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EXHIBIT 4.8
ASSIGNMENT AND SECURITY AGREEMENT
Dated as of March 30, 2000
by
NRG SOUTH CENTRAL GENERATING LLC
to
THE CHASE MANHATTAN BANK,
as Collateral Agent
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS; RULES OF INTERPRETATION ............. 2
SECTION 1.1. Definitions ............................................... 2
SECTION 1.2. Rules of Interpretation ................................... 6
ARTICLE II
ASSIGNMENT AND GRANT OF SECURITY INTERESTS ............... 6
SECTION 2.1. Assignment and Grant of Security Interest ................. 6
SECTION 2.2. Security Interest Absolute ................................ 8
SECTION 2.3. Power of Attorney ......................................... 9
SECTION 2.4. Inspection and Verification ............................... 11
SECTION 2.5. Perfection of Security Interest in Guarantor Note ......... 11
ARTICLE III
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS .......... 12
SECTION 3.1. Title and Authority ....................................... 12
SECTION 3.2. Validity, Perfection and Priority of Lien ................. 12
SECTION 3.3. No Liens; Other Financing Statements ...................... 13
SECTION 3.4. Chief Executive Office; Name; Records ..................... 13
SECTION 3.5. Additional Statements and Schedules ....................... 14
SECTION 3.6. Further Actions ........................................... 14
ARTICLE IV
SPECIAL PROVISIONS CONCERNING INVENTORY AND EQUIPMENT ..... 15
SECTION 4.1. Maintenance of Insurance; Protection of Security Interest . 15
SECTION 4.2. Location of Inventory and Equipment ....................... 15
SECTION 4.3. Inventory Records ......................................... 15
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ARTICLE V
SPECIAL PROVISIONS CONCERNING
RECEIVABLES, CONTRACTS AND INSTRUMENTS ................... 15
SECTION 5.1. Additional Representations and Warranties ....................... 15
SECTION 5.2. Maintenance of Records; Legending of Records .................... 16
SECTION 5.3. Modification of Terms; No Payment to Grantor .................... 16
SECTION 5.4. Collection ...................................................... 16
SECTION 5.5. Instruments ..................................................... 17
ARTICLE VI
SPECIAL PROVISIONS CONCERNING CONTRACTS ......................... 17
SECTION 6.1. Security Interest in Contract Rights ............................ 17
SECTION 6.2. Further Protection .............................................. 18
SECTION 6.3. Liabilities Under Receivables and Contracts ..................... 18
SECTION 6.4. Remedies ........................................................ 18
ARTICLE VII
DUTY OF CARE OF COLLATERAL AGENT ................................ 19
SECTION 7.1. Collateral Agent's Duties; Reasonable Care ...................... 19
ARTICLE VIII
REMEDIES UPON OCCURRENCE OF A TRIGGER EVENT ..................... 19
SECTION 8.1. Remedies; Obtaining the Issuer Security Agreement Collateral upon
Trigger Event ................................................... 19
SECTION 8.2. Remedies; Disposition of the Issuer Security Agreement Collateral 20
SECTION 8.3. Waiver .......................................................... 21
SECTION 8.4. Application of Proceeds; Grantor Liable for Deficiency .......... 23
SECTION 8.5. No Waiver; Remedies Cumulative .................................. 23
SECTION 8.6. Discontinuance of Proceedings ................................... 23
ARTICLE IX
MISCELLANEOUS ................................................... 24
SECTION 9.1. Notices ......................................................... 24
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SECTION 9.2. Amendment ....................................................... 24
SECTION 9.3. Successors and Assigns .......................................... 24
SECTION 9.4. Survival ........................................................ 24
SECTION 9.5. Headings Descriptive ............................................ 24
SECTION 9.6. Severability .................................................... 24
SECTION 9.7. Grantor's Duties ................................................ 25
SECTION 9.8. Termination; Release ............................................ 25
SECTION 9.9. Reinstatement ................................................... 25
SECTION 9.10. Counterparts ................................................... 25
SECTION 9.11 Governing Law; Submission to Jurisdiction; Waiver of Jury Trial . 26
SECTION 9.12. Authority of Collateral Agent .................................. 27
SECTION 9.13. Conflict with Intercreditor Agreement .......................... 27
SECTION 9.14. Indemnities and Expenses ....................................... 27
SECTION 9.15. Entire Agreement ............................................... 27
SECTION 9.16. Independent Security ........................................... 28
SECTION 9.17. Third Party Beneficiaries ...................................... 28
SECTION 9.18. Limitation of Liability ........................................ 28
SECTION 9.19. Merger of Collateral Agent ..................................... 28
Schedule IV to Assignment and Security Agreement ............................. Sch.IV-1
Schedule I - Filing Offices
Schedule II - Instruments
Schedule III - Copyrights
Schedule IV - Patents
Schedule V - Trademarks
Schedule 4.2 - Location of Investory and Equipment
Exhibit A - Bond Power
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ASSIGNMENT AND SECURITY AGREEMENT
ASSIGNMENT AND SECURITY AGREEMENT, dated as of March 30, 2000 (this
"Agreement"), made by NRG South Central Generating LLC (the "Grantor"), in favor
of The Chase Manhattan Bank, as collateral agent (together with its successors
in such capacity, the "Collateral Agent") for the benefit of the Secured
Parties.
W I T N E S S E T H:
WHEREAS, pursuant to the Acquisition Agreement, the Subsidiary Guarantor,
a wholly owned subsidiary of the Grantor, is acquiring the Project from Cajun;
and
WHEREAS, the Grantor has simultaneously with the execution and delivery of
this Agreement issued and sold the Initial Bonds pursuant to the Indenture; and
WHEREAS, payments of the principal of, premium (if any), interest on and
any other amounts due with respect to the Initial Bonds will be serviced by
repayment of the Guarantor Loan and guaranteed (subject to certain limitations)
by the Subsidiary Guarantor; and
WHEREAS, the Working Capital Facility Banks, the Working Capital Facility
Agent and the Grantor are parties to the Working Capital Facility providing,
subject to the terms and conditions thereof, for the making of loans to the
Grantor for working capital purposes; and
WHEREAS, to secure its obligations under the Finance Documents, the
Grantor is entering into this Agreement with the Collateral Agent, pursuant to
which the Collateral Agent, acting on behalf of the Secured Parties, will obtain
a continuing Lien on and perfected security interest in, the Issuer Security
Agreement Collateral.
NOW THEREFORE, in consideration of the Secured Parties entering
into the Finance Documents and to induce the Secured Parties to release the
proceeds of the issuance and sale of the Initial Bonds, and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Grantor hereby agrees with the Collateral Agent as follows:
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ARTICLE I
DEFINITIONS; RULES OF INTERPRETATION
SECTION 1.1. Definitions.
(a) For all purposes of this Agreement, capitalized terms used but
not otherwise defined herein shall have the meanings set forth in Appendix A to
the Trust Indenture, dated as of March 30, 2000, among the Grantor, the
Subsidiary Guarantor and The Chase Manhattan Bank, as Bond Trustee (the
"Indenture").
(b) The following terms shall have the following respective meanings
unless the context otherwise requires. The definitions shall be equally
applicable to the singular and plural forms of the terms defined. Commercial
terms used herein but not defined herein or in Appendix A to the Indenture shall
have the meanings specified for such terms in the UCC as in effect in the State
of New York.
"Agreement" shall have the meaning specified in the preamble hereto.
"Chattel Paper" shall mean "chattel paper" as such term is defined
in the UCC as in effect in any relevant jurisdiction.
"Contract Rights" shall have the meaning specified in Section 6.1.
"Contracts" shall mean all contracts to which the Grantor now is,
or hereafter will be, bound, or a party, beneficiary or assignee, including,
without limitation, all of the Project Documents, including all exhibits,
schedules and appendices thereto, and all other instruments, agreements and
documents executed and delivered with respect to such contracts, all Third Party
Consents, and all revenues, rentals, Proceeds and other sums of money due and to
become due from any of the foregoing, as the same may be modified, supplemented
or amended from time to time in accordance with their respective terms.
"Copyrights" shall mean all of the following now owned or hereafter
acquired by the Grantor: (a) all copyright rights in any work subject to the
copyright laws of the United States, whether as author, assignee, transferee or
otherwise; and (b) all registrations and applications for registration of any
such copyright rights in the United States, including registrations,
recordings, supplemental registrations and pending applications for
registration in the United States Copyright Office, including, without
limitation, those listed on Schedule III.
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"Documents" shall mean "documents" as such term is defined in the
UCC as in effect in any relevant jurisdiction.
"Equipment" shall mean all "equipment" (as such term is defined in
the UCC as in effect in any relevant jurisdiction), now or hereafter owned or
leased by the Grantor and, in any event, shall include, but shall not be limited
to, all equipment used in connection with the Project, all machinery,
manufacturing equipment, data processing equipment, computers, tools, office
equipment, appliances, furniture, furnishings, fixtures, spare parts, vehicles,
motor vehicles, and any manuals, instructions, blueprints, computer software and
similar items which relate to the above, and any and all additions to,
substitutions for and replacements of any of the foregoing, wherever located,
together with all improvements thereon and all attachments, components, parts,
equipment and accessories installed thereon or affixed thereto.
"Financing Statements" shall mean all financing statements,
recordings, filings or other instruments of registration necessary and
appropriate to perfect a security interest or lien by filing in any appropriate
filing or recording office in accordance with the UCC as enacted in any and all
relevant jurisdictions or any other relevant applicable law.
"Fixtures" shall mean "fixtures" as such term is defined in the UCC
as in effect in any relevant jurisdiction and in any event shall include all
goods now or hereafter attached to, placed on, or incorporated in the real
property constituting the Project.
"General Intangibles" shall mean all "general intangibles" (as such
term is defined in the UCC as in effect in any relevant jurisdiction) now or
hereafter owned by the Grantor and shall include, but not be limited to, all
Trademarks, trademark applications, trademark registrations, tradenames,
fictitious business names, business names, company names, business identifiers,
prints, labels, trade styles and service marks (whether or not registered),
including logos and/or designs, Copyrights, Patents, patent applications,
goodwill of the Grantor's business symbolized by any of the foregoing, trade
secrets, license rights, license agreements, permits, franchises and any rights
to tax refunds to which the Grantor is now or hereafter may be entitled.
"Goods" shall mean "goods" as such term is defined in the UCC as in
effect in any relevant jurisdiction.
"Grantor" shall have the meaning specified in the preamble hereto.
"Instruments" shall mean "instruments" as such term is defined in
the UCC as in effect in any relevant jurisdiction.
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"Insurance Policies" shall mean all insurance policies to which the
Grantor now is, or hereafter will be, a party, including, without limitation,
all insurance policies required pursuant to this Agreement and the other Finance
Documents.
"Insurance Proceeds" shall mean all amounts and proceeds of any kind
(including interest, if any, thereon) paid or payable pursuant to any Insurance
Policy.
"Intellectual Property" shall mean, collectively, Copyrights,
Patents and Trademarks.
"Inventory" shall mean all of the inventory of the Grantor of every
type or description, including all "inventory" as such term is defined in the
UCC as in effect in any relevant jurisdiction, now owned or hereafter acquired
and wherever located, including without limitation, whether raw, in process or
finished, all materials usable in processing the same and all documents of title
covering any inventory, including, but not limited to, work in process,
materials used or consumed in the Grantor's business, now owned or hereafter
acquired or manufactured by the Grantor and held for sale in the ordinary course
of its business, all present and future substitutions therefor, parts and
accessories thereof and all additions thereto, and all proceeds thereof and
products of such inventory in any form whatsoever.
"Inventory Records" shall mean all books, records and other
property and General Intangibles at any time relating to the Inventory.
"Investment Property" shall mean "investment property" as such term
is defined in the UCC as in effect in any relevant jurisdiction.
"Issuer Security Agreement Collateral" shall have the meaning
specified in Section 2.1(a).
"Patents" shall mean all of the following now owned or hereafter
acquired by the Grantor: (a) all letters patent of the United States, all
registrations and recordings thereof, and all applications for letters patent of
the United States, including registrations, recordings and pending applications
in the United States Patent and Trademark Office, including, without limitation,
those listed on Schedule IV; and (b) all reissues, continuations, divisions,
continuations-in-part, renewals or extensions thereof, and the inventions
disclosed or claimed therein, including the right to make, use and/or sell the
inventions disclosed or claimed therein.
"Proceeds" shall mean "proceeds" as such term is defined in the UCC
as in effect in any relevant jurisdiction or under other relevant law and, in
any event, shall include,
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but shall not be limited to, (i) any and all proceeds of any insurance,
indemnity, warranty or guaranty payable to the Collateral Agent or the Grantor
from time to time, and claims for insurance, indemnity, warranty or guaranty
effected or held for the benefit of the Grantor with respect to any of the
Issuer Security Agreement Collateral, (ii) any and all payments (in any form
whatsoever) made or due and payable to the Grantor from time to time in
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Issuer Security Agreement Collateral by any
Governmental Authority (or any person acting under color of Governmental
Authority) and (iii) any and all other amounts from time to time paid or payable
under or in connection with any of the Issuer Security Agreement Collateral.
"Receivables" shall mean any "account" as such term is defined in
the UCC as in effect in any relevant jurisdiction and in any event shall
include, but not be limited to, all of the Grantor's rights to payment for
goods (including, without limitation, electricity) sold or leased, or services
performed, by the Grantor, whether now in existence or arising from time to
time hereafter, including, without limitation, rights evidenced by an account,
note, contract, contract rights (including any and all rights to liquidated
damage payments), security agreement, chattel paper, or other evidence of
indebtedness or security, together with (i) all security pledged, assigned,
hypothecated or granted to or held by the Grantor to secure the foregoing, (ii)
all guarantees, warranties, endorsements, indemnifications or collateral on, or
of, any of the foregoing, (iii) all powers of attorney for the execution of any
evidence of indebtedness or security or other writing in connection therewith,
(iv) all books, correspondence, credit files, records, ledger cards, invoices
and other papers relating thereto, including, without limitation, all similar
information stored on a magnetic medium or other similar storage device and
other papers and documents in the possession or under the control of the
Grantor or any computer bureau from time to time acting for the Grantor, (v)
all evidences of the filing of Financing Statements and other statements and
the registration of other instruments in connection therewith and amendments
thereto, notices to other creditors or secured parties, and certificates from
filing or other registration officers, (vi) all credit information, reports and
memoranda relating thereto, and (vii) all other writings related in any way to
the foregoing.
"Security Entitlement" shall have the meaning assigned to that term
under the UCC as in effect in any relevant jurisdiction.
"Security Interest" shall have the meaning specified in Section 2.1.
"Trademarks" shall mean all of the following now owned or hereafter
acquired by the Grantor: (i) all trademarks, service marks, trade names,
corporate names, company names, business names, fictitious business names,
trade styles, trade dress, logos, other source or business identifiers, designs
and general intangibles of like nature, now existing or hereafter
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adopted or acquired, all registrations and recordings thereof, and all
registration and recording applications filed in connection therewith, including
registrations and registration applications in the United States Patent and
Trademark Office, any State of the United States or any political subdivision
thereof, and all extensions or renewals thereof, including, without limitation,
those listed on Schedule V; (ii) all goodwill associated therewith or symbolized
thereby; and (iii) all other assets, rights and interests that uniquely reflect
or embody such goodwill.
"UCC" shall mean the Uniform Commercial Code as in effect from time
to time in the State of New York; provided that, if by reason of mandatory
provisions of law, the perfection or priority of the security interest granted
hereunder in any Issuer Security Agreement Collateral is governed by the Uniform
Commercial Code in effect in a jurisdiction other than the State of New York,
the term "UCC" shall mean the Uniform Commercial Code as in effect in such other
jurisdiction solely for the purposes of the provisions hereof relating to such
perfection or priority.
SECTION 1.2. Rules of Interpretation. Except as otherwise expressly
provided herein, the rules of interpretation set forth in Section 1.1 to the
Indenture shall apply to this Agreement.
ARTICLE II
ASSIGNMENT AND GRANT OF SECURITY INTERESTS
SECTION 2.1. Assignment and Grant of Security Interest. (a) As
security for the prompt and complete payment and performance when due of all of
the Secured Obligations, the Grantor hereby grants to the Collateral Agent, for
itself and for the ratable benefit of all the Secured Parties, a continuing
security interest of first priority (the "Security Interest") in all of the
Grantor's right, title and interest in, to and under the following, in each
case, whether now owned or existing or hereafter acquired, arising or created,
and wherever located: (i) all Receivables; (ii) all Documents; (iii) all
Equipment; (iv) all General Intangibles; (v) all Inventory; (vi) all cash
collateral accounts established with respect to the Grantor, and all checking,
savings, deposit, securities or other accounts of the Grantor, including,
without limitation, the Depositary Accounts and any successor accounts thereto,
and all property on deposit therein or credited thereto, including, without
limitation, all Investment Property, Security Entitlements, Financial Assets,
securities, instruments or cash on deposit therein or credited thereto and all
Security Entitlements with respect thereto; (vii) all Contracts and Contract
Rights, to the extent assignable pursuant to their terms, including, without
limitation, all Contract Rights under the Project Documents to which the Grantor
is a party; (viii) all cash, accounts, deposits, securities and insurance
policies now or at any time hereafter in the
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possession or under control of the Grantor or its bailees, including, but not
limited to, the Escrow Fund established pursuant to the Escrow Agreement, and
any interest therein; (ix) all Insurance Policies and all Loss Proceeds; (x) all
Governmental Approvals, provided that any Governmental Approval which by its
terms or by operation of law would become void, voidable, terminable or
revocable (or would constitute a breach or default thereunder or under
applicable law) if mortgaged, pledged or assigned hereunder or if a security
interest therein were granted hereunder are expressly excepted and excluded from
the Lien and the terms of this Agreement to the extent, and only to the extent,
necessary so as to avoid such voidness, voidability, terminability or
revocability or breach or default; (xi) all Fixtures, including, without
limitation, those now or hereafter attached to, placed on, or incorporated in
the Site; (xii) all natural gas, fuel oil, electricity and related products;
(xiii) without limiting the generality of the foregoing, all other personal
property, Goods, Instruments, Chattel Paper, credits, claims, demands, assets,
books and records, customer lists, ledger cards, credit files, print-outs and
other materials and records pertaining to any of the foregoing, of the Grantor,
whether now existing or hereafter acquired from time to time and whether or not
of a type which may be subject to a security interest under the UCC as in effect
in the State of New York; (xiv) the Guarantor Note and all of the Grantor's
rights thereto and all proceeds associated therewith; and (xv) any and all
additions and accessions to any of the foregoing, all improvements thereto, all
substitutions and replacements therefor and all products and Proceeds thereof
(all of the above collectively, the "Issuer Security Agreement Collateral");
provided, however, that the Security Interest in the Debt Service Reserve
Account granted herein to the Collateral Agent shall be for the sole benefit of
the Holders of the Bonds and the Bond Trustee.
(b) The security interest granted to the Collateral Agent pursuant
to this Agreement extends to all Issuer Security Agreement Collateral of the
kind which is the subject of this Agreement which the Grantor may acquire at
any time during the continuation of this Agreement, whether such Issuer
Security Agreement Collateral is in transit or in the Grantor's, the Collateral
Agent's, any other Secured Party's or any other Person's constructive, actual
or exclusive occupancy or possession until the release thereof pursuant to
Section 9.8.
(c) The assignments and security interests under this Agreement
granted to the Collateral Agent shall not relieve the Grantor from the
performance of any term, covenant, condition or agreement on the Grantor's part
to be performed or observed under or in respect of any of the Issuer Security
Agreement Collateral pledged by it hereunder or from any liability to any
Person under or in respect of any of such Issuer Security Agreement Collateral
or impose any obligation on the Collateral Agent to perform or observe any such
term, covenant, condition or agreement on the Grantor's part to be so performed
or observed or impose any liability on the Collateral Agent for any act or
omission on the part of the Grantor or for any
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breach of any representation or warranty on the part of the Grantor contained
in this Agreement or any other Project Document, or in respect of the Issuer
Security Agreement Collateral pledged by it hereunder or made in connection
herewith or therewith. The obligations of the Grantor contained in this
paragraph shall survive the termination of this Agreement and the discharge of
the Grantor's other obligations hereunder.
(d) This Agreement shall create a continuing security interest in
the Issuer Security Agreement Collateral until the release thereof pursuant to
Section 9.8.
SECTION 2.2. Security Interest Absolute. The parties hereto shall
not challenge or question in any proceeding the validity or enforceability of
this Agreement as a whole or any term or provision contained herein or the
validity of any Lien or Financing Statement in favor of the Collateral Agent.
All rights of the Collateral Agent and the other Secured Parties and all
security interests hereunder shall, to the fullest extent permitted by law, be
absolute and unconditional irrespective of:
(a) any invalidity, irregularity or unenforceability of any Finance
Document or any other agreement or instrument relating thereto, or any
amendment, change or modification of any of the Finance Documents;
(b) any impairment, modification, change, exchange, release or
subordination of or limitation on, any liability to, or stay of actions or lien
enforcement proceedings against, the Grantor, its property or its estate in
bankruptcy resulting from any bankruptcy, arrangement, readjustment,
composition, liquidation, rehabilitation or similar proceeding against or
otherwise involving or affecting the Grantor;
(c) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Secured Obligations, or any other amendment or
waiver of or any consent to any departure from any Finance Document;
(d) any change in the time, order or method of attachment or
perfection of Liens or the filing or recording of Financing Statements or other
Security Documents and irrespective of anything contained in any filing or
agreement to which the Collateral Agent or any other Secured Party may now or
hereafter be a party;
(e) any exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of, or consent to departure
from, any guaranty for all or any of the Secured Obligations; or
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(f) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Grantor or a third party pledgor,
except as otherwise provided herein.
SECTION 2.3. Power of Attorney. (a) The Grantor hereby irrevocably
constitutes and appoints the Collateral Agent, on behalf of itself and the
other Secured Parties, or any Person, officer or agent thereof whom the
Collateral Agent may designate, as the Grantor's true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of the Grantor and in the name of the Grantor or in its own name, at the
Grantor's cost and expense, to exercise at any time in the Collateral Agent's
discretion all or any of the following powers, which, being coupled with an
interest, shall be irrevocable until the Debt Termination Date (as defined in
the Intercreditor Agreement):
(i) to receive, take, endorse, sign, assign and deliver, all
in the Collateral Agent's name or the Grantor's name, any and all checks,
notes, drafts, and other documents or instruments relating to the Issuer
Security Agreement Collateral;
(ii) to receive, open and dispose of all mail addressed to
the Grantor and to notify postal authorities to change the address for
delivery thereof to such address as the Collateral Agent designates;
(iii) to request from account debtors of the Grantor, in the
Grantor's name or in the name of the Collateral Agent or the Collateral
Agent's designee, information concerning the Receivables and the amounts
owing thereon;
(iv) to transmit to account debtors indebted on
Receivables notice of the Collateral Agent's interest therein;
(v) to notify account debtors indebted on Receivables to
make payment directly to the Collateral Agent;
(vi) to take or bring, in the Grantor's name or in the
Collateral Agent's name on behalf of the Secured Parties, all steps,
actions, suits or proceedings deemed by the Collateral Agent to be
necessary or desirable to enforce or effect collection of the
Receivables;
(vii) to the fullest extent permitted by law, to prepare,
sign and file any Financing Statements or file this Agreement in the name
of the Grantor as debtor;
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(viii) if the Grantor shall have failed to do so in a timely
manner, to take or cause to be taken all actions necessary to perform or
comply, or cause performance or compliance with, the covenants of the Grantor
contained in any Transaction Document;
(ix) to sign and endorse any invoices, freight or express bills,
bills of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications, notices and other documents in connection with
any of the Issuer Security Agreement Collateral;
(x) to defend any suit, action or proceeding brought against
the Grantor with respect to any Issuer Security Agreement Collateral;
(xi) to settle, compromise or adjust any suit, action or
proceeding described in the preceding clause (x) and, in connection
therewith, to give such discharges or releases as the Collateral Agent,
acting pursuant to the Intercreditor Agreement, or as otherwise expressly
provided herein, may deem appropriate;
(xii) generally, to sell or transfer and make any agreement with
respect to or otherwise deal with any of the Issuer Security Agreement
Collateral as fully and completely as though the Secured Parties were the
absolute owner thereof for all purposes, and to do, at the Secured Parties'
option and the Grantor's expense, at any time, or from time to time, all acts
and things which the Collateral Agent, acting pursuant to the Intercreditor
Agreement, or as otherwise expressly provided herein, deem necessary to
protect, preserve or realize upon the Issuer Security Agreement Collateral
and the Liens of the Secured Parties thereon;
(xiii) to execute, in connection with any foreclosure, any
endorsements, assignments or other instruments of conveyance or transfer
with respect to the Issuer Security Agreement Collateral;
(xiv) to exercise the Grantor's rights under any Contract in
accordance with Section 6.1; and
(xv) to exercise any and all other rights, remedies, powers and
privileges of the Grantor with respect to the Issuer Security Agreement
Collateral;
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provided, however, that the Collateral Agent shall not exercise its powers under
clauses (i), (ii), (iii), (iv), (v), (vi), (ix), (x), (xi), (xii), (xiii), (xiv)
or (xv) unless a Trigger Event of which the Collateral Agent has actual
knowledge has occurred and is continuing.
(b) The Grantor hereby ratifies all that said attorney shall
lawfully do or cause to be done by virtue hereof. The Grantor hereby
acknowledges and agrees that in acting pursuant to this power-of-attorney the
Collateral Agent shall be acting in its own interest and in the interest of the
other Secured Parties and the Grantor acknowledges and agrees that the
Collateral Agent and the other Secured Parties shall have no fiduciary duties
to the Grantor and the Grantor hereby waives any claims to the rights of a
beneficiary of a fiduciary relationship hereunder.
SECTION 2.4. Inspection and Verification. The Collateral Agent and
such Persons as the Collateral Agent may reasonably designate shall have the
right, no more often than once each year, unless an Event of Default has
occurred and is continuing, and, if an Event of Default has occurred and is
continuing, at any reasonable time or times, in each case upon ten (10) days'
notice and at the Grantor's own cost and expense, to inspect the Issuer Security
Agreement Collateral, all records related thereto (and to make extracts and
copies from such records) and the premises upon which any of the Issuer Security
Agreement Collateral is located, to discuss the Grantor's affairs with the
appropriate officers of the Grantor and its independent accountants and to
verify under reasonable procedures the validity, amount, quality, quantity,
value, condition and status of, or any other matter relating to, the Issuer
Security Agreement Collateral, including, in the case of Receivables or Issuer
Security Agreement Collateral in the possession of any third party, by
contacting account debtors or the third party possessing such Issuer Security
Agreement Collateral for the purpose of making such a verification. The
Collateral Agent shall have the absolute right to share any information it gains
from such inspection or verification with any other Secured Party.
SECTION 2.5. Perfection of Security Interest in Guarantor Note.
Prior to or concurrently with the execution and delivery of this Agreement, the
Grantor shall deliver to the Collateral Agent the Guarantor Note accompanied by
an undated bond power substantially in the form of Exhibit A hereto duly
executed in blank.
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ARTICLE III
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
The Grantor hereby represents, warrants and covenants to the
Collateral Agent and the other Secured Parties, which representations,
warranties and covenants shall survive execution and delivery of this Agreement
and the making and repayment of the Secured Obligations, subject to the
provisions of Section 9.9, as follows:
SECTION 3.1. Title and Authority. The Grantor has good and valid
rights in and title to the Issuer Security Agreement Collateral with respect to
which it has purported to grant a Security Interest hereunder and has full power
and authority to grant to the Collateral Agent the Security Interest in such
Issuer Security Agreement Collateral pursuant hereto and to execute, deliver and
perform its obligations in accordance with the terms of this Agreement, without
the consent or approval of any Person other than any consent or approval that
has been obtained and is in full force and effect.
SECTION 3.2. Validity, Perfection and Priority of Lien.
(a) This Agreement creates in favor of the Collateral Agent, for
itself and for the ratable benefit of the Secured Parties, a legal, valid and
enforceable security interest in the Issuer Security Agreement Collateral and
the proceeds thereof owned by the Grantor, and when Financing Statements in
appropriate form are filed in the offices specified on Schedule I hereto, the
Lien created under this Agreement will constitute a fully perfected Lien on,
and security interest in, all right, title and interest of the Grantor in such
Issuer Security Agreement Collateral and the proceeds thereof, in each case
prior and superior in right to any other Person, subject only to Permitted
Liens.
(b) (i) Fully executed Financing Statements or other appropriate
filings, recordings or registrations containing a description of the Issuer
Security Agreement Collateral have been delivered to the Collateral Agent for
filing in each governmental, municipal or other office specified in Schedule I,
which are all the filings, recordings and registrations that are necessary to
publish notice of and protect the validity of and to establish a valid and
perfected security interest in favor of the Collateral Agent (for the benefit
of itself and for the ratable benefit of the Secured Parties) in respect of all
Issuer Security Agreement Collateral in which the Security Interest may be
perfected by filing, recording or registration in the United States (or any
political subdivision thereof) and its territories and possessions, and no
further or subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary in any such jurisdiction, except as provided under
Applicable Law with respect to the filing of continuation statements and except
that recordation of the Security Interest in the United States
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Patent and Trademark Office may be necessary with respect to Issuer Security
Agreement Collateral consisting of Patents and Trademarks and recordation of the
Security Interest, in addition to registration of any unregistered copyrights,
in the United States Copyright Office may be necessary with respect to Issuer
Security Agreement Collateral consisting of Copyrights. The Grantor will pay any
applicable filing fees and related expenses. The Grantor hereby irrevocably
authorizes the Collateral Agent to file any such Financing Statements without
its signature as the debtor.
(ii) The Instruments listed on Schedule II hereto, which, as of the
date hereof, constitute all instruments of the Grantor, and all other Chattel
Paper have been stamped to indicate the Security Interest of the Collateral
Agent for itself and the ratable benefit of the Secured Parties hereunder.
SECTION 3.3. No Liens; Other Financing Statements. (a) Except for
the Lien granted to the Collateral Agent for itself and the ratable benefit of
the Secured Parties hereunder and Permitted Liens, and, further, except for the
interest in and control over the Depositary Accounts of and by the Depositary
Bank as provided in the Indenture, the Grantor is, and as to all Issuer Security
Agreement Collateral whether now existing or hereafter acquired after the date
hereof, the Grantor will and will continue to be the owner of valid and
marketable title in and to each item of the Issuer Security Agreement Collateral
free and clear of any and all Liens other than Permitted Liens and the Grantor
shall defend the Issuer Security Agreement Collateral against all claims and
demands of all Persons at any time claiming the same or any interest therein
adverse to the Collateral Agent or any other Secured Party.
(b) Other than Financing Statements filed in connection herewith,
there is no Financing Statement (or similar statement or instrument of
registration under the law of any jurisdiction) covering or purporting to cover
any interest of any kind in the Issuer Security Agreement Collateral except (i)
Financing Statements filed in connection with Permitted Liens, and (ii)
Financing Statements for which proper termination statements have been
delivered to the Collateral Agent for filing. The Grantor will not execute or
authorize any Financing Statement (or similar statement or instrument of
registration under the law of any jurisdiction) or statements relating to the
Issuer Security Agreement Collateral to be filed in any public office, except
Financing Statements filed or to be filed in respect of and covering the
security interests granted hereby to the Collateral Agent by the Grantor and
Financing Statements filed in respect of and covering Permitted Liens.
SECTION 3.4. Chief Executive Office; Name; Records. (a) The
chief executive office and principal place of business of the Grantor is
located at 1221 Nicollet Mall, Suite 700, Minneapolis, Minnesota 55403.
Except as permitted by the Indenture, the Grantor
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will not (i) move its chief executive office, or (ii) change its name from, nor
carry on business under any name other than "NRG South Central Generating LLC,"
unless it has complied with the requirements of Section 3.4(b). The originals of
all documents evidencing all Contracts and Receivables of the Grantor, and the
only original books of account and records concerning the Issuer Security
Agreement Collateral are, and will continue to be, kept at, and controlled and
directed (including, without limitation, for general accounting purposes) from,
such chief executive office, or at such new location for such chief executive
office as the Grantor may establish in accordance with Section 3.4(b).
(b) The Grantor shall not establish a new location for its chief
executive office or change its name or the name under which it presently
conducts its business unless (i) it has given to the Collateral Agent not less
than thirty (30) days' prior written notice of its intention so to do, clearly
describing such new location or specifying such new name, as the case may be,
and providing such other information in connection therewith as the Collateral
Agent may reasonably request, and (ii) with respect to such new location or
such new name, as the case may be, the Grantor shall have taken all action,
satisfactory to the Collateral Agent, to maintain the security interest of the
Collateral Agent in the Issuer Security Agreement Collateral intended to be
granted hereby at all times fully perfected and in full force and effect.
SECTION 3.5. Additional Statements and Schedules. The Grantor shall
execute and deliver to the Collateral Agent, from time to time, for its
convenience in maintaining a record of the Issuer Security Agreement Collateral,
such written statements and schedules as the Collateral Agent may reasonably
require, designating, identifying or describing the Issuer Security Agreement
Collateral.
SECTION 3.6. Further Actions. The Grantor will, at its own expense,
make, execute, endorse, acknowledge, file and/or deliver to the Collateral Agent
from time to time such lists, descriptions and designations of its Issuer
Security Agreement Collateral, warehouse receipts, receipts in the nature of
warehouse receipts, bills of lading, documents of title, vouchers, invoices,
schedules, confirmatory assignments, conveyances, Financing Statements, transfer
endorsements, powers of attorney, certificates, reports and other assurances or
instruments and take such further steps relating to the Issuer Security
Agreement Collateral and other property or rights covered by the Security
Interest hereby granted by the Grantor to perfect, preserve or protect its
security interest in the Issuer Security Agreement Collateral within thirty (30)
days after any request by the Collateral Agent or such earlier date as may be
required by applicable law or necessary to preserve or protect the security
interests in the Issuer Security Agreement Collateral granted by the Grantor
pursuant to this Agreement, including the payment of any fees and taxes required
in connection with the execution and delivery of
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this Agreement, the granting of the Lien created hereby and the filing of any
Financing Statements or other documents in connection herewith.
ARTICLE IV
SPECIAL PROVISIONS CONCERNING INVENTORY AND EQUIPMENT
SECTION 4.1. Maintenance of Insurance; Protection of Security
Interest. The Grantor shall carry with respect to the Issuer Security Agreement
Collateral and its use such insurance, if any, as shall be required under the
Indenture.
SECTION 4.2. Location of Inventory and Equipment. All Inventory and
Equipment owned on the date hereof by the Grantor is located at one of the
locations shown on Schedule 4.2 (other than Equipment undergoing repairs). The
Grantor agrees that all Inventory and Equipment now held or subsequently
acquired by it shall be kept at (or shall be in transport to) one of the
locations on Schedule 4.2.
SECTION 4.3 Inventory Records. The Grantor shall maintain, at its
own cost and expense, satisfactory and complete Inventory Records.
ARTICLE V
SPECIAL PROVISIONS CONCERNING RECEIVABLES,
CONTRACTS AND INSTRUMENTS
SECTION 5.1. Additional Representations and Warranties. As of the
time when each of its Receivables arises, the Grantor shall be deemed to have
represented and warranted to the best of its knowledge that such Receivable and
all records, papers and documents relating thereto (if any) are genuine and in
all respects what they purport to be, and that all papers and documents (if
any) relating thereto (i) will (subject to dispute, return, replacement,
settlement or compromise) represent the genuine, legal, valid and binding
obligation of the account debtor evidencing indebtedness unpaid and owed by
such account debtor arising out of the performance of labor or services or the
sale and delivery of the merchandise listed therein, or both, (ii) will be the
only original writings evidencing and embodying such obligation of the account
debtor named therein (other than copies created for purposes other than general
accounting purposes), (iii) will (subject to dispute, return, replacement,
settlement or compromise) evidence true and valid obligations, enforceable in
accordance with their respective terms, not subject to the fulfillment of any
contract or condition whatsoever unless set forth in the writing and not
subject to any defenses, set-offs or counterclaims or stamp or other taxes, and
not subject to any provisions prohibiting the
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Security Interest granted hereunder, and (iv) will be in compliance and will
conform with all Applicable Law.
SECTION 5.2. Maintenance of Records; Legending of Records. The
Grantor will keep and maintain at its own cost and expense satisfactory and
complete records of its Receivables for at least five (5) years from the date
on which the Receivable comes into existence, including, without limitation,
records of all payments received and all credits granted thereon, and the
Grantor will make the same available to the Collateral Agent and the other
Secured Parties for inspection in accordance with Section 2.4. The Grantor
shall, at its own cost and expense, deliver all tangible evidence of its
Receivables (including, without limitation, all documents evidencing the
Receivables) and books and records that the Collateral Agent may request to the
Collateral Agent or to its representatives (copies of which evidence and books
and records may be retained by the Grantor) at any reasonable time during
normal business hours upon the Collateral Agent's demand. The Grantor shall, at
the Collateral Agent's request and at the Grantor's own cost and expense,
legend in form and substance satisfactory to the Collateral Agent, the Issuer
Security Agreement Collateral, as well as books, records and documents of the
Grantor evidencing or pertaining to the Issuer Security Agreement Collateral,
with an appropriate reference to the fact that the items constituting the
Issuer Security Agreement Collateral have been assigned to the Collateral Agent
and that the Collateral Agent has a security interest therein.
SECTION 5.3. Modification of Terms; No Payment to Grantor. The
Grantor shall not, other than in the ordinary course of business, rescind or
cancel any indebtedness evidenced by any Receivable or make any adjustment with
respect thereto, or extend or renew the same, or compromise or settle any
dispute, claim, suit or legal proceeding relating thereto, or sell any
Receivable or interest therein, without the prior written consent of the
Collateral Agent, acting pursuant to the Intercreditor Agreement, or as
otherwise expressly provided herein. The Grantor will duly fulfill all
obligations on its part to be fulfilled under or in connection with the
Receivables and will do nothing to impair the rights of the Collateral Agent in
the Receivables.
SECTION 5.4. Collection. The Grantor shall take all commercially
reasonable actions to cause to be collected from the account debtors of each of
the Receivables, as and when due (including Receivables that are delinquent,
such Receivables to be collected in accordance with generally accepted
commercial collection procedures), any and all amounts owing under or on
account of such Receivables, and apply forthwith upon receipt thereof all such
amounts as are so collected to the outstanding balance of such Receivables.
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SECTION 5.5. Instruments. If any of the Receivables becomes
evidenced by an Instrument having a face value in excess of $5,000 and a
maturity of thirty (30) days or longer, the Grantor shall promptly notify the
Collateral Agent thereof in writing, and within ten (10) days of a request by
the Collateral Agent therefor, shall deliver such Instrument to the Collateral
Agent appropriately endorsed to the order of the Collateral Agent as further
security hereunder. Notwithstanding the foregoing, at such time that an Event
of Default shall have occurred and be continuing, or at such time as the
Grantor shall own or acquire Instruments which in the aggregate exceed $20,000,
the Grantor shall deliver all Instruments to the Collateral Agent within ten
(10) days, appropriately endorsed to the order of the Collateral Agent as
further security hereunder.
ARTICLE VI
SPECIAL PROVISIONS CONCERNING CONTRACTS
SECTION 6.1. Security Interest in Contract Rights. The Grantor's
grant, pursuant to Section 2.1, to the Collateral Agent, of a security interest
in all of its right, title and interest in and to each and all of the Contracts
and the contract rights thereunder, includes, but is not limited to:
(i) all (A) rights to payment under any Contract and (B)
payments due and to become due under any Contract, in each case whether
as contractual obligations, damages or otherwise;
(ii) all of its claims, rights, powers, privileges and
remedies under any Contract; and
(iii) all of its rights under any Contract to make
determinations, to exercise any election (including, without limitation,
election of remedies) or option or to give or receive any notice,
consent, waiver or approval together with full power and authority with
respect to any Contract to demand, receive, enforce, collect or receipt
for any of the foregoing rights or any property the subject of any of the
Contracts, to enforce or execute any checks or other instruments or
orders, to file any claims and to take any action which, in the opinion
of the Collateral Agent, may be necessary or advisable in connection with
any of the foregoing (the Contracts, together with all of the foregoing
in this Section 6.1, the "Contract Rights");
provided, however, that, unless a Trigger Event shall have occurred and be
continuing, notwithstanding anything else herein to the contrary, the Grantor
may, subject to the terms and
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provisions of the Finance Documents, exclusively exercise all of its rights,
powers, privileges and remedies under the Contracts.
SECTION 6.2. Further Protection. The Grantor warrants and forever
shall defend the title to the Contract Rights against the claims and demands of
any Person other than the Collateral Agent and the Secured Parties, and hereby
grants the Collateral Agent full power and authority, upon the occurrence and
during the continuance of a Trigger Event, to take all actions as the
Collateral Agent, acting pursuant to the Intercreditor Agreement, or as
otherwise expressly provided herein, reasonably deems necessary or advisable to
effectuate the provisions set forth in this sentence.
SECTION 6.3. Liabilities Under Receivables and Contracts. Anything
herein to the contrary notwithstanding (including, without limitation, the
grant of any rights to the Collateral Agent), the Grantor shall remain liable
under each of the Receivables and Contracts to observe and perform all the
conditions and obligations to be observed and performed by it thereunder and
under or with respect to the Issuer Security Agreement Collateral, all in
accordance with the terms of any agreement giving rise to each such Receivable,
Contract or procurement of Issuer Security Agreement Collateral. Neither the
Collateral Agent nor any other Secured Party shall have any obligation or
liability under any Receivable (or any agreement giving rise thereto) or
Contract or with respect to the Issuer Security Agreement Collateral by reason
of or arising out of this Agreement or the receipt by the Collateral Agent of
any payment relating to such Receivable, Contract or Issuer Security Agreement
Collateral pursuant hereto, nor shall the Collateral Agent or any other Secured
Party be obligated in any manner to perform any of the obligations of the
Grantor under or pursuant to any Receivable (or any agreement giving rise
thereto) or under or pursuant to any Contract, to make any payment, to make any
inquiry as to the nature or the sufficiency of any payment received by it or as
to the sufficiency of any performance by any party under any Receivable (or any
agreement giving rise thereto) or under any Contract, to present or file any
claim, to take any action to enforce any performance or to collect the payment
of any amounts which may have been assigned to it or to which it may be
entitled at any time or times.
SECTION 6.4. Remedies. Upon the occurrence of any Trigger Event,
the Collateral Agent shall have the rights set forth in Article VIII, and,
acting pursuant to the Intercreditor Agreement, or as otherwise expressly
provided herein, may (i) enforce all remedies, rights, powers and privileges of
the Grantor under any or all of the Contracts, (ii) sell any or all of the
Contract Rights at public or private sale upon at least ten (10) days' prior
written notice and/or (iii) substitute itself or any nominee or trustee in lieu
of the Grantor as party to any of the Contracts and to notify the obligor of any
Contract Right (the Grantor hereby agreeing to deliver any such notice at the
request of the Collateral Agent) that all
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payments and performance under the relevant Contract shall be made or rendered
to the Collateral Agent or such other Person as the Collateral Agent may
designate.
ARTICLE VII
DUTY OF CARE OF COLLATERAL AGENT
SECTION 7.1. Collateral Agent's Duties; Reasonable Care. The
Collateral Agent shall have the duty to exercise reasonable care in the custody
and preservation of any Issuer Security Agreement Collateral in its possession,
which duty shall be fully satisfied if the Collateral Agent maintains safe
custody of such Issuer Security Agreement Collateral in accordance with
customary banking standards.
SECTION 7.2. Further Protection. In acting hereunder, the
Collateral Agent shall be entitled to the same rights, indemnities and
immunities as afforded to it under the Intercreditor Agreement.
ARTICLE VIII
REMEDIES UPON OCCURRENCE OF A TRIGGER EVENT
SECTION 8.1. Remedies; Obtaining the Issuer Security Agreement
Collateral upon Trigger Event. (a) Upon the occurrence and during the
continuance of a Trigger Event, the Collateral Agent, acting pursuant to the
Intercreditor Agreement, or as otherwise expressly provided herein, shall be
entitled to exercise on behalf of itself and the other Secured Parties, all the
rights and remedies of a secured party under the UCC as in effect in any
relevant jurisdiction and all rights now or hereafter existing under all other
Applicable Law to enforce this Agreement and the security interests contained
herein, and, in addition, subject to any Applicable Laws then in effect, the
Collateral Agent, acting pursuant to the Intercreditor Agreement, or as
otherwise expressly provided herein, may, but is under no obligation to, in
addition to its other rights and remedies hereunder, including without
limitation under Section 8.2 and Section 8.6, and also the rights of the
Collateral Agent and the other Secured Parties under any of the Transaction
Documents, do any of the following to the fullest extent permitted by applicable
law:
(i) personally, or by agents, trustees or attorneys, immediately
take possession of the Issuer Security Agreement Collateral or any part thereof,
from the Grantor or any other Person who then has possession of any part thereof
with or without notice or process of law, and for that purpose may enter upon
the Grantor's premises or such other Person's premises
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where any of the Issuer Security Agreement Collateral is located and remove the
same and use in connection with such removal any and all services, supplies,
aids and other facilities of the Grantor;
(ii) instruct the obligor or obligors of any agreement, instrument
or other obligation (including, without limitation, the Receivables and the
Contracts) constituting the Issuer Security Agreement Collateral to make any
payment required by the terms of such instrument or agreement directly to the
Collateral Agent; and
(iii) take possession of the Issuer Security Agreement Collateral or
any part thereof, by directing the Grantor in writing to turn over the same to
the Collateral Agent at the Project Site or, to the extent such Issuer Security
Agreement Collateral may be moved, to deliver the same to the Collateral Agent
at any other place or places designated by the Collateral Agent, in which event
the Grantor shall, at its own expense, (A) forthwith turn over the same to the
Collateral Agent at one of the locations on Schedule 4.2 or cause the same to be
moved to the place or places so designated by the Collateral Agent and there
delivered to the Collateral Agent, as the case may be, (B) store and keep any
Issuer Security Agreement Collateral so turned over or delivered to the
Collateral Agent at one of the locations on Schedule 4.2 or at such place or
places pending further action by the Collateral Agent as provided in Section
8.2, and (C) while the Issuer Security Agreement Collateral shall be so stored
and kept, provide such guards and maintenance services as shall be necessary to
protect the same and to preserve and maintain the Issuer Security Agreement
Collateral in good condition.
(b) The Grantor's obligation to turn over or deliver the Issuer
Security Agreement Collateral as set forth above is of the essence of this
Agreement and, accordingly, upon application to a court of equity having
jurisdiction, the Collateral Agent shall be entitled to obtain a decree
requiring specific performance by the Grantor of said obligation.
(c) When Issuer Security Agreement Collateral is in the Collateral
Agent's possession, (i) the Grantor shall pay (or reimburse the Collateral Agent
on demand for) all reasonable expenses (including the cost of any insurance and
payment of taxes or other charges) incurred in the custody, preservation, use or
operation of the Issuer Security Agreement Collateral, and the obligation to
reimburse all such expenses shall be secured hereby, and (ii) the risk of
accidental loss or damage shall be on the Grantor to the extent of any
deficiency in any effective insurance coverage.
SECTION 8.2. Remedies; Disposition of the Issuer Security Agreement
Collateral. Any Issuer Security Agreement Collateral repossessed by the
Collateral Agent
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under or pursuant to Section 8.1 and any other Issuer Security Agreement
Collateral, whether or not so repossessed by the Collateral Agent, may, to the
extent permitted by any contract terms governing such Issuer Security Agreement
Collateral and to the fullest extent permitted by applicable law, be sold,
leased or otherwise disposed of under one or more contracts or as an entirety,
whether by public or private sale and without the necessity of gathering at the
place of sale the property to be sold, and in general in such manner, at such
time or times, at such place or places and on such terms (whether cash or
credit, and in the case of credit, without assumption of future credit risk) as
the Collateral Agent may, in compliance with Applicable Law, determine to be
commercially reasonable. If any Issuer Security Agreement Collateral is sold by
the Collateral Agent upon credit or for future delivery, the Collateral Agent
shall not be liable for the failure of the purchaser to pay for the same and in
such event the Collateral Agent may resell the Issuer Security Agreement
Collateral. In no event shall the Grantor be credited with any part of the
proceeds of sale of any Issuer Security Agreement Collateral until payment
thereof in cash or cash equivalents has actually been received by the Collateral
Agent. Any of the Issuer Security Agreement Collateral may be sold, leased or
otherwise disposed of, or options or contracts may be entered to do so, in the
condition in which the same existed when taken by the Collateral Agent or after
any overhaul or repair which the Collateral Agent shall determine to be
commercially reasonable. Any such disposition shall be made upon not less than
ten (10) days' written notice to the Grantor specifying the time such
disposition is to be made and, if such disposition shall be a public sale,
specifying the place of such sale. Any such sale may be adjourned by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned. To
the extent permitted by Applicable Law, the Collateral Agent or any other
Secured Party may itself bid for and become the buyer of the Issuer Security
Agreement Collateral or any item thereof offered for sale at a public auction
without accountability to the Grantor.
SECTION 8.3. Waiver. (a) EXCEPT AS OTHERWISE PROVIDED IN THIS
AGREEMENT, THE GRANTOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
NOTICE OR JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL AGENT'S TAKING
POSSESSION OR THE COLLATERAL AGENT'S DISPOSITION OF ANY OF THE COLLATERAL IN
ACCORDANCE WITH THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR
NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT
WHICH THE GRANTOR WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF
THE UNITED STATES OR OF ANY STATE, AND THE GRANTOR HEREBY FURTHER WAIVES:
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(i) all damages occasioned by such taking of possession except
any damages which are finally judicially determined to have been the
direct result of the Collateral Agent's gross negligence or wilful
misconduct;
(ii) all other requirements as to the time, place and terms of
sale or other requirements with respect to the enforcement of the
Collateral Agent's and the other Secured Parties' rights hereunder;
(iii) demand of performance or other demand, notice of intent
to demand or accelerate, notice of acceleration, presentment, protest,
advertisement or notice of any kind to or upon the Grantor or any other
Person; and
(iv) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any applicable law
in order to prevent or delay the enforcement of this Agreement or the
absolute sale of the Issuer Security Agreement Collateral or any portion
thereof, and the Grantor, for itself and all who may claim under it,
insofar as it or they may now or hereafter lawfully do so, hereby waives
the benefit of such laws.
(b) Without limiting the generality of the foregoing, the Grantor
hereby: (i) authorizes the Collateral Agent, in its sole discretion and without
notice to or demand upon the Grantor and without otherwise affecting the
obligations of the Grantor hereunder from time to time, to take and hold other
collateral granted to it by any other Person (in addition to the Issuer Security
Agreement Collateral) for payment of any Secured Obligations, or any part
thereof, and to exchange, enforce or release such other collateral or any part
thereof, and to accept and hold any endorsement or guarantee of payment of the
Secured Obligations or any part thereof, and to release or substitute any
endorser or guarantor or any other Person granting security for or in any way
obligated upon any Secured Obligations, or any part thereof; and (ii) waives and
releases any and all right to require the Collateral Agent or the other Secured
Parties to collect any of the Secured Obligations from any specific item or
items of Issuer Security Agreement Collateral or from any other party liable as
guarantor or in any other manner in respect of any of the Secured Obligations or
from any collateral (other than the Issuer Security Agreement Collateral) for
any of the Secured Obligations.
(c) Any sale of, or the grant of options to purchase, or any other
realization upon, any Issuer Security Agreement Collateral shall, provided that
it is done in accordance with applicable law and this Agreement, operate to
divest all right, title, interest, claim and demand, either at law or in equity,
of the Grantor therein and thereto, and shall be a perpetual bar both at law and
in equity against the Grantor and against any and all Persons claiming or
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attempting to claim the Issuer Security Agreement Collateral so sold, optioned
or realized upon, or any part thereof, from, through and under the Grantor.
SECTION 8.4. Application of Proceeds; Grantor Liable for Deficiency.
The Collateral Agent shall apply the net proceeds of any collection, sale or
other realization of all or any part of the Issuer Security Agreement Collateral
pursuant to this Agreement, and any other cash at the time of such collection,
sale or other realization held by the Collateral Agent under this Agreement, in
accordance with Article V of the Intercreditor Agreement. The Grantor shall
remain liable to the extent of any deficiency between the amount of proceeds of
the Issuer Security Agreement Collateral and the aggregated amount of the
Secured Obligations in accordance with the Finance Documents.
SECTION 8.5. No Waiver; Remedies Cumulative. No failure or delay on
the part of any Secured Party in exercising any right, remedy, power or
privilege hereunder and no course of dealing between the Grantor and any
Secured Party shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power
or privilege. A waiver by any Secured Party of any right or remedy hereunder on
any one occasion shall not be construed as a bar to any right or remedy which
any Secured Party would otherwise have on any future occasion. The rights and
remedies herein expressly provided are cumulative and may be exercised singly
or concurrently and as often and in such order as any Secured Party deems
expedient and are not exclusive of any rights or remedies which the Secured
Parties would otherwise have whether by agreement or now or hereafter existing
under Applicable Law. No notice to or demand on the Grantor in any case shall
entitle the Grantor to any other or further notice or demand in similar or
other circumstances or constitute a waiver of the rights of the Secured Parties
to any other or future action in any circumstances without notice or demand.
SECTION 8.6. Discontinuance of Proceedings. In case any Secured
Party shall have instituted any proceeding to enforce any right, power or remedy
under this Agreement by foreclosure, sale, entry or otherwise, and such
proceeding shall have been discontinued or abandoned for any reason or shall
have been determined adversely to such Secured Party, then, in every such case,
subject to the terms of any final non-appealable judgment rendered in any such
proceeding, the Grantor, the Secured Parties and each holder of any of the
Secured Obligations shall be restored to their former positions and rights
hereunder with respect to the Issuer Security Agreement Collateral, subject to
the Security Interest created under this Agreement, and all rights, remedies and
powers of the Secured Parties shall continue as if no such proceeding had been
instituted.
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ARTICLE IX
MISCELLANEOUS
SECTION 9.1. Notices. Unless otherwise specifically herein
provided, all notices required or permitted under the terms and provisions
hereof shall be in writing and any such notice shall become effective if given
in accordance with the provisions of Section 12.5 of the Indenture.
SECTION 9.2. Amendment. No waiver, amendment, modification or
termination of any provision of this Agreement, or consent to any departure by
the Grantor therefrom, shall in any event be effective without the prior
written consent of the Collateral Agent, acting pursuant to the Intercreditor
Agreement, or as otherwise expressly provided herein, and none of the Issuer
Security Agreement Collateral shall be released without the written consent of
the Collateral Agent, acting pursuant to the Intercreditor Agreement, or as
otherwise expressly provided herein. Any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
SECTION 9.3. Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the Grantor and the Secured Parties,
all future holders of the Secured Obligations and their respective successors,
transferees and assigns (to the extent such successors, transferees and assigns
are permitted under the Finance Documents and the documents regarding
additional Permitted Indebtedness), except that the Grantor may not assign or
transfer any of its rights or obligations under this Agreement without the
prior written consent of the Collateral Agent and in accordance with this
Agreement.
SECTION 9.4. Survival. All agreements, statements, representations
and warranties made by the Grantor herein or in any certificate or other
instrument delivered by the Grantor or on its behalf under this Agreement shall
be considered to have been relied upon by the Secured Parties and shall survive
the execution and delivery of this Agreement and the other Finance Documents
regardless of any investigation made by any Secured Party or made on their
behalf.
SECTION 9.5. Headings Descriptive. The headings of the several
sections of this Agreement are inserted for convenience only and shall not
in any way affect the meaning or construction of any provision of this
Agreement.
SECTION 9.6. Severability. In case any provision in or
obligation under this Agreement shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality
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and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
SECTION 9.7. Grantor's Duties. Anything herein contained to the
contrary notwithstanding, the Grantor shall remain liable to perform all of its
obligations under or with respect to the Issuer Security Agreement Collateral,
and the Secured Parties shall not have any obligations or liabilities under or
with respect to any Issuer Security Agreement Collateral by reason of or
arising out of this Agreement, nor shall the Secured Parties be required or
obligated in any manner to perform or fulfill any of the obligations of the
Grantor under or with respect to any Issuer Security Agreement Collateral.
SECTION 9.8. Termination; Release. (a) Upon the occurrence of the
Debt Termination Date, this Agreement shall terminate (except as provided in
Section 9.4), and the Collateral Agent, at the written request and expense of
the Grantor, will promptly execute and deliver to the Grantor the proper
instruments (including UCC termination statements on form UCC-3) acknowledging
the termination of this Agreement, and will duly assign, transfer and deliver to
the Grantor (without recourse and without any representation or warranty of any
kind) such of the Issuer Security Agreement Collateral as may be in the
possession of the Collateral Agent and has not theretofore been disposed of or
otherwise applied or released.
(b) Upon the sale or disposition of any portion of the Issuer
Security Agreement Collateral permitted pursuant to the terms of the Finance
Documents, including, but not limited to, any Permitted Asset Sale, the
purchaser of such portion of the Issuer Security Agreement Collateral shall,
upon such purchase, acquire good title to the Issuer Security Agreement
Collateral so purchased, free of the security interest created by this
Agreement. The Collateral Agent, upon the request, and at the expense, of the
Grantor, shall execute and deliver all such documentation necessary to evidence
such release of the security interest created in such Issuer Security Agreement
Collateral pursuant to this Agreement.
SECTION 9.9. Reinstatement. This Agreement shall continue to be
effective or be reinstated, as the case may be, if at any time any amount
received by any Secured Party in respect of the Secured Obligations is rescinded
or must otherwise be restored or returned by such Secured Party upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Grantor or upon the appointment of any intervenor or conservator of, or trustee
or similar official for, the Grantor or any substantial part of its assets, or
upon the entry of an order by a bankruptcy court avoiding payment of such
amount, or otherwise, all as though such payments had not been made.
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SECTION 9.10. Counterparts. This Agreement may be executed in any
number of counterparts, each of which, taken together, shall constitute one and
the same instrument and any of the parties hereto may execute this Agreement by
signing any such counterpart.
SECTION 9.11 Governing Law; Submission to Jurisdiction; Waiver of
Jury Trial. (a) THIS AGREEMENT IS A CONTRACT MADE UNDER THE LAWS OF THE STATE OF
NEW YORK OF THE UNITED STATES AND SHALL FOR ALL PURPOSES BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF SUCH STATE WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW). Regardless of any provision in any other Finance Document, for
purposes of the UCC, New York shall be deemed to be the Depositary Bank's
location and the Depositary Accounts (as well as the securities entitlements
related thereto) shall be governed by the laws of the State of New York, without
regard to the conflict of law rules thereof (other than Section 5-1401 of the
New York General Obligations Law).
(b) Any legal action or proceeding against the Grantor with respect
to this Agreement may be brought in the courts of the State of New York in the
County of New York or of the United States for the Southern District of New York
and, by execution and delivery of this Agreement, the Grantor hereby irrevocably
submits and accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. The Grantor agrees
that a judgment, after exhaustion of all available appeals, in any such action
or proceeding shall be conclusive and binding upon the Grantor, and may be
enforced in any other jurisdiction, by a suit upon such judgment, a certified
copy of which shall be conclusive evidence of the judgment. The Grantor hereby
irrevocably designates, appoints and empowers CT Corporation System with offices
on the date hereof at 111 Eighth Avenue, New York, N.Y. 10011, as its designee,
appointee and agent to receive, accept and acknowledge for and on its behalf,
and in respect of its property, service of any and all legal process, summons,
notice and documents which may be served in any such action or proceeding. If
for any reason such designee, appointee and agent shall cease to be available to
act as such agent, the Grantor agrees to designate a new designee, appointee and
agent in New York City on the terms and for the purposes of this provision
satisfactory to the Collateral Agent. The Grantor further irrevocably consents
to the service of process out of any of the aforementioned courts in any such
action or proceeding by the mailing of copies thereof by registered or certified
mail, postage prepaid, to the Grantor, at its address referred to in Section
12.5(a) of the Indenture, such service to become effective thirty (30) days
after such mailing. Nothing herein shall affect the right of the Collateral
Agent or any other Person to serve process in any other manner
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permitted by law or to commence legal proceedings or otherwise proceed against
the Grantor in any other jurisdiction.
(c) The Grantor hereby irrevocably waives any objection which it
may now or hereafter have to the laying of venue of any of the aforesaid
actions or proceedings arising out of or in connection with this Agreement in
the courts referred to in clause (b) above and hereby further irrevocably
waives and agrees not to plead or claim in any such court that any such action
or proceeding brought in any such court has been brought in an inconvenient
forum.
(d) WITH REGARD TO THIS AGREEMENT, EACH PARTY HERETO HEREBY
WAIVES THE RIGHT TO A TRIAL BY JURY.
SECTION 9.12. Authority of Collateral Agent. The Grantor
acknowledges that the rights and responsibilities of the Collateral Agent under
this Agreement with respect to any action taken by the Collateral Agent or the
exercise or non-exercise by the Collateral Agent of any option, right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement shall, as between the Collateral Agent and the other
Secured Parties, be governed by this Agreement, the other Finance Documents and
by such other agreements with respect thereto as may exist from time to time
among them, but, as between the Collateral Agent and the Grantor, the
Collateral Agent shall be conclusively presumed to be acting as agent for the
Secured Parties with full and valid authority so to act or refrain from acting,
and the Grantor shall not be under any obligation, or entitlement, to make any
inquiry respecting such authority.
SECTION 9.13. Conflict with Intercreditor Agreement. In case of a
conflict between any provision of this Agreement and any provision of the
Intercreditor Agreement, the provisions of the Intercreditor Agreement shall
control. No such conflict shall be deemed to exist merely because this
Agreement imposes greater obligations on the Grantor than the Intercreditor
Agreement.
SECTION 9.14. Indemnities and Expenses. The obligation of the
Grantor to pay the costs and expenses of, and to indemnify, defend and hold
harmless, the Collateral Agent, its agents, officers, directors and
representatives and the other Secured Parties under and in connection with this
Agreement shall be as provided in Section 2.4 of the Intercreditor Agreement as
in effect as of the date hereof. No amendment to such Section 2.4 or termination
of the Intercreditor Agreement shall affect the provisions of this Section 9.16
unless such amendment or termination shall have been consented to by the parties
to this Agreement in accordance with the provisions hereof and of the other
Finance Documents.
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SECTION 9.15. Entire Agreement. This Agreement, together with any
other agreement executed in connection herewith, is intended by the parties as
a final expression of their agreement as to the matters covered hereby and is
intended as a complete and exclusive statement of the terms and conditions
thereof.
SECTION 9.16. Independent Security. The security provided for in
this Agreement shall be in addition to and shall be independent of every other
security which the Collateral Agent or the other Secured Parties may at any time
hold for any of the Secured Obligations hereby secured, whether or not under the
Security Documents. The execution of any other Security Document shall not
modify or supersede the security interest or any rights or obligations contained
in this Agreement and shall not in any way affect, impair or invalidate the
effectiveness and validity of this Agreement or any term or condition hereof.
The Grantor hereby waives its right to plead or claim in any court that the
execution of any other Security Document is a cause for extinguishing,
invalidating, impairing or modifying the effectiveness and validity of this
Agreement or any term or condition contained herein. The Collateral Agent shall
be at liberty to accept further security from the Grantor or from any third
party and/or release such security without notifying the Grantor and without
affecting in any way the obligations of the Grantor under the Security Documents
or the other Finance Documents. The Collateral Agent, acting pursuant to the
Intercreditor Agreement, or as otherwise expressly provided herein, shall
determine if any security conferred upon the Collateral Agent and the other
Secured Parties under the Security Documents shall be enforced by the Collateral
Agent, as well as the sequence of securities to be so enforced.
SECTION 9.17. Third Party Beneficiaries. The agreements of the
parties hereto are intended to benefit the Secured Parties and their
respective successors and assigns.
SECTION 9.18. Limitation of Liability. The provisions of
Section 12.11 of the Indenture shall apply to this Agreement.
SECTION 9.19. Merger of Collateral Agent. Any corporation into which
the Collateral Agent may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Collateral Agent shall be a party, or any
corporation succeeding to the business of the Collateral Agent shall be the
successor of the Collateral Agent hereunder without the execution or filing of
any paper with any party hereto or any further act on the part of any of the
parties hereto except where an instrument of transfer or assignment is required
by law to effect such succession, anything herein to the contrary
notwithstanding.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their duly authorized officers as of the date
first above written.
NRG SOUTH CENTRAL GENERATING LLC, as Grantor
By: /s/ C. A. Mataczynski
--------------------------------
Name: Craig A. Mataczynski
Title: President
THE CHASE MANHATTAN BANK, as Collateral Agent
By: /s/ Annette M. Marsula
--------------------------------
Name: Annette M. Marsula
Title: Vice President
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Schedule I to Assignment
and Security Agreement
Filing Offices
Office of the Secretary of State of the State of Minnesota
Sch. I - 1
35
Schedule II to Assignment
and Security Agreement
Instruments
None.
Sch. II - 1
36
Schedule III to Assignment
and Security Agreement
Copyrights
None.
Sch. III - 1
37
Schedule IV to Assignment
and Security Agreement
Patents
None.
Sch. IV - 1
38
Schedule V to Assignment
and Security Agreement
Trademarks
None.
Sch. V - 1
39
Schedule 4.2 to
Assignment and Security Agreement
Location of Inventory and Equipment
None.
Sch. 4.2 - 1
40
Exhibit A
BOND POWER
FOR VALUE RECEIVED, NRG SOUTH CENTRAL GENERATING LLC hereby assigns
and transfers unto _________ one promissory note of LOUISIANA GENERATING LLC, a
Delaware limited liability company, in the principal amount of [
______________________ ($[ ______ ])], dated [ _______ ], and does hereby
irrevocably consent and appoint ________ attorney to transfer the said
promissory note with full power of substitution in the premises.
DATED:___________
NRG SOUTH CENTRAL GENERATING LLC
By: ___________________________
Name:
Title:
Exhibit A-1