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EXHIBIT 10.2
EXECUTION COUNTERPART
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WORKING CAPITAL AGREEMENT
February 22, 2000
among
NRG NORTHEAST GENERATING LLC,
THE GUARANTORS PARTY HERETO
THE LENDERS PARTY HERETO
THE CHASE MANHATTAN BANK,
as an Administrative Agent
and
CITIBANK, N.A.,
as an Administrative Agent and Paying Agent
$50,000,000
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TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS..................................................................... 1
SECTION 1.01. Defined Terms........................................................ 1
SECTION 1.02. Terms Generally...................................................... 20
SECTION 1.03. Accounting Terms; GAAP............................................... 21
ARTICLE II. THE CREDITS.................................................................... 21
SECTION 2.01. The Commitments...................................................... 21
SECTION 2.02. Loans and Borrowings................................................. 21
SECTION 2.03. Requests for Borrowings.............................................. 22
SECTION 2.04. Funding of Borrowings................................................ 23
SECTION 2.05. Interest Elections................................................... 23
SECTION 2.06. Termination and Reduction of the Commitments......................... 25
SECTION 2.07. Repayment of Loans; Evidence of Debt................................. 25
SECTION 2.08. Prepayment of Loans.................................................. 26
SECTION 2.09. Fees................................................................. 27
SECTION 2.10. Interest............................................................. 28
SECTION 2.11. Alternate Rate of Interest........................................... 28
SECTION 2.12. Increased Costs...................................................... 29
SECTION 2.13. Break Funding Payments............................................... 30
SECTION 2.14. Taxes................................................................ 30
SECTION 2.15. Payments Generally; Pro Rata Treatment; Sharing of Set-offs.......... 31
SECTION 2.16. Mitigation Obligations; Replacement of Lenders....................... 33
ARTICLE III. GUARANTEE..................................................................... 34
SECTION 3.01. The Guarantees....................................................... 34
SECTION 3.02. Obligations Unconditional............................................ 34
SECTION 3.03. Reinstatement........................................................ 35
SECTION 3.04. Subrogation.......................................................... 35
SECTION 3.05. Remedies............................................................. 35
SECTION 3.06. Instrument for the Payment of Money.................................. 36
SECTION 3.07. Continuing Guarantees................................................ 36
SECTION 3.08. Rights of Contribution............................................... 36
SECTION 3.09. General Limitation on Guarantee Obligations.......................... 37
SECTION 3.10. Effectiveness........................................................ 37
ARTICLE IV. REPRESENTATIONS AND WARRANTIES................................................. 37
SECTION 4.01. Organization; Powers................................................. 37
SECTION 4.02 Authorization; Enforceability......................................... 38
SECTION 4.03. No Conflicts; Governmental Approvals................................. 38
SECTION 4.04. Financial Condition.................................................. 39
SECTION 4.05. Actions, Suits and Proceedings....................................... 39
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SECTION 4.06. Compliance with Laws and Agreements.................................. 39
SECTION 4.07. Taxes................................................................ 40
SECTION 4.08. Investment Company Status............................................ 40
SECTION 4.09. Utility Regulation................................................... 40
SECTION 4.10. Accounting........................................................... 41
SECTION 4.11. Insurance............................................................ 41
SECTION 4.12. Properties........................................................... 41
SECTION 4.13. Labor; ERISA......................................................... 42
SECTION 4.14. Environmental Matters................................................ 42
SECTION 4.15. No Material Adverse Change........................................... 42
SECTION 4.16. Certificates......................................................... 43
SECTION 4.17. Year 2000 Issues..................................................... 43
SECTION 4.18. Use of Credit........................................................ 43
SECTION 4.19. Disclosure........................................................... 43
ARTICLE V. CONDITIONS PRECEDENT............................................................ 44
SECTION 5.01. Effective Date....................................................... 44
SECTION 5.02. Conditions Precedent for each Loan................................... 46
ARTICLE VI. COVENANTS OF THE BORROWER...................................................... 47
SECTION 6.01. Financial Statements and Other Information........................... 47
SECTION 6.02. Existence; Conduct of Business....................................... 48
SECTION 6.03. Maintenance of Tax Status............................................ 48
SECTION 6.04. Compliance with Laws and Contractual Obligations..................... 48
SECTION 6.05. Maintenance of Properties; Insurance................................. 49
SECTION 6.06. Payment of Taxes and Claims.......................................... 49
SECTION 6.07. Books and Records; Inspection Rights................................. 49
SECTION 6.08. Indebtedness......................................................... 49
SECTION 6.09. Liens................................................................ 50
SECTION 6.10. Certain Obligations Respecting Subsidiaries.......................... 50
SECTION 6.11. Restrictive Agreements............................................... 50
SECTION 6.12. Prohibition on Sale of Assets........................................ 51
SECTION 6.13. Modifications of Certain Documents................................... 51
SECTION 6.14. Prohibition on Fundamental Changes................................... 52
SECTION 6.15. Restricted Payments.................................................. 52
SECTION 6.16. Transactions with Affiliates......................................... 53
SECTION 6.17. Investments.......................................................... 53
SECTION 6.18. EWG Status........................................................... 54
SECTION 6.19. Use of Proceeds...................................................... 55
ARTICLE VII. COVENANTS OF THE GUARANTORS................................................... 55
SECTION 7.01. Existence; Conduct of Business....................................... 55
SECTION 7.02. Compliance with Laws and Contractual Obligations..................... 55
SECTION 7.03. Maintenance of Properties; Insurance................................. 55
SECTION 7.04. Indebtedness......................................................... 56
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SECTION 7.05. Liens................................................................ 56
SECTION 7.06. Prohibition on Fundamental Changes................................... 56
SECTION 7.07. Restricted Payments.................................................. 56
SECTION 7.08. Transactions with Affiliates......................................... 56
SECTION 7.09. Investments.......................................................... 57
SECTION 7.10. Operation of Facilities.............................................. 58
SECTION 7.11. Prohibition on Sale of Assets........................................ 58
SECTION 7.12. Modification of Certain Documents.................................... 58
ARTICLE VIII. EVENTS OF DEFAULT............................................................ 59
SECTION 8.01. Events of Default.................................................... 59
SECTION 8.02 Acceleration; Remedies................................................ 61
ARTICLE IX. THE AGENTS..................................................................... 62
ARTICLE X. MISCELLANEOUS................................................................... 64
SECTION 10.01. Notices............................................................. 64
SECTION 10.02. Waivers; Amendments................................................. 65
SECTION 10.03. Expenses; Indemnity; Damage Waiver.................................. 66
SECTION 10.04. Successors and Assigns.............................................. 67
SECTION 10.05. Survival............................................................ 69
SECTION 10.06. Counterparts; Integration; Effectiveness............................ 70
SECTION 10.07. Severability........................................................ 70
SECTION 10.08. Right of Setoff..................................................... 70
SECTION 10.09. Governing Law; Jurisdiction; Etc.................................... 71
SECTION 10.10. WAIVER OF JURY TRIAL................................................ 71
SECTION 10.11. Headings............................................................ 71
SECTION 10.12. Treatment of Certain Information; Confidentiality................... 72
SCHEDULE I - Commitments
SCHEDULE II - Encumbrances
SCHEDULE III - Restrictive Agreements
SCHEDULE IV - Investments
EXHIBIT A - Form of Assignment and Acceptance
EXHIBIT B - Form of Security Agreement
EXHIBIT C - Form of Power Marketing Security Agreement
EXHIBIT D - Form of Collateral Agency and Intercreditor Agreement
EXHIBIT E - Form of Subordination Provisions
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WORKING CAPITAL AGREEMENT dated as of February 22, 2000 among NRG
NORTHEAST GENERATING LLC, the GUARANTORS party hereto, the LENDERS party hereto,
THE CHASE MANHATTAN BANK, as an Administrative Agent and CITIBANK, N.A., as an
Administrative Agent and as Paying Agent.
The Borrower (as hereinafter defined) has requested that the
Lenders (as so defined) make loans to it, under the guarantee of the Guarantors
(as so defined), in an aggregate principal amount not exceeding $50,000,000, to
finance ordinary course working capital needs (other than debt service) of the
Borrower and the Guarantors. The Lenders are prepared to make such loans upon
the terms and conditions hereof, and, accordingly, the parties hereto agree as
follows:
ARTICLE I. DEFINITIONS.
SECTION 1.01. Defined Terms
. As used in this Agreement, the following terms have the meanings specified
below:
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans constituting such Borrowing, are bearing
interest at a rate determined by reference to the Alternate Base Rate.
"Adjusted LIBO Rate" means, for the Interest Period for any
Eurodollar Borrowing, an interest rate per annum (rounded upwards, if necessary,
to the next 1/100 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate for such Interest Period.
"Administrative Agents" means Chase and Citibank acting jointly,
in their respective capacities as administrative agents for the Lenders
hereunder.
"Administrative Questionnaire" means an Administrative
Questionnaire in a form supplied to the Lenders by the Administrative Agents.
"Affected Property" means, with respect to any Event of Loss, the
property of the Borrower or any of the Guarantors that is lost, destroyed,
damaged, condemned or otherwise taken as a result of such Event of Loss.
"Affiliate" with respect to any Person, means any other Person
directly or indirectly controlling or controlled by, or under direct or indirect
common control with, such Person. For purposes of this definition, the term
"control" (including the correlative meanings of the terms "controlled by" and
"under common control with"), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of
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the management policies of such Person, whether through the ownership of voting
securities or by contract or otherwise. In any event, any member of the Borrower
shall be deemed to be an Affiliate of the Borrower and any Person that owns
directly or indirectly 10% or more of securities having ordinary voting power
for the election of directors or other governing body of a corporation or 10% or
more of the Borrower or other ownership interests of any other Person will be
deemed to control such corporation or other Person.
"Agreement" means this Working Capital Agreement dated as of
February 22, 2000 among the Borrower, the Guarantors, the Lenders, the
Administrative Agents and the Paying Agent.
"Alternate Base Rate" means a fluctuating interest rate per annum
equal at all times to the highest of:
(a) the rate of interest announced publicly by the Paying
Agent in New York, New York, from time to time, as the Paying Agent's
base rate; or
(b) 0.5% per annum above the latest three-week moving average
of secondary market morning offering rates in the United States for
three-month certificates of deposit of major United States money market
banks, such three-week moving average being determined weekly on each
Monday (or, if any such day is not a Business Day, on the next
succeeding Business Day) for the three-week period ending on the next
previous Friday by the Paying Agent on the basis of such rates reported
by certificate of deposit dealers to and published by the Federal
Reserve Bank of New York or, if such publications shall be suspended or
terminated, on the basis of quotations for such rates received by the
Paying Agent from three New York certificate of deposit dealers of
recognized standing selected by the Paying Agent, in either case
adjusted to the nearest 1/4 of one percent or, if there is no nearest
1/4 of one percent, to the next higher 1/4 of one percent; and
(c) for any day, 0.5% per annum above the weighted average of the
rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published
for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day which is a Business Day, the
average of the quotations for such day on such transactions received by
the Paying Agent from three Federal funds brokers of recognized standing
selected by it.
"Applicable Percentage" means, with respect to any Lender, the
percentage of the total Commitments or Loans hereunder represented by the
aggregate amount of such Lender's Commitments or Loans hereunder.
"Applicable Rate" means, for any day, shall be 0.250% with
respect to any ABR Loan and 1.250% with respect to any Eurodollar Loan
"Arthur Kill Operator" means NRG Arthur Kill Operations Inc., a
Delaware
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corporation.
"Arthur Kill Power" means Arthur Kill Power LLC, a Delaware
limited liability company.
"Assignment of Payments" means each the Assignment of Payments
dated as of February 22, 2000 between the Borrower and each Guarantor party to a
Power Marketing Agreement.
"Astoria Operator" means NRG Astoria Gas Turbines Operations
Inc., a Delaware corporation.
"Astoria Power" means Astoria Gas Turbine Power LLC, a Delaware
limited liability company.
"Authorized Representative" of any of the Borrower, the
Guarantors or any other Person means the person or persons authorized to act on
behalf of such entity by its chief executive officer, president, chief operating
officer, chief financial officer or any vice president or its Board of Directors
or any other governing body of such entity.
"Availability Period" means the period from and including the
Effective Date to and including the date one Business Day prior to the Maturity
Date.
"Board" means the Board of Governors of the Federal Reserve
System of the United States of America.
"Board of Directors", when used with respect to a corporation,
means either the board of directors of such corporation or any committee of that
board duly authorized to act for it, and when used with respect to a limited
liability company, partnership or other entity other than a corporation, any
Person or body authorized by the organizational documents or by the voting
equity owners of such entity to act for them.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Borrower to have been adopted by the
Board of Directors of the Borrower and to be in full force and effect on the
date of such certification.
"Bond Documents" means the Indenture, the Offering Circular, the
Bonds and the Purchase Agreement.
"Bonds" means, collectively, (a) the $320,000,000 8.065% Series A
Senior Secured Bonds due 2004 of the Borrower, (b) the $130,000,000 8.842%
Series B Senior Secured Bonds due 2015 of the Borrower, (c) the $300,000,000
9.292% Series C Senior Secured Bonds due 2004 of the Borrower, and bonds of the
Borrower issued pursuant the First Series Supplemental Indenture.
"Borrower" means NRG Northeast Generating LLC, a Delaware limited
liability
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company.
"Borrowing" means (a) all ABR Loans made, converted or continued
on the same date or (b) all Eurodollar Loans that have the same Interest Period.
For purposes hereof, the date of a Borrowing comprising one or more Loans that
have been converted or continued shall be the effective date of the most recent
conversion or continuation of such Loan or Loans.
"Borrowing Request" means a request by the Borrower for a
Borrowing in accordance with Section 2.03.
"Business Day" means any day that is not a Saturday, Sunday or
other day on which commercial banks in New York City or the city of Minneapolis,
Minnesota are authorized or required by law to remain closed; provided that,
when used in connection with a Eurodollar Loan, the term "Business Day" shall
also exclude any day on which banks are not open for dealings in Dollar deposits
in the London interbank market.
"Change in Law" means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender (or,
for purposes of Section 2.12(b), by any lending office of such Lender or by such
Lender's holding company, if any) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the date of this Agreement.
"Change of Control" means (a) the acquisition of ownership,
directly or indirectly, beneficially or of record or otherwise, by any Person or
group (within the meaning of the Exchange Act and the rules of the SEC
thereunder as in effect on the date hereof) other than NRG Energy or its
wholly-owned Subsidiaries, of ownership interests representing more than 50% of
the aggregate ordinary voting power represented by the membership interests of
the Borrower; or (b) the acquisition of direct or indirect control of the
Borrower by any Person or group other than NRG Energy or its wholly-owned
Subsidiaries otherwise than as described in clause (a); provided that there
shall be no Change of Control if the Required Lenders approve the occurrence of
such event.
"Chase" means The Chase Manhattan Bank.
"Citibank" means Citibank, N.A.
"CL&P" means Connecticut Light & Power Company, a Connecticut
corporation.
"CL&P Acquisition Documents" means the Asset Sales Agreement
between NRG Energy and CL&P dated as of July 1, 1999 and each of the other
agreements attached as a form thereto.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time.
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"Collateral Agency and Intercreditor Agreement" means the
Collateral Agency and Intercreditor Agreement substantially in the form of
Exhibit D among the Borrower, the Initial Guarantors, the Administrative Agents,
the Trustee and the Collateral Agent.
"Collateral Agent" means Chase, in its capacity as collateral
agent under the Security Agreement, the NRG Power Marketing Security Agreement
and the Collateral Agency and Intercreditor Agreement.
"Collateral Documents" means the Security Agreement, the NRG
Power Marketing Security Agreement, the Collateral Agency and Intercreditor
Agreement, each Assignment of Payments, the Consent and Agreements and the
Intercompany Notes.
"Commitment" means, with respect to each Lender, the commitment
of such Lender to make one or more Revolving Loans hereunder during the
Availability Period, expressed as an amount representing the maximum aggregate
principal amount of the Revolving Loans to be made by such Lender hereunder, as
such commitment may be (a) reduced from time to time pursuant to Section 2.06 or
2.08(b) and (b) reduced or increased from time to time pursuant to assignments
by or to such Lender pursuant to Section 10.04. The initial amount of each
Lender's Commitment is set forth on Schedule I, or in the Assignment and
Acceptance pursuant to which such Lender shall have assumed its Commitment, as
applicable.
"Con Ed" means Consolidated Edison Company of New York, Inc.
"Connecticut Jet Operator" means NRG Connecticut Jet Operations
Inc., a Delaware corporation.
"Connecticut Jet Power" means Connecticut Jet Power LLC, a
Delaware limited liability company.
"Consent and Agreements" means, collectively, (a) the consent and
agreement dated February 22, 2000 among Niagra Mohawk Power Corporation, Dunkirk
Power, Huntley Power and Oswego Power, (b) the consent and agreement dated
February 22, 2000 among Consolidated Edison Company of New York, Inc., Arthur
Kill Power and Astoria Power, (c) the consent and agreement dated February 22,
2000 among Eastern Edison Company, Blackstone Valley Electric Company, Newport
Electric Corporation and NRG Power Marketing and (d) the consent and agreement
dated February 22, 2000 between CL&P and NRG Power Marketing.
"Corporate Services Agreement" means (a) the Corporate Services
Agreement between NRG Energy and Astoria Power dated June 25, 1999, (b) the
Corporate Services Agreement between NRG Energy and Arthur Kill Power dated June
25, 1999, (c) the Corporate Services Agreement between NRG Energy and Dunkirk
Power dated June 11, 1999, (d) the Corporate Services Agreement between NRG
Energy and Huntley Power dated June 11, 1999, (e) the Amended and Restated
Corporate Services Agreement between NRG Energy and Somerset Power dated July
15, 1999, (f) the Corporate Services Agreement between NRG Energy and Oswego
Harbor Power dated October 22, 1999, (g) the Corporate Services Agreement
between NRG Energy and Connecticut Jet Power dated December 15, 1999, (h) the
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Corporate Services Agreement between NRG Energy and Devon Power dated December
15, 1999, (i) the Corporate Services Agreement between NRG Energy and Middletown
Power dated December 15, 1999, (j) the Corporate Services Agreement between NRG
Energy and Montville Power dated December 15, 1999 and (k) the Corporate
Services Agreement between NRG Energy and Norwalk Harbor Power dated December
15, 1999, or any combination thereof (as the context requires).
"Debt Service Coverage Ratio" for any period means, on a
consolidated basis of the Borrower and the Guarantors (excluding the
Unrestricted Subsidiaries and without duplication), the ratio of, (x) all
Revenues less Operating Expenses (other than nonrecurring expenses in connection
with the issuance of Permitted Indebtedness), less all capital expenditures
(unless funded with Permitted Indebtedness), to (y) the aggregate of principal,
interest and fees payable on outstanding Permitted Indebtedness (other than
Subordinated Indebtedness, fees payable in connection with the issuance of
Permitted Indebtedness and principal payments under this Agreement, provided
that such amounts remain available to be drawn under the Agreement or are
refinanced under a replacement working capital facility) plus payments required
to be made under any Interest Rate Agreements, less payments to be received
under any Interest Rate Agreement for such period.
"Default" means any event or condition which constitutes an Event
of Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Designation Letter" has the meaning given to such term in the
Collateral Agency and Intercreditor Agreement.
"Devon Operator" means NRG Devon Operations Inc., a Delaware
corporation.
"Devon Power" means Devon Power LLC, a Delaware limited liability
company.
"Dollars" or "$" refers to lawful money of the United States of
America.
"Dunkirk Operator" means NRG Dunkirk Operations Inc., a Delaware
corporation.
"Dunkirk Power" means Dunkirk Power LLC, a Delaware limited
liability company.
"Effective Date" means the date on which the conditions specified
in Section 5.01 are satisfied (or waived in accordance with Section 10.02).
"Environmental Approvals" means Governmental Approvals required
under applicable Environmental Laws.
"Environmental Laws" means any and all Laws (as well as
obligations, duties and requirements relating thereto under common law) relating
to: (i) noise, emissions, discharges,
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spills, releases or threatened releases of pollutants, contaminants,
environmentally regulated materials, materials containing environmentally
regulated materials, or hazardous or toxic materials or wastes into ambient air,
surface water, groundwater, watercourses, publicly or privately-owned treatment
works, drains, sewer systems, wetlands, septic systems or onto land surface or
subsurface strata; (ii) the use, treatment, storage, disposal, handling,
manufacture, processing, distribution, transportation, or shipment of
environmentally regulated materials, materials containing environmentally
regulated materials or hazardous and/or toxic wastes, material, products or
by-products (or of equipment or apparatus containing environmentally regulated
materials); (iii) pollution or the protection of human health, the environment
or natural resources or (iv) zoning and land use.
"Environmental Liability" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Borrower or any of its
Subsidiaries directly or indirectly resulting from or based upon (a) violation
of any Environmental Law, (b) the generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials, (c) exposure to any
Hazardous Materials, (d) the release or threatened release of any Hazardous
Materials into the environment or (e) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"Eurodollar", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans constituting such Borrowing, are
bearing interest at a rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" has the meaning assigned to such term in
Article VIII.
"Event of Eminent Domain" means any compulsory transfer or taking
or transfer under threat of compulsory transfer or taking of any material part
of the collateral by any Governmental Authority.
"Event of Loss" means an event which causes all or a portion of
any Facility to be damaged, destroyed or rendered unfit for normal use for any
reason whatsoever including, but not limited to, an Event of Eminent Domain.
"Facilities" means the electric generation plants and the related
facilities and equipment owned by the Initial Guarantors and any Subsequent
Guarantors and, in each case, the business and activities related thereto.
"Federal Funds Effective Rate" means, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
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necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Paying Agent from three Federal funds brokers of
recognized standing selected by it.
"Financing Documents" means this Working Capital Agreement and
the Collateral Documents..
"First Series Supplemental Indenture" means the First
Supplemental Indenture dated as of February 22, 2000 among the Trustee, the
Borrower and the Guarantors.
"Foreign Lender" means any Lender that is organized under the
laws of a jurisdiction other than that in which the Borrower is located. For
purposes of this definition, the United States of America, each State thereof
and the District of Columbia shall be deemed to constitute a single
jurisdiction.
"Funds Administration Agreement" means the Funds Administration
Agreement dated February 22, 2000 among the Borrower and each of the Guarantors.
"GAAP" means generally accepted accounting principles in effect
in the United States applied on a basis consistent with the principles, methods,
procedures and practices employed in the preparation of the Borrower's audited
financial statements, including, without limitation, those set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as approved by a significant segment of the accounting profession.
"Good Faith Contest" means the contest of an item if such item is
diligently contested in good faith by appropriate proceedings timely instituted
and (a) adequate reserves are established if required by and in accordance with
GAAP with respect to the contested item and held in cash or investments and (b)
during the period of such contest the enforcement of any contested item is
effectively stayed.
"Governmental Approvals" means any authorization, consent,
approval, order, license, franchise, ruling, permit, certification, waiver,
exemption, filing or registration by or with any Governmental Authority
(including, without limitation, Environmental Approvals, zoning variances,
special exceptions and non-conforming uses) relating to the construction,
ownership, operation or maintenance of the Facilities or to the execution,
delivery or performance of any Transaction Document.
"Governmental Authority" means any nation, state, sovereign or
government, any federal, regional, state, municipal, local or political
subdivision thereof or any department, commission, board, bureau, agency,
instrumentality, judicial or administrative body or other entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guarantee" means, with respect to any Person, any obligation,
contingent or otherwise, of such Person directly or indirectly guaranteeing in
any manner any Indebtedness or
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other obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or other obligation (whether arising by virtue of
Borrower arrangements, by agreement to keep-well, to purchase assets, goods,
bonds or services, to take-or-pay, or to maintain financial statement conditions
or otherwise), (ii) entered into for the purpose of assuring in any other manner
the obligee of such Indebtedness or other obligation of the payment thereof or
to protect such obligee against loss in respect thereof (in whole or in part) or
(iii) to reimburse any Person for the payment by such Person under any letter of
credit, surety, bond or other guaranty issued for the benefit of such other
Person, provided that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
or "Guaranteed" used as a verb has a correlative meaning.
"Guaranteed Obligations" has the meaning set forth in Section
3.01.
"Guarantor" means each of the Initial Guarantors and any
Subsequent Guarantor. "Hazardous Materials" means all explosive or radioactive
substances or wastes and all hazardous or toxic substances, wastes or other
pollutants, including petroleum or petroleum distillates, asbestos or asbestos
containing materials, polychlorinated biphenyls, radon gas, infectious or
medical wastes and all other substances or wastes of any nature regulated
pursuant to any Environmental Law.
"Hedging Agreement" means any Interest Rate Agreement, foreign
currency exchange agreement, commodity price protection agreement or other
interest or currency exchange rate or commodity price hedging arrangement
entered into in the ordinary course of business and not for speculative
purposes.
"Huntley Operator" means NRG Huntley Operations Inc., a Delaware
corporation.
"Huntley Power" means Huntley Power LLC, a Delaware limited
liability company.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
under conditional sale or other title retention agreements relating to property
acquired by such Person, (d) all obligations of such Person upon which interest
charges are customarily paid, (e) all obligations of such Person in respect of
the deferred purchase price of property or services (excluding trade and other
accounts payable incurred in the ordinary course of business so long as such
trade accounts payable are payable and paid within 90 days of the date the
respective goods are delivered or the respective services rendered), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (g) all Indebtedness of any other Person
guaranteed by such person or for which such Person shall otherwise
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(including payments pursuant to any keep-well, make-well or similar arrangement)
become directly or indirectly liable, (h) all capital lease obligations of such
Person, (i) all obligations, contingent or otherwise, of such Person as an
account party or issuer in respect of letters of credit or the like and (j) all
obligations, contingent or otherwise, of such Person in respect of bankers'
acceptances. The Indebtedness of any Person shall include the Indebtedness of
any other entity (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such
Person's ownership interest in or other relationship with such entity, except to
the extent the terms of such Indebtedness provide that such Person is not liable
therefor.
"Indemnification Agreement" means the indemnification agreement
dated December 23, 1999 by NRG Energy in favor of The Chase Manhattan Bank and
Citibank, N.A. as Lender Representatives (as defined therein) and the
Indemnified Parties (as defined therein).
"Indemnity Consent Agreement" means the letter dated February 22,
2000 among NRG Energy, the Borrower, the initial purchasers party to the
Purchase Agreement; the Trustee, the Collateral Agent and the Administrative
Agents.
"Indenture" means the indenture dated as of February 22, 2000 by
and among the Borrower, the Guarantors and the Trustee.
"Independent Engineer" means Stone & Webster.
"Independent Insurance Consultant" means Marsh USA, Inc.
"Independent Market Consultant" means PHB Hagler Bailly.
"Initial Guarantors" means each of Arthur Kill Power, Astoria
Power, Connecticut Jet Power, Devon Power, Dunkirk Power, Huntley Power,
Middletown Power, Montville Power, Norwalk Harbor Power, Oswego Harbor Power and
Somerset Power.
"Intercompany Loan" means Indebtedness to the Borrower or any
Guarantor by the Borrower or any Guarantor.
"Intercompany Notes" means the notes evidencing indebtedness owed
by the Guarantors to the Borrower dated February 22, 2000.
"Interest Election Request" means a request by the Borrower to
convert or continue a Borrowing in accordance with Section 2.05.
"Interest Payment Date" means (a) with respect to any ABR Loan,
each Quarterly Date and (b) with respect to any Eurodollar Loan, the last day of
each Interest Period therefor.
"Interest Period" means, for any Eurodollar Loan, the period
commencing on the date of such Loan and ending on the numerically corresponding
day in the calendar month that is one, two or three months thereafter, as
specified in the applicable Borrowing Request or Interest
WORKING CAPITAL AGREEMENT
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Election Request; provided that (i) if any Interest Period would end on a day
other than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless such next succeeding Business Day would fall in
the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day and (ii) any Interest Period that commences on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of such
Interest Period. For purposes hereof, the date of a Loan initially shall be the
date on which such Loan is made and thereafter shall be the effective date of
the most recent conversion or continuation of such Loan.
"Interest Rate Agreement" means any interest rate protection
agreement, interest rate future, interest rate option, interest rate swap,
interest rate cap or other interest rate hedge arrangement, to which the
Borrower or any Guarantor is a party, entered into in the ordinary course of
business in connection with Permitted Indebtedness and not for speculative
purposes.
"Investment" means, for any Person: (i) the acquisition (whether
for cash, property of such Person, services or securities or otherwise) of
capital stock, bonds, notes, debentures or other ownership interests or other
securities of any other Person or any agreement to make any such acquisition
(including, without limitation, any "short sale" or any sale of any securities
at a time when such securities are not owned by the Person entering into such
short sale), (ii) the making of any deposit with, or advance, loan or other
extension of credit to, any other Person (including the purchase of property
from another Person subject to an understanding or agreement, contingent or
otherwise, to resell such property to such Person, but excluding any such
advance, loan or extension of credit arising in connection with the sale of
inventory or supplies by such Person in the ordinary course of business), (iii)
the entering into of any Guarantee of, or any other contingent obligation with
respect to, Indebtedness or other liability of any other Person and (without
duplication) any amount committed to be advanced, lent or extended to such
Person or (iv) the entering into of any Hedging Agreement.
"Lenders" means the Persons listed on Schedule I and any other
Person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Acceptance.
"LIBO Rate" means, for the Interest Period for any Eurodollar
Borrowing, the rate appearing on Page 3750 of the Dow Jones Markets (Telerate)
Service (or on any successor or substitute page of such Service, or any
successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by the Paying Agent from time to time for purposes of providing
quotations of interest rates applicable to Dollar deposits in the London
interbank market) at approximately 11:00 a.m., London time, two Business Days
prior to the commencement of such Interest Period, as the rate for the offering
of Dollar deposits with a maturity comparable to such Interest Period. In the
event that such rate is not available at such time for any reason, then the LIBO
Rate for such Interest Period shall be the rate at which Dollar deposits of
$5,000,000 and for a maturity comparable to such Interest Period are offered by
the principal London office of the Paying Agent in immediately available funds
in the London interbank market at approximately
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11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage, deed
of trust, lien, pledge, hypothecation, encumbrance, charge or security interest
in, on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Loans" means the loans made by the Lenders to the Borrower
pursuant to this Agreement.
"Loss Proceeds" means all insurance proceeds or other amounts
received on account of any Event of Loss.
"Margin Stock" means "margin stock" within the meaning of
Regulations T, U and X of the Board.
"Material Adverse Effect" means a material adverse effect on (a)
the business, assets, operations, prospects or condition, financial or
otherwise, of the Borrower and the Guarantors taken as a whole, (b) the ability
of any Obligor to perform any of its obligations under any Transaction Document
to which it is a party, which obligations are material to Borrower and the
Guarantors, taken as a whole, or (c) the material rights of or benefits
available to the Lenders or the Administrative Agents or the Paying Agent.
"Maturity Date" means February 20, 2001.
"Member" means each of NRG Eastern and NRG Generation, which are
at the date of this Agreement the sole holders of an equity interest in the
Borrower, and any future members or equity holders of the Borrower.
"Middletown Operator" means NRG Middletown Operations Inc., a
Delaware corporation.
"Middletown Power" means Middletown Power LLC, a Delaware limited
liability company.
"Montville Operator" means NRG Montville Operations Inc., a
Delaware corporation.
"Montville Power" means Montville Gas Turbine Power LLC, a
Delaware limited liability company.
"Moody's" means Moody's Investor Service, Inc.
"Net Tangible Assets" means means, as of the date of any
determination thereof, the total amount of all assets of the Borrower and the
Guarantors (determined on a consolidated
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basis in accordance with GAAP), less the sum of (i) the consolidated current
liabilities of the Borrower and the Guarantors (determined on a consolidated
basis in accordance with GAAP) and (ii) assets properly classified as
"intangible assets" in accordance with GAAP.
"Non-Recourse Obligations" means Indebtedness or other
obligations or liabilities (i) as to which neither the Borrower nor any of the
Guarantors (a) provides credit support of any kind (including any undertaking,
agreement or instrument that would constitute Indebtedness) (b) is directly or
indirectly liable (as a guarantor or otherwise) other than pursuant to a pledge
by the issuer of an equity interest in the obligor of the Indebtedness or (c)
constitutes the lender and (ii) no default with respect to which (including any
rights any Person may have to take enforcement action against an Unrestricted
Subsidiary) would permit (upon notice, lapse of time or both) any holder of any
Indebtedness of the Borrower or any of Guarantor to declare a default on such
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its stated maturity.
"Norwalk Power" means Norwalk Power LLC, a Delaware limited
liability company.
"Norwalk Operator" means NRG Norwalk Operations Inc., a Delaware
corporation.
"NRG Eastern" means NRG Eastern LLC, a Delaware limited liability
company.
"NRG Energy" means NRG Energy, Inc., a Delaware corporation.
"NRG Generation" means Northeast Generation Holding LLC, a
Delaware limited liability company.
"NRG Operations" means NRG Operating Services, Inc., a Delaware
corporation.
"NRG Power Marketing" means NRG Power Marketing Inc., a Delaware
corporation.
"NRG Power Marketing Security Agreement" means the security
agreement substantially in the form of Exhibit C among NRG Power Marketing and
the Collateral Agent, as the same shall be modified and supplemented and in
effect from time to time..
"Obligor" means the Borrower and each Guarantor.
"Offering Circular" means the Preliminary Offering Circular dated
as of February 1, 2000 together with the Offering Circular dated as of February
15, 2000, each prepared by the Borrower setting forth the information concerning
the Borrower and the Bonds.
"Officer's Certificate" means, in the case of the Borrower, a
certificate of an Authorized Representative of the Borrower and signed by a
managing director, president, a vice president, the treasurer, an assistant
treasurer, the secretary or an assistant secretary of the
WORKING CAPITAL AGREEMENT
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Borrower.
"Operating Expenses" means for any period, the sum, computed
without duplication, of all costs and expenses incurred (in the case of the
Borrower) by the Borrower or (in the case of any Guarantor) by such Guarantor
during such period (or, in the case of any future period, projected to be paid
or payable during such period) in connection with the operation, maintenance and
administration of the Facilities.
"Operation and Maintenance Agreement" means (a) the Operation and
Maintenance Agreement dated June 25, 1999 between the Astoria Operator and
Astoria Power, (b) the Operation and Maintenance Agreement dated June 25, 1999
between the Arthur Kill Operator and Arthur Kill Power, (c) the Operation and
Maintenance Agreement dated December 15, 1999 between the Middletown Operator
and Connecticut Jet Power, (d) the Operation and Maintenance Agreement dated
December 15, 1999 between the Devon Operator and Devon Power, (e) the Operation
and Maintenance Agreement dated June 11, 1999 between the Dunkirk Operator and
Dunkirk Power, (f) the Operation and Maintenance Agreement dated June 11, 1999
between the Huntley Operator and Huntley Power, (g) the Operation and
Maintenance Agreement dated December 15, 1999 between the Middletown Operator
and Middletown Power, (h) the Operation and Maintenance Agreement dated December
15, 1999 between the Montville Operator and Montville Power, (i) the Operation
and Maintenance Agreement dated December 15, 1999 between the Norwalk Operator
and Norwalk Power, (j) the Operation and Maintenance Agreement dated October 22,
1999 between the Oswego Operator and Oswego Harbor Power and (k) the Amended and
Restated Operation and Maintenance Agreement dated July 15, 1999 between the
Somerset Operator and Somerset Power and any successor or replacement
agreements, or any combination thereof (as the context requires).
"Operator" means the Arthur Kill Operator, the Astoria Operator,
the Connecticut Jet Operator, the Devon Operator, the Dunkirk Operator, the
Huntley Operator, the Middletown Operator, the Montville Operator, the Norwalk
Operator, the Oswego Operator or the Somerset Operator, or any combination
thereof (as the context requires).
"Oswego Harbor Power" means Oswego Harbor Power LLC, a Delaware
limited liability company.
"Oswego Operator" means NRG Oswego Harbor Power Operations Inc.,
a Delaware corporation.
"Paying Agent" means Citibank, solely in its role as Paying Agent
under this Ageement.
"Permitted Indebtedness" means (a) the Bonds; (b) Indebtedness,
provided, that after giving effect to the incurrence of such Indebtedness on a
pro forma basis and the application of the net proceeds thereof (A) there is no
current Default or Event of Default unless the proceeds of such Indebtedness are
applied to cure, and such application does cure, such Default or Event of
Default; and (B) the Borrower provides an Officer's Certificate that certifies
that (x) the minimum annual Projected Debt Service Coverage Ratio for each
calendar year commencing
WORKING CAPITAL AGREEMENT
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with the year in which such Indebtedness is incurred through the final maturity
of the Bonds with the longest maturity is no less than 2.00 to 1; and (y) the
Debt Service Coverage Ratio for the preceding four consecutive fiscal quarters
(taken as a whole) was not less than 2.00 to 1 (or such shorter period covering
the quarters ended subsequent to the issuance of the Bonds); and (C) each of the
Rating Agencies confirms its then current rating on the Bonds; (c) Indebtedness
under this Working Capital Agreement plus, upon the acquisition of any
Subsequent Guarantor or any additional facility by a Guarantor or the Borrower,
4% of the Indebtedness incurred by the Borrower in connection with such
acquisition; (d) Indebtedness related to Permitted Liens; (e) Indebtedness of
the Borrower to a wholly-owned Guarantor; (f) Indebtedness represented by
Hedging Agreements; (g) Indebtedness in the form of performance or payment
guarantees entered into by the Borrower in the ordinary course of business in
connection with (i) fuel procurement by NRG Power Marketing directly related to
the Facilities, (ii) sales or purchases of emissions allowances by NRG Power
Marketing directly related to the facilities and (iii) sales of electrical
generating capacity, energy or ancillary services by NRG Power Marketing
directly related to the Facilities in each case, so long as such activities are
not for speculative purposes; (h) Indebtedness in respect of letters of credit,
surety bonds or performance bonds issued in the ordinary course of business; (i)
trade accounts payable or other similar indebtedness arising, and accrued
expenses incurred, in the ordinary course of business (but not in any case for
borrowed money) (j) other Senior Debt not to exceed $15,000,000; and (k)
Subordinated Indebtedness, provided, that no such Permitted Indebtedness shall
be secured by the Collateral unless the lender or lenders thereof or its or
their representative shall have executed, and been designated a "Secured Party"
pursuant to, a Designation Letter delivered to the Collateral Agent.
"Permitted Investments" means investments in securities or other
instruments that are: (i) direct obligations of the United States, or any agency
thereof; (ii) obligations fully guaranteed by the United States or any agency
thereof; (iii) certificates of deposit issued by commercial banks under the laws
of the United States or any political subdivision thereof or under the laws of
Canada, Japan or any country that is a member of the European Economic Union
having a combined capital and surplus of at least $500,000,000 and having
long-term unsecured debt securities rated "A" or better by S&P and "A2" or
better by Moody's (but at the time of investment not more than $25,000,000 may
be invested in such certificates of deposit from any one bank); (iv) repurchase
obligations for underlying securities of the types described in clauses (i) and
(ii) above, entered into with any commercial bank meeting the qualifications
specified in clause (iii) above or any other financial institution having
long-term unsecured debt securities rated "A" or better by S&P and "A2" or
better by Moody's in connection with which such underlying securities are held
in trust or by a third-party custodian; (v) open market commercial paper of any
corporation incorporated or doing business under the laws of the United States
or of any political subdivision thereof having a rating of at least "A-1" from
S&P and "P-1" from Moody's (but at the time of investment not more than
$25,000,000 may be invested in such commercial paper from any one company); (vi)
investments in money market funds having a rating assigned by each of the Rating
Agencies equal to the highest rating assigned thereby to money market funds or
money market mutual funds sponsored by any securities broker dealer of
recognized national standing (or an Affiliate thereof), having an investment
policy that requires substantially all the invested assets of such fund to be
invested in investments described in any one or more of the foregoing clauses
and having a rating of "A" or better by S&P and "A2" or
WORKING CAPITAL AGREEMENT
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better by Moody's (including money market funds or money market mutual funds for
which Chase in its individual capacity or any of its affiliates is investment
manager or adviser) or (vii) a deposit of any bank (including the Administrative
Agents or the Trustee), trust company or financial institution authorized to
engage in the banking business having a combined capital and surplus of at least
$500,000,000, whose long-term, unsecured debt is rated "A" or higher by S&P and
"A2" or higher by Moody's.
"Permitted Liens" means:
(a) Liens in favor of the Borrower or any Guarantor;
(b) Liens imposed by law for taxes, assessments or governmental
charges that are not yet delinquent and remain payable without penalty or that
are being contested in good faith by appropriate proceedings;
(c) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in the ordinary course
of business and securing obligations that are not overdue by more than 45 days
or are being contested in good faith by appropriate proceedings;
(d) pledges and deposits made in the ordinary course of business
in compliance with workers' compensation, unemployment insurance and other
social security laws or regulations or other statutory obligations of the
Borrower or any Guarantor;
(e) cash deposits or rights of set-off to secure the performance
of bids, tenders, trade contracts, leases, statutory obligations, surety and
appeal bonds, performance bonds, government contracts and other obligations of a
like nature (other than for payment obligations of borrowed money), in each case
in the ordinary course of business;
(f) judgment liens in respect of judgments that do not give rise
to an Event of Default under Section 8.01(g);
(g) encumbrances identified on Schedule II hereto, and other
easements, zoning restrictions, rights-of-way and similar charges or
encumbrances on real property imposed by law or arising in the ordinary course
of business that do not secure any monetary obligations and do not materially
detract from the value of the affected property or interfere with the ordinary
conduct of business of the Borrower or any Guarantor;
(h) Liens securing Hedging Agreements which Hedging Agreements
relate to Indebtedness that is secured by Liens otherwise permitted under this
Agreement;
(i) Liens that are incidental to the business of the Borrower or
the Guarantors, are not for borrowing money and are not material, taken as a
whole, to the business of the Borrower and the Guarantors;
(j) Liens created or granted pursuant to the Collateral
Documents; and
WORKING CAPITAL AGREEMENT
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(k) Liens with respect to other Permitted Indebtedness (other
than Subordinated Indebtedness), provided that the Indebtedness pursuant to this
Agreement is secured on an equal and ratable basis with the obligation so
secured until such obligation is no longer secured and provided further that the
creditor with respect to such obligation has been designated a Secured Party
pursuant to a Designation Letter.
"Person" means any individual, sole proprietorship, corporation,
company, partnership, joint venture, limited liability company, trust,
unincorporated association, institution, Governmental Authority or any other
entity.
"Power Sales Agreement" means each transition agreement and each
other contract or agreement, other than Power Marketing Agreements, now existing
or entered into in the future by the Borrower or any of the Guarantors for the
sale of electrical generating capacity, electrical energy, ancillary services or
any combination thereof.
"Power Marketing Agreement" means (a) the Power Sales and Agency
Agreement between NRG Power Marketing and Astoria Power, (b) the Power Sales and
Agency Agreement dated June 25, 1999 between NRG Power Marketing and Arthur Kill
Power, (c) the Power Sales and Agency Agreement dated December 15, 1999 between
NRG Power Marketing and Connecticut Jet Power, (d) the Power Sales and Agency
Agreement dated December 15, 1999 between NRG Power Marketing and Devon Power,
(e) the Power Sales and Agency Agreement dated June 11, 1999 between NRG Power
Marketing and Dunkirk Power, (f) the Power Sales and Agency Agreement dated June
11, 1999 between NRG Power Marketing and Huntley Power, (g) the Power Sales and
Agency Agreement dated December 15, 1999 between NRG Power Marketing and
Middletown Power, (h) the Power Sales and Agency Agreement dated December 15,
1999 between NRG Power Marketing and Montville Power, (i) the Power Sales and
Agency Agreement dated December 15, 1999 between NRG Power Marketing and Norwalk
Power, (j) the Power Sales and Agency Agreement dated October 22, 1999 between
NRG Power Marketing and Oswego Harbor Power and (k) the Amended and Restated
Power Sales and Agency Agreement dated July 15, 1999 between NRG Power Marketing
and Somerset Power, or any combination thereof (as the context requires).
"Projected Debt Service Coverage Ratio" means, at any time of
determination thereof, a projection of the Debt Service Coverage Ratio over the
period specified, prepared by the Borrower in good faith based upon assumptions
consistent in all material respects with the Transaction Documents, historical
operating results, if any, and the Borrower's good faith projections of future
Revenues and Operating Expenses of the Borrower and the Guarantors in light of
the then existing or reasonably expected regulatory and market environments in
the markets in which the Facilities are or will be operated and upon the
assumption that no early redemption or prepayment of the Bonds of any series
will be made prior to the stated maturity of such series of Bonds. Whenever this
Agreement provides for the determination of a Projected Debt Service Coverage
Ratio, the Projected Debt Service Coverage Ratio shall be set forth in an
Officer's Certificate of the Borrower filed with the Administrative Agents
stating that, based upon reasonable investigation and review, the Projected Debt
Service Coverage Ratio is based on the criteria set forth in the preceding
sentence.
WORKING CAPITAL AGREEMENT
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"Prudent Industry Practice" means any of those practices,
methods, standards and acts (including but not limited to the practices, methods
and acts engaged in or approved by a significant portion of the electric power
generation industry in the United States) that, at a particular time, in the
exercise of reasonable judgment in light of the facts known or that should
reasonably have been known at the time a decision was made, could have been
expected to accomplish the desired result consistent with good business
practices, reliability, economy, safety and expedition, and which practices
generally conform to applicable law and governmental approvals. "Prudent
Industry Practice" is not intended to be limited to optimal practices that could
be used to accomplish a desired result.
"PUHCA" means the Public Utility Holding Company Act of 1935, as
amended and in effect from time to time.
"Purchase Agreement" means the agreement to purchase Bonds by and
among the Borrower, Chase Securities, Inc and Salomon Smith Barney Inc.
"Quarterly Dates" means the last Business Day of January, April,
July and October in each year, the first of which shall be the first such day
after the date hereof.
"Rating Agencies" means S&P and Moody's, or another nationally
recognized credit rating agency of similar standing if either of the foregoing
corporations is not in the business of rating the subject of such rating.
"Register" has the meaning set forth in Section 10.04.
"Related Parties" means, with respect to any specified Person,
such Person's Affiliates and the respective directors, officers, employees,
agents and advisors of such Person and such Person's Affiliates.
"Required Lenders" means, at any time, subject to Section
10.02(b), Lenders having outstanding Loans and unused Commitments representing
more than 50% of the sum of the total outstanding Loans and unused Commitments
at such time.
"Restoration Certificate" shall have the meaning assigned to such
term in Section 2.08(b).
"Restricted Payments" means (i) membership distributions by or
distributions in respect of any equity interest in the Borrower or any Guarantor
(in cash, securities, property or obligations) on, or (ii) any payments or
distributions on account of, payments of interest on or the setting apart of
money for a sinking or other analogous fund for, or the purchase, redemption,
retirement or other acquisition of, (a) Subordinated Indebtedness or (b) any
portion of any membership interest or equity interest in the Borrower or such
Guarantor or of any warrants, options or other rights to acquire any such
membership interest or equity interest (or to make any payments to any Person,
such as "phantom stock" payments, where the amount thereof is calculated with
reference to fair market or equity value of the Borrower or any Guarantor),
provided that distributions or other payments by a Guarantor to the Borrower
will not constitute
WORKING CAPITAL AGREEMENT
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Restricted Payments.
"Revenues" means, with respect to the Borrower or any Guarantor,
for any period, the sum of: (i) all revenues of the Borrower or any Guarantor in
respect of its operations under any contract or agreement or otherwise including
amounts received pursuant to Hedging Agreements (other than Interest Rate
Agreements).
"Revolver Amount" means $50,000,000.
"Revolving Loan" means a Loan made pursuant to clause (e) of
Section 2.01 and subject to the conditions precedent in Section 5.02.
"S&P" means Standard & Poor's Ratings Group, a division of
McGraw-Hill Companies, Inc or any successor thereto.
"Security Agreement" means a Security Agreement substantially in
the form of Exhibit B among the Borrower, the Guarantors and the Collateral
Agent, as the same shall be modified and supplemented and in effect from time to
time.
"Senior Debt" means the Borrower's Indebtedness under this
Agreement or any other Indebtedness (including the Bonds) of the Borrower that
ranks pari passu with the Borrower's Indebtedness under this Agreement.
"Somerset Operator" means Somerset Operations Inc., a Delaware
corporation.
"Somerset Power" means Somerset Power LLC, a Delaware limited
liability company.
"Statutory Reserve Rate" means, for the Interest Period for any
Eurodollar Borrowing, a fraction (expressed as a decimal), the numerator of
which is the number one and the denominator of which is the number one minus the
arithmetic mean, taken over each day in such Interest Period, of the aggregate
of the maximum reserve percentages (including any marginal, special, emergency
or supplemental reserves) expressed as a decimal established by the Board to
which the Paying Agent is subject for eurocurrency funding (currently referred
to as "Eurocurrency liabilities" in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
"Subordinated Indebtedness" means any Indebtedness of the
Borrower that is (a) payable solely and exclusively from the funds that would
otherwise have been available to make Restricted Payments from the Borrower or
any Guarantor, (b) fully subordinated in all rights and remedies to Senior Debt
on terms substantially similar to the subordination provisions set forth in
Exhibit E and (c) unsecured.
WORKING CAPITAL AGREEMENT
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"Subsequent Guarantor" means any Subsidiary of the Borrower,
other than an Initial Guarantor, that the Borrower designates as a Guarantor
subsequent to the Effective Date.
"Subsidiary" means, with respect to any Person, (i) any
corporation 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, limited liability
company, association, joint venture or other entity in which such Person,
directly or indirectly through Subsidiaries, has a 50% or greater equity
interest at the time.
"Taxes" means, with respect any Person, any tax (whether income,
gross receipts, documentary, sales, stamp, registration, issue, capital,
property, excise or otherwise), duty, levy, impost, fee, charge or withholding
directly or indirectly imposed, assessed, levied or collected by or for the
account of any Governmental Authority.
"Transaction Documents" means the Financing Documents, the Power
Sales Agreements, the Power Marketing Agreements, the Operations and Maintenance
Agreements, the Corporate Services Agreements, the Funds Administration
Agreement, the Assignment of Payments, the Indemnification Agreement and the
Indemnity Consent Agreement.
"Transactions" means the execution, delivery and performance by
each Obligor of this Agreement and the other Transaction Documents to which such
Obligor is or is intended to be a party or by which it or its properties are
bound.
"Trustee" means Chase, acting solely in its capacity as trustee
for the holder of the Bonds and its successors and assigns, and any corporation
resulting from or surviving any consolidation or merger to which it or its
successors and assigns may be a party, or any successor to all or substantially
all of its corporate trust business, provided that any such successor or assign
or surviving corporation shall be eligible for appointment as trustee pursuant
to the Indenture, until a successor Trustee must have become such pursuant to
the applicable provisions of the Indenture, and thereafter means such successor
Trustee.
"Type", when used in reference to any Loan or Borrowing, refers
to whether the rate of interest on such Loan, or on the Loans constituting such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate
Base Rate.
"Unrestricted Subsidiary" means (i) any Subsidiary of the
Borrower that is designated by the Borrower's Board of Directors as an
Unrestricted Subsidiary pursuant to a Board Resolution; but only to the extent
that such Subsidiary: (a) has no Indebtedness or other liabilities or
obligations other than Non-Recourse Obligations; (b) is not party to any
agreement, contract, arrangement or understanding with the Borrower or any
Guarantor unless the terms of any such agreement, contract, arrangement or
understanding are no less favorable to the Borrower or such Guarantor than those
that might be obtained at the time from Persons who are not Affiliates of the
Borrower; and (c) is a Person with respect to which neither the Borrower nor
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any of the Guarantors has any direct or indirect obligation (x) to subscribe for
additional equity interests or (y) to maintain or preserve such Person's
financial condition or to cause such Person to achieve any specified levels of
operating results. Any such designation by the Borrower's Board of Directors
shall be evidenced to the Administrative Agents by filing with the
Administrative Agents a certified copy of the Board Resolution giving effect to
such designation and an Officers' Certificate certifying that such designation
complied with the foregoing conditions. If, at any time, any Unrestricted
Subsidiary would fail to meet the foregoing requirements as an Unrestricted
Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for
purposes of this Agreement, and for all other purposes such Subsidiary will be
deemed to be a Guarantor and any Indebtedness of such Subsidiary shall be deemed
to be incurred by a Guarantor as of such date (and, if such Indebtedness is not
permitted to be incurred as of such date under Section 6.08 hereof, the Borrower
shall be in default of such Section). The Board of Directors of the Borrower may
at any time designate any Unrestricted Subsidiary to be a Guarantor; provided
that such designation shall be deemed to be an incurrence of Indebtedness by a
Guarantor of any outstanding Indebtedness of such Unrestricted Subsidiary and
such designation shall only be permitted if (i) such Indebtedness is permitted
under Section 6.08 hereof, and (ii) no Default or Event of Default would occur
or be in existence following such designation.
"Year 2000 Problem" means any significant risk that computer
hardware, software or equipment containing embedded microchips essential to the
businesses or operations of the Borrower and its Subsidiaries will not, in the
case of dates or time periods occurring after December 31, 1999, function at
least as effectively as in the case of dates or time periods occurring prior to
January 1, 2000.
SECTION 1.02. Terms Generally
. The definitions of terms herein shall apply equally to the singular and plural
forms of the terms defined. Whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter forms. The words
"include", "includes" and "including" shall be deemed to be followed by the
phrase "without limitation". The word "will" shall be construed to have the same
meaning and effect as the word "shall". Unless the context requires otherwise
(a) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument or
other document as from time to time amended, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications
set forth herein), (b) any reference herein to any Person shall be construed to
include such Person's successors and assigns, (c) the words "herein", "hereof"
and "hereunder", and words of similar import, shall be construed to refer to
this Agreement in its entirety and not to any particular provision hereof, (d)
all references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
SECTION 1.03. Accounting Terms; GAAP
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. Except as otherwise expressly provided herein, all terms of an accounting or
financial nature shall be construed in accordance with GAAP, as in effect from
time to time; provided that if the Borrower notifies the Administrative Agents
that the Borrower requests an amendment to any provision hereof to eliminate the
effect of any change occurring after the date hereof in GAAP or in the
application thereof on the operation of such provision (or if the Administrative
Agents notify the Borrower that the Required Lenders request an amendment to any
provision hereof for such purpose), regardless of whether any such notice is
given before or after such change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until such
notice shall have been withdrawn or such provision amended in accordance
herewith.
ARTICLE II. THE CREDITS.
SECTION 2.01. The Commitments
. Subject to the terms and conditions set forth herein, each Lender agrees to
make Loans to the Borrower from time to time during the Availability Period in
an aggregate principal amount not exceeding the lesser of (i) its Commitment and
(ii) its ratable share (in accordance with its respective Commitment) of the
Revolver Amount as at the date such Loan is made. Within the foregoing limits
and subject to the terms and conditions set forth herein, the Borrower may
borrow, prepay and reborrow the Loans.
SECTION 2.02. Loans and Borrowings
.
(a) Obligations of Lenders. Each Loan shall be made as part of a
Borrowing consisting of Loans of the same Type made by the Lenders ratably in
accordance with their respective Commitments. The failure of any Lender to make
any Loan required to be made by it shall not relieve any other Lender of its
obligations hereunder; provided that the Commitments of the Lenders are several
and no Lender shall be responsible for any other Lender's failure to make Loans
as required.
(b) Type of Loans. Subject to Section 2.11, each Borrowing shall
be constituted entirely of ABR Loans or Eurodollar Loans as the Borrower may
request in accordance herewith. Each Lender at its option may make any
Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such
Lender to make such Loan; provided that any exercise of such option shall not
affect the obligation of the Borrower to repay such Loan in accordance with the
terms of this Agreement.
(c) Minimum Amounts; Limitation on Number of Borrowings. At the
commencement of the Interest Period for any Eurodollar Borrowing, such Borrowing
shall be in an aggregate amount of $1,000,000 or a larger multiple of $500,000.
At the time that each ABR Borrowing is made, such Borrowing shall (except in the
case of a Borrowing that utilizes the full amount of the relevant Commitment) be
in an aggregate amount equal to $500,000 or a larger
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multiple of $100,000. Borrowings of more than one Type may be outstanding at the
same time; provided that there shall not at any time be more than a total of six
Eurodollar Borrowings outstanding.
(d) Limitations on Lengths of Interest Periods. Notwithstanding
any other provision of this Agreement, the Borrower shall not be entitled to
request, or to elect to convert to or continue as a Eurodollar Borrowing, any
Borrowing if the Interest Period requested therefor would end after the Maturity
Date.
SECTION 2.03. Requests for Borrowings
. To request a Borrowing, the Borrower shall notify the Paying Agent of such
request by telephone (a) in the case of a Eurodollar Borrowing, not later than
11:00 a.m., New York City time, three Business Days before the date of the
proposed Borrowing or (b) in the case of an ABR Borrowing, not later than 11:00
a.m., New York City time, one Business Day before the date of the proposed
Borrowing. Each such telephonic Borrowing Request shall be irrevocable and shall
be confirmed promptly by hand delivery or telecopy to the Paying Agent of a
written Borrowing Request in a form approved by the Paying Agent and signed by
the Borrower. Each such telephonic and written Borrowing Request shall specify
the following information in compliance with Section 2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii) whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing;
(iv) in the case of a Eurodollar Borrowing, the Interest Period
therefor, which shall be a period contemplated by the definition of the
term "Interest Period"; and
(v) the location and number of the Borrower's account to which
funds are to be disbursed, which shall comply with the requirements of
Section 2.04.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed
to have selected an Interest Period of one month's duration. Promptly following
receipt of a Borrowing Request in accordance with this Section, the Paying Agent
shall advise each Lender of the details thereof and of the amount of such
Lender's Loan to be made as part of the requested Borrowing.
SECTION 2.04. Funding of Borrowings
.
(a) Funding by Lenders. Each Lender shall make each Loan to be
made by it
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hereunder on the proposed date thereof by wire transfer of immediately available
funds by 12:00 noon, New York City time, to the account of the Paying Agent most
recently designated by it for such purpose by notice to the Lenders. The Paying
Agent will make such Loans available to the Borrower by promptly crediting the
amounts so received, in like funds, to an account of the Borrower maintained
with the Paying Agent in New York City and designated by the Borrower in the
applicable Borrowing Request.
(b) Presumption by the Paying Agent. Unless the Paying Agent
shall have received notice from a Lender prior to the proposed date of any
Borrowing that such Lender will not make available to the Paying Agent such
Lender's share of such Borrowing, the Paying Agent may assume that such Lender
has made such share available on such date in accordance with paragraph (a) of
this Section and may, in reliance upon such assumption, make available to the
Borrower a corresponding amount. In such event, if a Lender has not in fact made
its share of the applicable Borrowing available to the Paying Agent, then the
applicable Lender and the Borrower severally agree to pay to the Paying Agent
forthwith on demand such corresponding amount with interest thereon, for each
day from and including the date such amount is made available to the Borrower to
but excluding the date of payment to the Paying Agent, at (i) in the case of
such Lender, the Federal Funds Effective Rate or (ii) in the case of the
Borrower, the interest rate that applies to the applicable Borrowing. If such
Lender pays such amount to the Paying Agent, then such amount shall constitute
such Lender's Loan included in such Borrowing.
SECTION 2.05. Interest Elections
.
(a) Elections by the Borrower for Borrowings. Each Borrowing
initially shall be of the Type specified in the applicable Borrowing Request
and, in the case of a Eurodollar Borrowing, shall have the Interest Period
specified in such Borrowing Request. Thereafter, the Borrower may elect to
convert such Borrowing to a Borrowing of a different Type or to continue such
Borrowing as a Borrowing of the same Type and, in the case of a Eurodollar
Borrowing, may elect the Interest Period therefor, all as provided in this
Section. The Borrower may elect different options with respect to different
portions of the affected Borrowing, in which case each such portion shall be
allocated ratably among the Lenders holding the Loans constituting such
Borrowing, and the Loans constituting each such portion shall be considered a
separate Borrowing.
(b) Notice of Elections. To make an election pursuant to this
Section, the Borrower shall notify the Paying Agent of such election by
telephone by the time that a Borrowing Request would be required under Section
2.03 if the Borrower were requesting a Borrowing of the Type resulting from such
election to be made on the effective date of such election. Each such telephonic
Interest Election Request shall be irrevocable and shall be confirmed promptly
by hand delivery or telecopy to the Paying Agent of a written Interest Election
Request in a form approved by the Paying Agent and signed by the Borrower.
(c) Information in Interest Election Requests. Each telephonic
and written
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Interest Election Request shall specify the following information in
compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request applies
and, if different options are being elected with respect to different
portions thereof, the portions thereof to be allocated to each resulting
Borrowing (in which case the information to be specified pursuant to
clauses (iii) and (iv) of this paragraph shall be specified for each
resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing
or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period therefor after giving effect to such election, which
shall be a period contemplated by the definition of the term "Interest
Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Notice by the Paying Agent to Lenders. Promptly following
receipt of an Interest Election Request, the Paying Agent shall advise each
Lender of the details thereof and of such Lender's portion of each resulting
Borrowing.
(e) Failure to Elect; Events of Default. If the Borrower fails to
deliver a timely Interest Election Request with respect to a Eurodollar
Borrowing prior to the end of the Interest Period therefor, then, unless such
Borrowing is repaid as provided herein, at the end of such Interest Period such
Borrowing shall be converted to an ABR Borrowing. Notwithstanding any contrary
provision hereof, if an Event of Default has occurred and is continuing and the
Administrative Agents, at the request of the Required Lenders, so notify the
Borrower, then, so long as an Event of Default is continuing (i) no outstanding
Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii)
unless repaid, each Eurodollar Borrowing shall be converted to an ABR Borrowing
at the end of the Interest Period therefor.
SECTION 2.06. Termination and Reduction of the Commitments
.
(a) Scheduled Termination. Unless previously terminated, the
Commitment shall terminate at 5:00 p.m., New York City time, on the last day of
the Availability Period.
(b) Voluntary Termination or Reduction. The Borrower may at any
time terminate, or from time to time reduce, the Commitment; provided that
(except in the case of any
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such termination of the full amount of the Commitment) each reduction of the
Commitment pursuant to this Section shall be in an amount that is $5,000,000 or
a larger multiple of $1,000,000.
(c) Notice of Voluntary Termination or Reduction. The Borrower
shall notify the Paying Agent of any election to terminate or reduce the
Commitment under paragraph (b) of this Section at least three Business Days
prior to the effective date of such termination or reduction, specifying such
election and the effective date thereof. Promptly following receipt of any
notice, the Paying Agent shall advise the Lenders of the contents thereof. Each
notice delivered by the Borrower pursuant to this Section shall be irrevocable.
(d) Effect of Termination or Reduction. Any termination or
reduction of the Commitment shall be permanent. Each reduction of the Commitment
shall be made ratably among the Lenders in accordance with their respective
Commitments.
SECTION 2.07. Repayment of Loans; Evidence of Debt
.
(a) Repayment. The Borrower hereby unconditionally promises to
pay the Loans to the Paying Agent for account of the Revolving Lenders the
outstanding principal amount of the Loans on the Maturity Date.
(b) Manner of Payment. Prior to any repayment or prepayment of
any Borrowings hereunder, the Borrower shall select the Borrowing or Borrowings
to be paid and shall notify the Paying Agent by telephone (confirmed by
telecopy) of such selection not later than 11:00 a.m., New York City time, two
Business Days before, in the case of a Loan that is a Eurodollar Loan, two
Business Days before and in the case of a Loan that is an ABR Loan, the same day
as, the scheduled date of such repayment; provided that each repayment of
Borrowings shall be applied to repay any outstanding ABR Borrowings before any
other Borrowings. If the Borrower fails to make a timely selection of the
Borrowing or Borrowings to be repaid or prepaid, such payment shall be applied,
first, to pay any outstanding ABR Borrowings and, second, to other Borrowings in
the order of the remaining duration of their respective Interest Periods (the
Borrowing with the shortest remaining Interest Period to be repaid first). Each
payment of a Borrowing shall be applied ratably to the Loans included in such
Borrowing.
(c) Maintenance of Loan Accounts by Lenders. Each Lender shall
maintain in accordance with its usual practice an account or accounts evidencing
the indebtedness of the Borrower to such Lender resulting from each Loan made by
such Lender, including the amounts of principal and interest payable and paid to
such Lender from time to time hereunder.
(d) Maintenance of Loan Accounts by the Paying Agent. The Paying
Agent shall maintain accounts in which it shall record (i) the amount of each
Loan made hereunder, the Type thereof and each Interest Period therefor, (ii)
the amount of any principal or interest due and payable or to become due and
payable from the Borrower to each Lender hereunder and (iii) the amount of any
sum received by the Paying Agent hereunder for account of the Lenders and each
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Lender's share thereof.
(e) Effect of Entries. The entries made in the accounts
maintained pursuant to paragraph (c) or (d) of this Section shall be prima facie
evidence of the existence and amounts of the obligations recorded therein;
provided that the failure of any Lender or the Paying Agent to maintain such
accounts or any error therein shall not in any manner affect the obligation of
the Borrower to repay the Loans in accordance with the terms of this Agreement.
(f) Promissory Notes. Any Lender may request that Loans made by
it be evidenced by a promissory note. In such event, the Borrower shall prepare,
execute and deliver to such Lender a promissory note payable to the order of
such Lender (or, if requested by such Lender, to such Lender and its registered
assigns) and in a form approved by the Paying Agent. Thereafter, the Loans
evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 10.04) be represented by one or
more promissory notes in such form payable to the order of the payee named
therein (or, if such promissory note is a registered note, to such payee and its
registered assigns).
SECTION 2.08. Prepayment of Loans
.
(a) Optional Prepayments. The Borrower shall have the right at
any time and from time to time to prepay any Borrowing in whole or in part,
subject to the Borrower's right to reborrow such amounts as provided in this
Agreement..
(b) Mandatory Prepayments. The Borrower will prepay the Loans,
and/or the Commitments shall be subject to automatic reduction, (i) if (x) an
Event of Loss shall occur and the Borrower has either (A) determined that the
Affected Property cannot be rebuilt, repaired or restored or (B) decided not to
rebuild, repair or restore the Affected Property and (y) Loss Proceeds exceed
$10,000,000; provided that, the Borrower delivers an Officer's Certificate of
the Borrower to the Administrative Agents that certifies that such repair,
rebuild or repair will not have a Material Adverse Effect. ("Restoration
Certificate"). The Loans will be prepaid in an amount equal to amount allocated
to the Lenders as its pro rata share of Loss Proceeds pursuant to Section 7(d)
of the Collateral Agency and Intercreditor Agreement. The prepayment of Loans
shall occur on any date during the 90-day period following the date of the
Borrower's determination (x) that the Affected Property cannot be rebuilt,
repaired or restored or (y) not to rebuild, repair or restore the Affected
Property, as the case may be (taking into account the notice requirements set
forth in Section 8.4) and (ii) if an Event of Loss shall occur and it has been
determined that the Affected Property be rebuilt, repaired or restored and the
amount of the Loss Proceeds, as the case may be, remaining after the payment of
the actual total cost of such rebuilding, repair or restoration exceeds
$5,000,000. The Loans will be prepaid in an amount equal to amount allocated to
the Lenders as its pro rata share of Loss Proceeds pursuant to Section 7(e) of
the Collateral Agency and Intercreditor Agreement. The prepayment of the Loans
shall occur on any date during the 90-day period following the date of the
delivery of an Officer's Certificate of the Borrower to the Administrative
Agents certifying completion of the
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rebuilding, repair or restoration of the Affected Property.
(c) Notices, Etc. The Borrower shall notify the Paying Agent by
telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., New York City
time, two Business Days before the date of prepayment or (ii) in the case of
prepayment of an ABR Borrowing, not later than 11:00 a.m., New York City time,
the date of prepayment. Each such notice shall be irrevocable and shall specify
the prepayment date, the principal amount to be prepaid, in the case of a
reduction of Commitment and, in the case of a mandatory prepayment, a reasonably
detailed calculation of the amount of such prepayment. Promptly following
receipt of any such notice, the Paying Agent shall advise the Lenders of the
contents thereof. Each partial prepayment shall be in an amount that would be
permitted in the case of a Borrowing of the same Type as provided in Section
2.02, except as necessary to apply fully the required amount of a mandatory
prepayment. Prepayments shall be accompanied by accrued interest to the extent
required by Section 2.10 and shall be made in the manner specified in Section
2.07(b).
SECTION 2.09. Fees
.
(a) Commitment Fee. The Borrower agrees to pay to the Paying
Agent for account of each Lender a commitment fee, which shall accrue at a rate
per annum equal to 1/4 of 1% on the average daily unused amount of the
Commitments of such Lender for the period from and including the date hereof to
but not including the earlier of the date such Commitments terminate and the
last day of the Availability Period. Accrued commitment fees shall be payable in
arrears on each Quarterly Date and on the earlier of the date the relevant
Commitment terminates and the last day of the Availability Period, commencing on
the first such date to occur after the date hereof. All commitment fees shall be
computed on the basis of a year of 360 days and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day).
(b) Agents' Fees. The Borrower agrees to pay the Paying Agent the
fees payable to the Paying Agent in the amounts and at the times separately
agreed upon between the Borrower and the Paying Agent.
(c) Payment of Fees. All fees payable hereunder shall be paid on
the dates due, in immediately available funds, to the Paying Agent for
distribution, to the Lenders entitled thereto. Fees paid shall not be refundable
under any circumstances.
SECTION 2.10. Interest
.
(a) ABR Loans. The Loans constituting each ABR Borrowing shall
bear interest at a rate per annum equal to the Alternate Base Rate plus the
Applicable Rate.
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(b) Eurodollar Loans. The Loans constituting each Eurodollar
Borrowing shall bear interest at a rate per annum equal to the Adjusted LIBO
Rate for the Interest Period for such Borrowing plus the Applicable Rate.
(c) Default Interest. Notwithstanding the foregoing, if any
principal of or interest on any Loan or any fee or other amount payable by the
Borrower hereunder is not paid when due, whether at stated maturity, upon
acceleration, by mandatory prepayment or otherwise, such overdue amount shall
bear interest, after as well as before judgment, at a rate per annum equal to
(i) in the case of overdue principal of any Loan, 2% plus the rate otherwise
applicable to such Loan as provided above or (ii) in the case of any other
amount, 2% plus the rate applicable to ABR Loans as provided in paragraph (a) of
this Section.
(d) Payment of Interest. Accrued interest on each Loan shall be
payable in arrears on each Interest Payment Date for such Loan; provided that
(i) interest accrued pursuant to paragraph (c) of this Section shall be payable
on demand, (ii) in the event of any repayment or prepayment of any Loan, accrued
interest on the principal amount repaid or prepaid shall be payable on the date
of such repayment or prepayment and (iii) in the event of any conversion of any
Eurodollar Borrowing prior to the end of the Interest Period therefor, accrued
interest on such Borrowing shall be payable on the effective date of such
conversion.
(e) Computation. All interest hereunder shall be computed on the
basis of a year of 360 days, except that interest computed by reference to the
Alternate Base Rate at times when the Alternate Base Rate is based on clause (a)
of the definition "Alternate Base Rate" shall be computed on the basis of a year
of 365 days (or 366 days in a leap year), and in each case shall be payable for
the actual number of days elapsed (including the first day but excluding the
last day). The applicable Alternate Base Rate or Adjusted LIBO Rate shall be
determined by the Paying Agent, and such determination shall be conclusive
absent manifest error.
SECTION 2.11. Alternate Rate of Interest
. If prior to the commencement of the Interest Period for a Eurodollar
Borrowing:
(a) the Administrative Agents determine (which determination
shall be conclusive absent manifest error) that adequate and reasonable
means do not exist for ascertaining the Adjusted LIBO Rate for such
Interest Period; or
(b) the Administrative Agents are advised by the Required Lenders
that the Adjusted LIBO Rate for such Interest Period will not adequately
and fairly reflect the cost to such Lenders of making or maintaining
their Loans included in such Borrowing for such Interest Period;
then the Administrative Agents shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agents notify the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and (ii) if any
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Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made
as an ABR Borrowing.
SECTION 2.12. Increased Costs
.
(a) Increased Costs Generally. If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for
account of, or credit extended by, any Lender (except any such reserve
requirement reflected in the Adjusted LIBO Rate); or
(ii) impose on any Lender or the London interbank market any
other condition affecting this Agreement or Eurodollar Loans made by
such Lender;
and the result of any of the foregoing shall be to increase the cost to such
Lenders of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to reduce the amount of any sum received or
receivable by such Lender hereunder (whether of principal, interest or
otherwise), then the Borrower will pay to such Lender such additional amount or
amounts as will compensate such Lender for such additional costs incurred or
reduction suffered.
(b) Capital Requirements. If any Lender determines that any
Change in Law regarding capital requirements has or would have the effect of
reducing the rate of return on such Lender's capital or on the capital of such
Lender's holding company, if any, as a consequence of this Agreement or the
Loans made by such Lender to a level below that which such Lender or such
Lender's holding company could have achieved but for such Change in Law (taking
into consideration such Lender's policies and the policies of such Lender's
holding company with respect to capital adequacy), then from time to time the
Borrower will pay to such Lender such additional amount or amounts as will
compensate such Lender or such Lender's holding company for any such reduction
suffered.
(c) Certificates from Lenders. A certificate of a Lender setting
forth the amount or amounts necessary to compensate such Lender or its holding
company, as the case may be, as specified in paragraph (a) or (b) of this
Section shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender the amount shown as due on
any such certificate within 30 days after receipt thereof.
(d) Delay in Requests. Failure or delay on the part of any Lender
to demand compensation pursuant to this Section shall not constitute a waiver of
such Lender's right to demand such compensation; provided that the Borrower
shall not be required to compensate a Lender pursuant to this Section for any
increased costs or reductions incurred more than six months prior to the date
that such Lender notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender's intention to claim
compensation therefor; provided, further, that, if the Change in Law giving rise
to such increased costs or
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reductions is retroactive, then the six-month period referred to above shall be
extended to include the period of retroactive effect thereof; provided, however,
that, the Borrower shall have no obligation with respect to demands made after
the Maturity Date.
SECTION 2.13. Break Funding Payments
. In the event of (a) the payment of any principal of any Eurodollar Loan other
than on the last day of an Interest Period therefor (including as a result of an
Event of Default), (b) the conversion of any Eurodollar Loan other than on the
last day of an Interest Period therefor, (c) the failure to borrow, convert,
continue or prepay any Loan on the date specified in any notice delivered
pursuant hereto or (d) the assignment of any Eurodollar Loan other than on the
last day of an Interest Period therefor as a result of a request by the Borrower
pursuant to Section 2.16, then, in any such event, the Borrower shall compensate
each Lender for the loss, cost and expense attributable to such event. In the
case of a Eurodollar Loan, the loss to any Lender attributable to any such event
shall be deemed to include an amount determined by such Lender to be equal to
the excess, if any, of (i) the amount of interest that such Lender would pay for
a deposit equal to the principal amount of such Loan for the period from the
date of such payment, conversion, failure or assignment to the last day of the
then current Interest Period for such Loan (or, in the case of a failure to
borrow, convert or continue, the duration of the Interest Period that would have
resulted from such borrowing, conversion or continuation) if the interest rate
payable on such deposit were equal to the Adjusted LIBO Rate for such Interest
Period, over (ii) the amount of interest that such Lender would earn on such
principal amount for such period if such Lender were to invest such principal
amount for such period at the interest rate that would be bid by such Lender (or
an affiliate of such Lender) for Dollar deposits from other banks in the
eurodollar market at the commencement of such period. A certificate of any
Lender setting forth any amount or amounts that such Lender is entitled to
receive pursuant to this Section shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay such Lender the amount
shown as due on any such certificate within 10 days after receipt thereof.
SECTION 2.14. Taxes
.
(a) Payments Free of Taxes. Any and all payments by or on account
of any obligation of the Borrower hereunder or under any other Financing
Document shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes; provided that if the Borrower shall be
required to deduct any Indemnified Taxes or Other Taxes from such payments, then
(i) the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section) the Administrative Agents or Lender (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions and (iii) the
Borrower shall pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.
(b) Payment of Other Taxes by the Borrower. In addition, the
Borrower shall pay
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any Other Taxes to the relevant Governmental Authority in accordance with
applicable law.
(c) Indemnification by the Borrower. The Borrower shall indemnify
the Administrative Agents and each Lender, within 10 days after written demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes (including
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to
amounts payable under this Section) paid by the Administrative Agents or such
Lender, as the case may be, and any penalties, interest and reasonable expenses
arising therefrom or with respect thereto, whether or not such Indemnified Taxes
or Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or
liability delivered to the Borrower by a Lender, or by the Administrative Agents
on its own behalf or on behalf of a Lender, shall be conclusive absent manifest
error.
(d) Evidence of Payments. As soon as practicable after any
payment of Indemnified Taxes or Other Taxes by the Borrower to a Governmental
Authority, the Borrower shall deliver to the Administrative Agents the original
or a certified copy of a receipt issued by such Governmental Authority
evidencing such payment, a copy of the return reporting such payment or other
evidence of such payment reasonably satisfactory to the Administrative Agents.
(e) Foreign Lenders. Any Foreign Lender that is entitled to an
exemption from or reduction of withholding tax under the law of the jurisdiction
in which the Borrower is located, or any treaty to which such jurisdiction is a
party, with respect to payments under this Agreement shall deliver to the
Borrower (with a copy to the Administrative Agents), at the time or times
prescribed by applicable law or reasonably requested by the Borrower, such
properly completed and executed documentation prescribed by applicable law as
will permit such payments to be made without withholding or at a reduced rate.
SECTION 2.15. Payments Generally; Pro Rata Treatment; Sharing of
Set-offs
.
(a) Payments by the Obligors. Each Obligor shall make each
payment required to be made by it hereunder (whether of principal, interest or
fees, or under Section 2.12, 2.13 or 2.14, or otherwise) or under any other
Financing Document (except to the extent otherwise provided therein) prior to
12:00 noon, New York City time, on the date when due, in immediately available
funds, without set-off or counterclaim. Any amounts received after such time on
any date may, in the discretion of the Paying Agent, be deemed to have been
received on the next succeeding Business Day for purposes of calculating
interest thereon. All such payments shall be made to the Paying Agent at its
offices at One Court Square, Long Island City, New York 11120, except as
otherwise expressly provided in the relevant Financing Document, and except that
payments pursuant to Sections 2.12, 2.13, 2.14 and 10.03 shall be made directly
to the Persons entitled thereto. The Paying Agent shall distribute any such
payments received by it for account of any other Person to the appropriate
recipient promptly following receipt thereof. If any payment hereunder shall be
due on a day that is not a Business Day, the date for payment shall be extended
to the next succeeding Business Day and, in the case of any payment accruing
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interest, interest thereon shall be payable for the period of such extension.
All payments hereunder or under any other Financing Document (except to the
extent otherwise provided therein) shall be made in Dollars.
(b) Application of Insufficient Payments. If at any time
insufficient funds are received by and available to the Paying Agent to pay
fully all amounts of principal, interest and fees then due hereunder, such funds
shall be applied (i) first, to pay interest and fees then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties, and (ii) second, to pay principal then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of principal then due to such parties.
(c) Pro Rata Treatment. Except to the extent otherwise provided
herein: (i) each Borrowing shall be made from the relevant Lenders, each payment
of fees under Section 2.09 in respect of Commitments shall be made for account
of the relevant Lenders, and each termination or reduction of the amount of the
Commitments under Section 2.06 shall be applied to the respective Commitments of
the relevant Lenders, pro rata according to the amounts of their respective
Commitments; (ii) each Borrowing shall be allocated pro rata among the relevant
Lenders according to the amounts of their respective Commitments (in the case of
the making of Loans) or their respective Loans (in the case of conversions and
continuations of Loans); (iii) each payment or prepayment of principal of Loans
by the Borrower shall be made for account of the relevant Lenders pro rata in
accordance with the respective unpaid principal amounts of the Loans held by
them; and (iv) each payment of interest on Loans by the Borrower shall be made
for account of the relevant Lenders pro rata in accordance with the amounts of
interest on such Loans then due and payable to the respective Lenders.
(d) Sharing of Payments by Lenders. If any Lender shall, by
exercising any right of set-off or counterclaim or otherwise, obtain payment in
respect of any principal of or interest on any of its Loans resulting in such
Lender receiving payment of a greater proportion of the aggregate amount of its
Loans and accrued interest thereon then due than the proportion received by any
other Lender, then the Lender receiving such greater proportion shall purchase
(for cash at face value) participations in the Loans of other Lenders to the
extent necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Loans; provided that (i) if any such
participations are purchased and all or any portion of the payment giving rise
thereto is recovered, such participations shall be rescinded and the purchase
price restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by any Obligor pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans to any assignee or
participant, other than to the Borrower or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply). Each Obligor
consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against such Obligor rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of such Obligor in the
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amount of such participation.
(e) Presumptions of Payment. Unless the Paying Agent shall have
received notice from the Borrower prior to the date on which any payment is due
to the Paying Agent for account of the Lenders hereunder that the Borrower will
not make such payment, the Paying Agent may assume that the Borrower has made
such payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders the amount due. In such event, if the
Borrower has not in fact made such payment, then each of the Lenders severally
agrees to repay to the Paying Agent forthwith on demand the amount so
distributed to such Lender with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date of
payment to the Paying Agent, at the Federal Funds Effective Rate.
(f) Certain Deductions by the Paying Agent. If any Lender shall
fail to make any payment required to be made by it pursuant to Section 2.04(b)
or 2.15(e), then the Paying Agent may, in its discretion (notwithstanding any
contrary provision hereof), apply any amounts thereafter received by the Paying
Agent for account of such Lender to satisfy such Lender's obligations under such
Sections until all such unsatisfied obligations are fully paid.
SECTION 2.16. Mitigation Obligations; Replacement of Lenders
.
(a) Designation of a Different Lending Office. If any Lender
requests compensation under Section 2.12, or if the Borrower is required to pay
any additional amount to any Lender or any Governmental Authority for account of
any Lender pursuant to Section 2.14, then such Lender shall use reasonable
efforts to designate a different lending office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the sole judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to Section 2.12 or 2.14, as the case may be, in the future and (ii) would not
subject such Lender to any unreimbursed cost or expense and would not otherwise
be disadvantageous to such Lender. The Borrower hereby agrees to pay all
reasonable costs and expenses incurred by any Lender in connection with any such
designation or assignment.
(b) Replacement of Lenders. If any Lender requests compensation
under Section 2.12, or if the Borrower is required to pay any additional amount
to any Lender or any Governmental Authority for account of any Lender pursuant
to Section 2.14, or if any Lender defaults in its obligation to fund Loans
hereunder, then the Borrower may, at its sole expense and effort, upon notice to
such Lender and the Administrative Agents, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in Section 10.04), all its interests, rights and obligations under
this Agreement to an assignee that shall assume such obligations (which assignee
may be another Lender, if a Lender accepts such assignment); provided that (i)
the Borrower shall have received the prior written consent of the Administrative
Agents, which consent shall not unreasonably be withheld, (ii) such Lender shall
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have received payment of an amount equal to the outstanding principal of its
Loans, accrued interest thereon, accrued fees and all other amounts payable to
it hereunder (other than, in the case of the replacement of any Lender that
defaults in its obligation to fund Loans hereunder, amounts payable to such
Lender pursuant to Section 2.13 to the extent such amounts are payable solely as
a result of such replacement), from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or the Borrower (in the
case of all other amounts) and (iii) in the case of any such assignment
resulting from a claim for compensation under Section 2.12 or payments required
to be made pursuant to Section 2.14, such assignment will result in a reduction
in such compensation or payments. A Lender shall not be required to make any
such assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling the Borrower to require
such assignment and delegation cease to apply.
ARTICLE III. GUARANTEE.
SECTION 3.01. The Guarantees
. The Guarantors hereby jointly and severally guarantee to each Lender and the
Administrative Agents and their respective successors and assigns the prompt
payment in full when due (whether at stated maturity, by acceleration or
otherwise) of the principal of and interest on the Loans made by the Lenders to
the Borrower and all other amounts from time to time owing to the Lenders or the
Administrative Agents by the Borrower under this Agreement and by any Obligor
under any of the other Financing Documents strictly in accordance with the terms
thereof (such obligations being herein collectively called the "Guaranteed
Obligations"). The Guarantors hereby further jointly and severally agree that if
the Borrower shall fail to pay in full when due (whether at stated maturity, by
acceleration or otherwise) any of the Guaranteed Obligations, the Guarantors
will promptly pay the same, without any demand or notice whatsoever, and that in
the case of any extension of time of payment or renewal of any of the Guaranteed
Obligations, the same will be promptly paid in full when due (whether at
extended maturity, by acceleration or otherwise) in accordance with the terms of
such extension or renewal.
SECTION 3.02. Obligations Unconditional
. The obligations of the Guarantors under Section 3.01 are absolute and
unconditional, joint and several, irrespective of the value, genuineness,
validity, regularity or enforceability of the obligations of the Borrower under
this Agreement or any other agreement or instrument referred to herein, or any
substitution, release or exchange of any other guarantee of or security for any
of the Guaranteed Obligations, and, to the fullest extent permitted by
applicable law, irrespective of any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor, it being the intent of this Section that the obligations of the
Guarantors hereunder shall be absolute and unconditional, joint and several,
under any and all circumstances. Without limiting the generality of the
foregoing, it is agreed that the occurrence of any one or more of the following
shall not alter or impair the liability of the Guarantors hereunder, which shall
remain absolute and unconditional as described above:
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(i) at any time or from time to time, without notice to the
Guarantors, the time for any performance of or compliance with any of
the Guaranteed Obligations shall be extended, or such performance or
compliance shall be waived;
(ii) any of the acts mentioned in any of the provisions of this
Agreement or any other agreement or instrument referred to herein shall
be done or omitted;
(iii) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under this
Agreement or any other agreement or instrument referred to herein shall
be waived or any other guarantee of any of the Guaranteed Obligations or
any security therefor shall be released or exchanged in whole or in part
or otherwise dealt with; or
(iv) any lien or security interest granted to, or in favor of,
the Administrative Agents or any Lender or Lenders as security for any
of the Guaranteed Obligations shall fail to be perfected.
The Guarantors hereby expressly waive diligence, presentment, demand of payment,
protest and all notices whatsoever, and any requirement that the Administrative
Agents or any Lender exhaust any right, power or remedy or proceed against the
Borrower under this Agreement or any other agreement or instrument referred to
herein, or against any other Person under any other guarantee of, or security
for, any of the Guaranteed Obligations.
SECTION 3.03. Reinstatement
. The obligations of the Guarantors under this Article shall be automatically
reinstated if and to the extent that for any reason any payment by or on behalf
of the Borrower in respect of the Guaranteed Obligations is rescinded or must be
otherwise restored by any Lender of any of the Guaranteed Obligations, whether
as a result of any proceedings in bankruptcy or reorganization or otherwise, and
the Guarantors jointly and severally agree that they will indemnify the
Administrative Agents and each Lender on demand for all reasonable costs and
expenses (including reasonable fees of counsel) incurred by the Administrative
Agents or such Lender in connection with such rescission or restoration,
including any such costs and expenses incurred in defending against any claim
alleging that such payment constituted a preference, fraudulent transfer or
similar payment under any bankruptcy, insolvency or similar law.
SECTION 3.04. Subrogation
. The Guarantors hereby jointly and severally agree that, until the payment and
satisfaction in full of all Guaranteed Obligations and the expiration and
termination of the Commitments of the Lenders under this Agreement, they shall
not exercise any right or remedy arising by reason of any performance by them of
their guarantees in Section 3.01, whether by subrogation or otherwise, against
the Borrower or any other guarantor of any of the Guaranteed Obligations or any
security for any of the Guaranteed Obligations.
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SECTION 3.05. Remedies
. The Guarantors jointly and severally agree that, as between the Guarantors and
the Lenders, the obligations of the Borrower under this Agreement may be
declared to be forthwith due and payable as provided in Article VIII (and shall
be deemed to have become automatically due and payable in the circumstances
provided in Article VIII), for purposes of Section 3.01 notwithstanding any
stay, injunction or other prohibition preventing such declaration (or such
obligations from becoming automatically due and payable) as against the
Borrower, and that, in the event of such declaration (or such obligations being
deemed to have become automatically due and payable), such obligations (whether
or not due and payable by the Borrower) shall forthwith become due and payable
by the Guarantors for purposes of Section 3.01.
SECTION 3.06. Instrument for the Payment of Money
. Each Guarantor hereby acknowledges that the guarantees in this Article
constitute an instrument for the payment of money, and consents and agrees that
any Lender or the Administrative Agents, at its sole option, in the event of a
dispute by such Guarantor in the payment of any moneys due hereunder, shall have
the right to bring motion-action under New York CPLR Section 3213.
SECTION 3.07. Continuing Guarantees
. The guarantees in this Article are continuing guarantees and shall apply to
all Guaranteed Obligations whenever arising.
SECTION 3.08. Rights of Contribution
. The Guarantors hereby agree, as between themselves, that if any Guarantor
shall become an Excess Funding Guarantor (as defined below) by reason of the
payment by such Guarantor of any Guaranteed Obligations, each other Guarantor
shall, on demand of such Excess Funding Guarantor (but subject to the next
sentence), pay to such Excess Funding Guarantor an amount equal to such
Guarantor's Pro Rata Share (as defined below and determined, for this purpose,
without reference to the properties, debts and liabilities of such Excess
Funding Guarantor) of the Excess Payment (as defined below) in respect of such
Guaranteed Obligations. The payment obligation of a Guarantor to any Excess
Funding Guarantor under this Section shall be subordinate and subject in right
of payment to the prior payment in full of the obligations of such Guarantor
under the other provisions of this Article, and such Excess Funding Guarantor
shall not exercise any right or remedy with respect to such excess until payment
and satisfaction in full of all of such obligations.
For purposes of this Section, (i) "Excess Funding Guarantor"
means, in respect of any Guaranteed Obligations, a Guarantor that has paid an
amount in excess of its Pro Rata Share of such Guaranteed Obligations, (ii)
"Excess Payment" means, in respect of any Guaranteed Obligations, the amount
paid by an Excess Funding Guarantor in excess of its Pro Rata Share of such
Guaranteed Obligations and (iii) "Pro Rata Share" means, for any Guarantor, the
amount calculated by multiplying (A) all amounts due and payable in respect of
the Guaranteed
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Obligations times (B) the ratio of (x) the amount by which the aggregate present
fair saleable value of all assets of such Guarantor (excluding any shares of
stock of any other Guarantor) exceeds the amount of all the debts and
liabilities of such Guarantor (including contingent, subordinated, unmatured and
unliquidated liabilities, but excluding the obligations of such Guarantor
hereunder and any obligations of any other Guarantor that have been Guaranteed
by such Guarantor) to (y) the amount by which the aggregate fair saleable value
of all assets of all of the Guarantors exceeds the amount of all the debts and
liabilities (including contingent, subordinated, unmatured and unliquidated
liabilities, but excluding the obligations of the Borrower and the Guarantors
hereunder and under the other Transaction Documents) of all of the Guarantors,
determined (A) with respect to any Guarantor that is a party hereto on the
Effective Date, as of the Effective Date, and (B) with respect to any other
Guarantor, as of the date such Guarantor becomes a Guarantor hereunder.
SECTION 3.09. General Limitation on Guarantee Obligations
. In any action or proceeding involving any state corporate law, or any state or
Federal bankruptcy, insolvency, reorganization or other law affecting the rights
of creditors generally, if the obligations of any Guarantor under Section 3.01
would otherwise, taking into account the provisions of Section 3.08, be held or
determined to be void, invalid or unenforceable, or subordinated to the claims
of any other creditors, on account of the amount of its liability under Section
3.01, then, notwithstanding any other provision hereof to the contrary, the
amount of such liability shall, without any further action by such Guarantor,
any Lender, the Administrative Agents or any other Person, be automatically
limited and reduced to the highest amount that is valid and enforceable and not
subordinated to the claims of other creditors as determined in such action or
proceeding.
SECTION 3.10. Effectiveness
. The respective obligations of each Subsequent Guarantor under this Article III
shall not be effective unless and until an Authorized Representative of the
Borrower shall have delivered a certificate (each, a "Guarantee Effectiveness
Certificate") to the Administrative Agents to the effect that all Governmental
Approvals under Section 204 of the Federal Power Act as may be necessary for
such Guarantor to incur and perform its obligations under this Article III have
been obtained and remain in effect and that all applicable waiting periods have
expired without any action being taken by any competent authority which
restricts, prevents or imposes materially adverse conditions upon the incurrence
or performance of such obligations. The Borrower shall cause a Guarantee
Effectiveness Certificate in respect of each Subsequent Guarantor to be
delivered to the Administrative Agents within four Business Days after receipt
by such Guarantor of such Governmental Approvals and the expiration of such
applicable waiting periods.
ARTICLE IV. REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants to the Lenders that:
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SECTION 4.01. Organization; Powers
. The Borrower and each of the Guarantors have been duly
organized and are validly existing as limited liability companies and NRG Power
Marketing has been duly organized and is validly existing as a corporation and
each of the Borrower, the Guarantors and NRG Power Marketing is in good standing
under the laws of their respective jurisdictions of organization, are duly
qualified to do business and are in good standing in each jurisdiction in which
their respective ownership or lease of property or the conduct of their
respective businesses requires such qualification, and have all power and
authority necessary to own or hold their respective properties and to conduct
the businesses in which they are engaged, except where the failure to so qualify
or have such power or authority could not, singularly or in the aggregate, be
reasonably expected to have a Material Adverse Effect on the condition
(financial or otherwise), results of operations, business or prospects of the
Borrower and the Guarantors taken as a whole.
SECTION 4.02 Authorization; Enforceability
.
(a) Each of the Borrower, NRG Power Marketing and each Guarantor
has full right, power and authority to execute and deliver, to the extent a
party thereto, this Agreement and the other Financing Documents, to the extent
it is a party thereto and to perform its obligations hereunder and thereunder;
and all limited liability company or other action required to be taken for the
due and proper authorization, execution and delivery of each of the Transaction
Documents to which the Borrower, NRG Power Marketing and each Guarantor is a
party and the consummation of the transactions contemplated thereby have been
duly and validly taken.
(b) This Agreement has been duly authorized, executed and
delivered by the Borrower and constitutes a valid and legally binding agreement
of the Borrower.
SECTION 4.03. No Conflicts; Governmental Approvals
.
(a) The execution, delivery and performance by the Borrower and
each Guarantor of each of the Transaction Documents to which it is a party, the
issuance, authentication, sale and delivery of the Securities and compliance by
the Borrower with the terms thereof and the consummation of the transactions
contemplated by the Transaction Documents will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, or (except for the Collateral Documents) result in the creation
or imposition of any lien, charge or encumbrance upon any property or assets of
the Borrower or any Guarantor pursuant to, any material indenture, mortgage,
deed of trust, loan agreement or other material agreement or instrument to which
the Borrower or any Guarantor is a party or by which the Borrower or any
Guarantor is bound or to which any of the property or assets of the Borrower or
any Guarantor is subject, except such conflicts, breaches, violations, defaults,
liens charges or encumbrances as
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could not reasonably be expected to have a Material Adverse Effect, nor will
such actions result in any violation of the provisions of the charter or by-laws
of the Borrower or any Guarantor or any statute or any judgment, order, decree,
rule or regulation of any court or arbitrator or governmental agency or body
having jurisdiction over the Borrower or any Guarantor or any of their
properties or assets, except such violation as could not reasonably be expected
to have a Material Adverse Effect and except for blue sky laws and federal
securities laws.
(b) No consent, approval, authorization or order of, or filing or
registration with, any such court or arbitrator or governmental agency or body
under any such statute, judgment, order, decree, rule or regulation is required
for the execution, delivery and performance by the Borrower or any Guarantor of
each of the Transaction Documents and compliance by the Borrower and each
Guarantor with the terms thereof and the consummation of the transactions
contemplated by the Transaction Documents, except for such consents, approvals,
authorizations, filings, registrations or qualifications which shall have been
obtained or made prior to the Effective Date.
(c) The Borrower, NRG Power Marketing and each Guarantor possess
all material licenses, certificates, authorizations and permits issued by, and
have made all filings with, the appropriate federal, state or foreign regulatory
agencies or bodies which are necessary for the execution, delivery and
performance of its respective obligations under this Agreement and other
Financing Documents, except where the failure to possess or make the same could
not reasonably be expected to have a Material Adverse Effect, and neither the
Borrower nor any Guarantor has received notification of any revocation or
modification of any such license, certificate, authorization or permit or has
any reason to believe that any such license, certificate, authorization or
permit will not be renewed in the ordinary course, except where such revocation,
modification or non-renewal could not reasonably be expected to have a Material
Adverse Effect.
SECTION 4.04. Financial Condition
. PricewaterhouseCoopers LLP are independent certified public
accountants with respect to the Borrower and the Guarantors within the meaning
of Rule 101 of the Code of Professional Conduct of the American Institute of
Certified Public Accountants ("AICPA") and its interpretations and rulings
thereunder. The financial statements furnished to the Lenders have been prepared
in accordance with generally accepted accounting principles consistently applied
throughout the periods covered thereby, except as may be set forth in such
financial statements, and fairly present the financial position of the entities
purported to be covered thereby at the respective dates or respective periods
indicated.
SECTION 4.05. Actions, Suits and Proceedings
. There are no legal or governmental proceedings pending to which
the Borrower or any Guarantor is a party or of which any property or assets of
the Borrower or any Guarantor is the subject which could reasonably be expected
likely to have a Material Adverse Effect; and to the best knowledge of the
Borrower, no such proceedings are threatened or contemplated by governmental
authorities or threatened by others.
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SECTION 4.06. Compliance with Laws and Agreements
.
Neither the Borrower, nor NRG Power Marketing nor any Guarantor
is (i) in violation of its organizational documents, (ii) in default in any
respect, and no event has occurred which, with notice or lapse of time the
making of any determination or any combination thereof, would constitute such a
default, in the due performance or observance of any term, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Borrower or any Guarantor is a party or by
which the Borrower or any Guarantor is bound or to which any of their respective
properties or assets is subject or (iii) in violation of any law, ordinance,
governmental rule, regulation or court decree to which it or its property or
assets may be subject, except in the case of clause (i), (ii) or (iii) as could
not reasonably be expected to have a Material Adverse Effect.
SECTION 4.07. Taxes
. The Borrower and each Guarantor have filed all federal, state,
local and foreign income and franchise tax returns required to be filed through
the date hereof and have paid all taxes due thereon, and no tax deficiency has
been determined adversely to the Borrower or any Guarantor which has had (nor
does the Borrower or any Guarantor have any knowledge of any tax deficiency
which, if determined adversely to the Borrower or any Guarantor, could
reasonably be expected to have) a Material Adverse Effect, except where such tax
is being contested in good faith and where adequate reserves are maintained in
accordance with generally accepted accounting principles.
SECTION 4.08. Investment Company Status
. Neither the Borrower nor any of the Guarantors is required to
be registered or regulated as an "investment company" or a company "controlled
by" an investment company within the meaning of the Investment Company Act of
1940, as amended (the "Investment Company Act"), and the rules and regulations
thereunder.
SECTION 4.09. Utility Regulation
.
(a) Neither the Borrower nor any of the Guarantors, nor any of
the members of the Borrower or any operator of any facility owned by the
Borrower or the Guarantors is a "public utility company", an "electric utility
company" or a "holding company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended ("PUHCA"), nor subject to regulation under PUHCA
except pursuant to Section 9(a)(2) or Section 32 thereof.
(b) Each Guarantor is an "exempt wholesale generator" under
Section 32(a) of PUHCA and none of the subsidiaries, nor any of the
Administrative Agents, the Collateral Agent or the Lenders is or will be, solely
as a result of the participation by such parties individually or
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as a group in the ownership of the Borrower or the Borrower's and its
subsidiaries' use or operation of each Facility and sale of power generated by
any such Facility, subject to regulation as a "public-utility company," an
"electric utility company," a "holding company" or a "subsidiary company" or
"affiliate" of any of the foregoing, under PUHCA.
(c) So long as each Guarantor is an "exempt wholesale generator"
under Section 32(a) of PUHCA, none of the Administrative Agents, the Collateral
Agent or the Lenders will solely by reason of the exercise of remedies under the
Collateral Documents be subject to regulation as a "public-utility company," an
"electric utility company," or a "holding company," or a "subsidiary company" or
"affiliate" of any of the foregoing, under PUHCA; provided that (i) each
Guarantor remains the sole owner of each Facility, within the meaning of Section
2(a)(3) of PUHCA and maintains its "exempt wholesale generator" status, or (ii)
the Administrative Agents, the Collateral Agent or the Lenders assumes ownership
or operation of a Facility through a special purpose subsidiary that obtains a
determination of "exempt wholesale generator" status.
SECTION 4.10. Accounting
. The Borrower and each of the Guarantors maintain a system of
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
SECTION 4.11. Insurance
. The Borrower and each Guarantor have insurance covering their
respective properties, operations, personnel and businesses, which insurance is
substantially in amounts and against such insurable risks as are customarily
maintained by companies engaged in the same or similar businesses operating in
the same or similar locations and against risks and substantially in amounts
customarily insured against by other enterprises with similar capital structures
and owning and operating facilities of like size and type as that of the
Facilities in accordance with Prudent Industry Practice. Neither the Borrower
nor any Guarantor has received notice from any insurer or agent of such insurer
that capital improvements or other expenditures are required or necessary to be
made in order to continue such insurance.
SECTION 4.12. Properties
.
(a) The Borrower and each Guarantor own or possess adequate
rights to use all material patents, patent applications, trademarks, service
marks, trade names, trademark registrations, service mark registrations,
copyrights, licenses and know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems
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or procedures) necessary for the conduct of their respective businesses, except
where the failure to own or possess could not reasonably be expected to have a
Material Adverse Effect; and the conduct of their respective businesses will not
conflict in any material respect with, and the Borrower and the Guarantors have
not received any notice of any claim of conflict with, any such rights of
others, which could reasonably be expected to have a Material Adverse Effect.
(b) The Borrower and each Guarantor have good and marketable
title in fee simple to, or have valid rights to lease or otherwise use, all
items of real and personal property which are material to the business of the
Borrower and the Guarantors, in each case free and clear of all liens,
encumbrances, claims and defects and imperfections of title except such as (i)
do not materially interfere with the use made and proposed to be made of such
property by the Borrower and the Guarantors, (ii) could not reasonably be
expected to have a Material Adverse Effect or (iii) are created or permitted by
the Financing Documents.
SECTION 4.13. Labor; ERISA
.
(a) No labor disturbance by or dispute with the employees of the
Borrower or any of its Subsidiaries exists or, to the best knowledge of the
Borrower, is contemplated or threatened.
(b) No "prohibited transaction" (as defined in Section 406 of the
Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"), or Section 4975
of the Internal Revenue Code of 1986, as amended (the "Code")) or "accumulated
funding deficiency" (as defined in Section 302 of ERISA) or any of the events
set forth in Section 4043(b) of ERISA (other than events with respect to which
the 30-day notice requirement under Section 4043 of ERISA has been waived) has
occurred with respect to any employee benefit plan of the Borrower or any of its
Subsidiaries which could reasonably be expected to have a Material Adverse
Effect; each such employee benefit plan is in compliance in all material
respects with applicable law, including ERISA and the Code; the Borrower and
each of its Subsidiaries have not incurred and do not expect to incur liability
under Title IV of ERISA with respect to the termination of, or withdrawal from,
any pension plan for which the Borrower or any of its Subsidiaries would have
any liability; and each such pension plan that is intended to be qualified under
Section 401(a) of the Code is so qualified in all material respects and nothing
has occurred, whether by action or by failure to act, which could reasonably be
expected to cause the loss of such qualification.
SECTION 4.14. Environmental Matters
. There has been no storage, generation, transportation,
handling, treatment, disposal, discharge, emission or other release of any kind
of toxic or other wastes or other hazardous substances by, due to or caused by
the Borrower or any of its Subsidiaries (or, to the best knowledge of the
Borrower, any other entity (including any predecessor) for whose acts or
omissions the Borrower or any of its Subsidiaries is or could reasonably be
expected to be liable) upon any of the property now or previously owned or
leased by the Borrower or any of its
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Subsidiaries, or upon any other property, in violation of any statute or any
ordinance, rule, regulation, order, judgment, decree or permit, in each case,
now in effect or which would, under any statute or any ordinance, rule
(including rule of common law), regulation, order, judgment, decree or permit,
give rise to any liability of the Borrower or any of its Subsidiaries, except
for any violation or liability which could not reasonably be expected to have,
singularly or in the aggregate with all such violations and liabilities, a
Material Adverse Effect; and there has been no disposal, discharge, emission or
other release of any kind onto such property or into the environment surrounding
such property of any toxic or other wastes or other hazardous substances with
respect to which the Borrower has knowledge, except for any such disposal,
discharge, emission or other release of any kind which could not reasonably be
expected to have a Material Adverse Effect.
SECTION 4.15. No Material Adverse Change
. Since February 15, 2000, (i) there has been no material adverse
change or any development involving a prospective material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs,
management or business prospects of the Borrower and its Subsidiaries, whether
or not arising in the ordinary course of business, (ii) there has been no
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs, management or business prospects of NRG Operations
or NRG Power Marketing that has had or may have a Material Adverse Effect, (iii)
neither the Borrower nor any Guarantor has incurred any material liability or
obligation, direct or contingent, other than in the ordinary course of business,
(iv) neither the Borrower nor any Guarantor has entered into any material
transaction other than in the ordinary course of business and (v) there has not
been any change in the ownership or long-term debt of the Borrower or the
Guarantors, or any dividend or distribution of any kind declared, paid or made
by the Borrower or the Guarantors on any class of its membership interests.
SECTION 4.16. Certificates
. Any certificate signed by any officer of the Borrower or any
Guarantor and delivered to the Lenders in connection with the performance of
obligations under the Financing Documents shall be deemed a representation and
warranty by the Borrower, as to matters covered thereby, to the Lenders.
SECTION 4.17. Year 2000 Issues
. On the basis of a comprehensive review and assessment of the Borrower's and
the Guarantors' systems and equipment and inquiry made of the Borrower's and the
Guarantors' material suppliers, vendors and customers, including testing and
replacements to be completed by the fourth quarter of 1999, the Borrower has no
reason to believe that the Year 2000 Problem, including costs of remediation,
will result in a Material Adverse Effect. The Borrower and the Guarantors have
developed and are developing feasible contingency plans which the Borrower
believes in good faith to be adequate to ensure uninterrupted and unimpaired
business operation without a Material Adverse Effect in the event of failure of
their own or a third party's systems or
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equipment (including those of vendors, customers and suppliers) due to the Year
2000 Problem.
SECTION 4.18. Use of Credit
. Neither the Borrower nor any Guarantor is engaged principally, or as one of
its important activities, in the business of extending credit for the purpose,
whether immediate, incidental or ultimate, of buying or carrying Margin Stock,
and no part of the proceeds of any Loan hereunder will be used to buy or carry
any Margin Stock.
SECTION 4.19. Disclosure
. The Borrower has disclosed to the Lenders all agreements, instruments and
corporate or other restrictions to which it or any of its Subsidiaries is
subject, and all other matters known to it, that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.
None of the reports, financial statements, certificates or other information
furnished by or on behalf of the Obligors to the Lender in connection with the
negotiation of this Agreement, the other Financing Documents and the Bond
Documents or delivered hereunder or thereunder (as modified or supplemented by
other information so furnished) contains any material misstatement of fact or
omits to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided that, with respect to projected financial information, the Borrower
represents only that such information was prepared in good faith based upon
assumptions believed to be reasonable at the time.
ARTICLE V. CONDITIONS PRECEDENT.
SECTION 5.01. Effective Date
. The respective obligations of the Lenders hereunder are subject to the
accuracy, on and as of the date hereof and the Effective Date, of the
representations and warranties of the Borrower contained herein, to the accuracy
of the statements of the Borrower and its officers made in any certificates
delivered pursuant hereto, to the performance by the Borrower of its obligations
hereunder, and to each of the following additional terms and conditions:
(a) Executed Counterparts. From each party hereto either (i) a
counterpart of this Agreement signed on behalf of such party or (ii)
written evidence satisfactory to the Administrative Agents (which may
include telecopy transmission of a signed signature page to this
Agreement) that such party has signed a counterpart of this Agreement.
(b) Transaction Documents. Certified copies of the Transaction
Documents then in effect, in form and substance satisfactory to the
Lenders.
(c) Offering Circular.
(i) The Offering Circular (and any amendments or
supplements thereto) shall have been printed and copies thereof
distributed to the Lenders prior to the Effective Date; and
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(ii) none of the Lenders shall have discovered and
disclosed to the Borrower on or prior to the Effective Date that
the Offering Circular or any amendment or supplement thereto
contains an untrue statement of a fact which, in the reasonable
opinion of counsel for the Lenders, is material or omits to state
any fact which, in the reasonable opinion of such counsel, is
material and is required to be stated therein or is necessary to
make the statements therein not misleading.
(d) Corporate Proceedings. All corporate proceedings and other
legal matters incident to the authorization, form and validity of each
of the Transaction Documents and the Offering Circular, and all other
legal matters relating to the Transaction Documents and the transactions
contemplated thereby, shall be satisfactory in all material respects to
the Lenders, and the Borrower and the Guarantors shall have furnished to
the Lenders all documents and information that they or their counsel may
reasonably request to enable them to pass upon such matters.
(e) Opinion of Counsel to the Borrower. Skadden, Arps, Slate,
Meagher & Flom LLP shall have furnished to the Lenders their written
opinion, as counsel to the Borrower, addressed to the Lenders and dated
the Effective Date, in form and substance reasonably satisfactory to the
Lenders and covering such other matters relating to the Borrower, this
Agreement or the Transactions as the Lenders shall reasonably request.
(f) Opinion of Counsel to the Lenders. The Lenders shall have
received from Milbank, Tweed, Hadley & McCloy LLP, special New York
counsel for the Lenders, such opinion or opinions, dated the Effective
Date, with respect to such matters as the Lenders may reasonably
require, and the Borrower and the Guarantors shall have furnished to
such counsel such documents and information as they reasonably request
for the purpose of enabling them to pass upon such matters.
(g) Officer's Certificate. The Borrower shall have furnished to
the Lenders a certificate, dated the Effective Date, of its president
and its treasurer stating that (A) such officers have carefully examined
the Offering Circular, (B) in their opinion, the Offering Circular, as
of its date, did not include any untrue statement of a material fact and
did not omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and since the
date of the Offering Circular, no event has occurred which should have
been set forth in a supplement or amendment to the Offering Circular so
that the Offering Circular (as so amended or supplemented) would not
include any untrue statement of a material fact and would not omit to
state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading and (C) as of the Effective
Date, the representations and warranties of the Borrower in this
Agreement are true and correct in all material respects, the Borrower
has complied in all material respects with all agreements and satisfied
in all material respects all conditions on its part to be performed or
satisfied hereunder on or prior to the Effective Date, and subsequent to
the date of the most recent financial statements contained in the
Offering Circular, there has been no
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Material Adverse Change, or any change, or any development including a
prospective change, in or affecting the condition (financial or
otherwise), results of operations, business or prospects of the Borrower
and the Guarantors taken as a whole, except as set forth in the Offering
Circular.
(h) Closing of the Bond Offering. The initial $750,000,000 Bond
offering by the Borrower shall have been completed.
(i) Repayment of Loans. The Borrower shall have fully repaid its
Indebtedness under the $686,564,000 Loan Agreement dated as of June 4,
1999 by and among the Borrower, the subsidiary guarantors party thereto,
the lenders party thereto, Chase and Citibank.
(j) Independent Engineer's Report. The Independent Engineer shall
have delivered its final report to the Lenders in form and substance
reasonably satisfactory in all respects to the Administrative Agents
favorably reviewing (among other matters) the technical feasibility of
all engineering, design, capacity and operating specifications and
arrangements and capital expenditure and operating cost estimates
relating to the Facilities and environmental matters relating to the
Facilities and provided a letter, dated the Effective Date, confirming
its report and the conclusions therein as of the Effective Date.
(k) Independent Market Consultant's Report. The Independent
Market Consultant shall have delivered its final report to the Lenders
in form and substance reasonably satisfactory in all respects to the
Lenders and provided a letter, dated the Effective Date, confirming its
report and the conclusions therein as of the Effective Date.
(l) Independent Insurance Consultant's Report. The Independent
Insurance Consultant shall have delivered its final report to the
Lenders in form and substance reasonably satisfactory in all respects to
the Lenders, and provided a letter, dated the Effective Date.
(m) Fees and Taxes. (i) Evidence that all filing, recordation,
subscription and inscription fees and all recording and other similar
fees, and all recording, stamp and other taxes and other expenses
related to such filings, registrations and recordings necessary for the
consummation of the transactions contemplated by this Agreement and the
other Transaction Documents have been paid in full (to the extent the
obligation to make such payment then exists) by or on behalf of the
Borrower and (ii) the Paying Agent shall have received all fees and
other amounts due and payable on or prior to the Effective Date,
including, to the extent invoiced, reimbursement or payment of all
out-of-pocket expenses required to be reimbursed or paid by the Borrower
hereunder.
SECTION 5.02. Conditions Precedent for each Loan
. The obligation of each Lender to make a Loan on or after the Effective Date is
subject to the satisfaction of the following conditions precedent:
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(a) Representations and Warranties. The representations and
warranties of the Borrower set forth in this Agreement, and of each
Obligor in each of the Financing Documents to which such Obligor is a
party, shall be true and correct on and as of the date of such
Borrowing.
(b) No Defaults. At the time of and immediately after giving
effect to such Borrowing, no Default shall have occurred and be
continuing.
(c) Available Revolver Amount. Immediately after giving effect to
such Borrowing, the aggregate outstanding principal amount of the Loans
of all Lenders will be equal to or less than the Revolver Amount.
Each Borrowing shall be deemed to constitute a representation and warranty by
the Borrower on the date thereof as to the matters specified in clauses (a), (b)
and (c) above.
ARTICLE VI. COVENANTS OF THE BORROWER.
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees and expenses payable
hereunder shall have been paid in full, the Borrower covenants and agrees with
the Lenders that:
SECTION 6.01. Financial Statements and Other Information
. The Borrower will furnish to the Administrative Agents:
(a) within 105 days after the end of each fiscal year of the
Borrower, (i) the audited consolidated balance sheet and related
statements of operations, members' equity and cash flows of the Borrower
and its Subsidiaries as of the end of and for such year and (ii) the
audited consolidated balance sheet and related statements of operations,
members' equity and cash flows of the Borrower and the Guarantors
(excluding the financial condition and results of operations of the
Borrower and the Unrestricted Subsidiaries) as of the end of and for
such year, setting forth in each case in comparative form the figures
for the previous fiscal year, all reported on by PricewaterhouseCoopers
LLP or other independent public accountants of recognized national
standing (without a "going concern" or like qualification or exception
and without any qualification or exception as to the scope of such
audit) to the effect that such consolidated financial statements present
fairly in all material respects the financial condition and results of
operations of the Borrower and its Subsidiaries on a consolidated basis
in accordance with GAAP consistently applied;
(b) within 60 days after the end of each of the first three
quarters of each fiscal year of the Borrower, (i) the unaudited
consolidated balance sheet and related statements of operations,
members' equity and cash flows of the Borrower and its Subsidiaries as
of the end of and for such fiscal quarter and the then-elapsed portion
of the fiscal year and (ii) the unaudited consolidated balance sheet and
related statements of operations,
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members' equity and cash flows of the Borrower and the Guarantors
(excluding the financial condition and results of operations of the
Borrower and the Unrestricted Subsidiaries), setting forth in each case
in comparative form the figures for (or, in the case of the balance
sheet, as of the end of) the corresponding period or periods of the
previous fiscal year, all certified by an Authorized Representative of
the Borrower as presenting fairly in all material respects the financial
condition and results of operations of the Borrower and its Subsidiaries
on a consolidated basis in accordance with GAAP consistently applied,
subject to normal year-end audit adjustments and the absence of
footnotes;
(c) concurrently with any delivery of financial statements under
clause (a) or (b) of this Section, an Officer's Certificate (i)
certifying as to whether to the best knowledge of the signer thereof a
Default has occurred and, if a Default has occurred, specifying the
details thereof and any action taken or proposed to be taken with
respect thereto, (ii) stating whether any change in GAAP or in the
application thereof has occurred since the date of the most recent prior
audited financial statements delivered pursuant to Section 6.01(a) or
delivered to Lenders on or prior to the Effective Date, as applicable,
and, if any such change has occurred, specifying the effect of such
change on the financial statements accompanying such certificate;
(d) concurrently with any delivery of financial statements under
clause (a) of this Section, a certificate of the accounting firm that
reported on such financial statements stating whether they obtained
knowledge during the course of their examination of such financial
statements of Defaults under clause (b)(B)(y) of the definition of
"Permitted Indebtedness" or clause (b) or (c) of Section 6.15 (which
certificate may be limited to the extent required by accounting rules or
guidelines);
(e) promptly after the same become publicly available, copies of
all periodic and other reports, proxy statements and other materials
filed by the Borrower or any of the Guarantors with the SEC, or any
Governmental Authority succeeding to any or all of the functions of said
commission, or with any national securities exchange, or distributed by
the Borrower to its members generally, as the case may be;
(f) promptly after receiving notice of the same, copies of any
information with respect to any material litigation or material
governmental or environmental proceedings against the Borrower or the
Guarantors; and
(g) promptly following any request therefor, such other
information regarding the operations, business affairs and financial
condition of the Borrower or any of the Guarantors, or compliance with
the terms of this Agreement and the other Transaction Documents, as the
Administrative Agents or Required Lenders may reasonably request.
SECTION 6.02. Existence; Conduct of Business
. The Borrower will, and will cause each of the Guarantors to, do or cause to be
done all things necessary to preserve, renew and keep in full force and effect
its legal existence as a limited
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liability company and all things reasonably necessary to preserve, renew and
keep in full force and effect the rights, licenses, permits, privileges and
franchises material to the conduct of its business as then conducted; provided
that the foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution permitted under Section 6.14; provided, further that the Borrower or
any Guarantor may change its status as a limited liability company with the
consent of the Required Lenders, such consent no to be unreasonably withheld.
SECTION 6.03. Maintenance of Tax Status
. The Borrower will not, and will cause each of the Guarantors not to,
voluntarily take any action to cause the Borrower or any Guarantors to be
subject to taxation as a separate entity for federal income tax purposes.
SECTION 6.04. Compliance with Laws and Contractual Obligations
. The Borrower will, and will cause each of its Subsidiaries to, comply with all
laws, rules, regulations and orders of any Governmental Authority (including
Environmental Laws and ERISA matters), and all contractual obligations
applicable to it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.
SECTION 6.05. Maintenance of Properties; Insurance
.
(a) The Borrower will, and will cause each of the Guarantors to,
(i) keep and maintain all property material to the conduct of its business in
good working order and condition, ordinary wear and tear excepted; provided,
however, that nothing in this Section shall prevent the Borrower or Guarantor
from disposing of any asset (subject to compliance with Section 6.12 or 6.14) or
from discontinuing the operation or maintenance of any of such material
properties if such discontinuance is, as determined by the Borrower in good
faith, desirable in the conduct of its business or the business of any Guarantor
and would not reasonably be expected to have a Material Adverse Effect on the
Borrower and the Guarantors taken as a whole and (ii) maintain, with financially
sound and reputable insurance companies, insurance with respect to each Facility
in such amounts and against such risks as are customarily maintained by
companies engaged in the same or similar businesses operating in the same or
similar locations. The Borrower will maintain and will cause the Guarantors to
maintain insurance for risks customarily insured against by other enterprises
with similar capital structures and owning and operating facilities of like size
and type as that of the Facilities in accordance with Prudent Industry Practice.
(b) The Borrower will (i) provide funds to each of the Guarantors
at such times and in such amounts so as to enable each of the Guarantors to pay
all Operating Expenses incurred by each such Guarantor on or before the date
such Operating Expenses become due and payable and (ii) cause each of the
Guarantors to comply with Section 7.07.
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SECTION 6.06. Payment of Taxes and Claims
. The Borrower will, and will cause each of the Guarantors to, pay its
obligations, including Tax liabilities, before the same shall become delinquent
or in default unless the same is then the subject of a Good Faith Contest or
except where nonpayment would not have a Material Adverse Effect.
SECTION 6.07. Books and Records; Inspection Rights
. The Borrower will, and will cause each of the Guarantors to, keep proper books
of record and account in which full, true and correct entries are made of all
dealings and transactions in relation to its business and activities. The
Borrower will, and will cause each of the Guarantors to, permit the
Administrative Agents or their representatives, upon reasonable prior notice, to
visit and inspect its properties, to examine and make extracts from its books
and records, and to discuss its affairs, finances and condition with its
officers and independent accountants, all at such reasonable times and as often
as reasonably requested.
SECTION 6.08. Indebtedness
. The Borrower will not: (a) create, incur, assume or permit to exist any
Indebtedness, except Permitted Indebtedness; (b) permit any Guarantor to create,
incur, assume or permit to exist any Indebtedness, except its guarantee of the
Bonds or other Permitted Indebtedness (other than Subordinated Indebtedness) and
Intercompany Loans; or (c) permit any Unrestricted Subsidiary to create, incur,
assume or permit to exist any Indebtedness, except Non-Recourse Obligations.
SECTION 6.09. Liens
. The Borrower will not, nor will it permit any of the Guarantors to, create,
incur, assume or permit to exist any Lien on any property or asset now owned or
hereafter acquired by it, or assign or sell any income or revenues (including
accounts receivable) or rights in respect of any thereof, except Permitted
Liens.
SECTION 6.10. Certain Obligations Respecting Subsidiaries
.
(a) Guarantors. In the event that the Borrower shall form or
acquire any new subsidiary that shall constitute a Subsidiary hereunder, it
shall designate such new Subsidiary as a "Guarantor" or an "Unrestricted
Subsidiary" and will cause each new Subsidiary designated as a Guarantor:
(i) to become an "Obligor" under the Security Agreement;
(ii) to take such action (including delivering such membership
interests or other ownership interests, executing and delivering such
Uniform Commercial Code financing statements) as shall be necessary to
create and perfect valid and enforceable first priority
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Liens on substantially all of the personal property of such Guarantor on
which a Lien is required to be created pursuant to the Security
Agreement as collateral security for the obligations of such Guarantor
hereunder; and
(iii) to take such action, from time to time as shall be
necessary to ensure that any such Guarantor remain at all times a
"Guarantor" hereunder except as otherwise permitted hereunder (including
Sections 6.12 and 6.14).
(b) Ownership of Subsidiaries. The Borrower will, and will cause
each of its Subsidiaries to, take such action from time to time as shall be
necessary to ensure that the ownership of the Borrower in the voting equity
interests of each of its Subsidiaries (other than Unrestricted Subsidiaries)
shall at all times exceed 50% of all such voting equity interests. In the event
that any additional membership interests shall be issued by any Subsidiary
(other than an Unrestricted Subsidiary) to the Borrower, the Borrower agrees
forthwith to deliver to the Collateral Agent pursuant to the Security Agreement
the certificates evidencing such membership interests, accompanied by undated
stock powers executed in blank and to take such other action as the Lenders
shall request to perfect the security interest created therein pursuant to the
Security Agreement.
SECTION 6.11. Restrictive Agreements
. The Borrower will not, and will not permit any of the Guarantors to, directly
or indirectly, enter into, incur or permit to exist any agreement or other
arrangement that prohibits, restricts or imposes any condition upon (a) the
ability of the Borrower or any Guarantor to create, incur or permit to exist any
Lien upon any of its property or assets that is either (i) created under the
Financing Documents or (ii) in favor of the Borrower, or (b) the ability of any
Guarantor to pay dividends or other distributions with respect to any shares of
its capital stock or to make or repay loans or advances to the Borrower or any
other Guarantor or to Guarantee Indebtedness of the Borrower or any other
Guarantor except such prohibition, restriction or condition existing under or by
reason of: (1) applicable Law, (2) this Agreement or any Transaction Document,
(3) with respect to real property, customary non-assignment provisions of any
contract or any lease governing a leasehold interest of any Guarantor, (4) any
agreements existing at the time of acquisition of any Person or the properties
or assets of the Person so acquired, which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any Person, other than
the Person or the properties or assets of the Person so acquired, (5) agreements
listed on Schedule III hereof (6) Liens incurred in accordance with Section 6.09
or 7.05 or (7) refinancing of Indebtedness with respect to clauses (4) or (5).
SECTION 6.12. Prohibition on Sale of Assets
. The Borrower will not, and will not, permit the Guarantors to, sell or
otherwise dispose of any assets other than (i) transfers of assets among the
Borrower and the Guarantors; (ii) sales and dispositions in the ordinary course
of business not in excess of $20,000,000 in the aggregate for the Borrower and
the Guarantors in any fiscal year; (iii) any sales or dispositions of surplus,
obsolete or worn-out equipment; (iv) any sales or dispositions required for
compliance with
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applicable Law or necessary Governmental Approvals; (v) sales or dispositions of
non-controlling ownership interests in Guarantors in accordance with Section
6.10(b) so long as the guarantee set forth herein with regard to such Guarantor
stays in effect; (vi) sales or dispositions of ownership interests in
Unrestricted Subsidiaries; (vii) any sales or dispositions of assets permitted
under Section 6.14 or 7.11; and (viii) any other sale or other disposition so
long as (A) after giving effect to such events, the Rating Agencies shall have
confirmed their respective ratings of the Bonds in effect immediately prior to
such sale or other disposition and (B) such sale or disposition shall not exceed
10% of the Net Tangible Assets of the Borrower and the Guarantors, taken as a
whole.
SECTION 6.13. Modifications of Certain Documents
. (a) Without the prior consent of the Required Lenders, the Borrower will not
agree or consent to nor allow any Guarantor to agree or consent to any
termination, modification, supplement, replacement or waiver of any Transaction
Document (excluding the Indemnification Agreement), unless such termination,
modification, supplement, replacement or waiver could not, individually or
collectively with all other such terminations, modifications, supplements,
replacements and waivers, reasonably be expected to have a Material Adverse
Effect and (b) without the prior unanimous consent of the Lenders, the Borrower
will not agree or consent to nor allow any Guarantor to agree or consent to any
termination, modification, supplement or waiver of the Indemnification
Agreement.
SECTION 6.14. Prohibition on Fundamental Changes
.
(a) Mergers, Consolidations, Disposal of Assets, Etc. Except as
permitted under Section 6.12 (other than clause (vii) thereof) or Section 7.11
(other than clause (v) thereof), the Borrower will not, nor will it permit any
of the Guarantors to, merge into or consolidate with any other Person, or permit
any other Person to merge into or consolidate with it, or sell, transfer, lease
or otherwise dispose of (in one transaction or in a series of transactions) all
or any substantial part of its assets, or all or substantially all of the
membership or other equity interests of any of its Subsidiaries (in each case,
whether now owned or hereafter acquired), or liquidate or dissolve, except that,
if as a result thereof no Default shall have occurred and be continuing, (i) any
Subsidiary may merge into the Borrower in a transaction in which the Borrower is
the surviving corporation, (ii) any Guarantor may merge into any Guarantor in a
transaction in which the surviving entity is a Guarantor and the Borrower's
economic interest in each merging Guarantor's assets shall not have been
diminished as a result of such merger, (iii) any Guarantor may sell, transfer,
lease or otherwise dispose of its assets to the Borrower or to another Guarantor
(provided that the Borrower's economic interest in such assets is not diminished
as a result thereof) and (iv) any Guarantor may liquidate or dissolve if the
assets of such Guarantor are transferred to another Guarantor (provided that the
Borrower's economic interest in such assets is not diminished as a result
thereof and that the Borrower determines in good faith that such liquidation or
dissolution is in the best interests of the Borrower and is not materially
disadvantageous to the Lenders).
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(b) Lines of Business. The Borrower will not, nor will it permit
any of the Guarantors to, engage to any material extent in any business other
than, (i) in the case of the Borrower, the ownership of the Guarantors and the
Unrestricted Subsidiaries and the ownership and operation of non-nuclear
electric generating facilities and (ii) in the case of the Guarantors (including
any Subsequent Guarantors), the ownership and operation of their respective
Facilities and the ownership and operation of other non-nuclear electric
generating facilities.
SECTION 6.15. Restricted Payments
. The Borrower will not make, or agree to pay or make, directly or
indirectly, any Restricted Payment, unless, at the time of and after giving
effect to such Restricted Payment (a) no Default or Event of Default shall have
occurred and be continuing or would occur as a consequence of such Restricted
Payment; (b) the debt service reserve account under the Indenture is fully
funded with cash and/or debt service reserve instruments as permitted under the
Indenture; (c) the Debt Service Coverage Ratio for the preceding four
consecutive quarters (or such shorter period covering the quarters ended
subsequent to the initial Borrowing, taken as a consecutive period) was not less
than 1.50 to 1.0 in the case of any such period ending prior to December 31,
2003 or 1.70 to 1.0 for any such period ending thereafter; (d) the Projected
Debt Service Coverage Ratio for the next succeeding eight calendar quarters
(taken as two periods of four quarters and determined as of the beginning of the
quarter during which the determination is made) is not less than 1.50 to 1.0 in
the case of any such four quarter period ending prior to December 31, 2003 or
1.70 to 1.0 for any such four quarter period ending thereafter; and (e) the
Borrower certifies that making the Restricted Payment would not reasonably be
expected to have a Material Adverse Effect on the Borrower and the Guarantors
taken as a whole. Restricted Payments by any Guarantor of the Borrower that is
not a wholly-owned Subsidiary of the Borrower made otherwise than to the
Borrower shall be subject to the restrictions set forth in clauses (a), (b) (c),
(d) and (e) of the preceding sentence. Restricted Payments to the Borrower by
any wholly-owned Subsidiary of the Borrower shall not be subject to any
restrictions.
Notwithstanding the foregoing, the Borrower will not be
restricted from (i) making payments to NRG Energy of any proceeds from treasury
locks entered into by the Borrower on or prior to the date hereof and (ii) the
repayment on the Effective Date of loans made by NRG Energy in connection with
the Facilities located in Connecticut and assumed by the Borrower.
SECTION 6.16. Transactions with Affiliates
. The Borrower will not, nor will it permit any of the Guarantors to, sell,
lease or otherwise transfer any property or assets to, or purchase, lease or
otherwise acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except (a) transactions in the
ordinary course of business at prices and on terms and conditions not less
favorable to the Borrower or such Subsidiary than could be obtained on an
arm's-length basis from unrelated third parties, (b) transactions between or
among the Borrower and the Guarantors not involving any other Affiliate, (c) any
Restricted Payment permitted by Section 6.15 or 7.07, and (d) transactions that
are contemplated by any Transaction Document or any extensions,
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renewals or replacements thereof that will not have a Material Adverse Effect.
Notwithstanding the foregoing, the restrictions set forth in this
covenant shall not apply to (i) reasonable and customary directors' fees,
indemnification and similar arrangements, consulting fees, employee salaries,
bonuses or employment agreements, compensation or employee benefit arrangements
and incentive arrangements with any officer, director or employee of the
Borrower or any Subsidiary entered into in the ordinary course of business, (ii)
loans and advances to officers, directors and employees of the Borrower or any
Subsidiary for reasonable travel, entertainment, moving and other relocation
expenses, in each case made in the ordinary course of business, (iii) the
incurrence of intercompany Indebtedness which constitutes Permitted
Indebtedness, (iv) transactions pursuant to agreements in effect on the date
hereof, (v) the repayment to NRG Energy of funds money loaned by NRG Energy in
connection with the transactions contemplated by the CL&P Acquisition Documents
and (vi) the distribution to NRG Energy of any proceeds received by the Borrower
in connection with any treasury locks entered into on or before the Effective
Date.
SECTION 6.17. Investments
. The Borrower will not, nor will it permit any of the Guarantors to, make or
permit to remain outstanding any Investments except:
(a) Investments outstanding on the date hereof and identified on
Schedule IV;
(b) operating deposit accounts with banks;
(c) cash or Permitted Investments;
(d) Investments by the Borrower or the Guarantors in the Borrower
or the Guarantors (including Investments by the Borrower in Intercompany
Loans);
(e) Investments in another Person, if as a result of such
Investment (A) such other Person becomes a Guarantor or (B) such other
Person is merged or consolidated with or into, or transfers or conveys
all or substantially all of its assets to the Borrower or a Guarantor;
(f) Investments representing capital stock or obligations issued
to, the Borrower or any Guarantor in settlement of claims against any
other Person by reason of a composition or readjustment of debt or a
reorganization of any debtor of the Borrower or any Guarantor;
(g) Investments in the Bonds;
(h) Investments acquired by the Borrower or any of the Guarantors
in connection with any asset sale permitted under Section 6.12, 6.14(a),
7.06(a) or 7.11 to the extent such Investments are non-cash proceeds as
permitted under Section 6.12, 6.14(a), 7.06(a) or 7.11;
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(i) any Investment to the extent that the consideration therefor
is capital stock (other than redeemable capital stock) of the Borrower;
(j) Investments consisting of security deposits with utilities
and other Persons made in the ordinary course of business;
(k) Hedging Agreements entered into in the ordinary course of
business and not for speculative purposes;
(l) amounts constituting Restricted Payments which the Borrower
would be permitted to make under Section 6.15 and the Guarantors would
be permitted to make under Section 7.7; and
(m) additional Investments up to but not exceeding $10,000,000 in
the aggregate.
For purposes of clause (m) of this Section, the aggregate amount of an
Investment at any time shall be deemed to be equal to (A) the aggregate amount
of cash, together with the aggregate fair market value of property, including
any securities, loaned, advanced, contributed, transferred or otherwise invested
that gives rise to such Investment minus (B) the aggregate amount of dividends,
distributions or other payments received in cash in respect of such Investment;
the amount of an Investment shall not in any event be reduced by reason of any
write-off of such Investment nor increased by any increase in the amount of
earnings retained in the Person in which such Investment is made that have not
been dividend, distributed or otherwise paid out.
SECTION 6.18. EWG Status
. The Borrower will take, or cause to be taken, all action required to maintain
its and each Guarantor's status as an "exempt wholesale generator" under Section
32(a) of PUHCA.
SECTION 6.19. Use of Proceeds
. The Borrower will use the proceeds of Loans incurred by it for ordinary course
working capital on the Effective Date for the Borrower, to refinance the
Borrower's existing working capital debt and to make Intercompany Loans to the
Guarantors for ordinary course working capital for the Guarantors.
ARTICLE VII. COVENANTS OF THE GUARANTORS.
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees and expenses payable
hereunder shall have been paid in full, each Guarantor covenants and agrees with
the Lenders that:
SECTION 7.01. Existence; Conduct of Business
. Each Guarantor agrees that it will do or cause to be done all things necessary
to preserve, renew and keep in full force and effect such Guarantor's legal
existence as a limited liability
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company and all things reasonably necessary to preserve, renew and keep in full
force and effect such Guarantor's the rights, licenses, permits, privileges and
franchises material to the conduct of such Guarantor's business as then
conducted; provided that the foregoing shall not prohibit any merger,
consolidation, liquidation or dissolution permitted under Section 7.06;
provided, further that such Guarantor may change its status as a limited
liability company with the consent of the Required Lenders, such consent no to
be unreasonably withheld.
SECTION 7.02. Compliance with Laws and Contractual Obligations
. Each Guarantor agrees that it will comply with all Laws (including
Environmental Laws and ERISA matters) and all contractual obligations, in each
case, as applicable to such Guarantor or its property, except where the failure
to do so, individually or in the aggregate, would not reasonably be expected to
result in a Material Adverse Effect.
SECTION 7.03. Maintenance of Properties; Insurance
. Each Guarantor agrees that it will (i) keep and maintain all property material
to the conduct of such Guarantor's business in good working order and condition,
ordinary wear and tear excepted; provided, however, that nothing in this Section
shall prevent any Guarantor from disposing of any asset (subject to compliance
with Section 7.06 or Section 7.11) or from discontinuing the operation or
maintenance of any of such material properties if the Guarantor reasonably
determines in good faith that such discontinuance is desirable in the conduct of
its business and would not reasonably be expected to have a Material Adverse
Effect, and (ii) maintain, with financially sound and reputable insurance
companies, insurance with respect to each Facility in such amounts and against
such risks as are customarily maintained by companies engaged in the same or
similar businesses operating in the same or similar locations in accordance with
Prudent Industry Practices. Each Guarantor agrees that it will maintain
insurance for risks customarily insured against by other enterprises with
similar capital structures and owning and operating facilities of like size and
type as that of the Facilities in accordance with Prudent Industry Practice.
SECTION 7.04. Indebtedness
. Each Guarantor agrees that it will not create, incur, assume or permit to
exist any Indebtedness, except Intercompany Loans, the Guarantees of the Bonds
and the Loans made by Lenders to the Borrower, guarantees of other Permitted
Indebtedness (other than Subordinated Indebtedness).
SECTION 7.05. Liens
. Each Guarantor agrees that it will not create, incur, assume or permit to
exist any Lien on any property or asset now owned or hereafter acquired by such
Guarantor, or assign or sell any income or revenues (including accounts
receivable) or rights in respect of any thereof, except Permitted Liens.
SECTION 7.06. Prohibition on Fundamental Changes
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.
(a) Mergers, Consolidations, Disposal of Assets, Etc. Except as
permitted by Section 6.12 (other than clause (vii) thereof) or Section 7.11
(other than clause (v) thereof), each Guarantor agrees that it will not merge
into or consolidate with any other Person, or permit any other Person to merge
into or consolidate with such Guarantor, or sell, transfer, lease or otherwise
dispose of (in one transaction or in a series of transactions) all or any
substantial part of its assets (in each case, whether now owned or hereafter
acquired), or liquidate or dissolve, except that (i) each Guarantor may merge
into a Subsidiary in a transaction in which such Guarantor is the surviving
corporation, (ii) any Guarantor may merge into any other Guarantor in a
transaction in which the surviving entity is a Guarantor, (iii) each Guarantor
may sell, transfer, lease or otherwise dispose of such Guarantor's assets to the
Borrower or to any other Guarantor and (iv) any Guarantor may liquidate or
dissolve if the Borrower determines in good faith that such liquidation or
dissolution is in the best interests of the Guarantor and is not materially
disadvantageous to the Lenders, provided that no Default shall have occurred and
be continuing as of result of any of the events described in clauses (i), (ii)
or (iii) above.
(b) Lines of Business. Each Guarantor agrees that it will not
engage to any material extent in any business other than the ownership and
operation of such Guarantor's respective Facilities or other non-nuclear
electric generating facilities, provided that each Subsequent Guarantor agrees
that it will not engage to any material extent in any business other than the
ownership, operation and use of non-nuclear electric generating facilities.
SECTION 7.07. Restricted Payments
. Each Guarantor agrees that it will not make, or agree to pay or make, directly
or indirectly, any Restricted Payment, unless such payment is only (a) to the
Borrower at any time or (b) to any future minority owners of the Guarantors only
if at the time of such Restricted Payment the Borrower would itself be permitted
to make the payment to such other minority owner as if such minority owner held
a minority interest in the Borrower instead of such Guarantor..
SECTION 7.08. Transactions with Affiliates
. Each Guarantor agrees that it will not sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of such
Guarantor's Affiliates, except (a) transactions in the ordinary course of
business at prices and on terms and conditions not less favorable to the
Guarantor or its Subsidiary than could be obtained on an arm's-length basis from
unrelated third parties, (b) transactions between or among such Guarantor and
the Borrower or any of the other Guarantors not involving any other Affiliate,
(c) any Restricted Payment permitted by Section 6.15 or 7.07 and (d)
transactions that are contemplated by any Transaction Document or any
extensions, renewals or replacements thereof, if any such transaction would not
reasonably be expected to result in a Material Adverse Effect.
Notwithstanding the foregoing, the restrictions set forth in this
covenant shall not apply to (i) reasonable and customary directors' fees,
indemnification and similar arrangements,
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consulting fees, employee salaries, bonuses or employment agreements,
compensation or employee benefit arrangements and incentive arrangements with
any officer, director or employee of the Borrower or any Subsidiary entered into
in the ordinary course of business, (ii) loans and advances to officers,
directors and employees of the Borrower or any Subsidiary for reasonable travel,
entertainment, moving and other relocation expenses, in each case made in the
ordinary course of business, (iii) the incurrence of intercompany Indebtedness
which constitutes Permitted Indebtedness and (iv) transactions pursuant to
agreements in effect on the date hereof.
SECTION 7.09. Investments
. Each Guarantor agrees that it will not make or permit to remain outstanding
any Investments except:
(a) Investments outstanding on the date hereof and identified in
Schedule III;
(b) operating deposit accounts with banks;
(c) cash or Permitted Investments;
(d) Investments by such Guarantor in the Borrower or other
Guarantors;
(e) Investments in another Person, if as a result of such
Investment (A) such other Person becomes a Guarantor or (B) such other
Person is merged or consolidated with or into, or transfers or conveys
all or substantially all of its assets to the Borrower or a Guarantor;
(f) Investments representing capital stock or obligations issued
to, the Borrower or any Guarantor in settlement of claims against any
other Person by reason of a composition or readjustment of debt or a
reorganization of any debtor of the Borrower or any Guarantor;
(g) Investments in the Bonds;
(h) Investments acquired by any Guarantor in connection with any
asset sale permitted under Section 6.12, 6.14, 7.06(a) or 7.11 to the
extent such Investments are non-cash proceeds as permitted under Section
6.12, 6.14(a), 7.06(a) or 7.11;
(i) any Investment to the extent that the consideration therefor
is capital stock (other than redeemable capital stock) of the Borrower;
(j) Investments consisting of security deposits with utilities
and other like Persons made in the ordinary course of business;
(k) Hedging Agreements entered into in the ordinary course of
business and not for speculative purposes;
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(l) amounts constituting Restricted Payments which the Guarantor
would otherwise be permitted to make to minority owners under Section
7.07; and
(m) additional Investments up to but not exceeding $10,000,000 in
the aggregate with respect to such Guarantor, the other Guarantors and
the Borrower.
For purposes of clause (m) of this Section, the aggregate amount of an
Investment at any time shall be deemed to be equal to (A) the aggregate amount
of cash, together with the aggregate fair market value of property, including
any securities, loaned, advanced, contributed, transferred or otherwise invested
that gives rise to such Investment minus (B) the aggregate amount of dividends,
distributions or other payments received in cash in respect of such Investment;
the amount of an Investment shall not in any event be reduced by reason of any
write-off of such Investment nor increased by any increase in the amount of
earnings retained in the Person in which such Investment is made that have not
been dividend, distributed or otherwise paid out.
SECTION 7.10. Operation of Facilities
. Each Guarantor agrees that it will operate or cause its respective Facility to
be operated its respective Facility in accordance with Prudent Industry
Practices.
SECTION 7.11. Prohibition on Sale of Assets
. Each Guarantor agrees not to sell or otherwise dispose of any assets other
than (i) transfers of assets between the Borrower and such Guarantor; (ii) sales
and dispositions in the ordinary course of business not in excess of $20,000,000
in the aggregate for such Guarantor, any other Guarantor and the Borrower in any
fiscal year; (iii) any sales or dispositions of surplus, obsolete or worn-out
equipment; (iv) any sales or dispositions required for compliance with
applicable Law or necessary Governmental Approvals; (v) any sales or
dispositions of assets permitted under Section 6.13 or 7.06; or (vi) any other
sale or other disposition so long as (A) after giving effect to such events, the
Rating Agencies shall have confirmed their respective ratings of the Bonds in
effect immediately prior to such sale or other disposition and (B) such sale or
disposition shall not exceed 10% of net tangible assets of the Borrower and the
Guarantors, taken as a whole.
SECTION 7.12. Modification of Certain Documents
. (a) Without the prior consent of the Majority Lenders, no Guarantor will agree
or consent to any termination, modification, supplement, replacement or waiver
of any Transaction Document (excluding the Indemnification Agreement), unless
such termination, modification, supplement, replacement or waiver could not,
individually or collectively with all other such terminations, modifications,
supplements, replacements and waivers, reasonably be expected to have a Material
Adverse Effect and (b) without the prior unanimous consent Lenders, the
Guarantors will not agree or consent to any termination, modification,
supplement or waiver of the Indemnification Agreement.
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ARTICLE VIII. EVENTS OF DEFAULT.
SECTION 8.01. Events of Default
. The term "Event of Default", whenever used herein, shall mean any of the
following events (whatever the reason for such event and whether it shall be
voluntary or involuntary or come about or be affected by operation of law, or be
pursuant to or in compliance with any applicable Law), and any such event shall
continue to be an Event of Default if and for so long as it shall not have been
remedied:
(a) the Borrower defaults in the payment of any principal of any
Loan when and as the same becomes due and payable, whether at due date
or date fixed for prepayment or by acceleration or otherwise;
(b) the Borrower shall fail to pay any interest on any Loan or
any fee or any other amount (other than an amount referred to in clause
(a) of this Article) payable under this Agreement or under any other
Financing Document, when and as the same shall become due and payable,
and such failure shall continue unremedied for a period of three or more
Business Days;
(c) any representation or warranty made or deemed made by or on
behalf of the Borrower or the Guarantors in or in connection with this
Agreement or any other Financing Document or any amendment or
modification hereof or thereof, or in any report, certificate, financial
statement or other document furnished pursuant to or in connection with
this Agreement or any other Financing Document or any amendment or
modification hereof or thereof, shall prove to have been incorrect in
any material respect when made or deemed made;
(d) (i) default in the observance or performance of any term,
covenant or agreement contained in Section 6.02 (with respect to the
Borrower's existence), 6.08, 6.09, 6.10, 6.11, 6.12, 6.13, 6.14, 6.15,
6.18, 6.19, 7.01 (with respect to the Guarantor's existence), 7.04,
7.05, 7.06, 7.07 and 7.11 and the continuance of such default for more
than 2 Business Days after the earliest to occur of (A) actual knowledge
of an executive officer of the Borrower of such default, (B) the time at
which an executive officer of the Borrower should reasonably have had
knowledge of such default or (C) notice from the Administrative Agents
or the Lenders of such default; and (ii) default in the performance or
observance in any material respect of any other term, covenant, or
obligation of the Borrower or the Guarantors under this Agreement, not
otherwise expressly defined as an Event of Default, and the continuance
of such default for more than 30 days after the earliest to occur of (A)
actual knowledge of an executive officer of the Borrower of such
default, (B) the time at which an executive officer of the Borrower
should reasonably have had knowledge of such default or (C) notice from
the Administrative Agents or the Lenders of such default;
(e) default or defaults under one or more agreements,
instruments, mortgages,
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bonds, debentures or other evidences of Indebtedness under which the
Borrower or any Guarantor then has outstanding Indebtedness in excess of
$15,000,000, individually or in the aggregate, and such default or
defaults result in such Indebtedness becoming due prior to its scheduled
maturity or will enable or will permit the holder or holders of such
Indebtedness or any trustee or agent on its or their behalf to cause
such Indebtedness to become due, and to require the prepayment,
repurchase, redemption of defeasance thereof, prior to its scheduled
maturity; provided that such default or defaults shall continue for 15
days or more.
(f) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation,
reorganization or other relief in respect of the Borrower or any
Guarantor or its debts, or of a substantial part of its assets, under
any Federal, state or foreign bankruptcy, insolvency, receivership or
similar law now or hereafter in effect or (ii) the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar
official for the Borrower or any Guarantor or for a substantial part of
its assets, and, in any such case, such proceeding or petition shall
continue undismissed for a period of 60 or more days or an order or
decree approving or ordering any of the foregoing shall be entered;
(g) the Borrower or any Guarantor shall (i) voluntarily commence
any proceeding or file any petition seeking liquidation, reorganization
or other relief under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect, (ii)
consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or petition described in clause (h)
of this Section, (iii) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar
official for itself or for a substantial part of its assets, (iv) file
an answer admitting the material allegations of a petition filed against
it in any such proceeding, (v) make a general assignment for the benefit
of creditors or (vi) take any action for the purpose of effecting any of
the foregoing;
(h) any event described in clauses (f) or (g) above occurs with
respect to NRG Energy, NRG Power Marketing, NRG Operations or any
Operator (so long as such Operator continues to be Subsidiary of NRG
Energy), in each case to the extent a party to any Transaction Document,
and remains uncured for the grace periods provided in such clauses,
provided, however, that in respect of such an event relating to any
Operator, the Borrower shall have an additional 60-day period within
which to enter into a replacement operating arrangement, and provided
further, that in no case shall such an event in respect of an Operator
constitute an Event of Default unless it has a Material Adverse Effect
on the Borrower and the Guarantors taken as a whole.
(i) the Borrower or any Guarantor shall become unable, admit in
writing its inability or fail generally to pay its debts as they become
due;
(j) one or more judgments for the payment of money in an
aggregate amount in excess of $25,000,000 shall be rendered against the
Borrower or any of the Guarantors or
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any combination thereof and the same shall remain undischarged or unpaid
for a period of 60 consecutive days during which execution shall not be
effectively stayed;
(k) a Change in Control shall occur;
(l) the Borrower shall be terminated, dissolved or liquidated (as
a matter of law or otherwise);
(m) the Liens created by the Collateral Documents shall at any
time not constitute a valid and perfected Lien on the collateral
intended to be covered thereby (to the extent perfection by filing,
registration, recordation or possession is required herein or therein)
in favor of the Administrative Agents, free and clear of all other Liens
(other than Liens permitted under this Agreement or under the respective
Collateral Documents), or, except for expiration in accordance with its
terms, any of the Collateral Documents shall for whatever reason be
terminated or cease to be in full force and effect, or the
enforceability thereof shall be contested by any Obligor or Member;
(n) either (i) this Agreement or any other Financing Document or
Bond Document is declared in a final non-appealable judgment to be
unenforceable against the Borrower or any Guarantor or the Borrower or
any Guarantor shall have expressly repudiated its obligations
thereunder; or (ii) any other Transaction Document is declared in a
final non-appealable judgment to be unenforceable against any party
thereto, or any such party shall have expressly repudiated its
obligations thereunder and ceased to perform such obligations, or
defaulted in the performance or observance of any of its material
obligations thereunder and such default has continued unremedied for a
period of five days or more or any such party is the subject of any
proceeding under the Federal Bankruptcy Code;
(o) default by the Borrower, any Guarantor or any counterparty
under or invalidity of any Power Sales Agreement, Operation and
Maintenance Agreement or Corporate Services Agreement, to the extent
such default under or invalidity of any such agreement (x) continues for
30 consecutive days and (y) could reasonably be expected to have a
Material Adverse Effect on the Borrower and the Guarantors taken as a
whole; or
(p) failure to renew or replace any Operation and Maintenance
Agreement (or to make a substantially similar arrangement with respect
to the operation and maintenance of a Facility) upon (i) termination by
a Guarantor or an Operator, after having given 180 days' notice of its
intent to terminate, within 5 days of such termination, (ii) termination
by any Guarantor, within 5 days of such termination, or (iii)
termination by any Operator, within 30 days of such termination.
SECTION 8.02 Acceleration; Remedies
. In every such event (other than an event with respect to any Obligor described
in paragraph (f), (g) or (i) of Section 8.01), and at any time thereafter during
the continuance of such event, the Administrative Agents may, and at the request
of the Required Lenders shall, by notice to the
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Borrower, take either or both of the following actions, at the same or different
times: (i) terminate the Commitments, and thereupon the Commitments shall
terminate immediately, and (ii) declare the Loans then outstanding to be due and
payable in whole (or in part, in which case any principal not so declared to be
due and payable may thereafter be declared to be due and payable), and thereupon
the principal of the Loans so declared to be due and payable, together with
accrued interest thereon and all fees and other obligations of the Obligors
accrued hereunder, shall become due and payable immediately, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by each Obligor; and in case of any event with respect to any
Obligor described in paragraph (f), (g) or (i) of Section 8.01, the Commitments
shall automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other obligations of the
Obligors accrued hereunder, shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by each Obligor.
ARTICLE IX. THE AGENTS.
Each of the Lenders hereby irrevocably appoints Chase and
Citibank as its agent hereunder and under the other Financing Documents and
authorizes Chase and Citibank to take such actions on its behalf and to exercise
such powers as are delegated to the Administrative Agents by the terms hereof or
thereof, together with such actions and powers as are reasonably incidental
thereto (including the execution of the Collateral Agency and Intercreditor
Agreement). Each of the Lenders hereby irrevocably appoints Citibank as its
paying agent hereunder and under the other Financing Documents and authorizes
Citibank to take such actions on its behalf and to exercise such powers as are
delegated to the Paying Agent by the terms hereof or thereof, together with such
actions and powers as are reasonably incidental thereto. The following
provisions of this Article IX shall apply to the Paying Agent mutatis mutandis.
The Persons serving as the Administrative Agents hereunder shall
have the same rights and powers in its capacity as a Lender as any other Lender
and may exercise the same as though it were not the Administrative Agents, and
such Person and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Borrower or any Subsidiary or
other Affiliate thereof as if it were not the Administrative Agents hereunder.
The Administrative Agents shall not have any duties or
obligations except those expressly set forth herein and in the other Financing
Documents. Without limiting the generality of the foregoing, (a) the
Administrative Agents shall not be subject to any fiduciary or other implied
duties, regardless of whether a Default has occurred and is continuing, (b) the
Administrative Agents shall not have any duty to take any discretionary action
or exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby or by the other Financing Documents that the
Administrative Agents are required to exercise in writing by the Required
Lenders, and (c) except as expressly set forth herein and in the other Financing
Documents, the Administrative Agents shall not have any duty to disclose, and
shall not be liable for the failure to disclose, any information relating to the
Borrower or any of its Subsidiaries that is communicated to or obtained by the
bank serving as Administrative Agents
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or any of its Affiliates in any capacity. The Administrative Agents shall not be
liable for any action taken or not taken by it with the consent or at the
request of the Required Lenders or in the absence of its own gross negligence or
willful misconduct. The Administrative Agents shall be deemed not to have
knowledge of any Default unless and until written notice thereof is given to the
Administrative Agents by the Borrower or a Lender, and the Administrative Agents
shall not be responsible for or have any duty to ascertain or inquire into (i)
any statement, warranty or representation made in or in connection with this
Agreement or any other Financing Document, (ii) the contents of any certificate,
report or other document delivered hereunder or thereunder or in connection
herewith or therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein or therein,
(iv) the validity, enforceability, effectiveness or genuineness of this
Agreement, any other Financing Document or any other agreement, instrument or
document, or (v) the satisfaction of any condition set forth in Article V or
elsewhere herein or therein, other than to confirm receipt of items expressly
required to be delivered to the Administrative Agents.
The Administrative Agents shall be entitled to rely upon, and
shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by the proper Person. The
Administrative Agents also may rely upon any statement made to it orally or by
telephone and believed by it to be made by the proper Person, and shall not
incur any liability for relying thereon. The Administrative Agents may consult
with legal counsel (who may be counsel for an Obligor, Member or NRG Energy),
independent accountants and other experts selected by it, and shall not be
liable for any action taken or not taken by it in accordance with the advice of
any such counsel, accountants or experts.
The Administrative Agents may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agents. The Administrative Agents and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agents and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agents.
Each Administrative Agent may resign at any time by notifying the
Lenders and the Borrower. Upon any such resignation, the Required Lenders shall
have the right, in consultation with the Borrower, to appoint a successor. If no
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Administrative Agent
gives notice of its resignation, then the retiring Administrative Agent's
resignation shall nonetheless become effective and (1) the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder and (2) the Required Lenders shall perform the duties of the
Administrative Agent (and all payments and communications provided to be made
by, to or through the Administrative Agent shall instead be made by or to each
Lender directly) until such time as the Required Lenders appoint a successor
agent as provided for above in this paragraph. Upon the acceptance of its
appointment as
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Administrative Agent hereunder by a successor, such successor shall succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring (or retired) Administrative Agent and the retiring Administrative Agent
shall be discharged from its duties and obligations hereunder (if not already
discharged therefrom as provided above in this paragraph). The fees payable by
the Borrower to a successor Administrative Agent shall be the same as those
payable to its predecessor unless otherwise agreed between the Borrower and such
successor. After the Administrative Agent's resignation hereunder, the
provisions of this Article and Section 10.03 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Administrative Agent.
Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Financing Document or any related agreement or any document furnished
hereunder or thereunder.
Except as otherwise provided in Section 10.02(b) with respect to
this Agreement, the Administrative Agent may, with the prior consent of the
Required Lenders (but not otherwise), consent to any modification, supplement or
waiver under any of the Financing Documents to which it is a party.
ARTICLE X. MISCELLANEOUS.
SECTION 10.01. Notices
. Except in the case of notices and other communications expressly permitted to
be given by telephone, all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by telecopy, as follows:
(a) if to the Borrower or any Guarantor, to it at c/o NRG Energy,
Inc., 1221 Nicollet Mall, Suite 700, Minneapolis, MN 55403, Attention of
Adam Carte (Telecopy No. (612) 373-5359; Telephone No. (612) 373-8804);
(b) if to the Administrative Agents, to The Chase Manhattan Bank,
270 Park Avenue, 23rd Floor, New York, New York 10017, Attention of
Robert M. Bowen, (Telecopy No. (212) 270-2101; Telephone No. (212)
270-4215), with a copy to The Chase Manhattan Bank, 270 Park Avenue, New
York, New York 10017, Attention of Robert Mathews (Telecopy No. (212)
270-3089; Telephone No. (212) 270-6004); and Citibank, N.A., 399 Park
Avenue, Fifth Floor, Zone 24, New York, New York, 10043, Attention:
Lorraine Frankel (Telecopy No. 212-793-4574; Telephone No. 212-559-2080;
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(c) if to the Paying Agent, to Citibank, N.A., Global Loan
Operations, 2 Penns Way, Suite 200, New Castle, Delaware 19720,
Attention: Pat Dimery (Telecopy No. (302) 894-6120; Telephone No. (302)
894-6022); or
(d) if to a Lender, to it at its address (or telecopy number) set
forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto (or, in the case
of any such change by a Lender, by notice to the Borrower and the Administrative
Agents). All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt.
SECTION 10.02. Waivers; Amendments
.
(a) No Deemed Waivers; Remedies Cumulative. No failure or delay
by the Administrative Agents, the Paying Agent or any Lender in exercising any
right or power hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Administrative Agents, the Paying Agent and the Lenders
hereunder are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provision of this Agreement or
consent to any departure by any Obligor therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) of this Section,
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. Without limiting the generality of the
foregoing, the making of a Loan shall not be construed as a waiver of any
Default, regardless of whether the Administrative Agents, the Paying Agent or
any Lender may have had notice or knowledge of such Default at the time.
(b) Amendments. Neither this Agreement nor any provision hereof
may be waived, amended or modified except pursuant to an agreement or agreements
in writing entered into by the Borrower and the Required Lenders or by the
Borrower and the Administrative Agents with the consent of the Required Lenders;
provided that no such agreement shall (i) increase any Commitment of any Lender
without the written consent of such Lender, (ii) reduce the principal amount of
any Loan or reduce the rate or amount of interest thereon, or reduce any fees
payable hereunder, without the written consent of each Lender affected thereby,
(iii) postpone the scheduled date of payment of the principal amount of any
Loan, or any interest thereon, or any fees payable hereunder, or reduce the
amount of, waive or excuse any such payment, or postpone the scheduled date of
expiration of any Commitment, without the written consent of each Lender
affected thereby, (iv) alter the manner in which payments or prepayments of
principal, interest or other amounts hereunder shall be applied as among the
Lenders or Types or Classes of Loans, without the written consent of each
Lender, (v) change any of the provisions
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of this Section or the definition of the term "Required Lenders" or any other
provision hereof specifying the number or percentage of Lenders required to
waive, amend or modify any rights hereunder or make any determination or grant
any consent hereunder, without the written consent of each Lender, and (vi)
release any Guarantor from any of its guarantee obligations under Article III
without the written consent of each Lender; and provided, further, that (x) no
such agreement shall amend, modify or otherwise affect the rights or duties of
the (1) Administrative Agents hereunder without the prior written consent of
each Administrative Agent or (2) Paying Agent hereunder without the prior
written consent of the Paying Agent and (y) that any modification or supplement
of Article III shall require the consent of each Guarantor.
(c) Collateral. Without the written consent of each Lender, the
Lenders will not authorize the Collateral Agent to release any collateral or
otherwise terminate any Lien under any Collateral Documents providing collateral
security, agree to additional obligations being secured by such collateral
security, alter the relative priorities of the obligations entitled to the
benefits of the Liens created under the Collateral Documents, except that no
such consent shall be required, and the Collateral Agent will be authorized, to
release any Lien covering property that is subject of wither a disposition of
property permitted hereunder or a disposition to which the Required Lenders have
consented;
SECTION 10.03. Expenses; Indemnity; Damage Waiver
.
(a) Costs and Expenses. The Borrower shall pay (i) all reasonable
out-of-pocket expenses incurred by the Administrative Agents and the Paying
Agent and their Affiliates, including the reasonable fees, charges and
disbursements of counsel for the Administrative Agents, in connection with the
syndication of the credit facilities provided for herein, the preparation and
administration of this Agreement and the other Financing Documents or any
amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all out-of-pocket expenses incurred by the Administrative
Agents or any Lender, including the fees, charges and disbursements of any
counsel for the Administrative Agents or any Lender, in connection with the
enforcement or protection of its rights in connection with this Agreement and
the other Financing Documents, including its rights under this Section, or in
connection with the Loans made hereunder, including in connection with any
workout, restructuring or negotiations in respect thereof and (iii) and all
costs, expenses, taxes, assessments and other charges incurred in connection
with any filing, registration, recording or perfection of any security interest
contemplated by any Collateral Document or any other document referred to
therein.
(b) Indemnification by the Borrower. The Borrower shall indemnify
the Administrative Agents, the Paying Agent and each Lender, and each Related
Party of any of the foregoing Persons (each such Person being called an
"Indemnitee") against, and to hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses, including the fees,
charges and disbursements of any counsel for any Indemnitee, incurred by or
asserted against any Indemnitee arising out of, in connection with, or as a
result of (i) the
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execution or delivery of this Agreement or any agreement or instrument
contemplated hereby, the performance by the parties hereto of their respective
obligations hereunder or the consummation of the Transactions or any other
transactions contemplated hereby, (ii) any Loan or the use of the proceeds
therefrom, (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by the Borrower or any of
its Subsidiaries, or any Environmental Liability related in any way to the
Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any Indemnitee is a party thereto; provided that such indemnity shall not, as to
any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee.
(c) Reimbursement by Lenders. To the extent that the Borrower
fails to pay any amount required to be paid by it to the Administrative Agents
or the Paying Agent under paragraph (a) or (b) of this Section, each Lender
severally agrees to pay to the Administrative Agents or the Paying Agent, as the
case may be, such Lender's Applicable Percentage (determined as of the time that
the applicable unreimbursed expense or indemnity payment is sought) of such
unpaid amount; provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against the Administrative Agents or the Paying Agent in its
capacity as such.
(d) Waiver of Consequential Damages, Etc. To the extent permitted
by applicable law, no party hereto shall assert, and each party hereto hereby
waives, any claim against any other party or any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement or any agreement or instrument contemplated hereby, the
Transactions, any Loan or the use of the proceeds thereof.
(e) Payments. All amounts due under this Section shall be payable
not later than 20 days after written demand therefor.
SECTION 10.04. Successors and Assigns
.
(a) Assignments Generally. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that no Obligor may
assign or otherwise transfer any of its rights or obligations hereunder without
the prior written consent of each Lender (and any attempted assignment or
transfer by any Obligor without such consent shall be null and void). Nothing in
this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby and, to the extent expressly contemplated hereby, the Related
Parties of each of the Administrative Agents, the Paying Agent and the Lenders)
any legal or equitable right, remedy or claim under or by reason
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of this Agreement.
(b) Assignments by Lenders. Any Lender may assign to one or more
assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitments and the Loans at the time owing
to it); provided that (i) except in the case of an assignment to a Lender or an
Affiliate of a Lender (other than in the case of an assignment to such an
Affiliate that would impose costs on the Borrower pursuant to Section 2.12 or
2.14 in excess of those costs incurred prior to such assignment), each of the
Borrower and each Administrative Agent must give their prior written consent to
such assignment (which consent shall not be unreasonably withheld), (ii) except
in the case of an assignment to a Lender or an Affiliate of a Lender or an
assignment of the entire remaining amount of the assigning Lender's
Commitment(s), the amount of the Commitment(s) of the assigning Lender subject
to each such assignment (determined as of the date the Assignment and Acceptance
with respect to such assignment is delivered to the Administrative Agents) shall
not be less than $5,000,000 unless each of the Borrower and each Administrative
Agent otherwise consent, (iii) each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender's rights and
obligations under this Agreement, (iv) the parties to each assignment shall
execute and deliver to the Administrative Agents an Assignment and Acceptance,
together with a processing and recordation fee of $3,500, and (v) the assignee,
if it shall not be a Lender, shall deliver to the Administrative Agents an
Administrative Questionnaire; provided, further, that any consent of the
Borrower otherwise required under this paragraph shall not be required if an
Event of Default under Section 8.01(f), (g) or (i) has occurred and is
continuing. Upon acceptance and recording pursuant to paragraph (d) of this
Section, from and after the effective date specified in each Assignment and
Acceptance, the assignee thereunder shall be a party hereto and, to the extent
of the interest assigned by such Assignment and Acceptance, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all of the assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections 2.12,
2.13, 2.14 and 10.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this paragraph shall
be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (e) of
this Section.
(c) Maintenance of Register by the Paying Agent. The Paying
Agent, acting for this purpose as an agent of the Borrower, shall maintain at
one of its offices in New York City a copy of each Assignment and Acceptance
delivered to it and a register for the recordation of the names and addresses of
the Lenders, and the Commitments of, and principal amount of the Loans owing to,
each Lender pursuant to the terms hereof from time to time (the "Register"). The
entries in the Register shall be conclusive, and the Borrower, the
Administrative Agents, the Collateral Agent, the Paying Agent and the Lenders
may treat each Person whose name is recorded in the Register pursuant to the
terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrower, the Administrative Agents, the Collateral Agent and
any Lender, at
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any reasonable time and from time to time upon reasonable prior
notice.
(d) Effectiveness of Assignments. Upon their receipt of a duly
completed Assignment and Acceptance executed by an assigning Lender and an
assignee, the assignee's completed Administrative Questionnaire (unless the
assignee shall already be a Lender hereunder), the processing and recordation
fee referred to in paragraph (b) of this Section and any written consent to such
assignment required by paragraph (b) of this Section, the Administrative Agents
and the Paying Agent shall accept such Assignment and Acceptance and the Paying
Agent record the information contained therein in the Register. No assignment
shall be effective for purposes of this Agreement unless it has been recorded in
the Register as provided in this paragraph.
(e) Participations. Any Lender may, without the consent of the
Borrower or the Administrative Agents, sell participations to one or more banks
or other entities (a "Participant") in all or a portion of such Lender's rights
and obligations under this Agreement and the other Financing Documents
(including all or a portion of its Commitments and the Loans owing to it);
provided that (i) such Lender's obligations under this Agreement and the other
Financing Documents shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Borrower, the Administrative Agents, the Paying Agent and the
other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement and
the other Financing Documents. Any agreement or instrument pursuant to which a
Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and the other Financing Documents and
to approve any amendment, modification or waiver of any provision of this
Agreement or any other Financing Document; provided that such agreement or
instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in the
first proviso to Section 10.02(b) that affects such Participant. Subject to
paragraph (f) of this Section, the Borrower agrees that each Participant shall
be entitled to the benefits of Sections 2.12, 2.13 and 2.14 to the same extent
as if it were a Lender and had acquired its interest by assignment pursuant to
paragraph (b) of this Section.
(f) Limitations on Rights of Participants. A Participant shall
not be entitled to receive any greater payment under Section 2.12 or 2.14 than
the applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower's prior written consent. A
Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of Section 2.14 unless the Borrower is notified of the
participation sold to such Participant and such Participant agrees, for the
benefit of the Borrower, to comply with Section 2.14(e) as though it were a
Lender.
(g) Certain Pledges. Any Lender may at any time pledge or assign
a security interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including any such pledge or assignment to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such
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pledge or assignment of a security interest shall release a Lender from any of
its obligations hereunder or substitute any such assignee for such Lender as a
party hereto.
(h) No Assignments to the Obligors or Affiliates. Anything in
this Section to the contrary notwithstanding, no Lender may assign or
participate any interest in any Loan held by it hereunder to NRG Energy or any
of its Affiliates or the Borrower or any of its Affiliates or Subsidiaries
without the prior consent of each Lender.
SECTION 10.05. Survival
. All covenants, agreements, representations and warranties made by the Borrower
herein and in the certificates or other instruments delivered in connection with
or pursuant to this Agreement shall be considered to have been relied upon by
the other parties hereto and shall survive the execution and delivery of this
Agreement and the making of any Loans, regardless of any investigation made by
any such other party or on its behalf and notwithstanding that any
Administrative Agent, the Paying Agent or any Lender may have had notice or
knowledge of any Default or incorrect representation or warranty at the time any
credit is extended hereunder, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or any fee or any
other amount payable under this Agreement is outstanding and unpaid and so long
as the Commitments have not expired or terminated. The provisions of Sections
2.12 (except to the extent provided in clause (d) thereof), 2.13, 2.14, 3.03 and
10.03 and Article IX shall survive and remain in full force and effect
regardless of the consummation of the transactions contemplated hereby, the
repayment of the Loans, the expiration or termination of the Commitments or the
termination of this Agreement or any provision hereof.
SECTION 10.06. Counterparts; Integration; Effectiveness
. This Agreement may be executed in counterparts (and by different parties
hereto on different counterparts), each of which shall constitute an original,
but all of which when taken together shall constitute a single contract. This
Agreement and any separate letter agreements with respect to fees payable to the
Administrative Agents and the Paying Agent constitute the entire contract
between and among the parties relating to the subject matter hereof and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof. Except as provided in Section 5.01, this
Agreement shall become effective when it shall have been executed by the
Administrative Agents and when the Administrative Agents shall have received
counterparts hereof which, when taken together, bear the signatures of each of
the other parties hereto, and thereafter shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
Delivery of an executed counterpart of a signature page to this Agreement by
telecopy shall be effective as delivery of a manually executed counterpart of
this Agreement.
SECTION 10.07. Severability
. Any provision of this Agreement held to be invalid, illegal or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such invalidity, illegality or unenforceability without affecting the
validity, legality and enforceability of the remaining
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provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.
SECTION 10.08. Right of Setoff
. If an Event of Default shall have occurred and be continuing, each Lender is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness at
any time owing by such Lender to or for the credit or the account of any Obligor
against any of and all the obligations of any Obligor now or hereafter existing
under this Agreement held by such Lender, irrespective of whether or not such
Lender shall have made any demand under this Agreement and although such
obligations may be unmatured. The rights of each Lender under this Section are
in addition to other rights and remedies (including other rights of setoff)
which such Lender may have.
SECTION 10.09. Governing Law; Jurisdiction; Etc.
(a) Governing Law. This Agreement shall be construed in
accordance with and governed by the law of the State of New York.
(b) Submission to Jurisdiction. Each Obligor hereby irrevocably
and unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement, or for recognition or enforcement
of any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that the
Administrative Agents or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement against any Obligor or its properties in
the courts of any jurisdiction.
(c) Waiver of Venue. Each Obligor hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement in
any court referred to in paragraph (b) of this Section. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.
(d) Service of Process. Each party to this Agreement irrevocably
consents to service of process in the manner provided for notices in Section
10.01. Nothing in this Agreement will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
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SECTION 10.10. WAIVER OF JURY TRIAL
. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY
OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
SECTION 10.11. Headings
. Article and Section headings and the Table of Contents used herein are for
convenience of reference only, are not part of this Agreement and shall not
affect the construction of, or be taken into consideration in interpreting, this
Agreement.
SECTION 10.12. Treatment of Certain Information;
Confidentiality.
(a) Treatment of Certain Information. The Borrower acknowledges
that from time to time financial advisory, investment banking and other services
may be offered or provided to the Borrower or one or more of its Subsidiaries
(in connection with this Agreement or otherwise) by any Lender or by one or more
subsidiaries or affiliates of such Lender and the Borrower hereby authorizes
each Lender to share any information delivered to such Lender by the Borrower
and its Subsidiaries pursuant to this Agreement, or in connection with the
decision of such Lender to enter into this Agreement, to any such subsidiary or
affiliate, it being understood that any such subsidiary or affiliate receiving
such information shall be bound by the provisions of paragraph (b) of this
Section as if it were a Lender hereunder. Such authorization shall survive the
repayment of the Loans, the expiration or termination of the Commitments or the
termination of this Agreement or any provision hereof.
(b) Confidentiality. Each of the Administrative Agents, the
Paying Agent and the Lenders agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (i) to
its and its Affiliates' directors, officers, employees and agents, including
accountants, legal counsel and other advisors on a need-to-know basis (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (ii) to the extent requested by regulatory authority
having jurisdiction over such Person, (iii) to the extent required by applicable
laws or regulations or by any subpoena or similar legal process, (iv) to any
other party to this Agreement, (v) in connection with the exercise of any
remedies hereunder or under any other Financing Document or any suit, action or
proceeding relating to this
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Agreement or any other Financing Document or the enforcement of rights hereunder
or thereunder, (vi) subject to an agreement containing provisions substantially
the same as those of this paragraph, to any assignee of or Participant in, or
any prospective assignee of or Participant in, any of its rights or obligations
under this Agreement, (vii) with the prior written consent of the Borrower in
its sole discretion or (viii) to the extent such Information (A) becomes
publicly available other than as a result of a breach of this paragraph or (B)
becomes available to the Administrative Agents, the Paying Agent or any Lender
on a nonconfidential basis from a source other than an Obligor. For the purposes
of this paragraph, "Information" means all information received from any Obligor
relating to any Obligor or its business, other than any such information that is
available to the Administrative Agents, the Paying Agent or any Lender on a
nonconfidential basis prior to disclosure by an Obligor. Any Person required to
maintain the confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has
taken reasonable precautions to keep such Information confidential in accordance
with its customary procedures for handling confidential information of the same
nature and in accordance with safe and sound banking practices. Unless
prohibited by law or court order, each Lender, each Administrative Agent and the
Paying Agent shall, prior to disclosure thereof, notify the Borrower of any
request for disclosure of any Information pursuant to subclause (ii) or (iii) of
the first sentence of this clause (b).
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective authorized officers as of the day and
year first above written.
NRG NORTHEAST GENERATING LLC
By: /s/ Craig Mataczynski
-------------------------------
Name: Craig Mataczynski
Title: President
GUARANTORS
ARTHUR KILL POWER LLC
By: /s/ Brian B. Bird
-------------------------------
Name: Brian B. Bird
Title: Treasurer
ASTORIA GAS TURBINE POWER LLC
By: /s/ Brian B. Bird
-------------------------------
Name: Brian B. Bird
Title: Treasurer
CONNECTICUT JET POWER LLC
By: /s/ Brian B. Bird
-------------------------------
Name: Brian B. Bird
Title: Treasurer
DEVON POWER LLC
By: /s/ Brian B. Bird
-------------------------------
Name: Brian B. Bird
Title: Treasurer
DUNKIRK POWER LLC
By: /s/ Brian B. Bird
-------------------------------
Name: Brian B. Bird
Title: Treasurer
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S-2
HUNTLEY POWER LLC
By: /s/ Brian B. Bird
-------------------------------
Name: Brian B. Bird
Title: Treasurer
MIDDLETOWN POWER LLC
By: /s/ Brian B. Bird
-------------------------------
Name: Brian B. Bird
Title: Treasurer
MONTVILLE POWER LLC
By: /s/ Brian B. Bird
-------------------------------
Name: Brian B. Bird
Title: Treasurer
NORWALK POWER LLC
By: /s/ Brian B. Bird
-------------------------------
Name: Brian B. Bird
Title: Treasurer
OSWEGO HARBOR POWER LLC
By: /s/ Brian B. Bird
-------------------------------
Name: Brian B. Bird
Title: Treasurer
SOMERSET POWER LLC
By: /s/ Brian B. Bird
-------------------------------
Name: Brian B. Bird
Title: Treasurer
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LENDERS
THE CHASE MANHATTAN BANK,
individually and as an Administrative
Agent
By: /s/ Robert M. Bowen II
-------------------------------
Name: Robert M. Bowen II
Title: Managing Director
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CITIBANK, N.A.,
individually, as an Administrative
Agent and as Paying Agent
By: /s/ Jonathan B. Lindenberg
-------------------------------
Name: Jonathan B. Lindenberg
Title: Managing Director
WORKING CAPITAL AGREEMENT
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