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Exhibit 10.1
EXECUTION COPY
WORKING CAPITAL AGREEMENT
dated as of April 30, 2000
among
NRG SOUTH CENTRAL GENERATING LLC,
THE GUARANTORS PARTY HERETO
THE LENDERS PARTY HERETO AND
THE BANK OF TOKYO-MITSUBISHI, LTD., NEW YORK BRANCH,
AS ADMINISTRATIVE AGENT
$40,000,000
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TABLE OF CONTENTS
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ARTICLE I. DEFINITIONS ............................................................ 1
SECTION 1.01. Defined Terms .................................................... 1
SECTION 1.02. Terms Generally .................................................. 19
SECTION 1.03. Accounting Terms; GAAP ........................................... 19
SECTION 1.04. Working Capital Facility Agent ................................... 20
ARTICLE II. THE CREDITS ........................................................... 20
SECTION 2.01. The Commitments .................................................. 20
SECTION 2.02. Loans and Borrowings ............................................. 20
SECTION 2.03. Requests for Borrowings .......................................... 21
SECTION 2.04. Funding of Borrowings ............................................ 21
SECTION 2.05. Interest Elections ............................................... 22
SECTION 2.06. Termination and Reduction of the Commitments ..................... 23
SECTION 2.07. Repayment of Loans; Evidence of Debt ............................. 24
SECTION 2.08. Prepayment of Loans .............................................. 25
SECTION 2.09. Fees ............................................................. 26
SECTION 2.10. Interest ......................................................... 26
SECTION 2.11. Alternate Rate of Interest ....................................... 27
SECTION 2.12. Increased Costs .................................................. 28
SECTION 2.13. Break Funding Payments ........................................... 29
SECTION 2.14. Taxes ............................................................ 29
SECTION 2.15. Payments Generally; Pro Rata Treatment; Sharing of Set-offs ...... 30
SECTION 2.16. Mitigation Obligations; Replacement of Lenders ................... 32
ARTICLE III. GUARANTEE ............................................................ 33
SECTION 3.01. The Guarantees .................................................... 33
SECTION 3.02. Obligations Unconditional ......................................... 33
SECTION 3.03. Reinstatement ..................................................... 34
SECTION 3.04. Subrogation ....................................................... 34
SECTION 3.05. Remedies .......................................................... 35
SECTION 3.06. Instrument for the Payment of Money ............................... 35
SECTION 3.07. Continuing Guarantees ............................................. 35
SECTION 3.08. Rights of Contribution ............................................ 35
SECTION 3.09. General Limitation on Guarantee Obligations ....................... 36
SECTION 3.10. Effectiveness ..................................................... 36
ARTICLE IV. REPRESENTATIONS AND WARRANTIES ........................................ 37
SECTION 4.01. Organization; Powers .............................................. 37
SECTION 4.02 Authorization; Enforceability ..................................... 37
SECTION 4.03. No Conflicts; Governmental Approvals .............................. 37
SECTION 4.04. Financial Condition ............................................... 38
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 ............................................................. 39
SECTION 4.08. Investment Company Status ......................................... 39
SECTION 4.09. Utility Regulation ................................................ 39
SECTION 4.10. Accounting ........................................................ 40
SECTION 4.11. Insurance ......................................................... 40
SECTION 4.12. Properties ........................................................ 41
SECTION 4.13. Labor; ERISA ...................................................... 41
SECTION 4.14. Environmental Matters ............................................. 41
SECTION 4.15. No Material Adverse Change ........................................ 42
SECTION 4.16. Certificates ...................................................... 42
SECTION 4.17. Use of Credit ..................................................... 42
SECTION 4.18. Disclosure ........................................................ 43
ARTICLE V. CONDITIONS PRECEDENT ................................................... 43
SECTION 5.01. Effective Date .................................................... 43
SECTION 5.02. Conditions Precedent for each Loan ................................ 46
ARTICLE VI. COVENANTS OF THE BORROWER ............................................. 46
SECTION 6.01. Financial Statements and Other Information ........................ 46
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 .............................. 48
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 ................................ 51
SECTION 6.15. Restricted Payments ............................................... 52
SECTION 6.16. Transactions with Affiliates ...................................... 53
SECTION 6.17. Investments ....................................................... 53
SECTION 6.18. EWG Status ........................................................ 55
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
SECTION 7.05. Liens ............................................................. 56
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SECTION 7.06. Prohibition on Fundamental Changes ................................ 56
SECTION 7.07. Restricted Payments ............................................... 57
SECTION 7.08. Transactions with Affiliates ...................................... 57
SECTION 7.09. Investments ....................................................... 57
SECTION 7.10. Operation of Facilities ........................................... 59
SECTION 7.11. Prohibition on Sale of Assets ..................................... 59
SECTION 7.12. Modification of Certain Documents ................................. 59
ARTICLE VIII. EVENTS OF DEFAULT ................................................... 59
SECTION 8.01. Events of Default .................................................. 59
SECTION 8.02 Acceleration; Remedies ............................................. 62
ARTICLE IX. The Administrative Agent .............................................. 62
SECTION 9.01 Appointment ........................................................ 62
SECTION 9.02 Administrative Agent's Rights as a Lender .......................... 63
SECTION 9.03 Duties; Limitation of Liability .................................... 63
SECTION 9.04 Reliance by Administrative Agent ................................... 63
SECTION 9.05 Sub-Agents ......................................................... 64
SECTION 9.06 Resignation ........................................................ 64
SECTION 9.07 Independent Credit Decisions ....................................... 64
SECTION 9.08 Consent by Administrative Agent .................................... 65
ARTICLE X. MISCELLANEOUS .......................................................... 65
SECTION 10.01. Notices .......................................................... 65
SECTION 10.02. Waivers; Amendments .............................................. 65
SECTION 10.03. Expenses; Indemnity; Damage Waiver ............................... 66
SECTION 10.04. Successors and Assigns ........................................... 68
SECTION 10.05. Survival ......................................................... 70
SECTION 10.06. Counterparts; Integration; Effectiveness ......................... 70
SECTION 10.07. Severability ..................................................... 71
SECTION 10.08. Right of Setoff .................................................. 71
SECTION 10.09. Governing Law; Jurisdiction; Etc ................................. 71
SECTION 10.10. WAIVER OF JURY TRIAL ............................................. 72
SECTION 10.11. Headings ......................................................... 72
SECTION 10.12. Treatment of Certain Information; Confidentiality ................ 72
SCHEDULE I - Commitments
SCHEDULE II - Encumbrances
SCHEDULE III - Restrictive Agreements
SCHEDULE IV - Assets Specifically Held for Resale
SCHEDULE V - Fees and Rates
EXHIBIT A - Form of Assignment and Acceptance
EXHIBIT B - Form of Subordination Provisions
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WORKING CAPITAL AGREEMENT dated as of April 30, 2000 among NRG
SOUTH CENTRAL GENERATING LLC, the GUARANTORS party hereto, the LENDERS party
hereto, and THE BANK OF TOKYO-MITSUBISHI, LTD., NEW YORK BRANCH, as
Administrative 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 $40,000,000, 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.
"Additional Guarantor" means any Subsidiary of the Borrower,
other than the Initial Guarantor, that the Borrower designates as a Guarantor
subsequent to the Effective Date.
"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 Agent" means The Bank of Tokyo-Mitsubishi,
Ltd., New York Branch, in its capacity as Administrative Agent for the Lenders
hereunder.
"Administrative Questionnaire" means an Administrative
Questionnaire in a form supplied to the Lenders by the Administrative Agent.
"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" means, with respect to a Person, any other Person
that, directly or indirectly through one or more intermediaries, Controls, is
Controlled by or is under common Control with such first Person.
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"Agreement" means this Working Capital Agreement dated as of
April 30, 2000 among the Borrower, the Guarantors, the Lenders and the
Administrative 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
Administrative Agent in New York, New York, from time to time, as the
Administrative 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 Administrative 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 Administrative Agent from three New York certificate of
deposit dealers of recognized standing selected by the Administrative
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 Administrative 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, the rate per annum equal
to the rate set forth on Schedule V hereto corresponding to the then senior
secured ratings of the Borrower with respect to ABR Loans or Eurodollar Loans,
as the case may be.
"Approved Restoration Plan" shall mean a plan which provides
for the repair, replacement or rebuilding of all or any material portion of the
Facilities and which is accompanied by a certificate of an authorized officer of
the Borrower or a Guarantor certifying that, after taking into consideration the
availability of Loss Proceeds and such other proceeds available for the repair,
replacement or restoration of such Facilities, there will be adequate cash flow,
including but not limited to any Loss Proceeds, during the period of repair,
replacement or restoration to pay all ongoing expenses, including debt service,
if any, and no Material Adverse Effect would reasonably be expected to result
from such repair, replacement or restoration.
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"Assets Specifically Held for Resale" means the assets listed
on Schedule IV.
"Assignment and Acceptance" means an assignment and acceptance
substantially in the form of Exhibit A which satisfies the requirements of
Section 10.04(b).
"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 $500,000,000 8.962%
Series A Senior Secured Bonds due 2016 of the Borrower, and (b) the $300,000,000
9.479% Series B Senior Secured Bonds due 2024 of the Borrower.
"Borrower" means NRG South Central Generating LLC, a Delaware
limited liability company.
"Borrower Pledge Agreement" means the Pledge and Security
Agreement dated as of March 30, 2000, between the Borrower and the Collateral
Agent, as the same shall be modified and supplemented and in effect from time to
time.
"Borrower Security Agreement" means the Assignment and
Security Agreement dated as of March 30, 2000, between the Borrower and the
Collateral Agent, as the same shall be modified and supplemented and in effect
from time to time.
"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
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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.
"BTM" means The Bank of Tokyo-Mitsubishi, Ltd., New York
Branch.
"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.
"Cajun Electric" means Cajun Electric Power Cooperative, Inc.,
a non-profit Louisiana electric membership cooperative corporation.
"Cajun Facilities" means the interest representing
approximately 1,700 MW of non-nuclear electric generating facilities in New
Roads, Louisiana, that the Initial Guarantor acquired from Cajun Electric
pursuant to a Fifth Amended and Restated Asset Purchase and Reorganization
Agreement, dated as of September 21, 1999, among the Initial Guarantor, Ralph K.
Mabey, as Chapter 11 Trustee of Cajun Electric and, as to certain sections of
the agreement only, NRG Energy, Inc.
"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 the acquisition, directly or
indirectly, beneficially or of record or otherwise, by any Person or group
(within the meaning of the Securities and Exchange Act of 1934, and the rules of
the Securities and Exchange Commission as in effect on the date hereof) other
than NRG Energy or its Controlled Subsidiaries of Control of the Borrower or any
Guarantor; 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.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Collateral Agency and Intercreditor Agreement" means the
Collateral Agency and Intercreditor Agreement dated as of March 30, 2000, among
the Borrower, the Guarantors, the Trustee, the Collateral Agent and Chase, as
Depositary Bank.
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"Collateral Agent" means Chase, in its capacity as collateral
agent under the Collateral Agency and Intercreditor Agreement and the other
Financing Documents to which it is a party.
"Collateral Documents" means the Borrower Security Agreement,
the Borrower Pledge Agreement, each Guarantor Security Agreement, each Member
Pledge Agreement, the Collateral Agency and Intercreditor Agreement, each
Consent and Agreement, each Intercompany Note, the Indenture (with respect to
the Depositary Accounts other than the debt service reserve account thereunder),
the Mortgage and any other document providing for any lien, pledge, encumbrance,
mortgage or security interest in favor of the Collateral Agent.
"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(b) 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.
"Control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
"Consent and Agreement" means each of (i) the Consent and
Agreement dated as of March 30, 2000, among NRG Energy, the Borrower and the
Collateral Agent; (ii) the Consent and Agreement dated as of March 30, 2000,
among NRG Energy, the Initial Guarantor and the Collateral Agent; (iii) the
Consent and Agreement dated as of March 30, 2000, among NRG Power Marketing, the
Initial Guarantor and the Collateral Agent, and (iv) the Consent and Agreement
dated as of March 30, 2000, among NRG Operating, the Initial Guarantor and the
Collateral Agent.
"Corporate Services Agreement" means each of (i) the Corporate
Services Agreement dated as of March 24, 2000, between NRG Energy and the
Borrower, and (ii) the Corporate Services Agreement dated as of March 24, 2000,
between NRG Energy and the Initial Guarantor.
"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 and Maintenance 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
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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.
"Dollars" or "$" refers to lawful money of the United States
of America.
"Effective Date" means the date on or after April 30, 2000, 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, 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, including the regulations and published
interpretations thereunder.
"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.
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"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 intended to be covered by the Collateral Documents by any
Governmental Authority.
"Event of Loss" means an event which causes all or a material
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 non-nuclear electric generating, district
assets or plants and related facilities and equipment acquired, owned,
constructed, developed, operated or maintained by the Borrower, the Initial
Guarantor and any Additional 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 necessary, to the next 1/100 of 1%) of the quotations for
such day for such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it.
"Financing Documents" means, collectively, this Agreement, the
Indenture, the Collateral Agency and Intercreditor Agreement, the Bonds, the
Collateral Documents and all other documents related to any of the foregoing or
otherwise related to the issuance of the Bonds.
"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.
"GAAP" means generally accepted accounting principles in the
United States as in effect from time to time.
"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,
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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 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 the Initial Guarantor and any Additional
Guarantor.
"Guarantor Security Agreement" means each of (i) the
Assignment and Security Agreement dated as of March 30, 2000, between the
Initial Guarantor and the Collateral Agent, and (ii) an Assignment and Security
Agreement between each Additional Guarantor and the Collateral Agent in
substantially the same form as the Assignment and Security Agreement between the
Initial Guarantor and the Collateral Agent, as each shall be modified and
supplemented and in effect from time to time.
"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.
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"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 (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
to the extent required to be capitalized on the books of such Person in
accordance with GAAP, (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.
"Indenture" means the Trust Indenture dated as of March 30,
2000 by and among the Borrower, the Initial Guarantor and the Trustee.
"Independent Engineer" means Stone & Webster Management
Consultants, Inc.
"Independent Insurance Consultant" means Marsh USA, Inc.
"Independent Market Consultant" means Pace Global Energy
Services, Inc.
"Initial Guarantor" means Louisiana Generating LLC, a Delaware
limited liability company.
"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, including the note of the Initial
Guarantor dated March 30, 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 the 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
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one, two or three months thereafter, as specified in the applicable Borrowing
Request or Interest 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 Administrative 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
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Administrative Agent in immediately available funds in the London interbank
market at approximately 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 financial condition of the
Borrower and the Guarantors taken as a whole, (b) the validity or priority of
the Liens on the Collateral; (c) the ability of any Obligor to perform its
material obligations under any Transaction Document to which it is a party, or
(d) the ability of the Administrative Agent to enforce any of the payment
obligations of any Obligor under this Agreement.
"Maturity Date" means March 29, 2001.
"Member" means each of NRG Central 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.
"Member Pledge Agreements" means each of (i) the Pledge and
Security Agreement dated as of March 30, 2000, between NRG Central and the
Collateral Agent and (ii) the Pledge and Security Agreement dated as of March
30, 2000, between NRG Generation and the Collateral Agent, as each shall be
modified and supplemented and in effect from time to time.
"Moody's" means Moody's Investors Service, Inc.
"Mortgage" means the Mortgage, dated as of March 30, 2000,
between the Initial Guarantor and the Collateral Agent.
"Net Tangible Assets" 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 basis in
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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 Guarantor to declare a default on such
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its stated maturity.
"NRG Central" means NRG Central U.S. LLC, a Delaware limited
liability company.
"NRG Energy" means NRG Energy, Inc., a Delaware corporation.
"NRG Generation" means South Central Generation Holding LLC, a
Delaware limited liability company.
"NRG Operating" 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 dated as of March 30, 2000, between 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 March 14, 2000 together with the Offering Circular dated as of March
27, 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 Borrower.
"Operating and Maintenance Expenses" means (a) all amounts
disbursed by or on behalf of an Obligor for operation, maintenance, repair or
improvement of the Facilities including, but not limited to, premiums on
insurance policies, property and other Taxes, and
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payments under the relevant operating and maintenance agreements, leases,
royalty and other land use agreements, and any other payments required under the
Transaction Documents or for the administration or performance of the
Transaction Documents and (b) all fees and other amounts due and owing to the
Lenders and the Administrative Agent.
"Operation and Management Services Agreement" means the
Operation and Management Services Agreement dated as of March 24, 2000, between
the Initial Guarantor and NRG Operating, and any successor or replacement
agreement.
"Permitted Indebtedness" means (a) Indebtedness incurred
pursuant to the Indenture and the Bonds; (b) Indebtedness incurred pursuant to
additional bonds issued in accordance with the Indenture; (c) Indebtedness
provided that (i) an authorized officer of the Borrower certifies to the
Administrative Agent in writing that no Default or Event of Default has occurred
and is continuing or will occur after giving effect to the incurrence of such
Indebtedness and the application of the net proceeds thereof; (ii) an authorized
officer of the Borrower certifies to the Administrative Agent in writing that
after giving effect to the incurrence of such Indebtedness, the minimum annual
Projected Debt Service Coverage Ratio for each fiscal year (starting in the
fiscal year in which the Indebtedness is incurred) through the final maturity
date for the Bonds with the longest maturity, will not be less than 1.5 to 1;
and (iii) the Administrative Agent receives written confirmation from each
rating agency then rating the Bonds that the incurrence of such Indebtedness
will not result in a lowering or withdrawal by a rating agency of the then
current ratings of the Bonds; (d) Indebtedness related to Permitted Liens; (e)
Indebtedness represented by interest rate protection agreements with respect to
other Permitted Indebtedness; (f) Indebtedness under this Agreement plus, upon
the acquisition of an Additional Guarantor or any additional Facility by a
Guarantor or the Borrower, 5% of the Indebtedness incurred by the Borrower in
connection with such acquisition; provided that the outstanding principal amount
of such Indebtedness shall be reduced to zero for five (5) days each year; (g)
Indebtedness of the Borrower owed to the Initial Guarantor or any Additional
Guarantor; (h) Indebtedness of any Guarantor represented by Hedging Agreements;
(i) Indebtedness of any Guarantor in respect of letters of credit, surety bonds
or performance bonds issued in the ordinary course of business; (j) trade
indebtedness or other similar Indebtedness incurred by any Guarantor in the
ordinary course of business (but not in any case for borrowed money); (k) other
Indebtedness in an aggregate principal amount not to exceed $15,000,000 at any
one time; (l) Indebtedness related to any Guarantor's obligations to establish
certain funds under its power purchase agreements with any electricity
membership cooperative; and (m) Subordinated Indebtedness.
"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, Switzerland or any country that is a member of the
European Economic Union having a combined capital and surplus of at least
$250,000,000 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
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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 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 Agent 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(j);
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(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;
(k) Liens arising by action of law; and
(l) 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 the Power Marketing Agreement, 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 the Power Sales and Agency
Agreement dated as of March 24, 2000, between NRG Power Marketing and the
Initial Guarantor.
"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 and Maintenance 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
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Agent 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.
"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 Lehman Brothers, Inc.
"Quarterly Dates" means the last Business Day of March, June,
September and December 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.
"Ratings Downgrade" means a lowering or withdrawal by a Rating
Agency of the then current ratings of the Bonds.
"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.
"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 (x) distributions or other payments by an Obligor to another
Obligor, and (y) distributions of proceeds from the sale of Assets Specifically
Held for Resale, will not constitute 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).
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"Revolver Amount" means $40,000,000.
"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.
"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.
"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 Administrative 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 B and (c) unsecured.
"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.
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"Title Event" means the existence of any defect of title or
Lien or encumbrance on the Facilities which entitles the Collateral Agent, the
Borrower or any Guarantor to make a claim under the title insurance policy in
effect with respect to any Facilities.
"Transaction Documents" means the Financing Documents, the
Power Sales Agreements, the Power Marketing Agreement, the Corporate Services
Agreements and the Operation and Management Services 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 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 Agent by filing with the Administrative
Agent 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
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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.
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. 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 Agent 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 Agent notifies 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.
SECTION 1.04. Working Capital Facility Agent. The parties
hereby acknowledge and agree that the revolving credit facility created pursuant
to this Agreement shall be the sole "Working Capital Facility," as such term is
defined in the Indenture, and that the Administrative Agent shall be the sole
"Working Capital Facility Agent" as therein defined.
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
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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 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 deliver to the Administrative Agent a written Borrowing
Request in a form approved by the Administrative Agent and signed by the
Borrower (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 10:00 a.m., New
York City time, on the date of the proposed Borrowing. Each such Borrowing
Request shall be irrevocable. Each such Borrowing Request shall specify the
following information in compliance with Section 2.02:
(i) the aggregate amount of the requested Borrowing;
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(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
Administrative 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 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 Administrative Agent most recently designated by it for such purpose by
notice to the Lenders. The Administrative 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 permitted under the Indenture and designated by the
Borrower in the applicable Borrowing Request.
(b) Presumption by the Administrative Agent. Unless the
Administrative 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
Administrative Agent such Lender's share of such Borrowing, the Administrative
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 Administrative Agent, then the applicable Lender and the
Borrower severally agree to pay to the Administrative 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 Administrative 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 Administrative Agent, then such amount shall constitute such Lender's
Loan included in such Borrowing.
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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 Administrative 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 Administrative Agent of a written Interest
Election Request in a form approved by the Administrative Agent and signed by
the Borrower.
(c) Information in Interest Election Requests. Each telephonic
and written 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.
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(d) Notice by the Administrative Agent to Lenders. Promptly
following receipt of an Interest Election Request, the Administrative 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 Agent, at the request of the Required Lenders, so notifies 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
Commitments 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 Commitments; provided that
(except in the case of any such termination of the full amount of the
Commitments) each reduction of the Commitments 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 Administrative Agent of any election to terminate or reduce the
Commitments 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 Administrative 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 Commitments shall be permanent. Each reduction of the
Commitments 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 Administrative Agent for the account of the 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 Administrative Agent by telephone (confirmed by
telecopy) of such selection not
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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 Administrative Agent.
The Administrative 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 Administrative Agent hereunder for the
account of the Lenders and each 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 Administrative 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 Administrative 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 shall prepay the
Loans, and the Commitments shall be automatically reduced, as follows:
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(i) If (x) an Event of Loss occurs with respect to any
Facilities and (y) the Borrower or any Guarantor (or the Collateral
Agent on their behalf) receives Loss Proceeds in connection with such
Event of Loss in excess of $10,000,000 and (z) the Facilities are not
or cannot be repaired, rebuilt or replaced in accordance with an
Approved Restoration Plan, then (A) the Loss Proceeds in excess of
$10,000,000 shall be used to prepay the Loans in an amount equal to the
amount allocated to each Lender as its pro rata share of Loss Proceeds
pursuant to Section 5.6(c) of the Collateral Agency and Intercreditor
Agreement and (B) each Lender's Commitment shall be reduced by the
amount so received.
(ii) If (x) an Event of Loss occurs with respect to any
Facilities and (y) the Facilities are repaired, rebuilt or replaced in
accordance with an Approved Restoration Plan and (z) the Borrower or a
Guarantor (or the Collateral Agent on their behalf) receives Loss
Proceeds in excess of $5,000,000 in excess of the cost of such repair,
rebuilding or replacement in connection with such Event of Loss, then
(A) the Loss Proceeds in excess of $5,000,000 shall be used to prepay
the Loans in an amount equal to the amount allocated to each Lender as
its pro rata share of Loss Proceeds pursuant to Section 5.6(d) of the
Collateral Agency and Intercreditor Agreement and (B) each Lender's
Commitment shall be reduced by the amount so received.
(iii) If a Title Event occurs with respect to any Facilities
and the Borrower or a Guarantor (or the Collateral Agent on their
behalf) receives proceeds in connection with such Title Event in excess
of $10,000,000, then (A) the proceeds in excess of $10,000,000 shall be
used to prepay the Loans in an amount equal to the amount allocated to
each Lender as its pro rata share of Loss Proceeds pursuant to Section
5.6(a) of the Collateral Agency and Intercreditor Agreement and (B)
each Lender's Commitment shall be reduced by the amount so received.
(c) Notices, Etc. The Borrower shall notify the Administrative
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 the Commitments 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 Administrative 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
Administrative Agent for the account of each Lender a commitment fee, which
shall accrue at a rate per annum equal
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to the amount set forth on Schedule V hereto corresponding to the then senior
secured ratings of the Borrower on the average daily unused amount of the
Commitment of such Lender for the period from and including April 30, 2000 to
but not including the earlier of the date such Commitment terminates 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
Administrative Agent the fees payable to the Administrative Agent in the amounts
and at the times separately agreed upon between the Borrower and the
Administrative Agent.
(c) Payment of Fees. All fees payable hereunder shall be paid
on the dates due, in immediately available funds, to the Administrative 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.
(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, 5% plus the rate otherwise
applicable to such Loan as provided above or (ii) in the case of any other
amount, 5% 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
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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 Administrative 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 Agent determines (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 Agent is 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 Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies 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 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
Lender 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
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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 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
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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 Taxes;
provided that if the Borrower shall be required to deduct any 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 Agent 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 any other Taxes to the relevant Governmental Authority in
accordance with applicable law.
(c) Indemnification by the Borrower. The Borrower shall
indemnify the Administrative Agent and each Lender, within 10 days after written
demand therefor, for the full amount of any Taxes (including Taxes imposed or
asserted on or attributable to amounts payable under this Section) paid by the
Administrative Agent 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 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
Agent 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 Taxes by the Borrower to a Governmental Authority, the Borrower shall
deliver to the Administrative Agent 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 Agent.
(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 Agent), 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
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2.14, or otherwise) or under any other Financing Document (except to the extent
otherwise provided therein) prior to 1:00 p.m., 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, at the discretion of the
Administrative 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 Administrative Agent at its offices at 1251 Avenue of the
Americas, New York, New York 10020, 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 Administrative Agent shall distribute any such payments received by
it for the 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 interest,
interest thereon shall be payable for the period of such extension; provided,
that nothing herein shall extend any payment beyond the Maturity Date. 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 Administrative Agent to
pay fully all amounts then due hereunder, such funds shall be applied (i) first,
to reimburse or pay all reasonable out-of-pocket expenses required to be
reimbursed or paid by the Borrower hereunder, (ii) second, 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
(iii) third, 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 the 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 the 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 the 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
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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 amount of such participation.
(e) Presumptions of Payment. Unless the Administrative Agent
shall have received notice from the Borrower prior to the date on which any
payment is due to the Administrative Agent for the account of the Lenders
hereunder that the Borrower will not make such payment, the Administrative 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
Administrative 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
Administrative Agent, at the Federal Funds Effective Rate.
(f) Certain Deductions by the Administrative 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 Administrative Agent may, in its discretion
(notwithstanding any contrary provision hereof), apply any amounts thereafter
received by the Administrative Agent for the 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 the
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.
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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 the 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 Agent, 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 Agent, which consent shall not
unreasonably be withheld, (ii) such Lender shall 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 (which in no
event shall include any Unrestricted Subsidiary) hereby jointly and severally
guarantee to each Lender and the Administrative Agent 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 Agent 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.
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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:
(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 Agent 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
Agent 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 Agent and each
Lender on demand for all reasonable costs and expenses (including reasonable
fees of counsel) incurred by the Administrative Agent 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
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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.
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 Agent, 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
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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 Obligations by (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 Agent 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 Additional 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 Agent to the effect that (i) 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 and (ii) after giving effect to the addition of such Additional
Guarantor, the Rating Agencies shall have confirmed their respective ratings of
the Bonds in effect immediately prior to the addition of such Additional
Guarantor. The Borrower shall cause a Guarantee Effectiveness Certificate in
respect of each Additional Guarantor to be delivered to the Administrative Agent
within four Business Days after receipt by such Guarantor of such Governmental
Approvals, the expiration of such applicable waiting periods and receipt of such
confirmation.
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ARTICLE IV. REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants as of the Effective Date
to the Lenders that:
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 its respective
jurisdiction of organization, is duly qualified to do business and is in good
standing in each jurisdiction in which its respective ownership or lease of
property or the conduct of its respective business requires such qualification,
and has all power and authority necessary to own or hold its respective
properties and to conduct the business in which it is engaged, except where the
failure to so qualify or have such power or authority could not, singularly or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
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 the
Financing Documents to which it is a party 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 each Guarantor and constitutes a valid and legally
binding agreement of the Borrower and each Guarantor.
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 Bonds 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 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
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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.
(b) No consent, approval, authorization or order of, or filing
or registration with, any 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 the 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.
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
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which, with notice, 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 PUHCA, nor subject to
regulation under PUHCA except pursuant to Section 9(a)(2) or Section 32 thereof.
(b) Each Guarantor that owns or operates facilities used for
the generation, transmission or distribution or electric energy for sale is an
"exempt wholesale generator" under Section 32(a) of PUHCA and none of the
subsidiaries, nor any of the Administrative Agent, the Collateral Agent or the
Lenders is or will be, solely as a result of the participation by such parties
individually or 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 referred to in Section 4.09(b)
owns and operates its Facilities as an "exempt wholesale generator" under
Section 32(a) of PUHCA, none of the Administrative Agent, 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
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company," an "electric utility company," or a "holding company," or a
"subsidiary company" or "affiliate" of any of the foregoing, under PUHCA.
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
independent power 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 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.
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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
ERISA, or Section 4975 of 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
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 Power Marketing or NRG Operating that has had or could
reasonably be expected to have
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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) except for the transactions
contemplated by the Transaction Documents, 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. 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 4.18. 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. The Administrative Agent shall have
received 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 Agent (which may include telecopy
transmission of a signed signature page to this Agreement) that such
party has signed a counterpart of this Agreement.
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(b) Intercreditor Agreement. The Administrative Agent shall
have received a counterpart of a Designation Letter, dated as of the
date hereof, duly executed by the Collateral Agent, acknowledging the
designation of the Administrative Agent as the "Working Capital
Facility Agent" under the Collateral Agency and Intercreditor
Agreement.
(c) Transaction Documents. The Administrative Agent shall have
received certified copies of the Transaction Documents then in effect,
in form and substance satisfactory to the Lenders.
(d) 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
(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.
(e) 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.
(f) Opinion of Counsel to the Borrower. Gibson, Dunn &
Crutcher 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.
(g) Opinion of Local Counsel to the Borrower. The Lenders
shall have received from Jones, Walker, Waechter, Poitevent, Carrere
and Denegre, special Louisiana counsel for the Borrower, such opinion
or opinions, addressed to the Lenders, 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.
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(h) Officer's Certificate. The Borrower shall have furnished
to the Lenders a certificate, dated the Effective Date, of an officer
of the Borrower stating that (A) such officer has carefully examined
the Offering Circular, (B) in such officer's 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
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.
(i) Closing of the Bond Offering. The $800,000,000 Bond
offering by the Borrower shall have been completed.
(j) Closing of the Acquisition of the Cajun Facilities. The
acquisition of the Cajun Facilities by the Initial Guarantor shall have
been completed.
(k) 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
Agent 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 as of the
closing of the Bond offering, confirming its report and the conclusions
therein as of such date.
(l) 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 as of the closing of the Bond
offering, confirming its report and the conclusions therein as of such
date.
(m) 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 as of the
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closing of the Bond offering, confirming its report and the conclusions
therein as of such date.
(n) Federal Energy Regulatory Commission Approval. All
Governmental Approvals under Section 204 of the Federal Power Act as
may be necessary for the Borrower to incur and perform its obligations
under this Agreement shall have been obtained and remain in effect and
all applicable waiting periods shall 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.
(o) 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 Administrative Agent shall have received all fees
and other amounts due and payable hereunder, 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:
(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 by reference to circumstances then pertaining.
(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.
(d) Borrowing Request. The Administrative Agent shall have
received a Borrowing Request in accordance with Section 2.03.
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.
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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 Agent:
(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 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, 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;
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(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
6.17 (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 Securities and
Exchange Commission, 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 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 (i) change its status
as a limited liability company with the consent of the Required Lenders, such
consent not to be unreasonably withheld, and (ii) the Borrower or any Guarantor
may, on not less than 30 days' written notice to the Administrative Agent, amend
its certificate of formation or other organizational document to effect a name
change.
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.
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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 6.15) 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 could 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 independent power
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 and Maintenance Expenses incurred by each such Guarantor on or before
the date such Operating and Maintenance Expenses become due and payable and (ii)
cause each of the Guarantors to comply with Section 7.07.
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
could not reasonably be expected to 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 Agent or its 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.
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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 a Guarantor Security
Agreement;
(ii) to take such action (including delivering such membership
interests or other ownership interests and executing and delivering
such Uniform Commercial Code financing statements) as shall be
necessary to create and perfect valid and enforceable first priority
Liens on substantially all of the personal property of such Guarantor
on which a Lien is required to be created pursuant to the Guarantor
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 remains 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 Borrower Security Agreement the
certificates evidencing such membership interests, accompanied by undated stock
powers executed in blank and to take such other action as the Administrative
Agent or the Lenders shall request to perfect the security interest created
therein pursuant to the Borrower 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-
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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 any Guarantor 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
$15,000,000 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
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
Specifically Held for Resale or any sales or dispositions of assets permitted
under Section 6.12 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. 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, 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.
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
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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).
(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 other district energy assets and (ii) in the
case of the Guarantors (including any Additional Guarantors), the ownership and
operation of their respective 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) if 50% or more of the
Borrower's projected revenues for the next four fiscal quarters will be derived
from power supply agreements which have a remaining term of at least two years,
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 1.40 to 1.0 and the
Projected Debt Service Coverage Ratio for the next succeeding four fiscal
quarters (taken as a whole) is not less than 1.40 to 1.0; (d) if 10% or more but
less than 50% of the Borrower's projected revenues for the next four fiscal
quarters will be derived from power supply agreements which have a remaining
term of at least two years, 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 1.55 to 1.0 and the Projected Debt Service Coverage Ratio for the next
succeeding four fiscal quarters (taken as a whole) is not less than 1.55 to 1.0;
and (e) if less than 10% of the Borrower's projected revenues for the next four
fiscal quarters will be derived from power supply agreements which have a
remaining term of at least two years, 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 1.70 to 1.0 and the Projected Debt Service Coverage
Ratio for the next succeeding four fiscal quarters (taken as a whole) is not
less than 1.70 to 1.0. 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.
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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 otherwise permitted by
the terms and conditions of this Agreement, and (d) transactions that are
contemplated by any Transaction Document or any extensions, 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, and (iv) transactions pursuant to agreements in effect on the date
hereof.
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 in Unrestricted Subsidiaries with funds that
(i) could otherwise be distributed in accordance with this Agreement or
(ii) otherwise with the proceeds of additional equity contributions to
the Borrower made explicitly for this purpose;
(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;
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(g) Investments in additional Bonds issued in the amounts and
for the purposes permitted by, and upon satisfaction of the conditions
set forth in, Section 2.3 of the Indenture;
(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;
(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 paid as dividends, distributed or otherwise paid out.
SECTION 6.18. EWG Status. The Borrower will take, or cause to
be taken, all action required to maintain the status of each Guarantor that owns
or operates facilities used for the generation, transmission or distribution of
electric energy for sale 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 (i) to finance a one-time distribution to NRG
Energy in repayment of the Working Capital Equity (as defined in the Indenture),
(ii) for ordinary course working capital on the Effective Date for the Borrower,
and (iii) 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.
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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 company and all things reasonably necessary to preserve, renew
and keep in full force and effect such Guarantor's 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 any Guarantor may (i) change its status as a limited
liability company with the consent of the Required Lenders, such consent not to
be unreasonably withheld, and (ii) on not less than 30 days' written notice to
the Administrative Agent, amend its certificate of formation or other
organizational document to effect a name change.
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, could 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 could 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 independent power industry practice. 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 independent power
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).
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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.
(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),
(iii) or (iv) 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.
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 could not reasonably be expected
to result in a Material Adverse Effect.
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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
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 in Unrestricted Subsidiaries with funds that
(i) could otherwise be distributed in accordance with this Agreement or
(ii) otherwise with the proceeds of additional equity contributions to
such Guarantor made explicitly for this purpose;
(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 additional Bonds issued in the amounts and
for the purposes permitted by, and upon satisfaction of the conditions
set forth in, Section 2.3 of the Indenture;
(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;
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(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;
(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 paid as dividends, distributed or otherwise paid out.
SECTION 7.10. Operation of Facilities. Each Guarantor agrees
that it will operate its respective Facilities, or cause its respective
Facilities to be operated, in accordance with prudent independent power industry
practice.
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 $15,000,000 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
Specifically Held for Resale or any sales or dispositions of assets permitted
under Section 6.14 or 7.11; 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. Without the
prior consent of the Required Lenders, no Guarantor will agree or consent to any
termination, modification, supplement, replacement or waiver of any Transaction
Document, 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.
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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 or
(B) notice from the Administrative Agent 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 or
(B) notice from the Administrative Agent or the Lenders of such
default;
(e) default or defaults under one or more agreements,
instruments, mortgages, 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
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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 or NRG Operating, in
each case to the extent such Person is a party to any Transaction
Document, and remains uncured for the grace periods provided in such
clauses;
(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 final and non-appealable judgments for the
payment of money in an aggregate amount in excess of $25,000,000,
exclusive of amounts covered by insurance or indemnity, shall be
rendered against the Borrower or any of the Guarantors or 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 of 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)
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in favor of the Administrative Agent, 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; or
(o) default by the Borrower, any Guarantor or any counterparty
under or invalidity of any Power Sales Agreement, the Operation and
Management Services Agreement or either 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; or
(p) failure to renew or replace the Operation and Management
Services 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 NRG Operating, 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 NRG Operating, 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 Agent may, and at the request of the Required
Lenders shall, by notice to the 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
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presentment, demand, protest or other notice of any kind, all of which are
hereby waived by each Obligor.
ARTICLE IX. THE ADMINISTRATIVE AGENT.
SECTION 9.01 Appointment. Each of the Lenders hereby
irrevocably appoints BTM as its agent hereunder and under the other Financing
Documents and authorizes BTM to take such actions on its behalf and to exercise
such powers as are delegated to the Administrative Agent 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).
SECTION 9.02 Administrative Agent's Rights as a Lender. The
Person serving as the Administrative Agent 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 Agent, 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 Agent hereunder.
SECTION 9.03 Duties; Limitation of Liability. The
Administrative Agent 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 Agent shall not
be subject to any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing, (b) the Administrative Agent 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 Agent is 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 Agent
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 Agent
or any of its Affiliates in any capacity. The Administrative Agent 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 Agent shall be deemed not to have
knowledge of any Default unless and until written notice thereof is given to the
Administrative Agent by the Borrower or a Lender, and the Administrative Agent
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 Agent.
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SECTION 9.04 Reliance by Administrative Agent. The
Administrative Agent 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 Agent
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 Agent 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.
SECTION 9.05 Sub-Agents. The Administrative Agent 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 Agent. The Administrative
Agent 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 Agent 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 Agent.
SECTION 9.06 Resignation. The 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 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.
SECTION 9.07 Independent Credit Decisions. 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,
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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.
SECTION 9.08 Consent by Administrative Agent. 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) 373-8804; Telephone No.
(612) 373-5359);
(b) if to the Administrative Agent, to The Bank of
Tokyo-Mitsubishi, Ltd., New York Branch, Project Finance and Emerging
Markets Group, 1251 Avenue of the Americas, 10th Floor, New York, New
York 10020-1104, Attention: Messrs. Makoto Kobayashi and Nicholas
Griffiths, Phone: (212) 782-4053, Fax: (212) 782-6442, with a copy to
BTM Information Services, Inc., c/o The Bank of Tokyo-Mitsubishi, Ltd.,
NY Branch, 1251 Avenue of the Americas, 12th Floor, New York, New York
10020-1104, Attention: Mr. Rolando Uy, Loan Operations Dept., Phone:
(201) 413-8570, Fax: (201) 521-2304 or (201) 521-2305.; or
(c) if to a Lender, to its address set forth on Schedule I
hereto.
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
Agent). 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 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
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further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Administrative 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 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 Agent 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 the 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 the 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 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 Administrative Agent hereunder without the
prior written consent of the Administrative Agent and (y) 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 the subject of 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 Agent and its
Affiliates, including any reasonable fees,
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charges and disbursements of counsel for the Administrative Agent in connection
with any 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
Agent or any Lender, including the reasonable fees, charges and disbursements of
any counsel for the Administrative Agent 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 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
execution or delivery of this Agreement or any agreement or instrument
contemplated hereby, (ii) the performance by the parties hereto of their
respective obligations hereunder or the consummation of the Transactions or any
other transactions contemplated hereby, including but not limited to any Default
or Event of Default, (iii) any Loan or the use of the proceeds therefrom, (iv)
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 (v) 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 non-appealable
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 Agent
under paragraph (a) or (b) of this Section, each Lender severally agrees to pay
to the Administrative Agent 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 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,
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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 the Administrative Agent and the Lenders) any legal or equitable
right, remedy or claim under or by reason 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 the 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 Agent) shall
not be less than $5,000,000 unless each of the Borrower and the 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 Agent an Assignment and Acceptance,
together with a processing and recordation fee of $3,500, and (v) the assignee,
if it shall not already be a Lender, shall deliver to the Administrative Agent
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
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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 Administrative Agent. The
Administrative 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 Agent, the Collateral 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 Collateral Agent and any Lender, at 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 Agent
shall accept such Assignment and Acceptance and 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 Agent, 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 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
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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 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 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 Agent and the Lenders constitute the entire contract between and
among the parties relating to the subject matter hereof and supersede any and
all previous agreements and
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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 Agent and when the Administrative Agent
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 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 laws of the State of New York without
reference to its principles of conflicts of laws (other than Section 5-1401 of
the New York General Obligations Law).
(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 Agent 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.
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(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.
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. The Administrative Agent and each of 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
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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 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 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 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, the Administrative 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).
[REMAINDER OF PAGE INTENTIONALLY BLANK]
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EXECUTION
IN WITNESS WHEREOF, the parties hereto have caused this
Working Capital Agreement to be duly executed by their respective authorized
officers as of the day and year first above written.
NRG SOUTH CENTRAL GENERATING LLC
By: /s/ Craig A. Mataczynski
__________________________________
Name: Craig A. Mataczynski
Title: President
LOUISIANA GENERATING LLC
By: /s/ Craig A. Mataczynski
__________________________________
Name: Craig A. Mataczynski
Title: Vice President
THE BANK OF TOKYO-MITSUBISHI, LTD.,
NEW YORK BRANCH, individually and
as Administrative Agent
By: /s/ [illegible]
___________________________________
Name: [illegible]
Title: [illegible]
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Schedule I to Loan Agreement
SCHEDULE I
Commitments
NAME AND ADDRESS OF LENDER AMOUNT ($)
- -------------------------------------------------------- ----------------------
THE BANK OF TOKYO-MITSUBISHI, LTD., 40,000,000
NEW YORK BRANCH
1251 Avenue of the Americas
New York, New York 10020-1104
Addresses for Notices:
Credit Contacts (Financial Information):
- ---------------------------------------
The Bank of Tokyo-Mitsubishi, Ltd., New York Branch
Project Finance and Emerging Markets Group
1251 Avenue of the Americas, 10th Floor
New York, New York 10020-1104
Attention: Mr. Makoto Kobayashi
Phone: (212) 782-4053
Fax: (212) 782-6442
Copy to: Mr. Nicholas Griffiths
Phone: (212) 782-5861
Fax: (212) 782-6442
Operations Contacts (Borrowings, Paydowns, Interest, Fees, etc.):
- ----------------------------------------------------------------
BTM Information Services, Inc.
c/o The Bank of Tokyo-Mitsubishi, Ltd., New York Branch
1251 Avenue of the Americas, 12th Floor
New York, New York 10020-1104
Attention: Mr. Rolando Uy, Loan Operations Dept.
Phone: (201) 413-8570
Fax: (201) 521-2304 or (201) 521-2305
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Schedule II to Loan Agreement
SCHEDULE II
[Encumbrances]
78
Schedule III to Loan Agreement
SCHEDULE III
[Restrictive Agreements]
79
Schedule IV to Loan Agreement
SCHEDULE IV
[Assets Specifically Held for Resale]
80
Schedule V to Loan Agreement
SCHEDULE V
[Fees and Rates]
- ------------------------------------------------------------------------------
APPLICABLE RATE FOR APPLICABLE RATE
RATING(*) COMMITMENT FEE EURODOLLAR LOANS FOR ABR LOANS
S&P/MOODY'S
- ------------------------------------------------------------------------------
>BBB-/Baa3 0.125 % 0.750 % 0.000 %
BBB-/Baa3 0.150 % 0.900 % 0.000 %
<BBB-/Baa3 0.350 % 1.400 % 0.400 %
- ------------------------------------------------------------------------------
* In the event of a split rating, the lower rating level shall apply.
81
EXHIBIT A
Assignment and Acceptance
[Form of Assignment and Acceptance]
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Working Capital Agreement dated as of April
30, 2000 (as amended and in effect on the date hereof, the "Working Capital
Agreement"), among NRG South Central Generating LLC, the Guarantors party
thereto, the Lenders named therein, and The Bank of Tokyo-Mitsubishi, Ltd., New
York Branch, as Administrative Agent for the Lenders. Terms defined in the
Working Capital Agreement are used herein with the same meanings.
The Assignor named below hereby sells and assigns, without recourse, to
the Assignee named below, and the Assignee hereby purchases and assumes, without
recourse, from the Assignor, effective as of the Assignment Date set forth
below, the interests set forth below (the "Assigned Interest") in the Assignor's
rights and obligations under the Working Capital Agreement, including the
interests set forth below in the Commitment of the Assignor on the Assignment
Date and Loans owing to the Assignor which are outstanding on the Assignment
Date, together with unpaid interest accrued on the assigned Loans to the
Assignment Date, and the amount, if any, set forth below of the fees accrued to
the Assignment Date for the account of the Assignor. The Assignee hereby
acknowledges receipt of a copy of the Working Capital Agreement. From and after
the Assignment Date (i) the Assignee shall be a party to and be bound by the
provisions of the Working Capital Agreement and, to the extent of the interests
assigned by this Assignment and Acceptance, have the rights and obligations of a
Lender thereunder and (ii) the Assignor shall, to the extent of the interests
assigned by this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Working Capital Agreement.
This Assignment and Acceptance is being delivered to the Administrative
Agent together with (i) if the Assignee is a Foreign Lender, any documentation
required to be delivered by the Assignee pursuant to Section 2.14(e) of the
Working Capital Agreement, duly completed and executed by the Assignee, and (ii)
if the Assignee is not already a Lender under the Working Capital Agreement, an
Administrative Questionnaire in the form supplied by the Administrative Agent,
duly completed by the Assignee. The [Assignee/Assignor] shall pay the fee
payable to the Administrative Agent pursuant to Section 10.04(b) of the Working
Capital Agreement.
This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of New York without reference to its
principles of conflicts of laws (other than Section 5-1401 of the New York
General Obligations Law).
82
Date of Assignment:
Legal Name of Assignor:
Legal Name of Assignee:
Assignee's Address for Notices:
Effective Date of Assignment: [ ] ("Assignment Date").(1)
----------
Percentage Assigned of
Commitments/Loan (set forth, to
at least 8 decimals, as a
percentage of the Loan and the
aggregate Commitments
Principal Amount Assigned of all Lenders thereunder)
------------------------- -------------------------
Commitments:
- -----------
Loans:
- -----
Fees:
- ----
The terms set forth above and below are hereby agreed to:
- ----------------------
(1) Must be at least five Business Days after execution hereof by all required
parties.
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[NAME OF ASSIGNOR],
as Assignor
By:____________________________________
Name:
Title:
[NAME OF ASSIGNEE],
as Assignee
By:____________________________________
Name:
Title:
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The undersigned hereby consent to the within assignment:(2)
NRG SOUTH CENTRAL GENERATING LLC
By:_____________________________________
Name:
Title:
THE BANK OF TOKYO-MITSUBISHI, LTD.,
NEW YORK BRANCH, as Administrative Agent
By:_____________________________________
Name:
Title:
(2) Consents to be included to the extent required by Section 10.04(b) of the
Working Capital Agreement.
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EXHIBIT B
[Form of Subordination Provisions]
Section 1. NRG South Central Generating LLC, a limited liability
company organized under the laws of Delaware (the "Issuer"), hereby covenants
and agrees, and [NAME OF SUBORDINATED LENDER ] (the "Subordinated Lender"),
likewise agrees, that, to the extent and in the manner set forth in this
Agreement, [describe subordinated indebtedness] (the "Subordinated
Indebtedness"), and the payment from whatever source of the principal of, and
interest and premium (if any) on, the Subordinated Indebtedness, are hereby
expressly made subordinate and subject in right of payment to the prior payment
in full in cash of all Senior Indebtedness (as hereinafter defined). All
capitalized terms used herein and not otherwise defined herein shall have the
meanings ascribed thereto, whether directly or by reference to another agreement
or document, in the Indenture dated as of March 30, 2000 (as amended,
supplemented or modified and in effect from time to time, the "Indenture") among
the Issuer, the Subsidiary Guarantor and The Chase Manhattan Bank, as trustee
(in such capacity, together with its successors and assigns, the "Bond Trustee")
for the Holders.
For purposes hereof, "Senior Indebtedness" shall mean all indebtedness,
liabilities and other obligations of the Issuer (including, but not limited to,
all such obligations in respect of principal, premiums, interest, fees,
reimbursement obligations, penalties, indemnities, legal expenses, costs and
other expenses, whether due after acceleration or otherwise) to the Secured
Parties (of whatsoever nature and howsoever evidenced) under or pursuant to the
Finance Documents, in each case, direct or indirect, primary or secondary, fixed
or contingent, now or hereafter arising out of or relating to any such agreement
or document. The term "Senior Indebtedness" shall include any interest accruing
after the date of any filing by the Issuer of any petition in bankruptcy or the
commencing of any bankruptcy, insolvency or similar proceedings with respect to
the Issuer, whether or not such interest is allowable as a claim in any such
proceeding.
Section 2. Each of the Secured Parties and the Subordinated Lender
further agree that:
(a) (i) Unless and until the Senior Indebtedness
shall have been paid or otherwise satisfied in full, the Subordinated
Lender shall not ask, demand, sue for, take or receive from the Issuer,
directly or indirectly, in cash or other property or by set-off or in
any other manner (including, without limitation, from or by way of the
Collateral or any guaranty of payment or performance), payment of all
or any of the Subordinated Indebtedness, except as permitted under the
Indenture and shall be paid solely from cash available for application
to Restricted Payments. For the purposes of these provisions, the
Senior Indebtedness shall not be deemed to have been paid or satisfied
in full until the Senior Indebtedness shall have been indefeasibly so
paid in cash to the Secured Parties (after the passage of any relevant
preference periods).
86
(ii) Upon any distribution of all or any of the
assets of the Issuer to creditors of the Issuer upon the dissolution,
winding up, liquidation, arrangement, reorganization or composition of
the Issuer, whether in any bankruptcy, insolvency, arrangement,
reorganization, receivership or similar proceedings or upon an
assignment for the benefit of creditors or any other marshalling of the
assets and liabilities of the Issuer or otherwise, any payment or
distribution of any kind (whether in cash, property or securities)
which otherwise would be payable or deliverable upon or with respect to
the Subordinated Indebtedness but for the provisions of this Agreement,
including, without limitation, any such payment or distribution that
may be payable or deliverable by reason of the payment of any other
indebtedness of the Issuer being subordinated to the payment of the
Subordinated Indebtedness shall be paid or delivered directly to the
Collateral Agent for application (in the case of cash) to or as
Collateral (in the case of non-cash property or securities) for the
payment or prepayment of the Senior Indebtedness until the Senior
Indebtedness has been paid or otherwise satisfied in full in cash.
(iii) Each of the Secured Parties may demand specific
performance of these terms of subordination, whether or not the Issuer
shall have complied with any of the provisions hereof applicable to
them at any time when the Subordinated Lender shall have failed to
comply with any of such provisions applicable to it. The Subordinated
Lender hereby irrevocably waives any defense based on the adequacy of a
remedy at law, which might be asserted as a bar to such remedy of
specific performance.
(iv) So long as any of the Senior Indebtedness shall
remain unpaid or otherwise unsatisfied, the Subordinated Lender shall
not commence or join with any creditor other than the Collateral Agent
in commencing any proceeding referred to in subsection (ii) above for
the payment of any amounts which otherwise would be payable or
deliverable upon or with respect to the Subordinated Indebtedness.
(v) Subject to the indefeasible payment or
satisfaction in full in cash of all of the Senior Indebtedness, the
Subordinated Lender shall be subrogated to the rights of the Secured
Parties to receive payments or distributions of assets of the Issuer
made on the Senior Indebtedness until the Subordinated Indebtedness has
been satisfied in full.
(vi) In the event that, notwithstanding the foregoing
provisions of this Section 2, the Subordinated Lender shall have
received, before all Senior Indebtedness is paid in full in cash or
payment thereof is otherwise provided for, any such payment or
distribution of assets of the Issuer of any kind or character, whether
in cash, property or securities, including any such payment or
distribution arising out of the exercise by the Subordinated Lender of
a right of set-off or counterclaim and any such payment or distribution
received by reason of any other indebtedness of the Issuer being
subordinated to the Subordinated Indebtedness, then, and in such event,
such payment or distribution shall be held in trust for the benefit of
the Secured Parties, and shall be immediately paid over to the
Collateral Agent, to the extent necessary to make payment in full in
cash of all Senior Indebtedness remaining unpaid, after giving effect
to any concurrent payment or distribution to the Secured Parties.
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The foregoing provisions regarding subordination are for the benefit of
the Secured Parties and shall be enforceable by them directly against the
Subordinated Lender, and no Secured Party shall be prejudiced in its right to
enforce subordination of any of the Subordinated Indebtedness by any act or
failure to act by the Issuer or anyone in custody of its assets or property.
Notwithstanding anything to the contrary contained in the foregoing provisions,
the Subordinated Lender may receive and retain payments in respect of the
Subordinated Indebtedness from the Issuer to the extent that such payments are
permitted by the Indenture.
(b) So long as any Senior Indebtedness remains outstanding,
the following provisions shall apply:
(i) If an Event of Default shall have occurred and be
continuing, the Collateral Agent, on behalf of the Secured Parties,
shall be permitted to take any and all actions to exercise any and all
rights, remedies and options which it may have under the other Security
Documents.
(ii) The Subordinated Lender shall not, without the
prior written consent of the Secured Parties, (x) exercise any rights
or enforce any remedies or assert any claim with respect to the
Collateral, (y) seek to foreclose any Lien or sell the Collateral, or
(z) take any action, directly or indirectly, or institute any
proceedings, directly or indirectly, with respect to any of the
foregoing.
(iii) The Subordinated Lender hereby waives: (x)
notice of the existence, creation or non-payment of all or any of the
Senior Indebtedness and (y) to the fullest extent permitted by law, any
right it may have to require the Collateral Agent to marshal assets.
(c) The Secured Parties may, at any time and from time to
time, without any consent of or notice to the Subordinated Lender and without
impairing or releasing the obligations of the Subordinated Lender: (I) amend,
modify, extend, renew, waive or consent to in any manner, any provision of any
agreement under which any of the Senior Indebtedness is outstanding in
accordance with the terms thereof; (ii) sell, exchange, release, not perfect and
otherwise deal with any property at any time pledged, assigned or mortgaged to
secure the Senior Indebtedness in accordance with the Security Documents; (iii)
release anyone liable in any manner under or in respect of the Senior
Indebtedness; (iv) exercise or refrain from exercising any rights against the
Issuer and others; and (v) apply any sums from time to time received to payment
or satisfaction of the Senior Indebtedness.
(d) After the payment in full of all amounts due in respect of
the Senior Indebtedness, the holder or holders of the Subordinated Indebtedness
shall be subrogated to the rights of the holders of the Senior Indebtedness to
receive payments or distributions of cash, property or securities of the Issuer
applicable to the Senior Indebtedness until the principal of, premium, if any,
interest on and all other amounts due or to become due with respect to the
Subordinated Indebtedness shall be paid in full; and, for the purposes of such
subrogation, no payments or distributions to the holders of the Senior
Indebtedness of any cash, property or securities to which the holder or holders
of the Subordinated Indebtedness would be entitled but
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for the provisions hereof, and no payment over pursuant to these provisions to
the holders of the Senior Indebtedness by any holder of the Subordinated
Indebtedness shall, as among the Issuer, its creditors other than holders of the
Senior Indebtedness and the holder or holders of the Subordinated Indebtedness,
be deemed to be a payment by the Issuer to or on account of the Senior
Indebtedness. No payment or distributions to the holders of the Senior
Indebtedness which such holder or holders of the Subordinated Indebtedness shall
be entitled to receive pursuant to such subrogation shall, as among the Issuer,
its creditors other than holders of the Senior Indebtedness and the holder or
holders of the Subordinated Indebtedness be deemed to be a payment by the Issuer
or on account of the Subordinated Indebtedness.
Nothing contained in this instrument is intended to or shall impair as
among the Issuer, its creditors other than the holders of the Senior
Indebtedness, and the holders of the Subordinated Indebtedness, the obligation
of the Issuer, which is absolute and unconditional, to pay to the holders of the
Subordinated Indebtedness as and when the same shall become due and payable in
accordance with its terms, or to affect the relative rights of the holders of
the Subordinated Indebtedness and creditors of the Issuer other than the holders
of the Senior Indebtedness.
Section 3. The Subordinated Lender agrees not to take any action in
respect of or to enforce any right of subrogation arising as a result of the
Subordinated Lender paying over amounts to the holders of the Senior
Indebtedness as provided herein, prior to payment in full in cash of the Senior
Indebtedness.
Section 4. The Subordinated Lender agrees that, if it shall fail to
file claims or proofs of claim with respect to the Subordinated Indebtedness at
least thirty (30) days prior to the expiration of the period in which such
claims or proofs of claim shall be required to be filed, the holders of the
Senior Indebtedness are authorized to file such claims or proofs of claim on
behalf of the Subordinated Lender as its attorney-in-fact.
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