specify the bases for, and set forth the
computation of, the claimed amount in reasonable detail and,
absent manifest error, shall be final, conclusive and binding
upon all of the parties hereto.
(b) In the case of any LIBOR Rate Loan affected
by the circumstances described in clause (a)(ii) above the
Borrower may, and in the case of any LIBOR Rate Loan affected
by the circumstances described in clause (a)(iii) above the
Borrower shall, either (x) if any such LIBOR Rate Loan has not
yet been made but is then the subject of a Notice of Borrowing
or a Notice of Conversion or Continuation, be deemed to have
canceled and rescinded such notice, or (y) if any such LIBOR
Rate Loan is then outstanding, require the affected Bank to
convert each such LIBOR Rate Loan into a Loan of a different
Type at the end of the applicable Interest Period or such
earlier time as may be required by Law, in each case by giving
the Agent Bank notice thereof on the Business Day that the
Borrower was notified by the Bank pursuant to clause (a) above;
provided, however, that all Banks whose LIBOR Rate Loans are
affected by the circumstances described in clause (a) above
shall be treated in the same manner under this clause (b).
(c) In the event that the Agent Bank determines
at any time following its giving of notice based on the
conditions described in clause (a)(i) above that such
conditions no longer exist, the Agent Bank shall promptly give
notice thereof to the Borrower and the Banks, whereupon the
Borrower's right to request LIBOR Rate Loans of the affected
Type from the Banks and the Banks' obligation to make such
LIBOR Rate Loans shall be restored.
(d) In the event that a Bank determines at any
time following its giving of a notice based on the conditions
described in clause (a)(iii) above that such conditions no
longer exist, such Bank shall promptly give notice thereof to
the Borrower and the Agent Bank, whereupon the Borrower's right
to request LIBOR Rate Loans of the affected Type from such Bank
and such Bank's obligation to make such LIBOR Rate Loans shall
be restored.
Section 2.17. Funding Losses. The Borrower shall
compensate each Bank, upon such Bank's delivery of a written
demand therefor to the Borrower, with a copy to the Agent Bank
(which demand shall, absent manifest error, be final and
conclusive and binding upon all of the parties hereto), for all
reasonable losses, expenses and
48
liabilities (including, without limitation, any loss, expense
or liability incurred by such Bank in connection with the
liquidation or reemployment of deposits or funds required by it
to make or carry its LIBOR Rate Loans, and including losses of
anticipated profits), that such Bank actually sustains: (i) if
for any reason (other than a default by such Bank) a Borrowing
of, or conversion from or into, or a continuation of, LIBOR
Rate Loans does not occur on a date specified therefor in a
Notice of Borrowing or Notice of Conversion or Continuation
(whether or not rescinded, canceled or withdrawn or deemed
rescinded, canceled or withdrawn); (ii) if any repayment
(including, without limitation, payment after acceleration) or
conversion of any of its LIBOR Rate Loans occurs on a date
which is not the last day of the Interest Period applicable
thereto; (iii) if any prepayment of any of its LIBOR Rate Loans
is not made on any date specified in a notice of prepayment
given by the Borrower; or (iv) as a consequence of any default
by the Borrower in repaying its LIBOR Rate Loans or any other
amounts owing hereunder in respect of its LIBOR Rate Loans when
required by the terms of this Agreement. Calculation of all
amounts payable to a Bank under this Section 2.17 shall be made
on the assumption that such Bank has funded its relevant LIBOR
Rate Loan through the purchase of a LIBOR deposit, bearing
interest at the LIBOR Rate, in an amount equal to the amount of
such LIBOR Rate Loan, with a maturity equivalent to the
Interest Period applicable to such LIBOR Rate Loan and through
the transfer of such LIBOR deposit from an offshore office of
such Bank to a domestic office of such Bank in the United
States, provided that each Bank may fund its LIBOR Rate Loans
in any manner that it in its sole discretion chooses and the
foregoing assumption shall only be made in order to calculate
amounts payable under this Section 2.17.
Section 2.18. Increased Capital. If any Bank shall
have determined that compliance with any applicable Law,
guideline, request or directive enacted after the Bank
Effective Date applicable to such Bank (whether or not having
the force of Law), has or would have the effect of reducing the
rate of return on the capital or assets of such Bank or any
Person controlling such Bank as a consequence of its
commitments or obligations hereunder, then from time to time,
upon such Bank's delivery of a written demand therefor to the
Borrower (with a copy to the Agent Bank), the Borrower shall
pay to such Bank such additional amount or amounts as will
compensate such Bank or Person for such reduction. Each
written demand for compensation under this Section 2.18 shall
specify the bases for, and set forth the computation of, the
claimed amount in reasonable detail, and, absent manifest
error, shall be final, conclusive and binding upon all of the
parties hereto.
Section 2.19. Taxes.
(a) All payments made by the Borrower under
this Agreement shall be made free and clear of, and without
reduction or withholding for or on account of, any present or
future income, stamp or other taxes, levies, imposts, duties,
charges, fees, deductions or withholdings, now or hereafter
imposed, levied, collected, withheld or
49
assessed by any Governmental Authority excluding, in the case
of the Agent Bank and each Bank, net income and franchise taxes
imposed on the Agent Bank or such Bank by (i) the jurisdiction
under the Laws of which the Agent Bank or such Bank is
organized or any political subdivision or taxing authority
thereof or therein, (ii) by any jurisdiction in which such
Bank's Domestic Lending Office or LIBOR Rate Lending Office, as
the case may be, is located or any political subdivision or
taxing authority thereof or therein, or (iii) the State of
Illinois as a result of the presence or activities of the Agent
Bank or any Bank in such jurisdictions that are not related to
the transactions contemplated by the Loan Documents (all such
non-excluded taxes, levies, imposts, deductions, charges or
withholdings being hereinafter called "Withholding Taxes"). If
any Withholding Taxes are required to be withheld from any
amounts payable to the Agent Bank, the Collateral Agent or any
Bank hereunder or under the Notes as a result of a change in
Law occurring after the Closing Date, the amounts so payable to
the Agent Bank, the Collateral Agent or such Bank shall be
increased to the extent necessary to yield to the Agent Bank,
the Collateral Agent or such Bank (after payment of all
Withholding Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this
Agreement and the Notes. Whenever any Withholding Taxes are
payable by the Borrower, as promptly as possible thereafter,
the Borrower shall send to the Agent Bank for its own account
or for the account of the Collateral Agent or such Bank, as the
case may be, a certified copy of an original official receipt
received by the Borrower showing payment thereof. If the
Borrower fails to pay any Withholding Taxes when due to the
appropriate taxing authority or fails to remit to the Agent
Bank the required receipts or other required documentary
evidence, the Borrower shall indemnify the Agent Bank, the
Collateral Agent and the Banks for any incremental taxes,
interest or penalties that become payable by the Agent Bank,
the Collateral Agent or any Bank as a result of any such
failure. The provisions of this Section 2.19 shall survive the
termination of this Agreement and the payment of the Notes and
all other Obligations.
(b) Each Bank that is not incorporated under
the Laws of the United States or a state thereof (including
each Purchasing Bank that becomes a party to this Agreement
pursuant to Section 11.4(d)) represents and warrants that it is
entitled to receive payments under this Agreement and the Notes
without deduction or withholding of any United States federal
income taxes or is entitled to an exemption from backup
withholding tax and agrees that, prior to the first date on
which any payment is due to it hereunder, it will deliver to
the Borrower and the Agent Bank (i) two duly completed copies
of United States Internal Revenue Service Form 1001 or 4224 or
successor applicable form, as the case may be, certifying in
each case that such Bank is entitled to receive payments under
this Agreement and the Notes payable to it without deduction or
withholding of any United States federal income taxes and (ii)
an Internal Revenue Service Form W-8 or W-9 or successor
applicable form, as the case may be, to establish an exemption
from United States backup withholding tax. Each Bank which
delivers to the Borrower and the Agent Bank a Form 1001 or 4224
and Form W-8 or W-9 pursuant to the preceding sentence further
undertakes to deliver to the Borrower and the Agent Bank two
further
50
copies of Form 1001 or 4224 and Form W-8 or W-9, or successor
applicable forms, or other manner of certification, as the case
may be, on or before the date that any such form expires or
becomes obsolete or after the occurrence of any event requiring
a change in the most recent form previously delivered by it to
the Borrower, and such extensions or renewals thereof as may
reasonably be requested by the Borrower, certifying in the case
of a Form 1001 or 4224 that such Bank is entitled to receive
payments under this Agreement without deduction or withholding
of any United States federal income taxes, unless in any such
case an event (including, without limitation, any change in
Law) has occurred prior to the date on which any such delivery
would otherwise be required which renders all such forms
inapplicable or which would prevent such Bank from duly
completing and delivering any such form with respect to it and
such Bank advises the Borrower that it is not capable of
receiving payments without any deduction or withholding of
United States federal income tax, and in the case of a Form W-8
or W-9, establishing an exemption from United States backup
withholding tax.
Section 2.20. Notice of Increased Amounts.
Notwithstanding anything herein to the contrary, no Bank shall
be entitled to demand compensation or be compensated under this
Article II other than under Section 2.19 to the extent that
such compensation relates to any period of time more than
ninety (90) days prior to the date upon which such Bank first
notified the Borrower of the occurrence of the event entitling
such Bank to such compensation (unless, and to the extent, that
any such compensation so demanded shall relate to the
retroactive application of any event so notified to the
Borrower).
Section 2.21. Use of Proceeds. The Borrower shall
use the proceeds of the Construction Loans solely to pay
Project Costs. The Borrower shall use the proceeds of the Term
Loans solely to repay the outstanding Construction Loans and
accrued and unpaid interest and Fees thereof.
Section 2.22. Sharing of Payments, Etc.
(a) The Borrower agrees that, in addition to
(and without limitation of) any right of set-off, banker's lien
or counterclaim which a Bank may otherwise have, each Bank
shall be entitled, at its option, to offset balances held by it
for the account of the Borrower at any of its offices, in
Dollars or in any other currency, against any principal of or
interest on any of such Bank's Loans, the Reimbursement
Obligations or any other amount payable to such Bank hereunder,
that is not paid when due (regardless of whether such balances
are then due to the Borrower), in which case it shall promptly
notify the Borrower and the Agent Bank thereof, provided that
such Bank's failure to give such notice shall not affect the
validity thereof.
(b) If any Bank shall obtain from the Borrower
payment of any principal of or interest on any Loan or
Reimbursement Obligation owing to it or payment of any other
amount under this Agreement or any Note held by it or any other
Loan
51
Document through the exercise of any right of set-off, banker's
lien or counterclaim or similar right or otherwise (other than
from the Agent Bank as provided herein), and, as a result of
such payment, such Bank shall have received a greater
percentage of the principal of or interest on the Loans or
Reimbursement Obligations or such other amounts then due
hereunder by the Borrower to such Bank than the percentage
received by any of the other Banks, it shall promptly purchase
from such other Banks participations in (or, if and to the
extent specified by such Bank, direct interests in) the Loans
or Reimbursement Obligations or such other amounts,
respectively, owing to such other Banks (or in interest due
thereon, as the case may be) in such amounts, and make such
other adjustments from time to time as shall be equitable, to
the end that all of the Banks shall share the benefit of such
excess payment (net of any expenses which may be incurred by
such Bank in obtaining or preserving such excess payment) pro
rata in accordance with the unpaid principal of and/or interest
on the Loans or Reimbursement Obligations or such other
amounts, respectively, owing to each of the Banks. To such end
all of the Banks shall make appropriate adjustments among
themselves (by the resale of participations sold or otherwise)
if such payment is rescinded or must otherwise be restored.
(c) The Borrower agrees that any Bank so
purchasing such a participation (or direct interest) may
exercise all rights of set-off, banker's lien, counterclaim or
similar rights with respect to such participation as fully as
if such Bank were a direct holder of Loans or other amounts (as
the case may be) owing to such Bank in the amount of such
participation.
(d) Nothing contained herein shall require any
Bank to exercise any such right or shall affect the right of
any Bank to exercise, and retain the benefits of exercising,
any such right with respect to any other Indebtedness or
obligation of the Borrower. If, under any applicable
bankruptcy, insolvency or other similar Law, any Bank receives
a secured claim in lieu of a set-off to which this Section 2.22
applies, such Bank shall, to the extent practicable, exercise
its rights in respect of such secured claim in a manner
consistent with the rights of the Banks entitled under this
Section 2.22 to share in the benefits of any recovery on such
secured claim.
ARTICLE III. CONDITIONS PRECEDENT.
Section 3.1. Conditions Precedent to Initial
Construction Loans. The obligation of each Bank to make its
initial Construction Loan is subject to the satisfaction on the
Closing Date of the following conditions precedent, all of
which shall be satisfactory to each of the Banks:
(a) Loan Documents. The Agent Bank shall have
received this Agreement (together with all amendments,
supplements, schedules, and exhibits thereto) and an
appropriately completed Construction Note for each Bank, each
of which (i) shall
52
have been duly authorized, executed and delivered by each
Person party thereto (other than the Agent Bank, the Collateral
Agent and the Banks), (ii) shall be substantially in the form
of the appropriate form attached hereto (if such form is
attached) or otherwise in form and substance reasonably
satisfactory to each Bank, and (iii) shall be in full force and
effect. All representations and warranties contained in each
Loan Document shall be true and correct in all material
respects and no default or event of default shall have occurred
thereunder.
(b) Project Documents. The Agent Bank shall
have received copies of each Project Document (together with
all amendments, supplements, schedules and exhibits thereto)
(other than the Long Term Service Agreement, the RO EPC
Contract and the NGC Guarantee), each of which (i) shall have
been duly authorized, executed and delivered by each Person
party thereto (other than the Agent Bank, the Collateral Agent
and the Banks), (ii) shall be substantially in the form of the
appropriate form attached hereto (if such form is attached) or
otherwise in form and substance reasonably satisfactory to the
Agent Bank, and (iii) shall be in full force and effect. All
representations and warranties contained in each Project
Document shall be true and correct in all material respects and
no default or event of default shall have occurred thereunder
which could reasonably be expected to result in a Material
Adverse Effect.
(c) Security Documents. The Agent Bank shall
have received each Security Document (together with all
amendments, supplements, schedules and exhibits thereto), each
of which (i) shall have been duly authorized, executed and
delivered by each Person party thereto (other than the Agent
Bank, the Collateral Agent and the Banks), (ii) shall be
substantially in the form of the appropriate form attached
hereto (if such form is attached) or otherwise in form and
substance reasonably satisfactory to each Bank, and (iii) shall
be in full force and effect. All representations and
warranties contained in each Security Document shall be true
and correct in all material respects and no default or event of
default shall have occurred thereunder.
(d) Equity Commitment Agreements. The Agent
Bank shall have received an Equity Commitment Agreement from
each Equity Holder (other than NRG MI) (together with all
amendments, supplements, schedules and exhibits thereto), each
of which (i) shall have been duly authorized, executed and
delivered by each Person party thereto (other than the Agent
Bank, the Collateral Agent and the Banks), (ii) shall be
substantially in the form of the appropriate form attached
hereto (if such form is attached) or otherwise in form and
substance reasonably satisfactory to each Bank, and (iii) shall
be in full force and effect. All representations and
warranties contained in each Equity Commitment Agreement shall
be true and correct in all material respects and no default or
event of default shall have occurred thereunder which could
reasonably be expected to result in a Material Adverse Effect.
53
(e) Due Diligence Review. The Agent Bank shall
have completed to its satisfaction a review of the Borrower,
the Project and the Site, and nothing shall have come to the
attention of the Agent Bank during such review that, in the
reasonable view of the Agent Bank, would result in a Material
Adverse Effect.
(f) Consents. Each Project Party (other than
the Borrower and any Additional Project Party) shall have
entered into a Consent with respect to each Project Document to
which it is a party, each of which shall be unconditional and
in full force and effect in accordance with its respective
terms and shall be in form and substance reasonably
satisfactory to each Bank. The Agent Bank shall have received
true and correct copies of each such Consent.
(g) Filings and Searches; Survey and Easements.
(i) Pursuant to the terms of the Security Documents, the Liens
on the Collateral shall have been duly created or attached. In
addition, such Liens on all of the Collateral shall have been
perfected and, where appropriate, registered, to create a first
priority security interest in and charge over the Collateral
(subject only to Permitted Liens) in favor of the Collateral
Agent for the benefit of itself and the other Secured Parties.
All Taxes (including, but not limited to, mortgage recording
taxes and recording fees), fees and other charges payable in
connection therewith shall have been paid in full by the
Borrower. Without limiting the preceding sentence, the
Borrower shall have duly authorized, executed and delivered or,
as the case may be, provided:
(A) financing statements or other instruments to be
duly filed on the Closing Date under the applicable Law of
each jurisdiction listed on Schedule 3.1(g)(i)(A),
including evidence of payment of all recording and other
taxes, as may be necessary or, in the reasonable opinion
of the Agent Bank, the Collateral Agent and the Banks,
desirable to perfect such Liens on the Collateral;
(B) to the extent available in the applicable
jurisdiction, certified copies of requests for information
or copies, or equivalent reports, which shall be issued
within a reasonable time prior to the Closing Date,
listing all effective financing statements that name the
Borrower or any Equity Holder as debtor and that are filed
in any jurisdiction in which the Borrower, any Equity
Holder or the Collateral owned by any of them is located
(or deemed located by reason of the location of the
Borrower or any Equity Holder, as the case may be, or by
operation of applicable Law), a list of which is attached
hereto as Schedule 3.1(g)(i)(B), together with copies of
such other financing statements and instruments (none of
which shall reveal Liens on any of the Collateral except
to the extent evidencing Permitted Liens or Liens
otherwise acceptable to the Agent Bank, the Collateral
Agent and the Banks);
54
(C) evidence of the completion of all other
recordings and filings of, or with respect to, the
Security Documents as may be necessary or, in the opinion
of the Agent Bank, the Collateral Agent and the Banks,
desirable to perfect the Liens on the Collateral purported
to be created thereby; and
(D) evidence of the completion of all other actions
necessary or, in the reasonable opinion of the Agent Bank
and the Collateral Agent, desirable to perfect and protect
the Liens purported to be created by the Security
Documents on all of the Collateral.
(ii) The Agent Bank shall have received a current survey
of the Site, conforming with First American Title Insurance
Company survey standards and otherwise acceptable to each Bank,
prepared by a registered or licensed surveyor acceptable to
each Bank and the title company insuring the Collateral Agent's
interest in the Mortgaged Property, certified to the Borrower,
the Agent Bank, the Collateral Agent, the Banks and said title
company, showing: (i) the location of the Site; (ii) all
easements benefiting the Site (or constituting a portion of the
Site), all easements affecting the Site and all rights of way
and existing utility lines referred to in the Title Insurance
Policy or disclosed by a physical inspection of the Site; (iii)
any established building lines, whether by zoning or agreement,
and areas affected by restrictive covenants affecting the Site;
(iv) adequate access to the Mortgaged Property; (v)
encroachments, if any, and the extent thereof in feet and
inches upon the Site and onto property adjacent to the Site;
and (vi) any improvements, whether existing or to the extent
constructed, and the relationship of such improvements by
distances to the perimeter of the Site, established building
lines and street lines.
(iii) The Agent Bank shall have received evidence
satisfactory to each Bank that the Borrower has obtained all
easements, licenses, rights-of-way and any other rights
necessary for the construction, operation and maintenance of
the Project free and clear of all Liens (other than Permitted
Liens).
(h) Independent Engineer's Report. The Agent
Bank shall have received (i) a report of the Independent
Engineer, in form and substance satisfactory to the Agent Bank,
addressing, among other matters, (A) the technical feasibility
of the Project, (B) the reasonableness of the Construction
Schedule and the Construction Budget, (C) the sufficiency of
the completion and performance tests contained in the EPC
Contract, (D) the adequacy of environmental permitting and the
environmental site assessment, and (E) the reasonableness of
the primary assumptions upon which the projections of sales of
excess electrical power are based and (ii) a certificate of the
Independent Engineer substantially in the form of Exhibit H.
(i) Fuel Consultant's Report. The Agent Bank
shall have received a report of the Fuel Consultant, in form
and substance satisfactory to the Agent Bank, addressing
certain items with respect to the adequacy of the gas supply
plan for the Project,
55
including, without limitation, (i) the short- and long-term
risk of insufficient gas supply for the Project, (ii) the
reasonableness of the gas supply, transportation, distribution
and storage arrangements for the Project and (iii) the
consistency of the gas supply arrangements for the Project with
the Energy Services Agreement and the other relevant Project
Documents.
(j) Petrochemical Industry Consultant's Report.
The Agent Bank shall have received a report of the
Petrochemical Industry Consultant, in form and substance
satisfactory to the Agent Bank, addressing the long-term
viability of the Morris Plant.
(k) Insurance Consultant's Report. The Agent
Bank shall have received a certificate of the Insurance
Consultant stating that (i) all insurance coverages required to
be obtained by or on behalf of the Borrower, the EPC Contractor
or the Energy Purchaser have been obtained and (ii) all such
insurance coverages are in full force and effect.
(l) Insurance. (i) The Agent Bank shall have
received insurance certificates evidencing that all insurance
coverages required under Section 5.7 to be obtained by or on
behalf of the Borrower or the EPC Contractor have been obtained
and are in full force and effect.
(ii) The Agent Bank shall have received a paid policy of
mortgage title insurance (the "Title Insurance Policy"), in an
amount equal to $91,000,000, in form and substance satisfactory
to the Agent Bank, issued by a title insurance company
satisfactory to the Agent Bank (with such reinsurance in such
amounts and with such title insurance companies as may be
required and approved by the Agent Bank), containing no
exceptions (printed or otherwise) other than those approved by
the Agent Bank, and insuring that the Collateral Agent has a
good, valid and enforceable first Lien of record on the
Mortgaged Property free and clear of all defects and
encumbrances.
(m) Opinions of Counsel. The Agent Bank shall
have received the following legal opinions, each of which shall
be in form and substance satisfactory to the Agent Bank and
shall be dated the Closing Date:
(i) Opinion of Counsel of James J. Bender, Esq., as
corporate counsel to the Borrower, NRG Energy and the
Operator;
(ii) Opinion of Counsel of Maslon, Edelman, Borman &
Brand LLP, as outside counsel to the Borrower, NRG Energy
and the Operator;
(iii) Opinion of Counsel of Pedersen & Houpt, as
local counsel to the Borrower, NRG Energy and the
Operator;
56
(iv) Opinion of Counsel of Troutman Sanders LLP, as
regulatory counsel to the Borrower;
(v) Opinion of Counsel of Henley R. Webb, Esq., as
corporate counsel to the Energy Purchaser, and Opinion of
Counsel of Mayer, Brown & Platt, as outside counsel to the
Energy Purchaser,
(vi) Opinion of Counsel of Bruce W. Ballai, Esq., as
corporate counsel to the EPC Contractor;
(vii) Opinion of Counsel of Thomas C. Stortz, Esq.,
as corporate counsel to the Construction Guarantor;
(viii) Opinion of Counsel of Alexander C. Allison,
Esq., as corporate counsel to NIGAS, and Opinion of
Counsel of Mayer, Brown & Platt, as outside counsel to
NIGAS; and
(ix) Opinion of Counsel of Charles H. Brownman, Esq.,
as corporate counsel to NGC, and Opinion of Counsel of
John C. Herbert, Esq., as corporate counsel to NGC.
(n) Financial Statements and Information. The
Agent Bank shall have received (i) true, correct and complete
copies of audited financial statements for the most recently
completed fiscal year for each Equity Holder (other than NRG
MI), each Equity Contributor, the Energy Purchaser, the EPC
Contractor, the Construction Guarantor and the O&M Guarantor,
and (ii) true, correct and complete copies of unaudited pro
forma financial statements (if audited statements are not
otherwise available) for the most recent fiscal quarter for the
Borrower and the Operator, each in form and substance
satisfactory to each Bank.
(o) Governmental Approvals. (i) Schedule
3.1(o) shall list all Necessary Project Approvals (including
all Deferred Approvals), (ii) all Necessary Project Approvals
(other than Deferred Approvals) shall be in full force and
effect as of the Closing Date and (iii) the Agent Bank shall
have received (A) true, correct and complete copies of all
Necessary Project Approvals and (B) a certificate of an
Authorized Officer of the Borrower stating that (1) Schedule
3.1(o) lists all Necessary Project Approvals (including all
Deferred Approvals), (2) all Necessary Project Approvals (other
than Deferred Approvals) are in full force and effect as of the
Closing Date and (3) the copies of Necessary Project Approvals
received by the Agent Bank are true, correct and complete
copies of the originals of such Necessary Project Approvals.
(p) No Default, Etc. (i)(A) No default or
event of default shall have occurred and be continuing under
any Transaction Document, (B) all representations
57
and warranties made by the Borrower, and to the best of its
knowledge each other Project Party, in the Transaction
Documents shall be true and correct in all material respects,
(C) no litigation or other proceeding shall be pending, or, to
the best of the Borrower's knowledge, threatened against the
Borrower or, to the best of its knowledge, any other Project
Party that could reasonably be expected to result in a Material
Adverse Effect and (D) there shall have been no material
adverse change in the projected Project Costs or the business
operations, prospects or financial or other condition of the
Borrower or, to the best of the Borrower's knowledge, any
Equity Holder, any Equity Contributor, the Energy Purchaser,
the EPC Contractor, the Construction Guarantor, the Operator,
the O&M Guarantor or any other Project Party (excluding
Additional Project Parties) and (ii) the Agent Bank shall have
received a certificate of an Authorized Officer of the Borrower
certifying as to the foregoing.
(q) Qualifying Facility Status. The Agent Bank
shall have received evidence reasonably satisfactory to it and
to the Independent Engineer demonstrating that, on or prior to
the Commercial Operation Date, either (i) the Project will be
able to attain Qualifying Facility status through self
certification (including, without limitation (A) efficiency
calculations in form and substance satisfactory to the
Independent Engineer and (B) an opinion of Regulatory Counsel
to that effect in form and substance satisfactory to the Agent
Bank), or (ii) the Borrower will otherwise be able to sell
electricity and steam to the Energy Purchaser and to wholesale
purchasers without being regulated as an "electric utility" or
an "electric utility holding company" under applicable federal
and state Law.
(r) Utility Regulation. The Agent Bank shall
have received evidence reasonably satisfactory to it that the
sale of electricity by the Project will not result in the
regulation of the Borrower, NRG Energy or any other Project
Party as an "electric utility" or an "electric utility holding
company" under applicable federal or state Law, including,
without limitation, an opinion of Regulatory Counsel and/or
other counsel to the Borrower to that effect in form and
substance satisfactory to the Agent Bank.
(s) Construction Budget, Construction Schedule
and Progress Payment Schedule. The Agent Bank shall have
received the Construction Budget, the Construction Schedule and
the Progress Payment Schedule for the Project, each (i)
certified as complete and accurate in all material respects by
an Authorized Officer of the Borrower and (ii) in form and
substance satisfactory to the Agent Bank.
(t) Base Case Forecasts. The Agent Bank shall
have received the Base Case Forecasts for the Project, in form
and substance satisfactory to the Agent Bank and the
Independent Engineer, evidencing, after giving effect to the
financing of the Project, an average projected Debt Service
Coverage Ratio of at least 1.4 to 1 and a minimum projected
Debt Service Coverage Ratio of at least 1.2 to 1, each through
the Final Maturity Date.
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(u) Notice to Proceed. The Borrower shall have
issued, and the EPC Contractor shall have acknowledged the
receipt of, the Notice to Proceed.
(v) Certificate of EPC Contractor. The Agent
Bank shall have received a certificate of the EPC Contractor,
in form and substance satisfactory to the Agent Bank, stating
that (i) the Borrower is not in default under the EPC Contract,
(ii) no Change Orders are required under the EPC Contract other
than Change Orders which have been delivered to the Agent Bank
and reviewed and approved by the Independent Engineer and (iii)
to the best of its knowledge, after reasonable inquiry, no
event constituting Uncontrollable Circumstances (as defined in
the EPC Contract) has occurred and is continuing under the EPC
Contract.
(w) Fees and Expenses. The Agent Bank shall
have received on the Closing Date, for its account and for the
account of each Bank, as applicable, all Fees and other fees,
costs and expenses of the Independent Engineer, the Fuel
Consultant, the Insurance Consultant, the Petrochemical
Industry Consultant and any legal counsel retained by the Agent
Bank or the Collateral Agent due and payable hereunder on or
before the Closing Date, including, without limitation, the
fees and expenses accrued and invoiced through the Closing
Date.
(x) No Material Adverse Effect. No event shall
have occurred which could reasonably be expected to result in a
Material Adverse Effect.
(y) Appointment of Independent Auditors.
Arrangements satisfactory to the Agent Bank shall have been
made for the appointment of the Auditors, and the Agent Bank
shall have received a copy of the documents authorizing the
Auditors to communicate directly with the Agent Bank and the
Collateral Agent.
(z) Appointment of Agent for Service of
Process. The Borrower and all other obligors under the
Financing Documents shall have appointed an agent for service
of process on terms satisfactory to the Agent Bank and shall
have paid all fees necessary for such process agent to act as
such through the Final Maturity Date.
(aa) Notice of Borrowing The Agent Bank shall
have received an executed Notice of Borrowing in respect of the
Loans to be made on the Closing Date which Notice of Borrowing
shall contain the certifications required hereunder each made
as of the date of such Notice of Borrowing and as of the date
on which the Loan is to be made.
(bb) Corporate Documents. The Agent Bank shall
have received each of the following in form and substance
satisfactory to it:
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(i) a certificate of an Authorized Officer of each
Project Party (other than Additional Project Parties),
dated as of the Closing Date, certifying as true, complete
and correct attached copies of (A) the certificate of
formation or certificate of incorporation, as applicable,
of such Project Party, (B) the bylaws or similar document
of such Project Party and (C) the resolutions of the
managers or board of directors, as applicable, of such
Project Party approving and authorizing the execution,
delivery and performance of all Transaction Documents to
which such Project Party is a party;
(ii) a certificate of an Authorized Officer of each
Project Party (other than Additional Project Parties),
dated as of the Closing Date, certifying the names and
true signatures of the incumbent officers of such Project
Party authorized to sign the Transaction Documents to
which such Project Party is a party; and
(iii) evidence that each Project Party (other than
Additional Project Parties) is duly authorized to carry on
its business as now being conducted by it, and as proposed
to be conducted by it, in each jurisdiction in which it is
required to be so authorized.
(cc) Environmental Matters. The Agent Bank
shall (i) be satisfied that the Borrower does not have any
present or contingent liability relating to any Environmental
Approval, Environmental Claim or Environmental Law which is not
covered by an indemnity agreement satisfactory to the Agent
Bank in form and substance, (ii) be satisfied that the Borrower
presently is in compliance with all Environmental Laws and all
Environmental Approvals in all material respects, and (iii)
have received evidence that all Environmental Approvals
necessary to construct and operate the Project (other than
Environmental Approvals that are Deferred Approvals) have been
obtained and are in full force and effect.
(dd) Payment of Subcontractors. If all or any
part of the proceeds of the Loans to be made on the Closing
Date are to be paid to the EPC Contractor, the Agent Bank shall
have received a certificate of the EPC Contractor substantially
in the form of Schedule Q to the EPC Contract.
Section 3.2. Conditions Precedent to the Making of
All Loans and Issuance of Letters of Credit. The obligation of
each Bank to extend any credit, including the obligation to
make, extend or increase Loans (including any Loan made on the
Closing Date) and the obligation of the Issuing Bank to issue
any Letter of Credit, is subject to the satisfaction on the
date such Loan is to be made or such Letter of Credit is to be
issued, of the following conditions precedent, all of which
shall be satisfactory to each Bank:
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(a) No Defaults, Etc. (i)(A) No default or event of
default shall have occurred and be continuing under any
Transaction Document, (B) all representations and warranties
made by the Borrower, and to the best of its knowledge each
other Project Party, in the Transaction Documents shall be true
and correct in all material respects, (C) no litigation or
other proceeding shall be pending, or, to the best of its
knowledge, threatened against the Borrower or, to the best of
its knowledge, any other Project Party that could reasonably be
expected to result in a Material Adverse Effect and (D) there
shall have been no material adverse change in the projected
Project Costs or the business operations, prospects or
financial or other condition of the Borrower or, to the best of
the Borrower's knowledge, any Equity Holder, any Equity
Contributor, the Energy Purchaser, the EPC Contractor, the
Construction Guarantor, the Operator, the O&M Guarantor or any
other Project Party and (ii) the Agent Bank shall have received
a certificate of an Authorized Officer of the Borrower
certifying as to the foregoing.
(b) Independent Engineer's Certificate. The Agent
Bank shall have received a certificate of the Independent
Engineer substantially in the form of Exhibit I.
(c) Insurance. The Agent Bank shall have received
(i) a certificate of an Authorized Officer of the Borrower, in
form and substance satisfactory to the Agent Bank, stating that
(A) all insurance coverages required to be obtained by or on
behalf of the Borrower are in place and are in full force and
effect and (B) to the best knowledge of the Borrower, all
insurance coverages required to be obtained by or on behalf of
the EPC Contractor or the Energy Purchaser are in place and in
full force and effect, and (ii) a notice of title continuation
or an endorsement of the title company insuring the Collateral
Agent's interest in the Mortgaged Property updating the Title
Insurance Policy to the date of disbursement of such Loan or
the issuance of such Letter of Credit, as the case may be,
showing no intervening Liens (other than Permitted Liens) or
encumbrances on the Mortgaged Property and showing that there
has been no change in the state of title and no survey
exceptions not theretofore approved by each Bank, which
endorsements shall have the effect of setting the coverage of
the Title Insurance Policy.
(d) Governmental Approvals. All Necessary Project
Approvals required to be in place as of such date shall be in
full force and effect and the Agent Bank shall have received
(i) true, correct and complete copies of all such Necessary
Project Approvals and (ii) a certificate of an Authorized
Officer of the Borrower confirming the statements set forth in
this clause (d).
(e) Payment of Subcontractors. If all or any
portion of the Loans to be made on such date are to be paid to
the EPC Contractor, the Agent Bank shall have received a
certificate from the EPC Contractor substantially in the form
of Schedule Q to the EPC Contract.
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(f) Material Adverse Effect. No event or condition
shall have occurred that could reasonably be expected to result
in a Material Adverse Effect.
(g) Additional Project Documents. The Agent Bank
shall have received copies of Additional Project Documents
required to be in place as of such date and not previously
delivered to the Agent Bank (together with all amendments,
supplements and exhibits thereto) and all Ancillary Documents
in respect of such Additional Project Documents, each of which
(i) shall have been duly authorized, executed and delivered by
each Person party thereto (other than the Agent Bank, the
Collateral Agent and the Banks), (ii) shall be in the form of
the appropriate form attached hereto (if such form is attached)
or otherwise in form and substance satisfactory to the Agent
Bank, and (iii) shall be in full force and effect. All
representations and warranties contained in each such
Additional Project Document shall be true and correct in all
material respects and no default or event of default shall have
occurred thereunder which could reasonably be expected to
result in a Material Adverse Effect.
(h) Notice of Borrowing; Request for Issuance. The
Agent Bank shall have received an executed Notice of Borrowing
in respect of the Loans to be made, or a Request for Issuance
in respect of any Letter of Credit to be issued, on such date,
which Notice of Borrowing or Request for Issuance shall contain
the certifications required hereunder, each made as of the date
of such Notice of Borrowing or Request for Issuance and as of
the date on which the Loans are to be made or the Letter of
Credit is to be issued.
(i) Equity Contribution. Each Equity Contributor
shall have made all Equity Contributions required under the
Equity Commitment Agreement to which such Equity Contributor is
a party; provided, however, that the condition precedent set
forth in this clause (i) shall apply only if the aggregate
Dollar amount of all Construction Loan Borrowings equals or
exceeds $84,000,000.
Section 3.3. Conditions Precedent to Conversion to
Term Loans. The obligation of the Banks to convert
Construction Loans to Term Loans is subject to the satisfaction
on the date of such conversion of the following conditions
precedent, all of which shall be satisfactory to each Bank:
(a) Acceptance; Commercial Operation. Each of the
following shall have occurred and the Agent Bank shall have
received a certificate of an Authorized Officer of the Borrower
confirming the occurrence thereof:
(i) the Project shall have achieved Acceptance;
(ii) all Punch List items (other than Minor
Punch List Items) shall have been completed; and
62
(iii) the Project shall have achieved
Commercial Operation.
(b) Independent Engineer's Certificate. The Agent
Bank shall have received a certificate of the Independent
Engineer substantially in the form of Exhibit J.
(c) Transaction Documents. Each Transaction
Document entered into by or on behalf of the Borrower with a
Project Party which has obligations that continue after the
Conversion Date shall be in full force and effect and the Agent
Bank shall have received a certificate of an Authorized Officer
of the Borrower confirming the foregoing.
(d) No Defaults, Etc. (i)(A) No default or event of
default shall have occurred and be continuing under any
Transaction Document, (B) all representations and warranties
made by the Borrower, and to the best of its knowledge each
other Project Party, in the Transaction Documents shall be true
and correct in all material respects, (C) no litigation or
other proceeding shall be pending, or, to the best of the
Borrower's knowledge, threatened against the Borrower or, to
the best of its knowledge, any other Project Party that could
reasonably be expected to result in a Material Adverse Effect
and (D) there shall have been no material adverse change in the
projected Project Costs or the business operations, prospects
or financial or other condition of the Borrower or, to the best
of the Borrower's knowledge, any other Project Party and (ii)
the Agent Bank shall have received a certificate of an
Authorized Officer of the Borrower certifying as to the
foregoing.
(e) Legal Opinions. The Agent Bank shall have
received the following legal opinions, each of which shall be
in form and substance satisfactory to the Agent Bank and shall
be dated the Conversion Date:
(i) Opinion of Counsel of corporate counsel to
the Borrower, NRG Energy (so long as the O&M Guarantee is
in effect) and the Operator;
(ii) Opinion of Counsel of outside counsel to
the Borrower, NRG Energy (so long as the O&M Guarantee is
in effect) and the Operator;
(iii) Opinion of Counsel of local counsel to the
Borrower, NRG Energy (so long as the O&M Guarantee is in
effect) and the Operator;
(iv) Opinion of Counsel of regulatory counsel to
the Borrower;
(v) Opinion of Counsel of counsel to the Energy
Purchaser;
(vi) Opinion of Counsel of counsel to NIGAS;
(vii) Opinion of Counsel of counsel to NGC; and
63
(viii) Opinion of Counsel of counsel to the
Maintenance Contractor.
(f) Insurance; Title. The Agent Bank shall have
received (i) insurance certificates evidencing that all
insurance coverages required to be obtained by or on behalf of
the Borrower, the Operator or the Energy Purchaser under
Section 5.7 have been obtained and are in full force and
effect, (ii) a certificate of the Insurance Consultant stating
that (A) all insurance coverages required to be obtained by or
on behalf of the Borrower, the Operator or the Energy Purchaser
have been obtained and (B) all such insurance coverages are in
full force and effect and (iii) a notice of title continuation
or an endorsement of the title company insuring the Collateral
Agent's interest in the Mortgaged Property updating the Title
Insurance Policy to the Conversion Date, showing no intervening
Liens (other than Permitted Liens) or encumbrances on the
Mortgaged Property and showing that there has been no change in
the state of title and no survey exceptions not theretofore
approved by each Bank, which endorsements shall have the effect
of setting the coverage of the Title Insurance Policy.
(g) Government Approvals. (i) All Necessary Project
Approvals required to be obtained by the Conversion Date shall
be in full force and effect and (ii) the Agent Bank shall have
received (A) true, correct and complete copies of such
Necessary Project Approvals and (B) a certificate of an
Authorized Officer of the Borrower stating that (1) such
Necessary Project Approvals are in full force and effect as of
the Conversion Date and (2) the copies of such Necessary
Project Approvals received by the Agent Bank are true, correct
and complete copies of the originals of such Necessary Project
Approvals.
(h) Operating Budget. The Agent Bank shall have
received the initial operating budget prepared pursuant to
Section 4.17 of the Operation and Maintenance Agreement (the
"Preliminary Operating Budget"), together with any completed
extensions thereto prepared pursuant to Section 6.2.1 of the
Operation and Maintenance Agreement, all in form and substance
satisfactory to the Agent Bank.
(i) Equity Commitments. Each Equity Contributor
shall have fully satisfied its obligations under its Equity
Commitment Agreement and the Agent Bank shall have received a
certificate of an Authorized Officer of the Borrower confirming
that such obligations have been satisfied.
(j) Debt Service Reserve. Amounts on deposit in the
Debt Service Reserve Account, together with any Debt Service
Reserve Letter of Credit credited thereto, shall equal or
exceed the Debt Service Reserve Required Balance and the Agent
Bank shall have received evidence thereof in form and substance
satisfactory to it.
(k) Material Adverse Effect. No event shall have
occurred which could reasonably be expected to result in a
Material Adverse Effect.
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(l) Qualifying Facility Status. The Agent Bank
shall have received evidence satisfactory to it that the
Project has obtained Qualifying Facility status through self-
certification.
(m) Term Notes. The Agent Bank shall have received
an appropriately completed Term Note for each Bank, each of
which (i) shall have been duly authorized, executed and
delivered by the Borrower, (ii) shall be substantially in the
form of Exhibit C and (iii) shall be in full force and effect.
All representations and warranties contained in each Term Note
shall be true and correct in all material respects and no
default or event of default shall have occurred thereunder.
Section 3.4. Conditions; General Principles.
(a) The acceptance of the proceeds of each Loan
shall constitute a representation and warranty by the Borrower
to each of the Banks that all of the conditions required to be
satisfied under this Article III in connection with the making
of such Loan have been satisfied.
(b) All of the agreements, instruments, reports,
opinions and other documents and papers referred to in this
Article III, unless otherwise expressly specified, shall be
delivered to the Agent Bank for the account of each of the
Banks and, except for the Notes, in sufficient counterparts for
each of the Banks, and shall be satisfactory in form and
substance to each Bank.
ARTICLE IV. REPRESENTATIONS AND WARRANTIES.
In order to induce the Agent Bank, the Collateral
Agent and the Banks to enter into this Agreement and the Banks
to make the Loans, and to induce the Issuing Bank to issue the
Letters of Credit, the Borrower makes the following
representations and warranties, which shall survive the
execution and delivery of this Agreement and the Notes, the
making of each Loan and the issuance of each Letter of Credit.
Any reference in any representation or warranty to a
Transaction Document shall include only Transaction Documents
that have been entered into on or prior to the date such
representation or warranty is made or deemed made.
Section 4.1. Status; Power and Authority; Due
Authorization; Enforceability.
(a) The Borrower (i) is a limited liability company
duly organized, validly existing and in good standing in
accordance with the laws of the State of Delaware and (ii) has
duly qualified and is authorized to do business and is in good
standing as a foreign limited liability company under the laws
of each other jurisdiction in
66
which it owns or leases real property or in which the nature of
its business requires it to be so qualified, except where the
failure to be so qualified could not reasonably be expected to
result in a Material Adverse Effect.
(b) The Borrower has full power and authority to (i)
own the property and assets owned by it and lease the property
and assets leased by it, (ii) transact the business in which it
is engaged or proposes to be engaged, (iii) execute and deliver
each of the Transaction Documents to which it is or is intended
to be a party and (iv) perform its obligations under and
consummate the transactions contemplated by the Transaction
Documents to which it is or is intended to be a party.
(c) The Borrower has taken all necessary action to
authorize the execution, delivery and performance of the
Transaction Documents to which it is or is intended to be a
party. No consent or authorization of, filing with or other
act by or in respect of any Governmental Authority or other
Person is required in connection with the execution, delivery
and performance by the Borrower of the Transaction Documents to
which it is or is intended to be a party or the validity and
enforceability of the Transaction Documents, except for the
Deferred Approvals.
(d) This Agreement and each other Transaction
Document to which the Borrower is or is intended to be a party,
when executed and delivered by the Borrower, will constitute a
legal, valid and binding obligation of the Borrower enforceable
against the Borrower in accordance with its terms except as the
enforcement thereof may be limited by applicable bankruptcy,
insolvency or similar Laws affecting the enforcement of rights
of creditors generally and except to the extent that
enforcement of rights and remedies set forth therein may be
limited by equitable principles (regardless of whether
enforcement is considered in a court of law or a proceeding in
equity).
Section 4.2. No Violation. Neither the execution,
delivery or performance by the Borrower of the Transaction
Documents to which it is or is intended to be a party, nor
compliance with or performance of the terms thereof (a) will
contravene or violate any applicable provision of Law to which
the Borrower or any of its assets is subject, (b) will conflict
or be inconsistent with, result in any breach of, or constitute
a default under, any agreement to which the Borrower is a party
or to which it or any of its assets is subject, (c) result in
the creation or imposition of (or the obligation to create or
impose) any Lien (other than Permitted Liens) upon any of the
property or assets of the Borrower, except, in the case of each
of clauses (a), (b) and (c), any contravention, violation,
conflict, inconsistency, breach, default, creation or
imposition that could not reasonably be expected to result in a
Material Adverse Effect, or (d) will violate the certificate of
formation, agreement of limited liability company or any other
constitutive documents of the Borrower.
66
Section 4.3. Litigation. There are no actions,
suits, investigations or proceedings by or before any
Governmental Authority or arbitrator pending or, to the best of
the Borrower's knowledge, threatened against the Borrower, the
Project or, to the best of the Borrower's knowledge, any other
Project Party which could reasonably be expected to result in a
Material Adverse Effect.
Section 4.4. Financial Statements; Financial
Condition; Etc. The financial statements of the Borrower
delivered to the Agent Bank pursuant to Section 3.1(n)
(including the related notes and schedules thereto) were
prepared in accordance with GAAP and fairly present the
financial condition and the results of operations of the
Borrower on the dates and for the periods covered thereby,
except as disclosed in the notes thereto and, with respect to
interim financial statements, subject to normally recurring
year-end adjustments. As of the Closing Date, the Borrower has
no Contingent Obligations or other undisclosed material
obligations not shown on such financial statements except for
indemnity obligations under the Transaction Documents.
Section 4.5. Material Adverse Change. Since the
ending date of the most recent audited (or unaudited if audited
statements were not available) financial statements delivered
pursuant to Section 3.1(n), no event, condition or circumstance
has existed or has occurred which has resulted in or could
reasonably be expected to result in a Material Adverse Effect.
Section 4.6. Use of Proceeds; Margin Regulations.
All proceeds of each Loan will be used by the Borrower only in
accordance with the provisions of Section 5.11. No part of the
proceeds of any Loan will be used by the Borrower to purchase
or carry any Margin Stock (as defined in Regulation U) or to
extend credit to others for the purpose of purchasing or
carrying any Margin Stock. Neither the making of any Loan nor
the use of the proceeds thereof will violate or be inconsistent
with the provisions of Regulations G, T, U or X.
Section 4.7. Governmental Approvals. All
Governmental Approvals which under applicable Law are required
to have been obtained in connection with (i) the due execution,
delivery and performance by the Borrower of the Transaction
Documents to which it is or is intended to be a party, (ii) the
construction and operation of the Project as contemplated by
the Transaction Documents and (iii) the grant by the Borrower
of the Liens granted under the Security Documents or the
validity, perfection and enforceability thereof or for the
exercise by the Collateral Agent of its rights and remedies
thereunder (all of the foregoing, the "Necessary Project
Approvals"), have been obtained, are in full force and effect,
if so required are in the name of the Borrower and are final
and all appeal periods with respect thereto have expired or
terminated, except those approvals listed on Part B of Schedule
3.1(o) but only to the extent such approvals are not required
to have been obtained prior to the date this representation is
made or deemed made (collectively, the "Deferred Approvals").
Each such Necessary Project Approval (other
67
than the Deferred Approvals) is listed on Part A of Schedule
3.1(o) and the information set forth in each application
submitted by or on behalf of the Borrower in connection with
each such Necessary Project Approval was accurate and complete
in all material respects at the time of submission and
continues to be accurate and complete in all material respects
to the extent required for the issuance or continued
effectiveness of the related Necessary Project Approval, and
the Borrower has no knowledge of any event, act, condition or
state of facts inconsistent with such information. The
Borrower reasonably believes that each Deferred Approval shall
be obtained in a final and non-appealable form in the ordinary
course prior to the time it is required to be obtained
hereunder or under the other Transaction Documents. There is
no action, suit, investigation or proceeding pending, or, to
the best knowledge of the Borrower, threatened, that could
result in the modification, rescission, termination or
suspension of any Governmental Approval referred to in Schedule
3.1(o) obtained prior to the date this representation is made
or deemed made.
Section 4.8. Compliance with Applicable Laws.
(a) The Borrower has been and is currently in
compliance with all applicable Laws, except where the failure
to so comply could not reasonably be expected to result in a
Material Adverse Effect.
(b) With respect to any date prior to the
Conversion Date, the Project is being owned, developed and
constructed in compliance with all applicable Laws and in
compliance with the requirements of all Necessary Project
Approvals except such noncompliance as could not, singly and in
the aggregate, result in a Material Adverse Effect.
(c) As constructed, the Project will conform to
and comply with all federal, state and local zoning,
environmental, land use and other Laws and the requirements of
all Necessary Project Approvals and Deferred Approvals except
such noncompliance as could not, singly and in the aggregate,
result in a Material Adverse Effect.
(d) With respect to any date after the
Conversion Date, the Project is being owned, operated and
maintained in compliance with all applicable Laws and in
compliance with the requirements of all Necessary Project
Approvals and Deferred Approvals except such noncompliance as
could not, singly and in the aggregate, result in a Material
Adverse Effect.
Section 4.9. Sole Purpose Nature; Business. The
Borrower (i) does not engage in any business other than
business relating to the ownership, development, financing,
construction, operation and maintenance of the Project and the
activities related thereto as contemplated by the Transaction
Documents and (ii) is not a party to any agreement, contract or
commitment other than the Transaction Documents and those
68
agreements and instruments which it is permitted to enter into
in accordance with the terms of the Transaction Documents.
Section 4.10. Collateral. The Borrower has good,
marketable and valid title in and to all of the Collateral,
free and clear of all Liens other than Permitted Liens.
Section 4.11. Security Interests and Liens. The
Security Documents create, as security for the Obligations, a
valid and enforceable perfected first priority security
interest in all of the Collateral, in favor of the Collateral
Agent, subject to no Liens other than Permitted Liens. All
Governmental Approvals necessary or desirable to perfect such
security interest have been duly effected or taken.
Section 4.12. Patents, Trademarks, Etc. The Borrower
owns or has the right to use all patents, trademarks,
copyrights, licenses, franchises and other such rights or
adequate licenses therein, free from burdensome restrictions,
which are reasonably necessary for the ownership, development,
construction, operation and maintenance of the Project, to the
extent required as of the date on which the representation set
forth in this Section 4.12 is made or deemed made, except where
failure to do so could not reasonably be expected to result in
a Material Adverse Effect.
Section 4.13. Investment Company Act; Public Utility
Holding Company Act. The Borrower is not (i) an "investment
company" or a company "controlled" by an "investment company,"
within the meaning of the ICA, (ii) subject to regulation as a
"holding company," a "public utility company," or an
"affiliate" or a "subsidiary company" of a "registered holding
company," as defined in PUHCA, or (iii) subject to any other
Law which purports to restrict or regulate its ability to
borrow money.
Section 4.14. Governmental Regulation.
(a) The Borrower is not, and, by reason of (i)
the ownership of the Project or the operation thereof by the
Borrower or (ii) any other transaction contemplated by this
Agreement or any of the other Transaction Documents, will not
be deemed by any Governmental Authority to be, subject to
financial, organizational or rate regulation as (A) a "public
utility" within the meaning of Section 201(e) of the Federal
Power Act, (B) an "electric utility company", a "public utility
company", or a "holding company" under PUHCA or (C) a "public
utility" within the meaning of Section 3-105 of the Public
Utilities Act of the State of Illinois, 220 ILCS 5/3-105
(1997).
(b) None of the Agent Bank, the Collateral
Agent or the Banks will, solely by reason of (i) the ownership,
construction, operation and maintenance of the Project by the
Borrower as contemplated by the Notice of Self-Certification of
a Qualifying Cogeneration Facility filed by the Borrower with
the Federal Energy Regulatory Commission on September 5, 1997
on Docket No. QF97-140-000, (ii) the making of any
69
Loans or (iii) the securing of the Obligations by Liens on the
Collateral, be deemed by any Governmental Authority to be, or
to be subject to regulation as (A) a "public utility" within
the meaning of Section 201(e) of the Federal Power Act, (B) an
"electric utility company", a "public utility company", or a
"holding company" under PUHCA or (C) a "public utility" within
the meaning of Section 3-105 of the Public Utilities Act of the
State of Illinois, 220 ILCS 5/3-105 (1997).
(c) If (i) the Project continues to be operated
as contemplated by the Notice of Self-Certification of a
Qualifying Cogeneration Facility filed by the Borrower with the
Federal Energy Regulatory Commission on September 5, 1997 on
Docket No. QF97-140-000 and (ii) none of the Agent Bank, the
Collateral Agent or any of the Banks is otherwise a "person
primarily engaged in the generation or sale of electric power
(other than electric power solely from cogeneration facilities
or small power production facilities)" within the meaning of 18
C.F.R. 292.206, none of the Agent Bank, the Collateral Agent
or any of the Banks will, solely by reason of ownership or
operation of the Project upon the exercise of its remedies
under the Security Documents, be deemed by any Governmental
Authority to be subject to financial, organizational or rate
regulation as (A) a "public utility" within the meaning of
Section 201(e) of the Federal Power Act, (B) an "electric
utility company", a "public utility company", or a "holding
company" under PUHCA or (C) a "public utility" within the
meaning of Section 3-105 of the Public Utilities Act of the
State of Illinois, 220 ILCS 5/3-105 (1997).
Section 4.15. Sufficient Rights. The services to be
performed and the materials to be supplied pursuant to the
Project Documents and the land use and other rights granted to
the Borrower in the Project will provide the Borrower with all
rights and property interests necessary for the development,
construction, operation and maintenance of the Project, other
than those services, materials or rights which the Borrower can
obtain in the ordinary course of business without material
expense or material delay.
Section 4.16. Property Rights, Utilities, Etc. The
Borrower has secured all utility services, means of
transportation, facilities and other materials necessary for
the construction and operation of the Project (including as
necessary, gas, electrical, water and sewage services and
facilities), and any utility services which will be required at
a later date for the operation of the Project will be available
in the ordinary course of business.
Section 4.17. No Defaults. No default, event of
default, breach or event of Force Majeure has occurred or is
continuing under any Transaction Document. Neither the
Borrower, or to the best of the Borrower's knowledge, any
Project Party is in breach of, or in default under, any
Transaction Document, nor is the Borrower in breach of or in
default under any other agreement or instrument to which it is
a party or by which it or its properties or assets may be
bound.
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Section 4.18. Payment of Taxes. The Borrower has
filed or caused to be filed all federal, state and other tax
returns which are required to be filed by it and has paid or
has caused to be paid (prior to their delinquency dates) all
taxes, fees, charges and assessments ("Taxes") which have
become due pursuant to such returns or pursuant to any
assessment received by it, other than Taxes the payment of
which is subject to a Contest.
Section 4.19. ERISA. With respect to each Plan, the
Borrower and each other member of the Controlled Group has
fulfilled its obligations under the minimum funding standards
of and is in compliance in all material respects with ERISA and
with the Code the extent applicable to it and has not incurred
any liability to the PBGC or a Plan under Title IV of ERISA
other than a liability to the PBGC for premiums under Section
4007 of ERISA. The Borrower does not have any contingent
liabilities for any post- retirement benefits under a Welfare
Plan, other than liability for continuation coverage described
in Part 6 of Title I of ERISA.
Section 4.20. Transaction Documents.
(a) Set forth on Schedule 4.20 is a list of all
material contracts, agreements, letters of intent,
understandings and instruments to which the Borrower is
currently a party or by which it or any of its properties is
bound or to which it is (or was as of the Closing Date)
contemplated to become a party or by which it or any of its
properties is (or was as of the Closing Date) contemplated to
become bound (including, without limitation, all amendments,
supplements, waivers, letter agreements, interpretations and
other documents amending, supplementing or otherwise modifying
or clarifying such agreements and instruments), true, correct
and complete copies of all of which have been delivered to the
Agent Bank on the Closing Date.
(b) Each of the Transaction Documents (other
than any Transaction Document which has terminated in
accordance with its terms) is in full force and effect and all
representations, warranties and other factual statements of the
Borrower and, to the best of the Borrower's knowledge, each
other Project Party in the Transaction Documents are true and
correct in all material respects.
Section 4.21. True and Complete Disclosure;
Assumptions.
(a) All representations, warranties and other
factual statements (excluding projections) furnished by or on
behalf of the Borrower in this Agreement, in any other
Transaction Document or otherwise in writing to the Agent Bank,
any Secured Party, the Independent Engineer, the Fuel
Consultant, the Insurance Consultant, the Petrochemical
Industry Consultant or any appraiser on or prior to the Closing
Date, are, and all other representations, warranties and other
factual statements hereafter furnished by or on behalf of the
Borrower in writing to the Agent Bank, any Secured Party, the
Independent Engineer, the Fuel Consultant, the Insurance
Consultant, the Petrochemical Industry
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Consultant or any appraiser will be true and correct in all
material respects on the date as of which such information is
or was dated or furnished and not incomplete by the omission of
any material fact necessary to make such information (taken as
a whole) not misleading at such time.
(b) The assumptions constituting the basis on
which the Borrower prepared the Construction Budget, the
Construction Schedule, the Progress Payment Schedule and the
Base Case Forecasts and developed the numbers set forth therein
were developed and consistently utilized in good faith and are
reasonable in all respects and fairly present the Borrower's
expectations as to the matters covered thereby. The Borrower
has no reason to believe that the Project will not be completed
in accordance with the Construction Budget, the Construction
Schedule and the Progress Payment Schedule.
Section 4.22. Ownership and Related Matters.
(a) As of the Closing Date, the equity of the
Borrower is one hundred percent (100%) owned, directly or
indirectly, by NRG Energy.
(b) Other than the rights of the Energy
Purchaser set forth in Section 19.5 of the Energy Services
Agreement, the Borrower does not have outstanding any
securities convertible into or exchangeable for any of its
equity or any rights to subscribe for or to purchase, or any
warrants or options for the purchase of, or any agreements
providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to, any
such equity.
Section 4.23. Environmental Matters.
(a) Except as described in Schedule 4.23, the
Borrower (i) is in compliance with all applicable Environmental
Laws in all material respects, (ii) has obtained all
Environmental Approvals (other than any Deferred Approvals not
required to be obtained as of the date this representation is
made or deemed made) required to operate its business as
presently conducted or as reasonably anticipated to be
conducted and is in compliance with the terms and conditions
thereof, and (iii) to the Borrower's best knowledge after due
inquiry, there are no circumstances that may prevent or
interfere with such full compliance in the future, except in
each case where such noncompliance could not reasonably be
expected to result in a Material Adverse Effect.
(b) Except as described in Schedule 4.23, the
Borrower has not received any communication (written or oral),
whether from a Governmental Authority, citizens group, employee
or otherwise, that alleges that the Borrower is not in full
compliance with all Environmental Laws and Environmental
Approvals.
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(c) Except as described in Schedule 4.23, there
are no Environmental Claims pending or, to the best of the
Borrower's knowledge, threatened against the Borrower in
connection with the Project, except where such Environmental
Claims could not reasonably be expected to result in a Material
Adverse Effect.
(d) Except as described in Schedule 4.23, there
have been no releases or discharges of any Material of
Environmental Concern in excess of permitted levels at the
Project, except where such releases or discharges could not
reasonably be expected to result in a Material Adverse Effect.
Section 4.24. Other Filings. Except as set forth in
the Title Insurance Policy and the Lien searches completed
pursuant to Section 3.1(g)(i)(B), no mortgage, financing
statement or other instrument or recordation has been filed or
authorized by the Borrower or, to the best of its knowledge,
any other Person, covering all or any part of the Borrower's
property or assets, except with respect to Permitted Liens.
Section 4.25. Qualifying Facility Status. The
Project is, or prior to the Commercial Operation Date will be,
a Qualifying Facility, or the Borrower is, or prior to the
Commercial Operation Date will be, otherwise able to sell
electricity and steam to the Energy Purchaser and to wholesale
purchasers without being regulated as an "electric utility" or
an "electric utility holding company" under applicable federal
or state Law.
Section 4.26. Subsidiaries, Etc. The Borrower has
no Subsidiaries and owns no equity interest in any other
corporation, partnership, joint venture or other entity.
ARTICLE V. AFFIRMATIVE COVENANTS.
The Borrower covenants and agrees that on and after the
Closing Date and until the Loan Agreement Termination Date,
unless otherwise agreed by the Required Banks:
Section 5.1. Information Covenants. The Borrower
shall furnish to the Agent Bank:
(a) Quarterly Unaudited Financial Statements of
the Borrower. Within forty-five (45) days after the close of
each fiscal quarter in each fiscal year of the Borrower, the
balance sheet of the Borrower as at the end of such quarterly
period and the related statements of income, cash flows and
changes in financial position for such quarterly period and for
the elapsed portion of the fiscal year ended with the last day
of such quarterly period, and in each case setting forth
comparative figures for the related periods in the prior fiscal
year.
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(b) Annual Audited Financial Statements of the
Borrower. Within one hundred twenty (120) days after the close
of each fiscal year of the Borrower, the balance sheet of the
Borrower as at the end of such fiscal year and the related
statements of income, cash flows and changes in financial
position for such fiscal year, setting forth comparative
figures for the preceding fiscal year and certified without
qualification by the Auditors, together with a report of the
Auditors stating that in the course of their regular audit of
the financial statements of the Borrower, which audit was
conducted in accordance with GAAP, the Auditors have obtained
no knowledge of any Default or Event of Default, or if in the
opinion of the Auditors a Default or an Event of Default has
occurred and is continuing, a statement as to the nature
thereof.
(c) Officer's Certificates. At the time of the
delivery of the financial statements under clauses (a) and (b)
above, a certificate of an Authorized Officer of the Borrower
which certifies (i) that such financial statements fairly
present the financial condition and the results of operations
of the Borrower on the dates and for the periods indicated in
accordance with GAAP, subject, in the case of interim financial
statements, to the absence of notes and normally recurring year-
end adjustments, and (ii) that such Authorized Officer has
reviewed the terms of the Financing Documents and has made, or
caused to be made under his or her supervision, a review in
reasonable detail of the business and financial condition of
the Borrower during the accounting period covered by such
financial statements, and that as a result of such review such
Authorized Officer has concluded that no Default or Event of
Default has occurred during the period commencing at the
beginning of the accounting period covered by the financial
statements accompanied by such certificate and ending on the
date of such certificate or, if any Default or Event of Default
has occurred, specifying the nature and extent thereof and, if
continuing, the action the Borrower proposes to take in respect
thereof. Such certificate shall set forth the calculations
required to establish the Debt Service Coverage Ratio and
Excess Cash Flow for the fiscal period covered by such
financial statements.
(d) Management Letters. Promptly after the
Borrower's receipt thereof, a copy of any "management letter"
or other material report received by the Borrower from the
Auditors.
(e) Annual Audited Financial Statements of
other Project Parties. Within one hundred twenty (120) days
after the close of the respective fiscal years of each of the
Energy Purchaser, the Operator, the O&M Guarantor (so long as
the O&M Guarantee is in effect) and the Maintenance Contractor,
the balance sheet of such Project Party as at the end of such
fiscal year and the related statements of income, cash flows
and changes in financial position for such fiscal year, setting
forth comparative figures for the preceding fiscal year and
certified (with customary qualifications and exceptions) by
independent certified public accountants of recognized national
standing acceptable to the Agent Bank.
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(f) Amendments to Construction Budget and
Construction Schedule; Change Orders. (i) Written notice of
any proposed amendments to the Construction Schedule, the
Construction Budget or the Progress Payment Schedule and (ii) a
copy of any proposed Change Order (which shall be provided to
the Independent Engineer simultaneously with delivery thereof
to the Agent Bank pursuant to this clause (f)); provided,
however, that any such amendment or Change Order shall not
become effective (and, if applicable, the then effective budget
or schedule, as the case may be, shall continue to remain in
effect) unless and until it has been approved in accordance
with the terms hereof.
(g) Notice of Default, Litigation, Etc.
Promptly and in any event within two (2) Business Days after an
Authorized Officer of the Borrower obtains actual knowledge
thereof, notice of:
(i) any Default or Event of Default,
specifying the nature thereof and the action which
the Borrower is taking and proposes to take with
respect to the same;
(ii) any breach or default under any
Project Document (if such breach could reasonably be
expected to result in a Material Adverse Effect),
specifying the nature thereof and the action which
the Borrower is taking and proposes to take with
respect to the same;
(iii) any event of Force Majeure or
similar event under any Project Document;
(iv) any pending or threatened
litigation, arbitration or proceeding against the
Borrower, the Operator or the O&M Guarantor, or, to
the best knowledge of the Borrower, any other Project
Party related to the Project, which could reasonably
be expected to result in a Material Adverse Effect;
(v) any loss or threat to any
Necessary Project Approval that could reasonably be
expected to result in a Material Adverse Effect;
(vi) any Environmental Claim or any
event relating to the environment or any
Environmental Law which could reasonably be expected
to result in a Material Adverse Effect;
(vii) any notice from any
Governmental Authority with respect to the
acquisition by condemnation, seizure or otherwise of
all
75
or any portion of the Project if such acquisition
could reasonably be expected to result in a Material
Adverse Effect; and
(viii) any other event or condition
which could reasonably be expected to result in a
Material Adverse Effect;
(h) Monthly Progress Invoices. Promptly and in
any event within five (5) Business Days after the Borrower's
receipt thereof, all Monthly Progress Invoices delivered to the
Borrower pursuant to the EPC Contract;
(i) O&M Deliverables. Promptly and in any
event within five (5) Business Days after the Borrower's
receipt thereof, copies of all O&M Deliverables (which shall be
provided to the Independent Engineer simultaneously with
delivery thereof to the Agent Bank pursuant to this clause
(i));
(j) Scheduled Major Maintenance. Written
notice of any scheduled major maintenance to be performed in
accordance with Section 4.2.14 of the Operation and Maintenance
Agreement (which shall be provided to the Independent Engineer
simultaneously with delivery thereof to the Agent Bank pursuant
to this clause (j));
(k) Amendments to Operating Budget and Major
Maintenance Budget; O&M Change Orders. (i) Written notice of
any proposed amendments to any Operating Budget or Major
Maintenance Budget and (ii) copies of any proposed O&M Change
Orders (each of which shall be provided to the Independent
Engineer simultaneously with delivery thereof to the Agent Bank
pursuant to this clause (k)); provided, however, that any such
amendment or O&M Change Order shall not become effective unless
and until it has been approved in accordance with the terms
hereof; and
(l) Other Information. From time to time, such
other information or documents (financial or otherwise) as the
Agent Bank or any Bank through the Agent Bank may reasonably
request.
Section 5.2. Maintenance of Existence. The Borrower
shall at all times preserve and maintain in full force and
effect (a) its existence as a limited liability company in good
standing in the State of Delaware, (b) its qualification to do
business in each other jurisdiction where such qualification is
necessary and (c) all of its powers, rights, privileges and
franchises necessary for the construction, ownership,
maintenance and operation of the Project.
Section 5.3. Books, Records and Inspections. The
Borrower shall (a) keep proper books of record and accounts in
which full, true and correct entries in conformity with GAAP
and all requirements of Law shall be made of all dealings and
transactions in
76
relation to its business and activities, (b) provide the
officers and designated representatives of the Agent Bank, the
Collateral Agent and the Independent Engineer reasonable rights
to visit and inspect any of the properties of the Borrower
(subject to all safety standards and procedures of the
Borrower, the Operator and the Energy Purchaser), and to
examine the books of record and accounts of the Borrower, and
discuss the affairs, finances and accounts of the Borrower
with, and be advised as to the same by, it and its officers,
and (c) authorize the Auditors to communicate directly with the
Agent Bank and the Collateral Agent.
Section 5.4. Taxes and Claims. The Borrower shall
file all tax returns required to be filed by it and pay or
cause to be paid when due all Taxes and all charges,
betterments or other assessments relating to the Mortgaged
Property, and all other lawful claims required to be paid by
it, except to the extent any of the same are subject to a
Contest.
Section 5.5. Governmental Approvals. The Borrower
shall (i) obtain and maintain in full force and effect all
Necessary Project Approvals (including all Environmental
Approvals) and (ii) use its best efforts to obtain all Deferred
Approvals (all of which shall be satisfactory to the Required
Banks (in consultation with the Independent Engineer)) as
promptly as practicable but in any event no later than the date
required to be obtained under applicable Law, except in each
case where the failure to do so could not reasonably be
expected to result in a Material Adverse Effect. Any Necessary
Project Approvals and Deferred Approvals relating to the supply
or transportation of natural gas to or on behalf of any
supplier of gas under any Gas Contract shall name the Borrower
as permitted.
Section 5.6. Compliance with Law. The Borrower
shall comply with all applicable Laws (including all applicable
Environmental Laws) and all Necessary Project Approvals, except
where the failure to so comply could not reasonably be expected
to result in a Material Adverse Effect.
Section 5.7. Insurance. The Borrower shall obtain
and maintain, or cause to be obtained and maintained, the types
and amounts of insurance listed and described on Schedule 5.7
in accordance with the terms and provisions set forth in such
Schedule. The Borrower shall obtain and maintain such other
insurance policies reasonably required by, and in form and
substance reasonably satisfactory to, the Agent Bank (i)
insuring the Collateral against loss by fire, explosion, theft
and other casualties and (ii) insuring the Borrower, and the
Secured Parties as additional loss payees, against liability
for personal injury and property damage relating to the
Collateral. In the event the Borrower fails to take out or
maintain the full insurance coverage required by this Section
5.7, the Agent Bank, upon ten (10) days prior notice (unless
the aforementioned insurance would lapse within such period, in
which event notice shall not be required) to the Borrower of
any such failure, may (but shall not be obligated to) take out
the required policies of insurance
77
and pay the premiums on the same. All amounts so advanced by
the Agent Bank shall become an additional Obligation of the
Borrower under this Agreement and the Borrower shall forthwith
pay such amounts to the Agent Bank, together with interest from
the date of payment by the Agent Bank at the Default Rate.
Section 5.8. Mobilization Budget; Operating Budget;
Major Maintenance Budget; Spare Parts List; Heat Rate.
(a) (i) The Borrower shall provide a copy of
any proposed budget (the "Mobilization Budget") prepared in
accordance with Section 4.1.20 of the Operation and Maintenance
Agreement to the Agent Bank and the Independent Engineer
promptly upon, and in any event within five (5) Business Days
after, receipt by the Borrower of any proposed Mobilization
Budget from the Operator. The Agent Bank (in consultation with
the Independent Engineer) shall have fifteen (15) days from
receipt thereof by the Agent Bank to approve or reject any
proposed Mobilization Budget delivered to the Agent Bank
pursuant to the preceding sentence. If the Agent Bank (in
consultation with the Independent Engineer) approves or fails
to reject any proposed Mobilization Budget within fifteen (15)
days of receipt thereof by the Agent Bank, such Mobilization
Budget shall become effective. If the Agent Bank (in
consultation with the Independent Engineer) rejects any
proposed Mobilization Budget within fifteen (15) days of
receipt thereof by the Agent Bank, such Mobilization Budget
shall not be effective and the Borrower shall submit a revised
version of such Mobilization Budget to the Agent Bank and the
Independent Engineer for approval in accordance with this
clause (a).
(ii) The Borrower shall, not later than
thirty (30) days before the Conversion Date, adopt an operating
plan and budget with respect to the Project for the period from
such date to the conclusion of the then current calendar year
and provide a copy of such operating plan and budget at such
time to the Agent Bank and the Independent Engineer. No less
than forty-five (45) days in advance of the beginning of each
calendar year thereafter, the Borrower shall similarly adopt an
operating plan and budget for the ensuing calendar year and
provide a copy of such operating plan and budget at such time
to the Agent Bank and the Independent Engineer. (Each such
operating plan and budget is herein called an "Operating
Budget".) Each Operating Budget shall become effective if it
shall have not been rejected by the Required Banks (in
consultation with the Independent Engineer) within fifteen (15)
days of receipt thereof by the Agent Bank. If the Borrower
shall not have adopted an annual Operating Budget before the
beginning of any calendar year or any Operating Budget adopted
by the Borrower shall not have been accepted by the Required
Banks (in consultation with the Independent Engineer) before
the beginning of any upcoming calendar year, the Operating
Budget for the preceding calendar year (as increased or
decreased in accordance with Section 6.2.4 of the Operation and
Maintenance Agreement) shall, until the adoption of an annual
Operating Budget by the Borrower and acceptance of such
Operating Budget by the Required Banks (in consultation with
the Independent Engineer), as the case may be, be deemed to be
in force and
78
effective as the annual Operating Budget for such upcoming
calendar year; provided that if the initial Operating Budget is
not approved by the Required Banks (in consultation with the
Independent Engineer), the Borrower may use a budget that is
consistent with the Base Case Forecasts until an initial
Operating Budget is approved, and shall work diligently to
prepare an initial Operating Budget that is acceptable to the
Required Banks (in consultation with the Independent Engineer).
(b) No less than forty-five (45) days in
advance of the beginning of each calendar year following the
Conversion Date, the Borrower shall adopt a plan and budget for
major maintenance tasks for the five (5) year period commencing
with the subsequent calendar year and provide a copy of such
plan and budget at such time to the Agent Bank and the
Independent Engineer. (Each such plan and budget is herein
called a "Major Maintenance Budget".) Each Major Maintenance
Budget shall become effective if it shall not have been
rejected by the Required Banks (in consultation with the
Independent Engineer) within fifteen (15) days of receipt
thereof by the Agent Bank. If the Borrower shall not have
adopted an annual Major Maintenance Budget before the beginning
of any calendar year or any Major Maintenance Budget adopted by
the Borrower shall not have been accepted by the Required Banks
(in consultation with the Independent Engineer) before the
beginning of any upcoming calendar year, the Major Maintenance
Budget for the preceding calendar year shall, until the
adoption of an annual Major Maintenance Budget by the Borrower
and acceptance of such Major Maintenance Budget by the Required
Banks (in consultation with the Independent Engineer), as the
case may be, be deemed to be in force and effective as the
annual Major Maintenance Budget for such upcoming calendar
year; provided that if the initial Major Maintenance Budget is
not approved by the Required Banks (in consultation with the
Independent Engineer), the Borrower may use a budget that is
consistent with the Base Case Forecasts until an initial Major
Maintenance Budget is approved, and shall work diligently to
prepare an initial Major Maintenance Budget that is acceptable
to the Required Banks (in consultation with the Independent
Engineer).
(c) Each Operating Budget and each Major
Maintenance Budget delivered to the Agent Bank and the
Independent Engineer pursuant to this Section 5.8 shall be
accompanied by a memorandum detailing all material assumptions
used in the preparation of such Operating Budget or Major
Maintenance Budget, as the case may be, shall contain a line
item for each budget category (which budget categories shall be
acceptable to the Required Banks (in consultation with the
Independent Engineer)), and shall specify for each month and
for each such budget category, the amount budgeted for such
category for such month.
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(d) The Borrower shall provide a copy of any
list of spare parts and related items (each a "Spare Parts
List") developed pursuant to Section 4.1.5 of the Operation and
Maintenance Agreement to the Agent Bank and the Independent
Engineer. The Agent Bank (in consultation with the Independent
Engineer) shall have fifteen (15) days from receipt thereof by
the Agent Bank to approve or reject any Spare Parts List
delivered to the Agent Bank pursuant to the preceding sentence.
If the Agent Bank (in consultation with the Independent
Engineer) approves or fails to reject any Spare Parts List
within fifteen (15) days of receipt thereof by the Agent Bank,
such Spare Parts List shall become effective. If the Agent
Bank (in consultation with the Independent Engineer) rejects
any Spare Parts List within fifteen (15) days of receipt
thereof by the Agent Bank, such Spare Parts List shall not be
effective and the Borrower shall submit a revised version of
such Spare Parts List to the Agent Bank and the Independent
Engineer for approval in accordance with this clause (d).
(e) The Borrower shall present in writing any
proposed Guaranteed Heat Rate curve to the Agent Bank and the
Independent Engineer promptly and in any event within five (5)
Business Days of receipt thereof by the Borrower pursuant to
the Operation and Maintenance Agreement. The Agent Bank (in
consultation with the Independent Engineer) shall have fifteen
(15) days from receipt thereof by the Agent Bank to approve or
reject any Guaranteed Heat Rate curve presented to the Agent
Bank pursuant to the preceding sentence. If the Agent Bank (in
consultation with the Independent Engineer) approves or fails
to reject any Guaranteed Heat Rate curve within fifteen (15)
days of receipt thereof by the Agent Bank, such Guaranteed Heat
Rate curve shall become effective. If the Agent Bank (in
consultation with the Independent Engineer) rejects any
Guaranteed Heat Rate curve within fifteen (15) days of receipt
thereof by the Agent Bank, such Guaranteed Heat Rate curve
shall not be effective and the Borrower shall submit a revised
version of such Guaranteed Heat Rate curve to the Agent Bank
and the Independent Engineer for approval in accordance with
this clause (e).
(f) The Borrower shall present in writing any
formula (each a "Heat Rate Formula") for determination of the
heat rate of the Project to the Agent Bank and the Independent
Engineer promptly and in any event within five (5) Business
Days of completion thereof pursuant to Section 6.6 of the
Operation and Maintenance Agreement. The Agent Bank (in
consultation with the Independent Engineer) shall have fifteen
(15) days from receipt thereof by the Agent Bank to approve or
reject any Heat Rate Formula presented to the Agent Bank
pursuant to the preceding sentence. If the Agent Bank (in
consultation with the Independent Engineer) approves or fails
to reject any Heat Rate Formula within fifteen (15) days of
receipt thereof by the Agent Bank, such Heat Rate Formula shall
become effective. If the Agent Bank (in consultation with the
Independent Engineer) rejects any Heat Rate Formula within
fifteen (15) days of receipt thereof by the Agent Bank, such
Heat Rate Formula shall not be effective and the Borrower shall
submit a revised version of such Guaranteed Heat Rate curve to
the Agent Bank and the Independent Engineer for approval in
accordance with this clause (f).
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Section 5.9. Project Implementation.
(a) The Borrower shall duly construct and
complete, or cause the construction and completion of, the
Project in accordance with the Construction Budget, the
Construction Schedule and the Technical Specifications, use
reasonable efforts to cause the Conversion Date to occur on or
before the date which is seventeen (17) months from the Closing
Date, and in any case shall cause the Conversion Date to occur
on or before the Date Certain, and shall cause Final Completion
(as defined in the EPC Contract) to occur as promptly as
practicable after the Acceptance Date.
(b) The Borrower shall keep, or cause to be
kept, in good working order and condition, ordinary wear and
tear excepted, the Project and all of its other properties
necessary or useful in the proper conduct of its business.
(c) The Borrower shall, or shall cause the
Operator to, as applicable, carry out and operate and maintain
the Project in accordance with (i) the terms of this Agreement
and the other Transaction Documents, (ii) all Necessary Project
Approvals and Deferred Approvals and (iii) industry standards
and good utility practice.
Section 5.10. Further Assurances. (
(a) The Borrower shall (i) execute and deliver
all documents as shall be necessary and advisable or that the
Agent Bank or the Collateral Agent shall reasonably request in
connection with the rights and remedies of the Banks, the Agent
Bank and the Collateral Agent under the Transaction Documents
and (b) take all reasonable actions requested by the Agent Bank
or the Collateral Agent or that the Borrower knows are
necessary to establish, maintain, protect and perfect the Liens
of the Collateral Agent on the Collateral.
(b) The Borrower shall take all action
reasonably required to cause each Additional Project Document
to be or become subject to the Lien of the Security Documents
(whether by amendment to the applicable Security Document or
otherwise) and shall deliver or cause to be delivered to the
Agent Bank such legal opinions, certificates or other documents
with respect to such Additional Project Document as the Agent
Bank, the Collateral Agent or the Required Banks may reasonably
request. The Borrower will execute and deliver, and will use
commercially reasonable efforts to cause each Person (other
than the Borrower) to execute and deliver, a Consent in
writing, which Consent shall be in a form and substance
satisfactory to the Agent Bank, to the Liens created by the
Security Documents (or otherwise) on each Additional Project
Document entered into by the Borrower with the prior consent of
the Agent Bank (as contemplated by Section 6.13) and such legal
opinions relating to such Additional Project Document and such
consents as the Agent Bank or the Required Banks may reasonably
request.
(c) To the extent and at such time as the
Borrower acquires additional property, easements and rights-of-
way, the Borrower shall promptly cause such
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property, easements and rights-of-way to be subjected to the
Lien of the Security Documents. At the request of the
Collateral Agent, the Borrower will execute and deliver all
necessary amendments to the Security Documents in respect
thereto and file and record all Governmental Approvals
necessary or advisable to enable the Collateral Agent to obtain
a first priority perfected Lien on such additional property,
easements and rights-of-way.
Section 5.11. Use of Proceeds. The Borrower shall
use all proceeds of Loans made hereunder, all Letters of Credit
issued hereunder and all Equity Contributions received pursuant
to any Equity Commitment Agreement only in accordance with this
Agreement and the other Financing Documents.
Section 5.12. Title. The Borrower shall maintain
good, legal and valid title to its assets and properties,
subject to no Liens other than Permitted Liens.
Section 5.13. Project Documents. The Borrower shall
maintain in full force and effect, perform its obligations
under, protect, defend and enforce its rights under and take
all action necessary to prevent the termination of each of the
Project Documents (other than in accordance with the terms of
such Project Documents).
Section 5.14. Qualifying Facility Status. Following
the Commercial Operation Date, the Borrower shall (a) maintain
the Project as a Qualifying Facility or (b) otherwise be able
to sell electricity and steam to the Energy Purchaser and to
wholesale purchasers without being regulated as an "electric
utility" or an "electric utility holding company" under
applicable federal or state Law.
Section 5.15. Application of Revenues. The Borrower
shall deposit and apply, or cause to be deposited and applied,
all revenues received by or on behalf of it in accordance with
the terms set forth in Article VII.
Section 5.16. Interest Rate Protection Agreements.
The Borrower shall enter into Interest Rate Protection
Agreements satisfactory to the Agent Bank which, (a) if the
average LIBOR over any thirty (30) day period equals or exceeds
a level of 6.35% at any time prior to the Conversion Date, fix
or cap the rate of interest payable on at least fifty percent
(50%) of outstanding Construction Loans through the
Construction Loan Maturity Date, and (b) if the average LIBOR
over any thirty (30) day period equals or exceeds a level of
6.85% at any time after the Conversion Date, fix or cap the
rate of interest payable on at least fifty percent (50%) of
outstanding Term Loans through the Final Maturity Date.
Section 5.17. Long Term Service Agreement. On or
prior to December 31, 1997, the Borrower shall enter into the
Long Term Service Agreement and shall deliver to the Agent Bank
an executed version of the Long Term Service Agreement and
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each Ancillary Document in respect thereof, all of which shall
be in form and substance satisfactory to the Agent Bank.
Section 5.18. RO EPC Contract. On or prior to
December 31, 1997, the Borrower shall enter into the RO EPC
Contract and shall deliver to the Agent Bank an executed
version of RO EPC Contract and each Ancillary Document in
respect thereof, all of which shall be in form and substance
satisfactory to the Agent Bank.
Section 5.19. Payment. The Borrower shall promptly
pay or cause to be paid when due all principal of and interest
on the Loans and all Fees and other amounts due hereunder in
accordance with the terms hereof.
Section 5.20. ERISA. The Borrower shall promptly
pay and discharge all obligations and liabilities arising under
ERISA of a character which if unpaid or unperformed might
result in the imposition of a Lien against any of its
properties or assets and shall promptly notify the Agent Bank
of (i) the occurrence of any reportable event (as defined in
ERISA) affecting a Plan, other than any such event of which the
PBGC has waived notice by regulation, (ii) receipt of any
notice from the PBGC of its intention to seek termination of
any Plan or appointment of a trustee therefor, (iii) its
intention to terminate or withdraw from any Plan, and (iv) the
occurrence of any event affecting any Plan which could result
in the incurrence by the Borrower of any material liability,
fine or penalty, or any material increase in the contingent
liability of the Borrower under any post-retirement Welfare
Plan benefit.
Section 5.21. Punch List. The Borrower shall
provide a copy of any proposed Punch List prepared in
accordance with Section 10.3 of the EPC Contract (or in
accordance with any similar provision in the RO EPC Contract,
if applicable) to the Agent Bank and the Independent Engineer
promptly upon, and in any event within five (5) Business Days
after, receipt by the Borrower of any proposed Punch List from
the EPC Contractor (or the RO EPC Contractor, if applicable).
The Agent Bank (in consultation with the Independent Engineer)
shall have fifteen (15) days from receipt thereof by the Agent
Bank to approve or reject any proposed Punch List delivered to
the Agent Bank pursuant to the preceding sentence. If the
Agent Bank (in consultation with the Independent Engineer)
approves or fails to reject any proposed Punch List within
fifteen (15) days of receipt thereof by the Agent Bank, such
Punch List shall become effective. If the Agent Bank (in
consultation with the Independent Engineer) rejects any
proposed Punch List within fifteen (15) days of receipt thereof
by the Agent Bank, such Punch List shall not be effective and
the Borrower shall submit a revised version of such Punch List
to the Agent Bank and the Independent Engineer for approval in
accordance with this Section 5.21.
Section 5.22. Operator Termination. The Borrower
shall terminate the Operator pursuant to Section 12.4 of the
Operation and Maintenance Agreement if the
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Borrower is required to pay more than $1,900,000 in Operator
Standby Power Costs (as defined in the Operation and
Maintenance Agreement) in any Operating Year.
Section 5.23. Minor Punch List Items. The Borrower
shall cause all Minor Punch List Items to be completed on or
prior to the date which is twelve (12) months after the
Provisional Acceptance Date (as defined in the EPC Contract).
Section 5.24. Gas Agreement. Within four (4) years
of the Commercial Operation Date, the Borrower shall either (i)
enter into one or more contracts which shall be in form and
substance satisfactory to the Required Banks and which in the
aggregate (a) have a term of not less than twenty (20) years
and (b) provide the Borrower with natural gas transportation
and storage services substantially equivalent in quality and
quantity to the natural gas transportation and storage services
required to be provided by NIGAS under the NIGAS Agreement, or
(ii) provide other arrangements which shall be in form and
substance satisfactory to the Required Banks.
Section 5.25. Millennium Letter of Credit. At any
time the Borrower is required under Section 32.1 of the Energy
Services Agreement to cause the letter of credit described in
such Section to be in full force and effect, the Borrower,
pursuant to such Section, shall deliver an extension of such
letter of credit or a replacement letter of credit no later
than three hundred sixty-five (365) days prior to the
termination of the existing letter of credit.
ARTICLE VI. NEGATIVE COVENANTS.
The Borrower covenants and agrees that on and after the
Closing Date until the Loan Agreement Termination Date, unless
otherwise agreed by the Required Banks:
Section 6.1. Distributions. The Borrower shall not
make, pay or declare any distributions or return any capital to
its members or authorize or make any other distribution,
payment or delivery of property or cash to its members as such,
or redeem, retire, purchase or otherwise acquire, directly or
indirectly, any membership interests, units or other equity
interests of the Borrower now or hereafter outstanding (or any
options or rights issued with respect thereto), or set aside
any funds for any of the foregoing purposes (all the foregoing
"Distributions"), except upon satisfaction of the Distribution
Conditions and otherwise in accordance with the Section 7.9.
Section 6.2. Indebtedness. The Borrower shall not
create, incur, assume, suffer to exist or otherwise become or
remain directly or indirectly liable with respect to any
Indebtedness, other than the following (such Indebtedness,
"Permitted Debt"):
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(a) Indebtedness incurred hereunder and under
the other Financing Documents;
(b) Indebtedness incurred under any Debt
Service Reserve Letter of Credit;
(c) Indebtedness incurred to finance the making
of capital improvements to the Project to the extent such
capital improvements are reasonably required by applicable Law;
provided that (i) the Independent Engineer shall confirm that
such capital improvements are required to comply with
applicable Law and (ii) after giving effect to the incurrence
of such Indebtedness, the average projected Debt Service
Coverage Ratio shall not be less than 1.4 to 1 and the minimum
projected Debt Service Coverage Ratio shall not be less than
1.2 to 1, each through the Final Maturity Date, as certified by
an Authorized Officer of the Borrower and confirmed as
reasonable by the Independent Engineer;
(d) Indebtedness incurred to finance the making
of capital improvements to the Project which are not required
by applicable Law; provided that (i) no Default or Event of
Default shall have occurred and be continuing or shall result
from the incurrence of such Indebtedness and (ii) after giving
effect to the incurrence of such Indebtedness, the average
projected Debt Service Coverage Ratio shall not be less than
1.5 to 1 and the minimum projected Debt Service Coverage Ratio
shall not be less than 1.3 to 1, each through the Final
Maturity Date, as certified by an Authorized Officer of the
Borrower and confirmed as reasonable by the Independent
Engineer;
(e) Indebtedness incurred for working capital
purposes in an amount not to exceed $5,000,000;
(f) Indebtedness incurred in connection with
Interest Rate Protection Agreements entered into to provide for
a hedge against interest payable on other Permitted Debt;
(g) Trade Indebtedness, (other than for
borrowed money), arising in the ordinary course of business;
provided that such Indebtedness shall not be more than ninety
(90) days past due, unless such Indebtedness is subject to a
Contest;
(h) To the extent deemed Indebtedness (other
than for borrowed money), obligations under the Project
Documents; and
(i) Purchase money debt in an amount not to
exceed $1,000,000.
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Section 6.3. Liens. The Borrower shall not create,
incur, assume or suffer or permit to exist, directly or
indirectly, any Lien on any of its property now owned or
hereafter acquired, other than the following (such Liens,
"Permitted Liens"):
(a) Liens granted to the Collateral Agent for
the benefit of the Secured Parties pursuant to the Security
Documents;
(b) Liens to secure Permitted Debt; provided
that (i) no Liens shall secure Indebtedness pursuant to clause
(e), (f) (except with respect to Secured Interest Rate
Protection Agreements entered into by the Borrower with a
Bank), (g), or (h) of Section 6.2, (ii) Indebtedness incurred
pursuant to clause (i) of Section 6.2 shall be secured only by
Liens on the assets financed with such Indebtedness and (iii)
any creditor providing Indebtedness pursuant to clause (b), (c)
or (d) of Section 6.2 shall enter into an intercreditor
agreement in form and substance satisfactory to the Agent Bank;
(c) Liens (other than any Lien imposed by
ERISA) in connection with workmen's compensation, unemployment
insurance or other social security or pension obligations;
(d) Mechanics', workmen's, materialmen's,
suppliers', construction or like Liens, in each case (i) for
amounts not yet due and payable or (ii) for amounts due and
payable with respect to ordinary course claims which are
subject to a Contest, unless the existence of such Liens could
reasonably be expected to result in a Material Adverse Effect;
(e) Servitudes, easements, rights-of-way,
restrictions or minor defects or irregularities in title and
such other encumbrances or charges against real property or
interests therein referred to in the Title Insurance Policy as
are of a nature generally existing with respect to properties
of a similar character and which do not in any way materially
interfere with the use thereof;
(f) Liens for Taxes not yet delinquent or, if
delinquent, which are subject to a Contest; and
(g) Attachment or judgment Liens; provided that
(i) the existence of such Liens could not reasonably be
expected to result in a Material Adverse Effect and (ii) such
Liens are discharged within thirty (30) days of the creation
thereof.
Section 6.4. Restriction on Fundamental Changes.
The Borrower shall not enter into any merger or consolidation,
or liquidate, wind-up or dissolve (or suffer any liquidation or
dissolution of) itself or discontinue its business.
86
Section 6.5. Subsidiaries; Advances, Investments and
Loans. The Borrower shall not form or have any Subsidiaries,
make investments, loans or advances or otherwise acquire any
stock, obligations or securities of any Person, except that the
Borrower may maintain the Project Accounts and invest amounts
on deposit therein in Permitted Investments in accordance with
Section 7.2.
Section 6.6. Arm's Length Transactions. The
Borrower shall not enter into any transaction or series of
related transactions with any person (including any Affiliate
of the Borrower) other than on an arm's-length basis.
Section 6.7. Sole Purpose Nature. The Borrower
shall not enter into or engage in any business other than the
ownership, development, financing, construction, operation and
maintenance of the Project and the activities related thereto.
Section 6.8. Certain Restrictions. Except in
connection with Permitted Debt and Permitted Liens, the
Borrower shall not enter into any agreement (other than the
Transaction Documents as in effect on the Closing Date) which
restricts the ability of the Borrower to amend any Transaction
Document, sell any of its assets, create Liens, incur
Indebtedness or make Distributions.
Section 6.9. Sale of Assets. The Borrower shall not
sell, assign, dispose of or abandon the Project or any of its
other assets (other than electricity, steam and any by-products
produced by the Project) or assign any rights other than (so
long as no Default or Event of Default has occurred and is
continuing) (a) those in the ordinary course of its business
for cash equal to the fair market value of such assets at the
time of sale, (b) sales of equipment which is uneconomic or
obsolete or sales of assets that are no longer used or useful
to the Borrower, (c) any sale, assignment or transfer by the
Borrower to any Affiliate of the Borrower, provided that the
assets so sold, assigned, or transferred are (i) not integral
to the proper and efficient operation and maintenance of the
Project, (ii) sold for fair market value and (iii) sold for
consideration consisting of cash, cash equivalents (other than
notes or other obligations of the Person to whom such assets
are transferred or such Person's Affiliates) or other assets
useful to the operation and maintenance of the Project, or (d)
any assignment of rights constituting a Permitted Lien.
Section 6.10. Amendment of Project Documents. The
Borrower shall not terminate, assign, modify or waive any
provision of, or consent to the termination, assignment,
modification or waiver of any provision of, any Project
Document without the prior written consent of the Agent Bank.
Section 6.11. Change Orders; Budgets.
(a) The Borrower shall not(x) enter into any Change
Order or (y) modify or permit any modification of the
Construction Budget; provided that the Borrower may enter into
Change Orders or any such modifications which do not exceed
$1,000,000 individually or $3,000,000 in the
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aggregate and which have been reviewed and approved by the
Independent Engineer, if, after giving effect to such Change
Orders or modifications, (a) the Project when completed will
have at least 117 MW installed capacity and at least a 114 MW
net capacity and will have boiler capacity to produce 1,080,000
pounds per hour of steam, (b) the Project will achieve
Acceptance and Commercial Operation and all Punch List items
(other than Minor Punch List Items) will be completed on or
before the Date Certain and (c) total Project Costs will not
exceed the sum of the Project Equity Amount and the Total
Construction Loan Commitment.
(b) The Borrower shall not (x) enter into any O&M
Change Order or (y) modify or permit any modification of any
Operating Budget or Major Maintenance Budget; provided that the
Borrower may enter into O&M Change Orders or any such
modifications (i) which do not exceed $250,000 individually or
$500,000 in the aggregate in any one Operating Year, if, after
giving effect to such O&M Change Orders or modifications, the
projected Debt Service Coverage Ratio for such Operating Year
shall be equal to or greater than 1.2 to 1, or (ii) which are
required pursuant to Section 6.3.1, 6.3.2, 6.3.3 or 6.4 of the
Operation and Maintenance Agreement.
Section 6.12. Margin Regulations. No part of the
proceeds of any Loan shall be used by the Borrower to purchase
or carry any Margin Stock (as defined in Regulation U) or to
extend credit to others for the purpose of purchasing or
carrying any Margin Stock. The Borrower shall not use the
proceeds of any Loan in a manner that will violate or be
inconsistent with the provisions of Regulations G, T, U or X.
Section 6.13. Additional Project Agreements. The
Borrower shall not enter into any material agreement relating
to the construction, operation, maintenance or use of the
Project, except as contemplated on the Closing Date or as
approved in writing by the Agent Bank.
Section 6.14. Expenditures. The Borrower shall not
make any expenditures for operation and maintenance or any
capital expenditures except (a) in accordance with the
Construction Budget or the current annual Operating Budget, as
the case may be, (b) for the payment of Fuel Expenses or (c) as
approved in writing by the Agent Bank.
Section 6.15. Amendments to Construction Schedule or
Progress Payment Schedule; Test Procedures.
(a) The Borrower shall not change or permit any
change to be made to the Construction Schedule or the Progress
Payment Schedule, except changes which have been reviewed and
approved by the Independent Engineer and which do not impair
the ability of the Project to achieve Acceptance and Commercial
Operation, or the ability of the EPC Contractor or the RO EPC
Contractor, as the case may be, to complete all Punch List
items (other than Minor Punch List Items), on or prior to the
Date Certain; provided that the Borrower shall not change or
permit any change to be made to Schedule
88
O to the EPC Contract without the prior written consent of the
Agent Bank, (in consultation with the Independent Engineer).
(b) The Borrower shall not approve the Performance
Tests unless such Performance Tests have been reviewed and
approved by the Independent Engineer, which approval shall not
be unreasonably withheld.
Section 6.16. Restricted Uses. The Borrower shall
not use, maintain, operate or occupy or allow the use,
maintenance or occupancy of any portion of the Project or the
Site for any purpose:
(a) which is reasonably likely to create a
significant hazard, unless safeguarded as required by
applicable Law; provided, however, that this clause (a) shall
not be deemed to prohibit the Borrower from carrying out the
Project in accordance with the terms of the Project Documents
in a reasonable and prudent manner;
(b) which may constitute a public or private
nuisance that could reasonably be expected to result in a
Material Adverse Effect;
(c) which may make void, voidable or
cancelable, or increase the premium of, any insurance then in
force with respect to the Site or the Project or any part
thereof unless, in the case of an increase in premium, the
Borrower gives proof of payment of such increase; or
(d) other than for the intended purpose thereof
in connection with the development, construction, operation and
maintenance of the Project.
Section 6.17. NGC Agreement. The Borrower shall not
reject any proposed Commodity Price (as defined in the NGC
Agreement) and/or any proposed Reservation Charge (as defined
in the NGC Agreement) except as approved in writing by the
Agent Bank.
ARTICLE VII. ACCOUNTS AND CASH FLOWS.
Section 7.1. Establishment and Maintenance of
Project Accounts.
(a) The Borrower hereby establishes with the
Collateral Agent each of the Construction Account, the Revenue
Account, the Operation and Maintenance Account, the Debt
Payment Account, the Debt Service Reserve Account, the
Maintenance Reserve Account, the NGC Reserve Account, the
Distribution Retention Account, the Letter of Credit Account
and the Proceeds Account (collectively, the "Project Accounts")
in the name of the Collateral Agent. All Project Accounts
shall be in the exclusive possession of, and under the
exclusive dominion and control of, the Collateral Agent. The
Borrower hereby irrevocably di-
89
rects and authorizes the Collateral Agent to deposit into and
withdraw funds from such Project Accounts in accordance with
the terms and conditions of this Agreement. The Borrower shall
have no right of withdrawal in respect of any of the Project
Accounts except in accordance with this Article VII. Each
transfer of funds to be made hereunder shall be made only to
the extent that funds are on deposit in the affected Project
Account, and the Collateral Agent shall have no responsibility
to make additional funds available in the event that funds on
deposit are insufficient. All instructions regarding the
Project Accounts, monies on deposit therein and Permitted
Investments credited thereto shall be delivered to the
Collateral Agent at its address specified below its signature
hereto (x) in writing or (y) by facsimile with an original
writing to be delivered within five (5) Business Days thereof;
provided that the Collateral Agent may discontinue the ability
to provide such instructions by facsimile at any time by
delivery of written notice of such discontinuation to each
other party hereto in accordance with Section 11.3. Upon the
occurrence and during the continuance of any Default or Event
of Default, the Collateral Agent shall accept instructions with
respect to the Project Accounts solely from the Agent Bank and
shall not accept such instructions from the Borrower or any
representative thereof. On or before the fifteenth (15th)
Business Day of each month, the Collateral Agent shall provide
to the Borrower statements reflecting all deposits to,
withdrawals from and other activities in respect of each of the
Project Accounts during the preceding month.
Section 7.2 Permitted Investments.
(a) Upon the written request of the Borrower,
the Collateral Agent shall invest and reinvest any balances in
any Project Account from time to time in Permitted Investments
as instructed by the Borrower in such written request; provided
that (i) if the Borrower fails to so instruct the Collateral
Agent with respect to any amounts on deposit in any of the
Project Accounts, such amounts shall be invested in accordance
with standing instructions set forth in a side letter between
the Borrower and the Collateral Agent, (ii) upon the occurrence
and during the continuance of a Default or an Event of Default,
the Collateral Agent shall invest and reinvest such balances in
Permitted Investments as instructed by the Agent Bank, (iii)
all such Permitted Investments shall be held in the name of the
Collateral Agent, (iv) no Permitted Investment shall be made
unless the Collateral Agent shall retain a perfected first
priority Lien on such Permitted Investment securing the
Obligations and all filings and other actions necessary to
ensure the validity, perfection and priority of such Lien have
been taken, and (v) no more than ten (10) Permitted Investments
may be maintained at any time. All funds in any Project
Account that are invested in a Permitted Investment are deemed
to be held in such Project Account for all purposes of this
Agreement and the Security Documents. All investments and
reinvestments shall be held in the name and be under the sole
dominion and control of the Collateral Agent. The Collateral
Agent shall have no liability for any loss in investments of
funds in any Project Account that are invested in Permitted
Investments.
(b) The Collateral Agent agrees that the
interest paid or other earnings on the Permitted Investments
made hereunder shall be credited to the Project
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Account from which the monies used to make such Permitted
Investment were drawn on the date received by the Collateral
Agent and held therein.
Section 7.3. Funding of the Construction Account.
The proceeds of all Construction Loans and all Equity
Contributions (other than Default Equity Contributions) shall
be deposited in the Construction Account. So long as no
Default or Event of Default shall have occurred and be
continuing, the Collateral Agent shall make any payment out of
the Construction Account in accordance with the instructions
set forth in any Disbursement Certificate delivered to the
Collateral Agent by the Borrower at least three (3) Business
Days prior to the day on which such payment is to be made.
Section 7.4. Funding of the Revenue Account and
Payment of Operation and Maintenance Expenses.
(a) The Borrower agrees and confirms (i) that
it has irrevocably instructed each of the other parties to each
Project Document in effect as of the Closing Date pursuant to
which payments may be made to or received by the Borrower, and
that it will so instruct all parties to any Additional Project
Document, that all payments due or to become due to the
Borrower under each such Project Document (other than payments
the proceeds of which are required to be deposited into the
Proceeds Account pursuant to Section 7.10) shall be made
directly to the Collateral Agent for deposit in the Revenue
Account and (ii) that each of such other parties to such
Project Document has agreed (or will be caused by the Borrower
to agree) to make all such payments (other than payments the
proceeds of which are required to be deposited into the
Proceeds Account pursuant to Section 7.10) directly to the
Collateral Agent for deposit in the Revenue Ac count. If,
notwithstanding the foregoing, any payments due to the Borrower
are remitted directly to the Borrower (or any Affiliate of the
Borrower), the Borrower shall (or shall cause any such
Affiliate to) hold such payments in trust for the Collateral
Agent and shall promptly remit such payments (other than
payments the proceeds of which are required to be deposited
into the Proceeds Account pursuant to Section 7.10) to the
Collateral Agent for deposit in the Revenue Account, in the
form received, with any necessary endorsements. All business
interruption insurance proceeds shall also be deposited into
the Revenue Account.
(b) Between the Commercial Operation Date and
the Conversion Date, if no Event of Default shall have occurred
and be continuing, the Collateral Agent shall, on one Business
Day of each month specified by the Borrower in a writing
delivered to the Collateral Agent in accordance with Section
7.1, transfer from the Revenue Account to the Operation and
Maintenance Account the amount required to bring the balance of
the Operation and Maintenance Account to the amount specified
in the Preliminary Operating Budget in respect of budgeted
Operation and Maintenance Expenses for the Project for the next
month. If no Event of Default shall have occurred and be
continuing, then the Collateral Agent shall on the Conversion
Date and on each Payment Date thereafter (i) transfer to the
Operation and Maintenance Account from the Revenue Account the
amount required to bring the balance of the Operation and
Maintenance Account to an amount
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equal to the sum of (A) the estimated Fuel Expenses incurred
during the current month (or with respect to the transfer
occurring on the Conversion Date, any Fuel Expenses not paid
with the proceeds of the Construction Loans made pursuant to
the final Notice of Borrowing delivered hereunder), as notified
to the Collateral Agent by the Borrower in a writing delivered
to the Collateral Agent in accordance with Section 7.1, plus
(B) the amount specified in the current Operating Budget in
respect of other budgeted Operation and Maintenance Expenses
for the Project for the next month, and (ii) transfer to the
Operation and Maintenance Account from the Maintenance Reserve
Account such amounts as are necessary to pay any Major
Maintenance Expenses to be paid in the next month as notified
to the Collateral Agent by the Borrower in a writing delivered
to the Collateral Agent in accordance with Section 7.1 and
approved by the Agent Bank and the Independent Engineer in the
Major Maintenance Budget for that year or otherwise approved by
the Agent Bank and the Independent Engineer in writing. The
Operation and Maintenance Account shall be maintained as a
revolving fund, from which the Borrower may draw and pay from
time to time such amounts as shall be required to pay Operation
and Maintenance Expenses upon delivery to the Collateral Agent
of a Disbursement Certificate at least three (3) Business Days
prior to the day upon which any of such payments are to be
made.
(c) If the Borrower determines reasonably and
in good faith that the amount available in the Operation and
Maintenance Account is insufficient to pay the reasonable and
necessary Operation and Maintenance Expenses for the Project
for the current calendar month, an Authorized Officer of the
Borrower shall deliver a certificate to the Collateral Agent
and the Banks setting forth the amount of such insufficiency
and the cause therefor. The Collateral Agent shall transfer
into the Operations and Maintenance Account such amounts as
shall be necessary to fund such insufficiency, first, from the
Revenue Account, then from the Distribution Retention Account,
then from the Proceeds Account, then from the Maintenance
Reserve Account, then from the NGC Reserve Account and finally
from the Debt Service Reserve Account (in each case to the
extent funds are available in each such Project Account).
Section 7.5. Debt Payment Account. The Collateral
Agent shall, on each Payment Date occurring after the
Conversion Date, transfer from the Revenue Account to the Debt
Payment Account, to the extent of funds remaining on deposit in
the Revenue Account after the application of funds provided for
in Section 7.4 on such Payment Date: () first, an amount equal
to one-third (1/3) of the next quarterly payment of Mandatory
Secured Debt Service, and () second, an amount equal to one-
third (1/3) of the next quarterly payment of Mandatory
Unsecured Debt Service. If at any time amounts on deposit in
the Debt Payment Account are insufficient to make all payments
of Mandatory Secured Debt Service and Mandatory Unsecured Debt
Service, then the Collateral Agent shall transfer to the Debt
Payment Account such amounts as shall be necessary to fund such
insufficiency, first from the Revenue Account, then from the
Distribution Retention Account, then from the Debt Service
Reserve Account, then from the NGC Reserve
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Account, then from the Proceeds Account and finally from the
Maintenance Reserve Account; provided that the Collateral Agent
shall transfer from the Debt Service Reserve Account only the
portion of such insufficiency which is attributable to the
principal of, interest on and Fees and other amounts due in
respect of the Loans. Amounts on deposit in the Debt Payment
Account shall be applied to make payments on Mandatory Secured
Debt Service and Mandatory Unsecured Debt Service () with
respect to amounts due on the Loans, when due and payable in
accordance with the terms hereof, and () with respect to
amounts due on other Mandatory Secured Debt Service and
Mandatory Unsecured Debt Service, as requested in a
Disbursement Certificate delivered by the Borrower to the
Collateral Agent at least three (3) Business Days prior to the
day on which any of such payments are to be made; provided that
no payments on Mandatory Unsecured Debt Service shall be made
while any amounts remain due and unpaid on any Mandatory
Secured Debt Service.
Section 7.6. Funding of the Maintenance Reserve
Account. The Collateral Agent shall, on each Payment Date
occurring after the Conversion Date, transfer from the Revenue
Account to the Maintenance Reserve Account, to the extent of
funds remaining on deposit in the Revenue Account after the
application of funds provided for in Sections 7.4 and 7.5 on
such Payment Date, an amount equal to the sum of (a) one
twelfth (1/12th) of the Maintenance Reserve Amount applicable
to the calendar year in which such Payment Date occurs plus (b)
the shortfall (if any) in the amount transferred pursuant to
this Section 7.6 in the immediately preceding calendar months.
In each month in which a Major Maintenance Expense is to be
paid, the Collateral Agent shall transfer funds from the
Maintenance Reserve Account to the Operation and Maintenance
Account as provided in Section 7.4(b).
Section 7.7. Funding of the Debt Service Reserve
Account. The Borrower shall initially fund the Debt Service
Reserve Fund up to the Debt Service Reserve Required Balance on
or before the Conversion Date with the making of a cash deposit
and/or the delivery of a Debt Service Reserve Letter of Credit
to the Collateral Agent. The Collateral Agent shall, on each
Payment Date occurring after the Conversion Date, transfer an
amount from the Revenue Account to the Debt Service Reserve
Account, to the extent of funds remaining on deposit in the
Revenue Account after the application of funds provided for in
Sections 7.4, 7.5 and 7.6 on such Payment Date, the sum of
which amount and the amounts then on deposit therein and the
amount available for drawing under any Debt Service Reserve
Letter of Credit shall equal the Debt Service Reserve Required
Balance. Funds on deposit in the Debt Service Reserve Account
shall be transferred to the Debt Payment Account as and when
needed pursuant to Section 7.5. If at any time amounts on
deposit in the Debt Service Reserve Account, together with the
amount available for drawing under any Debt Service Reserve
Letter of Credit, shall exceed the then current Debt Service
Reserve Required Balance, such excess shall be transferred to
the Revenue Account.
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Section 7.8. Funding of the NGC Reserve Account.
The Collateral Agent shall, on each Payment Date occurring
after the Conversion Date, transfer an amount from the Revenue
Account to the NGC Reserve Account, to the extent of funds
remaining on deposit in the Revenue Account after the
application of funds provided for in Sections 7.4, 7.5, 7.6 and
7.7 on such Payment Date, such that the sum of such amount and
the amounts then on deposit in the NGC Reserve Account shall be
at least equal to the greater of: (a) (i) the average of the
Forward Market Price in effect on the days that the Forward
Market Price is published during the period beginning on the
Payment Date immediately preceding such Payment Date and ending
on such Payment Date multiplied by sixty (60) multiplied by
fourteen thousand five hundred (14,500) less (ii) $3,000,000;
or (b) the amount by which the face amount of the letter of
credit required to be maintained by the Borrower pursuant to
Section 6.1(b) of the NGC Agreement exceeds $3,000,000 (the
greater of the amounts described in clauses (a) and (b), the
"NGC Reserve Required Balance"). If at any time the Forward
Market Price is greater than one hundred thirty-three percent
(133%) of the Forward Market Price in effect as of the date of
the NGC Agreement, then the Collateral Agent, upon receipt of
written notice thereof from the Agent Bank, shall use all
amounts then on deposit in the NGC Reserve Account to cash
collateralize the letter of credit required to be maintained by
the Borrower pursuant to Section 6.1(b) of the NGC Agreement.
If at any time the amounts on deposit in the NGC Reserve
Account shall exceed the then current NGC Reserve Required
Balance, such excess shall be transferred to the Revenue
Account.
Section 7.9. Funding of the Distribution Retention
Account; Distributions. The Collateral Agent shall, on each
Payment Date occurring after the Conversion Date, transfer from
the Revenue Account to the Distribution Retention Account all
amounts remaining on deposit in the Revenue Account after the
application of funds provided for in Sections 7.4, 7.5, 7.6,
7.7 and 7.8 on such Payment Date. On each Quarterly Date
following the Conversion Date, the Collateral Agent shall
disburse all or any portion of funds on deposit in the
Distribution Retention Account to or as directed by the
Borrower upon receipt by the Collateral Agent of a certificate
of an Authorized Officer of the Borrower correctly stating that
the following conditions (the "Distribution Conditions") have
been satisfied and will continue to be satisfied as of such
Quarterly Date, which certificate shall be delivered to the
Collateral Agent at least three (3) Business Days prior to such
Quarterly Date:
(i) the Conversion Date has occurred;
(ii) no default or event of default under any
Transaction Document has occurred and is continuing or
will result from such disbursement;
(iii) all Project Accounts have been funded to their
then current required levels; and
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(iv) (A) the Debt Service Coverage Ratio for the
previous four (4) fiscal quarters was at least 1.2 to 1 or
(B) with respect to any Quarterly Date occurring during
the period ending twelve (12) months after the Conversion
Date, the Debt Service Coverage Ratio for the period from
the Conversion Date through the end of the most recent
fiscal quarter was at least 1.2 to 1.
Section 7.10. Funding of the Proceeds Account;
Application of Proceeds.
(a) Deposit of Proceeds. The Borrower shall
deposit or cause to be deposited each of the following into the
Proceeds Account:
(i) all proceeds in respect of any
property insurance policy (other than proceeds of business
interruption insurance or delayed opening insurance)
received by or on behalf of the Borrower in connection
with partial or total damage to or destruction of the
Project (such proceeds, "Loss Proceeds" and such event, an
"Event of Loss");
(ii) all proceeds received by or on behalf
of the Borrower in connection with any action to condemn,
seize or appropriate all or any portion of the Project
(such proceeds, "Condemnation Proceeds" and such event, an
"Event of Condemnation");
(iii) all Liquidated Performance Damages
received by or on behalf of the Borrower (except
Liquidated Performance Damages received pursuant to the
Operation and Maintenance Agreement or the O&M Guarantee,
which shall be deposited in the Revenue Account);
(iv) all Liquidated Delay Damages received
by or on behalf of the Borrower;
(v) all proceeds received by or on behalf
of the Borrower in connection with any sales of assets
(other than electricity and steam produced by the Project
and sold pursuant to the Energy Services Agreement or
otherwise) of the Borrower (such proceeds, "Asset Sale
Proceeds");
(vi) all proceeds received by or on behalf
of the Borrower (A) as indemnification or contribution
payments, (B) pursuant to warranties contained in the
Project Documents, (C) as a judgment, decree or arbitral
award or (D) as a result of any similar provision or
circumstance (such proceeds, "Other Proceeds"); and
(vii) all Default Equity Proceeds received
by or on behalf of the Borrower.
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(b) Application of Loss Proceeds.
(i) The Collateral Agent shall transfer
any Loss Proceeds in an amount less than or equal to
$5,000,000 which are received by or on behalf of the
Borrower and deposited in the Proceeds Account in
accordance with clause (a)(i) of this Section 7.10 to (x)
prior to the Conversion Date, the Construction Ac count,
and (y) after the Conversion Date, the Revenue Account,
each for application in accordance with the other
provisions of this Article VII.
(ii) If (A) Loss Proceeds in excess of
$5,000,000 are received by or on behalf of the Borrower
and deposited in the Proceeds Account in accordance with
clause (a)(i) of this Section 7.10 and (B) no Approved
Restoration Plan with respect to the relevant Event of
Loss shall have been developed within ninety (90) days
after the date such Loss Proceeds were received, the
Collateral Agent shall apply such Loss Proceeds to the
prepayment of outstanding Loans and accrued interest
thereon in accordance with Section 2.13(c).
(iii) If (A) Loss Proceeds in excess of
$5,000,000 are received by or on behalf of the Borrower
and deposited in the Proceeds Account in accordance with
clause (a)(i) of this Section 7.10 and (B) an Approved
Restoration Plan with respect to the relevant Event of
Loss shall have been developed within ninety (90) days
after the date such Loss Proceeds were received, the
Collateral Agent shall, upon satisfaction of the
conditions set forth in clause (i) of this Section 7.10
and provided no Event of Default (other than an Event of
Default under Section 8.1(c) resulting from a breach of
the covenants set forth in Section 5.9) shall have
occurred and be continuing, withdraw and pay to the
Borrower portions of such Loss Proceeds from time to time
in installments sufficient to effect such Approved
Restoration Plan. After completion of such Approved
Restoration Plan, the Collateral Agent shall apply any of
such Loss Proceeds in excess of the amount needed to
effect such Approved Restoration Plan to the prepayment of
outstanding Loans and accrued interest thereon in
accordance with Section 2.13(c).
(c) Application of Condemnation Proceeds.
(i) The Collateral Agent shall transfer
any Condemnation Proceeds in an amount less than or equal
to $5,000,000 which are received by or on behalf of the
Borrower and deposited in the Proceeds Account in
accordance with clause (a)(ii) of this Section 7.10 to (x)
prior to the Conversion Date, the Construction Account,
and (y) after the Conversion Date, the Revenue Account,
each for application in accordance with the other
provisions of this Article VII.
(ii) If (A) Condemnation Proceeds in
excess of $5,000,000 are received by or on behalf of the
Borrower and deposited in the
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Proceeds Account in accordance with clause (a)(ii) of this
Section 7.10 and (B) no Approved Restoration Plan with
respect to the relevant Event of Condemnation shall have
been developed within ninety (90) days after the date such
Condemnation Proceeds were received, the Collateral Agent
shall apply such Condemnation Proceeds to the prepayment
of outstanding Loans and accrued interest thereon in
accordance with Section 2.13(d).
(iii) If (A) Condemnation Proceeds in
excess of $5,000,000 are received by or on behalf of the
Borrower and deposited in the Proceeds Account in
accordance with clause (a)(ii) of this Section 7.10 and
(B) an Approved Restoration Plan with respect to the
relevant Event of Condemnation shall have been developed
within ninety (90) days after the date such Condemnation
Proceeds were received, the Collateral Agent shall, upon
satisfaction of the conditions set forth in clause (i) of
this Section 7.10 and provided no Event of Default (other
than an Event of Default under Section 8.1(c) resulting
from a breach of the covenants set forth in Section 5.9)
shall have occurred and be continuing, withdraw and pay to
the Borrower portions of such Condemnation Proceeds from
time to time in installments sufficient to implement such
Approved Restoration Plan. After completion of such
Approved Restoration Plan, the Collateral Agent shall
apply any of such Condemnation Proceeds in excess of the
amount needed to effect such Approved Restoration Plan to
the prepayment of outstanding Loans and accrued interest
thereon in accordance with Section 2.13(d).
(d) Liquidated Performance Damages.
(i) Upon deposit of any Liquidated
Performance Damages in the Proceeds Account, the
Collateral Agent shall transfer an amount of such
Liquidated Performance Damages to the Construction Account
that is needed to pay any Project Costs due or which are
projected to become due in accordance with the
Construction Budget, the Construction Schedule and the
Progress Payment Schedule, as set forth in a certificate
of an Authorized Officer of the Borrower; provided,
however, that none of such Liquidated Performance Damages
shall be applied to the payment of Energy Adjustment
Payments without the prior written consent of the Required
Banks, which consent shall not be unreasonably withheld or
delayed.
(ii) The Collateral Agent shall apply any
Liquidated Performance Damages remaining on deposit in the
Proceeds Account after application of clause (i)
immediately above to the prepayment of outstanding Loans
and accrued interest thereon in accordance with Section
2.13(e).
(e) Liquidated Delay Damages.
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(i) Upon deposit of any Liquidated Delay
Damages in the Proceeds Account, the Collateral Agent
shall transfer an amount of such Liquidated Delay Damages
to the Construction Account that is needed to pay any
Project Costs due or which are projected to become due in
accordance with the Construction Budget, the Construction
Schedule and the Progress Payment Schedule, as set forth
in a certificate of an Authorized Officer of the Borrower.
(ii) The Collateral Agent shall apply any
Liquidated Delay Damages remaining on deposit in the
Proceeds Account after application of clause (i)
immediately above to the prepayment of outstanding Loans
and accrued interest thereon in accordance with Section
2.13(f).
(f) Asset Sale Proceeds.
(i) The Collateral Agent shall transfer
any Asset Sale Proceeds in an amount less than or equal to
$5,000,000 which are received by or on behalf of the
Borrower and deposited in the Proceeds Account in
accordance with clause (a)(v) of this Section 7.10 to (x)
prior to the Conversion Date, the Construction Account,
and (y) after the Conversion Date, the Revenue Account,
each for application in accordance with the other
provisions of this Article VII.
(ii) If (A) Asset Sale Proceeds in excess
of $5,000,000 are received by or on behalf of the Borrower
and deposited in the Proceeds Account in accordance with
clause (a)(v) of this Section 7.10 and (B) the Collateral
Agent shall not receive within ninety (90) days from the
receipt of such Asset Sale Proceeds a certificate of an
Authorized Officer of the Borrower stating that such
proceeds shall be used to purchase assets for use in the
Project and setting forth all relevant information
regarding such assets, including, without limitation, the
price and proposed use thereof, the Collateral Agent shall
apply the first $5,000,000 of such Asset Sale Proceeds in
accordance with clause (i) immediately above and the
excess of such Asset Sale Proceeds to the prepayment of
outstanding Loans and accrued interest thereon in
accordance with Section 2.13(g).
(iii) If (A) Asset Sale Proceeds in excess
of $5,000,000 are received by or on behalf of the Borrower
and deposited in the Proceeds Account in accordance with
clause (a)(v) of this Section 7.10 and (B) the Collateral
Agent shall have received within ninety (90) days from the
receipt of such Asset Sale Proceeds a certificate of an
Authorized Officer of the Borrower stating that such
proceeds shall be used to purchase assets for use in the
Project and setting forth all relevant information
regarding such assets, including, without limitation, the
price and proposed use thereof, the Collateral Agent
shall, provided no Event of Default shall have occurred
and be continuing, withdraw from the Proceeds Account and
pay to the Borrower an amount (as specified in such
certificate)
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necessary to purchase such assets. The Collateral Agent
shall apply any of such Asset Sale Proceeds in excess of
such amount to the prepayment of outstanding Loans and
accrued interest thereon in accordance with Section
2.13(g).
(g) Application of Other Proceeds.
(i) The Collateral Agent shall transfer
any Other Proceeds in an amount less than or equal to
$5,000,000 which are received by or on behalf of the
Borrower and deposited in the Proceeds Account in
accordance with clause (a)(vi) of this Section 7.10 to (x)
prior to the Conversion Date, the Construction Account,
and (y) after the Conversion Date, the Revenue Account,
each for application in accordance with the other
provisions of this Article VII.
(ii) If (A) Other Proceeds in excess of
$5,000,000 are received by or on behalf of the Borrower
and deposited in the Proceeds Account in accordance with
clause (a)(vi) of this Section 7.10 and (B) the Collateral
Agent shall not receive within ninety (90) days from the
receipt of such Other Proceeds a certificate of an
Authorized Officer of the Borrower stating that such
proceeds shall be used to pay costs associated with the
development, construction, operation or maintenance of the
Project, the Collateral Agent shall apply the first
$5,000,000 of such Other Proceeds in accordance with
clause (i) immediately above and the excess of such Other
Proceeds to the prepayment of outstanding Loans and
accrued interest thereon in accordance with Section
2.13(h).
(iii) If (A) Other Proceeds in excess of
$5,000,000 are received by or on behalf of the Borrower
and deposited in the Proceeds Account in accordance with
clause (a)(vi) of this Section 7.10 and (B) the Collateral
Agent shall have received within ninety (90) from the
receipt of such Other Proceeds a certificate of an
Authorized Officer of the Borrower stating that such
proceeds shall be used to pay costs associated with the
development, construction, operation or maintenance of the
Project, the Collateral Agent shall, provided no Event of
Default shall have occurred and be continuing, withdraw
from the Proceeds Account and pay to the Borrower an
amount (as specified in such certificate) necessary to pay
such costs. The Collateral Agent shall apply any of such
Other Proceeds in excess of such amount to the prepayment
of outstanding Loans and accrued interest thereon in
accordance with Section 2.13(h).
(h) Application of Default Equity
Contributions. Any Default Equity Contributions deposited into
the Proceeds Account pursuant to any Equity Commitment
Agreement shall be applied by the Collateral Agent, at the
direction of the Required Banks, to (i) the payment of Project
Costs and/or (ii) the prepayment of outstanding Loans and
accrued interest thereon, in such proportions as the Required
Banks shall specify. The Collateral Agent shall transfer any
amounts specified by the Required Banks for applica-
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tion to the payment of Project Costs to the Construction
Account upon receipt by the Collateral Agent of a certificate
of an Authorized Officer of the Borrower that such amounts will
be used toward the payment of Project Costs. The Collateral
Agent shall apply any amounts specified by the Required Banks
for application to the prepayment of outstanding Loans and
accrued interest thereon to such prepayment in accordance with
Section 2.13(j).
(i) Application of Funds to an Approved
Restoration Plan. Prior to the withdrawal of monies on deposit
in the Proceeds Account for use in the implementation of an
Approved Restoration Plan in accordance with clause (b) or (c)
of this Section 7.10, the Collateral Agent shall have received
(i) for the initial release of monies in respect of an Approved
Restoration Plan, a copy of such Approved Restoration Plan
approved by all Persons required to approve the same as
provided in the definition of "Approved Restoration Plan" set
forth in Section 1.1 and (ii) for the initial and each
subsequent release of monies in respect of such Approved
Restoration Plan, an executed Restoration Requisition
substantially in the form of Exhibit G, which Restoration
Requisition shall be delivered to the Collateral Agent at least
three (3) Business Days prior to the day on which such release
is to occur.
(j) Excess Proceeds. Any amounts which remain
on deposit in the Proceeds Account after all transfers and
payments required by this Section 7.10 have been made shall be
transferred to (x) prior to the Conversion Date, the
Construction Account, and (y) after the Conversion Date, the
Revenue Account and, in each case, applied in accordance with
the other Sections of this Article VII.
Section 7.11. Letter of Credit Account.
(a) Upon the occurrence of the circumstances
described in Section 2.2(l), the Borrower shall deposit with
the Collateral Agent an amount in cash equal to the aggregate
Stated Amount of all outstanding Letters of Credit. In the
event that the Borrower shall fail to make or fully fund such
payment, the Collateral Agent shall transfer into the Letter of
Credit Account such amounts as shall be necessary to fund such
insufficiency, first, from the Revenue Account, then from the
Distribution Retention Account, then from the Proceeds Account,
then from the Maintenance Reserve Account, then from the Debt
Service Reserve Account and finally from the NGC Reserve
Account (in each case to the extent funds are available in each
such Project Account).
(b) Amounts on deposit in the Letter of Credit
Account shall be held by the Collateral Agent for the benefit
of the Issuing Bank and the other Banks to be used to repay any
Reimbursement Obligation or other Obligation of the Borrower,
or until all Letters of Credit have terminated and all
Reimbursement Obligations and other Obligations have been paid
in full.
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Section 7.12. Event of Default. Notwithstanding any
provision of this Agreement to the contrary, if an Event of
Default shall have occurred and be continuing, all amounts on
deposit in the Project Accounts shall be applied by the
Collateral Agent toward payment of the Obligations or as
otherwise directed by the Agent Bank (acting upon the
instructions of the Required Banks).
ARTICLE VIII. EVENTS OF DEFAULT; REMEDIES.
Section 8.1. Events of Default. Each of the
following events, acts, occurrences or conditions shall
constitute an Event of Default under this Agreement, regardless
of whether such event, act, occurrence or condition is
voluntary or involuntary or results from the operation of Law
or pursuant to or as a result of compliance by any Person with
any judgment, decree, order, rule or regulation of any
Governmental Authority:
(a) Failure to Make Payments. The Borrower
shall default in the payment when due of any principal of or
interest on the Loans (including any mandatory prepayments
required hereunder or any Fees or other Obligations) and such
default shall continue uncured for five (5) or more days.
(b) Breach of Representation or Warranty. Any
representation or warranty made by the Borrower in this
Agreement or any other Transaction Document to which it is a
party or any representation, warranty or statement in any
certificate, financial statement or other document furnished to
the Agent Bank or the Collateral Agent by or on behalf of the
Borrower hereunder or thereunder, shall prove to have been
untrue or misleading in any material respect as of the time
made, confirmed or furnished, and such misrepresentation shall
continue uncured for thirty (30) or more days after the earlier
of (i) the date upon which an Authorized Officer of the
Borrower obtains actual knowledge of such misrepresentation or
(ii) the date upon which the Borrower receives notice of such
misrepresentation from the Agent Bank; provided that, if any
Event of Bankruptcy occurs with respect to the Borrower, the
notice referred to in clause (ii) immediately above shall not
be required and shall be deemed to have been received upon the
occurrence of the event giving rise to such misrepresentation.
(c) Breach of Covenants. (i) The Borrower
shall fail to perform or observe any covenant or obligation
arising under Article VI or under Section 5.1(g), 5.2(a), 5.7,
5.11 or 5.13 and any applicable grace period expressly provided
therein shall have expired, or (ii) the Borrower shall fail to
perform or observe any covenant, term or agreement arising
under this Agreement or any other Financing Document (except
those described in clauses (a) and (b) and subsection (c)(i)
above) and such failure shall continue uncured for thirty (30)
or more days after an Authorized Officer of the Borrower
obtains actual knowledge thereof; provided that if such failure
cannot reasonably be cured in such
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thirty (30) day period but is susceptible to cure within a
longer period, the Borrower may have an additional sixty (60)
days to cure such failure if the Borrower is diligently
pursuing such cure and such extension of the cure period does
not result in a Material Adverse Effect.
(d) Default Under Other Financing Documents.
An event of default under any Financing Document other than
this Agreement shall occur and be continuing beyond the
applicable grace period expressly provided therefor in such
Financing Document.
(e) Nonperformance Under Financing Documents.
Any Project Party (other than the Borrower) shall fail to
perform or observe any covenant, term or agreement contained in
any Financing Document to which it is a party and such failure
shall (i) continue uncured after the expiration of the
applicable grace period expressly provided therefor in such
Financing Document and (ii) result in a Material Adverse
Effect.
(f) Event of Bankruptcy. Any Event of
Bankruptcy shall occur with respect to the Borrower or any
Equity Contributor which has continuing obligations under any
Equity Commitment Agreement.
(g) Judgments. One or more final judgments or
decrees shall be entered by a court or courts of competent
jurisdiction against the Borrower involving in the aggregate a
liability of $5,000,000 or more and none of such judgments or
decrees shall have been bonded, stayed, discharged or vacated
within thirty (30) days after entry thereof.
(h) Environmental Matters. (i) Any
Environmental Claim shall have been asserted against the
Borrower which (after a consideration of (x) reasonably
available and reasonably feasible plans of mitigation or
remediation and (y) the indemnification provisions set forth in
Section 21 of the Ground Lease) could reasonably be expected to
result in a Material Adverse Effect or (ii) any release,
emission, discharge or disposal of any Material of
Environmental Concern in violation of any applicable
Environmental Laws shall have been caused by the Borrower or
the Project and such event could reasonably be expected to
result in a Material Adverse Effect.
(i) Eminent Domain. There shall have occurred
an Event of Condemnation involving a material portion of the
assets or operations of the Project and receipt by or on behalf
of the Borrower of Condemnation Proceeds in excess of
$5,000,000, and the Borrower shall not deliver an Approved
Restoration Plan in respect thereof within sixty (60) days
after the occurrence thereof.
(j) Event of Loss. There shall have occurred
an Event of Loss involving a material portion of the assets or
operations of the Project and receipt by or on
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behalf of the Borrower of Loss Proceeds in excess of
$5,000,000, and the Borrower shall not deliver an Approved
Restoration Plan in respect of such damage or destruction
within sixty (60) days after the occurrence thereof.
(k) Governmental Approvals. Any Necessary
Project Approval or Deferred Approval required to have been
obtained shall not have been obtained, or shall be revoked,
terminated, withdrawn, suspended, modified in any material
adverse respect, withheld or shall otherwise cease to be in
full force and effect for a period of thirty (30) or more days
after the date on which an Authorized Officer of the Borrower
obtains actual knowledge thereof and such event shall result in
a Material Adverse Effect.
(l) Invalidity of Project Documents. Any of
the Project Documents shall cease to be valid and binding and
in full force and effect (other than any Project Document which
expires in accordance with the terms thereof) and the Borrower
shall not replace such Project Document with another contract
acceptable to the Agent Bank (i) immediately if such event
relates to the Energy Services Agreement and (ii) within sixty
(60) days if such event relates to any other Project Document.
(m) Security Interest. Any Security Document
shall cease to be in full force and effect or any Lien
purported to be granted thereby shall cease to be a perfected,
first priority Lien in favor of the Collateral Agent for the
benefit of the Secured Parties and such cessation shall
continue uncured for thirty (30) or more days after the date on
which an Authorized Officer of the Borrower obtains actual
knowledge thereof.
(n) Nonperformance Under Project Documents.
Except to the extent waived or consented to in writing by the
Required Banks, any Project Party (other than the Borrower)
shall fail to perform its obligations or shall assign any of
its rights or obligations under any Project Document, which
failure or assignment shall result in a Material Adverse Effect
and the Borrower shall not cause such Project Party to resume
performance or replace such Project Party with another project
party acceptable to the Agent Bank (i) immediately if such
event relates to the Energy Services Agreement and (ii) within
sixty (60) days if such event relates to any other Project
Document.
(o) Obligations under Equity Commitment
Agreements. Any Equity Contributor shall fail to satisfy its
obligations under its Equity Commitment Agreement.
(p) Acceleration of Debt. Indebtedness of the
Borrower (other than Indebtedness incurred under this
Agreement) in excess of $5,000,000 shall be required to be
prepaid, or shall be declared to be due and payable, other than
by regular scheduled required repayment, prior to the stated
maturity thereof, as the result of the acceleration of the
stated maturity thereof following an event of default
thereunder.
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(q) Ownership of the Borrower. NRG Energy
shall cease to beneficially own, directly or indirectly, at
least thirty percent (30%) of the membership interests in the
Borrower or NRG Energy and/or NRG Generating shall cease to be
the managing member of the Borrower; provided, however, that
such event shall not be an Event of Default if upon the
occurrence of such event, NRG Generating shall (i) directly own
at least fifty percent (50%) of the membership interests in the
Borrower, (ii) have an Investment Grade Rating and (iii) be the
managing member of the Borrower.
(r) Federal Regulation. The Borrower shall
become subject to regulation as (i) an "investment company" or
a company "controlled by" an "investment company" under the
ICA, or (ii) a "holding company," a "public utility company" or
a "subsidiary company" of a "registered holding company" under
PUHCA.
(s) Qualifying Facility. At any time after the
Commercial Operation Date, the Project shall cease to be a
Qualifying Facility and the Borrower shall not otherwise be
able to sell electricity and steam to the Energy Purchaser and
to wholesale purchasers without being regulated as an "electric
utility" or an "electric utility holding company" under
applicable federal or state Law.
(t) Material Adverse Effect. An event or
condition shall occur that could reasonably be expected to
result in a Material Adverse Effect; provided, however, that if
the occurrence of any such event or condition also results in
an Event of Default as specified in any of clauses (a) through
(s) of this Section 8.1, any grace period expressly set forth
in such clause for such event or condition shall apply
notwithstanding that such event or condition could reasonably
be expected to result in a Material Adverse Effect.
Section 8.2. Rights and Remedies.
(a) Notwithstanding any provision of this
Agreement to the contrary, upon the occurrence of any Event of
Default described in Section 8.1(f) and without declaration or
notice of any kind, the Commitments shall automatically and
immediately terminate and the unpaid principal amount of and
any and all accrued interest on the Loans and any and all
accrued Fees and other Obligations shall automatically become
immediately due and payable, with all additional interest from
time to time accrued thereon and without presentation, demand
or protest or other requirements of any kind (including,
without limitation, valuation and appraisement, diligence,
presentment, notice of intent to demand or accelerate and
notice of acceleration), all of which are hereby expressly
waived by Borrower, and the obligation of each Bank to make any
Loan hereunder shall thereupon terminate.
(b) Notwithstanding any provision of this
Agreement to the contrary, upon the occurrence and during the
continuance of any Event of Default (other
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than an Event of Default described in Section 8.1(f)), the
Agent Bank shall at the request, or may with the consent, of
the Required Banks, by written notice to the Borrower (i)
declare that the Commitments are terminated, whereupon the
Commitments and the obligation of each Bank to make any Loan
hereunder shall immediately terminate, and (ii) declare the
unpaid principal amount of and any and all accrued and unpaid
interest on the Loans and any and all accrued and unpaid Fees
and other Obligations to be, and the same shall thereupon be,
immediately due and payable with all additional interest from
time to time accrued thereon and without presentation, demand
or protest or other requirements of any kind (including,
without limitation, valuation and appraisement, diligence,
presentment, notice of intent to demand or accelerate and
notice of acceleration), all of which are hereby expressly
waived by the Borrower.
(c) In addition to the foregoing, upon the
occurrence and during the continuance of any Event of Default,
the Agent Bank shall at the request, or may with the consent,
of the Required Banks, (i) exercise, or direct the Collateral
Agent to exercise, all of its rights as a secured party under
the Security Documents or under applicable Law or otherwise
(and all remedial provisions in the Security Documents are
hereby incorporated by reference), and (ii) apply, or direct
the Collateral Agent to apply, all amounts on deposit in the
Project Accounts to the Obligations in such order as it shall
select in its sole discretion.
Section 8.3. Application of Proceeds.
(a) Except as otherwise expressly provided herein
(including, without limitation, the terms and conditions of
Article VII), following an Event of Default and the
acceleration of the maturity date of the Obligations (whether
automatically, by declaration or otherwise), the proceeds of
any collection, sale or other realization of all or any part of
the Collateral pursuant to the Security Documents, and any
other cash at the time of such collection, sale or other
realization held by the Collateral Agent under the Security
Documents or this Agreement, shall be applied by the Collateral
Agent in the following order of priority:
(i) first, to the payment of (A) all costs and
expenses relating to the sale of the Collateral and the
collection of all amounts owing hereunder, including
reasonable attorneys' fees and disbursements and the just
compensation of the Collateral Agent for services rendered
in connection therewith or in connection with any
proceeding to sell if a sale is not completed, and (B) all
charges, expenses and advances incurred or made by the
Collateral Agent in order to protect the Liens of the
Security Documents or the security afforded thereby,
together with interest at the rate per annum equal to the
Base Rate then in effect plus the Applicable Margin plus
two percent (2%), computed on the basis of the actual
number of days elapsed and a year of three hundred sixty-
five (365) or three hundred sixty-six (366) days, as
appropriate;
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(ii) second, to the payment in full of all
Obligations (to be paid to the Secured Parties pro rata in
accordance with the aggregate outstanding amounts of the
Obligations owed to each Secured Party), each such payment
to be applied by each Secured Party as follows: first
against indemnities, charges, fees, costs and expenses
with respect to the Obligations; then against interest on
interest which became overdue with respect to the
Obligations; then against interest on principal of the
Obligations which became overdue; then against interest
due on the Obligations; and finally to the principal of
the Obligations; and
(iii) finally, to the payment to the Borrower,
or its successors or assigns, or as a court of competent
jurisdiction may direct, of any surplus then remaining.
(b) As used in this Section 8.3, "proceeds" of
Collateral shall mean cash, securities or other property
realized in respect of, and distributions in kind of,
Collateral, including any thereof received under a
reorganization, liquidation or adjustment of Indebtedness of
the Borrower or any issuer of or obligor on any of the
Collateral.
ARTICLE IX. THE AGENT BANK.
Section 9.1. Appointment. Each Bank hereby
irrevocably designates and appoints the Agent Bank (subject to
the first sentence of Section 9.9) as the agent of such Bank
under this Agreement and each other Financing Document, and
each such Bank irrevocably authorizes the Agent Bank to take
such actions on its behalf under the provisions of this
Agreement and each other Financing Document and to exercise
such powers and perform such duties as are expressly delegated
to the Agent Bank by the terms of this Agreement and each other
Financing Document, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision
to the contrary elsewhere in this Agreement, the Agent Bank
shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with
any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities on the
part of the Agent Bank shall be read into this Agreement or
otherwise exist against the Agent Bank. The provisions of this
Article IX are solely for the benefit of the Agent Bank and the
Banks and the Borrower shall not have any rights as a third
party beneficiary or otherwise under any of the provisions
hereof. In performing its functions and duties hereunder and
under the other Financing Documents, the Agent Bank shall act
solely as the agent of the Banks and does not assume nor shall
be deemed to have assumed any obligation or relationship of
trust or agency with or for the Borrower or any of its
successors and assigns.
Section 9.2. Delegation of Duties. The Agent Bank
may execute any of its duties under this Agreement or the other
Financing Documents by or through agents or attorneys-in-fact
and shall be entitled to advice of counsel concerning all
matters pertaining to such duties so long as such counsel is
selected with reasonable due care. The Agent
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Bank shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact selected by it with
reasonable care.
Section 9.3. Exculpatory Provisions. The Agent Bank
shall not be (i) liable for any action lawfully taken or
omitted to be taken by it or any Person described in Section
9.2 under or in connection with this Agreement or any other
Financing Document (except for its or such Person's own gross
negligence or willful misconduct), or (ii) responsible in any
manner to any of the Banks for any recitals, statements,
representations or warranties made by any Project Party
contained in this Agreement or any other Transaction Document
or in any certificate, report, statement or other document
referred to or provided for in, or received under or in
connection with, this Agreement or any other Transaction
Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or
any other Transaction Document or for any failure of any
Project Party to perform its obligations hereunder or
thereunder. The Agent Bank shall not be under any obligation
to any Bank to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or
conditions of, this Agreement or any other Transaction
Document, or to inspect the properties, books or records of any
Project Party. This Section 9.3 is intended solely to govern
the relationship between the Agent Bank, on the one hand, and
the Banks, on the other.
Section 9.4. Reliance by Agent Bank. The Agent Bank
shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy,
telex or teletype message, statement, order or other document
or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons
and upon advice and statements of legal counsel (including,
without limitation, counsel to any Project Party), independent
accountants and other experts selected by the Agent Bank with
reasonable due care. The Agent Bank may deem and treat the
payee of any Note as the owner thereof for all purposes unless
the Agent Bank shall have received an executed Transfer
Supplement in respect thereof. The Agent Bank shall have no
liability for failing or refusing to take any action under this
Agreement or any other Financing Document if it shall first
receive such advice or concurrence of the Required Banks as it
deems appropriate or it shall first be indemnified to its
satisfaction by the Banks against any and all liability and
expense which may be incurred by it by reason of taking or
continuing to take any such action. The Agent Bank shall in
all cases have no liability in acting, or in refraining from
acting, under this Agreement and the other Financing Documents
in accordance with a request of the Required Banks, and such
request and any action taken or failure to act pursuant thereto
shall be binding upon all of the Banks and all future holders
of the Notes. This Section 9.4 does not govern the
relationship of the Borrower and the Banks.
Section 9.5. Notice of Default. The Agent Bank
shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default unless the
107
Agent Bank has received written notice from a Bank or the
Borrower referring to this Agreement, describing such Default
or Event of Default and stating that such notice is a "notice
of default". In the event that the Agent Bank receives such a
notice, the Agent Bank shall promptly deliver copies thereof to
the Banks. The Agent Bank shall take such action with respect
to such Default or Event of Default as shall be directed by the
Required Banks; provided that unless and until the Agent Bank
shall have received such directions, the Agent Bank may (but
shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of
Default as the Agent Bank shall deem advisable and in the best
interests of the Banks.
Section 9.6. Non-Reliance on Agent Bank and Other
Banks. Each Bank expressly acknowledges that neither the Agent
Bank, nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates has made any representations or
warranties to it and that no act by the Agent Bank hereafter
taken, including, without limitation, any review of the affairs
of any Project Party, shall be deemed to constitute any
representation or warranty by the Agent Bank. Each Bank
represents and warrants to the Agent Bank that it has,
independently and without reliance upon the Agent Bank or any
other Bank and based on such documents and information as it
has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property,
prospects, financial and other conditions and creditworthiness
of the Project Parties and made its own decision to make its
Loans hereunder and enter into this Agreement. Each Bank also
represents that it will, independently and without reliance
upon the Agent Bank or any other Bank, and based on such
documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and
decisions in taking or not taking action under this Agreement,
and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, prospects,
financial and other condition and creditworthiness of the
Project Parties. Except for notices, reports and other
documents expressly required under the Financing Documents to
be furnished to the Banks by the Agent Bank, the Agent Bank
shall not have any duty or responsibility to provide any Bank
with any credit or other information concerning the business,
operations, property, prospects, financial and other condition
or creditworthiness of the Project Parties which may come into
the possession of the Agent Bank or any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates.
Section 9.7. Bank Indemnification. The Banks agree
to indemnify the Agent Bank and its officers, directors,
employees, representatives and agents (to the extent not
reimbursed by the Borrower and without limiting the obligation
of the Borrower to do so), ratably according to their Pro Rata
Shares, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever
(including, without limitation, the fees and disbursements of
counsel for the Agent Bank or such Person in connection with
any investigative, administrative or judicial proceeding
commenced or threatened, whether or not the Agent Bank or such
Person shall be designated a party thereto) that may at any
time
108
(including, without limitation, at any time following the
payment of the Obligations) be imposed on, incurred by or
asserted against the Agent Bank or such Person as a result of,
or arising out of, or in any way related to or by reason of,
any of the transactions contemplated hereby or the execution,
delivery or performance of any Transaction Document (but
excluding any such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or
disbursements to the extent resulting from the gross negligence
or willful misconduct of the Agent Bank or such Person as
finally determined by a court of competent jurisdiction).
Section 9.8. Agent Bank in its Individual Capacity.
The Agent Bank and its Affiliates may make loans to, accept
deposits from and generally engage in any kind of business with
the Project Parties as though the Agent Bank were not the Agent
Bank hereunder. With respect to Loans made or renewed by it
and any Note issued to it, the Agent Bank shall have the same
rights and powers under this Agreement as any Bank and may
exercise the same as though it were not the Agent Bank, and the
terms "Bank" and "Banks" shall include the Agent Bank in its
individual capacity.
Section 9.9. Successor Agent Bank. The Agent Bank
may resign as Agent Bank upon thirty (30) days notice to the
Borrower and the Banks and the Agent Bank may be removed from
its position as Agent Bank at any time by the vote of the
Required Banks. If the Agent Bank shall resign as Agent Bank
under this Agreement or be removed pursuant to the preceding
sentence, then the Required Banks during such 30-day period
shall appoint from among the Banks a successor agent, and upon
the acceptance by such successor Agent Bank and its execution
of a Confidentiality Agreement, the successor agent shall
succeed to the rights, powers and duties of the Agent Bank and
the term "Agent Bank" shall mean such successor agent,
effective upon its appointment and acceptance, and the former
Agent Bank's rights, powers and duties as Agent Bank shall then
be terminated, without any other or further act or deed on the
part of such former Agent Bank or any of the parties to this
Agreement or any holders of the Notes. After any retiring
Agent Bank's resignation hereunder as Agent Bank, the
provisions of this Article IX and Section 11.1 shall inure to
its benefit as to any actions taken or omitted to be taken by
it while it was Agent Bank under this Agreement.
ARTICLE X. THE COLLATERAL AGENT.
Section 10.1. Appointment. Each Bank hereby
irrevocably designates and appoints the Collateral Agent
(subject to the first sentence of Section 10.9) as the
collateral agent of such Bank under this Agreement and each
other Financing Document, and each such Bank irrevocably
authorizes the Collateral Agent to take such actions on its
behalf under the provisions of this Agreement and each other
Financing Document and to exercise such powers and perform such
duties as are expressly delegated to the Collateral Agent by
the terms of this Agreement and each other Financing Document,
together with
109
such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this
Agreement, the Collateral Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or
any fiduciary relationship with any Bank, and no implied
covenants, functions, responsibilities, duties, obligations or
liabilities on the part of the Collateral Agent shall be read
into this Agreement or otherwise exist against the Collateral
Agent. The provisions of this Article X are solely for the
benefit of the Collateral Agent and the Banks and the Borrower
shall not have any rights as a third party beneficiary or
otherwise under any of the provisions hereof. In performing
its functions and duties hereunder and under the other
Financing Documents, the Collateral Agent shall act solely as
the collateral agent of the Banks and does not assume nor shall
be deemed to have assumed any obligation or relationship of
trust or agency with or for the Borrower or any of its
successors and assigns.
Section 10.2. Delegation of Duties. The Collateral
Agent may execute any of its duties under this Agreement or the
other Financing Documents by or through agents or attorneys-in-
fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties so long as such counsel was
selected with reasonable due care. The Collateral Agent shall
not be responsible for the negligence or misconduct of any
agents or attorneys-in- fact selected by it with reasonable
care.
Section 10.3. Exculpatory Provisions. The
Collateral Agent shall not be (i) liable for any action
lawfully taken or omitted to be taken by it or any Person
described in Section 10.2 under or in connection with this
Agreement or any other Financing Document (except for its or
such Person's own gross negligence or willful misconduct), or
(ii) responsible in any manner to any of the Banks for any
recitals, statements, representations or warranties made by any
Project Party contained in this Agreement or any other
Transaction Document or in any certificate, report, statement
or other document referred to or provided for in, or received
under or in connection with, this Agreement or any other
Transaction Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or
any other Transaction Document or for any failure of any
Project Party to perform their obligations hereunder or
thereunder. The Collateral Agent shall not be under any
obligation to any Bank to ascertain or to inquire as to the
observance or performance of any of the agreements contained
in, or conditions of, this Agreement or any other Transaction
Document, or to inspect the properties, books or records of any
Project Party. This Section 10.3 is intended solely to govern
the relation ship between the Collateral Agent, on the one
hand, and the Banks, on the other.
Section 10.4. Reliance by Collateral Agent. The
Collateral Agent shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order
or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal
counsel (including, without limitation,
110
counsel to any Project Party), independent accountants and
other experts selected by the Collateral Agent with reasonable
due care. The Collateral Agent may deem and treat the payee of
any Note as the owner thereof for all purposes unless the
Collateral Agent shall have received an executed Transfer
Supplement in respect thereof. The Collateral Agent shall have
no liability for failing or refusing to take any action under
this Agreement or any other Financing Document if it shall
first receive such advice or concurrence of the Required Banks
as it deems appropriate or it shall first be indemnified to its
satisfaction by the Banks against any and all liability and
expense which may be incurred by it by reason of taking or
continuing to take any such action. The Collateral Agent shall
in all cases have no liability in acting, or in refraining from
acting, under this Agreement and the other Financing Documents
in accordance with a request of the Required Banks, and such
request and any action taken or failure to act pursuant thereto
shall be binding upon all of the Banks and all future holders
of the Notes. This Section 10.4 does not govern the
relationship of the Borrower and the Banks.
Section 10.5. Notice of Default. The Collateral
Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default unless the
Collateral Agent has received written notice from a Bank or the
Borrower referring to this Agreement, describing such Default
or Event of Default and stating that such notice is a "notice
of default". In the event that the Collateral Agent receives
such a notice, the Collateral Agent shall promptly deliver
copies thereof to the Agent Bank, which shall promptly deliver
copies thereof to the Banks. The Collateral Agent shall take
such action with respect to such Default or Event of Default as
shall be directed by the Agent Bank (acting upon the
instructions of the Required Banks); provided that unless and
until the Collateral Agent shall have received such directions,
the Collateral Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect
to such Default or Event of Default as the Collateral Agent
shall deem advisable and in the best interests of the Banks.
Section 10.6. Non-Reliance on Collateral Agent and
Other Banks. Each Bank expressly acknowledges that neither the
Collateral Agent, nor any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to it and that no act by the
Collateral Agent hereafter taken, including, without
limitation, any review of the affairs of any Project Party,
shall be deemed to constitute any representation or warranty by
the Collateral Agent. Each Bank represents and warrants to the
Collateral Agent that it has, independently and without
reliance upon the Collateral Agent or any other Bank and based
on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business,
operations, property, prospects, financial and other conditions
and creditworthiness of the Project Parties and made its own
decision to make its Loans hereunder and enter into this
Agreement. Each Bank also represents that it will,
independently and without reliance upon the Collateral Agent or
any other Bank, and based on such documents and information as
it shall deem appropriate at the time, continue to make its own
credit analysis,
111
appraisals and decisions in taking or not taking action under
this Agreement, and to make such investigation as it deems
necessary to inform itself as to the business, operations,
property, prospects, financial and other conditions and
creditworthiness of the Project Parties. Except for notices,
reports and other documents expressly required under the
Financing Documents to be furnished to the Banks by the
Collateral Agent, the Collateral Agent shall not have any duty
or responsibility to provide any Bank with any credit or other
information concerning the business, operations, property,
prospects, financial and other conditions or creditworthiness
of the Project Parties which may come into the possession of
the Collateral Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates.
Section 10.7. Bank Indemnification. The Banks agree
to indemnify the Collateral Agent and its officers, directors,
employees, representatives and agents (to the extent not
reimbursed by the Borrower and without limiting the obligation
of the Borrower to do so), ratably according to their Pro Rata
Shares, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever
(including, without limitation, the fees and disbursements of
counsel for the Collateral Agent or such Person in connection
with any investigative, administrative or judicial proceeding
commenced or threatened, whether or not the Collateral Agent or
such Person shall be designated a party thereto) that may at
any time (including, without limitation, at any time following
the payment of the Obligations) be imposed on, incurred by or
asserted against the Collateral Agent or such Person as a
result of, or arising out of, or in any way related to or by
reason of, any of the transactions contemplated hereby or the
execution, delivery or performance of any Transaction Document
(but excluding any such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses
or disbursements to the extent resulting from the gross
negligence or willful misconduct of the Collateral Agent or
such Person as finally determined by a court of competent
jurisdiction).
Section 10.8. Collateral Agent in its Individual
Capacity. The Collateral Agent and its Affiliates may make
loans to, accept deposits from and generally engage in any kind
of business with the Project Parties as though the Collateral
Agent were not the Collateral Agent hereunder. With respect to
Loans made or renewed by it and any Note issued to it, the
Collateral Agent shall have the same rights and powers under
this Agreement as any Bank and may exercise the same as though
it were not the Collateral Agent, and the terms "Bank" and
"Banks" shall include the Collateral Agent in its individual
capacity.
Section 10.9. Successor Collateral Agent. The
Collateral Agent may resign as Collateral Agent upon thirty
(30) days notice to the Borrower and the Banks and the
Collateral Agent may be removed from its position as Collateral
Agent at any time by the vote of the Required Banks. If the
Collateral Agent shall resign as Collateral Agent under this
Agreement or be removed pursuant to the preceding sentence,
then the Re-
112
quired Banks during such 30-day period shall appoint from among
the Banks a successor collateral agent with an office in the
State of New York, and upon the acceptance by such successor
Collateral Agent and its execution of a Confidentiality
Agreement, the successor collateral agent shall succeed to the
rights, powers and duties of the Collateral Agent and the term
"Collateral Agent" shall mean such successor collateral agent,
effective upon its appointment and acceptance, and the former
Collateral Agent's rights, powers and duties as Collateral
Agent shall then be terminated, without any other or further
act or deed on the part of such former Collateral Agent or any
of the parties to this Agreement or any holders of the Notes.
After any retiring Collateral Agent's resignation hereunder as
Collateral Agent, the provisions of this Article X and Section
11.1 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Collateral Agent under
this Agreement.
Section 10.10. Administration of the Collateral.
The Collateral Agent shall hold the Collateral and any Lien
thereon for the benefit of the Secured Parties pursuant to the
terms of this Agreement, the Security Documents and the other
Financing Documents. The Collateral Agent shall administer the
Collateral in the manner contemplated by this Agreement, the
Security Documents and the other Financing Documents and shall
apply the balances from time to time held in the Project
Accounts in the manner provided in Article VII. The Collateral
Agent shall exercise such rights and remedies with respect to
the Collateral (subject to applicable notice and cure period
provisions) as are granted to it under this Agreement, the
Security Documents and the other Financing Documents, except as
otherwise expressly provided in this Agreement, the Security
Documents and the other Financing Agreements, as shall be
directed by the Agent Bank (acting upon the instructions of the
Required Banks). Except as otherwise expressly provided in
this Agreement, the Security Documents and the other Financing
Documents, no Bank or group of Banks (other than the Required
Banks) shall have any right to direct the Collateral Agent to
take any action in respect of the Collateral, and no Bank shall
have any right to sell, exchange or otherwise deal with any
property at any time pledged, assigned or mortgaged to secure
the Obligations, or to take action with respect to the
Collateral independently of the Collateral Agent, other than to
direct the Collateral Agent to take action as provided herein.
ARTICLE XI. MISCELLANEOUS
Section 11.1. Payment of Expenses and Indemnity.
(a) The Borrower shall, whether or not the
transactions hereby contemplated are consummated, pay all out-
of-pocket costs and expenses of the Agent Bank, the Collateral
Agent and each Bank in connection with (i) the negotiation,
preparation, execution and delivery of the Financing Documents
and the documents and instruments referred to therein, (ii) the
syndication, management and agenting of the Loans (in-
113
cluding fees and expenses of the Independent Engineer, the Fuel
Consultant, the Petrochemical Industry Consultant and the
Insurance Consultant in the performance of services
contemplated by the terms of this Agreement, or otherwise in
providing expertise reasonably deemed necessary by the Agent
Bank in connection with any consent or approval by the Banks,
the Required Banks or the Agent Bank, or in connection with the
reasonably deemed necessary review of any circumstance or
condition affecting the Project), (iii) the creation,
perfection or protection of the Collateral Agent's Liens on the
Collateral (including, without limitation, fees and expenses
for title and lien searches and filing and recording fees),
(iv) the Agent Bank's review and due diligence (including,
without limitation, the review of the other Transaction
Documents and the fees and expenses of the Independent
Engineer, the Fuel Consultant, the Petrochemical Industry
Consultant and the Insurance Consultant), and (v) any
amendment, waiver or consent relating to any of the Financing
Documents (including, without limitation, as to each of the
foregoing, the fees and disbursements of counsel to the Agent
Bank and the Collateral Agent and any other attorneys retained
by the Agent Bank and the Collateral Agent and allocated costs
of internal counsel).
(b) The Borrower shall pay all out-of-pocket
costs and expenses of the Agent Bank, the Collateral Agent and
each Bank in connection with the preservation of rights under,
and enforcement of, the Financing Documents and the documents
and instruments referred to therein or in connection with any
restructuring or rescheduling of the Obligations (including,
without limitation, the fees and disbursements of counsel for
the Agent Bank, the Collateral Agent and the Banks and
allocated costs of internal counsel).
(c) The Borrower shall pay, and hold the Agent
Bank, the Collateral Agent and each of the Banks harmless from
and against, any and all present and future stamp, excise,
mortgage recording and other similar taxes and fees with
respect to the foregoing matters and hold the Agent Bank, the
Collateral Agent and each Bank harmless from and against any
and all liabilities with respect to or resulting from any delay
or omission (other than to the extent attributable to such
Bank) to pay such taxes.
(d) The Borrower shall indemnify the Agent
Bank, the Collateral Agent and each Bank and their respective
officers, directors, employees, representatives and agents
(each an "Indemnitee") from, and hold each of them harmless
against, any and all losses, liabilities, claims, damages,
expenses, obligations, penalties, actions, judgments, suits,
costs or disbursements of any kind or nature whatsoever
(including, without limitation, the fees and disbursements of
counsel for such Indemnitee in connection with any
investigative, administrative or judicial proceeding commenced
or threatened, whether or not such Indemnitee shall be
designated a party thereto) (each a "Claim") that may at any
time (including, without limitation, at any time following the
payment of the Obligations) be imposed on, asserted against or
incurred by any Indemnitee as a result of, or arising out of,
or in any way related to or by reason of, (i) any of the
transactions
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contemplated hereby or the execution, delivery or performance
of any other Financing Document or Transaction Document, (ii)
any violation by the Borrower of any applicable Environmental
Law or Environmental Approval, (iii) any Environmental Claim
arising out of the management, use, control, ownership or
operation of property or assets by the Borrower, including,
without limitation, all on-site and off-site activities
involving Materials of Environmental Concern, (iv) the breach
of any environmental representation or warranty set forth in
Section 4.23, (v) the grant to the Collateral Agent and the
Secured Parties of any Lien on any property or assets of the
Borrower or any equity interest in the Borrower, and (vi) the
exercise by the Collateral Agent and the Secured Parties of
their rights and remedies (including, without limitation,
foreclosure) under any agreements creating any such Lien (but
excluding, as to any Indemnitee, any such losses, liabilities,
claims, damages, expenses, obligations, penalties, actions,
judgments, suits, costs or disbursements to the extent caused
by reason of the gross negligence or willful misconduct of such
Indemnitee as finally determined by a court of competent
jurisdiction). If the Borrower shall obtain actual knowledge
of any Claim indemnified against under this clause (d), the
Borrower shall give prompt notice thereof to the appropriate
Indemnitee or Indemnitees, and if any Indemnitee shall obtain
actual knowledge of any Claim indemnified under this clause
(d), such Indemnitee shall give prompt notice thereof to the
Borrower; provided that failure to so notify the Borrower shall
not release the Borrower from its obligations to indemnify
hereunder. With respect to any amount that the Borrower is
requested by an Indemnitee to pay by reason of this clause (d),
such Indemnitee shall, if so requested by the Borrower and
prior to any payment, submit such additional information to the
Borrower as the Borrower may reasonably request and which is
reasonably available to such Indemnitee to substantiate
properly the requested payment. In case any action, suit or
proceeding shall be brought against any Indemnitee for which
the Indemnitee is indemnified under this clause (d), such
Indemnitee shall notify the Borrower of the commencement
thereof, and the Borrower shall be entitled, at its expense,
acting through counsel reasonably acceptable to such
Indemnitee, to participate in, and, to the extent that the
Borrower desires to, assume and control the defense thereof;
provided, however, that the Borrower shall have acknowledged in
writing its obligation to fully indemnify such Indemnitee in
respect of such action, suit or proceeding; and provided,
further, that the Borrower shall not be entitled to assume and
control the defense of any such action, suit or proceeding if
and to the extent that, (A) in the reasonable opinion of such
Indemnitee, (x) (i) such action, suit or proceeding involves
any risk of imposition of criminal liability or (ii) such
action, suit or proceeding involves any material risk of
material civil liability on such Indemnitee or will involve a
material risk of the sale, forfeiture or loss of, or the
creation of any Lien (other than a Permitted Lien) on, the
Collateral or any part thereof, unless, in the case of this
clause (x) (ii), the Borrower shall have posted a bond or other
security satisfactory to the relevant Indemnitees in respect to
such risk or (y) the control of such action, suit or proceeding
would involve a bona fide conflict of interest, (B) such
proceeding involves Claims not fully indemnified by the
Borrower which the Borrower and the Indemnitee have been unable
to sever from the indemnified Claim(s), (C) a Default or an
Event of Default has occurred and is continuing or (D) such
action, suit or
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proceeding involves matters which extend beyond or are
unrelated to the transactions contemplated by the Transaction
Documents and if determined adversely could be materially
detrimental to the interests of such Indemnitee notwithstanding
indemnification by the Borrower. The Indemnitee, on the one
hand, and the Borrower, on the other hand, may participate in a
reasonable manner at its own expense and with its own counsel
in any proceeding conducted by the other in accordance with the
foregoing. Each Indemnitee shall at the Borrower's expense
supply the Borrower with such information and documents
reasonably requested by the Borrower as are necessary or
advisable for the Borrower to participate in any action, suit
or proceeding to the extent permitted by this clause (d).
Unless an Event of Default shall have occurred and be
continuing, no Indemnitee shall enter into any settlement or
other compromise with respect to any Claim which is entitled to
be indemnified under this clause (d) without the prior written
consent of the Borrower, which consent shall not be
unreasonably withheld or delayed, unless such Indemnitee waives
its right to be indemnified under this clause (d) with respect
to such Claim. In addition, if an Indemnitee, in violation of
the Borrower's right to assume and control the defense of any
Claim, refuses to permit the Borrower to control the defense
after written demand by the Borrower for such control, such
Indemnitee waives its right to be indemnified under this clause
(d) with respect to such Claim. Upon payment in full of any
Claim by the Borrower pursuant to this clause (d) to or on
behalf of an Indemnitee, the Borrower without any further
action shall be subrogated to any and all claims that such
Indemnitee may have relating thereto (other than claims in
respect of insurance policies maintained by such Indemnitee at
its own expense), and such Indemnitee shall execute such
instruments of assignment and conveyance, evidence of claims
and payment and such other documents, instruments and
agreements as may be necessary to preserve any such claims and
otherwise cooperate with the Borrower and give such further
assurances as are necessary or advisable to enable the Borrower
vigorously to pursue such claims. The Borrower's obligations
and rights under this Section 11.1 shall survive the repayment
of all Obligations and the termination of this Agreement.
Section 11.2. Right of Set-off. In addition to any
rights now or hereafter granted under applicable Law or
otherwise, and not by way of limitation of any such rights,
upon the occurrence and during the continuance of any Event of
Default, each Bank is hereby authorized at any time or from
time to time, without presentment, demand, protest or other
notice of any kind to the Borrower or to any other Person, any
such notice being hereby expressly waived, to set off and to
appropriate and apply any and all deposits (general or special,
time or demand, provisional or final) and any other
Indebtedness at any time held or owing by such Bank (including,
without limitation, by branches and agencies of such Bank
wherever located) to or for the credit or the account of the
Borrower against and on account of the Obligations of the
Borrower to such Bank under this Agreement or under any of the
other Financing Documents, including, without limitation, all
interests in Obligations purchased by such Bank pursuant to
Section 2.22, and all other claims of any nature or description
arising out of or connected with this Agreement or any other
Financing Document, irrespective of whether or not such Bank
shall have made any
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demand hereunder and although said Obligations, liabilities or
claims, or any of them, shall be contingent or unmatured.
Section 11.3. Notices. Except as otherwise
expressly provided herein, all notices, requests and demands to
or upon the respective parties hereto to be effective shall be
in writing (including by telecopy, telex or cable
communication), and shall be deemed to have been duly given or
made when delivered by hand, or upon actual receipt if
deposited in the United States mail, postage prepaid, or, in
the case of telex notice, when answerback is received, or, in
the case of telecopy notice, when confirmation is received, or,
in the case of a nationally recognized overnight courier
service, one Business Day after delivery to such courier
service, addressed, in the case of each party hereto, at its
address specified opposite its signature below or on the
appropriate Transfer Supplement, or to such other address as
may be designated by any party in a written notice to the other
parties hereto; provided that notices and communications to the
Agent Bank, the Collateral Agent or the Banks by the Borrower
shall not be effective until received by the Agent Bank, the
Collateral Agent or the Banks, as the case may be.
Section 11.4. Successors and Assigns; Participation;
Assignments.
(a) Successors and Assigns. This Agreement
shall be binding upon and inure to the benefit of the Borrower,
the Banks, the Agent Bank, the Collateral Agent, all future
holders of the Notes and their respective successors and
assigns, except that the Borrower may not assign or transfer
any of its rights or obligations under this Agreement without
the prior written consent of each Bank. No Bank may
participate, assign or sell any of its Credit Exposure (as
defined in clause (b) below) except as required by operation of
Law, in connection with the merger, consolidation or
dissolution of any Bank or as provided in this Section 11.4.
(b) Participation. Subject to the terms of the
Financing Documents, the Banks may at any time sell to one or
more Persons (each a "Participant") participating interests in
any Loan owing to such Bank, any Note held by such Bank, any
Commitment of such Bank and/or any other interest of such Bank
hereunder (in respect of any such Bank, its "Credit Exposure");
provided, however, that Chase shall at all times retain the
leadership position among all Participants in the aggregate
Credit Exposures of all Banks. No sale of a participating
interest of less than $2,500,000 shall be permitted.
Notwithstanding any such sale by a Bank of participating
interests to a Participant, such Bank's rights and obligations
under this Agreement shall remain unchanged, such Bank shall
remain solely responsible for the performance thereof, such
Bank shall remain the holder of any such Note for all purposes
under this Agreement (except as expressly provided below), and
the Borrower, the Agent Bank and the Collateral Agent shall
continue to deal solely and directly with such Bank in
connection with such Bank's rights and obligations under this
Agreement. The Borrower agrees that if any Obligations are due
and unpaid, or shall have been declared or shall have become
due and payable upon
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the occurrence and during the continuance of an Event of
Default, each Participant shall be deemed to have the right of
set-off in respect of its participating interest in amounts
owing under this Agreement and any Note to the same extent as
if the amount of its participating interest were owing directly
to it as a Bank under this Agreement or any Note; provided that
such right of set-off shall be subject to the obligations of
such Participant to share with the Banks, and the Banks agree
to share with such Participant, as provided in Section 2.22.
The Borrower acknowledges that each Participant shall be
entitled to the benefits of Sections 2.15, 2.16, 2.17, 2.18,
2.19 and 2.22; provided that no Participant shall be entitled
to receive any greater amount pursuant to such Sections than
the transferor Bank would have been entitled to receive in
respect of the amount of the participating interest transferred
by such transferor Bank to such Participant had no such
transfer occurred. Each Bank agrees that any agreement between
such Bank and any such Participant in respect of such
participating interest shall not restrict such Bank's right to
agree to any amendment, supplement, waiver or modification to
this Agreement or any other Transaction Document, except where
the result of any of the foregoing would be to extend the final
maturity of any Obligation or any regularly scheduled
installment thereof, reduce the rate of interest or Fees,
extend the time of payment of interest thereon, reduce the
principal amount thereof or release all or substantially all of
the Collateral.
(c) Assignments. Subject to the terms of the
Financing Documents, each of the Banks may, in the ordinary
course of its business and in accordance with applicable Law,
at any time assign to any Person (each an "Assignee") with the
consent of the Agent Bank all or any part of its Credit
Exposure. No assignment of Credit Exposure in an amount less
than $2,500,000 shall be permitted. The Borrower, the Agent
Bank, the Collateral Agent and the Banks agree that to the
extent of any such assignment the Assignee shall be deemed to
have the same rights and benefits under the Financing Documents
and the same rights of set-off and obligation to share pursuant
to Section 2.22 as it would have had if it were a Bank
hereunder; provided that the Borrower, the Agent Bank and the
Collateral Agent shall be entitled to continue to deal solely
and directly with the assignor Bank in connection with the
interests so assigned to the Assignee and the assignor Bank
shall continue to be responsible for the performance of its
obligations under this Agreement unless and until such Assignee
becomes a Purchasing Bank pursuant to clause (d) below.
(d) Assignments to Purchasing Banks. Any Bank
may at any time and from time to time assign to one or more
Persons ("Purchasing Banks") all or any part of its Credit
Exposure pursuant to a supplement to this Agreement
substantially in the form of Exhibit K (a "Transfer
Supplement"), executed by such Purchasing Bank, such transferor
Bank, the Agent Bank and the Collateral Agent. Any Purchasing
Bank must be rated at least "A" by S&P and "A2" by Moody's. No
assignment of Credit Exposure in an amount less than $2,500,000
shall be permitted. Any such partial assignment shall be an
assignment of an identical percentage of the transferor Bank's
Loans and Commitments. Upon (i) such execution of such
Transfer Supplement, (ii) delivery of an executed copy
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thereof to the Borrower and the Agent Bank and (iii) payment by
such Purchasing Bank to such transferor Bank of an amount equal
to the purchase price agreed between such transferor Bank and
such Purchasing Bank, such transferor Bank shall be released
from its obligations hereunder to the extent of such assignment
and such Purchasing Bank shall for all purposes be a Bank party
to this Agreement and shall have all of the rights and
obligations of a Bank under this Agreement to the same extent
as if it were an original party hereto, and no further consent
or action by the Borrower, the Banks, the Collateral Agent or
the Agent Bank shall be required. Such Transfer Supplement
shall be deemed to amend this Agreement to the extent, and only
to the extent, necessary to reflect the addition of such
Purchasing Bank as a Bank and the resulting adjustment of the
Commitments, if any, arising from the purchase by such
Purchasing Bank of all or a portion of the Credit Exposure of
such transferor Bank. Promptly after the consummation of any
transfer to a Purchasing Bank pursuant hereto, the transferor
Bank, the Agent Bank and the Borrower shall make appropriate
arrangements so that a replacement Note is issued to such
transferor Bank and a new Note is issued to such Purchasing
Bank, in each case in principal amounts reflecting such
transfer.
(e) Additional Provisions for Letters of
Credit. In connection with any acquisition of Credit Exposure
in respect of Letters of Credit, each Transferee further agrees
as follows:
(i) The Issuing Bank is hereby
appointed as agent by each Transferee for the limited
purpose of making and receiving payments, and
examining, accepting or rejecting drafts in respect
of any Letters of Credit and, in this connection,
shall have such additional powers as are reasonably
incidental thereto;
(ii) Any Fee paid or payable to the
Issuing Bank (including, without limitation,
commitment fees and issuance fees) in respect of any
Letter of Credit shall, to the extent that such Fee
relates to the time after a Transferee has acquired
Credit Exposure in respect of such Letter of Credit,
be payable to such Transferee in accordance with the
terms hereof so that each such Transferee shall share
in such Fee to the extent paid or payable for (or in
the case of issuance fees to the extent allocable to)
the period commencing on the date its respective
Credit Exposure was acquired; and
(iii) Upon the issuance by the
Issuing Bank of any Letter of Credit on or after the
Closing Date, each Transferee having Credit Exposure
in respect of Letters of Credit shall automatically
acquire a participation in the liability under such
Letter of Credit in an amount equal to its applicable
percentage of the Stated Amount of such Letter of
Credit.
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(f) Disclosure of Information; Cooperation.
The Borrower authorizes each Bank to disclose to any
Participant, Assignee or Purchasing Bank (each, a "Transferee")
and any prospective Transferee (provided that such Transferee
has agreed to be bound by and complies with the confidentiality
requirements set forth in Section 11.18) any and all financial
and other information in such Bank's possession concerning the
Borrower which has been delivered to such Bank by the Borrower
pursuant to this Agreement or which has been delivered to such
Bank by the Borrower or the Agent Bank in connection with such
Bank's credit evaluation of the Borrower prior to entering into
this Agreement. The Borrower shall cooperate with the Agent
Bank and the Banks in connection with any sale of a
participation in, or assignment of, Credit Exposure in
accordance with this Section 11.4.
(g) Regulation A. Notwithstanding any other
language in this Agreement, any Bank may at any time assign all
or any portion of its rights under this Agreement and the Notes
to a Federal Reserve Bank as collateral in accordance with
Regulation A of the Board of Governors of the Federal Reserve
System and the applicable operating circular of such Federal
Reserve Bank.
(h) Notice to Borrower. So long as no Default
or Event of Default has occurred and is continuing, the Agent
Bank shall notify the Borrower of the occurrence of any sale or
assignment pursuant to this Section 11.4.
(i) Violation of Law. No Bank shall sell or
assign all or any portion of its Credit Exposure if such sale
or assignment would result in a violation of Law by the
Borrower or any Bank.
Section 11.5. Amendments and Waivers. Neither this
Agreement, any Note, any other Financing Document to which the
Borrower is a party nor any terms hereof or thereof may be
amended, supplemented, modified or waived except in accordance
with the provisions of this Section 11.5. The Required Banks
and the Borrower may, from time to time, enter into written
amendments or waivers of this Agreement, the Notes or the other
Financing Documents to which the Borrower is a party; provided
that no such amendment or waiver shall (i) extend either the
Final Maturity Date or any installment or required payment or
prepayment of any Obligations or reduce the rate or extend the
time of payment of interest on any Obligations, or reduce the
principal amount of any Obligations or reduce any fee payable
to the Banks hereunder, or release all or substantially all of
the Collateral (except as expressly permitted by the Security
Documents) or change the amount of any Commitment of any Bank,
or amend, modify or waive any provision of this Section 11.5 or
the definition of Required Banks, or consent to or permit the
assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement or any other Financing
Document, or release any Equity Contributor from its obligation
to make Equity Contributions under the Equity Commitment
Agreement, or change the number or percentage of Banks who must
approve the satisfaction of any
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condition precedent, or eliminate or reduce any requirement set
forth in Article IV in each case without the written consent of
all of the Banks, or (ii) amend, modify or waive any provision
of Article IX or any other provision of any Financing Document
if the effect thereof is to affect the rights or duties of the
Agent Bank, without the written consent of the then Agent Bank,
or (iii) amend, modify or waive any provision of Article X or
any other provision of any Financing Document if the effect
thereof is to affect the rights or duties of the Collateral
Agent, without the written consent of the then Collateral
Agent. Any such amendment, supplement, modification or waiver
shall apply to each of the Banks equally and shall be binding
upon the Borrower, the Banks, the Agent Bank, the Collateral
Agent and all future holders of the Notes. In the case of any
waiver, the Borrower, the Banks, the Agent Bank and the
Collateral Agent shall be restored to their former positions
and rights hereunder and under the outstanding Notes, and any
Default or Event of Default waived shall be deemed to be cured
and not continuing, but no such waiver shall extend to any
subsequent or other Default or Event of Default, or impair any
right consequent thereon.
Section 11.6. No Waiver; Remedies Cumulative. No
failure or delay on the part of the Agent Bank, the Collateral
Agent or any Bank or any holder of a Note in exercising any
right, power or privilege hereunder or under any other
Financing Document and no course of dealing between the
Borrower and the Agent Bank, the Collateral Agent or any Bank
or the holder of any Note shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, power or
privilege hereunder or under any other Financing Document
preclude any other or further exercise thereof of the exercise
of any other right, power or privilege hereunder or thereunder.
The rights and remedies herein expressly provided are
cumulative and not exclusive of any rights or remedies which
the Agent Bank, the Collateral Agent or any Bank or the holder
of any Note would otherwise have. No notice to or demand on
the Borrower in any case shall entitle the Borrower to any
other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Agent
Bank, the Collateral Agent or any Bank or the holder of any
Note to any other or further action in any circumstances
without notice or demand.
Section 11.7. No Third Party Beneficiaries. The
agreement of the Banks to make the Loans on the terms and
conditions set forth in this Agreement are solely for the
benefit of the Borrower, and no other Person (including any
other Project Party, obligor, contractor, subcontractor,
supplier or materialman furnishing supplies, goods or services
to or for the benefit of the Project) shall have any rights
hereunder, as against the Agent Bank, the Collateral Agent or
any Bank, under any other Transaction Document or with respect
to the Loans or the proceeds thereof.
Section 11.8. Counterparts. This Agreement may be
executed in any number of counterparts and by the different
parties hereto on separate counterparts, each
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of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same
instrument.
Section 11.9. Effectiveness. This Agreement shall
become effective on the date on which all of the parties hereto
shall have signed a counterpart hereof and shall have delivered
the same to the Agent Bank, which delivery, in the case of the
Banks and the Collateral Agent, may be given to the Agent Bank
by telecopy (with the originals delivered promptly to the Agent
Bank via overnight courier service).
Section 11.10. Headings Descriptive. The headings
of the several Sections and subsections of this Agreement are
inserted for convenience only and shall not in any way affect
the meaning or construction of any provision of this Agreement.
Section 11.11. Marshalling; Recapture. None of the
Agent Bank, the Collateral Agent nor any Bank shall be under
any obligation to marshall any assets in favor of the Borrower
or any other party or against or in payment of any or all of
the Obligations. To the extent any Bank receives any payment
by or on behalf of the Borrower, which payment or any part
thereof is subsequently invalidated, declared to be fraudulent
or preferential, set aside or required to be repaid to the
Borrower or its estate, trustee, receiver, custodian or any
other party under any bankruptcy Law, state or federal Law,
common Law or equitable cause, then to the extent of such
payment or repayment, the obligation or part thereof which has
been paid, reduced or satisfied by the amount so repaid shall
be reinstated by the amount so repaid and shall be included
within the liabilities of the Borrower to such Bank as of the
date such initial payment, reduction or satisfaction occurred.
Section 11.12. Severability. In case any provision
in or obligation under this Agreement, the Notes or the other
Financing Documents shall be invalid, illegal or unenforceable
in any jurisdiction, the validity, legality and enforceability
of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in
any way be affected or impaired thereby.
Section 11.13. Survival. All representations,
warranties and indemnities set forth herein including, without
limitation, in Sections 2.15, 2.16, 2.17, 2.18, 2.19, 2.22 and
11.1 shall survive the execution and delivery of this Agreement
and the Notes and the making and repayment of the Loans.
Section 11.14. Domicile of Loans. Each Bank may
transfer and carry its Loans to or for the account of any
branch office, subsidiary or Affiliate of such Bank.
Section 11.15. Independence of Covenants. All
covenants hereunder shall be given independent effect so that
if a particular action or condition is not permitted by any of
such covenants, the fact that it would be permitted by an
exception to, or be
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otherwise within the limitations of, another covenant shall not
avoid the occurrence of a Default or Event of Default if such
action is taken or condition exists.
Section 11.16. Limitation of Liability. No Equity
Holder or any other Person shall be personally liable (whether
by operation of Law or otherwise) for payments due hereunder or
under any other Financing Document for the performance of any
Obligations except as expressly provided in such Financing
Document. The sole recourse of the Secured Parties for
satisfaction of the Obligations shall be against the Borrower
and its assets and not against any other Person; provided,
however, that (i) nothing in this Section 11.16 shall limit or
otherwise prejudice in any way the right of the Secured Parties
to proceed against any Person with respect to the enforcement
of such Person's obligations (or the enforcement of the Secured
Parties' rights) under any Transaction Document to which it is
a party, and (ii) recourse against a Person for such Person's
fraud or intentional misrepresentation shall not be limited by
this Section 11.16.
Section 11.17. Governing Law; Submission to
Jurisdiction; Waiver of Jury Trial.
(a) THIS AGREEMENT, EACH OTHER FINANCING
DOCUMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH
AND BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (WITHOUT
GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING TO CONFLICTS
OF LAW EXCEPT SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW).
(b) ANY LEGAL ACTION OR PROCEEDING AGAINST ANY
PARTY HERETO WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
TRANSACTION DOCUMENT AND ANY ACTION FOR ENFORCEMENT OF ANY
JUDGMENT IN RESPECT THEREOF MAY BE BROUGHT IN THE COURTS OF THE
STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY
OF THIS AGREEMENT, THE BORROWER HEREBY ACCEPTS FOR ITSELF AND
IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND
APPELLATE COURTS FROM ANY THEREOF. THE BORROWER HEREBY
IRREVOCABLY DESIGNATES, APPOINTS AND EMPOWERS CT CORPORATION
SYSTEM WITH OFFICES ON THE DATE HEREOF AT 1633 BROADWAY, NEW
YORK, NEW YORK 10019, AS ITS DESIGNEE, APPOINTEE AND AGENT TO
RECEIVE AND ACCEPT FOR AND ON ITS BEHALF SERVICE OR ANY AND ALL
LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE
SERVED IN SUCH ACTION OR PROCEEDING. IF FOR ANY REASON SUCH
DESIGNEE, APPOINTEE AND AGENT SHALL CEASE TO BE AVAILABLE TO
ACT AS SUCH, THE BORROWER AGREES TO DESIGNATE A NEW DESIGNEE,
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APPOINTEE AND AGENT IN NEW YORK CITY ON TERMS AND FOR PURPOSES
OF THIS PROVISION SATISFACTORY TO THE AGENT BANK. THE BORROWER
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF
ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER AT ITS ADDRESS
REFERRED TO IN SECTION 11.3. THE BORROWER HEREBY IRREVOCABLY
WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER TRANSACTION DOCUMENT BROUGHT IN THE COURTS REFERRED TO
ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES, TO THE
EXTENT PERMITTED BY APPLICABLE LAW, NOT TO PLEAD OR CLAIM IN
ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN
ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY PARTY HERETO TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED IN ANY OTHER
JURISDICTION.
(c) EACH OF THE BORROWER AND THE SECURED
PARTIES HEREBY IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER TRANSACTION
DOCUMENT OR ANY MATTER ARISING HEREUNDER OR THEREUNDER.
Section 11.18. Confidentiality. Each of the Agent
Bank, the Collateral Agent and the Banks agrees (on behalf of
itself and each of its Affiliates, directors, officers,
employees and representatives) to execute and deliver a
confidentiality agreement substantially in the form of Exhibit
L (each a "Confidentiality Agreement") and in accordance
therewith to use reasonable precautions to keep confidential,
in accordance with its customary procedures for handling
Confidential Information and in accordance with safe and sound
banking practices, any Confidential Information received by
such Person; provided that nothing herein shall limit the
disclosure of information to the extent that such information
(i) is in the public domain at the time of disclosure, (ii)
following disclosure, becomes generally known or available
through no act or omission of the Agent Bank, the Collateral
Agent or any Bank, as the case may be, (iii) is known, or
becomes known, to the Agent Bank, the Collateral Agent or any
Bank, as the case may be, from a source other than the Borrower
(provided that disclosure by such source is not in breach of a
confidentiality agreement with the Borrower), (iv) is
independently required to be disclosed by the Agent Bank, the
Collateral Agent or any Bank, as the case may be, without
violating any of such Person's obligations under the
Confidentiality Agreement to which such Person is a party or
(v) is legally required to be disclosed by Law or judicial
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or other governmental action; provided that prompt notice of
such legal requirement or such judicial or other governmental
action shall have been given to the Disclosing Party (as
defined in each Confidentiality Agreement) and that the
Disclosing Party shall be afforded the opportunity (consistent
with the legal obligations of the Receiving Party (as defined
in each Confidentiality Agreement)) to exhaust all reasonable
legal remedies to maintain the Confidential Information in
confidence; provided, further that nothing herein shall limit
the disclosure of Confidential Information to (i) the Agent
Bank's, the Collateral Agent's or any Bank's, as the case may
be, Affiliates, directors, officers, employees, attorneys,
accountants, consultants, advisors or agents or (ii) any
Transferee (or prospective Transferee) so long as such
Transferee (or prospective Transferee) first executes and
delivers to the respective Bank a Confidentiality Agreement;
provided, further that, unless specifically prohibited by
applicable Law or court order, the Agent Bank, the Collateral
Agent or the affected Bank shall, prior to disclosure thereof,
notify the Borrower of any request for disclosure of any
Confidential Information (x) by any governmental agency or
representative thereof (other than any such request in
connection with an examination of the financial condition of
the Agent Bank or the Collateral Agent or effected by such
governmental agency) or (y) pursuant to legal process; and
provided finally that in no event shall the Agent Bank, the
Collateral Agent or any Bank be obligated or required to return
any materials furnished by the Borrower (except as may be
required under any Confidentiality Agreement). The obligations
of the Agent Bank, the Collateral Agent or any Bank under this
Section 11.18 shall supersede and replace the obligations of
the Agent Bank, the Collateral Agent or any Bank under any
other confidentiality agreement in respect of this financing
signed and delivered by Agent Bank, the Collateral Agent or any
Bank to the Borrower prior to the date hereof or prior to the
date on which any Person becomes a Transferee.
Section 11.19. Removal by Assignment of Banks. If
any Bank shall (i) make any demand for payment under Section
2.16(a)(B), 2.18 or 2.19, (ii) give notice to the Borrower
pursuant to Section 2.16(a)(iii), or (iii) fails to make
available to the Agent Bank its Pro Rata Share of Loans to be
made on the date specified in any Notice of Borrowing in
accordance with Section 2.5(a), the Borrower may demand and the
affected Bank or the Defaulting Bank, as the case may be, shall
assign in accordance with Section 11.4(c) to one or more other
Banks designated by the Borrower all (but not less than all) of
such Bank's Commitment. If any such Bank designated by the
Borrower shall fail to consummate such assignment on terms
acceptable to the affected Bank, or if the Borrower shall fail
to designate any such other Bank for all of the affected Bank's
commitment, then such demand by the Borrower shall become
ineffective; it being understood for purposes of this Section
11.19 that such assignment shall be conclusively deemed to be
on terms acceptable to the affected Bank, and the affected Bank
shall be compelled to consummate such assignment to such other
Bank designated by the Borrower, if such other Bank (1) shall
agree to such assignment and (2) shall offer compensation to
the affected Bank in an amount equal to all amounts then owing
by the Borrower to the affected Bank hereunder
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and under the Notes made by the Borrower to the affected Bank,
whether for principal, interest, Fees, costs or expenses.
Section 11.20. Change of Lending Office. If an
event occurs with respect to a lending office of any Bank that
obligates the Borrower to pay any amount under Section 2.7(d),
2.17, 2.18 or 2.19, makes operable Section 2.16(a)(iii) or
entitles the Bank to make a claim under Section 2.16(a)(B),
such Bank shall, if requested by the Borrower, use reasonable
efforts to designate another lending office or offices the
designation of which will reduce the amount the Borrower is so
obligated to pay, eliminate such operability or reduce the
amount the Bank is so entitled to claim; provided that such
designation would not, in the sole discretion of the Bank, be
disadvantageous to such Bank in any manner or contrary to such
Bank's policy. Any Bank may at any time and from time to time
change any lending office and shall give notice of any such
change to the Agent Bank, the Collateral Agent and the
Borrower.
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IN WITNESS WHEREOF, the parties hereto have caused
their duly authorized officers to execute and deliver this
Credit Agreement as of the date first above written.
NRG (MORRIS) COGEN, LLC,
as the Borrower
By: /s/ James J. Bender
Name: James J. Bender
Title: Member Representative
Address for Notices:
1221 Nicollet Mall
Suite 700
Minneapolis, Minnesota 55403-2445
Attention: President
Telephone: (612) 373-5400
Facsimile: (612) 373-5430
THE CHASE MANHATTAN BANK,
as a Bank
By: /s/ Thomas Case
Name: Thomas L. Case
Title: Vice President
Address for Notices:
One Chase Manhattan Plaza
New York, New York 10081
Attention: Global Power and
Environmental Group
Telephone:
Facsimile:
THE CHASE MANHATTAN BANK,
as the Agent Bank
By: /s/ Thomas Case
Name: Thomas L. Case
Title: Vice President
Address for Notices:
One Chase Manhattan Plaza
New York, New York 10081
Attention: Global Power and
Environmental Group
Telephone:
Facsimile:
THE CHASE MANHATTAN BANK,
as the Collateral Agent
By: /s/ Annette M. Marsula
Name: Annette M. Marsula
Title: Assistant Vice President
Address for Notices:
450 West 33rd Street, 15th Floor
New York, New York 10001
Attention: Annette Marsula
Telephone: (212) 946-7557
Facsimile: (212) 946-8177/8178