FIRST AMENDMENT TO LOAN AGREEMENT
This FIRST AMENDMENT TO LOAN AGREEMENT (this "Amendment"), made and
entered into as of November 30, 1998, is by and between Cogeneration
Corporation of America, formerly known as NRG Generating (U.S.) Inc., a
Delaware corporation ("CogenAmerica"), and CogenAmerica Funding Inc.,
formerly known as NRGG Funding Inc., a Delaware corporation (each a
"Borrower" and collectively, the "Borrowers"), and NRG Energy, Inc., a
Delaware corporation (the "Lender").
RECITALS
1. The Lender and the Borrowers entered into a Supplemental Loan
Agreement dated as of December 10, 1997 (the "Loan Agreement"); and
2. The Borrowers desire to amend certain provisions of the Loan
Agreement, and the Lender has agreed to make such amendments, subject to the
terms and conditions set forth in this Amendment.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto hereby covenant
and agree to be bound as follows:
SECTION 1. CAPITALIZED TERMS. Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to them in the Loan
Agreement, unless the context shall otherwise require. For purposes of the
Loan Agreement, CogenAmerica shall continue to be referred to as "NRGG" and
CogenAmerica Funding Inc. shall continue to be referred to as "Funding".
SECTION 2. AMENDMENTS. The Loan Agreement is hereby amended as follows:
2.1 DEFINITIONS
(a) The definitions of "Base Rate", "Funding Date," "Notes,"
"NRG Equity Guaranty" and "NRGG Equity Guaranty" contained in
Section 1.01 of the Loan Agreement are amended to read in their
entireties as follows:
"Base Rate" means (a) a rate per annum equal to the Prime
Rate for that date PLUS one and one-half percent (1.5%) PLUS
two percent (2%) during the period commencing on October 30,
1998 until such time as the Borrowers have provided the Lender
with evidence, reasonably satisfactory to the Lender, that (i)
the "Possible Event of Default" (as defined in the MeesPierson
Waiver Letter) has been absolutely and irrevocably waived by
the lenders party to the MeesPierson Credit Agreement or has
been cured by NRGG, (ii) no "Event of Default" as defined in
the MeesPierson Credit Agreement (nor any event or
circumstance which with the giving of notice or the passage of
time, or both, would constitute an "Event of Default") has
occurred and is then continuing, whether or not any temporary
or contingent waiver may be in effect with respect to such
"Event of Default," and (iii) the "Margin" (as defined under
the MeesPierson Credit Agreement) has been reduced by the
lenders party to the MeesPierson Credit Agreement to the rate
in effect immediately prior to October 1, 1998 and (b) for any
date not falling within the period described in clause (a), a
rate per annum equal to the Prime Rate for that date PLUS one
and one-half percent (1.5%).
"Funding Date" shall mean any date upon which the Lender
makes a Loan to the Borrowers pursuant to the terms of this
Agreement.
"Note" means the joint and several Note of the Borrowers
substantially in the form attached hereto as Exhibit A.
"NRC Equity Guaranty" shall have the meaning assigned
thereto in Section 2.03.
"NRGG Equity Guaranty" shall have the meaning assigned
thereto in Section 2.02.
(b) Section 1.01 of the Loan Agreement is further amended by
adding thereto the following definitions of "Amount Advanced,"
"Initial Funding Date," "MeesPierson Credit Agreement,"
"MeesPierson Waiver Letter," "NRG Morris Inc." and "Prime Rate" in
correct alphabetical order:
"Amount Advanced" shall mean the aggregate amount of all
Loan advances made by the Lender under this Loan Agreement,
and shall not be reduced by any principal payment made by the
Borrowers to the Lender.
"Initial Funding Date" shall mean October 30, 1998.
"MeesPierson Credit Agreement" shall mean that certain
Credit Agreement dated December 17,1997 entered into by and
among NRGG and MeesPierson Capital Corp. and the other lenders
party thereto.
"MeesPierson Waiver Letter" shall mean that certain
waiver letter between NRGG and MeesPierson Capital Corp. dated
as of August 14,1998, under the MeesPierson Credit Agreement.
"NRG Morris Inc." shall mean CogenAmerica Morris Inc., formerly known
as NRG Morris Inc., a Delaware corporation.
"Prime Rate" shall mean at the time any determination
thereof is to be made, the fluctuating interest rate per annum
announced from time to time by The Chase Manhattan Bank, New
York, New York, as its "Prime Rate" (or, if otherwise
denominated, such bank's reference rate for interest rate
calculations on general commercial loans), which rate is not
necessarily the lowest or best rate which such bank may at any
time and
from time to time charge any of its customers.
2.2 LOAN. Section 2.01 of the Loan Agreement is amended to read
in its entirety as follows:
Section 2.01 LOAN. Subject to the terms and conditions hereof,
the Lender agrees to make one or more loans to the Borrowers, each on a
Funding Date prior to March 31, 1999, in an aggregate principal amount
with respect to all such loans not to exceed $22,000,000 (individually
or collectively, as the context may require, the "Loan"). Amounts paid
on the Loan may not be reborrowed.
2.3 MATURITY. Section 2.04 of the Loan Agreement is amended to
read in its entirety as follows:
Section 2.04 MATURITY. The Loan shall mature in its entirety on
December 31, 2004.
2.4 AMORTIZATION Article 2 of the Loan Agreement is amended to
add new Section 2.05(e) as follows:
(e) If on any payment date set forth on the Amortization
Schedule the Amount Advanced is less than $22,000,000, then the
principal payment date shall be reduced to the amount equal to (i)
the principal payment set forth on the Amortization Schedule
multiplied by (ii) the ratio of (A) the Amount Advanced to (B)
$22,000,000.
2.5 CONDITIONS PRECEDENT. Article 3 of the Loan Agreement is
amended by adding new Section 3.02 as follows:
SECTION 3.02. CONDITIONS TO ADDITIONAL LOANS AFTER THE
INITIAL FUNDING DATE. The obligation of the Lender on any
Funding Date after the Initial Funding Date to make any
additional Loan is subject to the satisfaction, or waiver by
the Lender, immediately prior to or concurrent with the making
of such Loan (or at such other time specified below), of the
following conditions:
(a) RESOLUTIONS; NOTICE OF BORROWING. The Lender
shall have received from the Borrowers a copy of the
resolutions of the Board of Directors of each Borrower
authorizing the requested borrowing, certified as true
and accurate by the Secretary or Assistant Secretary of
each Borrower, and, at least three Business Days prior to
the Funding Date, the signed notice of borrowing
specified in Section 2.07, in form and substance
satisfactory to the Lender. The notice of borrowing
shall include (i) an acknowledgment by the Borrowers of
the outstanding amounts of principal of and accrued
interest on the Note and (ii) a certification from each
Borrower that all conditions precedent to funding have
been satisfied.
(b) OPINION OF COUNSEL. The Lender shall have
received an opinion of counsel to the Borrowers and to
NRG Morris Inc. in form and substance satisfactory to the
Lender.
(c) REPRESENTATIONS TRUE; NO DEFAULT. Each
representation and warranty of the Borrowers hereunder
and under the Pledge Agreement and the other Credit
Documents shall be accurate and complete in all material
respects as of each Funding Date and no Default or Event
of Default shall have occurred hereunder.
(d) FEES AND EXPENSES. The Borrowers shall have
paid to the Lender the fees and expenses set forth in
Section 9.04 and all reasonable costs and expenses
incurred by the Lender in connection with the making of
any Loan on any Funding Date, including the reasonable
fees and disbursements of counsel to the Lender.
2.6 ARTICLE 6.
(a) The opening paragraph of Article 6 of the Loan Agreement is
amended to read in its entirety as follows:
The Borrowers hereby covenant and undertake with the Lender
that, from the date hereof and so long as any principal, interest
or other moneys are owing in respect of this Agreement, under the
Note or under any of the Security Documents or so long as the fall
amount of the Loan has not been drawn pursuant to Section 2.01:
(b) Article 6 of the Loan Agreement is further amended to add new
Section 6.01(s) as follows:
(s) Promptly upon obtaining knowledge thereof (and in any
event within five (5) days thereof), inform the Lender of the
occurrence of (i) any event which would constitute an "Event of
Default" under and as defined in the MeesPierson Credit Agreement
or of any event which, with the giving of notice or lapse of time,
or both, would constitute an "Event" of Default" thereunder, (ii)
receipt of any notice from MeesPierson Capital Corp. that (A) an
"Event of Default" has occurred under the MeesPierson Credit
Agreement, (B) an event which, with the giving of notice or lapse
of time, or both, would constitute an "Event of Default" thereunder
has occurred, or (C) any waiver or forbearance of any "Event of
Default" thereunder has expired or been terminated, (iii) receipt
by NRGG of any agreement or notice from MeesPierson Capital Corp.,
or from any other lender party to the MeesPierson Credit Agreement,
waiving any term, condition, representation or covenant applicable
to NRGG under the MeesPierson Credit Agreement or any of the other
agreements, documents or instruments executed and delivered in
connection therewith, or of the covenants described therein, or
consenting to any modification of the obligations or duties of NRGG
with respect to the same, and (iv) any change in the status or
terms of the financial
accommodations extended under the MeesPierson Credit Agreement,
including without limitation, any change with respect to or
affecting the MeesPierson Waiver Letter.
2.7 ACCELERATION. Section 7.02 of the Loan Agreement is amended to
read in its entirety as follows:
SECTION 7.02. ACCELERATION. If an Event of Default (other
than an Event of Default specified in Section 7.01(5) or (6) with
respect to a Borrower) occurs and is continuing, the Lender by
notice to a Borrower may declare the principal of and accrued
interest on the Loan to be due and payable and may terminate any
obligation of the Lender to make any Loans pursuant to Article 2 or
any Section thereof. Upon such declaration, all outstanding
principal of and accrued interest on the Loan shall be due and
payable immediately. If an Event of Default specified in Section
7.01(5) or (6) with respect to a Borrower occurs, the principal of
and interest on the Loans shall IPSO FACTO become and be
immediately due and payable without any declaration or other act on
the part of the Lender and, unless the Lender otherwise elects, any
obligation of the Lender to make any Loans pursuant to Article 2 or
any Section thereof shall terminate. The Lender by notice to a
Borrower may rescind an acceleration or any termination of
obligation to extend credit and the consequences of either such
action. No such rescission shall affect any subsequent Default or
impair any right consequent thereto.
2.8 FUNDING DATE. All references to "Funding Date" in Sections
5(i) (Insurance), 5(1) (ERISA), 6.01(p) (Maintenance of Insurance). 7.03
(Default and Remedies) and 7.04 (Other Remedies) shall be amended to
refer to "Initial Funding Date".
2.9 FEES. Sections 9.04(a) and (b) of the Loan Agreement are
amended by deleting the term "Funding Date" as it appears therein and
inserting in lieu thereof the term "Initial Funding Date".
2.10 AMENDED NOTE. Exhibit A to the Loan Agreement is hereby
amended to read as set forth on EXHIBIT A-1 attached to this Amendment
which is made a part of the Loan Agreement as Exhibit A thereto.
SECTION 3. EFFECTIVENESS OF AMENDMENTS. The amendments contained in
this Amendment shall become effective upon delivery by the Borrowers of, and
compliance by the Borrowers with, the following:
3.1 This Amendment and the promissory note in the form of EXHIBIT
A-1 hereto (the "Amended Note") each duly executed by the Borrowers.
3.2 A copy of the resolutions of the Board of Directors of each
Borrower authorizing the execution, delivery and performance of this
Amendment and the Amended Note certified as true and accurate by its
Secretary or Assistant Secretary, along with a copy of the Bylaws of
each Borrower and a certification by such Secretary or Assistant
Secretary (i) certifying that the Bylaws of such Borrower delivered
therewith are true and accurate, and (ii) identifying each officer of
such Borrower authorized to
execute this Amendment, the Amended Note and any other instrument or
agreement executed by such Borrower in connection with this Amendment
(collectively, the "Amendment Documents"), and certifying as to
specimens of such officer's signature and such officer's incumbency in
such offices as such officer holds.
3.3 Certified copies of all documents evidencing any necessary
corporate action, consent or governmental or regulatory approval (if
any) with respect to this Amendment, including without limitation, the
consent of the lenders to the MeesPierson Credit Agreement and
MeesPierson Capital Corp. as "Agent" pursuant to the terms and
conditions of that certain Subordination Agreement dated as of December
10, 1997, made by the Lender in favor of MeesPierson Capital Corp. and
the lenders party to the MeesPierson Credit Agreement and the consent of
The Chase Manhattan Bank as Collateral Agent pursuant to the terms and
conditions of that certain Subordination Agreement dated as of December
12, 1997 made by the Lender in favor of The Chase Manhattan Bank as
Collateral Agent.
3.4 An opinion of counsel to the Borrowers and to NRG Morris Inc.,
addressed to the Lender and dated the date of execution and delivery of
this Amendment, covering the matters set forth in EXHIBIT B hereto, duly
executed by said counsel.
3.5 A good standing certificate for the Borrowers from the State
of Delaware and from all other States in which the Borrowers are doing
business issued in each case as of a date satisfactory to the Lender.
3.6 A certificate of a responsible officer of each Borrower
certifying as to the matters set forth in Section 4.1 below.
3.7 The Borrowers shall have satisfied such other conditions as
specified by the Lender, including payment of all unpaid legal fees and
expenses incurred by the Lender through the date of this Amendment in
connection with the Loan Agreement and the Amendment Documents.
SECTION 4. REPRESENTATIONS, WARRANTIES, AUTHORITY, NO ADVERSE CLAIM.
4.1 REASSERTION OF REPRESENTATIONS AND WARRANTIES, NO DEFAULT.
The Borrowers hereby represent that on and as of the date hereof and
after giving effect to this Amendment (a) all of the representations and
warranties contained in the Loan Agreement are true, correct and
complete in all respects as of the date hereof as though made on and as
of such date, except for changes permitted by the terms of the Loan
Agreement, and (b) there will exist no Default or Event of Default under
the Loan Agreement as amended by this Amendment which is not subject to
a written waiver executed by the Lender or with respect to which the
Lender has not agreed in writing to forbear.
4.2 AUTHORITY, NO CONFLICT, NO CONSENT REQUIRED. Each Borrower
represents and warrants that such Borrower has the power and legal right
and authority to enter into the Amendment Documents and has duly
authorized as appropriate the execution and delivery of the Amendment
Documents and other agreements and documents executed and delivered by
such Borrower in connection herewith or therewith
by proper corporate action, and none of the Amendment Documents nor the
agreements contained herein or therein contravene or constitute a
default under any agreement, instrument or indenture to which such
Borrower is a party or a signatory or a provision of such Borrower's
Certificate of Incorporation, Bylaws or any other agreement or
requirement of law, or result in the imposition of any lien or
encumbrance on any of its property under any agreement binding on or
applicable to such Borrower or any of its property except, if any, in
favor of the Lender. Each Borrower represents and warrants that no
consent, approval or authorization of or registration or declaration
with any Person, including but not limited to any governmental
authority, is required in connection with the execution and delivery by
such Borrower of the Amendment Documents or other agreements and
documents executed and delivered by such Borrower in connection
therewith or the performance of obligations of such Borrower therein
described, except for those which such Borrower has obtained or provided
and as to which such Borrower has delivered certified copies of
documents evidencing each such action to the Lender.
4.3 NO ADVERSE CLAIM. The Borrowers warrant, acknowledge and agree
that no events have been taken place and no circumstances exist at the
date hereof which would give either Borrower a basis to assert a
defense, offset or counterclaim to any claim of the Lender with respect
to the Borrowers' obligations under the Loan Agreement as amended by
this Amendment.
4.4. MEESPIERSON CREDIT AGREEMENT. The Borrowers represent and
warrant that they have delivered to the Lender true and correct copies
of all material documents in connection with the MeesPierson Credit
Agreement and the obligations thereunder, including, without limitation,
all waiver and forbearance agreements, and that such documents and
agreements, in the respective forms delivered to the Lender, embody the
entire agreements and understandings between the parties thereto with
respect to the matters therein and remain in full force and effect
without supplement, amendment or other modification.
SECTION 5. AFFIRMATION OF LOAN AGREEMENT, FURTHER REFERENCES,
AFFIRMATION OF SECURITY INTEREST. The Lender and the Borrowers each
acknowledge and affirm that the Loan Agreement, as hereby amended, is hereby
ratified and confirmed in all respects and all terms, conditions and
provisions of the Loan Agreement, except as amended by this Amendment, shall
remain unmodified and in full force and effect. All references in any
document or instrument to the Loan Agreement are hereby amended and shall
refer to the Loan Agreement as amended by this Amendment. The Borrowers
confirm to the Lender that the Borrowers' obligations under the Loan
Agreement, as amended by this Amendment are and continue to be secured by the
security interest granted by Funding and NRG Morris Inc. in favor of the
Lender under that certain Subordinated Pledge and Security Agreement dated as
of December 10, 1997, and all of the terms, conditions, provisions,
agreements, requirements, promises, obligations, duties, covenants and
representations of the Borrowers under such documents and any and all other
documents and agreements entered into with respect to the obligations under
the Loan Agreement are incorporated herein by reference and are hereby
ratified and affirmed in all respects by the Borrowers. Funding hereby
ratifies and reaffirms all terms, conditions and provisions of the Assignment
and Assumption Agreement. NRGG hereby ratifies and reaffirms all terms,
conditions and provisions of the NRGG Equity Guaranty.
SECTION 6. MERGER AND INTEGRATION, SUPERSEDING EFFECT. This Amendment
and the Amended Note, from and after the date hereof, embodies the entire
agreement and understanding between the parties hereto and supersedes and has
merged into this Amendment all prior oral and written agreements on the same
subjects by and between the parties hereto, including without limitation,
that certain Note of the Borrowers dated October 30, 1998 in the principal
amount of $8,902,750.59 and payable to the order of the Lender and that
certain loan request made by the Borrowers by letter dated October 30, 1998,
with the effect that this Amendment, shall control with respect to the
specific subjects hereof and thereof.
SECTION 7. SEVERABILITY. Whenever possible, each provision of this
Amendment and the other Amendment Documents and any other statement,
instrument or transaction contemplated hereby or thereby or relating hereto
or thereto shall be interpreted in such manner as to be effective, valid and
enforceable under the applicable law of any jurisdiction, but, if any
provision of this Amendment, the other Amendment Documents or any other
statement, instrument or transaction contemplated hereby or thereby or
relating hereto or thereto shall be held to be prohibited, invalid or
unenforceable under the applicable law, such provision shall be ineffective
in such jurisdiction only to the extent of such prohibition, invalidity or
unenforceability, without invalidating or rendering unenforceable the
remainder of such provision or the remaining provisions of this Amendment,
the other Amendment Documents or any other statement, instrument or
transaction contemplated hereby or thereby or relating hereto or thereto in
such jurisdiction, or affecting the effectiveness, validity or enforceability
of such provision in any other jurisdiction.
SECTION 8. SUCCESSORS. The Amendment Documents shall be binding upon
the Borrowers and the Lender and their respective successors and assigns, and
shall inure to the benefit of the Borrowers and the Lender and the successors
and assigns of the Lender.
SECTION 9. LEGAL EXPENSES. The Borrowers agree to reimburse the
Lender, upon execution of this Amendment, for all reasonable out-of-pocket
expenses (including attorneys' fees and legal expenses of Dorsey & Whitney
LLP, special counsel for the Lender) incurred in connection with the Loan
Agreement, including in connection with the negotiation, preparation and
execution of the Amendment Documents and all other documents negotiated,
prepared and executed in connection with the Amendment Documents, and in
enforcing the obligations of the Borrower under the Amendment Documents, and
to pay and save the Lender harmless from all liability for, any stamp or
other taxes which may be payable with respect to the execution or delivery of
the Amendment Documents, which obligations of the Borrowers shall be joint
and several and shall survive any termination of the Loan Agreement.
SECTION 10. HEADINGS. The headings of various sections of this
Amendment have been inserted for reference only and shall not be deemed to be
a part of this Amendment,
SECTION 11. COUNTERPARTS. The Amendment Documents may be executed in
several counterparts as deemed necessary or convenient, each of which, when
so executed, shall be deemed an original provided that all such counterparts
shall be regarded as one and the same document, and either party to the
Amendment Documents may execute any such agreement by executing a counterpart
of such agreement.
SECTION 11 GOVERNING LAW. THE AMENDMENT DOCUMENTS SHALL BE
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF MINNESOTA, WITHOUT GIVING
EFFECT TO CONFLICT OF LAW PRINCIPLES THEREOF.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the date and year first above written.
BORROWER: COGENERATION CORPORATION OF
AMERICA, formerly known as NRG
Generating (U.S.) Inc.
By: /s/ Timothy P. Hunstad
--------------------------------
Title: VP & CFO
--------------------------------
BORROWER: COGENAMERICA FUNDING INC., formerly
known as NRGG Funding Inc.
By: /s/ Timothy P. Hunstad
--------------------------------
Title: VP & CFO
--------------------------------
LENDER: NRG ENERGY, INC.
By: Brian Bird
--------------------------------
Title: Treasurer
------------------------------
EXHIBIT A-1 TO
FIRST AMENDMENT
EXHIBIT A
November 30, 1998
AMENDED AND RESTATED NOTE
FOR VALUE RECEIVED, the undersigned, COGENERATION CORPORATION OF
AMERICA, formerly known as NRG Generating (U.S.) Inc., a Delaware corporation
("NRGG"), and CogenAmerica Funding Inc., formerly known as NRGG Funding Inc.,
a Delaware corporation ("Funding"), hereby jointly, severally and
unconditionally promise to pay to the order of NRG ENERGY, INC. a Delaware
corporation, or registered assigns (the "Lender"), at the office of the
Lender at 1221 Nicollet Mall, Suite 700, Minneapolis, MN 53403 or by wire
transfer in accordance with such instructions as the Lender may require, in
lawful money of the United States of America and in immediately available
funds, the principal amount of up to $22,000,000 or, if less, the aggregate
unpaid principal amount of the Loan made by the Lender pursuant to Section
2.01 of the Loan Agreement referred to below (in either case, to be paid
together with any accrued interest not required to be paid currently in
cash), which sum shall be due and payable in such amounts and on such dates
as are set forth in the Supplemental Loan Agreement, dated as of December 10,
1997 among NRGG and Funding (each a "Borrower" and collectively the
"Borrowers") and the Lender (as the same may be supplemented or amended from
time to time, the "Loan Agreement"; terms defined therein being used herein
as so defined). The undersigned further agree to pay interest at said office
or to such account, in like money, from October 30, 1998 on the unpaid
principal amount hereof from time to time outstanding at the rates and on the
dates specified in Section 2.06 of the Loan Agreement.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
diligence, presentment, demand, protest and notice of any kind whatsoever.
The nonexercise of the holder of this Note of any of its rights hereunder in
any particular instance shall not constitute a waiver thereof in that or any
subsequent instance.
This note is the Note referred to in the Loan Agreement, which Loan
Agreement, among other things, contains provisions for the acceleration of
the maturity hereof upon the happening of certain events, for optional and
mandatory prepayment of the principal hereof prior to the maturity hereof and
for the amendment or waiver of certain provisions of the Loan Agreement, all
upon the terms and conditions therein specified.
This Note amends and restates that certain Note of the Borrowers dated
October 30, 1998 in the principal amount of $8,902,750.59 and evidences
unpaid principal in such amount and an accrued and unpaid interest thereon.
This Note shall be construed in accordance with and governed by the laws
of the State of Minnesota and any applicable laws of the United States of
America.
THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS OF
THE LOAN AGREEMENT. TRANSFERS OF THIS NOTE MUST BE RECORDED IN THE REGISTER
MAINTAINED BY THE LENDER PURSUANT TO THE TERMS OF THE LOAN AGREEMENT.
THIS NOTE IS SUBJECT TO THE SUBORDINATION AGREEMENT, DATED AS OF
DECEMBER 10,1997, AMONG NRGG, THE LENDER AND MEESPIERSON CAPITAL CORP., UNDER
WHICH THIS NOTE AND NRGG'S OBLIGATIONS HEREUNDER ARE SUBORDINATED IN THE
MANNER SET FORTH THEREIN TO THE PRIOR PAYMENT OF CERTAIN OBLIGATIONS TO THE
HOLDERS OF SENIOR INDEBTEDNESS AS DEFINED THEREIN.
THIS NOTE IS FURTHER SUBJECT TO THE SUBORDINATION PROVISIONS SET FOR THE
IN THE SUBORDINATION AGREEMENT, DATED AS OF DECEMBER 10, 1997, BETWEEN THE
LENDER AND THE CHASE MANHATTAN BANK IN ITS CAPACITY AS COLLATERAL AGENT. A
COPY OF THAT SUBORDINATION AGREEMENT IS ON FILE WITH NRGG, FUNDING AND
COGENAMERICA MORRIS INC., FORMERLY KNOWN AS NRG MORRIS INC., AND IS AVAILABLE
FOR INSPECTION AT THEIR RESPECTIVE OFFICES.
COGENERATION CORPORATION OF AMERICA
-------------------------------------------
Timothy P. Hunstad
Vice President and Chief Financial Officer
COGENAMERICA FUNDING INC.
-------------------------------------------
Timothy P. Hunstad
Vice President and Chief Financial Officer
EXHIBIT B TO
FIRST AMENDMENT
MATTERS TO BE COVERED BY
OPINION OF COUNSEL
TO THE BORROWERS
The opinion of counsel to the Borrowers and to NRG Morris Inc. (the
Borrowers and NRG Morris Inc. from time to time being referred to,
collectively, as the "Loan Parties") and which is called for by Article 3 of
the Supplemental Loan Agreement, as amended by the First Amendment to Loan
Agreement dated November 30, 1998 (as amended, the "Loan Agreement") shall be
addressed to the Lender and dated the date upon which all other conditions to
effectiveness of the First Amendment to Loan Agreement are satisfied. It
shall be satisfactory in form and substance to the Lender and shall cover
the matters set forth below, subject to such assumptions, exceptions and
qualifications as may be acceptable to the Lender and counsel to the Lender.
For purposes of the opinion of counsel the term "Transaction Documents" shall
mean the Loan Agreement, the Amended and Restated Note of the Borrowers dated
November 30, 1998 in the principal amount of $22,000,000, the Pledge
Agreement (as such term and other capitalized terms used herein and not
otherwise defined herein are defined in the Loan Agreement), the Security
Documents and all agreements, instruments and documents executed and
delivered by the Borrowers or either of them in connection with the Loan
Agreement, the Equity Commitment Guaranty dated as of December 10, 1997 made
by NRGG in favor of the Lender and the Assignment and Assumption Agreement
dated as of December 10, 1997 between the Lender and Funding.
(i) Each Loan Party is a corporation duly incorporated and validly
existing and in good standing under the laws of the State of Delaware and has
and had at the time of entry into the Transaction Documents all requisite
corporate power and authority to carry on its business as now conducted, to
enter into the Transaction Documents executed by it and to perform all of its
obligations under each and all of the foregoing. Each Loan Party is duly
qualified and in good standing as a corporation in the State of Delaware and
as a foreign corporation in all of the jurisdictions in which the character
of the properties owned or leased by it or the business conducted by it makes
such qualification necessary and the failure to so qualify would permanently
preclude the Borrower from enforcing its rights with respect to any material
asset or expose the Borrower to material liability.
(ii) The execution, delivery and performance by each Loan Party of the
Transaction Documents have been duly authorized by all necessary corporate
action by such Loan Party.
(iii) The Transaction Documents constitute the legal, valid and binding
obligations of each Loan Party executing the same, enforceable against such
Loan Party in accordance with their respective terms.
(iv) The execution, delivery and performance by each Loan Party of the
Transaction Documents executed by it did not and will not (i) violate any
provision of any law, statute, rule or regulation or, to the best knowledge
of such counsel, any order, writ judgment, injunction, decree, determination
or award of any court, governmental agency or arbitrator presently in effect
having applicability to such Loan Party, (ii) violate or contravene any
provision of the
Certificate of Incorporation or bylaws of such Loan Party, or (iii) result in
a breach of or constitute a default under any indenture, loan or credit
agreement or any other agreement lease or instrument known to such counsel to
which such Loan Party is a party or by which it or any of its properties may
be bound or result in the creation of any Lien thereunder.
(v) No order, consent, approval, license, authorization or validation
of, or filing, recording or registration with, or exemption by, any
governmental or public body or authority was or is required on the part of
any Loan Party to authorize, or was or is required in connection with the
execution, delivery either performance of, or the legality, validity, binding
effect or enforceability of, the Transaction Documents, except for any
necessary filing or recordation of or with respect to any of the Security
Documents.
(vi) The best knowledge of such counsel, there are no actions, suits
or proceedings pending or threatened against or affecting any Loan Party or
any of its properties before any court or arbitrator, or any governmental
department, board, agency or other instrumentality which (i) challenge the
legality, validity or enforceability of the Transaction Documents, or (ii) if
determined adversely to a Loan Party, would have a material adverse effect on
the business, operations, property or condition (financial or otherwise) of
such Loan Party and its Subsidiaries as a consolidated enterprise or on the
ability of such Loan Party to perform its obligations under the Transaction
Documents.
(vii) The Pledge Agreement creates the lien it purports to create upon
the properties and interests specifically described therein. The descriptions
of properties and interests in the Security Documents and any related
financing statements are adequate for the purpose of such instruments and for
perfection of the liens of the Lender. The filing of the Uniform Commercial
Code financing statements executed by Funding and by NRG Morris Inc. and
filed in [describe filing office] on [state dates of filings] perfected the
Liens created under the Pledge Agreement and such Liens continue to be
perfected on the date hereof.