Exhibit 10.26.1
CREDIT AGREEMENT PROVIDING FOR
A
U.S. $30,000,000
REDUCING REVOLVING CREDIT FACILITY
TO BE MADE AVAILABLE TO
NRG GENERATING (U.S.) INC.
ARRANGED BY
MEESPIERSON CAPITAL CORP.
Dated as of December 17, 1997
INDEX
PAGE
SECTION 1 DEFINITIONS 1
1.1 Defined Terms 1
1.2 Construction 44
1.3 GAAP 44
SECTION 2 REPRESENTATIONS AND WARRANTIES 44
2(a) Due Organization and Power 44
2(b) Capitalization...... 44
2(c) Authorization and Consents.. 45
2(d) Binding Obligations.................. 45
2(e) No Violation........................... 45
2(f) Litigation 45
2(g) No Default 46
2(h) Existing Projects and Project Agreements 46
2(i) Insurance 47
2(j) Financial Information 48
2(k) Tax Returns 48
2(l) ERISA 48
2(m) Margin Regulations 48
2(n) Investment Company Act 49
2(o) Security Interests 49
2(p) Business of Project Entities 49
2(q) EWG Status: Qualifying Cogeneration
Facility Status 49
2(r) Regulation of Borrower Entities 49
2(s) Title to and Sufficiency of Assets 50
2(t) Labor Matters 50
2(u) Transactions with Affiliates 50
2(v) Environmental Matters and Claims 50
2(w) Bank Accounts 52
2(x) Survival 52
2(y) No Material Adverse Effect 52
i
SECTION 3 ADVANCES 52
3.1(a) Purposes 52
3.1(b) Making of the Advances 53
3.1(c) Maximum Number of LIBOR Rate Advances 53
3.2 Drawdown Notice 53
3.3 Effect of Drawdown Notices 53
3.4 Notation of Advances 54
SECTION 4 CONDITIONS 54
4.1 Conditions Precedent to Drawdown
of the Initial Advance 54
4.2 Further Conditions Precedent 58
4.3 Breakfunding Costs 59
4.4 Satisfaction After Drawdown 59
SECTION 5 REPAYMENT, REDUCTION AND PREPAYMENT 60
5.1 Repayment 60
5.2 Reductions of the Credit Facility 60
5.3 Prepayment; Reborrowing 60
5.4 Optional and Mandatory Conversions 60
5.5 Interest and Costs with Prepayments 61
5.6 Pro Rata Reduction of Commitments 61
SECTION 6 INTEREST AND RATE 61
6.1 Payment of Interest; Interest Rate 61
6.2 Calculation of Interest 62
6.3 Maximum Interest 62
SECTION 7 PAYMENTS 62
7.1 Place of Payments, No Set Off 62
7.2 Tax Forms 63
7.3 Tax Credits 63
ii
SECTION 8 ACCOUNTS 63
8.1 Collection Account 63
8.2 Application of Assigned Moneys 63
8.3 Assignment of Collection Account 64
SECTION 9 EVENTS OF DEFAULT 64
9.1 64
9.1(a) Non-Payment of Principal 64
9.1(b) Non-Payment of Interest or
Other Amounts 64
9.1(c) Representations 64
9.1(d) Certain Covenants 65
9.1(e) Other Covenants 65
9.1(f) Indebtedness 65
9.1(g) Stock Ownership 65
9.1(h) Failure to Maintain Status. 66
9.1(i) Bankruptcy 66
9.1(j) Termination of Operations; Sale
of Assets 66
9.1(k) Judgments 66
9.1(l) Inability to Pay Debts 66
9.1(m) Project Agreements 66
9.1(n) ERISA Debt 67
9.1(o) Invalidity or Revocation of Guarantee 67
9.1(p) Dissolution 67
9.2 Indemnification 68
9.3 Application of Moneys 68
9.4 Alleged PECO Option 69
9.5 Equipment Liens 70
SECTION 10 COVENANTS 70
10.1 70
10.1(A)(i) Performance of Credit Facility
Agreements 70
10.1(A)(ii) Notice of Default, Etc. 70
10.1(A)(iii) Obtain Consents 71
10.1(A)(iv) Financial Information 71
10.1(A)(v) Corporate Existence 72
iii
10.1(A)(vi) Books and Records 72
10.1(A)(vii) Taxes and Assessments 72
10.1(A)(viii) Inspection 72
10.1(A)(ix) Compliance with Statutes, Etc. 72
10.1(A)(x) Environmental Matters 73
10.1(A)(xi) ERISA 73
10.1(A)(xii) Consolidated Debt Service
Coverage Ratio 73
10.1(A)(xiii) Borrower Debt Service Coverage
Ratio 74
10.1(A)(xiv) Maintenance of Properties, Etc. 74
10.1(A)(xv) Revenue Collection Account;
Assignment 74
10.1(A)(xvi) Performance of Project Agreements 74
10.1(A)(xvii) Operating Logs 75
10.1(A)(xviii) Maintenance of Insurance 75
10.1(A)(xix) Use of Proceeds 75
10.1(A)(xx) Additional Documents; Filings and
Recordings 75
10.1(B)(i) Liens 76
10.1(B)(ii) Capital Expenditures 76
10.1(B)(iii) Indebtedness 76
10.1(B)(iv) Change in Business 77
10.1(B)(v) Sale or Pledge of Shares 77
10.1(B)(vi) Sale of Assets 77
10.1(B)(vii) Changes in Offices or Names 77
10.1(B)(viii) Consolidation and Merger 77
10.1(B)(ix) Limitation on Dividends 77
10.1(B)(x) Amendment, Termination, Etc. of
Project Agreements 78
10.1(B)(xi) Fiscal Year 78
10.1(B)(xii) Transactions with Affiliates 78
10.1(B)(xiii) Investments 78
iv
SECTION 11 ASSIGNMENT. 79
SECTION 12 ILLEGALITY, INCREASED COSTS,
NON-AVAILABILITY, ETC. 79
12.1 Illegality 79
12.2 Increased Costs 80
12.3 Nonavailability of Funds 81
12.4 Compensation for Losses 81
12.5 Replacement of Lender 81
SECTION 13 FEES AND EXPENSES 83
13.1 Commitment Fee 83
13.2 Administrative Fee 83
13.3 Expenses 83
SECTION 14 APPLICABLE LAW, JURISDICTION AND WAIVER 84
14.1 Applicable Law 84
14.2 Jurisdiction 84
14.3 WAIVER OF JURY TRIAL 84
SECTION 15 THE AGENT 85
15.1(a) Appointment of Agent 85
15.1(b) Appointment of Security Trustee 85
15.2 Distribution of Payments 85
15.3 Holder of Interest in Note 85
15.4 No Duty to Examine, Etc. 86
15.5 Agent as Lender 86
15.6(a) Obligations of Agent 86
15.6(b) No Duty to Investigate 86
15.7(a) Discretion of Agent 86
15.7(b) Instructions of Majority Lenders 86
15.8 Assumption re Event of Default 87
15.9 No Liability of Agent or Lenders 87
15.10 Indemnification of Agent 88
15.11 Consultation with Counsel 88
15.12 Resignation 88
15.13 Representations of Lenders 88
15.14 Notification of Event of Default 89
v
SECTION 16 NOTICES AND DEMANDS 89
16.1 Notices 89
SECTION 17 MISCELLANEOUS 90
17.1 Time of Essence 90
17.2 Unenforceable, etc., Provisions -
Effect 90
17.3 References 90
17.4 Prior Agreements, Merger 90
17.5 Entire Agreement, Amendments 91
17.6 Indemnification 91
17.7 Headings 92
vi
SCHEDULE
1 The Lenders and the Commitments
2 Margin
2(b) Capitalization
2(f) Litigation
2(h) Material Governmental Approvals
2(i) Insurance
2(o) Consents to Granting of Security Interests
2(s) Exceptions to Title
2(u) Transactions with Affiliates
2(v) Environmental Matters
2(w) Bank Accounts
EXHIBIT CONTENTS
A Form of Note
B Form of Guarantee
C Form of Borrower Pledge
D Form of Acknowledgment
E Form of General Security Agreement
F Form of Assignment and Assumption Agreement
G Form of Compliance Certificate
H Form of Drawdown Notice
I Form of Subordination Agreement
J Form of Letter of Credit
K Form of Mortgage
vii
CREDIT AGREEMENT
THIS CREDIT AGREEMENT is made as of the 17th day of December,
1997, by and among (1) NRG GENERATING (U.S.) INC., a corporation
incorporated under the laws of Delaware with offices at ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Borrower"),
(2) MEESPIERSON CAPITAL CORP. ("MPCC"), as arranger (the "Arranger"),
(3) the banks and financial institutions whose names and addresses are
set out in Schedule 1 (together, the "Lenders", each a "Lender"), and
(4) MPCC, as agent (the "Agent") and security trustee (the "Security
Trustee") for the Lenders.
WITNESSETH THAT:
WHEREAS, the Borrower desires to obtain Commitments from the
Lenders pursuant to which Advances will be made to the Borrower from
time to time prior to the Maturity Date; and
WHEREAS, the Lenders are willing, on the terms and subject to
the conditions hereinafter set forth, to extend such Commitments and
make such Advances to the Borrower.
NOW, THEREFORE, the parties hereto agree as follows:
1. DEFINITIONS
1.1 In this Agreement the words and expressions specified below shall,
except where the context otherwise requires, have the meanings
attributed to them below:
"Acceptable Accounting Firm" means Price Waterhouse LLP, or such
other nationally recognized accounting
firm as shall be approved by the
Agent, such approval not to be
unreasonably withheld;
"Acknowledgment(s)" means the acknowledgments and
undertakings executed by the Project
Entities (and in the case of Grays
Ferry, together with NRGG (Schuylkill)
Cogeneration Inc.) in connection with
the Assignment of Collection Account
substantially in the form of Exhibit D
hereto pursuant to which the Project
Entities shall, among other things,
covenant to make all permissible
distributions of Project Cash Flow to
the Collection Account;
"Advance(s)" means any amount advanced to the
Borrower hereunder as either a Base
Rate Advance or a LIBOR Rate Advance
or (as the context may require) the
aggregate amount of all such advances
for the time being outstanding;
"Adwin" means Adwin Equipment Company, a
Pennsylvania corporation;
"Adwin Schuylkill" means Adwin (Schuylkill) Cogeneration,
Inc., a Pennsylvania corporation;
"Affiliate" means with respect to any Person, any
other Person directly or indirectly
controlled by or under common control
with such Person. For the purposes of
this definition, "control" (including,
with correlative meanings, the terms
"controlled by" and "under common
control with") as applied to any
Person means the possession directly
or indirectly of the power to direct
or cause the direction of the
management and policies of that Person
whether through ownership of voting
securities or by contract or
otherwise;
"Agreement" means this Agreement, as the same
shall be amended, modified or
supplemented from time to time;
"Alternative Fuel" means fuel, other than natural gas
delivered pursuant to a purchase
agreement, that is permitted to be
used to operate an Existing Project to
meet its
2
objectives, including, but not limited
to, kerosene;
"Applicable Rate" means any rate of interest on the
Advances from time to time applicable
pursuant to Section 6.1;
"Aquila" means Aquila Energy Marketing
Corporation, a Delaware corporation;
"Aquila Tracking Account means the Tracking Account
Agreement" Agreement dated as of November 9, 1995
between Grays Ferry, Aquila and
Utilicorp as amended by Amendment
No. 1 dated as of March 1, 1996;
"Assigned Moneys" means sums received by the Agent, the
Security Trustee, the Lenders or the
Arranger pursuant to the Assignment of
Collection Account;
"Assignment and Assumption means the Assignment and Assumption
Agreement(s)" Agreement(s) executed pursuant to
Section 11 substantially in the form
set out in Exhibit F;
"Assignment of Collection means the first priority assignment of
Account" the Collection Account in favor of the
Security Trustee, made by the Borrower
pursuant to Section 8.3;
"Banking Day(s)" means day(s) on which banks are open
for the transaction of business in
London, England (in respect of LIBOR
Rate Advances only) and New York, New
York;
"Base Rate" means a fluctuating rate of interest
per annum equal to the higher of:
(a) the rate of interest
most recently publicly announced by
the Reference
3
Bank in New York City, New
York as its prime rate; and
(b) the Federal Funds Rate,
plus 1/2 of 1%.
The Base Rate is not necessarily
intended to be the lowest rate of
interest determined by the Agent in
connection with extensions of credit.
Changes in the rate of interest on any
Advance maintained as a Base Rate
Advance shall take effect
simultaneously with each change in the
Base Rate. The Agent shall give
notice promptly to the Borrower of
changes in the Base Rate;
"Base Rate Advance" means an Advance bearing interest
based on the Base Rate;
"Borrower Debt Service
Coverage Ratio" means, with respect to the Borrower on
any date, the ratio of (i) the
aggregate of (A) cash distributions to
the Borrower from the Project Entities
for the four fiscal quarters for which
financial information in respect
thereof is available immediately prior
to such date plus (B) fees received by
the Borrower from the Project Entities
during such period, to (ii) the
Borrower's Debt Service during such
four fiscal quarters, provided,
however, that such ratio shall be
determined by reference only to fiscal
quarters ending after the Initial
Drawdown Date;
"Borrower Entities" means each of the Borrower, OESC and
the Project Entities, any Subsidiary
of any Project Entity, or any of them;
4
"Borrower Pledge" means a pledge of the capital stock
owned by the Borrower or any Affiliate
of Philadelphia Cogeneration, OESC and
any other entity owning assets of the
Philadelphia Cogeneration Project,
executed by the Borrower pursuant to
Section 4.1(c) substantially in the
form of Exhibit C;
"Borrower's Debt Service" shall mean for any period, the sum of
(i) interest expense for such period
plus (ii) the excess of (A) the Credit
Facility Balance over (B) the amount
of the Credit Facility available under
the Credit Facility on the next
Scheduled Reduction Date, provided
that item (ii) shall never be more
than $2,500,000;
"Code" means the Internal Revenue Code of
1986, as amended, and any successor
statute and regulation promulgated
thereunder;
"Collateral" means all property or other assets,
real or personal, tangible or
intangible, whether now owned or
hereafter acquired in which the Agent,
Security Trustee or the Lenders has
been granted a security interest
pursuant to this Agreement and/or any
Security Document;
"Collection Account" has the meaning ascribed thereto in
Section 8;
"Commitment(s)" means, in relation to a Lender, the
portion of the Credit Facility set out
opposite its name in Schedule 1 or, as
the case may be, in any relevant
Assignment and Assumption Agreement,
as reduced from time to time pursuant
to the terms of this Agreement;
5
"Compliance Certificate" means a certificate certifying the
compliance by the Borrower with all of
its covenants contained herein and
showing the calculations thereof in
reasonable detail, delivered by the
chief financial officer of the
Borrower, in his capacity as an
officer, to the Agent from time to
time pursuant to Section 10.1(A)(iv)
in the form set out in Exhibit G, or
in such other form as the Agent may
agree;
"Consolidated Debt Service means, with respect to the Borrower
Coverage Ratio" and the Project Entities on any date,
the ratio of (i) the aggregate of
(A) total EBITDA of the Project
Entities attributable to the Borrower
for the four fiscal quarters for which
financial information in respect
thereof is available immediately prior
to such date plus (B) fees received by
the Borrower or its Subsidiaries from
the Project Entities for such period,
to (ii) the sum of (x) the portion of
debt service of each Project Entity
attributable to the Borrower plus (y)
Borrower's Debt Service for the four
fiscal quarters for which financial
information in respect thereof is
available immediately prior to such
date; provided, however, that such
ratio shall be determined by reference
only to fiscal quarters ending after
the Initial Drawdown Date;
"Credit Facility" means the sums to be advanced by the
Lenders to the Borrower pursuant to
this Agreement in an aggregate amount
not to exceed at any one time
outstanding Thirty Million Dollars
($30,000,000); provided, however, that
(i) until such time as the Borrower
shall have provided the Agent with
evidence reasonably satisfactory to
6
the Agent that the Borrower or
Philadelphia Cogeneration, as the case
may be, shall have purchased and/or
redeemed all of the minority interest
of the Revocable Trust of ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ in Philadelphia
Cogeneration the aggregate amount to
be advanced to the Borrower pursuant
to this Agreement shall not exceed
Twenty-nine Million Dollars
($29,000,000) and (ii) until such time
as Philadelphia Cogeneration shall
have executed and delivered the
Mortgage the aggregate amount to be
advanced to the Borrower pursuant to
this Agreement shall not exceed Twenty-
five Million Dollars ($25,000,000),
and provided, further, that until such
time as the Borrower shall have
provided the Agent with evidence
reasonably satisfactory to the Agent
that the Equipment Liens shall have
been released, the aggregate amount to
be advanced to the Borrower pursuant
to this Agreement shall be further
reduced by the aggregate amount of the
Indebtedness secured by all Equipment
Liens which have not been released;
"Credit Facility Balance" means the Dollar amount of the
Advances at any relevant time then
outstanding as reduced by payments
pursuant to the terms of this
Agreement;
"Credit Facility Period" means the period from the Initial
Drawdown Date to the date on which all
amounts owing under the Credit
Facility and all other amounts owing
to the Agent, the Arranger, the
Security Trustee and the Lenders
pursuant to this Agreement, the Note
and the Security Documents become
repayable and are repaid in full;
7
"Default Rate" means the rate per annum equal to the
Applicable Rate plus two percent (2%);
"Depository" shall have the meaning ascribed
thereto in Section 8.01;
"Dollars" and the means the legal currency, at
sign "$" any relevant time hereunder, of the
United States of America and, in
relation to all payments hereunder, in
same day funds settled through the New
York Clearing House Interbank Payments
System (or such other Dollar funds as
may be determined by the Agent to be
customary for the settlement in New
York City of banking transactions of
the type herein involved);
"Drawdown Dates" means the dates, each being a Banking
Day falling not later than the day
immediately preceding the Maturity
Date, upon which the Borrower has
requested that an Advance be made
available to the Borrower as provided
in Section 3;
"Drawdown Notice" has the meaning ascribed thereto in
Section 3.2;
"DuPont" means ▇.▇. ▇▇▇▇▇▇ de Nemours and
Company, a Delaware corporation, and
its successors and assigns;
"DuPont Power Purchase
Agreement" means the Electricity Purchase
Contract, dated January 18, 1988,
between DuPont and O'Brien (▇▇▇▇▇▇)
Cogeneration, Inc., as the same may be
amended, restated, supplemented or
otherwise modified from time to time;
"EBITDA" means, with respect to any Person for
any period, (A) net income (or net
loss), plus
8
(B) to the extent deducted in
determining net income, (i) interest
expense, (ii) depreciation expense,
(iii) amortization expense,
(iv) federal, state and local income
taxes and (v) all other non cash
charges minus (C) any non-cash income
or non-cash gains to the extent added
in determining such net income;
"Energy Service Agreements" means the Northeast Energy Service
Agreement and the Southwest Energy
Service Agreement, or either of them;
"Environmental Affiliate" means any person or entity, the
liability of which for Environmental
Claims any Security Party or
Subsidiary of any Security Party may
have assumed by contract or operation
of law;
"Environmental Approvals" has the meaning ascribed thereto in
Section 2(v);
"Environmental Claim(s)" has the meaning ascribed thereto in
Section 2(v);
"Environmental Laws" has the meaning ascribed thereto in
Section 2(v);
"Equipment Liens" has the meaning ascribed thereto in
Section 3.1(a);
"ERISA" means the Employment Retirement Income
Security Act of 1974, as amended;
"ERISA Affiliate" means a trade or business (whether or
not incorporated) which is under
common control with the Borrower
within the meaning of Sections 414(b),
(c), (m) or (o) of the Code;
9
"Events of Default" means any of the events set out in
Section 9.1;
"Exchange Act" means the Securities and Exchange Act
of 1934, as amended;
"Existing Project(s)" means the Newark Project, the ▇▇▇▇▇▇
Project, the Grays Ferry Project and
the Philadelphia Cogeneration Project,
or any of them;
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each
day during such period to 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 Banking Day, for the next
preceding Banking Day) by the Federal
Reserve Bank of New York, or, if such
rate is not so published for any day
which is a Banking Day, the average of
the quotations for such day on such
transactions received by the Agent
from three (3) Federal funds brokers
of recognized standing selected by the
Agent;
"FPA" means the Federal Power Act, as
amended from time to time, and all
rules and regulations promulgated
thereunder;
"Future Project(s)" means (a) the Millennium Project, and
(b) any other electric generation
project(s) (other than the Existing
Projects), including without
limitation cogeneration projects,
hereafter owned and operated, in whole
or in part, by the Borrower, any
Subsidiary of the Borrower, or any
Project Entity;
10
"GAAP" has the meaning ascribed thereto in
Section 1.3;
"General Security
Agreement(s)" means the general security agreements
in respect of (i) all of the personal
property of Philadelphia Cogeneration,
(ii) equipment leased or subleased by
OESC to Philadelphia Cogeneration and
(iii) equipment leased or subleased by
the Borrower to OESC and in turn
subleased by OESC to Philadelphia
Cogeneration as referenced in clause
(ii) above, to be executed by each of
the Borrower, Philadelphia
Cogeneration and OESC in favor of the
Security Trustee pursuant to Section
4.1(d) and substantially in the form
set out in Exhibit E;
"Good Faith Contest" means the contest of an item if the
item is diligently contested in good
faith by appropriate proceedings
timely instituted and (i) adequate
cash reserves (or, at the applicable
Borrower Entity's option, bonds or
other security reasonably satisfactory
to Agent) are established with respect
to the contested item, and (ii) during
the period of such contest, the
enforcement of any contested item is
effectively stayed;
"Governmental Approval" means all authorizations, consents,
approvals, registrations, waivers,
exemptions, variances, franchises,
permissions, permits and licenses of,
and filings and declarations with, and
rulings by any Governmental Authority
including, without limitation, all
ordinances, and resolutions of
Governmental Authorities relating to
each Existing Project;
11
"Governmental Authority" means the United States Federal
Government, any state or other
political subdivision thereof,
including any entity exercising
executive, legislative, judicial,
regulatory or administrative functions
of or pertaining to such government;
"Grays Ferry" means Grays Ferry Cogeneration
Partnership, a Pennsylvania general
partnership;
"Grays Ferry Construction means, collectively, (a) the Agreement
Contract" for Engineering, Procurement and
Construction Services dated as of
August 31, 1995 (the "Original
Construction Contract"), (b) Amendment
No. One to the Original Construction
Contract dated as of October 16, 1995,
(c) Amendment No. Two to the Original
Construction Contract dated as of
October 23, 1995, (d) Amendment
No. Three to the Original Construction
Contract dated as of December 31,
1995, (e) Amendment No. Four to the
Original Construction Contract dated
February 29, 1996, (f) the
Westinghouse Letter re Options under
the Original Construction Contract
dated as of March 1, 1996 (g) the
Letter Agreement re Project
Investigation dated as of March 1,
1996 and (h) the Letter Agreement re
Release, dated November 11, 1995, each
made between Grays Ferry and
Westinghouse;
"Grays Ferry Construction means that certain letter agreement
dated
Management Agreement" as of February 20, 1996 among Grays
Ferry and ▇▇▇.
▇▇
"▇▇▇▇▇ ▇▇▇▇▇ Dock Facility means the Dock Facility Service
Agreement
Service Agreement" dated as of November 11, 1991, among
PTDC, Trigen and Grays Ferry;
"Grays Ferry Gas Contract(s)" means the Grays Ferry Gas Sales
Agreement, the Grays Ferry Gas
Services Agreements, the Grays Ferry
Gas Transportation Agreements, the
Aquila Tracking Account Agreement and
any other material contracts relating
to the supply and transportation of
natural gas fuel to the Grays Ferry
Project;
"Grays Ferry Gas Sales means the Gas Sales Agreement dated as
Agreement" of November 9, 1995 among Aquila,
UtiliCorp and Grays Ferry, as amended
by Amendment No. 1 dated March 1,
1996;
"Grays Ferry Gas Services means, collectively, the
Agreement(s)" PAID Service Contract, the PAID
Service Agreement and the PAID
Assignment Agreement, each closing
certificate, document or instrument
delivered by the City of Philadelphia
or PAID relating to the foregoing
agreements and the Trigen Gas Services
Agreement;
"Grays Ferry Gas Transportation means, collectively, (a)
Agreements" the Capacity Release Umbrella
Agreement (Contract No. 900285) dated
as of February 16, 1996 between Grays
Ferry and TETCO (including Addenda
Numbers 882232 through 882248),
(b) the Service Agreement for Rate
Schedule FT-1 (Contract No. 800516),
dated February 29, 1996 between Grays
Ferry and TETCO, (c) the Service
Agreement for Rate Schedule FT-1
(Contract No. 800514) dated
February 29, 1996, between TETCO and
13
PAID, (d) the Service Agreement for
Rate Schedule FT-1 (Contract
No. 800515), dated as of February 29,
1996 between TETCO and PAID and
(e) the TETCO Letter Agreement;
"Grays Ferry Ground Lease" means, collectively, the Grays Ferry
Lease and the Grays Ferry Master
Lease;
"Grays Ferry Lease" means the Amended and Restated Site
Lease dated September 17, 1993 between
Trigen and Grays Ferry;
"Grays Ferry Management means the Project Management
Agreement" Services Letter Agreement dated
February 20, 1996 among Adwin
Schuylkill, O'Brien Schuylkill and
Trigen;
"Grays Ferry Master Lease" means the Schuylkill Station Lease
Agreement dated January 30, 1987
between PECO and Trigen;
"Grays Ferry O&M Agreement" means the Amended and Restated Project
Services and Development Agreement
dated as of September 17, 1993 between
Grays Ferry and the Grays Ferry
Operator;
"Grays Ferry Operator" means Philadelphia United Power
Corporation, a Pennsylvania
corporation, or such other Person as
shall be approved by the Majority
Lenders to operate the Grays Ferry
Project;
"Grays Ferry Partnership means the Amended and
"Agreement" Restated Partnership Agreement of
Grays Ferry, dated March 1, 1996 among
O'Brien Schuylkill, Adwin Schuylkill
and Trigen-Schuylkill;
14
"Grays Ferry Power Purchase means, collectively, (a) the
Agreement" Agreement for Purchase of Electric
Output (Phase I) dated as of July 28,
1992, (b) the Agreement for Purchase
of Electric Output (Phase II) dated as
of July 28, 1992, (c) the Contingent
Capacity Purchase Addenda (Phase I),
dated as of September 17, 1993,
(d) the Contingent Capacity Purchase
Addenda (Phase II), dated as of
September 17, 1993, (e) Amendment
Agreement to Power Purchase
Agreements, dated January 31, 1994,
each between Grays Ferry and PECO and
(f) the Activation Notice, dated as of
March 30, 1995;
"Grays Ferry Project" means the approximately 150 ▇▇ ▇▇▇▇▇
gas and oil fired cogeneration
facility to be constructed by
Westinghouse under the Grays Ferry
Construction Contract, including the
related electric power transmission,
fuel supply and fuel transportation
facilities, fuel storage facilities,
fuel contracts and other facilities,
services or goods that are ancillary,
incidental, necessary or reasonably
related to the marketing, management,
servicing, ownership or operation of
the foregoing, or otherwise, as well
as the applicable Project Agreements
and other contractual arrangements
with customers, suppliers and
contractors or any infrastructure
facilities related thereto;
"Grays Ferry Project
Agreements" means the Grays Ferry Construction
Contract, the Grays Ferry Gas
Contracts, the Grays Ferry Steam Sales
Agreement, the Grays Ferry Power
Purchase Agreement, the Grays Ferry
O&M Agreement, the Grays Ferry Lease,
the
15
Grays Ferry Master Lease, the Grays
Ferry Steam Venture Agreement, the
Grays Ferry Dock Facility Service
Agreement, the Grays Ferry Partnership
Agreement, the Grays Ferry Settlement
Agreement, the O'Brien Assignment
Agreements (Grays Ferry), the Grays
Ferry Relocation Agreement, the Grays
Ferry Management Agreement, and the
Grays Ferry Construction Management
Agreement;
"Grays Ferry Relocation means the Relocation
Agreement" Agreement dated as of March 1, 1996
between PECO and Grays Ferry;
"Grays Ferry Settlement means the Settlement
Agreement" Agreement and Mutual Release, dated as
of November 16, 1995, among Canadian
Imperial Bank of Commerce, ▇▇▇▇▇▇▇▇▇▇
& ▇▇▇▇▇, Grays Ferry and Adwin;
"Grays Ferry Steam means, collectively, (a) the Amended
and
Sales Agreement" Restated Steam Purchase Agreement
dated as of September 17, 1993 among
Trigen, Adwin, the Borrower and Grays
Ferry and (b) the Letter Agreement
Regarding Steam Pricing dated March 1,
1996 between Trigen and Grays Ferry;
"Grays Ferry Steam means, collectively, (a) the
Venture Agreement" Amended and Restated Steam Venture
Agreement dated September 17, 1993
among Trigen, Operator, Adwin and the
Borrower, as amended and (b) the
Agreement relating to Amended and
Restated Steam Venture Agreement dated
September 29, 1993 among Trigen,
Operator, Adwin, the Borrower and
Grays Ferry;
16
"Ground Lease" means the Newark Ground Lease, the
▇▇▇▇▇▇ Ground Lease, the Philadelphia
Cogeneration Leases or the Grays Ferry
Ground Lease;
"Guarantee" means the guarantee in favor of the
Security Trustee to be executed by
Philadelphia Cogeneration in respect
of the obligations of the Borrower
under this Agreement and under the
Note pursuant to Sections 4.l(d)
substantially in the form set out in
Exhibit B;
"Indebtedness" means, with respect to any Person at
any date of determination (without
duplication), (i) all indebtedness of
such Person for borrowed money,
(ii) all obligations of such Person
evidenced by bonds, debentures, notes
or other similar instruments,
(iii) all obligations of such Person
in respect of letters of credit or
other similar instruments (including
reimbursement obligations with respect
thereto), (iv) all obligations of such
Person to pay the deferred and unpaid
purchase price of property or
services, which purchase price is due
more than six months after the date of
placing such property in service or
taking delivery thereof or the
completion of such services, except
trade payables, (v) all obligations on
account of principal of such Person as
lessee under capitalized leases,
(vi) all indebtedness of other Persons
secured by a lien on any asset of such
Person, whether or not such
indebtedness is assumed by such
Person; provided that the amount of
such indebtedness shall be the lesser
of (a) the fair market value of such
asset at such date of determination
and (b) the amount of such
indebtedness, and (vii) all
17
indebtedness of other Persons
guaranteed by such Person to the
extent such indebtedness is guaranteed
by such Person. The amount of
Indebtedness of any Person at any date
shall be the outstanding balance at
such date of all unconditional
obligations as described above and,
with respect to contingent
obligations, the maximum liability
upon the occurrence of the contingency
giving rise to the obligation,
provided that the amount outstanding
at any time of any indebtedness issued
with original issue discount is the
face amount of such indebtedness less
the remaining unamortized portion of
the original issue discount of such
indebtedness at such time as
determined in conformity with GAAP;
and provided further that Indebtedness
shall not include any liability for
current or deferred federal, state,
local or other taxes, or any trade
payables; provided, however, in the
case of the Borrower, "Indebtedness"
shall not include (i) any Lien granted
by the Borrower on any equity interest
of Borrower in any Subsidiary of
Borrower as security for any debt of
such Subsidiary in respect of any
Future Project or any debt with
respect to such Subsidiary's project
or project owner in respect of any
Future Project, or (ii) subject to the
limitations set forth in
Section 10.1(B)(iii), any equity
funding commitment made or guaranteed
by Borrower, regardless of whether
such equity funding commitment is
assigned or otherwise pledged as
security for any debt of any
Subsidiary in respect of any Future
Project or any debt with respect to
such Subsidiary's project or project
owner in respect of any Future
Project.
18
For purposes of calculating the amount
of any Indebtedness hereunder, there
shall be no double-counting of direct
obligations, guarantees and
reimbursement obligations for letters
of credit;
"Initial Drawdown Date" means the Drawdown Date, being not
later than December 19, 1997, upon
which the Borrower has requested that
the first Advance be made available to
the Borrower as provided in Section 3;
"Interest Notice" means a notice to the Agent specifying
the duration of any relevant Interest
Period;
"Interest Period" means with respect to any LIBOR Rate
Advance, each period commencing on the
date such LIBOR Rate Advance is made
or converted from a Base Rate Advance
or the last day of the next preceding
Interest Period with respect to such
LIBOR Rate Advance and ending on the
same day in the first, second, third
or sixth (as selected by the Borrower)
calendar month thereafter, except that
each such Interest Period which
commences on the last Banking Day of a
calendar month (or on any day for
which there is no numerically
corresponding day in the appropriate
subsequent calendar month) shall end
on the last Banking Day of the
appropriate subsequent calendar month;
Notwithstanding the foregoing, (i) no
Interest Period may extend beyond the
Maturity Date; (ii) each Interest
Period which would otherwise end on a
day which is not a Banking Day shall
end on the next succeeding Banking Day
(or, if
19
such next succeeding Banking Day falls
in the next succeeding calendar month,
on the next preceding Banking Day);
(iii) each Interest Period which would
otherwise commence before and end
after the Maturity Date shall end on
the Maturity Date; and (iv)
notwithstanding clauses (i) and (iii)
above, if any Interest Period would
have a duration of less than one
month, such LIBOR Rate Advances shall
be Base Rate Advances during such
period;
"Interest Rate Agreements" means any interest rate protection
agreement, interest rate future
agreement, interest rate option
agreement, interest rate swap
agreement, interest rate cap
agreement, interest rate collar
agreement, interest rate hedge
agreement or other similar agreement
or arrangement designed to protect the
Borrower or any of its Subsidiaries
against fluctuations in interest rates
to or under which the Borrower or any
of its Subsidiaries is a party or a
beneficiary on the date of this
Agreement or becomes a party or a
beneficiary hereafter;
"Investment" in any Person means (i) any loan,
extension of credit or advance to such
Person, (ii) any purchase or other
acquisition of any capital stock,
warrants, rights, options, obligations
or other securities of such Person, or
(iii) any capital contribution to such
Person;
"JCP&L" means Jersey Central Power & Light
Company, a utility corporation
organized and existing under the laws
of the State of New Jersey, and its
successors and permitted assigns;
20
"Letter of Credit" means a letter of credit in favor of
the Security Trustee, issued from time
to time pursuant to Section
10.1(B)(ix) by a financial institution
reasonably acceptable to the Agent, in
an amount equal to six (6) months' of
the Borrower's Debt Service and in
substantially the form of set out in
Exhibit J;
"LIBOR Rate" means, with respect to any Interest
Period for any LIBOR Rate Advance, the
rate per annum determined by the Agent
to be equal to the quotient (rounded
upwards, if necessary, to the next
higher 1/16 of 1%) of (y) (i) the rate
of interest for deposits in Dollars
for a period equal to the number of
days in such Interest Period which
appears on Page "LIBO" on the Reuters
monthly money rate service as of
11:00 A.M., London time, on the day
that is two London Banking Days prior
to the first day of such Interest
Period, or (ii) if such rate does not
appear on the Reuters Page "LIBO" at
such time, the rate per annum at which
deposits in Dollars are offered to the
Agent in immediately available funds
at its LIBOR lending office in an
amount comparable to the principal
amount of such LIBOR Rate Advance for
a period equal to such Interest Period
at approximately 10:00 A.M., New York
City time, on the date two Banking
Days before the first day of such
Interest Period, divided by (z) a
number equal to 1.00 minus the LIBOR
Rate Reserve Percentage;
"LIBOR Rate Advance" means an Advance bearing interest
based on the LIBOR Rate;
"LIBOR Rate Reserve means, for any day, the
21
maximum percentage
Percentage" (expressed as a decimal) specified
from time to time by the Board of
Governors of the Federal Reserve
System (or any successor) for
determining the maximum reserve
requirements (including, but not
limited to, supplemental, marginal and
emergency reserves) with respect to
eurocurrency funding (currently
referred to as "Eurocurrency
Liabilities") of a member bank in such
System. The LIBOR Rate shall be
adjusted automatically with respect to
any LIBOR Rate Advance outstanding on
the effective date of any change in
the LIBOR Rate Reserve Percentage, as
of such effective date;
"Lien" means any mortgage, deed of trust,
security interest, pledge,
hypothecation, escrow arrangement,
assignment for security, charge,
encumbrance, lien (statutory or other)
or other preferential arrangement in
the nature of a security interest,
including, without limitation, any
conditional sale or other title
retention agreement, any financing
lease having substantially the same
economic effect as any such agreement,
and the filing of any statement under
the Uniform Commercial Code or
comparable law of any jurisdiction
evidencing a lien;
"Majority Lenders" means any Lender or Lenders whose
Commitments exceed one-half of the
total Commitments, or, if the
Commitments have terminated, any
Lender or Lenders holding in the
aggregate in excess of one-half of the
Credit Facility Balance;
22
"Margin" means an interest rate margin which
will vary based upon the Consolidated
Debt Service Coverage Ratio as set
forth in Schedule 2;
"Material Adverse Effect" means a material adverse effect on
(i) the ability of any Security Party
to perform its obligations to
Arranger, the Agent, the Security
Trustee or the Lenders under this
Agreement, the Note or any of the
Security Documents or (ii) the
business, property, assets,
liabilities, operations or condition
(financial or otherwise) of the
Borrower and the other Security
Parties taken as a whole;
"Material Governmental
Approval" means all Governmental Approvals which
are required under applicable law in
connection with the operation,
maintenance, ownership or leasing of
the Projects other than such
Governmental Approvals as are
immaterial in nature;
"Materials of Environmental has the meaning ascribed
Concern" thereto in Section 2(v);
"Maturity Date" means that date which is three years
from the Initial Drawdown Date or if
such day is not a Banking Day, the
next following Banking Day unless such
next following Banking Day falls in
the following month, in which case the
Maturity Date shall be the immediately
preceding Banking Day;
"Millennium Project" means the approximately 117 MW gas-
fired co-generation facility located
at the premises of Millennium Petro
Chemicals, Inc. in Morris, Illinois,
including the related electric power
transmission, fuel supply and fuel
transportation facilities,
23
fuel storage facilities, fuel
contracts and other facilities,
services or goods that are ancillary,
incidental, necessary or reasonably
related to the marketing, management,
servicing, ownership or operation of
the foregoing, or otherwise, as well
as the applicable project agreements
and other contractual arrangements
with customers, suppliers and
contractors or any infrastructure
facilities related thereto;
"Mortgage" means the leasehold mortgage in
respect of the Philadelphia
Cogeneration Leases in favor of the
Security Trustee executed by
Philadelphia Cogeneration pursuant to
Section 4.1(d) substantially in the
form of Exhibit K;
"Newark" means NRG Generating (Newark)
Cogeneration Inc., a Delaware
corporation;
"Newark Consents" means, collectively, the consents with
respect to each Newark Project
Agreement assigned to Credit Suisse
First Boston;
"Newark Ground Lease" means the Ground Lease, dated July 18,
1988, as amended pursuant to an
agreement dated July 20, 1988 and the
Stipulation of Settlement, as the same
may be amended, modified or
supplemented from time to time;
"Newark Group" means Newark Group Industries, Inc., a
New Jersey corporation f/k/a Newark
Boxboard Company, and its successors
and permitted assigns;
"Newark Mortgage" means the Mortgage, dated as of May
17, 1996, between Newark and Credit
Suisse
24
First Boston, as the same may be
amended, modified, supplemented or re-
recorded from time to time;
"Newark Operations and
Maintenance Agreement" means the Operating and Maintenance
Agreement, dated as of November 8,
1996, by and between Newark and POI,
as such agreement may be amended,
modified or supplemented from time to
time;
"Newark Pledge Agreement" means the Stock Pledge Agreement with
respect to the capital stock of Newark
dated as of May 17, 1996 by Borrower
in favor of Credit Suisse First
Boston;
"Newark Power Purchase means the Agreement for
Agreement" Purchase of Electric Power, dated
March 10, 1986, between O'Brien Energy
Systems, Inc. and JCP&L, as amended by
Letter Agreement, dated June 2, 1986,
as further amended by the Second
Amendment to Power Purchase Agreement,
dated as of March 1, 1988, as assigned
by O'Brien Energy Systems, Inc. to
O'Brien (Newark) Cogeneration, Inc.
pursuant to Assignment Agreement,
dated as of July 22, 1988, as further
amended by the Third Amendment to
Power Purchase Agreement executed
April 30, 1996, as the same may be
further amended, modified or
supplemented from time to time;
"Newark Project" means the 52 MW power plant located in
Newark, New Jersey, including the
related electric power transmission,
fuel supply and fuel transportation
facilities, fuel storage facilities,
fuel contracts and other facilities,
services or goods that are ancillary,
incidental, necessary or
25
reasonably related to the marketing,
management, servicing, ownership or
operation of the foregoing, or
otherwise, as well as the applicable
Project Agreements and other
contractual arrangements with
customers, suppliers and contractors
or any infrastructure facilities
related thereto;
"Newark Project Agreements" means the Newark Power Purchase
Agreement, Newark Ground Lease, Newark
Steam Agreement, Newark Transmission
Agreement, Newark Operations and
Maintenance Agreement, the Operating
Guaranty, and the Newark Consents;
"Newark Steam Agreement" means the Steam Purchase Agreement,
dated October 3, 1986, between O'Brien
Cogeneration IV, Inc. and Newark
Group, as amended by Amendment to
Steam Purchase Agreement between
O'Brien Cogeneration IV, Inc. and
Newark Group, executed March 8, 1988,
as further amended by Amendment to
Steam Purchase Agreement between
O'Brien (Newark) Cogeneration, Inc.
(formerly known as O'Brien
Cogeneration IV, Inc.) and Newark
Group, as the same may be further
amended, modified or supplemented from
time to time;
"Newark Transmission
Agreement" means the Transmission Service and
Interconnection Agreement, dated
November 17, 1987, between O'Brien
Energy Systems, Inc. and PSE&G, as
assigned by O'Brien Energy Systems,
Inc. to O'Brien (Newark) Cogeneration,
Inc. (formerly known as O'Brien
Cogeneration IV, Inc.) and Newark
26
Group, as the same may be amended,
modified or supplemented from time to
time;
"Northeast Agreements" means the Northeast Energy Service
Agreement, the Northeast Master Lease,
the Northeast Lease, the Northeast
Collection Facilities Lease, the
Northeast Collection Facilities
Sublease Agreement, the Northeast Gas
Supply Agreement, the Northeast Gas
Supply Contract and the Northeast
Service Contract;
"Northeast Collection means the Collection Facilities
Facilities Lease" Lease dated as of June 30, 1992 made
between the City of Philadelphia and
the Philadelphia Municipal Authority
in respect of the Northeast Facility;
"Northeast Collection means the Collection Facilities
Facilities Sublease Sublease Agreement dated as of
Agreement" June 30, 1992 made between the
Philadelphia Municipal Authority and
Philadelphia Biogas in respect of the
Northeast Facility;
"Northeast Demised Premises" means the certain parcels of land
together with improvements thereon
erected subject of the Northeast
Lease;
"Northeast Energy Service means that certain energy
Agreement" service agreement dated June 30, 1992
by and between Philadelphia Municipal
Authority and Philadelphia
Cogeneration in respect of the
Northeast Facility;
"Northeast Facility" means the cogeneration facility
operated by Philadelphia Cogeneration
on the Northeast Demised Premises;
"Northeast Gas Supply means the Gas Supply Agreement
27
Agreement" dated as of June 30, 1992 between
Philadelphia Biogas and the
Philadelphia Municipal Authority in
respect of the Northeast Facility;
"Northeast Gas Supply means the Gas Supply Contract
Contract" dated as of June 30, 1992 between the
City of Philadelphia and the
Philadelphia Municipal Authority in
respect of the Northeast Facility;
"Northeast Lease" means that certain sublease dated
June 30, 1992 by and between
Philadelphia Municipal Authority, as
lessor, and Philadelphia Cogeneration,
as lessee, in respect of the Northeast
Demised Premises;
"Northeast Master Lease" means the Lease dated June 30, 1992
between the City of Philadelphia and
the Philadelphia Municipal Authority
in respect of the Northeast Facility;
"Northeast Service Contract" means the Service Contract made as of
June 30, 1992 between the City of
Philadelphia and the Philadelphia
Municipal Authority in respect of the
Northeast Facility;
"Note" means that certain promissory note to
be executed by the Borrower to the
order of the Security Trustee pursuant
to Section 4.1(c), to evidence the
Advances substantially in the form set
out Exhibit A;
"NRG Energy" means NRG Energy, Inc., a Delaware
corporation;
"OESC" means O'Brien Energy Services Company,
a Delaware corporation;
28
"OESC Financing Program" means the annual, or from time to
time, asset-based debt financing
required for the acquisition of assets
for the OESC Rental Fleet;
"OESC Rental Fleet" means the engine-generator sets
employed by OESC and leased or rented
to customers from which revenues are
derived;
"O'Brien Assignment Agreements" means, collectively, (a) the
(Grays Ferry) Agreement of Assignment, Assumption,
Consent and Release dated as of
March 1, 1996, among the Borrower,
Adwin, Grays Ferry, PUPCO, and Trigen
and (b) the O'Brien Signature
Agreement dated March 1, 1996, among
the Borrower, Adwin, Grays Ferry,
PTDC, Adwin Schuylkill, O'Brien
Schuylkill, PUPCO and Trigen;
"O'Brien Schuylkill" means O'Brien (Schuylkill)
Cogeneration, Inc., a Delaware
corporation;
"Operating Guaranty" means the Corporate Guaranty dated as
of March 21, 1997, effective as of
January 1, 1997, among NRG Energy,
Newark, ▇▇▇▇▇▇ and POI;
"PAID" means the Philadelphia Authority for
Industrial Development, a public
instrumentality of the City of
Philadelphia;
"PAID Assignment Agreement" means, collectively, (a) the
Assignment of Service Agreement dated
as of March 1, 1996 by PAID in favor
of Grays Ferry, and (b) the Assignment
of FT-1 Agreements dated as of
March 1, 1996 by PAID in favor of
Grays Ferry;
29
"PAID Service Agreement" means the Service Agreement dated as
of January 28, 1996 between PAID and
the City of Philadelphia;
"PAID Service Contract" means the Service Contract dated as of
January 28, 1996 between PAID and
Grays Ferry;
"▇▇▇▇▇▇" means NRG Generating (▇▇▇▇▇▇)
Cogeneration Inc., a Delaware
corporation;
"▇▇▇▇▇▇ Consents" means, collectively, the consents with
respect to each ▇▇▇▇▇▇ Project
Agreement assigned to Credit Suisse
First Boston (other than the DuPont
Power Purchase Agreement);
"▇▇▇▇▇▇ Ground Lease" means the Ground Lease, dated January
2, 1986, between O'Brien (▇▇▇▇▇▇)
Cogeneration, Inc. and DuPont, as the
same may be amended, modified or
supplemented from time to time;
"▇▇▇▇▇▇ Mortgage" means the Mortgage, dated as of June
28, 1996, between ▇▇▇▇▇▇ and Credit
Suisse First Boston, as the same may
be amended, modified, supplemented or
re-recorded from time to time;
"▇▇▇▇▇▇ Operations and
Maintenance Agreement" means the Operating and Maintenance
Agreement dated as of December 31,
1996, by and between ▇▇▇▇▇▇ and POI,
as such agreement may be amended,
modified or supplemented from time to
time;
"▇▇▇▇▇▇ Pledge Agreement" means the Stock Pledge Agreement with
respect to the capital stock of ▇▇▇▇▇▇
dated as of June 28, 1996 by Borrower
in favor of Credit Suisse First
Boston;
30
"▇▇▇▇▇▇ Power Purchase
Agreement" means the Amended and Restated
Agreement for Purchase and Sale of
Electric Power between ▇▇▇▇▇▇ and
JCP&L executed April 30, 1996, as the
same may be further amended, modified
or supplemented from time to time;
"▇▇▇▇▇▇ Project" means the approximately 122 MW power
plant located in Sayerville, New
Jersey, including the related electric
power transmission, fuel supply and
fuel transportation facilities, fuel
storage facilities, fuel contracts and
other facilities, services or goods
that are ancillary, incidental,
necessary or reasonably related to the
marketing, management, servicing,
ownership or operation of the
foregoing, as well as the applicable
Project Agreements and other
contractual arrangements with
customers, suppliers and contractors
or any infrastructure facilities
related thereto;
"▇▇▇▇▇▇ Project Agreements" means the ▇▇▇▇▇▇ Power Purchase
Agreement, ▇▇▇▇▇▇ Ground Lease, ▇▇▇▇▇▇
Steam Agreement, ▇▇▇▇▇▇ Operations and
Maintenance Agreement, ▇▇▇▇▇▇ Non
Disturbance Agreement, Wholesale Power
Purchase Agreement, DuPont Power
Purchase Agreement, Operating
Guaranty, and the ▇▇▇▇▇▇ Consents;
"▇▇▇▇▇▇ Steam Agreement" means the Steam Purchase Contract,
dated December 8, 1996, between DuPont
and O'Brien Energy Systems, Inc., as
amended by Agreement between O'Brien
Energy Systems, Inc. and DuPont,
Amendment 1 to Steam Purchase
Agreement, dated January 12, 1988, as
amended by Letter, dated July 25,
1988, from ▇.▇. ▇▇▇▇▇▇ of ▇▇▇▇▇▇ to
31
▇▇▇▇▇▇ ▇▇▇▇▇ of O'Brien Energy
Systems, Inc., as amended by Agreement
between O'Brien Energy Systems, Inc.
and DuPont, Amendment No. 3 to Steam
Purchase Agreement, executed December
12, 1988, as amended by Amendment
Number Four to Steam Purchase Contract
between O'Brien Energy Systems, Inc.
and DuPont (▇▇▇▇▇▇ Cogeneration
Facility), executed July 14, 1989 and
July 26, 1989, and amended by
Amendment No. 5 to Steam Purchase
Agreement, executed January 22, 1993
and February 16, 1993, as assigned by
O'Brien Energy Systems, Inc. to
O'Brien (▇▇▇▇▇▇) Cogeneration, Inc.
and as further amended by Amendment
No. 6 to Steam Purchase Agreement
executed November 15, 1994, as the
same may be further amended, modified
or supplemented from time to time;
"PECO" means PECO Energy Company, formally
known as Philadelphia Electric
Company, a Pennsylvania corporation;
"Permitted Investments" means any of the following:
(a) Investments in commercial paper
maturing in 270 days or less from the
date of issuance which, (i) are issued
by any commercial bank of recognized
standing (or its parent corporation)
under the laws of the United States of
America, any state thereof or any
foreign jurisdiction, having capital
and surplus in excess of $300,000,000,
or (ii) at the time of acquisition, is
rated one of the two highest ratings
by Standard &Poor's Ratings Services
or by ▇▇▇▇▇'▇ Investors Services, Inc.
or any substantially similar
commercial paper or short-term ratings
32
by any other nationally recognized
credit rating agency domiciled in the
United States of America or the United
Kingdom of similar standing (a
"Substitute Rating Agency");
(b) Investments in obligations issued
by or guaranteed by the United States
of America or any agency or
instrumentality of the United States
of America;
(c) Investments in certificates of
deposit, time deposits or bankers'
acceptances issued by a bank or trust
company organized under the laws of
the United States of America or any
State thereof, having capital, surplus
and undivided profits aggregating at
least $300,000,000 or having a rating
of A or better from both S&P and
Moody's (if only one of S&P and
Moody's has issued a rating, then from
S&P or Moody's, as the case may be, or
if neither S&P or Moody's has issued a
rating, then from a nationally
recognized rating agency acceptable to
Agent);
(d) Investments in indebtedness of any
governmental body of the United States
of America or any State or political
subdivision thereof, which
indebtedness is at all times accorded
one of the two highest ratings by S&P,
Moody's, or a Substitute Rating Agency
maturing not later than three years
from the date of acquisition thereof
(or, if maturing more than three years
after the date of acquisition, which
is subject to a put at par by the
holder thereof on a weekly or more
frequent basis);
33
(e) Investments in money market
investment programs which are
classified as a current asset in
accordance with GAAP and which are
administered by reputable financial
institutions having capital, surplus
and undivided profits of at least
$300,000,000 and which are registered
under the Investment Company Act of
1940; and
(f) Investments in repurchase
obligations, with a term of not more
than thirty days for underlying
securities of the types described in
clauses (a) and (b) above, entered
into with any bank meeting the
qualifications specified in clause (a)
above;
"Permitted Liens" means any Liens that are:
(a) Liens for taxes, or other
governmental levies and assessments
that (i) do not arise under ERISA or
Environmental Laws and (ii) are not
yet due or which are subject to a Good
Faith Contest;
(b) carriers', warehousemen's,
mechanics', materialmen's, repairmen's
or other like Liens arising in the
ordinary course of business which are
not past due for a period of more than
90 days or which are subject to a Good
Faith Contest;
(c) pledges or deposits in connection
with workmen's compensation,
unemployment insurance and other
social security legislation;
(d) deposits to secure the performance
of bids, trade contracts (other than
for borrowed money), leases, statutory
34
obligations, surety and appeal bonds,
performance bonds and other
obligations of a like nature incurred
in the ordinary course of business;
(e) easements, rights-of-way,
restrictions (including landmarking
and zoning restrictions), royalties,
leasehold and fee interest covenants
and other similar encumbrances
incurred or imposed in the ordinary
course of business which are not of
the nature of a Lien for security
purposes and which do not in any case
materially detract from the value of
the property subject thereto or
interfere with the ordinary conduct of
the business of any Security Party;
(f) Liens arising under the Security
Documents;
(g) Liens for purchase money
obligations, provided that any such
Lien encumbers only the assets so
purchased;
(h) Liens arising from legal
proceedings, so long as such
proceedings are being contested in
Good Faith Contest and so long as
execution is stayed on all judgments
resulting from any such proceedings;
(i) Liens referred to in the title
insurance policies delivered in
connection with the Credit Agreements
described in Section
10.1B(iii)(b)(vi);
(j) Liens securing Indebtedness
permitted under Section 10.1B(iii)(b),
including without limitation pledges
by the Borrower of its equity interest
in any
35
Future Projects as security for such
permitted Indebtedness; and
(k) the Lien in favor of NRG on the
shares of stock of O'Brien Schuylkill
owned by the Borrower pursuant to that
certain NRG Subordinated Stock Pledge
Agreement dated as of March 1, 1996
among NRG Energy, the Borrower,
O'Brien Schuylkill and The Chase
Manhattan Bank;
"Person" means any individual, sole
proprietorship, corporation,
partnership (general or limited),
limited liability company, business
trust, bank, trust company, joint
venture, association, joint stock
company, trust or other unincorporated
organization, whether or not a legal
entity, or any government or agency or
political subdivision thereof;
"Philadelphia Biogas" means Philadelphia Biogas Supply,
Inc., a Delaware corporation;
"Philadelphia Cogeneration" means O'Brien (Philadelphia)
Cogeneration Inc., a Delaware
corporation;
"Philadelphia Cogeneration means the Southwest Lease
Leases" and the Northeast Lease, or either of
them;
"Philadelphia Cogeneration means the Operation & Maintenance
Operation & Maintenance Contract dated as of May 15, 1993
Contract" between Philadelphia Cogeneration and
OESC in respect of the Northeast
Facility and the Southwest Facility;
"Philadelphia Cogeneration
Project" means the Northeast Facility and the
36
Southwest Facility;
"Philadelphia Cogeneration means the Southwest Agreements
Project Agreements" and the Northeast Agreements;
"Philadelphia Municipal means The Philadelphia
Authority" Municipal Authority, a body corporate
and politic organized and existing
under the laws of the Commonwealth of
Pennsylvania;
"Plan" means any employee benefit plan
covered by Title IV of ERISA;
"POI" means Power Operations, Inc., a
Delaware corporation;
"Prepayment Amount" has the meaning ascribed thereto in
Section 9.4;
"Project Agreement(s)" means the Grays Ferry Project
Agreements, the Newark Project
Agreements, the ▇▇▇▇▇▇ Project
Agreements, the Philadelphia
Cogeneration Project Agreements and
any other agreements, contracts or
leases of any kind whatsoever pursuant
to which the Borrower is entitled
directly, indirectly, by assignment or
otherwise to receive payments in
respect of any Existing Project, or
any of them;
"Project Cash Flow" means any and all moneys or cash
distributions made or permitted to be
made by the Project Entities to the
Borrower with respect to the Existing
Projects (but excluding amounts on
deposit (i) in the Operating Account
(as such term is defined in Section
7.5 of that certain Credit Agreement,
dated March 1, 1996, among Grays
Ferry, the financial
37
institutions listed on Exhibit H
thereto and The Chase Manhattan Bank)
prior to the distribution thereof in
accordance with the terms of such
Credit Agreement, and (ii) in the
Project Account (as such term is
defined in Section 5.1(b) of that
certain Credit Agreement, dated as of
May 17, 1996, among Newark, ▇▇▇▇▇▇,
Credit Suisse, Greenwich Funding
Corporation and any Purchasing Lender
and Credit Suisse) prior to the
distribution thereof in accordance
with the terms of such Credit
Agreement;
"Project Entity(ies)" means Grays Ferry, Newark, ▇▇▇▇▇▇,
Philadelphia Cogeneration and any
other Affiliate of the Borrower owning
any Existing Project;
"PSE&G" means Public Service Electric & Gas
Company, a utility corporation
organized and existing under the laws
of the State of New Jersey, and its
successors and assigns;
"PTDC" means Philadelphia Thermal Development
Corporation, a Pennsylvania
corporation;
"PUHCA" means the Public Utility Holding
Company Act of 1935, as amended from
time to time, and all rules and
regulations promulgated thereunder;
"PUPCO" means Philadelphia United Power
Corporation, a Pennsylvania
corporation.
"PURPA" means the Public Utility Regulatory
Policies Act of 1978, as amended from
time to time, and all rules and
regulations adopted thereunder;
38
"QF Certificate" means, with respect to each Project
Entity which is a Qualifying
Cogeneration Facility, the
certification or certifications as to
the qualifying status of such Project
Entity, as the same are more
particularly described in
Section 2(q);
"Qualifying Cogeneration
Facility" has the meaning specified for such
term in PURPA;
"Reduction Dates" means the Scheduled Reduction Dates
and the Voluntary Reduction Dates, or
any of them;
"Reference Bank" means The Chase Manhattan Bank;
"Scheduled Reduction Dates" means each of the dates falling at
intervals of one (1) year after the
Initial Drawdown Date and prior to the
Maturity Date; if such day is not a
Banking Day, the next following
Banking Day, unless such next
following Banking Day falls in the
following calendar month, in which
case the relevant Scheduled Reduction
Date shall be the immediately
preceding Banking Day;
"Security Documents" means the Guarantee, the Borrower
Pledge, the Assignment of Collection
Account, the General Security
Agreement, the Mortgages, the
Subordination Agreements and any other
documents that may be executed as
security for the Credit Facility and
the Security Parties' obligations in
connection therewith;
"Security Party(ies)" means the Borrower, OESC and
Philadelphia Cogeneration, or any of
them;
39
"Southwest Agreements" means the Southwest Energy Service
Agreement, the Southwest Master Lease,
the Southwest Lease, the Southwest
Collection Facilities Lease, the
Southwest Collection Facilities
Sublease Agreement, the Southwest Gas
Supply Agreement, the Southwest Gas
Supply Contract and the Southwest
Service Contract;
"Southwest Collection means the Collection Facilities
Facilities Lease" Lease dated as of June 30, 1992 made
between the City of Philadelphia and
the Philadelphia Municipal Authority
in respect of the Southwest Facility;
"Southwest Collection means the Collection Facilities
Facilities Sublease Sublease Agreement dated as of
Agreement" June 30, 1992 made between the
Philadelphia Municipal Authority and
Philadelphia Biogas in respect of the
Southwest Facility;
"Southwest Demised Premises" means the parcels of land together
with improvements thereon erected
subject of the Southwest Lease;
"Southwest Energy Service means that certain energy
Agreement" service agreement dated June 30, 1992
by and between Philadelphia Municipal
Authority and Philadelphia
Cogeneration in respect of the
Southwest Facility;
"Southwest Facility" means the cogeneration facility
operated by Philadelphia Cogeneration
on the Southwest Demised Premises;
"Southwest Gas Supply means the Gas Supply Agreement
Agreement" dated as of June 30, 1992 between
Philadelphia Biogas and the
Philadelphia Municipal Authority in
respect of the Southwest Facility;
40
"Southwest Gas Supply means the Gas Supply Contract
Contract" dated as of June 30, 1992 between the
City of Philadelphia and the
Philadelphia Municipal Authority in
respect of the Southwest Facility;
"Southwest Lease" means that certain sublease dated
June 30, 1992 by and between
Philadelphia Municipal Authority, as
lessor, and Philadelphia Cogeneration,
as lessee, in respect of the Southwest
Demised Premises;
"Southwest Master Lease" means the Lease dated June 30, 1992
between the City of Philadelphia and
the Philadelphia Municipal Authority
in respect of the Southwest Facility;
"Southwest Service Contract" means the Service Contract made as of
June 30, 1992 between the City of
Philadelphia and the Philadelphia
Municipal Authority in respect of the
Southwest Facility;
"Steam Sales Agreement" means the Newark Steam Sales
Agreement, the ▇▇▇▇▇▇ Steam Sales
Agreement or the Grays Ferry Steam
Sales Agreement;
"Subordination Agreement(s)" means the subordination agreement or
agreements to be executed by (i) the
Borrower, OESC and the Agent
subordinating the rights of the
Borrower and OESC to payments from
Philadelphia Cogeneration in respect
of, among other things, equipment
rentals to the rights of the Agent,
the Arranger and the Lenders under and
in connection with this Agreement
pursuant to Sections 4.1(c) and (e)
and (ii) the Borrower, the Borrower's
creditors and the Agent
41
pursuant to Section 10.1(B)(iii), each
to be substantially in the form of
Exhibit I;
"Subsidiaries" means, with respect to any Person, any
business entity of which more than 50%
of the outstanding voting stock is
owned directly or indirectly by such
Person and one or more other
Subsidiaries of such Person;
"Taxes" means any present or future income or
other taxes, levies, duties, charges,
fees, deductions or withholdings of
any nature now or hereafter imposed,
levied, collected, withheld or
assessed by any taxing authority
whatsoever, except for taxes on or
measured by the overall net income of
each Lender imposed by its
jurisdiction of incorporation or
applicable lending office, the United
States of America, the State or City
of New York or any governmental
subdivision or taxing authority of any
thereof or by any other taxing
authority having jurisdiction over
such Lender (unless such jurisdiction
is asserted solely by reason of the
activities of the Borrower or any of
the Subsidiaries);
"Termination Event" shall mean (i) a "reportable event",
as such term is defined in
Section 4043 of ERISA (other than a
"reportable event" not subject to the
provision for 30-day notice to the
PBGC) (ii) the withdrawal of the
Borrower or any ERISA Affiliate from a
Multiple Employer Plan during a plan
year in which it was a "substantial
employer", as such term is defined in
Section 4001(a)(2) of ERISA, or the
incurrence of liability by the
Borrower or any ERISA Affiliate under
Section 4064 of ERISA upon the
termination of a
42
Multiple Employer Plan, (iii) the
filing of a notice of intent to
terminate a Plan under Section 4041(c)
of ERISA or the treatment of a
Multiemployer Plan amendment as a
termination under Section 4041A of
ERISA, (iv) the institution of
proceedings to terminate a Plan or a
Multiemployer Plan or (v) any other
event or condition which might
constitute grounds under Section 4042
of ERISA for termination of, or the
appointment of a trustee to
administer, any Plan or Multiemployer
Plan;
"TETCO" means Texas Eastern Transmission
Corporation, a Texas corporation;
"TETCO Letter Agreement" means the January 26, 1996 letter by
and among Grays Ferry, Trigen, TETCO,
and Sun Company, Inc. (R&M);
"Trigen" means Trigen-Philadelphia Energy
Corporation, a Pennsylvania
corporation (formerly known as
Philadelphia Thermal Energy
Corporation and Philadelphia Thermal
Corporation);
"Trigen Gas Services Agreement" means the Gas Services Agreement
between Trigen and Grays Ferry dated
March 1, 1996;
"Trigen-Schuylkill" means Trigen-Schuylkill Cogeneration,
Inc., a Pennsylvania corporation;
"Utilicorp" means Utilicorp United, Inc., a
Delaware corporation;
"Voluntary Reduction Date" means each of the dates each being a
Banking Day, on which the Borrower has
requested, as provided in
Section 5.2(b), that the Commitments
be reduced;
43
"Westinghouse" means Westinghouse Electric
Corporation, a Pennsylvania
corporation;
"Withdrawal Liability" shall have the meaning given to such
term under Part 1 of Subtitle E of
Title IV of ERISA.
1.2 Construction. Words importing the singular number only shall
include the plural and vice versa. Words importing persons shall
include companies, firms, corporations, partnerships, unincorporated
associations and their respective successors and assigns.
1.3 GAAP. All accounting terms not specifically defined herein shall
be construed in accordance with generally accepted accounting
principles as in effect from time to time in the United States of
America consistently applied ("GAAP") and all financial statements
submitted pursuant to this Agreement shall be prepared in accordance
with, and all financial data submitted pursuant hereto shall be derived
from financial statements prepared in accordance with, GAAP.
2. REPRESENTATIONS AND WARRANTIES
In order to induce the Arranger, the Agent, the Security Trustee
and the Lenders to enter into this Agreement and to induce the Lenders
to make the Credit Facility available, the Borrower hereby represents
and warrants to the Arranger, the Agent, the Security Trustee and the
Lenders (which representations and warranties shall survive the
execution and delivery of this Agreement and the Note and the drawdown
of the Advances hereunder) that:
(a) Due Organization and Power. Each Borrower Entity is
duly formed and is validly existing in good standing under the laws of
its jurisdiction of organization and is properly qualified to do
business and in good standing in every jurisdiction where the failure
to maintain such qualification or good standing could reasonably be
expected to result in a Material Adverse Effect. Each Borrower Entity
has full power to carry on its business as now being conducted and has
complied with all statutory, regulatory and other requirements relative
to such business and such agreements, except where non-compliance could
not reasonably be expected to result in a Material Adverse Effect.
Each Security Party has full power and authority to enter into and
perform its obligations under this Agreement, the Note and the Security
Documents to which it is a party.
(b) Capitalization. The authorized capital stock or other
equity interests of each of the Borrower Entities (other than the
Borrower) are held as set forth on Schedule 2(b) and except as set
forth thereon no shares of the capital stock or other equity
44
interests of the Borrower Entities are issued and outstanding. Except
as set forth on Schedule 2(b), all of the issued and outstanding shares
of capital stock of each Borrower Entity are duly authorized and
validly issued, fully paid, nonassessable, free and clear of all Liens
(to the extent owned by the Borrower), and such shares were issued in
compliance with all applicable state, federal and foreign laws
concerning the issuance of securities. Except as set forth on Schedule
2(b), there are no preemptive or other outstanding rights, options,
warrants, conversion rights or similar agreements or understandings for
the purchase or acquisition of any shares of capital stock or other
securities or equity interests of the Borrower Entities (to the extent
owned by the Borrower).
(c) Authorization and Consents. All necessary corporate
action has been taken to authorize, and all necessary consents and
authorities have been obtained and remain in full force and effect to
permit, each Security Party to enter into and perform its obligations
under this Agreement, the Note and the Security Documents to which it
is a party and, in the case of the Borrower, to borrow, service and
repay the Advances and, as of the date of this Agreement, no further
consents or authorities are necessary for the service and repayment of
the Advances or any part thereof, including, without limitation, any
consent or approval of, or notice to, or other action with or by, any
Governmental Authority, regulatory body or any other Person which has
not been made or obtained and in full force and effect.
(d) Binding Obligations. This Agreement, the Note and the
Security Documents constitute or will, when executed and delivered,
constitute the legal, valid and binding obligations of each Security
Party as is a party thereto enforceable against such Security Party in
accordance with their respective terms, except to the extent that such
enforcement may be limited by equitable principles, principles of
public policy or applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting generally the enforcement of
creditors' rights.
(e) No Violation. The execution and delivery of, and the
performance of the provisions of, this Agreement, the Note and the
Security Documents to which it is to be a party by each Security Party
do not contravene any applicable law or regulation existing at the date
hereof, any Governmental Approval or any contractual restriction
binding on such Security Party or the certificate of incorporation or
by-laws (or equivalent instruments) thereof.
(f) Litigation. Except as set forth on Schedule 2(f), no
action, suit or proceeding is pending or, to the Borrower's knowledge,
threatened against any Borrower Entity before any court, board of
arbitration or administrative agency which could reasonably be expected
to result in any Material Adverse Effect. There is no injunction,
writ, preliminary restraining order or any order of any nature issued
by an arbitrator or
45
other Governmental Authority directing that any material aspect of the
transactions provided for in this Agreement not be consummated as
herein or therein provided.
(g) No Default. No Borrower Entity is in default under any
material agreement by which it is bound, or is in default in respect of
any financial commitment or obligation, in either case the default of
which could reasonably be expected to result in a Material Adverse
Effect.
(h) Existing Projects and Project Agreements. Upon the date
hereof and as of the date of the making of each Advance:
(i) All Material Governmental
Approvals required under applicable law in
connection with the operation, maintenance and
ownership of the Existing Projects are set
forth on Schedule 2(h). Each Material
Governmental Approval has been obtained, is
validly issued, is in full force and effect,
is not subject to appeal by any Person, and,
to the knowledge of the Borrower, is free from
conditions or requirements compliance with
which could reasonably be expected to result
in a Material Adverse Effect. There is no
proceeding pending or, to the knowledge of the
Borrower, threatened which is reasonably
likely to result in the rescission,
revocation, material modification, suspension,
determination of invalidity or limitation of
effectiveness of any Material Governmental
Approval. To the knowledge of the Borrower,
the information set forth in each application
and other written material submitted by or on
behalf of each Project Entity to the
applicable Governmental Authority in
connection with such Material Governmental
Approval was accurate and complete in all
material respects at the time such application
or other written material was submitted. Each
Existing Project complies in all material
respects with all covenants, conditions,
restrictions and reservations in the Material
Governmental Approvals relating to such
Existing Project and the Project Agreements
applicable thereto and all laws applicable
thereto, except to the extent any non-
compliance could not reasonably be expected to
result in a Material Adverse Effect;
(ii) Each Project Agreement to which
a Project Entity is a party is a legal, valid
and binding agreement of such Project Entity
enforceable against such Project Entity in
accordance with its terms, except to the
extent enforceability may be limited by
applicable bankruptcy, insolvency, moratorium,
reorganization or other similar laws affecting
the enforcement of creditors' rights and
subject to general equitable principles;
46
(iii) All representations and
warranties set forth in each Project Agreement
by the Borrower Entity which is a party
thereto are true and correct in all material
respects (the determination of such material
truth and correctness to be made by the Agent
in good faith) as though made as of the date
hereof, except to the extent any such
representation or warranty relates to a prior
date;
(iv) Each Existing Project will be
able to be operated on a safe and commercially
sound basis in compliance with all
Governmental Approvals and applicable Project
Agreements and laws, so that the performance
and facility guarantees and specifications
provided for in the applicable Project
Agreements and Governmental Approvals can be
substantially met during the term of this
Agreement and each Project Entity can duly and
punctually meet its obligations under the
applicable Project Agreements and Governmental
Approvals in accordance with the terms
thereof, except to the extent any inadvertent
non-compliance with such Governmental
Approvals and Project Agreements could not
reasonably be expected to have a Material
Adverse Effect; provided, however, that such
inadvertent noncompliance must be remedied or
cured within 30 days of any Borrower Entity's
obtaining knowledge thereof. Each Project
Entity has adequate inventories and spare
parts to operate its respective Project in
accordance with the Project Agreements,
Governmental Approvals and applicable law;
(v) Each Existing Project includes
facilities for the storage of Alternative Fuel
(including kerosene) sufficient to meet its
obligations under the Project Agreements,
Governmental Approvals and laws applicable
thereto; and
(vi) Each Project Entity is the sole
owner of its respective Existing Project free
and clear of all Liens (other than Permitted
Liens).
(i) Insurance. Schedule 2(i) (which shall be updated by the
Borrower and provided to the Agent not less often than annually) sets
forth a complete and accurate description of all material policies of
insurance that will be in effect as of the Initial Drawdown Date. To
the knowledge of the Borrower, such policies are with companies rated
"A-" or better by Best's Insurance Guide and Key Rating or other
insurance companies of recognized responsibility satisfactory to the
Agent, and the coverages provided by such policies are in amounts and
cover such risks as are usually carried by companies engaged in similar
businesses and owning similar properties in the same general areas in
which each Borrower Entity operates and, in any event, other than to
47
account for amortization of loan repayments, the insurance coverages
shall not be less than the insurance coverages set forth in
Schedule 2(i).
(j) Financial Information. Except as otherwise disclosed in
writing to the Agent on or prior to the date hereof, all financial
statements, information and other data furnished by any Borrower Entity
to the Agent are complete and correct, such financial statements have
been prepared in accordance with GAAP (except, in the case of interim
financial statements, for the absence of footnotes) and accurately and
fairly present the financial condition of the parties covered thereby
as of the respective dates thereof and the results of the operations
thereof for the period or respective periods covered by such financial
statements and since such date or dates, there has been no Material
Adverse Effect as to any of such parties and none thereof has any
contingent obligations, liabilities for taxes or other outstanding
financial obligations which are material in the aggregate except as
disclosed in such statements, information and data.
(k) Tax Returns. Each Borrower Entity has filed all
material tax returns required to be filed thereby and has paid all
taxes payable thereby which have become due, other than those not yet
delinquent or the nonpayment of which would not have a Material Adverse
Effect on such Borrower Entity and except for those taxes the amount or
validity of which is currently being contested in a Good Faith Contest.
(l) ERISA. The execution and delivery of this Agreement,
the Note and the Security Documents and the consummation of the
transactions hereunder will not involve any prohibited transaction
within the meaning of ERISA or Section 4975 of the Code and no
condition exists or event or transaction has occurred in connection
with any Plan maintained or contributed to by any Borrower Entity or
any ERISA Affiliate resulting from the failure of any thereof to comply
with ERISA insofar as ERISA applies thereto which is reasonably likely
to result in such Borrower Entity or any ERISA Affiliate incurring any
liability, fine or penalty which individually or in the aggregate would
have a Material Adverse Effect. Prior to the date hereof, the Borrower
has delivered to the Agent a list of all Plans to which any Borrower
Entity or any ERISA Affiliate is a "party in interest" (within the
meaning of Section 3(14) of ERISA) or a "disqualified person" (within
the meaning of Section 4975(e)(2) of the Code).
(m) Margin Regulations. No Borrower Entity is engaged in
the business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulation G, T, U, or X
of the Board of Governors of the Federal Reserve System) and no
proceeds of any Advance will be used in a manner which would violate,
or result in a violation of, such Regulation, G, T, U, or X.
48
(n) Investment Company Act. No Borrower Entity is an
"investment company" nor a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended.
(o) Security Interests. Except to the extent consents set
forth in Schedule 2(o) are required to create a first priority
perfected security interest in the Collateral, the security interests
created in favor of the Security Trustee under the Security Documents
are valid and perfected, first priority security interests (subject
only to Permitted Liens) superior and prior to the rights of all
Persons (except those rights of the holders of Permitted Liens),
whether the property subject to the security interests is now owned by
the Security Party granting such security interest or is hereafter
acquired. The Security Documents (including Uniform Commercial Code
financing statements) have been duly filed, recorded and/or registered
in each office and in each jurisdiction where required to create and
perfect the lien and security interest described above. The chief
executive office and chief place of business of each Security Party and
the office in which the records relating to the earnings and other
receivables of each Security Party are kept is located, as of the date
hereof, at the locations set forth on Schedule 2(o) for such Security
Party. Such locations are the sole offices or places of business
maintained by each Security Party as of the date hereof. To the
knowledge of the Borrower, no Security Party has transacted any
business during the five year period prior to the date of this
Agreement under any name other than those set forth on Schedule 2(o).
(p) Business of Project Entities. No Project Entity has
engaged in any business other than the operation of its respective
Existing Project nor is any Project Entity a party to any contract,
operating lease, agreement or commitment which, either individually, or
in the aggregate is material to the operation of its respective
Existing Project other than the Project Agreements applicable thereto.
(q) EWG Status; Qualifying Cogeneration Facility Status.
▇▇▇▇▇▇ is an Exempt Wholesale Generator and each of the Newark Project,
the Grays Ferry Project and the Philadelphia Cogeneration Project is a
Qualifying Cogeneration Facility. Each of Newark, Grays Ferry and
Philadelphia Cogeneration has maintained and established by filing the
QF Certificate for each of the Newark Project, the Grays Ferry Project
and Philadelphia Cogeneration Project, with such filings reflecting the
ownership and operation of such Projects. Each of the Newark Project,
the Grays Ferry Project and the Philadelphia Cogeneration Project is
owned and operated in the manner contemplated by its QF Certificate.
(r) Regulation of Borrower Entities. None of the Borrower
Entities, the Agent, the Security Trustee nor any Lender is or will be,
solely as a result of the participation by such parties separately or
as a group in the transactions contemplated hereby or in any Project
Agreement, or by the ownership, use or operation of any
49
Existing Project in accordance with its respective Project Agreements,
subject to regulation by any Governmental Authority as a "public
utility" under the FPA, a "holding company" under PUHCA, a utility
under state law, or a subsidiary or affiliate of any of the foregoing;
provided, however, that ▇▇▇▇▇▇ is subject to regulation as a "public
utility" under the FPA. None of the Agent, the Security Trustee nor
any Lender will, solely by reason of its or their ownership or
operation of the Philadelphia Cogeneration Project upon the exercise of
remedies under the Security Documents, be subject to financial,
organizational or rate regulation by any Governmental Authority as a
"public utility" under the FPA, a "holding company" under PUHCA, a
utility under state law, or a subsidiary or affiliate of any of the
foregoing.
(s) Title to and Sufficiency of Assets. Except as set forth
on Schedule 2(s), each Borrower Entity has good, valid and sufficient
title to (or a leasehold interest in) its assets and properties. Each
of the Borrower Entities has good, marketable, indefeasible and
insurable title in fee simple (or its equivalent under applicable law)
to the real property owned by it, all of which is listed on
Schedule 2(s). Except as specified in Schedule 2(s), none of the real
property owned or leased by any Borrower Entity is located within any
federal, state or municipal flood plain. Except as set forth on
Schedule 2(s), the security interests granted to the Security Trustee
by the Security Parties are first and prior security interests and no
Security Party has granted any security interests in the Collateral
owned by it other than those granted to the Security Trustee hereunder.
All leases necessary for the conduct of the business of the Borrower
Entities as presently conducted and as proposed to be conducted are
valid and subsisting and are in full force and effect. The Borrower
Entities enjoy peaceful and undisturbed possession under all material
leases to which they are parties (all such leases being set forth on
Schedule 2(s)). The services to be performed, the materials to be
supplied and the easements, licenses and other rights granted or to be
granted to each Project Entity pursuant to the Project Agreements and
Governmental Approvals applicable thereto provide or will provide such
Project Entity with all rights and property interests required to
enable such Project Entity to obtain all services, materials or rights
(including access) required for the operation and maintenance of its
Existing Project, including such Project Entity's full and prompt
performance of its obligations, and full and timely satisfaction of all
conditions precedent to the performance by others of their obligations
under such Project Agreements and Governmental Approvals.
(t) Labor Matters. There are no strikes or other material
labor disputes or grievances, charges or complaints with respect to any
employee or group of employees pending or, to the knowledge of the
Borrower, threatened against any Borrower Entity.
(u) Transactions with Affiliates. Set forth on
Schedule 2(u) is a true, accurate and complete description of all
transactions between any Borrower Entity and any Affiliate thereof
since August 14, 1997 which required or which will require in the
50
case of any Borrower Entity the payment by such Borrower Entity of an
aggregate amount equal to or greater than $100,000 during any twelve-
month period.
(v) Environmental Matters and Claims. Except as set forth
on Schedule 2(v), (i) each of the Borrower Entities is in compliance
with all applicable United States federal, state and local laws,
regulations, rules and orders relating to pollution prevention or
protection of the environment or exposure to Materials of Environmental
Concern (including, without limitation, ambient air, surface water,
ground water, navigable waters, waters of the contiguous zone, ocean
waters and international waters), including, without limitation, laws,
regulations, rules and orders ("Environmental Laws") relating to
(1) emissions, discharges, releases or threatened releases of
substances defined as "hazardous substances," "hazardous materials,"
"contaminants," "pollutants," "hazardous wastes" or "toxic substances"
in (i) the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act, 42 U.S.C. ? 9601 et seq., (ii) the Hazardous
Materials Transportation Act, 49 U.S.C. ? 1801 et seq., (iii) the
Resource Conservation and Recovery Act, 42 U.S.C. ? 6901 et seq., (iv)
the Federal Water Pollution Control Act, as amended, 33 U.S.C. ? 1251
et seq., (v) the Clean Air Act, 33 U.S.C. ? 7401 et seq., (vi) the
Toxic Substances Control Act, 15 U.S.C. ? 2601 et seq. or (vii) the
Safe Drinking Water Act, 42 U.S.C. ? 300f et seq. ("collectively,
Materials of Environmental Concern"), or (2) the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Materials of Environmental Concern, all to the extent
the failure to comply with Environmental Laws could reasonably be
expected to have a Material Adverse Effect; (ii) each of the Borrower
Entities has all permits, licenses, approvals, consents or other
authorizations required under applicable Environmental Laws
("Environmental Approvals") and is in compliance with all Environmental
Approvals required to operate their business as then being conducted,
all to the extent the failure to maintain or comply with an
Environmental Approval could reasonably be expected to have a Material
Adverse Effect; (iii) none of the Borrower Entities has received any
notice of any claim, action, cause of action, investigation or demand
by any person, entity, enterprise or government, or any political
subdivision, intergovernmental body or agency, department or
instrumentality thereof, alleging potential liability for, or a
requirement to incur, material investigatory costs, cleanup costs,
response and/or remedial costs (whether incurred by a governmental
entity or otherwise), natural resources damages, property damages,
personal injuries, attorneys' fees and expenses, or fines or penalties,
in each case arising out of, based on or resulting from (1) the
presence, or release or threat of release into the environment, of any
Materials of Environmental Concern at any location, whether or not
owned by such person, or (2) circumstances forming the basis of any
violation, or alleged violation, of any Environmental Law or
Environmental Approval, and in each case which could reasonably be
expected to have a Material Adverse Effect ("Environmental Claim")
(other than Environmental Claims that have been fully and finally
adjudicated or otherwise determined and all fines, penalties
51
and other costs, if any, payable by the Security Parties in respect
thereof have been paid in full or which are fully covered by insurance
(including permitted deductibles)); (iv) there are no circumstances
that may prevent or interfere with such compliance in the future; (v)
no Materials of Environmental Concern are currently located at, in, on,
under or about or are being released from any of the properties on
which the Projects are located (or any other property with respect to
which any Borrower Entity has or may have liability either
contractually or by operation of law) in a manner which violates any
applicable Environmental Law, or for which cleanup or corrective action
of any kind is required under any applicable Environmental Law where
such violation, cleanup or corrective action could reasonably be
expected to have a Material Adverse Effect; (vi) no notice of
violation, Lien, complaint, suit, order or other notice with respect to
the environmental condition of any of the properties on which the
Projects are located (or any other property with respect to which any
of the Borrower Entities has or may have liability either contractually
or by operation of law) is outstanding or, to the Borrower's knowledge,
threatened against a Borrower Entity which could reasonably be expected
to result in a Material Adverse Effect.
(w) Bank Accounts. Schedule 2(w) sets forth the account
numbers and locations of all bank accounts of each Borrower Entity.
(x) Survival. All representations, covenants and warranties
made herein and in any certificate or other document delivered pursuant
hereto or in connection herewith shall survive the making of the
Advances and the issuance of the Note to be issued by the Borrower
hereunder.
(y) No Material Adverse Effect. Since June 30, 1997, there
has not occurred any event or condition resulting in a Material Adverse
Effect.
3. ADVANCES
3.1 (a) Purposes. The Lenders shall make the Advances available
to the Borrower for the purpose of making advances or loans to any
Affiliates of the Borrower, for the purposes of (i) refinancing the
Borrower's existing $5,500,000 credit facility with PECO Energy
Company, (ii) enabling (A) the Borrower or Philadelphia Cogeneration to
purchase the minority interest of the Revocable Trust of ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ in Philadelphia Cogeneration and (B) the Borrower or
Philadelphia Biogas to purchase the minority interest of the Revocable
Trust of ▇▇▇▇▇▇ ▇▇▇▇▇▇ Perelman in Philadelphia Biogas,
(iii) refinancing the existing Indebtedness of the Borrower to NRG
Energy, (iv) refinancing the existing Indebtedness of Borrower, OESC
and/or Philadelphia Cogeneration, as the case may be, to each of GE
Capital Corporation, Fleet Credit Corporation, Financing for Science
and Industry, Inc., FINOVA Capital Corporation, New England Capital
Corporation and WASCO Funding Corp. and obtaining the release
52
of the Liens securing such Indebtedness (the "Equipment Liens"), and
(v) for general working capital purposes.
(b) Making of the Advances. Each of the Lenders, relying
upon each of the representations and warranties set out in Section 2,
hereby severally and not jointly agrees with the Borrower that, subject
to and upon the terms of this Agreement, it will on the Drawdown Dates,
make the Advances available through the Agent to the Borrower in an
aggregate amount not to exceed its Commitment ratably with the other
Lenders according to their respective Commitments. The maximum
aggregate amount of all Advances which may be outstanding at any time
under this Agreement is the aggregate amount of the Credit Facility, as
reduced pursuant to Section 5.2. All Advances shall be in a minimum
amount of Two Hundred Fifty Thousand Dollars ($250,000).
(c) Maximum Number of LIBOR Rate Advances. The maximum
number of LIBOR Rate Advances that may be outstanding at any time under
this Agreement shall be six (6).
3.2 Drawdown Notice. The Borrower shall, in respect of all
Advances, serve a written notice in the form of Exhibit H hereto (a
"Drawdown Notice") on the Agent (which shall promptly furnish a copy to
each Lender) by facsimile or otherwise (i) for a LIBOR Rate Advance,
not later than 11:00 A.M., New York City time, at least two (2) Banking
Days prior to the date of the proposed LIBOR Rate Advance, and (ii) for
a Base Rate Advance, not later than 11:00 A.M., New York City time, on
the day of the proposed Base Rate Advance. Each Drawdown Notice shall
specify (a) the date of the proposed borrowing (which shall be a
Banking Day), (b) the principal amount of the Advance to be made by the
Lenders on that date, (c) whether such Advance is a Base Rate Advance
or a LIBOR Rate Advance, (d) if a LIBOR Rate Advance, the Interest
Period requested by the Borrower, and (e) the disbursement instructions
for the proceeds of such Advance. Each Drawdown Notice shall be
effective upon receipt by the Agent and shall be irrevocable.
3.3 Effect of Drawdown Notices. Each Drawdown Notice shall be
deemed to constitute a warranty by the Borrower (a) that the
representations and warranties stated in Section 2 (updated mutatis
mutandis) are true and correct on and as of the date of such Drawdown
Notice and will be true and correct on and as of the relevant Drawdown
Date as if made on such date, except to the extent such representations
and warranties relate to a prior date and except that the Borrower
shall not be required to update the Schedules hereto to the extent
changes have occurred in the information disclosed therein from and
after the date hereof (provided that such exception shall not relieve
the Borrower of its obligations to provide or update certain
information relating to matters disclosed on such Schedules under
Section 10.1A hereof), (b) that after giving effect to the borrowing
made pursuant to such Drawdown Notice, the Credit Facility Balance
shall not exceed the
53
maximum amount then available hereunder pursuant to the terms hereof
and (c) that no Event of Default nor any event which with the giving of
notice or lapse of time or both would constitute an Event of Default
has occurred and is continuing.
3.4 Notation of Advances. Each Advance made by the Lenders to
the Borrower may be evidenced by a notation of the same made by the
Agent on the grid attached to the Note, which notation, absent manifest
error, shall be prima facie evidence of the amount of the relevant
Advance.
4. CONDITIONS
4.1 Conditions Precedent to Drawdown of the Initial Advance. The
obligation of the Lenders to make the initial Advance available to the
Borrower under this Agreement shall be expressly subject to the
following conditions precedent:
(a) the Agent shall have received the following documents in
form and substance satisfactory to the Agent and its legal advisor:
(i) copies, certified as true and complete by
an officer of each of the Security Parties, of
the resolutions of the board of directors of such
Security Party evidencing approval of this
Agreement, the Note and those Security Documents
to which it is to be a party and authorizing an
appropriate officer or officers or attorney-in-
fact or attorneys-in-fact to execute the same on
its behalf, or other evidence of such approvals
and authorizations;
(ii) copies, certified as true and complete by an officer of
each of the Security Parties, of all documents evidencing any other
necessary action (including actions by such parties thereto other than
the Security Parties as may be required by the Agent), approvals or
consents with respect to this Agreement, the Note, and the Security
Documents;
(iii) copies, certified as true and complete by
an officer of the Borrower and each of the
Project Entities, of the constating instruments
of the Borrower and each Project Entity;
(iv) certificate of the Secretary of the
Borrower certifying that it legally and
beneficially owns, directly or indirectly, the
issued and outstanding capital stock and
partnership
54
interests of each of the Project Entities and
that such capital stock and/or interests as set
out in Schedule 2(b), are free and clear of any
liens, claims, pledges or other encumbrances
whatsoever other than as disclosed to the Lenders
in writing on or before the date hereof;
(v) certificate of the Secretary of each
Project Entity certifying as to the record
ownership of all of its issued and outstanding
capital stock or partnership interests, as the
case may be;
(vi) certificates of the jurisdiction of
formation of each of the Borrower Entities as to
the good standing thereof; and
(viii) certificate of the Secretary of each of
the Borrower Entities as to the incumbency and
signatures of the officers authorized to act for
each such entity.
(b) the Agent shall have received in form and substance
satisfactory to it and its legal advisors:
(i) environmental reports and/or reliance
letters which shall contain the results of the
review of the environmental audit of Philadelphia
Cogeneration, permitting issues and other matters
of environmental concern with respect to the
Existing Projects;
(ii) an engineer's report on the technical
condition of the equipment utilized by the
Philadelphia Cogeneration Project;
(iii) evidence, in the form of self-
certification, that each of the Existing Projects
(other than the ▇▇▇▇▇▇ Project) shall be a
Qualifying Cogeneration Facility and that each
Project Entity (other than ▇▇▇▇▇▇) shall have
maintained and established by filing the
necessary certificates with respect thereto;
(iv) evidence that the capital stock or other
equity interests of each of the Project Entities
held by the Borrower is held free and clear of
all Liens other than Permitted Liens;
55
(v) evidence that the Security Trustee has,
for the benefit of the Lenders and the Agent, a
valid and perfected first priority security
interest in the Collateral (subject only to
Permitted Liens) and that the Equipment Liens
have been terminated;
(vi) evidence that all Governmental Approvals
and filings and consents from third parties
required in connection with the transactions
contemplated hereby have been obtained;
(vii) evidence that none of the Existing
Projects includes any real property located within an area that has
been identified by the Director of the Federal Emergency Management
Agency as an area having special flood hazards and for which flood
insurance has been made available under the National Flood Insurance
Act of 1968, as amended; and
(viii) with respect to the Advance the
proceeds of which are to be used to acquire the minority interest of
Philadelphia Cogeneration held by the Revocable Trust of ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, evidence that such interest will be held by the Borrower or
Philadelphia Cogeneration free and clear of all Liens; and
(ix) written acknowledgment from The Chase
Manhattan Bank of its receipt of notice of the
pledge and assignment of the Collection Account
to the Security Trustee pursuant to Section 8.3.
(c) the Borrower shall have duly executed and delivered to
the Agent:
(i) the Note;
(ii) each Security Document to which it is to
be a party;
(iii) Uniform Commercial Code Financing
Statements for filing with New Jersey,
Pennsylvania, Delaware and Minnesota and in such
other jurisdictions as the Agent may reasonably
require; and
56
(iv) stock certificates representing 83% of the
issued and outstanding shares of capital stock of Philadelphia
Cogeneration, together with irrevocable undated stock powers duly
endorsed in blank.
(d) Philadelphia Cogeneration shall have duly executed and
delivered to the Agent:
(i) the Security Documents to which it is to
be a party, and
(ii) Uniform Commercial Code Financing
Statements for filing with Pennsylvania, Delaware
and Minnesota and in such other jurisdictions as
the Agent may reasonably require.
(e) OESC shall have duly executed and delivered:
(i) the Security Documents to which it is to
be a party, and
(ii) Uniform Commercial Code Financing
Statements for filing with Pennsylvania, Delaware, California and
Minnesota and in such other jurisdictions as the Agent may reasonably
require.
(f) the Agent shall have received fully executed copies of
the Subordination Agreements;
(g) the Agent shall have received a certificate of an
officer of Philadelphia Cogeneration, in his capacity as an officer,
confirming the representations and warranties with respect to solvency
set forth in the Guarantee and containing conclusions as to the
solvency of Philadelphia Cogeneration;
(h) the Agent shall have received consents from the
Philadelphia Municipal Authority to (i) the assignment of the
Philadelphia Cogeneration Leases to the Security Trustee pursuant to
the Mortgage and (ii) the assignment of Energy Service Agreements to
the Security Trustee, pursuant to the General Security Agreement.
(i) the Agent shall be satisfied that neither the Borrower
nor any of the Project Entities is subject to any Environmental Claim
which could have a Material Adverse Effect;
57
(j) the Agent shall have received payment in full of all
fees and expenses due to the Agent, the Arranger and the Lenders under
Section 14;
(k) the Borrower shall have established the Collection
Account pursuant to Section 8 and each of the Project Entities shall
have executed and delivered to the Security Trustee its Acknowledgment;
(l) the Agent shall have received evidence satisfactory to
it and to its legal advisor that, save for the liens created by the
filing of any Uniform Commercial Code Financing Statements, the
Borrower Pledge, the Assignments, or any other Security Document there
are no liens, charges or encumbrances of any kind whatsoever on any of
the Collateral except as permitted hereby or by any of the Security
Documents;
(m) the Agent shall have received legal opinions addressed
to the Agent and the Lenders from (i) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP, as counsel
for the Security Parties, (ii) Dechert Price & ▇▇▇▇▇▇, as local
Pennsylvania counsel for the Security Parties, and (iii) ▇▇▇▇▇▇ &
▇▇▇▇▇▇, special counsel to the Agent, in each case in such form as the
Agent may reasonably require; and
(n) the Agent shall have received (i) a certified copy of,
or binder for, each of the insurance policies required by
Section 2.1(i), such policies to be in form and substance, and issued
by companies, reasonably satisfactory to the Agent, together with
evidence satisfactory to the Agent that such insurance complies with
the provisions of Section 2.1(i) and with the provisions of the Project
Agreements, and that all premiums then due with respect to such
insurance have been paid and (ii) a written report of an insurance
consultant describing the insurance obtained by each Project Entity
with respect to its Existing Project and stating that the required
insurance is in full force and effect and provides reasonable and
adequate coverage for such Existing Project.
Each of the Agent, the Security Trustee, the Arranger and
each of the Lenders hereby agrees that, notwithstanding any provision
or term to the contrary set forth in this Agreement, the execution and
delivery of the Mortgage shall not be a condition precedent to the
funding of the Initial Advance, provided (i) that the amount available
under the Credit Facility shall be reduced as set forth in the
definition of "Credit Facility" in Section 1.1 above, and (ii) that
Philadelphia Cogeneration shall execute and deliver the Mortgage,
together with such opinions and Uniform Commercial Code financing
statement filings as the Agent shall reasonably request, by not later
than forty-five (45) days from and after the Initial Drawdown Date, and
it is expressly agreed that the failure to so deliver the Mortgage
within such 45-day period shall constitute an Event of Default
hereunder.
58
4.2 Further Conditions Precedent. The obligation of the Lenders
to make any Advance available to the Borrower under this Agreement
shall be expressly and separately subject to the following further
conditions precedent on the relevant Drawdown Date:
(a) the Agent having received a Drawdown Notice in
accordance with the terms of Section 3.2;
(b) the representations stated in Section 2 (updated
mutatis mutandis to such date) being true and correct as if made on and
as of that date except to the extent such representations and
warranties relate to a prior date and except that the Borrower shall
not be required to update the Schedules hereto to the extent changes
have occurred in the information disclosed therein from and after the
date hereof (provided that such exception shall not relieve the
Borrower of its obligations to provide or update certain information
relating to matters disclosed on such Schedules under Section 10.1A
hereof);
(c) no Event of Default having occurred and being continuing
and no event having occurred and being continuing which, with the
giving of notice or lapse of time, or both, would constitute an Event
of Default;
(d) the Agent being satisfied that no change in any
applicable laws, regulations, rules or in the interpretation thereof
shall have occurred which make it unlawful for any Security Party to
make any payment as required under the terms of this Agreement, the
Note, the Security Documents or any of them; and
(e) there having been no Material Adverse Effect since the
date hereof.
4.3 Breakfunding Costs. In the event that, on any date specified
for the making of an Advance in any Drawdown Notice, the Lenders shall
not be obliged under this Agreement to make such Advance available
under this Agreement, the Borrower shall indemnify and hold the Lenders
fully harmless against any actual losses which the Lenders (or any
thereof) may sustain as a result of borrowing or agreeing to borrow
funds to meet the drawdown requirement of such Drawdown Notice. At the
Borrower's request, each such Lender shall provide the Borrower with
reasonable evidence of such actual losses incurred by such Lender.
4.4 Satisfaction after Drawdown. Without prejudice to any of the
other terms and conditions of this Agreement, in the event the Lenders,
in their sole discretion, advance any Advance prior to the satisfaction
of all or any of the conditions referred to elsewhere in Sections 4.1
or 4.2, the Borrower hereby covenants and undertakes to satisfy or
procure the satisfaction of such condition or conditions within
seven (7) days after the
59
relevant Drawdown Date (or such longer period as the Lenders, in their
sole discretion, may agree).
5 REPAYMENT, REDUCTION AND PREPAYMENT
5.1 Repayment. The Borrower shall repay all outstanding Advances
(subject to such reduction and prepayments as hereinafter set forth) on
the Maturity Date and, to the extent required to comply with the
limitations set forth in Section 5.2 below, on each Reduction Date.
5.2 Reductions of the Credit Facility. The Credit Facility shall
be reduced:
(a) on each of the Scheduled Reduction Dates, by Two Million
Five Hundred Thousand Dollars ($2,500,000), and
(b) on any Voluntary Reduction Date, by such amount as the
Borrower may indicate to the Agent in writing at least ten (10) days in
advance of such date.
On each Reduction Date, each Lender's Commitment shall be
reduced by an amount equal to (i) the ratio of such Lender's Commitment
to the aggregate of the Commitments on such date, multiplied by
(ii) the amount by which the total Credit Facility is to be so reduced
on such date. On each Reduction Date the Borrower shall, if necessary,
prepay the Credit Facility in the amount required so that the Credit
Facility Balance shall not exceed the aggregate of the Commitments as
reduced pursuant to this Section 5.2.
5.3 Prepayment; Reborrowing. Subject to the provisions of
Section 5.5 in the case of the prepayment of any LIBOR Rate Advance on
any day other than the last day of the Interest Period with respect to
such LIBOR Rate Advance, the Borrower may, at its option, without
penalty or premium, on any Banking Day, prepay all or any portion of
the principal of any Advance. The Borrower shall deliver to the Agent
(which shall promptly furnish a copy to each Lender) notice of such
prepayment on not less than three (3) Banking Days with respect to each
LIBOR Rate Advance and one (1) Banking Day with respect to each Base
Rate Advance (which notice shall be irrevocable and shall specify the
date and amount of prepayment). Each prepayment shall be in a minimum
amount of One Million Dollars ($1,000,000). Subject to the limits and
upon the conditions herein provided (including the reduction of the
Commitments provided in Section 5.2), the Borrower may from time to
time prepay the Advances and thereafter re-borrow such Advances or a
portion thereof.
5.4 Optional and Mandatory Conversions. Subject to Section 5.5,
the Borrower may, at its option (i) on the last day of any Interest
Period, convert a LIBOR Rate
60
Advance into a Base Rate Advance, (ii) on the last day of any Interest
Period, continue a LIBOR Rate Advance as a LIBOR Rate Advance, and
(iii) on any Banking Day, convert a Base Rate Advance into a LIBOR Rate
Advance; provided, that, except as otherwise provided in this
Agreement to the contrary, the Borrower shall deliver to the Agent
(which will promptly send a copy to each Lender) a Notice of Conversion
or Continuation by 11:00 A.M., New York City time, (A) in the case of
clauses (ii) and (iii) above, not less than three Banking Days prior to
the date of each such conversion or continuation, and (B) in the case
of clause (i) above, on or prior to the date of such conversion. Each
Notice of Conversion or Continuation shall specify (x) the amount of
each Advance to be continued or converted, (y) the date of such
continuation or conversion, and (z) the type of Advance to be continued
or converted (and in the case of a conversion, the type of Advance to
result from such conversion and, if such Advance is to be converted
into a LIBOR Rate Advance, the Interest Period). Subject to
Section 9.2, upon the occurrence of an Event of Default all LIBOR Rate
Advances will be converted to Base Rate Advances upon termination of
the then applicable Interest Periods.
5.5 Interest and Costs with Prepayments. Any prepayment of the
Advances made hereunder (including, without limitation, those made
pursuant to Sections 5.2 and 5.3) shall be subject to the condition
that on the date of prepayment all accrued interest to the date of such
prepayment shall be paid in full with respect to the Advances or
portions thereof being prepaid, together with any and all actual costs
or expenses incurred by any Lender in connection with any breaking of
funding. At the Borrower's request, each such Lender shall provide the
Borrower with reasonable evidence of such actual losses incurred by
such Lender.
5.6 Pro-Rata Reduction of Commitments. If the Commitments of the
Lenders are reduced pursuant to Section 5.2 or any other provision of
this Agreement, the Commitments shall be reduced on the Reduction Dates
falling on or after the date of such reduction by the same proportion
as that by which the amount of the aggregate of the Commitments of the
Lenders is so reduced and the remaining reductions pursuant to Section
5.2 shall be adjusted proportionately to reflect such reduction.
6. INTEREST AND RATE
6.1 Payment of Interest; Interest Rate. (a) The Borrower hereby
promises to pay to the Lenders interest on the unpaid principal amount
of each Advance made to the Borrower for the period commencing on the
date of such Advance until but not including the stated maturity
thereof (whether by acceleration or otherwise) or the date of
prepayment thereof (i) during the periods such Advance is a Base Rate
Advance, at the Base Rate plus the Margin, and (ii) during the periods
such Advance is a LIBOR Rate Advance, at the LIBOR Rate plus the
Margin (as the case may be from time to time, the "Applicable Rate");
provided, however, that after the occurrence and during the
61
continuance of an Event of Default under Section 9.1(a) or (b) or,
after notice from the Agent, an Event of Default mentioned elsewhere in
Section 9.1, all outstanding Advances shall bear interest at the
Default Rate.
(b) Notwithstanding the foregoing, the Borrower hereby
promises to pay interest on any Advance made to the Borrower and (to
the extent that the payment of such interest shall be legally
enforceable) on any overdue installment of interest, and on any other
amount payable by such Borrower hereunder which shall not be paid in
full when due (whether at stated maturity, by acceleration or
otherwise), for the period commencing on the due date thereof until but
not including the date the same is paid in full at the Default Rate.
(c) Except as provided in the next sentence, accrued
interest on each Advance shall be payable (x) in respect of each Base
Rate Advance, quarterly, on the last Banking Day of each calendar
quarter, (y) in respect of each LIBOR Rate Advance on the last day of
each Interest Period, except that if the Borrowers shall select an
Interest Period in excess of three (3) months, accrued interest shall
be payable during such Interest Period on each three (3) month
anniversary of the commencement of such Interest Period and upon the
last day of such Interest Period, and (z) in the case of all Advances
together with each repayment of principal thereof. Interest payable at
the Default Rate shall be payable from time to time on demand of the
Agent.
6.2 Calculation of Interest. All interest shall accrue from day-to-
day and be calculated on the actual number of days elapsed and on the
basis of a three hundred sixty (360) day year with respect to each
LIBOR Rate Advance and on the basis of a 365/366 day year with respect
to each Base Rate Advance.
6.3 Maximum Interest. Anything in this Agreement or the Note to
the contrary notwithstanding, the interest rate on any Advance shall in
no event be in excess of the maximum rate permitted by applicable law.
7. PAYMENTS
7.1 Place of Payments, No Set Off. All payments to be made hereunder
by the Borrower shall be made to the Agent, not later than 11 a.m. New
York time (any payment received after 11 a.m. New York time shall be
deemed to have been paid on the next Banking Day) on the due date of
such payment, at its office located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇ or to such other office of the Agent as the Agent may
direct, without set-off or counterclaim and free from, clear of, and
without deduction for, any Taxes, provided, however, that, subject to
such Lender's compliance with Section 7.2 below, if the Borrower shall
at any time be compelled by law to withhold or deduct any Taxes from
any amounts payable to the Lenders hereunder, then the Borrower shall
pay
62
such additional amounts in Dollars as may be necessary in order that
the net amounts received after withholding or deduction shall equal the
amounts which would have been received if such withholding or deduction
were not required and, in the event any withholding or deduction is
made, whether for Taxes or otherwise, the Borrower shall promptly send
to the Agent such documentary evidence with respect to such withholding
or deduction as may be required from time to time by the Lenders.
7.2 Tax Forms. Each Lender shall promptly provide the Borrower
with two duly completed copies of Internal Revenue Service Form 1001 or
4224, as appropriate, or any successor form prescribed by the Internal
Revenue Service, certifying that such Lender is entitled to benefits
under an income tax treaty to which the United States is a party that
exempts withholding tax on payments under this Agreement or the Note or
certifying that the income receivable pursuant to this Agreement or the
Note is effectively connected with the conduct of a trade or business
in the United States.
7.3 Tax Credits. If any Lender obtains the benefit of a credit
against the liability thereof for federal income taxes imposed by any
taxing authority for all or part of the Taxes as to which the Borrower
has paid additional amounts as aforesaid (and each Lender agrees to use
its best efforts to obtain the benefit of any such credit which may be
available to it, provided it has knowledge that such credit is in fact
available to it), then such Lender shall reimburse the Borrower for the
amount of the credit so obtained. Each Lender agrees that in the event
that Taxes are imposed on account of the situs of its loans hereunder,
such Lender, upon acquiring knowledge of such event, shall, if
commercially reasonable, shift such loans on its books to another
office of such Lender so as to avoid the imposition of such Taxes.
8. ACCOUNTS
8.1 Collection Account. The Borrower shall procure that each
Project Entity shall make all distributions of Project Cash Flow and
that all of such Project Cash Flow shall be paid, whether by the
Borrower or by the Project Entities, to an account maintained by, and
in the name of, the Security Trustee for the account of the Borrower,
at The Chase Manhattan Bank (the "Depository") (Account No. 100970300;
Ref.: NRG GENERATING (U.S.) INC.) (the "Collection Account"). The
Collection Account shall be subject to the exclusive control of the
Security Trustee and to the pledge, assignment and security interest
granted in Section 8.3. The Security Trustee shall be entitled to
apply the Assigned Moneys toward payment of the Credit Facility Balance
and interest thereon then due and payable and all other charges and
indebtedness which then may be due and payable under this Agreement,
the Note or any of the Security Documents.
8.2 Application of Assigned Moneys. So long as no Event of
Default specified herein or in any of the Security Documents, and no
event which, with the lapse of time or
63
the giving of notice, would become an Event of Default shall have
occurred and be continuing, the Security Trustee shall, upon receipt
from the Borrower of a request therefor and a certification by an
officer of the Borrower (in form and substance satisfactory to the
Security Trustee) that all of the representations and warranties stated
in Section 2 (updated mutatis mutandis to the date of such
certification) are true and correct as if made on the date of such
certification (except to the extent such representations and warranties
relate to a prior date and except that the Borrower shall not be
required to update the Schedules hereto to the extent changes have
occurred in the information disclosed therein from and after the date
hereof (provided that such exception shall not relieve the Borrower of
its obligations to provide or update certain information relating to
matters disclosed on such Schedules under Section 10.1A hereof)) cause
the Depository to remit from the Collection Account to such account as
may be specified by the Borrower in writing the balance thereof. Upon
the occurrence of an Event of Default, and so long as the same shall be
continuing, all moneys then held in the Collection Account and all
Assigned Moneys thereafter received by the Security Trustee or the
Depository shall be applied as provided in Section 9.3.
8.3 Assignment of Collection Account. All monies held in the
Collection Account and all Assigned Moneys received by the Agent, the
Security Trustee or the Lenders shall be collateral security for the
payment and performance by the Borrower of its obligations hereunder
and under the Note and the Security Documents and the Borrower hereby
pledges, assigns and grants the Security Trustee a security interest in
the Borrower's interest in and to the Collection Account and the
Assigned Moneys. If an Event of Default shall occur and so long as the
same shall be continuing, all monies held in the Collection Account and
all Assigned Moneys thereafter received by the Agent, the Security
Trustee or the Lenders may be applied as provided in Section 9.3.
9. EVENTS OF DEFAULT
9.1 In the event that any of the following events shall occur and be
continuing:
(a) Non-Payment of Principal. Any payment of principal due
on a Reduction Date or on the Maturity Date is not paid on such due
date; or
(b) Non-Payment of Interest or Other Amounts. Any interest
on any Advance or any other amount becoming payable to the Agent, the
Security Trustee, the Arranger or any Lender under this Agreement,
under the Note or under any of the Security Documents is not paid on
the due date or date of demand (as the case may be), and such default
continues unremedied for a period of five (5) Banking Days; or
(c) Representations. Any representation, warranty or other
statement made by the Borrower in this Agreement or by any Security
Party in any of the Security
64
Documents or in any other instrument, document or other agreement
delivered in connection herewith or therewith proves to have been
untrue or misleading in any material respect as at the date as of which
made or confirmed and such default is not cured within 30 days after
written notice thereof, provided such cure period shall only apply if
the granting thereof could not reasonably be expected to have a
Material Adverse Effect; or
(d) Certain Covenants. Any Security Party defaults in the
performance or observance of any covenant contained in Sections 10.1(A)
(ii), (v), (vii), (xii), (xiii), (ix), (xv), (xix) or Section 10.1(B);
or
(e) Other Covenants. Any Security Party defaults in the due
and punctual observance or performance of any other term, covenant or
agreement contained in this Agreement, in the Note, in any of the
Security Documents or in any other instrument, document or other
agreement delivered in connection herewith or therewith, or it becomes
impossible or unlawful for any Security Party to fulfill any such term,
covenant or agreement or there occurs any other event which constitutes
a default under this Agreement, under the Note or under any of the
Security Documents, in each case other than an Event of Default
referred to elsewhere in this Section 9.1, and, if such default is
capable of being remedied, such default, continues unremedied or
unchanged, as the case may be, for a period of thirty (30) days after
such Security Party obtains knowledge of such default or, if (i) such
failure is incapable of being remedied in 30 days, and (ii) the
applicable Security Party is proceeding with diligence and good faith
to remedy such failure and such failure could not reasonably be
expected to result in a Material Adverse Effect, and (iii) no
distributions are made to the Borrower pursuant to Section 8.2 during
the cure period provided in this paragraph (e), 90 days after the
earlier of (i) the date on which such failure first becomes known to
any Security Party or (ii) the date on which a written notice thereof
shall have been given to the Borrower by the Agent or any Lender; or
(f) Indebtedness. Any Security Party or Project Entity
shall default in the payment when due (subject to any applicable grace
period) of any Indebtedness or of any other indebtedness, in either
case, in the outstanding principal amount equal to or exceeding Two
Hundred Fifty Thousand Dollars ($250,000) or such Indebtedness or
indebtedness is accelerated or any party becomes entitled to enforce
the security for any such Indebtedness or indebtedness and such party
shall take steps to enforce the same, unless such default or
enforcement is being contested in good faith and by appropriate
proceedings or other acts and the Security Party, Subsidiary or
Affiliate, as the case may be, shall set aside on its books adequate
reserves with respect thereto; or
(g) Stock Ownership. (i) NRG Energy shall cease to directly
own at least such number of shares of capital stock of the Borrower as
it did on the Initial
65
Drawdown Date (together with any shares acquired as a result of any
stock splits, warrants, rights, options or stock dividends associated
with such shares), (ii) the Borrower shall cease to directly own its
interest in any Project Entity as set out in Schedule 2(b), or (iii)
any Project Entity shall cease to directly own one hundred percent
(100%) of its respective Existing Project; or
(h) Failure to Maintain Status. Failure of any Project
Entity to maintain its status as either the owner of a Qualifying
Cogeneration Facility or as an Exempt Wholesale Generator;
(i) Bankruptcy. The Borrower or any Project Entity thereof
commences any proceeding under any reorganization, arrangement or
readjustment of debt, dissolution, winding up, adjustment, composition,
bankruptcy or liquidation law or statute of any jurisdiction, whether
now or hereafter in effect ("Proceeding"), or there is commenced
against any thereof any Proceeding and such Proceeding remains
undismissed or unstayed for a period of sixty (60) days or any
receiver, trustee, liquidator or sequestrator of, or for, any thereof
or any substantial portion of the property of any thereof is appointed
and is not discharged within a period of sixty (60) days or any thereof
by any act indicates consent to or approval of or acquiescence in any
Proceeding or the appointment of any receiver, trustee, liquidator or
sequestrator of, or for, itself or of, or for, any substantial portion
of its property; or
(j) Termination of Operations; Sale of Assets. Except as
expressly permitted under this Agreement, the Borrower or any Project
Entity ceases its operations or sells or otherwise disposes of all or
substantially all of its assets or all or substantially all of the
assets of the Borrower or any Project Entity are seized or otherwise
appropriated; or
(k) Judgments. Any judgment or order is made the effect
whereof is to render ineffective or invalid this Agreement, the Note or
any of the Security Documents; or
(l) Inability to Pay Debts. The Borrower or any Project
Entity is unable to pay or admits in writing its inability to pay its
debts as they fall due or a moratorium shall be declared in respect of
any material indebtedness of the Borrower or any Project Entity; or
(m) Project Agreements. There occurs any default or event
of default under any Project Agreement which is continuing which could
reasonably be expected to result in a Material Adverse Effect and such
default or event of default shall not be remediable or, if remediable,
shall continue unremedied for a period terminating on the last day of
the applicable cure period, if any, specified in the relevant Project
Agreement,
66
or shall not be waived by the appropriate party; provided that for
purposes of this Section 9.1(m) only, "Project Agreements" shall not
include the Assignment of the DuPont Power Purchase Agreement, dated as
of April 30, 1996 from ▇▇▇▇▇▇ to NRG ▇▇▇▇▇▇ Inc.; provided, further,
that, to the extent caused by a default or event of default by a Person
other than a Borrower Entity with respect to a Project Agreement, such
failure to comply, breach or default shall not be an event of default
under this Section 9.1(m) if (A) such failure to comply, breach or
default is cured within 60 days of the date of occurrence thereof, or
(B)(1) such Project Agreement is replaced within 60 days of the date of
such failure to comply, breach or default with a substitute Project
Agreement in form and substance reasonably satisfactory to the Majority
Lenders, (2) the party or parties (other than the applicable Borrower
Entity) to such substitute Project Agreement are acceptable to the
Majority Lenders, and, in the opinion of the Majority Lenders, are
capable of performing their obligations under such substitute Project
Agreement, (3) in the case of substitution of a Philadelphia
Cogeneration Project Agreement, the Security Trustee shall have been
granted a security interest in any substitute Philadelphia Cogeneration
Project Agreement for the benefit of the Lenders to the same extent as
the Philadelphia Cogeneration Project Agreement being replaced, or (4)
in the case of substitution of any Steam Sales Agreement, the Ground
Lease for the applicable Existing Project shall not be terminable as a
result of the termination of such Steam Sales Agreement; or
(n) ERISA Debt. The Borrower, any Project Entity or any
ERISA Affiliate shall (i) fail to pay when due an amount or amounts
which it shall have become liable to pay under Title IV of ERISA and
such failure to pay could reasonably be expected to result in a
Material Adverse Effect or (ii) incur, or shall reasonably expect to
incur, individually or collectively, any Withdrawal Liability or
liability upon the happening of a Termination Event and such incurrence
could reasonably be expected to a result in a Material Adverse Effect;
or
(o) Invalidity or Revocation of Guarantee. The Guarantee
shall at any time and for any reason cease to be valid and binding or
Philadelphia Cogeneration shall purport to renounce or revoke the
Guarantee; or
(p) Dissolution. The liquidation, dissolution, termination,
acquisition or consolidation of any Security Party other than as
permitted by Section 10.1(B)(viii);
then the Lenders' obligation to make any Advance available shall cease
and the Agent on the instructions of the Majority Lenders may, by
notice to the Borrower, declare the entire unpaid balance of the then
outstanding Advances, accrued interest and any other sums payable by
the Borrower hereunder or under the Note due and payable, whereupon the
same shall forthwith be due and payable without presentment, demand,
protest or notice of any kind, all of which are hereby expressly
waived; provided that upon the happening of an event specified in
subsections (i) of this Section 9.1 with respect to the Borrower,
67
the Note shall be immediately due and payable without declaration or
other notice to the Borrower. In such event, the Lenders may proceed
to protect and enforce their rights by action at law, suit in equity or
in admiralty or other appropriate proceeding, whether for specific
performance of any covenant contained in this Agreement, in the Note or
in any Security Document, or in aid of the exercise of any power
granted herein or therein, or the Lenders may proceed to enforce the
payment of the Note or to enforce any other legal or equitable right of
the Lenders, or proceed to take any action authorized or permitted
under the terms of any Security Document or by applicable law for the
collection of all sums due, or so declared due, on the Note, including,
without limitation, the right to appropriate and hold or apply
(directly, by way of set-off or otherwise) to the payment of the
obligations of the Borrower to the Lenders hereunder and/or under the
Note (whether or not then due) all moneys and other amounts of the
Borrower then or thereafter in possession of any Lender, the balance of
any deposit account (demand or time, mature or unmatured) of the
Borrower then or thereafter with any Lender and every other claim of
the Borrower then or thereafter against any of the Lenders.
9.2 Indemnification. The Borrower agrees to, and shall, indemnify and
hold the Agent, the Security Trustee, the Arranger and the Lenders
harmless against any out-of-pocket loss, as well as against any
reasonable costs or expenses (including reasonable legal fees and
expenses), which any of the Agent, the Security Trustee, the Arranger
or the Lenders sustains or incurs as a result of any default in payment
of the principal amount of the Advances, interest accrued thereon or
any other amount payable hereunder, under the Note or under any
Security Documents including, but not limited to, all actual losses
incurred in liquidating or re-employing fixed deposits made by third
parties or funds acquired to effect or maintain the Advances or any
portion thereof. At the Borrower's request, each such Lender shall
provide the Borrower with reasonable evidence of such actual losses
incurred by such Lender.
9.3 Application of Moneys. Except as otherwise provided in any
Security Document, all moneys received by the Agent, the Security
Trustee, the Arranger or the Lenders under or pursuant to this
Agreement, the Note or any of the Security Documents after the
happening of any Event of Default (unless cured to the satisfaction of,
or waived by, the Majority Lenders) shall be applied by the Agent in
the following manner:
(a) first, in or towards the payment or reimbursement of any
expenses or liabilities incurred by the Agent, the Security Trustee,
the Arranger or the Lenders in connection with the ascertainment,
protection or enforcement of its rights and remedies hereunder, under
the Note and under any of the Security Documents,
(b) secondly, in or towards payment of all other sums which
may be owing to the Agent, the Security Trustee, the Arranger or the
Lenders under this
68
Agreement, under the Note, under the fee letter between the Borrower
and the Agent of even date herewith or under any of the Security
Documents,
(c) thirdly, in or towards payment of any interest owing in
respect of the Advances,
(d) fourthly, in or towards repayment of principal owing in
respect of the Advances,
(e) fifthly, in prepayment of principal of any then
outstanding Advances, and
(f) sixthly, the surplus (if any) shall be paid to the
Borrower or to whosoever else may be entitled thereto.
9.4 Alleged PECO Option. Each of the Agent, the Security
Trustee, the Arranger and each of the Lenders hereby (a) acknowledges
that PECO has claimed that it possesses an option to purchase the
common stock of Philadelphia Cogeneration, as set forth in the payoff
letter and related release from PECO to the Borrower, dated on or about
the date hereof, copies of which have been delivered to the Agent,
which claim the Borrower disputes and has so advised PECO, (b) agrees
that, notwithstanding any provision or term to the contrary set forth
in this Agreement or any of the Security Documents, such claim and the
existence of any such option (and the existence of the Revocable Trust
of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇'▇ "right of first refusal" to purchase the
Philadelphia Cogeneration common stock upon the exercise by PECO of its
claimed option to purchase such stock) shall not by themselves
constitute an Event of Default under this Agreement or an event of
default under any of the Security Documents, (c) agrees that,
notwithstanding any provisions or term to the contrary set forth in
this Agreement or any of the other Security Documents, the exercise of
such claimed option by PECO (or the exercise by the Revocable Trust of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ of its "right of first refusal" to purchase the
Philadelphia Cogeneration common stock upon the exercise by PECO of its
claimed option to purchase such stock) shall not constitute an Event of
Default under this Agreement or an event of default under any of the
Security Documents, provided that (i) the Borrower pays to the Agent,
immediately upon the Borrower's receipt thereof, as a prepayment of the
Advances, an amount equal to the greater of (x) the net proceeds
received by the Borrower from any such purchase and sale, and (y)
$9,500,000 (such greater amount being referred to as the "Prepayment
Amount"), and (ii) the Credit Facility shall be permanently reduced by
the Prepayment Amount, and (d) agrees that, upon receipt of the
Prepayment Amount, the Agent, the Security Trustee and the Lenders
shall, if requested by the Borrower, (i) release all of their Liens in
the Collateral consisting of assets relating to the Philadelphia
Cogeneration Project, including
69
without limitation the common stock of Philadelphia Cogeneration, the
Collateral subject to the Mortgage, all personal property of
Philadelphia Cogeneration and OESC serving as Collateral for the
Advances, and all personal property of the Borrower located at the
Philadelphia Cogeneration Project, and (ii) execute and deliver, at the
Borrower's expense, such releases and terminations as the Borrower may
reasonably request in order to evidence such release.
9.5 Equipment Liens. Each of the Agent, the Security Trustee,
the Arranger and each of the Lenders hereby agrees that,
notwithstanding any provision or term to the contrary set forth in this
Agreement or any of the Security Documents, the existence of the
Equipment Liens shall not constitute an Event of Default under this
Agreement or an event of default under any of the Security Documents,
provided that the Borrower shall deliver evidence in form and substance
reasonably satisfactory to the Agent of the release of all of the
Equipment Liens by not later than forty-five (45) days from and after
the Initial Drawdown Date, and it is expressly agreed that the failure
to so deliver such evidence within such 45-day period shall constitute
an Event of Default hereunder.
10. COVENANTS
10.1 The Borrower hereby covenants and undertakes with the Lenders
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:
A. The Borrower will, and will procure that each other
Security Party will:
(i) Performance of Credit Facility Agreements. Duly
perform and observe, and procure the observance and performance by all
other parties thereto (other than the Agent, the Arranger, the Security
Trustee and the Lenders) of, the terms of this Agreement, the Note and
the Security Documents;
(ii) Notice of Default, Etc. Promptly upon obtaining
knowledge thereof (and in any event within ten (10) days thereof),
inform the Agent of the occurrence of (a) any Event of Default or of
any event which, with the giving of notice or lapse of time, or both,
would constitute an Event of Default, (b) any litigation or
governmental proceeding pending or threatened against it or against any
of the Project Entities which could reasonably be expected to have a
Material Adverse Effect, and (c) any other event or condition which is
reasonably likely to have a Material Adverse Effect on its ability, or
the ability of any of the Security Parties, to perform its obligations
under this Agreement, under the Note and/or under any of the Security
Documents;
70
(iii) Obtain Consents. Without prejudice to Section 2(a)
and this Section 10, obtain every consent and do all other acts and
things which may from time to time be necessary or advisable for the
continued due performance of all its and the other Security Parties'
respective obligations under this Agreement, under the Note and under
the Security Documents;
(iv) Financial Information. At the expense of the
Borrower, deliver to the Agent:
(a) as soon as available but not later than
105 days after the end of each fiscal year of the
Borrower complete copies of the consolidated
financial reports of the Borrower and its
Subsidiaries (in the case of the Borrower, together
with a Compliance Certificate), all in reasonable
detail, which shall include at least the
consolidated balance sheet of such entity and its
Subsidiaries as of the end of such year and the
related consolidated statements of income and
sources and uses of funds for such year, which
shall be audited reports prepared by an Acceptable
Accounting Firm;
(b) as soon as available but not less than 60
days after the end of each of the first three
quarters of each fiscal year of the Borrower a
quarterly interim consolidated balance sheet of the
Borrower and its Subsidiaries and the related
consolidated profit and loss statements and sources
and uses of funds (in the case of the Borrower,
together with a Compliance Certificate), all in
reasonable detail, unaudited, but certified to be
true and complete by the chief financial officer of
the Borrower;
(c) within 30 days of the filing thereof,
copies of all registration statements and reports
on Forms 10-K, 10-Q and 8-K (or their equivalents)
and other material filings which the Borrower shall
have filed with the Securities and Exchange
Commission or any similar governmental authority;
(d) promptly upon the mailing thereof to the
shareholders of the Borrower, copies of all
financial statements, reports, proxy statements and
other communications provided to the Borrower's
shareholders; and
71
(e) such other statements (including, without
limitation, monthly consolidated statements of
operating revenues and expenses), operating logs
for each Existing Project, lists of assets and
accounts, budgets, forecasts, reports and other
financial information with respect to the business
of the Borrower as the Agent may from time to time
reasonably request, certified to be true and
complete by the chief financial officer of the
Borrower;
(v) Corporate Existence. Do or cause to be done, and
procure that each Project Entity shall do or cause to be done, all
things necessary to: (a) preserve and keep in full force and effect
its corporate or partnership existence; and (b) preserve and keep in
full force and effect all licenses, franchises, permits and assets
necessary to the conduct of its business, except, in the case of clause
(b) only, where the failure to do so could not reasonably be expected
to result in a Material Adverse Effect;
(vi) Books and Records. Keep, and cause each Project
Entity to keep, proper and accurate books of record and account in
accordance with GAAP throughout the Credit Facility Period;
(vii) Taxes and Assessments. Pay and discharge, and
cause each Project Entity to pay and discharge, all material taxes,
assessments and governmental charges or levies imposed upon it or upon
its income or property prior to the date upon which penalties attach
thereto; provided, however, that it shall not be required to pay and
discharge, or cause to be paid and discharged, any such tax,
assessment, charge or levy so long as the legality thereof shall be
contested in good faith and by appropriate proceedings or other acts
and it shall set aside on its books adequate reserves with respect
thereto;
(viii) Inspection. Allow, and cause each Project Entity
to allow, any representative or representatives designated by any
Lender, subject to applicable laws and regulations, to visit and
inspect any of its properties, and, on the reasonable request thereof,
to examine (at a location where normally kept) its books of account,
records, reports and other papers and to discuss its affairs, finances
and accounts with its officers, at reasonable times and upon reasonable
prior notice;
(ix) Compliance with Statutes, etc. Do or cause to be
done, and cause each Project Entity to do and cause to be done, all
things necessary to comply in all material respects with all material
laws, and the rules and regulations thereunder, applicable to the
Borrower or such Project Entity, including, without limitation, those
laws, rules and regulations relating to employee benefit plans and
environmental matters;
72
(x) Environmental Matters. Promptly upon the
occurrence of any of the following conditions, provide to the Agent a
certificate of an officer thereof, specifying in detail the nature of
such condition and its proposed response or the response of its
Environmental Affiliates: (a) its receipt or the receipt by any
Project Entity or any Environmental Affiliates of the Borrower or any
Project Entity of any written communication whatsoever that alleges
that such person is not in compliance with any applicable Environmental
Law or Environmental Approval, if such noncompliance could reasonably
be expected to have a Material Adverse Effect, (b) knowledge by it, or
by any Project Entity or any Environmental Affiliates of the Borrower
or any Project Entity that there exists any Environmental Claim pending
or threatened against any such person, which could reasonably be
expected to have a Material Adverse Effect, or (c) any release,
emission, discharge or disposal of any Material of Environmental
Concern that could form the basis of any Environmental Claim against
it, any Project Entity or against any Environmental Affiliates of the
Borrower or any Project Entity under applicable Environmental Law, if
such Environmental Claim could reasonably be expected to have a
Material Adverse Effect. Upon the written request by the Agent, it
will submit to the Agent at reasonable intervals, a report providing an
update of the status of any issue or claim identified in any notice or
certificate required pursuant to this subsection;
(xi) ERISA. Forthwith upon learning of the occurrence
of any material liability of the Borrower or any Project Entity or any
ERISA Affiliate pursuant to ERISA in connection with the termination of
any Plan or withdrawal or partial withdrawal of any multi-employer plan
(as defined in ERISA) or of a failure to satisfy the minimum funding
standards of Section 412 of the Code or Part 3 of Title I of ERISA by
any Plan for which the Borrower or any Project Entity or any ERISA
Affiliate is plan administrator (as defined in ERISA), furnish or cause
to be furnished to the Agent written notice thereof;
(xii) Consolidated Debt Service Coverage Ratio. Maintain
a Consolidated Debt Service Coverage Ratio of not less than 1:20 to
1:00 provided, however, that if the Consolidated Debt Service Coverage
Ratio is at least 1.0 to 1.0, if (A) within thirty days after the
occurrence of a breach of this Section 10.1(A)(xii), the Borrower
provides Agent with a business plan (satisfactory to Agent), including,
without limitation, the projections for the immediately succeeding
twelve month period, which incorporate the assumptions set forth in the
business plan, describing the steps the Borrower will take to cause the
Consolidated Debt Service Coverage Ratio to be 1.2 to 1.0 or better
(together with such information as Agent may reasonably request) and
(B) the Borrower is proceeding with diligence and good faith to
implement such business plan, then the Borrower shall have up to ninety
days after the occurrence of such breach to bring the Consolidated Debt
Service Coverage Ratio to a level of at least 1.2 to 1.0; provided,
further, that during such ninety (90) day period, the Borrower shall be
entitled
73
to no moneys from the Collection Account and the Lenders shall not be
obligated to make any Advances under the Credit Facility;
(xiii) Borrower Debt Service Coverage Ratio. Maintain a
Borrower Debt Service Coverage Ratio of not less than 2:00 to 1:00;
provided, however, that if the Borrower Debt Service Coverage Ratio is
at least 1.3 to 1.0, if (A) within thirty days after the occurrence of
a breach of this Section 10.1(A)(xiii), the Borrower provides Agent
with a business plan (satisfactory to Agent), including, without
limitation, the projections for the immediately succeeding twelve month
period, which incorporate the assumptions set forth in the business
plan, describing the steps the Borrower will take to cause the Borrower
Debt Service Coverage Ratio to be 2.0 to 1.0 or better (together with
such information as Agent may reasonably request) and (B) the Borrower
is proceeding with diligence and good faith to implement such business
plan, then the Borrower shall have up to ninety days after the
occurrence of such breach to bring the Borrower Debt Service Coverage
Ratio to a level of at least 2.0 to 1.0; provided, further, that during
such ninety (90) day period, the Borrower shall be entitled to no
moneys from the Collection Account and the Lenders shall not be
obligated to make any Advances under the Credit Facility;
(xiv) Maintenance of Properties, Etc. Preserve and
maintain good and marketable title to all of its properties and assets
which are necessary in the conduct of its business in good working
order and condition, ordinary wear and tear excepted, subject to no
Liens other than Permitted Liens;
(xv) Revenue Collection Account; Assignment. Throughout
the Credit Facility Period, shall cause each Project Entity to make all
permissible distributions of Project Cash Flow and shall cause all such
Project Cash Flow to be paid into the Revenue Collection Account;
(xvi) Performance of Project Agreements. Cause each
Project Entity to (A) perform and observe all of its covenants and
agreements contained in the Governmental Approvals and any of the
Project Agreements to which it is a party, unless the failure to
perform or observe such covenants and agreements could not reasonably
be expected to result in a Material Adverse Effect, (B) preserve,
protect and defend its rights contained in the Governmental Approvals
and any of the Project Agreements to which it is a party, unless the
failure to preserve, protect or defend such rights could not reasonably
be expected to result in a Material Adverse Effect and (C) maintain in
full force and effect each of the Project Agreements to which it is a
party and all contracts, permits and Governmental Approvals relating
thereto which are necessary for the maintenance and operation its
Existing Project;
74
(xvii) Operating Logs. Cause each Project Entity at its
sole cost and expense to (A) maintain at its respective Existing
Project daily operating logs showing, among other things the electrical
output of such Existing Project, (B) keep maintenance and repair
reports in sufficient detail to indicate the nature and date of all
work done, (C) maintain a current operating manual and a complete set
of plans, accounting records and specifications reflecting all
alterations and (D) maintain all other records, logs and other
materials required by the relevant Project Agreements or any
Governmental Approval;
(xviii) Maintenance of Insurance. Maintain or cause to be
maintained with insurance companies rated "A-" or better by Best's
Insurance Guide and Key Ratings or other insurance companies of
recognized responsibility reasonably satisfactory to the Agent,
insurance in such amounts and covering such risks as are usually
carried by companies engaged in similar businesses and owning similar
properties in the same general areas in which such Security Party or
Project Entity operates, and in any event the insurance coverages shall
not be less than the insurance coverages set forth on Schedule 2(i).
The Borrower shall, upon the request of the Agent, promptly provide a
schedule indicating the policies maintained by each of the Borrower and
each Project Entity, coverage limits of liability, effective dates of
coverage, insurance carrier names and policy numbers. Borrower shall
cause the Security Trustee to be named as loss payee or as an
additional named insured in respect of the Philadelphia Cogeneration
Project, for the account of the Lenders and the Agent itself. Evidence
of payment of premiums for such insurance policies shall be delivered
to the Agent at least thirty (30) days prior to the expiration thereof
and such insurance policies shall be delivered to the Agent promptly
upon its request therefor;
(xix) Use of Proceeds. Use the proceeds of all Advances
only as set forth in Section 3.1(a);
(xx) Additional Documents; Filings and Recordings.
Execute and deliver from time to time as reasonably requested by Agent,
at such Security Party's expense, such other documents in connection
with the rights and remedies of the Security Trustee, Agent and Lenders
granted or provided for by the Security Documents, as applicable, which
are necessary to consummate the transactions contemplated therein.
Each Security Party shall, at its own expense, take all reasonable
actions that have been or shall be requested by the Security Trustee to
establish, maintain, protect, perfect and continue the perfection of
the security interests of the Security Trustee created by the Security
Documents including the execution of such instruments, and providing
such other information as may be required to enable the Security
Trustee to effect any such action. Without limiting the generality of
the foregoing, each Security Party shall execute or cause to be
executed and shall file or cause to be filed such financing statements,
continuation statements, fixture filings, assignments, mortgages or
deed of trust in all
75
places necessary or advisable (in the opinion of counsel for the
Security Trustee) to establish, maintain and perfect such security
interests and in all other places that the Security Trustee shall
reasonably request.
B. The Borrower will not, and will procure that each
Project Entity will not, without the prior written consent of the Agent
(or the Majority Lenders or all of the Lenders if required by
Section 16.7):
(i) Liens. Create, assume or permit to exist, any
mortgage, pledge, lien, charge, encumbrance or any security interest
whatsoever upon any Collateral except Permitted Liens.
(ii) Capital Expenditures. Make any capital
expenditures (excluding ordinary or scheduled maintenance) in relation
to any Existing Project, in any calendar year, exceeding (i) with
respect to the ▇▇▇▇▇▇ Project and the Grays Ferry Project, $2,000,000,
(ii) with respect to the Newark Project, $1,000,000, or (iii) with
respect to the Philadelphia Cogeneration Project, $500,000; provided,
however, that, during the calendar year 1997, such capital expenditures
of up to $2,000,000 may be made in respect of the Newark Project;
(iii) Indebtedness. Incur any Indebtedness except
(a) Indebtedness hereunder or in connection herewith to the Agent, the
Arranger, the Security Trustee or the Lenders, or (b) so long as no
Event of Default occurs and is continuing: (i) if non-recourse to the
Borrower, Indebtedness of any Subsidiary of the Borrower which is
formed after the Initial Drawdown Date; (ii) Indebtedness of the
Borrower to NRG Energy which is subordinated, pursuant to a
Subordination Agreement, to the Borrower's obligations under this
Agreement, the Note and any of the Security Documents;
(iii) Indebtedness of up to $1,000,000 during each calendar year during
the Credit Facility Period of OESC pursuant to the OESC Financing
Program, for use in the ordinary course of business of OESC to finance
the OESC Rental Fleet; (iv) unsecured Indebtedness of the Borrower, if
subordinated, pursuant to a Subordination Agreement, to the Borrower's
obligations under this Agreement, the Note and the Security Documents,
the terms of any such Indebtedness to be acceptable to the Agent;
(v) Indebtedness of any Project Entity, if non-recourse to the
Borrower, under interest rate swap agreements to hedge interest rate
exposure for permitted non-recourse financings; (vi) Indebtedness under
(A) that certain Credit Agreement, dated as of March 1, 1996, among
Grays Ferry, the financial institutions listed on Exhibit H thereto and
The Chase Manhattan Bank, N.A., and (B) that certain Credit Agreement,
dated as of May 17, 1996, among Newark, ▇▇▇▇▇▇, Credit Suisse,
Greenwich Funding Corporation and any Purchasing Lender and Credit
Suisse; and (vii) Indebtedness of Grays Ferry incurred under fuel price
▇▇▇▇▇▇ as the same were in effect on March 1, 1996;
76
(iv) Change in Business. Materially change the nature
of its business or commence any business materially different from its
current business;
(v) Sale or Pledge of Shares. Sell, assign, transfer,
pledge or otherwise convey or dispose of any of the shares or direct or
indirect interest (including by way of spin-off, installment sale or
otherwise) of the capital stock of or other equity interests in any
Project Entity;
(vi) Sale of Assets. Sell, or otherwise dispose of, any
Existing Project or any other asset (including by way of spin-off,
installment sale or otherwise) which is substantial in relation to its
assets taken as a whole, except for (a) sales and dispositions of
obsolete, worn or replaced property not used or useful in such Project
Entity's business provided that the proceeds thereof (to the extent not
used to replace such obsolete, worn or replace property) shall be
deposited in the Collection Account and (b) transfers of assets from
OESC to Philadelphia Cogeneration, and from the Borrower to
Philadelphia Cogeneration, in connection with the consolidation of the
Philadelphia Cogeneration operating assets;
(vii) Changes in Offices or Names. Change the location
of the chief executive office of any Security Party, the office of the
chief place of business any such parties, the office of the Security
Parties in which the records relating to the earnings or insurances of
the Existing Projects are kept unless the Agent shall have received
thirty (30) days prior written notice of such change;
(viii) Consolidation and Merger. Consolidate with, or
merge into, any corporation or other entity, or merge any corporation
or other entity into the Borrower or any Project Entity provided, that,
Philadelphia Cogeneration and OESC may merge and/or consolidate their
operations into Philadelphia Cogeneration as long as the security
interest of the Security Trustee in their assets maintains its priority
and effectiveness;
(ix) Limitation on Dividends. Directly or indirectly
declare or pay any dividend or make any distribution on its capital
stock (other than stock dividends) or distribution to partners, as the
case may be (any such payments being defined as "Dividends") (except
that the Project Entities may distribute Project Cash Flow to the
Borrower and Philadelphia Cogeneration and Philadelphia Biogas may pay
regularly scheduled dividends on their respective stock held by the
Revocable Trust of ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ until such time as such
shares are redeemed by Philadelphia Cogeneration or Philadelphia Biogas
or purchased by the Borrower) unless not less than thirty (30) days
prior to the proposed date of payment of such Dividend the Borrower
shall have delivered to the Agent (A) a certificate signed by the chief
financial officer of the Borrower that, after giving effect to such
proposed Dividend Payment, no Default or
77
Event of Default would occur or reasonably be anticipated to occur
and/or be continuing and (B) the Letter of Credit;
(x) Amendment, Termination, Etc. of Project Agreements.
Terminate, cancel or suspend, or permit or consent to any termination,
cancellation or suspension of, or enter into or consent to or permit
the assignment of the rights or obligations of any party to, any of the
Project Agreements or Governmental Approvals. The Borrower shall not
permit any Project Entity to, directly or indirectly, amend, modify,
supplement or waive, or permit or consent to the amendment,
modification, supplement or waiver of, any of the provisions of, or
give any consent under, any of the Project Agreements without (A) first
submitting to the Agent a copy of such proposed amendment,
modification, supplement, waiver or consent and (B) if in the
reasonable judgment of the Agent, such proposed amendment,
modification, supplement, waiver or consent could reasonably be
expected to result in a Material Adverse Effect, the express prior
written consent of the Majority Lenders thereto;
(xi) Fiscal Year. Change its fiscal year;
(xii) Transactions with Affiliates. Enter into any
transaction, including, without limitation, the purchase, sale or
exchange of property or the rendering of any service, with any
Affiliate except for (A) transactions contemplated by existing
operations and maintenance agreements and/or management agreements in
respect of the Existing Projects, (B) transactions contemplated by the
April 30, 1996 Management Services Agreement between the Borrower and
NRG Energy, and (C) other transactions in the ordinary course of
business and pursuant to the reasonable requirements of such Security
Party's or Project Entity's business and upon fair and reasonable terms
no less favorable than would be obtained in an comparable arm's length
transaction with a Person not an Affiliate, which, as to any
transaction with NRG Energy or its Affiliates, shall be conclusively
determined if the Independent Committee of the Board of Directors of
the Borrower approves such transaction; and
(xiii) Investments. Make any Investments except
(i) investments, directly or indirectly, in Future Projects and
(ii) Permitted Investments or use any part of the proceeds of any
Advance to purchase margin stock (as defined in the regulations
referred to below) or for any other purpose which would result in the
violation by any Borrower Entity of Regulations G, T, U or X of the
Board of Governors of the Federal Reserve System or to extend credit to
others for any such purpose.
78
11. ASSIGNMENT.
This Agreement shall be binding upon, and inure to the
benefit of, the Borrower and the Lenders, the Arranger, the Security
Trustee and the Agent and their respective successors and assigns,
except that the Borrower may not assign any of its rights or
obligations hereunder. Each Lender shall be entitled to assign its
rights and obligations under this Agreement or grant participation(s)
in the Credit Facility to any subsidiary, holding company or other
affiliate of such Lender, to any subsidiary or other affiliate company
of any thereof or, with the consent of the Borrower and the Agent, not
to be unreasonably withheld, to any other bank or financial institution
(in a minimum amount of not less than $5,000,000, provided, however,
that, unless otherwise agreed to in writing by the Agent and the
Borrower (such consent of the Borrower not to be unreasonably
withheld), after giving affect to any such assignment or grant of
participation, such Lender's remaining Commitment shall be in an amount
equal to at least $5,000,000), and such Lender shall forthwith give
notice of any such assignment or participation to the Borrower;
provided, however, that any such an assignment must be made pursuant to
an Assignment and Assumption Agreement. The Borrower will take all
reasonable actions requested by the Agent or any Lender to effect an
assignment, including, without limitation, the execution of a written
consent to an Assignment and Assumption Agreement. Voting rights of
any participants shall be limited to those matters with respect to
which the affirmative vote of the Lender from which it purchased its
participation would be required. Pledges of a Lender's loans under the
this Agreement are permitted without restriction to any Federal Reserve
Bank in support of borrowings made by the pledging Lender to such
Federal Reserve Bank. Separate Notes to individual Lenders will be
issued only upon request and only in connection with a pledge thereof
to a Federal Reserve Bank.
12. ILLEGALITY, INCREASED COST, NON-AVAILABILITY, ETC.
12.1 Illegality. In the event that by reason of any change in any
applicable law, regulation or regulatory requirement or in the
interpretation thereof, a Lender has a reasonable basis to conclude
that it has become unlawful for any Lender to maintain or give effect
to its obligations as contemplated by this Agreement, such Lender shall
inform the Agent and the Borrower to that effect, whereafter the
liability of such Lender to make its Commitment available shall
forthwith cease and the Borrower shall be required either to repay to
such Lender that portion of the Advances advanced by such Lender
immediately or, if such Lender so agrees, to repay such portion of the
Advances to the Lender on the last day of any then current Interest
Period in accordance with and subject to the provisions of
Section 12.5, provided, that, should such illegality relate solely to a
Lender's ability to make LIBOR Rate Advances, any such LIBOR Rate
Advances outstanding shall be converted to Base Rate Advances and such
Lender's obligation to make Base Rate Advances available to the
Borrower shall continue. In any such event,
79
but without prejudice to the aforesaid obligations of the Borrower to
repay such portion of the Advances, the Borrower and the relevant
Lender shall negotiate in good faith with a view to agreeing on terms
for making such portion of the Advances available from another
jurisdiction or otherwise restructuring such portion of the Credit
Facility on a basis which is not unlawful.
12.2 Increased Costs. If any change in applicable law, regulation
or regulatory requirement, or in the interpretation or application
thereof by any governmental or other authority, shall:
(i) subject any Lender to any Taxes with
respect to its income from the Credit Facility, or
any part thereof, or
(ii) change the basis of taxation to any
Lender of payments of principal or interest or any
other payment due or to become due pursuant to this
Agreement (other than a change in the basis
effected by the jurisdiction of organization of
such Lender, the jurisdiction of the principal
place of business of such Lender, the United States
of America, the State or City of New York or any
governmental subdivision or other taxing authority
having jurisdiction over such Lender (unless such
jurisdiction is asserted solely by reason of the
activities of the Borrower or any of the other
Security Parties) or such other jurisdiction where
the Credit Facility may be payable), or
(iii) impose, modify or deem applicable
any reserve requirements or require the making of
any special deposits against or in respect of any
assets or liabilities of, deposits with or for the
account of, or loans by, a Lender, or
(iv) impose on any Lender any other condition
affecting the Credit Facility or any part thereof,
and the result of the foregoing is either to increase the cost to such
Lender of making available or maintaining its Commitment or any part
thereof or to reduce the amount of any payment received by such Lender
(collectively, "Increased Costs"), then and in any such case if such
increase or reduction in the opinion of such Lender materially affects
the interests of such Lender under or in connection with this
Agreement:
(a) the Lender shall notify the Agent and the
Borrower of the happening of such event, and
80
(b) the Borrower agrees forthwith upon demand to
pay to such Lender the amount of such Increased Costs.
PROVIDED, however, that the foregoing provisions shall
not be applicable in the event that Increased Costs to
the Lender result from the exercise by the Lender of its
right to assign its rights or obligations under
Section 12. At the Borrower's request, such Lender
shall provide the Borrower with reasonable evidence of
the Increased Costs to such Lender.
Each Lender shall notify the Borrower of any event that will
entitle such Lender to compensation under this Section within 45 days
after such Lender obtains actual knowledge thereof, provide that if any
Lender fails to give such notice within 45 days after it obtains actual
knowledge of such an event, such Lender shall, with respect to
compensation payable under this Section, only be entitled to payment
for Increased Costs incurred from and after the date that is 45 days
prior to the date that such Lender does give such notice. Except as
provided in the preceding sentence, the failure to give any such notice
shall not release or diminish any of the Borrower's obligations to pay
any amounts pursuant to this Section.
12.3 Nonavailability of Funds. If the Agent shall determine that,
by reason of circumstances affecting the London Interbank Market
generally, adequate and reasonable means do not or will not exist for
ascertaining the Applicable Rate for any LIBOR Rate Advance for any
Interest Period, the Agent shall give notice of such determination to
the Borrower, and the right of the Borrower to select LIBOR Rate
Advances shall be suspended until the Agent shall notify the Borrower
that the circumstances causing such suspension no longer exists.
During such suspension, all Advances shall be made as Base Rate
Advances.
12.4 Compensation for Losses. Where any Advance or a portion
thereof is to be repaid by the Borrower pursuant to this Section 12,
the Borrower agrees simultaneously with such repayment to pay to the
relevant Lender all accrued interest to the date of actual payment on
the amount repaid and all other sums then payable by the Borrower to
the relevant Lender pursuant to this Agreement, together with such
amounts as may be necessary to compensate such Lender for any actual
loss, premium or penalties incurred or to be incurred thereby on
account of funds borrowed to make, fund or maintain its Commitment or
such portion thereof for the remainder (if any) of the then current
Interest Period or Periods, if any, but otherwise without penalty or
premium. At the Borrower's request, such Lender shall provide the
Borrower with reasonable evidence of the actual loss, premium or
penalty incurred by such Lender.
12.5 Replacement of Lender. (a) In the event that (i) any Lender
requests compensation pursuant to Section 12.2 or 12.4, (ii) the
obligation of any Lender to make or continue its proportionate interest
in the Loans or the Commitments is terminated
81
pursuant to Section 12.1, (iii) the obligation of any Lender to make or
continue LIBOR Rate Advances shall be suspended pursuant to
Section 12.3, or (iv) any Lender becomes insolvent or fails to make any
Advance in response to a request for borrowing by the Borrower where
the Majority Lenders have made the respective Advances to be made by
them in response to such request, then, so long as such condition
exists and no Event of Default has occurred and is continuing, the
Borrower may either (x) designate another financial institution (such
financial institution being herein called a "Replacement Lender")
acceptable to the Agent (which acceptance shall not be unreasonably
withheld) and which is not an Affiliate of the Borrower, to assume such
Lender's Commitment hereunder and to purchase the Advances of such
Lender and such Lender's rights under this Agreement and the Notes and
any other Security Documents held by such Lender, all without recourse
to or representation or warranty by, or expense to, such original
Lender, for a purchase price equal to the outstanding principal amount
of the Advances payable to such Lender plus any accrued but unpaid
interest on such Advances and accrued but unpaid fees owing to such
Lender under this Agreement, and upon such assumption, purchase and
substitution, and subject to the execution and delivery to the Agent by
the Replacement Lender of documentation satisfactory to the Agent
(pursuant to which such Replacement Lender shall assume the obligations
of such original Lender under this Agreement), the Replacement Lender
shall succeed to the rights and obligations of such original Lender
hereunder, or (y) pay to such Lender the outstanding principal amount
of the Advances and accrued but unpaid interest on such Advances and
accrued but unpaid fees owing to such Lender under this Agreement. In
the event that the Borrower exercises its rights under the preceding
sentence, the Lender against which such rights were exercised shall no
longer be a party hereto or have any rights or obligations hereunder.
If the Borrower exercises its rights under clause (y) above against any
Lender, then the outstanding Advances and the Commitments shall be
reduced to the extent of such Lender's pro rata share of the Advances
and the Commitments.
(b) If the Borrower exercises its rights under clause (y) of
Section 12.5(a) hereof, the Borrower may, not later than the first
anniversary of such exercise, designate another financial institution
(such financial institution being herein called a "Substitute Lender")
acceptable to the Agent (which acceptance shall not be unreasonably
withheld) and which is not an Affiliate of the Borrower, to assume the
Commitments of the Lender against which such rights were exercised and,
subject to the execution and delivery to the Agent by the Substitute
Lender of documentation satisfactory to the Lender, the Substitute
Lender shall become a party to this Agreement as a Lender. Upon the
Substitute Lender becoming a party to this Agreement, the Borrower
shall borrow Advances from the Substitute Lender in such a manner and
in such amounts as will result in the outstanding principal amount of
the Advances held by the Lenders being pro rata according to the
amounts of their respective Commitments.
82
13 FEES AND EXPENSES
13.1 Commitment Fee. The Borrower shall pay to the Agent for the
account of the Lenders a fee in an amount equal to three-eighths of one
percent (3/8%) per annum on the committed but undrawn amount of the
Credit Facility from the date hereof through the Maturity Date
quarterly in arrears, provided, however that, if on the last day of any
calendar quarter the average amount of outstanding Advances under the
Credit Facility during the immediately preceding four calendar quarters
is less than 80% of the Credit Facility (as reduced from time to time),
the commitment fee payable hereunder shall for such calendar quarter be
increased to one-half of one percent (1/2%). Such fee shall accrue
from day-to-day and be calculated on the actual number of days elapsed
and a three hundred and sixty (360) day year.
13.2 Administrative Fee. The Borrower shall pay the Agent an annual
administrative fee of $30,000, payable on the Initial Drawdown Date and
on each anniversary thereof (excluding the Maturity Date).
13.3 Expenses. The Borrower agrees, whether or not the transactions
hereby contemplated are consummated, on demand to pay, or reimburse the
Agent, the Security Trustee and the Arranger for their payment of, the
reasonable expenses of the Agent, the Security Trustee, the Arranger
and (after the occurrence and during the continuance of an Event of
Default) the Lenders incident to said transactions (and in connection
with any supplements, amendments, waivers or consents relating thereto
or incurred in connection with the enforcement or defense of any of the
Agent's, the Security Trustee's, the Arranger's and the Lenders' rights
or remedies with respect thereto or in the preservation of the Agent's,
the Security Trustee's, the Arranger's and the Lenders' priorities
under the documentation executed and delivered in connection therewith)
including, without limitation, all reasonable costs and expenses of the
Agent, the Security Trustee and the Arranger of preparation,
negotiation, execution and administration (other than routine
administration) of this Agreement and the documents referred to herein,
the reasonable fees and disbursements of the Agent's counsel in
connection therewith, as well as the reasonable fees and expenses of
any independent appraisers, surveyors, engineers and other consultants
reasonably retained by the Agent, the Security Trustee or the Arranger
in connection with this transaction (provided, however, that unless an
Event of Default has occurred, neither the Agent, the Security Trustee
or the Arranger shall be entitled to reimbursement of any consultants
fees and expenses unless the Borrower shall have received notice of the
intention to retain such consultants and a reasonable opportunity to
provide such party with the requested information), all reasonable
costs and expenses, if any, in connection with the enforcement of this
Agreement, the Note and the Security Documents and stamp and other
similar taxes, if any, incident to the execution and delivery of the
documents (including, without limitation, the Note) herein contemplated
and to hold the Agent, the Security Trustee, the Arranger and the
Lenders free and
83
harmless in connection with any liability arising from the nonpayment
of any such stamp or other similar taxes. Such taxes and, if any,
interest and penalties related thereto as may become payable after the
date hereof shall be paid immediately upon demand by the Borrower to
the Agent, the Security Trustee, the Arranger or the Lenders, as the
case may be, when liability therefor is no longer contested by such
party or parties or reimbursed immediately by the Borrower to such
party or parties after payment thereof (if the Agent, the Security
Trustee, the Arranger or the Lenders, at their sole discretion, chooses
to make such payment).
14 APPLICABLE LAW, JURISDICTION AND WAIVER
14.1 Applicable Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.
14.2 Jurisdiction. The Borrower hereby irrevocably submits to the
jurisdiction of the courts of the State of New York and of the United
States District Court for the Southern District of New York in any
action or proceeding brought against it by any of the Lenders, the
Agent, the Security Trustee or the Agent under this Agreement or under
any document delivered hereunder and hereby irrevocably agrees that
valid service of summons or other legal process on it may be effected
by serving a copy of the summons and other legal process in any such
action or proceeding on the Borrower by mailing (certified or
registered mail) or delivering the same by hand to the Borrower at the
address indicated for notices in Section 16.1. The service, as herein
provided, of such summons or other legal process in any such action or
proceeding shall be deemed personal service and accepted by the
Borrower as such, and shall be legal and binding upon the Borrower for
all the purposes of any such action or proceeding. A judgment (a
certified or exemplified copy of which shall be conclusive evidence of
the fact and of the amount of any indebtedness of the Borrower to the
Lenders, the Agent, the Security Trustee or the Arranger) after
exhaustion of any appeals taken against the Borrower in any such legal
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment. The Borrower will advise the
Agent promptly of any change of address for the purpose of service of
process. Notwithstanding anything herein to the contrary, the Lenders
may bring any legal action or proceeding in any other appropriate
jurisdiction.
14.3 WAIVER OF JURY TRIAL. IT IS MUTUALLY AGREED BY AND AMONG THE
BORROWER, THE OTHER SECURITY PARTIES, THE ARRANGER, THE AGENT, THE
SECURITY TRUSTEE AND THE LENDERS THAT EACH OF THEM HEREBY WAIVES TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY
HERETO AGAINST ANY OTHER PARTY HERETO ON ANY MATTER WHATSOEVER
84
ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT, THE NOTE,
THE GUARANTEE OR THE SECURITY DOCUMENTS.
15. THE AGENT
15.1 (a) Appointment of Agent. Each of the Lenders hereby irrevocably
appoints and authorizes the Agent (which for purposes of this
Section 15 shall be deemed to include the Agent acting in its capacity
as Security Trustee pursuant to Section 15.1(b)) to take such action as
agent on its behalf and to exercise such powers under this Agreement,
the Note and the Security Documents as are delegated to the Agent by
the terms hereof and thereof. Neither the Agent nor any of its
directors, officers, employees or agents shall be liable for any action
taken or omitted to be taken by it or them under this Agreement, the
Note or the Security Documents or in connection therewith, except for
its or their own gross negligence or willful misconduct.
(b) Appointment of Security Trustee. Each of the Lenders
irrevocably appoints the Security Trustee as security trustee on its
behalf with regard to (i) the security, powers, rights, titles,
benefits and interests (both present and future) constituted by and
conferred on the Lenders or any of them or for the benefit thereof
under or pursuant to this Agreement, the Note or any of the Security
Documents (including, without limitation, the benefit of all covenants,
undertakings, representations, warranties and obligations given, made
or undertaken to any Lender in the Agreement, the Note or any Security
Document), (ii) all moneys, property and other assets paid or
transferred to or vested in any Lender or any agent of any Lender or
received or recovered by any Lender or any agent of any Lender pursuant
to, or in connection with, this Agreement, the Note or the Security
Documents whether from any Security Party or any other person and (iii)
all money, investments, property and other assets at any time
representing or deriving from any of the foregoing, including all
interest, income and other sums at any time received or receivable by
any Lender or any agent of any Lender in respect of the same (or any
part thereof). The Security Trustee hereby accepts such appointment.
15.2 Distribution of Payments. Whenever any payment is received by the
Agent from the Borrower or any other Security Party for the account of
the Lenders, or any of them, whether of principal or interest on the
Note, commissions, fee under Section 13.1 or otherwise, it will
thereafter cause to be distributed on the same day if received before
11 a.m. New York time, or on the next day if received thereafter, like
funds relating to such payment ratably to the Lenders according to
their respective Commitments, in each case to be applied according to
the terms of this Agreement.
15.3 Holder of Interest in Note. The Agent may treat each Lender as
the holder of all of the interest of such Lender in the Note.
85
15.4 No Duty to Examine, Etc. The Agent shall not be under a duty to
examine or pass upon the validity, effectiveness or genuineness of any
of this Agreement, the Note, the Security Documents or any instrument,
document or communication furnished pursuant to this Agreement or in
connection therewith or in connection with the Note, or any Security
Document, and the Agent shall be entitled to assume that the same are
valid, effective and genuine, have been signed or sent by the proper
parties and are what they purport to be.
15.5 Agent as Lender. With respect to that portion of the Advances
made available by it, the Agent shall have the same rights and powers
hereunder as any other Lender and may exercise the same as though it
were not the Agent, and the term "Lender" or "Lenders" shall include
the Agent in its capacity as a Lender. The Agent and its affiliates
may accept deposits from, lend money to and generally engage in any
kind of business with, the Borrower and the other Security Parties as
if it were not the Agent.
15.6 (a) Obligations of Agent. The obligations of the Agent under
this Agreement, under the Note and under the Security Documents are
only those expressly set forth herein and therein.
(b) No Duty to Investigate. The Agent shall not at any time
be under any duty to investigate whether an Event of Default, or an
event which with the giving of notice or lapse of time, or both, would
constitute an Event of Default, has occurred or to investigate the
performance of this Agreement, the Note or any Security Document by any
Security Party.
15.7 (a) Discretion of Agent. The Agent shall be entitled to use its
discretion with respect to exercising or refraining from exercising any
rights which may be vested in it by, and with respect to taking or
refraining from taking any action or actions which it may be able to
take under or in respect of, this Agreement, the Note and the Security
Documents, unless the Agent shall have been instructed by the Majority
Lenders to exercise such rights or to take or refrain from taking such
action; provided, however, that the Agent shall not be required to take
any action which exposes the Agent to personal liability or which is
contrary to this Agreement or applicable law.
(b) Instructions of Majority Lenders. The Agent shall in
all cases be fully protected in acting or refraining from acting under
this Agreement, under the Note or under any Security Document in
accordance with the instructions of the Majority Lenders, and any
action taken or failure to act pursuant to such instructions shall be
binding on all of the Lenders. Neither this Agreement nor any of the
Security Documents nor any terms hereof or thereof may be amended
unless such amendment is approved by the Borrower and the Majority
Lenders, provided that no such amendment shall, without the consent of
each Lender affected hereby, (i) extend the Credit Facility Period, or
86
reduce the rate or extend the time of payment of principal or interest
or fees thereon, or reduce the principal amount of the Advances,
(ii) increase the Commitment of any Lender over the amount thereof then
in effect (it being understood that a waiver of any default or Event of
Default or any mandatory repayment of Advances shall not constitute a
change in the terms of any Commitment of any Lender), (iii) amend,
modify or waive any provision of this Section 15, (iv) amend the
definition of Majority Lenders, (v) consent to the assignment or
transfer by the Borrower of any of its rights and obligations under
this Agreement, (vi) release any Security Party from any of its
obligations under any Security Document except as expressly provided
herein or in such Security Document or (vii) amend any provision
relating to the maintenance of collateral under Section 9.3. All
amendments approved by the Majority Lenders under this Section 15 must
be in writing and signed by the Borrower and each of the Lenders. In
the event that any Lender is unable to or refuses to sign an amendment
approved by the Majority Lenders hereunder, such Lender hereby appoints
the Agent as its Attorney-In-Fact for the purposes of signing such
amendment. No provision of this Section 15 or any other provisions
relating to the Agent may be modified without the consent of the Agent.
15.8 Assumption re Event of Default. Except as otherwise provided in
Section 15.14, the Agent shall be entitled to assume that no Event of
Default, or event which with the giving of notice or lapse of time, or
both, would constitute an Event of Default, has occurred and is
continuing, unless the Agent has been notified by any Security Party of
such fact, or has been notified by a Lender that such Lender considers
that an Event of Default or such an event (specifying in detail the
nature thereof) has occurred and is continuing. In the event that the
Agent shall have been notified by any Security Party or any Lender in
the manner set forth in the preceding sentence of any Event of Default
or of an event which with the giving of notice or lapse of time, or
both, would constitute an Event of Default, the Agent shall notify the
Lenders and shall take action and assert such rights under this
Agreement, under the Note and under the Security Documents as the
Majority Lenders shall request in writing.
15.9 No Liability of Agent or Lenders. Neither the Agent nor any of
the Lenders shall be under any liability or responsibility whatsoever:
(A) to any Security Party or any other person or entity as a
consequence of any failure or delay in performance by, or any breach
by, any other Lenders or any other person of any of its or their
obligations under this Agreement or under any Security Document;
(B) to any Lender or Lenders as a consequence of any failure or
delay in performance by, or any breach by, any Security Party of any of
its respective obligations under this Agreement, under the Note or
under the Security Documents; or
87
(C) to any Lender or Lenders for any statements, representations
or warranties contained in this Agreement, in any Security Document or
in any document or instrument delivered in connection with the
transaction hereby contemplated; or for the validity, effectiveness,
enforceability or sufficiency of this Agreement, the Note , any
Security Document or any document or instrument delivered in connection
with the transactions hereby contemplated.
15.10 Indemnification of Agent. The Lenders agree to indemnify the
Agent (to the extent not reimbursed by the Security Parties or any
thereof), pro rata according to the respective amounts of their
Commitments, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
or disbursements of any kind or nature whatsoever (including legal fees
and expenses incurred in investigating claims and defending itself
against such liabilities) which may be imposed on, incurred by or
asserted against, the Agent in any way relating to or arising out of
this Agreement, the Note, or any Security Document, any action taken or
omitted by the Agent thereunder or the preparation, administration,
amendment or enforcement of, or waiver of any provision of, this
Agreement, the Note, or any Security Document, except that no Lender
shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
or disbursements resulting from the Agent's gross negligence or willful
misconduct.
15.11 Consultation with Counsel. The Agent may consult with legal
counsel selected by the Agent and shall not be liable for any action
taken, permitted or omitted by it in good faith in accordance with the
advice or opinion of such counsel.
15.12 Resignation. The Agent may resign at any time by giving
sixty (60) days' written notice thereof to the Lenders and the
Borrower. Upon any such resignation, the Lenders shall have the right
to appoint a successor Agent. If no successor Agent shall have been so
appointed by the Lenders and shall have accepted such appointment
within sixty (60) days after the retiring Agent's giving notice of
resignation, then the retiring Agent may, on behalf of the Lenders,
appoint a successor Agent which shall be a bank or trust company of
recognized standing. The appointment of any successor Agent shall be
subject to the prior written consent of the Borrower, such consent not
to be unreasonably withheld. After any retiring Agent's resignation as
Agent hereunder, the provisions of this Section 15 shall continue in
effect for its benefit with respect to any actions taken or omitted by
it while acting as Agent.
15.13 Representations of Lenders. Each Lender represents and
warrants to each other Lender and the Agent that:
(i) In making its decision to enter into this Agreement and to
make its Commitment available hereunder, it has independently taken
whatever steps it considers
88
necessary to evaluate the financial condition and affairs of the
Security Parties, that it has made an independent credit judgment and
that it has not relied upon any statement, representation or warranty
by any other Lender or the Agent; and
(ii) So long as any portion of its Commitment remains outstanding,
it will continue to make its own independent evaluation of the
financial condition and affairs of the Security Parties.
15.14 Notification of Event of Default. The Agent hereby
undertakes to promptly notify the Lenders, and the Lenders hereby
promptly undertake to notify the Agent and the other Lenders, of the
existence of any Event of Default which shall have occurred and be
continuing of which the Agent or any Lender has actual knowledge.
16. NOTICES AND DEMANDS
16.1 Notices. All notices, requests, demands and other
communications to any party hereunder shall be in writing (including
prepaid overnight courier, facsimile transmission or similar writing)
and shall be given to the Borrower at the address or telecopy number
set forth below and to the Lenders, the Agent and the Security Trustee
at their address and telecopy number set forth in Schedule 1 or at such
other address or telecopy number as such party may hereafter specify
for the purpose by notice to each other party hereto. Each such
notice, request or other communication shall be effective (i) if given
by telecopy, when such telecopy is transmitted to the telecopy number
specified in this Section and telephonic confirmation of receipt
thereof is obtained or (ii) if given by mail, prepaid overnight courier
or any other means, when received at the address specified in this
Section or when delivery at such address is refused.
If to the Borrower:
NRG Generating (U.S.) Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President-CFO
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
89
with a copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: M. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq.
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
17. MISCELLANEOUS
17.1 Time of Essence. Time is of the essence of this Agreement but no
failure or delay on the part of any Lender, the Agent, the Security
Trustee or the Arranger to exercise any power or right under this
Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise by any Lender, the Agent, the Security Trustee or the
Arranger of any power or right hereunder preclude any other or further
exercise thereof or the exercise of any other power or right. The
remedies provided herein are cumulative and are not exclusive of any
remedies provided by law.
17.2 Unenforceable, etc., Provisions - Effect. In case any one or more
of the provisions contained in this Agreement, the Note or in any
Security Document would, if given effect, be invalid, illegal or
unenforceable in any respect under any law applicable in any relevant
jurisdiction, said provision shall not be enforceable against the
relevant Security Party, but the validity, legality and enforceability
of the remaining provisions herein or therein contained shall not in
any way be affected or impaired thereby.
17.3 References. References herein to Sections, Schedules and Exhibits
are to be construed as references to sections of, schedules to and
exhibits to, this Agreement.
17.4 Prior Agreements, Merger. Any and all prior understandings and
agreements heretofore entered into between the Security Parties on the
one part, and the Agent, the Security Trustee, the Arranger or the
Lenders, on the other part, whether written or oral, are superseded by
and merged into this Agreement and the other agreements (the forms of
which are exhibited hereto) to be executed and delivered in connection
herewith to which the Security Parties, the Security Trustee, the
Arranger, the Agent and/or the Lenders are parties, which alone fully
and completely express the agreements between the Security Parties, the
Security Trustee, the Arranger, the Agent and the Lenders with respect
to the subject matter hereof.
90
17.5 Entire Agreement; Amendments. This Agreement constitutes the
entire agreement of the parties hereto with respect to the subject
matter hereof including all parties added hereto pursuant to an
Assignment and Assumption Agreement and, subject to Section 15.7(b)
cannot be amended other than by written agreement signed by all such
parties.
17.6 Indemnification. The Borrower and, by its execution and delivery
of the Consent and Agreement set forth below, each of the other
Security Parties jointly and severally agree to indemnify each Lender,
the Agent, the Security Trustee and the Arranger, their respective
successors and assigns, and their respective officers, directors,
employees, representatives and agents (each an "Indemnitee") from, and
hold each of them harmless against, any and all losses, liabilities,
claims, damages, expenses, obligations, penalties, actions, judgments,
suits, costs or disbursements of any kind or nature whatsoever
(including, without limitation, the fees and disbursements of counsel
for such Indemnitee in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether
or not such Indemnitee shall be designated a party thereto) that may at
any time (including, without limitation, at any time following the
payment of the obligations of the Borrower hereunder) be imposed on,
asserted against or incurred by, any Indemnitee as a result of, or
arising out of or in any way related to or by reason of any
investigation, litigation or other proceeding related to this
Agreement, the Credit Facility or the use of proceeds of the Advances,
including without limitation any investigation, litigation or other
proceeding related to, (a) any violation by any Security Party of any
applicable Environmental Law, (b) any Environmental Claim arising out
of the management, use, control, ownership or operation of property or
assets by any Security Party (or, after foreclosure, by any Lender, the
Agent, the Security Trustee, the Arranger or any of their respective
successors or assigns), (c) the breach of any representation, warranty
or covenant set forth in Sections 2.1(v) or 10.1A.(x) and (d) the
alleged PECO option referenced in Section 9.4 above; provided, that the
foregoing indemnity will not, as to any Indemnitee, apply to losses,
liabilities, claims, damages, expenses, obligations, penalties,
actions, judgments, suits, costs or disbursements, to the extent they
are found by a judgment of a court of competent jurisdiction to arise
from (A) the willful misconduct or gross negligence of such Indemnitee
or (B) a dispute between the Borrower and such Indemnitee in which the
Borrower prevails. Each such Indemnitee shall use its best efforts to,
upon becoming aware of any event which may result in the Borrower being
required to perform any of its indemnity obligations under this
Section, promptly notify the Borrower (provided that failure to so
notify shall not mitigate the obligations of the Borrower hereunder).
If and to the extent that the obligations of the Security Parties under
this Section are unenforceable for any reason, the Borrower and, by its
execution and delivery of the Consent and Agreement set forth below,
each of the other Security Parties jointly and severally agree to make
the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law. The obligations
of the Security Parties under this
91
Section 17.7 shall survive the termination of this Agreement and the
repayment to the Lender of all amounts owing thereto under or in
connection herewith.
17.7 Headings. In this Agreement, Section headings are inserted for
convenience of reference only and shall not be taken into account in
the interpretation of this Agreement.
92
IN WITNESS whereof the parties hereto have caused this
Agreement to be duly executed by their duly authorized representatives
as of the day and year first above written.
NRG GENERATING (U.S.) INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President-CFO
MEESPIERSON CAPITAL CORP.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇▇ ▇'▇▇▇▇▇▇
Name: ▇▇▇▇ ▇'▇▇▇▇▇▇
Title: Senior Vice President
CONSENT AND AGREEMENT
Each of the undersigned, referred to in the foregoing Credit
Agreement as the "Security Parties", hereby consents and agrees to said
Credit Agreement and to the documents contemplated thereby and to the
provisions contained therein relating to conditions to be fulfilled and
obligations to be performed by the undersigned pursuant to or in
connection with said Credit Agreement and agrees particularly to be
bound by the representations, warranties and covenants relating to the
undersigned contained in Sections 2 and 10 of said Credit Agreement and
by the indemnification provisions of Section 17.7 of said Credit
Agreement to the same extent as if the undersigned were a party to said
Credit Agreement.
O'BRIEN (PHILADELPHIA) COGENERATION INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President-CFO
O'BRIEN ENERGY SERVICES COMPANY
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President-CFO