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EXHIBIT 10.16
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364-DAY REVOLVING CREDIT AGREEMENT
DATED AS OF
MARCH 17, 1998
AMONG
NRG ENERGY, INC.
THE BANKS PARTY HERETO,
AND
ABN AMRO BANK N.V.
AS AGENT
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364-DAY REVOLVING CREDIT AGREEMENT
364-DAY REVOLVING CREDIT AGREEMENT, dated as of March 17, 1998 among NRG
Energy, Inc., a Delaware corporation (the "Borrower"), the banks from time to
time party hereto (each a "Bank," and collectively the "Banks") and ABN AMRO
Bank N.V. in its capacity as agent for the Banks hereunder (in such capacity,
the "Agent").
WITNESSETH THAT:
WHEREAS, the Borrower desires to obtain the several commitments of the
Banks to make available a revolving credit for loans (the "Revolving Credit"),
as described herein; and
WHEREAS, the Banks are willing to extend such commitments subject to all of
the terms and conditions hereof and on the basis of the representations and
warranties hereinafter set forth;
NOW, THEREFORE, in consideration of the recitals set forth above and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS; INTERPRETATION.
Section 1.1 Definitions. The following terms when used herein have the
following meanings:
"Adjusted LIBOR" is defined in Section 2.3(b) hereof.
"Affiliate" means, as to any Person, any other Person which directly
or indirectly controls, or is under common control with, or is controlled
by, such Person. As used in this definition, "control" (including, with
their correlative meanings, "controlled by" and "under common control
with") means possession, directly or indirectly, of power to direct or
cause the direction of management or policies of a Person (whether through
ownership of securities or partnership or other ownership interests, by
contract or otherwise), provided that, in any event for purposes of this
definition: (i) any Person which owns directly or indirectly 5% or more of
the securities having ordinary voting power for the election of directors
or other governing body of a corporation or 5% or more of the partnership
or other ownership interests of any other Person (other than as a limited
partner of such other Person) will be deemed to control such corporation or
other Person; and (ii) each director and executive officer of the Borrower
or any Subsidiary shall be deemed an Affiliate of the Borrower and each
Subsidiary.
"Agent" is defined in the first paragraph of this Agreement and
includes any successor Agent pursuant to Section 10.7 hereof.
"Agreement" means this 364-Day Revolving Credit Agreement, including
all Exhibits and Schedules hereto, as it may be amended, supplemented or
otherwise modified from time to time in accordance with the terms hereof.
"Applicable Margin" means, at any time (i) with respect to Base Rate
Loans, the Base Rate Margin and (ii) with respect to Eurocurrency Loans,
the Eurocurrency Margin.
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"Applicable Telerate Page" is defined in Section 2.3(b) hereof.
"Authorized Representative" means those persons shown on the list of
officers provided by the Borrower pursuant to Section 6.1(e) hereof, or on
any updated such list provided by the Borrower to the Agent, or any further
or different officer of the Borrower so named by any Authorized
Representative of the Borrower in a written notice to the Agent.
"Bank" is defined in the first paragraph of this Agreement.
"Base Rate" is defined in Section 2.3(a) hereof.
"Base Rate Loan" means a Loan bearing interest prior to maturity at a
rate specified in Section 2.3(a) hereof.
"Base Rate Margin" means the percentage set forth in Schedule 1 hereto
beside the then applicable Rating.
"Borrower" is defined in the first paragraph of this Agreement.
"Borrowing" means the total of Loans of a single type advanced,
continued for an additional Interest Period, or converted from a different
type into such type by the Banks on a single date and for a single Interest
Period. Borrowings of Loans are made and maintained ratably from each of
the Banks according to their Percentages. A Borrowing is "advanced" on the
day Banks advance funds comprising such Borrowing to the Borrower, is
"continued" on the date a new Interest Period for the same type of Loan
commences for such Borrowing, and is "converted" when such Borrowing is
changed from one type of Loan to the other, all as requested by the
Borrower pursuant to Section 2.5(a).
"Business Day" means any day other than a Saturday or Sunday on which
Banks are not authorized or required to close in Chicago, Illinois and, if
the applicable Business Day relates to the borrowing or payment of a
Eurocurrency Loan, on which dealings in U.S. Dollars may be carried on by
the Agent in the interbank eurodollar market.
"Capital Lease" means at any date any lease of Property which, in
accordance with GAAP, would be required to be capitalized on the balance
sheet of the lessee.
"Capitalized Lease Obligations" means, for any Person, the amount of
such Person's liabilities under Capital Leases determined at any date in
accordance with GAAP.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commitments" means the Revolving Credit Commitments.
"Compliance Certificate" means a certificate in the form of Exhibit B
hereto.
"Consolidated Capitalization" means Consolidated Net Worth plus
Indebtedness of the Borrower.
"Consolidated Current Liabilities" mean such liabilities of the
Borrower on a consolidated basis as shall be determined in accordance with
GAAP to constitute current liabilities.
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"Consolidated Net Income" means, for any period, the net income (or
net loss) of the Borrower for such period computed on a consolidated basis
in accordance with GAAP.
"Consolidated Net Tangible Assets" means, as of the date of
determination thereof, Consolidated Total Assets as of such date less the
sum of (i) Consolidated Current Liabilities and (ii) Intangible Assets.
"Consolidated Net Worth" means, as of the date of determination
thereof, the amount which would be reflected as stockholders' equity upon a
consolidated balance sheet of the Borrower (determined in accordance with
GAAP) prior to making any adjustment thereto in connection with the account
entitled "currency translation account" on such balance sheet.
"Consolidated Total Assets" means, as of the date of determination
thereof, the total amount of all assets of the Borrower determined on a
consolidated basis in accordance with GAAP.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
Property is bound.
"Controlled Group" means all members of a controlled group of
corporations and all trades and businesses (whether or not incorporated)
under common control that, together with the Borrower or any of its
Subsidiaries, are treated as a single employer under Section 414 of the
Code.
"Credit Documents" means this Agreement, the Notes and the Fee Letter.
"Credit Event" means the advancing of any Loan or the continuation of
or conversion into a Eurocurrency Loan.
"Debt" means, for any Person, any Indebtedness of such Person only of
the types described in clauses (i) through (vi) of the definition of such
term.
"Default" means any event or condition the occurrence of which would,
with the passage of time or the giving of notice, or both, constitute an
Event of Default.
"Effective Date" means the date on which the Agent has received signed
counterpart signature pages of this Agreement from each of the signatories
(or, in the case of a Bank, confirmation that such Bank has executed such a
counterpart and dispatched it for delivery to the Agent) and the documents
required by Section 6.1 hereof.
"Environmental Law" means the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section 9601 et seq., the
Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq., the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1802 et seq., the
Toxic Substances Control Act, 15 .S.C. Section 2601 et seq., the Federal
Water Pollution Control Act, 33 U.S.C. Section 1252 et seq., the Clean
Water Act, 33 U.S.C. Section 1321 et seq., the Clean Air Act, 42 U.S.C.
Section 7401 et seq., and any other federal, state, county, municipal,
local or other statute, law, ordinance or regulation which may relate to or
deal with human health or the environment, all as may be from time to time
amended.
"ERISA" is defined in Section 5.8 hereof.
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"Eurocurrency Loan" means a Loan bearing interest prior to maturity at
the rate specified in Section 2.3(b) hereof.
"Eurocurrency Margin" means the percentage set forth in Schedule 1
hereto beside the then applicable Rating.
"Eurocurrency Reserve Percentage" is defined in Section 2.3(b) hereof.
"Event of Default" means any of the events or circumstances specified
in Section 8.1 hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Facility Fee Rate" means the percentage set forth in Schedule 1
hereto beside the then applicable Rating.
"Federal Funds Rate" means the fluctuating interest rate per annum
described in part (x) of clause (ii) of the definition of Base Rate set
forth in Section 2.3(a) hereof.
"Fee Letter" means that certain letter between the Agent and the
Borrower dated as of the date hereof pertaining to fees to be paid by the
Borrower to the Agent for the Agent's sole account and benefit.
"GAAP" means generally accepted accounting principles as in effect in
the United States from time to time, applied by the Borrower and its
Subsidiaries on a basis consistent with the preparation of the Borrower's
financial statements furnished to the Banks.
"Guaranty" by any Person means all obligations (other than
endorsements in the ordinary course of business of negotiable instruments
for deposit or collection) of such Person guaranteeing or in effect
guaranteeing any Indebtedness, dividend or other obligation (including,
without limitation, limited or full recourse obligations in connection with
sales of receivables or any other Property) of any other Person (the
"primary obligor") in any manner, whether directly or indirectly,
including, without limitation, all obligations incurred through an
agreement, contingent or otherwise, by such Person: (i) to purchase such
Indebtedness or obligation or any Property or assets constituting security
therefor, (ii) to advance or supply funds (x) for the purchase or payment
of such Indebtedness or obligation, or (y) to maintain working capital or
other balance sheet condition, or otherwise to advance or make available
funds for the purchase or payment of such Indebtedness or obligation, or
(iii) to lease property or to purchase Securities or other property or
services primarily for the purpose of assuring the owner of such
Indebtedness or obligation of the ability of the primary obligor to make
payment of the Indebtedness or obligation, or (iv) otherwise to assure the
owner of the Indebtedness or obligation of the primary obligor against loss
in respect thereof. For the purpose of all computations made under this
Agreement, the amount of a Guaranty in respect of any obligation shall be
deemed to be equal to the maximum aggregate amount of such obligation or,
if the Guaranty is limited to less than the full amount of such obligation,
the maximum aggregate potential liability under the terms of the Guaranty.
Notwithstanding anything in this definition to the contrary, a Person's
support of its subsidiary's obligation to (a) make equity contributions or
(b) pay liquidated damages under an operating and maintenance agreement
should such subsidiary fail to comply with the terms thereof shall not be
considered a "Guaranty" by such Person.
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"Hazardous Material" means any substance or material which is
hazardous or toxic, and includes, without limitation, (a) asbestos,
polychlorinated biphenyls, dioxins and petroleum or its by-products or
derivatives (including crude oil or any fraction thereof) and (b) any other
material or substance classified or regulated as "hazardous" or "toxic"
pursuant to any Environmental Law.
"Indebtedness" means and includes, for any Person, all obligations of
such Person, without duplication, which are required by GAAP to be shown as
liabilities on its balance sheet, and in any event shall include all of the
following whether or not so shown as liabilities (i) obligations of such
Person for borrowed money, (ii) obligations of such Person representing the
deferred purchase price of property or services, (iii) obligations of such
Person evidenced by notes, acceptances, or other instruments of such Person
or arising out of letters of credit issued for such Person's account, (iv)
obligations, whether or not assumed, secured by Liens or payable out of the
proceeds or production from Property now or hereafter owned or acquired by
such Person, (v) Capitalized Lease Obligations of such Person and (vi)
obligations for which such Person is obligated pursuant to a Guaranty. All
calculations of the Indebtedness of any Person (and the components thereof)
shall be performed on a consolidated basis, provided, that Indebtedness
shall not include obligations which are required by GAAP to be shown as
liabilities on such Person's balance sheet, but which are non-recourse to
such Person.
"Interest Period" is defined in Section 2.6 hereof.
"Intangible Assets" means, as of the date of determination thereof,
all assets of the Borrower properly classified as intangible assets
determined on a consolidated basis in accordance with GAAP.
"Lending Office" is defined in Section 9.4 hereof.
"LIBOR" is defined in Section 2.3(b) hereof.
"LIBOR Index Rate" is defined in Section 2.3(b) hereof.
"Lien" means any interest in Property securing an obligation owed to,
or a claim by, a Person other than the owner of the Property, whether such
interest is based on the common law, statute or contract, including, but
not limited to, the security interest lien arising from a mortgage,
encumbrance, pledge, conditional sale, security agreement or trust receipt,
or a lease, consignment or bailment for security purposes. The term "Lien"
shall also include reservations, exceptions, encroachments, easements,
rights of way, covenants, conditions, restrictions, leases and other title
exceptions and encumbrances affecting Property. For the purposes of this
definition, a Person shall be deemed to be the owner of any Property which
it has acquired or holds subject to a conditional sale agreement, Capital
Lease or other arrangement pursuant to which title to the Property has been
retained by or vested in some other Person for security purposes, and such
retention of title shall constitute a "Lien."
"Loan" is defined in Section 2.1(a) hereof and, as so defined,
includes a Base Rate Loan or Eurocurrency Loan, each of which is a "type"
of Loan hereunder.
"Long-Term Credit Agreement" means that certain Revolving Credit
Agreement dated as of March 17, 1997 among NRG Energy, Inc., ABN AMRO Bank
N.V., as agent and the banks from time to time party thereto, as amended or
otherwise modified from time to time.
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"Material Adverse Effect" means any material adverse change in, or any
adverse development which materially affects or could reasonably be
expected to affect, the business, financial position or results of
operations of the Borrower and its Subsidiaries, taken as a whole, or the
ability of the Borrower to perform its obligations under the Credit
Documents.
"Material Subsidiary" means a Subsidiary of the Borrower (i) whose
total assets represent at least 5% of the total assets of the Borrower and
its Subsidiaries determined based upon the most recent financial statements
delivered pursuant to Section 7.6 (as determined in accordance with GAAP.
"Minimum Consolidated Net Worth" means an amount, as of any
determination thereof, equal to the sum of $175,000,000 plus 25% of
Consolidated Net Income for the period from and including April 1, 1996 to
such determination date but which amount shall in no event be less than
$175,000,000.
"Note" is defined in Section 2.10(a) hereof.
"Obligations" means all fees payable hereunder, all obligations of the
Borrower to pay principal or interest on Loans and all other payment
obligations of the Borrower arising under or in relation to any Credit
Document.
"Original Dollar Amount" means the amount of any Loan.
"Percentage" means, for each Bank, the percentage of the Revolving
Credit Commitments represented by such Bank's Revolving Credit Commitment
or, if the Revolving Credit Commitments have been terminated, the
percentage held by such Bank of the aggregate principal amount of all
outstanding Obligations.
"Person" means an individual, partnership, corporation, association,
trust, unincorporated organization or any other entity or organization,
including a government or any agency or political subdivision thereof.
"Plan" means at any time an employee pension benefit plan covered by
Title IV of ERISA or subject to the minimum funding standards under Section
412 of the Code that is either (i) maintained by a member of the Controlled
Group or (ii) maintained pursuant to a collective bargaining agreement or
any other arrangement under which more than one employer makes
contributions and to which a member of the Controlled Group is then making
or accruing an obligation to make contributions or has within the preceding
five plan years made contributions.
"PBGC" is defined in Section 5.9 hereof.
"Property" means any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible, whether now
owned or hereafter acquired.
"Rating" means the rating given to senior unsecured debt obligations
of the Borrower by ▇▇▇▇▇'▇ Investors Service, Inc. and Standard & Poor's
Ratings Service, Inc., and any successors thereto.
"Reference Banks" means ABN AMRO Bank N.V., and one other
representative of the Banks. In the event that any of such Banks ceases to
be a "Bank" hereunder or fails to
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provide timely quotations of interests rates to the Agent as and when
required by this Agreement, then such Bank shall be replaced by a new
reference bank jointly designated by the Agent and the Borrower.
"Replaceable Bank" is defined in Section 11.13(iii).
"Replacement Bank" is defined in Section 11.13(iii).
"Required Banks" means, as of the date of determination thereof, Banks
holding at least 66-2/3% of the Percentages.
"Revolving Credit Commitment" is defined in Section 2.1 hereof.
"SEC" means the Securities and Exchange Commission.
"Security" has the same meaning as in Section 2(l) of the Securities
Act of 1933, as amended.
"Subsidiary" means, as to the Borrower, any active, domestic
corporation or other entity of which one hundred percent (100%) of the
outstanding stock or comparable equity interests having ordinary voting
power for the election of the Board of Directors of such corporation or
similar governing body in the case of a non corporation (irrespective of
whether or not, at the time, stock or other equity interest of any other
class or classes of such corporation or other entity shall have or might
have voting power by reason of the happening of any contingency) is at the
time directly owned by the Borrower.
"Telerate Service" means the Dow ▇▇▇▇▇ Telerate Service.
"Termination Date" means the date occurring 364 days from the date of
this Agreement, subject to any extension of such date pursuant to Section
3.2 hereof.
"Unfunded Vested Liabilities" means, with respect to any Plan at any
time, the amount (if any) by which (i) the present value of all vested
nonforfeitable accrued benefits under such Plan exceeds (ii) the fair
market value of all Plan assets allocable to such benefits, all determined
as of the then most recent valuation date for such Plan, but only to the
extent that such excess represents a potential liability of a member of the
Controlled Group to the PBGC or the Plan under Title IV of ERISA.
"U.S. Dollars" and "$" each means the lawful currency of the United
States of America.
"Voting Stock" of any Person means capital stock of any class or
classes or other equity interests (however designated) having ordinary
voting power for the election of directors or similar governing body of
such Person.
"Welfare Plan" means a "welfare plan", as defined in Section 3(1) of
ERISA.
"Wholly-Owned" when used in connection with any Subsidiary of the
Borrower means a Subsidiary of which all of the issued and outstanding
shares of stock or other equity interests (other than directors? qualifying
shares as required by law) shall be owned by the Borrower and/or one or
more of its Wholly-Owned Subsidiaries.
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Section 1.2 Interpretation. The foregoing definitions shall be equally
applicable to both the singular and plural forms of the terms defined. All
references to times of day in this Agreement shall be references to
Chicago, Illinois time unless otherwise specifically provided. Where the
character or amount of any asset or liability or item of income or expense
is required to be determined or any consolidation or other accounting
computation is required to be made for the purposes of this Agreement, the
same shall be done in accordance with GAAP, to the extent applicable,
except where such principles are inconsistent with the specific provisions
of this Agreement.
SECTION 2. THE REVOLVING CREDIT.
Section 2.1 The Loan Commitment. General Terms. Subject to the terms
and conditions hereof, each Bank, by its acceptance hereof, severally
agrees to make a loan or loans (individually a "Loan" and collectively
"Loans") to the Borrower from time to time on a revolving basis in U.S.
Dollars in an aggregate outstanding Original Dollar Amount up to the amount
of its revolving credit commitment set forth on the applicable signature
page hereof (such amount, as reduced pursuant to Section 2.1(b) or Section
2.12 or changed as a result of one or more assignments under Section 3.2,
11.12 or 11.13(iii), its "Revolving Credit Commitment" and, cumulatively
for all the Banks, the "Revolving Credit Commitments") before the
Termination Date. The sum of the aggregate Original Dollar Amount of Loans
at any time outstanding shall not exceed the Revolving Credit Commitments
in effect at such time. Each Borrowing of Loans shall be made ratably from
the Banks in proportion to their respective Percentages. As provided in
Section 2.5(a) hereof, the Borrower may elect that each Borrowing of Loans
be either Base Rate Loans or Eurocurrency Loans. Loans may be repaid and
the principal amount thereof reborrowed before the Termination Date,
subject to all the terms and conditions hereof.
Section 2.2 [Intentionally Omitted].
Section 2.3 Applicable Interest Rates.
(a) Base Rate Loans. Each Base Rate Loan made or maintained by a
Bank shall bear interest during each Interest Period it is outstanding
computed on the basis of a year of 365 or 366 days, as applicable, and
actual days elapsed on the unpaid principal amount thereof from the
date such Loan is advanced, continued or created by conversion from a
Eurocurrency Loan until maturity (whether by acceleration or
otherwise) at a rate per annum equal to the sum of the Applicable
Margin plus the Base Rate from time to time in effect, payable on the
last day of its Interest Period and at maturity (whether by
acceleration or otherwise).
"Base Rate" means for any day the greater of:
(i) the rate of interest announced by the Agent at its
offices in Chicago, Illinois, from time to time as its prime
rate, or equivalent, for U.S. Dollar loans as in effect on such
day, with any change in the Base Rate resulting from a change in
said prime rate to be effective as of the date of the relevant
change in said prime rate; and
(ii) the sum of (x) the rate determined by the Agent to be
the prevailing rate per annum (rounded upwards, if necessary, to
the nearest one hundred-thousandth of a percentage point) at
approximately 10:00 a.m. (New York time) (or as soon thereafter
as is practicable) on such day (or, if such day is
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not a Business Day, on the immediately preceding Business
Day) for the purchase at face value of overnight Federal funds,
as published by the Federal Reserve bank of New York, in an
amount comparable to the principal amount owed to the Agent for
which such rate is being determined, plus (y) 1/2 of 1% (0.50%).
(b) Eurocurrency Loans. Each Eurocurrency Loan made or
maintained by a Bank shall bear interest during each Interest
Period it is outstanding (computed on the basis of a year of 360
days and actual days elapsed) on the unpaid principal amount
thereof from the date such Loan is advanced, continued, or
created by conversion from a Base Rate Loan until maturity
(whether by acceleration or otherwise) at a rate per annum equal
to the sum of the Applicable Margin plus the Adjusted LIBOR
applicable for such Interest Period, payable on the last day of
the Interest Period and at maturity (whether by acceleration or
otherwise), and, if the applicable Interest Period is longer than
three months, on each day occurring every three months after the
commencement of such Interest Period. All payments of principal
and interest on a Loan (whether a Base Rate Loan or Eurocurrency
Loan) shall be made in U.S. Dollars.
"Adjusted LIBOR" means, for any Borrowing of Eurocurrency
Loans, a rate per annum determined in accordance with the
following formula:
Adjusted LIBOR = LIBOR
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1 - Eurocurrency Reserve Percentage
"LIBOR" means, for an Interest Period, (a) the LIBOR Index Rate for
such Interest Period as from time to time quoted by the Telerate Service,
if such rate is available, and (b) if the LIBOR Index Rate is not quoted by
the Telerate Service, the arithmetic average of the rates of interest per
annum (rounded upwards, if necessary, to the nearest one-sixteenth of one
percent) at which deposits in U.S. Dollars in immediately available funds
are offered to each Reference Bank at 11:00 a.m. (London, England time) two
(2) Business Days before the beginning of such Interest Period by major
banks in the interbank eurocurrency market for delivery on the first day of
and for a period equal to such Interest Period in an amount equal or
comparable to the principal amount of the Eurocurrency Loan scheduled to be
made by the Agent as part of such Borrowing.
"LIBOR Index Rate" means, for any Interest Period, the rate per annum
(rounded upwards, if necessary, to the next higher one-sixteenth of one
percent) for deposits in U.S. Dollars for delivery on the first day of and
for a period equal to such Interest Period in an amount equal or comparable
to the principal amount of the Loan scheduled to be made by the Agent as
part of such Borrowing, which appears on the Applicable Telerate Page, as
of 11:00 a.m. (London, England time) on the day two (2) Business Days
before the commencement of such Interest Period.
"Applicable Telerate Page" means the display page designated as "Page
3750" on the Telerate Service (or such other page as may replace such
pages, as appropriate, on that service or such other service as may be
nominated by the British Bankers' Association as the information vendor for
the purpose of displaying British Bankers' Association Interest Settlement
Rates for deposits in U.S. Dollars).
"Eurocurrency Reserve Percentage" means the daily average for the
applicable Interest Period of the maximum rate, expressed as a decimal, at
which reserves (including,
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without limitation, any supplemental, marginal and emergency reserves)
are imposed during such Interest Period by the Board of Governors of the
Federal Reserve System (or any successor) on "eurocurrency liabilities", as
defined in such Board's Regulation D (or in respect of any other category
of liabilities that includes deposits by reference to which the interest
rate is determined or any category of extensions of credit or other assets
that include loans by non-United States offices of any Bank to United
States residents), subject to any amendments of such reserve requirement by
such Board or its successor, taking into account any transitional
adjustments thereto. For purposes of this definition, the Eurocurrency
Loans shall be deemed to be "eurocurrency liabilities" as defined in
Regulation D without benefit or credit for any prorations, exemptions or
offsets under Regulation D.
(c) Rate Determinations. The Agent shall determine each interest
rate applicable to Obligations and the Original Dollar Amount of
Loans, and a determination thereof by the Agent shall be conclusive
and binding except in the case of manifest error.
Section 2.4 Minimum Borrowing Amounts. Each Borrowing of Base Rate
Loans and Eurocurrency Loans denominated in U.S. Dollars shall be in an
amount not less than $1,000,000 and in integral multiples of $1,000,000.
Section 2.5 Manner of Borrowing Loans and Designating Interest Rates
Applicable to Loans.
(a) Notice to the Agent. The Borrower shall give written notice
to the Agent by no later than 10:00 a.m. (Chicago time) (i) at least
three (3) Business Days before the date on which the Borrower requests
the Banks to advance a Borrowing of Eurocurrency Loans and (ii) on the
date the Borrower requests the Banks to advance a Borrowing of Base
Rate Loans. The Loans included in each Borrowing shall bear interest
initially at the type of rate specified in such notice of a new
Borrowing. Thereafter, the Borrower may from time to time elect to
change or continue the type of interest rate borne by each Borrowing
or, subject to Section 2.4's minimum amount requirement for each
outstanding Borrowing, a portion thereof, as follows: (i) if such
Borrowing is of Eurocurrency Loans, on the last day of the Interest
Period applicable thereto, the Borrower may continue part or all of
such Borrowing as Eurocurrency Loans for an Interest Period or
Interest Periods specified by the Borrower or convert part or all of
such Borrowing into Base Rate Loans, (ii) if such Borrowing is of Base
Rate Loans, on any Business Day, the Borrower may convert all or part
of such Borrowing into Eurocurrency Loans for an Interest Period or
Interest Periods specified by the Borrower. The Borrower shall give
all such notices requesting the advance, continuation, or conversion
of a Borrowing to the Agent by telephone or telecopy (which notice
shall be irrevocable once given and, if by telephone, shall be
promptly confirmed in writing). Notices of the continuation of a
Borrowing of Eurocurrency Loans for an additional Interest Period or
of the conversion of part or all of a Borrowing of Eurocurrency Loans
into Base Rate Loans or of Base Rate Loans into Eurocurrency Loans
must be given by no later than 10:00 a.m. (Chicago time) at least
three (3) Business Days before the date of the requested continuation
or conversion. All such notices concerning the advance, continuation,
or conversion of a Borrowing shall specify the date of the requested
advance, continuation or conversion of a Borrowing (which shall be a
Business Day), the amount of the requested Borrowing to be advanced,
continued, or converted, the type of Loans to comprise such new,
continued or converted Borrowing and, if such Borrowing is to be
comprised of Eurocurrency Loans, the Interest Period applicable
thereto. The Borrower agrees that the Agent may rely on any such
telephonic or telecopy notice given by any
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person it in good faith believes is an Authorized Representative
without the necessity of independent investigation, and in the event any
such notice by telephone conflicts with any written confirmation, such
telephonic notice shall govern if the Agent has acted in reliance thereon.
There may be no more than five different Interest Periods in effect at any
one time.
(b) Notice to the Banks. The Agent shall give prompt telephonic or
telecopy notice to each Bank of any notice from the Borrower received
pursuant to Section 2.5.(a) above. The Agent shall give notice to the
Borrower and each Bank by like means of the interest rate applicable to
each Borrowing of Eurocurrency Loans and the Original Dollar amount
thereof.
(c) Borrower's Failure to Notify. Any outstanding Borrowing of Base
Rate Loans shall, subject to Section 6.2 hereof, automatically be continued
for an additional Interest Period on the last day of its then current
Interest Period unless the Borrower has notified the Agent within the
period required by Section 2.5(a) that it intends to convert such Borrowing
into a Borrowing of Eurocurrency Loans or notifies the Agent within the
period required by Section 2.8(a) that it intends to prepay such Borrowing.
If the Borrower fails to give notice pursuant to Section 2.5(a) above of
the continuation or conversion of any outstanding principal amount of a
Borrowing of Eurocurrency Loans before the last day of its then current
Interest Period within the period required by Section 2.5(a) and has not
notified the Agent within the period required by Section 2.8(a) that it
intends to prepay such Borrowing, such Borrowing shall automatically be
converted into a Borrowing of Base Rate Loans, subject to Section 6.2
hereof.
(d) Disbursement of Loans. Not later than 11:00 a.m. (Chicago time) on
the date of any requested advance of a new Borrowing of Eurocurrency Loans,
and not later than 12:00 noon (Chicago time) on the date of any requested
advance of a new Borrowing of Base Rate Loans, subject to Section 6 hereof,
each Bank shall make available its Loan comprising part of such Borrowing
in funds immediately available at the principal office of the Agent in
Chicago, Illinois. The Agent shall make available to the Borrower Loans at
the Agent's principal office in Chicago, Illinois or such other office as
the Agent has previously agreed to, in writing, with the Borrower.
(e) Agent Reliance on Bank Funding. Unless the Agent shall have been
notified by a Bank before the date on which such Bank is scheduled to make
payment to the Agent of the proceeds of a Loan (which notice shall be
effective upon receipt) that such Bank does not intend to make such
payment, the Agent may assume that such Bank has made such payment when due
and the Agent may in reliance upon such assumption (but shall not be
required to) make available to the Borrower the proceeds of the Loan to be
made by such Bank and, if any Bank has not in fact made such payment to the
Agent, such Bank shall, on demand, pay to the Agent the amount made
available to the Borrower attributable to such Bank together with interest
thereon in respect of each day during the period commencing on the date
such amount was made available to the Borrower and ending on (but
excluding) the date such Bank pays such amount to the Agent at a rate per
annum equal to the Federal Funds Rate. If such amount is not received from
such Bank by the Agent immediately upon demand, the Borrower will, on
demand, repay to the Agent the proceeds of the Loan attributable to such
Bank with interest thereon at a rate per annum equal to the interest rate
applicable to the relevant Loan.
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Section 2.6 Interest Periods. As provided in Section 2.5(a) hereof, at
the time of each request to advance, continue, or create by conversion a
Borrowing of Eurocurrency Loans, the Borrower shall select an Interest
Period applicable to such Loans from among the available options. The term
"Interest Period" means the period commencing on the date a Borrowing of
Loans is advanced, continued, or created by conversion and ending: (a) in
the case of Base Rate Loans, on the last Business Day of the calendar
quarter in which such Borrowing is advanced, continued, or created by
conversion (or on the last day of the following calendar quarter if such
Loan is advanced, continued or created by conversion on the last Business
Day of a calendar quarter), and (b) in the case of Eurocurrency Loans, 1,
2, 3, or 6 months thereafter; provided, however, that:
(a) any Interest Period for a Borrowing of Base Rate Loans that
otherwise would end after the Termination Date shall end on the
Termination Date;
(b) for any Borrowing of Eurocurrency Loans, the Borrower may not
select an Interest Period that extends beyond the Termination Date;
(c) whenever the last day of any Interest Period would otherwise
be a day that is not a Business Day, the last day of such Interest
Period shall be extended to the next succeeding Business Day, provided
that, if such extension would cause the last day of an Interest Period
for a Borrowing of Eurocurrency Loans to occur in the following
calendar month, the last day of such Interest Period shall be the
immediately preceding Business Day; and
(d) for purposes of determining an Interest Period for a
Borrowing of Eurocurrency Loans, a month means a period starting on
one day in a calendar month and ending on the numerically
corresponding day in the next calendar month; provided, however, that
if there is no numerically corresponding day in the month in which
such an Interest Period is to end or if such an Interest Period begins
on the last Business Day of a calendar month, then such Interest
Period shall end on the last Business Day of the calendar month in
which such Interest Period is to end.
Section 2.7 Maturity of Loans. Unless an earlier maturity is provided
for hereunder (whether by acceleration or otherwise), each Loan shall
mature and become due and payable by the Borrower on the Termination Date.
Section 2.8 Prepayments.
(a) The Borrower may prepay without premium or penalty and in
whole or in part (but, if in part, then: (i) if such Borrowing is of
Base Rate Loans, in an amount not less than $1,000,000, (ii) if such
Borrowing is of Eurocurrency Loans in an amount not less than
$1,000,000, and (iii) in an amount such that the minimum amount
required for a Borrowing pursuant to Section 2.4 hereof remains
outstanding) any Borrowing of Eurocurrency Loans upon three Business
Days prior notice to the Agent or, in the case of a Borrowing of Base
Rate Loans, notice delivered to the Agent no later than 10:00 a.m.
(Chicago time) on the date of prepayment, such prepayment to be made
by the payment of the principal amount to be prepaid and accrued
interest thereon to the date fixed for prepayment. In the case of
Eurocurrency Loans, such prepayment may only be made on the last day
of the Interest Period then applicable to such Loans. The Agent will
promptly advise each Bank of any such prepayment notice it receives
from the Borrower.
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Any amount paid or prepaid before the Termination Date may, subject
to the terms and conditions of this Agreement, be borrowed, repaid
and borrowed again.
(b) If the aggregate principal amount of outstanding Loans shall
at any time for any reason exceed the Revolving Credit Commitments
then in effect, the Borrower shall, immediately and without notice or
demand, pay the amount of such excess to the Agent for the ratable
benefit of the Banks as a prepayment of the Loans. Immediately upon
determining the need to make any such prepayment the Borrower shall
notify the Agent of such required prepayment.
(c) Each such prepayment shall be accompanied by a payment of all
accrued and unpaid interest on the Loans prepaid and shall be subject
to Section 2.11.
Section 2.9 Default Rate. If any payment of principal on any Loan is
not made when due (whether by acceleration or otherwise), such Loan shall
bear interest, computed on the basis of a year of 360 days and actual days
elapsed (except for Loans based on the rate described in clause (i) of the
definition of Base Rate, in which case such Loan shall bear interest
computed on the basis of a year of 365 or 366 days, as applicable, and the
actual number of days elapsed) from the date such payment was due until
paid in full, payable on demand, at a rate per annum equal to:
(a) for any Base Rate Loan, the sum of two percent (2%) plus the
Applicable Margin plus the Base Rate from time to time in effect; and
(b) for any Eurocurrency Loan, the sum of two percent (2%) plus
the rate of interest in effect thereon at the time of such default
until the end of the Interest Period applicable thereto and,
thereafter, at a rate per annum equal to the sum of two percent (2%)
plus the Applicable Margin plus the Base Rate from time to time in
effect.
Section 2.10 The Notes.
(a) The Loans made to the Borrower by a Bank shall be evidenced
by a single promissory note of the Borrower issued to such Bank in the
form of Exhibit A hereto. Each such promissory note is hereinafter
referred to as a "Note" and collectively such promissory notes are
referred to as the "Notes."
(b) Each Bank shall record on its books and records or on a
schedule to its Note the amount of each Loan advanced, continued, or
converted by it, all payments of principal and interest and the
principal balance from time to time outstanding thereon, the type of
such Loan, and, for any Eurocurrency Loan, the Interest Period and the
interest rate applicable thereto. The record thereof, whether shown on
such books and records of a Bank or on a schedule to any Note, shall
be prima facie evidence as to all such matters; provided, however,
that the failure of any Bank to record any of the foregoing or any
error in any such record shall not limit or otherwise affect the
obligation of the Borrower to repay all Loans made to it hereunder
together with accrued interest thereon. At the request of any Bank and
upon such Bank tendering to the Borrower the Note to be replaced, the
Borrower shall furnish a new Note to such Bank to replace any
outstanding Note, and at such time the first notation appearing on a
schedule on the reverse side of, or attached to, such Note shall set
forth the aggregate unpaid principal amount of all Loans, if any, then
outstanding thereon.
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Section 2.11 Funding Indemnity. If any Bank shall incur any loss, cost
or expense (including, without limitation, any loss of profit, and any
loss, cost or expense incurred by reason of the liquidation or
re-employment of deposits or other funds acquired by such Bank to fund or
maintain any Eurocurrency Loan or the relending or reinvesting of such
deposits or amounts paid or prepaid to such Bank) as a result of:
(a) any payment (whether by acceleration or otherwise),
prepayment or conversion of a Eurocurrency Loan on a date other than
the last day of its Interest Period,
(b) any failure (because of a failure to meet the conditions of
Section 6 or otherwise) by the Borrower to borrow or continue a
Eurocurrency Loan, or to convert a Base Rate Loan into a Eurocurrency
Loan, on the date specified in a notice given pursuant to Section
2.5(a) or established pursuant to Section 2.5(c) hereof,
(c) any failure by the Borrower to make any payment of principal
on any Eurocurrency Loan when due (whether by acceleration or
otherwise), or
(d) any acceleration of the maturity of a Eurocurrency Loan as a
result of the occurrence of any Event of Default hereunder, then, upon
the demand of such Bank, the Borrower shall pay to such Bank such
amount as will reimburse such Bank for such loss, cost or expense. If
any Bank makes such a claim for compensation, it shall provide to the
Borrower, with a copy to the Agent, a certificate executed by an
officer of such Bank setting forth the amount of such loss, cost or
expense in reasonable detail (including an explanation of the basis
for and the computation of such loss, cost or expense) and the amounts
shown on such certificate if reasonably calculated shall be conclusive
absent manifest error.
Section 2.12 Commitment Terminations. The Borrower shall have the
right at any time and from time to time, upon five (5) Business Days prior
written notice to the Agent, to terminate the Revolving Credit Commitments
without premium or penalty, in whole or in part, any partial termination to
be (i) in an amount not less than $5,000,000, and (ii) allocated ratably
among the Banks in proportion to their respective Percentages, provided
that the Revolving Credit Commitments may not be reduced to an amount less
than the sum of the Original Dollar Amount of all Loans then outstanding.
The Agent shall give prompt notice to each Bank of any such termination of
Commitments. Any termination of Revolving Credit Commitments pursuant to
this Section 2.12 may not be reinstated.
SECTION 3. FEES AND EXTENSIONS.
Section 3.1 Fees.
(a) Certain Fees. The Borrower shall pay, or cause to be paid, to
the Agent certain fees set forth in the Fee Letter at the time
specified in the Fee Letter for payment of such amounts.
(b) Facility Fee. For the period from the Effective Date to and
including the Termination Date, the Borrower shall pay to the Agent
for the ratable account of the Banks in accordance with their
Percentages a facility fee accruing at a rate per annum equal to the
Facility Fee Rate on the average daily amount of the Commitments
(whether used or unused), or if the Commitments have expired or
terminated, on the principal amount of Loans. Such facility fee is
payable in arrears on the last Business Day of each
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calendar quarter quarterly and on the Termination Date,
unless the Revolving Credit Commitments are terminated in whole on an
earlier date, in which event the fee for the period to but not
including the date of such termination shall be paid in whole on the
date of such termination.
(c) Fee Calculations. All fees payable under this Agreement shall
be payable in U.S. Dollars and shall be computed on the basis of a
year of 360 days, for the actual number of days elapsed. All
determinations of the amount of fees owing hereunder (and the
components thereof) shall be made by the Agent and shall be conclusive
absent manifest error.
Section 3.2 Extension of Termination Date
(a) No later than sixty (60) days before the Termination Date the
Borrower may make a request for a one year extension of the
Termination Date in a written notice to the Agent. The Agent will
promptly inform the Banks of any such request. Each Bank may, in its
sole and absolute discretion, determine whether to consent to such
request and may by a revocable written notice (a "Consent Notice") to
the Agent and the Borrower given no later than forty (40) days prior
to the Termination Date (the period from sixty (60) days prior to such
Termination Date to and including forty (40) days prior to the
Termination Date being the "Consent Period") notify the Agent and the
Borrower of its determination to consent to such request. Failure by
any Bank to respond within the Consent Period shall be deemed to be a
denial of the Borrower's request by such Bank. Promptly after the
Consent Period the Agent shall notify the Banks and the Borrower of
which Banks have delivered a Consent Notice. Any Bank may revoke its
Consent Notice at any time after the date forty (40) days prior to the
Termination Date to and including the date thirty (30) days prior to
the Termination Date (the "Revocation Period") by giving written
notice to the Agent and the Borrower of such revocation (a "Revocation
Notice"). If the Agent does not receive a Revocation Notice within the
Revocation Period from a Bank who has previously delivered a Consent
Notice, such Bank's Consent Notice shall become irrevocable. If the
Required Banks or the Agent in its capacity as a Bank have not
delivered Consent Notices which shall have become irrevocable in
accordance with the foregoing, the Termination Date shall not be
extended and the Agent shall promptly notify the Banks and the
Borrower of such circumstance. If the Required Banks and the Agent in
its capacity as a Bank shall have delivered Consent Notices which
shall have become irrevocable in accordance with the foregoing, the
Agent shall promptly notify the Borrower of such circumstance and the
Borrower shall, no later than twenty (20) days prior to the
Termination Date, notify the Agent if it still desires the extension
of the Termination Date. If the Borrower notifies the Agent in writing
no later than twenty (20) days prior to the Termination Date that it
no longer desires the extension of the Termination Date, then the
Termination Date shall not be extended and the Agent shall promptly
notify the Banks and the Borrower of such circumstance. If the Agent
does not receive a written notice from the Borrower no later than
twenty (20) days prior to the Termination Date stating that it no
longer desires the extension of the Termination Date or the Borrower
delivers written notice by such date to the Agent that it still
desires the extension of the Termination Date, then, subject to any
conditions precedent that the Agent may require in connection with
such extension (e.g., the remaking of representations and warranties,
no Default or Event of Default having occurred and the delivery of a
legal opinion and other appropriate documentation) and as to such
consenting Banks only, the Termination Date shall be so extended, such
extension to be
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effective as of the Termination Date and the Agent shall promptly
notify the Banks and the Borrower of such circumstance.
(b) In the event any Bank shall fail to agree to any extension
requested by the Borrower pursuant to Section 3.2(a) (each such Bank a
"Dissenting Bank"), the Borrower shall have the right to arrange with
one or more Banks acceptable to the Agent that have consented to the
extension of the Termination Date or other lenders acceptable to the
Agent to assume all or a part of such Dissenting Bank's obligations
under this Agreement. If the Borrower shall arrange for such a Bank or
lender to assume all or part of the obligations of any Dissenting
Bank, then such Dissenting Bank and such Bank or lender shall execute
and deliver to the Agent, for its acceptance and recording, an
assignment agreement along with the accompanying documentation
prescribed in Section 11.12 hereof. If the Borrower can not arrange
for such a Bank or lender to assume the obligations of such Dissenting
Bank, then (i) the Commitment of such Dissenting Bank shall terminate
on the Termination Date in effect immediately before such extension,
(ii) the Borrower shall repay in full on such Termination Date all
Obligations payable to such Dissenting Bank under this Agreement
(including all accrued interest and fees) and (iii) such Dissenting
Bank will not be obligated to make any Loan with a maturity date later
than such Termination Date.
SECTION 4. PLACE AND APPLICATION OF PAYMENTS.
Section 4.1 Place and Application of Payments. All payments of
principal of and interest on the Loans, and of all other amounts payable by
the Borrower under this Agreement, shall be made by the Borrower to the
Agent by no later than 12:00 Noon (Chicago time) on the due date thereof at
the principal office of the Agent in Chicago, Illinois (or such other
location in the United States as the Agent may designate to the Borrower).
Any payments received after such time shall be deemed to have been received
by the Agent on the next Business Day. All such payments shall be made free
and clear of, and without deduction for, any set-off, counterclaim, levy,
withholding or any other deduction of any kind in U.S. Dollars, in
immediately available funds at the place of payment. The Agent will
promptly thereafter cause to be distributed like funds relating to the
payment of principal or interest on Loans or applicable fees ratably to the
Banks and like funds relating to the payment of any other amount payable to
any Person to such Person, in each case to be applied in accordance with
the terms of this Agreement.
SECTION 5. REPRESENTATIONS AND WARRANTIES.
The Borrower hereby represents and warrants to each Bank as to
itself and, where the following representations and warranties apply to
Subsidiaries, as to each of its Subsidiaries, as follows:
Section 5.1 Corporate Organization and Authority. The Borrower and
each of its Subsidiaries is, and at the Closing Date will be, duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization, except where such failure to be in good
standing would not, individually or in the aggregate, have a Material
Adverse Effect. Each is duly qualified to transact business in each
jurisdiction in which such qualification is required, whether by reason of
ownership or leasing of property or the conduct of business or otherwise,
except where failure to be so qualified would not, individually or in the
aggregate, have a Material Adverse Effect. Each has the power and authority
required to own, lease and operate its properties and to conduct its
business as currently conducted, except where failure to have such power
and authority would not, individually or in the aggregate, have a Material
Adverse Effect.
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Section 5.2 Subsidiaries. Schedule 5.2 (as updated quarterly pursuant
to Section 7.6(b) hereof or otherwise from time to time in writing by the
Borrower) hereto identifies each Subsidiary and the jurisdiction of its
incorporation. All of the issued and outstanding shares of capital stock of
each Subsidiary are validly issued and outstanding and fully paid and
nonassessable except as set forth on Schedule 5.2 hereto. All such shares
owned by the Borrower are owned beneficially, and of record, free of any
Lien.
Section 5.3 Corporate Authority and Validity of Obligations. The
Borrower has full right and authority to enter into this Agreement and the
other Credit Documents to which it is a party, to make the borrowings
herein provided for, to issue its Notes in evidence thereof, and to perform
all of its obligations under the Credit Documents to which it is a party.
Each Credit Document to which it is a party has been duly authorized,
executed and delivered by the Borrower and constitutes valid and binding
obligations of the Borrower enforceable in accordance with its terms. No
Credit Document, nor the performance or observance by the Borrower of any
of the matters or things therein provided for, contravenes any provision of
law or any charter or by-law provision of the Borrower or any material
Contractual Obligation of or affecting the Borrower or any of its
Properties or results in or requires the creation or imposition of any Lien
on any of the Properties or revenues of the Borrower.
Section 5.4 Financial Statements. All financial statements heretofore
delivered to the Banks showing historical performance of the Borrower for
each of the Borrower's fiscal years ending on or before December 31, 1996,
and for the Borrower's quarter ended September 30, 1997 have been prepared
in accordance with generally accepted accounting principles applied on a
basis consistent, except as otherwise noted therein, with that of the
previous fiscal year. Each of such financial statements fairly presents on
a consolidated basis the financial condition of the Borrower as of the
dates thereof and the results of operations for the periods covered
thereby. The Borrower and its Subsidiaries have no material contingent
liabilities other than those disclosed in such financial statements
referred to in this Section 5.4 or in comments or footnotes thereto, or in
any report supplementary thereto, heretofore furnished to the Banks. Since
December 31, 1996, there has been no material adverse change in the
business, operations, Property or financial or other condition, or business
prospects, of the Borrower or any of its Subsidiaries.
Section 5.5 No Litigation; No Labor Controversies.
(a) Except as set forth on Schedule 5.5 (as updated quarterly
pursuant to Section 7.6(b) hereof or as otherwise from time to time in
writing by the Borrower), there is no litigation or governmental
proceeding pending, or to the knowledge of the Borrower, threatened,
against the Borrower or any Subsidiary which, if adversely determined,
could (individually or in the aggregate) have a Material Adverse
Effect.
(b) Except as set forth on Schedule 5.5 (as updated quarterly
pursuant to Section 7.6(b) hereof or as otherwise from time to time in
writing by the Borrower), there are no labor controversies pending or,
to the best knowledge of the Borrower, threatened against the Borrower
or any Subsidiary which could have a Material Adverse Effect.
Section 5.6 Taxes. The Borrower and its Subsidiaries have filed all
United States federal tax returns, and all other tax returns, required to
be filed and have paid all taxes due pursuant to such returns or pursuant
to any assessment received by the Borrower or any Subsidiary, except such
taxes, if any, as are being contested in good faith and for which adequate
reserves have been provided. No notices of tax liens have been filed and no
claims are being
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asserted concerning any such taxes, which liens or claims are material
to the financial condition of the Borrower or any of its Subsidiaries
(individually or in the aggregate). The charges, accruals and reserves on
the books of the Borrower and its Subsidiaries for any taxes or other
governmental charges are adequate.
Section 5.7 Approvals. Except as contemplated by Section 7.14, no
authorization, consent, license, exemption, filing or registration with any
court or governmental department, agency or instrumentality, nor any
approval or consent of the stockholders of the Borrower or any Subsidiary
or from any other Person, is necessary to the valid execution, delivery or
performance by the Borrower or any Subsidiary of any Credit Document to
which it is a party.
Section 5.8 Validity of Notes. When executed, authenticated and
delivered pursuant to the provisions of this Agreement against payment of
the consideration therefor, the Notes will be duly issued and will
constitute legal, valid and binding obligations of the Borrower,
enforceable in accordance with their terms, except for the effect of
bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to or affecting the rights of creditors generally, and will rank
pari passu with all other outstanding unsecured indebtedness of the
Borrower.
Section 5.9 ERISA. With respect to each Plan, the Borrower and each
other member of the Controlled Group has fulfilled its obligations under
the minimum funding standards of and is in compliance in all material
respects with the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), and with the Code to the extent applicable to it and has
not incurred any liability to the Pension Benefit Guaranty Corporation
("PBGC") or a Plan under Title IV of ERISA other than a liability to the
PBGC for premiums under Section 4007 of ERISA. The Borrower does not have
any contingent liabilities for any post-retirement benefits under a Welfare
Plan, other than liability for continuation coverage described in Part 6 of
Title I of ERISA.
Section 5.10 Government Regulation. Neither the Borrower nor any
Subsidiary is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
Section 5.11 Margin Stock; Use of Proceeds. Neither the Borrower nor
any Subsidiary is engaged principally, or as one of its primary activities,
in the business of extending credit for the purpose of purchasing or
carrying margin stock ("margin stock" to have the same meaning herein as in
Regulation U of the Board of Governors of the Federal Reserve System). The
proceeds of the Loans are to be used solely for the purposes set forth in
and permitted by Section 7.10. The Borrower will not use the proceeds of
any Loan in a manner that violates any provision of Regulation U or X of
the Board of Governors of the Federal Reserve System.
Section 5.12 Licenses and Authorizations; Compliance Laws. The
Borrower and each of its Subsidiaries has all necessary licenses, permits
and governmental authorizations to own and operate its Properties and to
carry on its business as currently conducted and contemplated. The Borrower
and each of its Subsidiaries is in compliance with all applicable laws,
regulations, ordinances and orders of any governmental or judicial
authorities except for any such law, regulation, ordinance or order which,
the failure to comply therewith, could not reasonably expected to have a
Material Adverse Effect.
Section 5.13 Ownership of Property; Liens. The Borrower and each
Subsidiary has good title to or valid leasehold interests in all its
Property. None of the Borrower's Property is subject to any Lien, except as
permitted in Section 7.9.
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Section 5.14 No Burdensome Restrictions; Compliance with Agreements.
Neither the Borrower nor any Subsidiary is (a) party or subject to any law,
regulation, rule or order, or any Contractual Obligation that (individually
or in the aggregate) could have a Material Adverse Effect or (b) in default
in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in, nor has any event occurred (and is
continuing) that constitutes or would (whether or not with the giving of
notice and/or with the passage of time and/or the fulfillment of any other
requirement) constitute, to the knowledge of the Borrower, a default or any
breach or failure to perform by the Borrower under any indenture, mortgage,
loan agreement lease or other agreement or instrument to which it is a
party, which default could have a Material Adverse Effect.
Section 5.15 Full Disclosure. All information heretofore furnished by
the Borrower to the Agent or any Bank for purposes of or in connection with
the Credit Documents or any transaction contemplated thereby is, and all
such information hereafter furnished by the Borrower to the Agent or any
Bank will be, true and accurate in all material respects and not misleading
on the date as of which such information is stated or certified.
SECTION 6. CONDITIONS PRECEDENT.
The obligation of each Bank to advance, continue, or convert
any Loan shall be subject to the following conditions precedent:
Section 6.1 Initial Credit Event. Before or concurrently with the
initial Credit Event:
(a) The Agent shall have received for each Bank the favorable
written opinion of counsel to the Borrower in substantially the form
attached hereto as Exhibit C hereto;
(b) The Agent shall have received for each Bank copies of (i) the
Articles of Incorporation, together with all amendments, and a
certificate of good standing, for the Borrower, both certified as of a
date not earlier than 20 days prior to the date hereof by the
appropriate governmental officer of the Borrower's jurisdiction of
incorporation and (ii) the Borrower's bylaws (or comparable
constituent documents) and any amendments thereto, certified in each
instance by its Secretary or an Assistant Secretary;
(c) The Agent shall have received for each Bank copies of
resolutions of the Borrower's Board of Directors authorizing the
execution and delivery of the Credit Documents and the consummation of
the transactions contemplated thereby together with specimen
signatures of the persons authorized to execute such documents on the
Borrower's behalf, all certified in each instance by its Secretary or
Assistant Secretary;
(d) The Agent shall have received for each Bank such Bank's duly
executed Note of the Borrower dated the date hereof and otherwise in
compliance with the provisions of Section 2.10(a) hereof;
(e) The Agent shall have received for each Bank a list of the
Borrower's Authorized Representatives and such other documents as any
Bank may reasonably request;
(f) All legal matters incident to the execution and delivery of
the Credit Documents shall be satisfactory to the Banks; and
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(g) The Agent shall have received a certificate by the chief
financial officer, treasurer, vice president of finance or corporate
controller of the Borrower, stating that on the date of such initial
Credit Event no Default or Event of Default has occurred and is
continuing.
Section 6.2 All Credit Events. As of the time of each Credit Event
hereunder (including the initial Credit Event):
(a) The Agent shall have received the notice required by Section
2.5 hereof;
(b) Each of the representations and warranties set forth in
Section 5 hereof shall be and remain true and correct in all material
respects as of said time, taking into account any amendments to such
Section (including, without limitation, any amendments to the
Schedules referenced therein) made after the date of this Agreement in
accordance with its provisions, except that if any such representation
or warranty relates solely to an earlier date it need only remain true
as of such date, provided that solely for purposes of this Section
6.2(b) the representations relating to the Borrower's Subsidiaries set
forth in Section 5.2 hereof shall be deemed representations relating
only to the Borrower's Material Subsidiaries;
(c) The Borrower shall be in full compliance with all of the
terms and conditions hereof, and no Default or Event of Default shall
have occurred and be continuing or would occur as a result of such
Credit Event;
(d) No event of default by the Borrower has been declared and is
continuing under any existing debt agreements; and
(e) Such Credit Event shall not violate any order, judgment or
decree of any court or other authority or any provision of law or
regulation applicable to any Bank (including, without limitation,
Regulation U of the Board of Governors of the Federal Reserve System).
Each request for a Borrowing hereunder shall
be deemed to be a representation and warranty by the Borrower
on the date of such Credit Event as to the facts specified in
paragraphs (b) and (c) of this Section 6.2, provided, that
solely in the case of a Credit Event which is a continuation
of a previous Borrowing, the Borrower shall not be deemed to
have made any representation or warranty with regard to the
matters set forth in Section 5.5(a) and (b) hereof.
SECTION 7. COVENANTS.
The Borrower covenants and agrees that, so long as any Loan is
outstanding hereunder, or any Commitment is available to or in use by the
Borrower hereunder, except to the extent compliance in any case is waived in
writing by the Required Banks:
Section 7.1 Corporate Existence; Subsidiaries. The Borrower shall, and
shall cause each of its Subsidiaries to, preserve and maintain its
corporate existence, subject to the provisions of Section 7.11 hereof.
Section 7.2 Maintenance. The Borrower will maintain, preserve and keep
its plants, Properties and equipment necessary to the proper conduct of its
business in reasonably good
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repair, working order and condition and will from time to time make
all reasonably necessary repairs, renewals, replacements, additions and
betterments thereto so that at all times such plants, Properties and
equipment shall be reasonably preserved and maintained, and the Borrower
will cause each of its Subsidiaries to do so in respect of Property owned
or used by it; provided, however, that nothing in this Section 7.2 shall
prevent the Borrower or a Subsidiary from discontinuing the operation or
maintenance of any such Properties if such discontinuance is not
disadvantageous to the Banks or the holders of the Notes, and is, in the
judgment of the Borrower, desirable in the conduct of its business or the
business of its Subsidiary.
Section 7.3 Taxes. The Borrower will duly pay and discharge, and will
cause each of its Subsidiaries duly to pay and discharge, all taxes, rates,
assessments, fees and governmental charges upon or against it or against
its Properties, in each case before the same becomes delinquent and before
penalties accrue thereon, unless and to the extent that the same is being
contested in good faith by appropriate proceedings and reserves in
conformity with GAAP have been provided therefor on the books of the
Borrower.
Section 7.4 ERISA. The Borrower will promptly pay and discharge all
obligations and liabilities arising under ERISA of a character which if
unpaid or unperformed might result in the imposition of a Lien against any
of its properties or assets and will promptly notify the Agent of (i) the
occurrence of any reportable event (as defined in ERISA) affecting a Plan,
other than any such event of which the PBGC has waived notice by
regulation, (ii) receipt of any notice from PBGC of its intention to seek
termination of any Plan or appointment of a trustee therefor, (iii) its
intention to terminate or withdraw from any Plan, and (iv) the occurrence
of any event affecting any Plan which could result in the incurrence by the
Borrower of any material liability, fine or penalty, or any material
increase in the contingent liability of the Borrower under any
post-retirement Welfare Plan benefit. The Agent will promptly distribute to
each Bank any notice it receives from the Borrower pursuant to this Section
7.4.
Section 7.5 Insurance. The Borrower will insure, and keep insured, and
will cause each of its Subsidiaries to insure, and keep insured, with good
and responsible insurance companies, all insurable Property owned by it of
a character usually insured by companies similarly situated and operating
like Property. To the extent usually insured (subject to self-insured
retentions) by companies similarly situated and conducting similar
businesses, the Borrower will also insure, and cause each of its
Subsidiaries to insure, employers and public and product liability risks
with good and responsible insurance companies. The Borrower will upon
request of the Agent furnish to the Agent a summary setting forth the
nature and extent of the insurance maintained pursuant to this Section 7.5.
Section 7.6 Financial Reports and Other Information.
(a) The Borrower will maintain a system of accounting in
accordance with GAAP and will furnish to the Banks and their
respective duly authorized representatives such information respecting
the business and financial condition of the Borrower and its
subsidiaries as any Bank may reasonably request; and without any
request, the Borrower will furnish each of the following to each Bank:
(i) within 120 days after the end of each fiscal year of the
Borrower, (A) a copy of the Borrower's audited financial
statements for such fiscal year, including the consolidated
balance sheet of the Borrower for such year and the related
statement of income and statement of cash flow, as certified by
independent public accountants of recognized national standing
selected by the
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Borrower in accordance with GAAP with such accountants'
unqualified opinion to the effect that the financial statements
have been prepared in accordance with GAAP and present fairly in
all material respects in accordance with GAAP the consolidated
financial position of the Borrower and its subsidiaries as of the
close of such fiscal year and the results of their operations and
cash flows for the fiscal year then ended and that an examination
of such accounts in connection with such financial statements has
been made in accordance with generally accepted auditing
standards and, accordingly, such examination included such tests
of the accounting records and such other auditing procedures as
were considered necessary in the circumstances; (B) a copy of the
Borrower's unaudited consolidating financials for such fiscal
year, including a consolidating unaudited balance sheet of the
Borrower, and the related statement of income and shall use its
best efforts to provide a statement of cash flow in a format
acceptable to the Agent; all of the foregoing prepared by the
Borrower in reasonable detail in accordance with GAAP and
certified by the Borrower's chief financial officer, treasurer,
vice president of finance or corporate controller as fairly
presenting the financial condition as at the dates thereof and
the results of operations for the periods covered thereby;
(ii) within 60 days after the end of each of the first three
quarterly fiscal periods of the Borrower, a condensed
consolidated unaudited balance sheet of the Borrower, and the
related statement of income and statement of cash flow, as of the
close of such period, all of the foregoing prepared by the
Borrower in reasonable detail in accordance with GAAP and
certified by the Borrower's chief financial officer, treasurer,
vice president of finance or corporate controller as fairly
presenting the financial condition as at the dates thereof and
the results of operations for the periods covered thereby
(subject to year end adjustments);
(iii) within the period provided in subsection (i) above,
the written statement of the accountants who certified the audit
report thereby required that in the course of their audit they
have obtained no knowledge of any Default or Event of Default,
or, if such accountants have obtained knowledge of any such
Default or Event of Default, they shall disclose in such
statement the nature and period of the existence thereof;
(iv) promptly after the sending or filing thereof, copies of
all proxy statements, financial statements and reports the
Borrower sends to its shareholders, and copies of all other
regular, periodic and special reports and all registration
statements the Borrower files with the SEC or any successor
thereto, or with any national securities exchanges.
(b) Each financial statement furnished to the Banks pursuant to
subsection (i) or (ii) of Section 7.6(a) shall be accompanied by (A) a
written certificate signed by the Borrower's chief financial officer,
vice president of finance, corporate controller or treasurer (i) to
the effect that no Default or Event of Default has occurred during the
period covered by such statements or, if any such Default or Event of
Default has occurred during such period, setting forth a description
of such Default or Event of Default and specifying the action, if any,
taken by the Borrower to remedy the same, (ii) to the effect that the
representations and warranties contained in Section 5 hereof are true
and correct in all material respects as though made on the date of
such certificate (other than those made solely as of an earlier date,
which need only remain true as of such date),
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taking into account any amendments to such Section (including,
without limitation, any amendments to the Schedules referenced
therein) made after the date of this Agreement in accordance wit its
provisions and except as otherwise described therein, (iii) notifying
the Banks (x) of any litigation or governmental proceeding of the type
described in Section 5.5 hereof or (y) of any change in the
information set forth on the Schedules hereto and (B) a Compliance
Certificate in the form of Exhibit B hereto showing the Borrower's
compliance with the covenants set forth in Sections 7.9, 7.11, 7.12
and 7.13 hereof.
(c) The Borrower will (i) promptly (and in any event within three
Business Days after an officer of the Borrower has knowledge thereof)
give notice to the Agent and each Bank (x) of the occurrence of any
Default or Event of Default or (y) of any payment default or payment
event of default aggregating $20,000,000 or more under any Contractual
Obligation of the Borrower and (ii) promptly (and in any event within
ten Business Days after an officer of the Borrower has knowledge
thereof) give notice to the Agent and each Bank of any material
adverse change in the business, operations, Property or financial or
other condition of the Borrower and its Subsidiaries (individually or
in the aggregate).
Section 7.7 Bank Inspection Rights. Upon reasonable notice from any
Bank, the Borrower will, at the Borrower's expense, (such expenses to be
reasonably incurred) permit such Bank (and such Persons as any Bank may
designate) during normal business hours to visit and inspect, under the
Borrower's guidance, any of the properties of the Borrower or any of its
Subsidiaries, to examine all of their books of account, records, reports
and other papers, to make copies and extracts therefrom, and to discuss
their respective affairs, finances and accounts with their respective
officers, employees and with their independent public accountants (and by
this provision the Borrower authorizes such accountants to discuss with the
Banks (and such Persons as any Bank may designate subject to
confidentiality agreements reasonably acceptable to the Borrower) the
finances and affairs of the Borrower and its Subsidiaries) all at such
reasonable times and as often as may be reasonably requested; provided,
however, that except upon the occurrence and during the continuation of any
Default or Event of Default, not more than one such set of visits and
inspections may be conducted each calendar quarter.
Section 7.8 Conduct of Business. The Borrower will not engage in any
line of business other than business associated with or related to energy
generation, transmission and distribution or other infrastructure lines of
business.
Section 7.9 Liens. The Borrower will not create, incur, permit to
exist or to be incurred any Lien of any kind on any Property owned by the
Borrower; provided, however, that this Section 7.9 shall not apply to nor
operate to prevent:
(a) Liens upon any Property acquired by the Borrower to secure
any Indebtedness of the Borrower incurred at the time of the
acquisition of such Property to finance the purchase price of such
Property, provided that any such Lien shall apply only to the Property
that was so acquired and the aggregate principal amount of
Indebtedness secured by such Liens shall not exceed the cost or value
of the acquired Property;
(b) Liens existing on the date of the Long-Term Credit Agreement
and listed on Schedule 7.9 hereto which were in existence as of the
date of issue of the Borrower's 7.625% senior notes due 2006;
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(c) Other liens not to exceed 10% of Consolidated Net Tangible
Assets; and
(d) Any extension, renewal or replacement (or successive
extensions, renewals or replacements) in whole or in part of any Lien
referred to in the foregoing paragraphs (a) through (c), inclusive.
Section 7.10 Use of Proceeds; Regulation U. The proceeds of each
Borrowing will be used by the Borrower for working capital and general
corporate purposes. The Borrower will not use any part of the proceeds of
any of the Borrowings directly or indirectly to purchase or carry any
margin stock (as defined in Section 5.11 hereof) or to extend credit to
others for the purpose of purchasing or carrying any such margin stock.
Section 7.11 Mergers, Consolidations and Sales of Assets.
(a) The Borrower will not consolidate with or merge into any
other Person or sell, convey, transfer or lease its properties and
assets substantially as an entirety to any Person, and the Borrower
shall not permit any Person to consolidate with or merge into the
Borrower, unless: (i) immediately prior to and immediately following
such consolidation, merger, sale or lease, and after giving effect
thereto, no Default or Event of Default shall have occurred and be
continuing; and (ii) the Borrower is the surviving or continuing
corporation, or the surviving or continuing corporation that acquires
by sale, conveyance, transfer or lease is incorporated in the United
States or Canada and expressly assumes the payment and performance of
all Obligations of the Borrower under the Credit Documents.
(b) Except for the sale of the properties and assets of the
Borrower substantially as an entirety pursuant to subsection (a)
above, and other than assets required to be sold to conform with
governmental regulations, the Borrower shall not sell or otherwise
dispose of any assets (other than short-term, readily marketable
investments purchased for cash management purposes with funds not
representing the proceeds of other asset sales) if on a pro forma
basis, the aggregate net book value of all such sales during the most
recent 12-month period would exceed 10 percent of Consolidated Net
Tangible Assets computed as of the end of the most recent fiscal
quarter preceding such sale; provided, however, that any such sales
shall be disregarded for purposes of this 10 percent limitation if
the proceeds are invested in assets in similar or related lines of
business of the Borrower and, provided further, that the Borrower may
sell or otherwise dispose of assets in excess of such 10 percent if
the proceeds from such sales or dispositions, which are not reinvested
as provided above, are retained by the Borrower as cash or cash
equivalents.
Section 7.12 Consolidated Net Worth. (a) The Borrower will at all
times maintain a ratio of Consolidated Net Worth to Consolidated
Capitalization of at least 0.32 to 1.00, and (b) the Borrower will at all
times cause its Consolidated Net Worth to be equal to or greater than the
Minimum Consolidated Net Worth.
Section 7.13 Compliance with Laws. Without limiting any of the other
covenants of the Borrower in this Section 7, the Borrower will conduct its
business, and otherwise be, in compliance with all applicable laws,
regulations, ordinances, writs, judgments, injunctions, decrees, awards and
orders of any governmental or judicial authorities; provided, however, that
the Borrower shall not be required to comply with any such law, rule,
regulation, ordinance, writ,
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judgments, injunction, decree, award or order if the failure to comply
therewith could not reasonably be expected to have a Material Adverse
Effect.
Section 7.14 PUHCA. The Borrower will obtain, or cause to be obtained,
all necessary approvals, if any, under the Public Utility Holding Company
Act of 1935, as amended, in connection with the Borrower's performance
under the Credit Documents.
SECTION 8. EVENTS OF DEFAULT AND REMEDIES.
Section 8.1 Events of Default. Any one or more of the following shall
constitute an Event of Default:
(a) The Borrower shall (i) fail to make when due any payment of
principal on the Notes, or (ii) fail to make when due, and continuance
of such failure for three or more Business Days, payment of interest
on the Notes or any fee or other amount required to be made to the
Agent pursuant to the Credit Documents;
(b) Any representation or warranty made or deemed to have been
made by or on behalf of the Borrower in the Credit Documents or on
behalf of the Borrower in any certificate, statement, report or other
writing furnished by or on behalf of the Borrower to the Agent
pursuant to the Credit Documents or any other instrument, document or
agreement shall prove to have been false or misleading in any material
respect on the date as of which the facts set forth are stated or
certified or deemed to have been stated or certified;
(c) The Borrower shall fail to comply with Section 7 hereof and
such failure to comply shall continue for 30 calendar days after
notice thereof to the Borrower by the Agent;
(d) The Borrower shall fail to comply with any agreement,
covenant, condition, provision or term contained in the Credit
Documents (and such failure shall not constitute an Event of Default
under any of the other provisions of this Section 8) and such failure
to comply shall continue for 30 calendar days after notice thereof to
the Borrower by the Agent;
(e) The Borrower shall become insolvent or shall generally not
pay its debts as they mature or shall apply for, shall consent to, or
shall acquiesce in the appointment of a custodian, trustee or receiver
of the Borrower or for a substantial part of the property thereof or,
in the absence of such application, consent or acquiescence, a
custodian, trustee or receiver shall be appointed for the Borrower or
for a substantial part of the property thereof and shall not be
discharged within 90 days;
(f) Any bankruptcy, reorganization, debt arrangement or other
proceedings under any bankruptcy or insolvency law shall be instituted
by or against the Borrower, and, if instituted against the Borrower,
shall have been consented to or acquiesced in by the Borrower, or
shall remain undismissed for 90 days, or an order for relief shall
have been entered against the Borrower, or the Borrower shall take any
corporate action to approve institution of, or acquiescence in, such a
proceeding;
(g) Any dissolution or liquidation proceeding shall be instituted
by or against the Borrower and, if instituted against the Borrower,
shall be consented to or acquiesced in
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by the Borrower or shall remain for 90 days undismissed, or the
Borrower shall take any corporate action to approve institution of, or
acquiescence in, such a proceeding;
(h) A judgment or judgments, decrees or orders of any court,
tribunal, arbitrator, administrative or other governmental body or
entity for the payment of money in excess of the sum of $20,000,000 in
the aggregate shall be rendered against the Borrower (excluding the
amount thereof covered by insurance) or any of the Borrower's
properties and such judgment, decree or order shall remain unvacated
and undischarged and unstayed for 90 consecutive days, except while
being contested in good faith by appropriate proceedings;
(i) The institution by the Borrower of steps to terminate any
Plan if in order to effectuate such termination, the Borrower would be
required to make a contribution to such Plan, or would incur a
liability or obligation to such Plan, in excess of $20,000,000, or the
institution by the PBGC of steps to terminate any Plan;
(j) A default in payment of any principal of or any interest
aggregating $20,000,000 or more on any bond, debenture, note or other
evidence of indebtedness of the Borrower or under any indenture or
other instrument under which any such evidence of indebtedness has
been issued or by which it is governed that has resulted in the
acceleration of such indebtedness;
(k) if at any time Northern States Power Company, a Minnesota
corporation, or its successors, ceases to own a majority of the
outstanding Voting Stock of the Borrower; or
(l) an "event of default" occurs under the Long-Term Credit
Agreement.
Section 8.2 Non-Bankruptcy Defaults. When any Event of Default other
than those described in subsections (e) or (f) of Section 8.1 hereof has
occurred and is continuing, the Agent shall, by written notice to the
Borrower: (a) if so directed by the Required Banks, terminate the remaining
Commitments and all other obligations of the Banks hereunder on the date
stated in such notice (which may be the date thereof); and (b) if so
directed by the Required Banks, declare the principal of and the accrued
interest on all outstanding Notes to be forthwith due and payable and
thereupon all outstanding Notes, including both principal and interest
thereon, shall be and become immediately due and payable together with all
other amounts payable under the Credit Documents without further demand,
presentment, protest or notice of any kind. The Agent, after giving notice
to the Borrower pursuant to Section 8.1(c), 8.1(d) or this Section 8.2,
shall also promptly send a copy of such notice to the other Banks, but the
failure to do so shall not impair or annul the effect of such notice.
Section 8.3 Bankruptcy Defaults. When any Event of Default described
in subsections (e) or (f) of Section 8.1 hereof has occurred and is
continuing, then all outstanding Notes shall immediately become due and
payable together with all other amounts payable under the Credit Documents
without presentment, demand, protest or notice of any kind and the
obligation of the Banks to extend further credit pursuant to any of the
terms hereof shall immediately terminate.
Section 8.4 [Intentionally Omitted]
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Section 8.5 Notice of Default. The Agent shall give notice to the
Borrower under Section 8.1(c) or 8.1(d) hereof promptly upon being
requested to do so by any Bank and shall thereupon notify all the Banks
thereof.
Section 8.6 Expenses. The Borrower agrees to pay to the Agent and each
Bank, and any other holder of any Note outstanding hereunder, all
reasonable costs and expenses incurred or paid by the Agent or such Bank or
any such holder, including attorneys? fees and court costs, in connection
with any Default or Event of Default by the Borrower hereunder or in
connection with the enforcement of any of the Credit Documents.
SECTION 9. CHANGE IN CIRCUMSTANCES.
Section 9.1 Change of Law. Notwithstanding any other provisions of
this Agreement or any Note if at any time after the date hereof any change
in applicable law or regulation or in the interpretation thereof makes it
unlawful for any Bank to make or continue to maintain Eurocurrency Loans or
to perform its obligations as contemplated hereby, such Bank shall promptly
give notice thereof to the Borrower and such Bank's obligations to make or
maintain Eurocurrency Loans under this Agreement shall terminate until it
is no longer unlawful for such Bank to make or maintain Eurocurrency Loans.
The Borrower shall prepay on demand the outstanding principal amount of any
such affected Eurocurrency Loans, together with all interest accrued
thereon at a rate per annum equal to the interest rate applicable to such
Loan; provided, however, subject to all of the terms and conditions of this
Agreement, the Borrower may then elect to borrow the principal amount of
the affected Eurocurrency Loans from such Bank by means of Base Rate Loans
from such Bank, which Base Rate Loans shall not be made ratably by the
Banks but only from such affected Bank.
Section 9.2 Unavailability of Deposits or Inability to Ascertain, or
Inadequacy of, LIBOR. If on or prior to the first day of any Interest
Period for any Borrowing of Eurocurrency Loans:
(a) the Agent determines that deposits in U.S. Dollars (in the
applicable amounts) are not being offered to it in the eurocurrency
interbank market for such Interest Period, or that by reason of
circumstances affecting the interbank eurocurrency market adequate and
reasonable means do not exist for ascertaining the applicable LIBOR;
or
(b) Banks having 25% or more of the aggregate amount of the
Revolving Credit Commitments reasonably determine and so advise the
Agent that LIBOR as reasonably determined by the Agent will not
adequately and fairly reflect the cost to such Banks or Bank of
funding their or its Eurocurrency Loans or Loan for such Interest
Period; then the Agent shall forthwith give notice thereof to the
Borrower and the Banks, whereupon until the Agent notifies the
Borrower that the circumstances giving rise to such suspension no
longer exist, the obligations of the Banks or of the relevant Bank to
make Eurocurrency Loans in the currency so affected shall be
suspended.
Section 9.3 Increased Cost and Reduced Return.
(a) If, on or after the date hereof, the adoption of any
applicable law, rule or regulation, or any change therein, or any
change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with
the interpretation or administration thereof, or compliance by any
Bank (or its Lending Office) with any request or directive (whether or
not having the force of law but, if not
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having the force of law, compliance with which is customary in
the relevant jurisdiction) of any such authority, central bank or
comparable agency:
(i) shall subject any Bank (or its Lending Office) to any
tax, duty or other charge with respect to its Eurocurrency Loans,
its Notes, or its obligation to make Eurocurrency Loans, or shall
change the basis of taxation of payments to any Bank (or its
Lending Office) of the principal of or interest on its
Eurocurrency Loans, or any other amounts due under this Agreement
in respect of its Eurocurrency Loans or its obligation to make
Eurocurrency Loans, (except for changes in the rate of tax on the
overall net income or profits of such Bank or its Lending Office
imposed by the jurisdiction in which such Bank or its lending
office is incorporated in which such Bank's principal executive
office or Lending Office is located); or
(ii) shall impose, modify or deem applicable any reserve,
special deposit or similar requirement (including, without
limitation, any such requirement imposed by the Board of
Governors of the Federal Reserve System, but excluding with
respect to any Eurocurrency Loans any such requirement included
in an applicable Eurocurrency Reserve Percentage) against assets
of, deposits with or for the account of, or credit extended by,
any Bank (or its Lending Office) or shall impose on any Bank (or
its Lending Office) or on the interbank market any other
condition affecting its Eurocurrency Loans, its Notes, or its
obligation to make Eurocurrency Loans; and the result of any of
the foregoing is to increase the cost to such Bank (or its
Lending Office) of making or maintaining any Eurocurrency Loan,
or to reduce the amount of any sum received or receivable by such
Bank (or its Lending Office) under this Agreement or under its
Notes with respect thereto, by an amount deemed by such Bank to
be material, then, within fifteen (15) days after demand by such
Bank (with a copy to the Agent), the Borrower shall be obligated
to pay to such Bank such additional amount or amounts as will
compensate such Bank for such increased cost or reduction. In the
event any law, rule, regulation or interpretation described above
is revoked, declared invalid or inapplicable or is otherwise
rescinded, and as a result thereof a Bank is determined to be
entitled to a refund from the applicable authority for any amount
or amounts which were paid or reimbursed by Borrower to such Bank
hereunder, such Bank shall refund such amount or amounts to
Borrower without interest.
(b) If, after the date hereof, any Bank or the Agent shall have
determined that the adoption of any applicable law, rule or regulation
regarding capital adequacy, or any change therein (including, without
limitation, any revision in the Final Risk-Based Capital Guidelines of
the Board of Governors of the Federal Reserve System (12 CFR Part 208,
Appendix A; ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇ ▇) or of the Office of the
Comptroller of the Currency (12 CFR Part 3, Appendix A), or in any
other applicable capital rules heretofore adopted and issued by any
governmental authority), or any change in the interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration
thereof, or compliance by any Bank (or its Lending Office) with any
request or directive regarding capital adequacy (whether or not having
the force of law but, if not having the force of law, compliance with
which is customary in the applicable jurisdiction) of any such
authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on such Bank's capital, or on
the capital of any corporation controlling
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such Bank, as a consequence of its obligations hereunder to a
level below that which such Bank could have achieved but for such
adoption, change or compliance (taking into consideration such Bank's
policies with respect to capital adequacy) by an amount deemed by such
Bank to be material, then from time to time, within fifteen (15) days
after demand by such Bank (with a copy to the Agent), the Borrower
shall pay to such Bank such additional amount or amounts as will
compensate such Bank for such reduction.
(c) Each Bank that determines to seek compensation under this
Section 9.3 shall notify the Borrower and the Agent of the
circumstances that entitle the Bank to such compensation pursuant to
this Section 9.3 and will designate a different Lending Office if such
designation will avoid the need for, or reduce the amount of, such
compensation and will not, in the sole judgment of such Bank, be
otherwise disadvantageous to such Bank. A certificate of any Bank
claiming compensation under this Section 9.3 and setting forth the
additional amount or amounts to be paid to it hereunder shall be
conclusive in the absence of manifest error. In determining such
amount, such Bank may use any reasonable averaging and attribution
methods.
(d) If any Bank (other than ABN AMRO Bank N.V.) has demanded
compensation or given notice of its intention to demand compensation
under this Section 9.3 or the Borrower is required to pay any
additional amount to any Bank under Section 9.3, the Borrower shall
have the right, with the assistance of the Agent, to seek a substitute
Bank or Banks reasonably satisfactory to the Agent (which may be one
or more of the Banks) to replace such Bank under this Agreement and on
the date of replacement, the Borrower shall pay all accrued interest
and fees to the Bank being replaced. The Bank to be so replaced shall
cooperate with the Borrower and substitute Bank to accomplish such
substitution, provided that all of such Bank's Loan Commitment is
replaced.
Section 9.4 Lending Offices. Each Bank may, at its option, elect to
make its Loans hereunder at the branch, office or affiliate specified on
the appropriate signature page hereof or in the assignment agreement which
any assignee bank executes pursuant to Section 11.12 hereof (each a
"Lending Office") for each type of Loan available hereunder or at such
other of its branches, offices or affiliates as it may from time to time
elect and designate in a written notice to the Borrower and the Agent.
Section 9.5 Discretion of Bank as to Manner of Funding.
Notwithstanding any other provision of this Agreement, each Bank shall be
entitled to fund and maintain its funding of all or any part of its Loans
in any manner it sees fit, it being understood, however, that for the
purposes of this Agreement all determinations hereunder shall be made as if
each Bank had actually funded and maintained each Eurocurrency Loan through
the purchase of deposits of U.S. Dollars in the eurocurrency interbank
market having a maturity corresponding to such Loan's Interest Period and
bearing an interest rate equal to LIBOR for such Interest Period.
SECTION 10. THE AGENT.
Section 10.1 Appointment and Authorization of Agent. Each Bank hereby
appoints ABN AMRO Bank N.V. as the Agent under the Credit Documents and
hereby authorizes the agent to take such action as Agent on its behalf and
to exercise such powers under the Credit Documents as are delegated to the
Agent by the terms thereof, together with such powers as are reasonably
incidental thereto. The relationship between the Agent and the Banks is and
shall be
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that of agent and principal only, and nothing contained in this
Agreement or any other Credit Document shall be construed to constitute the
Agent as a trustee or fiduciary for any Bank or the Borrower.
Section 10.2 Agent and its Affiliates. The Agent shall have the same
rights and powers under this Agreement and the other Credit Documents as
any other Bank and may exercise or refrain from exercising the same as
though it were not the Agent, and the Agent and its affiliates may accept
deposits from, lend money to, and generally engage in any kind of business
with the Borrower or any Affiliate of the Borrower as if it were not the
Agent under the Credit Documents. The term "Bank" as used herein and in all
other Credit Documents, unless the context otherwise clearly requires,
includes the Agent in its individual capacity as a Bank. References in
Section 2 hereof to the Agent's Loans, or to the amount owing to the Agent
for which an interest rate is being determined, refer to the Agent in its
individual capacity as a Bank.
Section 10.3 Action by Agent. If the Agent receives from the Borrower
a written notice of an Event of Default pursuant to Section 7.6(c)(i)
hereof, the Agent shall promptly give each of the Banks written notice
thereof. The obligations of the Agent under the Credit Documents are only
those expressly set forth therein. Without limiting the generality of the
foregoing, the Agent shall not be required to take any action hereunder
with respect to any Default or Event of Default, except as expressly
provided in Sections 8.2 and 8.5. In no event, however, shall the Agent be
required to take any action in violation of applicable law or of any
provision of any Credit Document, and the Agent shall in all cases be fully
justified in failing or refusing to act hereunder or under any other Credit
Document unless it shall be first indemnified to its reasonable
satisfaction by the Banks against any and all costs, expense, and liability
which may be incurred by it by reason of taking or continuing to take any
such action. The Agent shall be entitled to assume that no Default or Event
of Default exists unless notified to the contrary by a Bank or the
Borrower. In all cases in which this Agreement and the other Credit
Documents do not require the Agent to take certain actions, the Agent shall
be fully justified in using its discretion in failing to take or in taking
any action hereunder and thereunder.
Section 10.4 Consultation with Experts. The Agent may consult with
legal counsel, independent public accountants and other experts selected by
it and shall not be liable for any action taken or omitted to be taken by
it in good faith in accordance with the advice of such counsel, accountants
or experts.
Section 10.5 Liability of Agent; Credit Decision. Neither the Agent
nor any of its directors, officers, agents, or employees shall be liable
for any action taken or not taken by it in connection with the Credit
Documents (i) with the consent or at the request of the Required Banks or
(ii) in the absence of its own gross negligence or willful misconduct.
Neither the Agent nor any of its directors, officers, agents or employees
shall be responsible for or have any duty to ascertain, inquire into or
verify: (i) any statement, warranty or representation made in connection
with this Agreement, any other Credit Document or any Credit Event; (ii)
the performance or observance of any of the covenants or agreements of the
Borrower or any other party contained herein or in any other Credit
Document; (iii) the satisfaction of any condition specified in Section 6
hereof, except receipt of items required to be delivered to the Agent; or
(iv) the validity, effectiveness, genuineness, enforceability, perfection,
value, worth or collectability hereof or of any other Credit Document or of
any other documents or writing furnished in connection with any Credit
Document; and the Agent makes no representation of any kind or character
with respect to any such matter mentioned in this sentence. The Agent may
execute any of its duties under any of the Credit Documents by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Banks, the Borrower, or any other Person for the default or
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misconduct of any such agents or attorneys-in-fact selected with
reasonable care. The Agent shall not incur any liability by acting in
reliance upon any notice, consent, certificate, other document or statement
(whether written or oral) believed by it to be genuine or to be sent by the
proper party or parties. In particular and without limiting any of the
foregoing, the Agent shall have no responsibility for confirming the
accuracy of any Compliance Certificate or other document or instrument
received by it under the Credit Documents. The Agent may treat the payee of
any Note as the holder thereof until written notice of transfer shall have
been filed with the Agent signed by such payee in form satisfactory to the
Agent. Each Bank acknowledges that it has independently and without
reliance on the Agent or any other Bank, and based upon such information,
investigations and inquiries as it deems appropriate, made its own credit
analysis and decision to extend credit to the Borrower in the manner set
forth in the Credit Documents. It shall be the responsibility of each Bank
to keep itself informed as to the creditworthiness of the Borrower and any
other relevant Person, and the Agent shall have no liability to any Bank
with respect thereto.
Section 10.6 Indemnity. The Banks shall ratably, in accordance with
their respective Percentages, indemnify and hold the Agent, and its
directors, officers, employees, agents and representatives harmless from
and against any liabilities, losses, costs or expenses suffered or incurred
by it under any Credit Document or in connection with the transactions
contemplated thereby, regardless of when asserted or arising, except to the
extent they are promptly reimbursed for the same by the Borrower and except
to the extent that any event giving rise to a claim was caused by the gross
negligence or willful misconduct of the party seeking to be indemnified.
The obligations of the Banks under this Section 10.6 shall survive
termination of this Agreement.
Section 10.7 Resignation of Agent and Successor Agent. The Agent may
resign at any time by giving written notice thereof to the Banks and the
Borrower. Upon any such resignation of the Agent, the Required Banks shall
have the right to appoint a successor Agent with the consent of the
Borrower. If no successor Agent shall have been so appointed by the
Required Banks, and shall have accepted such appointment, within thirty
(30) days after the retiring Agent's giving of notice of resignation, then
the retiring Agent may, on behalf of the Banks, with the consent of the
Borrower, appoint a successor Agent, which shall be any Bank hereunder or
any commercial bank organized under the laws of the United States of
America or of any State thereof and having a combined capital and surplus
of at least $200,000,000. Upon the acceptance of its appointment as the
Agent hereunder, such successor Agent shall thereupon succeed to and become
vested with all the rights and duties of the retiring or removed Agent
under the Credit Documents, and the retiring Agent shall be discharged from
its duties and obligations thereunder. After any retiring Agent's
resignation hereunder as Agent, the provisions of this Section 10 and all
protective provisions of the other Credit Documents shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Agent.
SECTION 11. MISCELLANEOUS.
Section 11.1 Withholding Taxes.
(a) Payments Free of Withholding. Subject to Section 11.1(b)
hereof, each payment by the Borrower under this Agreement or the other
Credit Documents shall be made without withholding for or on account
of any present or future taxes (other than overall net income taxes on
the recipient). If any such withholding is so required, the Borrower
shall make the withholding, pay the amount withheld to the appropriate
governmental authority before penalties attach thereto or interest
accrues thereon and forthwith pay such additional amount as may be
necessary to ensure that the net amount
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actually received by each Bank and the Agent free and clear of
such taxes (including such taxes on such additional amount) is equal
to the amount which that Bank or the Agent (as the case may be) would
have received had such withholding not been made. If the Agent or any
Bank pays any amount in respect of any such taxes, penalties or
interest the Borrower shall reimburse the Agent or that Bank for that
payment on demand in the currency in which such payment was made. If
the Borrower pays any such taxes, penalties or interest, it shall
deliver official tax receipts evidencing that payment or certified
copies thereof to the Bank or Agent on whose account such withholding
was made (with a copy to the Agent if not the recipient of the
original) on or before the thirtieth day after payment. If any Bank or
the Agent determines it has received or been granted a credit against
or relief or remission for, or repayment of, any taxes paid or payable
by it because of any taxes, penalties or interest paid by the Borrower
and evidenced by such a tax receipt, such Bank or Agent shall, to the
extent it can do so without prejudice to the retention of the amount
of such credit, relief, remission or repayment, pay to the Borrower
such amount as such Bank or Agent determines is attributable to such
deduction or withholding and which will leave such Bank or Agent
(after such payment) in no better or worse position than it would have
been in if the Borrower had not been required to make such deduction
or withholding. Nothing in this Agreement shall interfere with the
right of each Bank and the Agent to arrange its tax affairs in
whatever manner it thinks fit nor oblige any Bank or the Agent to
disclose any information relating to its tax affairs or any
computations in connection with such taxes.
(b) U.S. Withholding Tax Exemptions. Each Bank that is not a
United States person (as such term is defined in Section 7701(a)(30)
of the Code) shall submit to the Borrower and the Agent on or before
the earlier of the date the initial Borrowing is made hereunder and
thirty (30) days after the date hereof, two duly completed and signed
copies of either Form 1001 (relating to such Bank and entitling it to
a complete exemption from withholding under the Code on all amounts to
be received by such Bank, including fees, pursuant to the Credit
Documents and the Loans) or Form 4224 (relating to all amounts to be
received by such Bank, including fees, pursuant to the Credit
Documents and the Loans) of the United States Internal Revenue
Service. Thereafter and from time to time, each Bank shall submit to
the Borrower and the Agent such additional duly completed and signed
copies of one or the other of such Forms (or such successor forms as
shall be adopted from time to time by the relevant United States
taxing authorities) as may be (i) requested by the Borrower in a
written notice, directly or through the Agent, to such Bank and (ii)
required under then-current United States law or regulations to avoid
or reduce United States withholding taxes on payments in respect of
all amounts to be received by such Bank, including fees, pursuant to
the Credit Documents or the Loans.
(c) Inability of Bank to Submit Forms. If any Bank determines, as
a result of any change in applicable law, regulation or treaty, or in
any official application or interpretation thereof, that it is unable
to submit to the Borrower or Agent any form or certificate that such
Bank is obligated to submit pursuant to subsection (b) of this Section
11.1. or that such Bank is required to withdraw or cancel any such
form or certificate previously submitted or any such form or
certificate otherwise becomes ineffective or inaccurate, such Bank
shall promptly notify the Borrower and Agent of such fact and the Bank
shall to that extent not be obligated to provide any such form or
certificate and will be entitled to withdraw or cancel any affected
form or certificate, as applicable.
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Section 11.2 No Waiver of Rights. No delay or failure on the part of
the Agent or any Bank or on the part of the holder or holders of any Note
in the exercise of any power or right under any Credit Document shall
operate as a waiver thereof, nor as an acquiescence in any default, nor
shall any single or partial exercise thereof preclude any other or further
exercise of any other power or right, and the rights and remedies hereunder
of the Agent, the Banks and the holder or holders of any Notes are
cumulative to, and not exclusive of, any rights or remedies which any of
them would otherwise have.
Section 11.3 Non-Business Day. If any payment of principal or interest
on any Loan or of any other Obligation shall fall due on a day which is not
a Business Day, interest or fees (as applicable) at the rate, if any, such
Loan or other Obligation bears for the period prior to maturity shall
continue to accrue on such Obligation from the stated due date thereof to
and including the next succeeding Business Day, on which the same shall be
payable.
Section 11.4 Documentary Taxes. The Borrower agrees that it will pay
any documentary, stamp or similar taxes payable in respect to any Credit
Document, including interest and penalties, in the event any such taxes are
assessed, irrespective of when such assessment is made and whether or not
any credit is then in use or available hereunder.
Section 11.5 Survival of Representations. All representations and
warranties made herein or in certificates given pursuant hereto shall
survive the execution and delivery of this Agreement and the other Credit
Documents, and shall continue in full force and effect with respect to the
date as of which they were made as long as any credit is in use or
available hereunder.
Section 11.6 Survival of Indemnities. All indemnities and all other
provisions relative to reimbursement to the Banks of amounts sufficient to
protect the yield of the Banks with respect to the Loans, including, but
not limited to, Section 2.11, Section 9.3 and Section 11.15 hereof, shall
survive the termination of this Agreement and the other Credit Documents
and the payment of the Loans and all other Obligations.
Section 11.7 Set-Off.
(a) In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon
the occurrence of any Event of Default, each Bank and each subsequent
holder of any Note is hereby authorized by the Borrower at any time or
from time to time, without notice to the Borrower or to any other
Person, any such notice being hereby expressly waived, to set off and
to appropriate and to apply any and all deposits (general or special,
including, but not limited to, Indebtedness evidenced by certificates
of deposit, whether matured or unmatured, and in whatever currency
denominated) and any other Indebtedness at any time held or owing by
that Bank or that subsequent holder to or for the credit or the
account of the Borrower, whether or not matured, against and on
account of the obligations and liabilities of the Borrower to that
Bank or that subsequent holder under the Credit Documents, including,
but not limited to, all claims of any nature or description arising
out of or connected with the Credit Documents, irrespective of whether
or not (a) that Bank or that subsequent holder shall have made any
demand hereunder or (b) the principal of or the interest on the Loans
or Notes and other amounts due hereunder shall have become due and
payable pursuant to Section 8 and although said obligations and
liabilities, or any of them, may be contingent or unmatured.
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(b) Each Bank agrees with each other Bank a party hereto that if
such Bank shall receive and retain any payment, whether by set-off or
application of deposit balances or otherwise, on any of the Loans in
excess of its ratable share of payments on all such obligations then
outstanding to the Banks, then such Bank shall purchase for cash at
face value, but without recourse, ratably from each of the other Banks
such amount of the Loans, or participations therein, held by each such
other Banks (or interest therein) as shall be necessary to cause such
Bank to share such excess payment ratably with all the other Banks;
provided, however, that if any such purchase is made by any Bank, and
if such excess payment or part thereof is thereafter recovered from
such purchasing Bank, the related purchases from the other Banks shall
be rescinded ratably and the purchase price restored as to the portion
of such excess payment so recovered, but without interest.
Section 11.8 Notices. Except as otherwise specified herein, all
notices under the Credit Documents shall be in writing (including telecopy
or other electronic communication) and shall be given to a party hereunder
at its address or telecopier number set forth below or such other address
or telecopier number as such party may hereafter specify by notice to the
Agent and the Borrower, given by courier, by United States certified or
registered mail, or by other telecommunication device capable of creating a
written record of such notice and its receipt. Notices under the Credit
Documents to the Banks shall be addressed to their respective addresses,
telecopier or telephone numbers set forth on the signature pages hereof or
in the assignment agreement which any assignee bank executes pursuant to
Section 11.12 hereof, and to the Borrower and to the Agent to:
If to the Borrower:
NRG Energy, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Treasurer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Agent:
ABN AMRO Bank
Agency Services
1325 Avenue of the ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
ABN AMRO Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
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▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇/▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇/904-2131
ABN AMRO Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Each such notice, request or other communication shall be effective
(i) if given by telecopier, when such telecopy is transmitted to the
telecopier number specified in this Section 11.8 or on the signature pages
hereof and a confirmation of receipt of such telecopy has been received by
the sender, (ii) if given by courier, when delivered, (iii) if given by
mail, three business days after such communication is deposited in the
mail, registered with return receipt requested, addressed as aforesaid or
(iv) if given by any other means, when delivered at the addresses specified
in this Section 11.8; provided that any notice given pursuant to Section 2
hereof shall be effective only upon receipt.
Section 11.9 Counterparts. This Agreement may be executed in any
number of counterpart signature pages, and by the different parties on
different counterparts, each of which when executed shall be deemed an
original but all such counterparts taken together shall constitute one and
the same instrument.
Section 11.10 Successors and Assigns. This Agreement shall be binding
upon the Borrower and its successors and assigns, and shall inure to the
benefit of each of the Banks and the benefit of their respective successors
and assigns, including any subsequent holder of any Note. The Borrower may
not assign any of its rights or obligations under any Credit Document
without the written consent of all of the Banks.
Section 11.11 Participants and Note Assignees. Each Bank shall have
the right at its own cost to grant participations (to be evidenced by one
or more agreements or certificates of participation) in the Loans made
and/or Revolving Credit Commitments held by such Bank at any time and from
time to time, and to assign its rights under such Loans or the Note
evidencing such Loans to a federal reserve bank; provided that (i) no such
participation or assignment shall relieve any Bank of any of its
obligations under this Agreement, (ii) no such assignee or participant
shall have any rights under this Agreement except as provided in this
Section 11.11, and (iii) the Agent shall have no obligation or
responsibility to such participant or assignee, except that nothing herein
is intended to affect the rights of an assignee of a Note to enforce the
Note assigned. Any party to which such a participation or assignment has
been granted shall have the benefits of Section 2.11 and Section 9.3, but
shall not be entitled to receive any greater payment under either such
Section than the Bank granting such participation would have been entitled
to receive in connection with the rights transferred. Any agreement
pursuant to which any Bank may grant such a participating interest shall
provide that such Bank shall retain the sole right and responsibility to
enforce the obligations of the Borrower hereunder, including, without
limitation, the right to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such participation agreement
may provide that such Bank will not agree to any modification, amendment or
waiver of this Agreement that would (A) increase any Revolving
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Credit Commitment of such Bank if such increase would also increase
the participant's obligations, (B) forgive any amount of or postpone the
date for payment of any principal of or interest on any Loan or of any fee
payable hereunder in which such participant has an interest or (C) reduce
the stated rate at which interest or fees in which such participant has an
interest accrue hereunder.
Section 11.12 Assignment of Commitments by Banks. Each Bank shall have
the right at any time, with the written consent of the Borrower and Agent
(which consent shall not be unreasonably withheld), to assign all or any
part of its Revolving Credit Commitment (including the same percentage of
its Note and outstanding Loans) to one or more other Persons; provided that
such assignment is in an amount of at least $10,000,000 or the entire
Revolving Credit Commitment of such Bank, and if such assignment is not for
such Bank's entire Revolving Credit Commitment then such Bank's Revolving
Credit Commitment after giving effect to such assignment shall not be less
than $10,000,000; and provided further that neither the consent of the
Borrower nor of the Agent shall be required for any Bank to assign all or
part of its Revolving Credit Commitment to any Affiliate of the assigning
Bank. Each such assignment shall set forth the assignees address for
notices to be given under Section 11.8 hereof hereunder and its designated
Lending Office pursuant to Section 9.4 hereof. Upon any such assignment,
delivery to the Agent of an executed copy of such assignment agreement and
the forms referred to in Section 11.1 hereof, if applicable, and the
payment of a $3,500 recordation fee to the Agent, the assignee shall become
a Bank hereunder, all Loans and the Revolving Credit Commitment it thereby
holds shall be governed by all the terms and conditions hereof and the Bank
granting such assignment shall have its Revolving Credit Commitment, and
its obligations and rights in connection therewith, reduced by the amount
of such assignment; provided, however, in the event a Bank assigns all of
its Revolving Credit Commitment at the request of the Borrower, pursuant to
Section 3.2(b) or 11.13(iii), no recordation fee shall be required
hereunder. A Bank may not assign its Revolving Credit Commitment hereunder
unless it shall simultaneously assign the same percentage of its
commitment, if any, under the Long-Term Credit Agreement in accordance with
the terms thereof. If the Borrower replaces a Dissenting Bank or
Replaceable Bank with another entity, it shall also cause the assignment of
such Dissenting Bank or Replaceable Bank's commitment, if any, under the
Long-Term Credit Agreement in accordance with the terms thereof, and such
Dissenting Bank or Replaceable Bank agrees to cooperate in the making of
such assignment.
Section 11.13 Amendments. Any provision of the Credit Documents may be
amended or waived if, but only if, such amendment or waiver is in writing
and is signed by (a) the Borrower, (b) the Required Banks, and (c) if the
rights or duties of the Agent are affected thereby, the Agent; provided
that:
(i) no amendment or waiver pursuant to this Section 11.13
shall (A) increase any Commitment of any Bank without the consent
of such Bank or (B) reduce the stated rate at which interest or
fees accrue or reduce the amount of or postpone any fixed date
for payment of any principal of or interest on any Loan or of any
fee payable hereunder without the consent of each Bank; and
(ii) no amendment or waiver pursuant to this Section 11.13
shall, unless signed by each Bank, change this Section 11.13, or
the definition of Required Banks, or affect the number of Banks
required to take any action under the Credit Documents.
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(iii) if the Borrower requests an amendment to this
Agreement which requires the approval of all of the Banks and one
of the Banks (a "Replaceable Bank") does not approve it, the
Borrower may propose that another bank which is reasonably
acceptable to the Agent (a "Replacement Bank") be substituted for
and replace the Replaceable Bank for purposes of this Agreement.
If a Replacement Bank is so substituted for the Replaceable Bank,
the Replaceable Bank shall enter into an assignment agreement
with the Replacement Bank, the Borrower and the Agent to assign
and transfer to the Replacement Bank, the Replaceable Bank's
Commitment hereunder; provided, however, if a Replacement Bank
can't be found, then the Borrower may elect to take out the
Replaceable Bank and reduce the facility accordingly by making a
prepayment in the amount of such Replaceable Bank's Commitment
(including the same percentage of its Note and outstanding Loans)
plus all accrued and unpaid interest thereon and all fees due and
owing on the date of replacement. Notwithstanding anything to the
contrary contained herein, in no event shall the Agent be a
Replaceable Bank.
Section 11.14 Headings. Section headings used in this Agreement are
for reference only and shall not affect the construction of this Agreement.
Section 11.15 Legal Fees, Other Costs and Indemnification. The
Borrower agrees to pay all reasonable costs and expenses of the Agent in
connection with the preparation and negotiation of the Credit Documents,
including, without limitation, the reasonable fees and disbursements of
▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel to the Agent, in connection with the preparation
and execution of the Credit Documents and any amendment, waiver or consent
related hereto, whether or not the transactions contemplated herein are
consummated. The Borrower further agrees to indemnify each Bank, the Agent,
and their respective Affiliates, directors, agents, officers and employees,
against all losses, claims, damages, penalties, judgments, liabilities and
expenses (including, without limitation, all expenses of litigation or
preparation therefor, whether or not the indemnified Person is a party
thereto) which any of them may incur or reasonably pay arising out of or
relating to any Credit Document or any of the transactions contemplated
thereby or the direct or indirect application or proposed application of
the proceeds of any Loan other than those which arise from the gross
negligence or willful misconduct of the party claiming indemnification. The
Borrower, upon demand by the Agent or a Bank at any time, shall reimburse
the Agent or Bank for any reasonable legal or other expenses incurred in
connection with investigating or defending against any of the foregoing
except if the same is directly due to the gross negligence or willful
misconduct of the party to be indemnified.
Section 11.16 Entire Agreement. The Credit Documents constitute the
entire understanding of the parties thereto with respect to the subject
matter thereof and any prior or contemporaneous agreements, whether written
or oral, with respect thereto are superseded thereby.
Section 11.17 Construction. The parties hereto acknowledge and agree
that neither this Agreement nor the other Credit Documents shall be
construed more favorably in favor of one than the other based upon which
party drafted the same, it being acknowledged that all parties hereto
contributed substantially to the negotiation of this Agreement and the
other Credit Documents.
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Section 11.18 Governing Law. This Agreement and the other Credit
Documents, and the rights and duties of the parties hereto, shall be
construed and determined in accordance with the internal laws of the State
of New York.
Section 11.19 Submission to Jurisdiction; Waiver of Jury Trial. THE
BORROWER HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW
YORK STATE COURT SITTING IN THE CITY OF NEW YORK FOR PURPOSES OF ALL LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. THE BORROWER
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH
PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. THE
BORROWER HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO ANY CREDIT DOCUMENT OR
THE TRANSACTIONS CONTEMPLATED THEREBY.
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40
In Witness Whereof, the parties hereto have caused this Agreement to be
duly executed and delivered in Chicago, Illinois by their duly authorized
officers as of the day and year first above written.
NRG ENERGY, INC.
By:__________________________________
Name: ______________________________
Title:_______________________________
39
41
Commitment: $20,000,000 ABN AMRO BANK N.V., in its individual
capacity as a Bank and as Agent
By:__________________________________
Name: ______________________________
Title:_______________________________
By:__________________________________
Name: ______________________________
Title:_______________________________
Address for notices:
ABN AMRO Bank N.V.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇\▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇\904-2131
With copy to:
ABN AMRO Bank N.V.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Lending Offices:
Base Rate Loans:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Loan Administration
Eurocurrency Loans:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Loan Administration
40
42
Commitment: $15,000,000 NATIONSBANK, N.A.
By:__________________________________
Name: ______________________________
Title:_______________________________
Address for notices:
Lending Offices:
Base Rate Loans:
Eurocurrency Loans:
41
43
Commitment: $15,000,000 SOCIETE GENERALE, CHICAGO BRANCH
By:__________________________________
Name: ______________________________
Title:_______________________________
Address for notices:
Lending Offices:
Base Rate Loans:
Eurocurrency Loans:
42
44
Commitment: $5,000,000 CIBC INC.
By:__________________________________
Name: ______________________________
Title:_______________________________
Address for notices:
Lending Offices:
Base Rate Loans:
Eurocurrency Loans:
43
45
Commitment: $10,000,000 THE CHASE MANHATTAN BANK
By:__________________________________
Name: ______________________________
Title:_______________________________
Address for notices:
Lending Offices:
Base Rate Loans:
Eurocurrency Loans:
44
46
Commitment: $10,000,000 WESTDEUTSCHE LANDERSBANK
GIROZENTRALE, NEW YORK BRANCH
By:__________________________________
Name: ______________________________
Title:_______________________________
Address for notices: By:__________________________________
Name: ______________________________
Title:_______________________________
Lending Offices:
Base Rate Loans:
Eurocurrency Loans:
45
47
EXHIBIT A
NOTE
________________, 19___
For Value Received, the undersigned, NRG Energy, Inc., a Delaware
corporation (the "Borrower"), promises to pay to the order of
________________________________ (the "Bank") on the Termination Date of the
hereinafter defined Credit Agreement, at the principal office of ABN AMRO Bank
N.V., Chicago Branch, in Chicago, Illinois, in U.S. Dollars, the aggregate
unpaid principal amount of all Loans made by the Bank to the Borrower pursuant
to the Credit Agreement, together with interest on the principal amount of each
Loan from time to time outstanding hereunder at the rates, and payable in the
manner and on the dates, specified in the Credit Agreement.
The Bank shall record on its books or records or on a schedule attached
to this Note, which is a part hereof, each Loan made by it pursuant to the
Credit Agreement, together with all payments of principal and interest and the
principal balances from time to time outstanding hereon, whether the Loan is a
Base Rate Loan or a Eurocurrency Loan, the interest rate and Interest Period
applicable thereto, provided that prior to the transfer of this Note all such
amounts shall be recorded on a schedule attached to this Note. The record
thereof, whether shown on such books or records or on a schedule to this Note,
shall be prima facie evidence of the same, provided, however, that the failure
of the Bank to record any of the foregoing or any error in any such record shall
not limit or otherwise affect the obligation of the Borrower to repay all Loans
made to it pursuant to the Credit Agreement together with accrued interest
thereon.
This Note is one of the Notes referred to in the 364-Day Revolving
Credit Agreement dated as of March 17, 1998, among the Borrower, ABN AMRO Bank
N.V., as Agent, and the Banks party thereto (the "Credit Agreement"), and this
Note and the holder hereof are entitled to all the benefits provided for thereby
or referred to therein, to which Credit Agreement reference is hereby made for a
statement thereof. All defined terms used in this Note, except terms otherwise
defined herein, shall have the same meaning as in the Credit Agreement. This
Note shall be governed by and construed in accordance with the internal laws of
the State of New York.
Prepayments may be made hereon and this Note may be declared due prior
to the expressed maturity hereof, all in the events, on the terms and in the
manner as provided for in the Credit Agreement.
The Borrower hereby waives demand, presentment, protest or notice of
any kind hereunder.
NRG Energy, Inc.
By:____________________________
Its: ____________________________
48
EXHIBIT B
COMPLIANCE CERTIFICATE
This Compliance Certificate is furnished to ABN AMRO Bank N.V., as
Agent pursuant to the 364-Day Revolving Credit Agreement (the "Credit
Agreement") dated as of March 17, 1998, by and among NRG Energy, Inc., the Banks
from time to time party thereto and ABN AMRO Bank N.V., as Agent. Unless
otherwise defined herein, the terms used in this Compliance Certificate have the
meanings ascribed thereto in the Credit Agreement.
The undersigned hereby certifies that:
1. I am the duly elected or appointed ________________ of
NRG Energy, Inc.;
2. I have reviewed the terms of the Credit Agreement and I have
made, or have caused to be made under my supervision, a detailed
review of the transactions and conditions of NRG Energy, Inc. and
its Subsidiaries during the accounting period covered by the
attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or event
which constitutes a Default or an Event of Default during or at
the end of the accounting period covered by the attached financial
statements or as of the date of this Compliance Certificate,
except as set forth below; and
4. Schedule B-1 attached hereto sets forth financial data and
computations evidencing compliance with certain covenants of the
Credit Agreement, all of which data and computations are true,
complete and correct. All computations are made in accordance with
the terms of the Credit Agreement.
Described below are the exceptions, if any, to paragraph 3 by listing,
in detail, the nature of the condition or event, the period during which it has
existed and the action which the Borrower has taken, is taking, or proposes to
take with respect to each such condition or event:
_____________________________________________
_____________________________________________
_____________________________________________
_____________________________________________
2
49
The foregoing certifications, together with the computations set forth
in Schedule 1 hereto and the financial statements delivered with this Compliance
Certificate in support hereof, are made and delivered this __________ day of
_____________, 19___.
_____________________________
3
50
COMPLIANCE CERTIFICATE
SCHEDULE B-1
COMPLIANCE CALCULATIONS FOR CREDIT AGREEMENT
CALCULATION AS OF ____________, 19_______
A. Liens (Section 7.9)
1. Total Liens $___________
2. Existing Liens $__________
3. Balance of Liens $______________ (Line A1 minus Line A2) (Line A3
not to exceed 10% of Consolidated Net Tangible Assets)
B. Sale of Assets (Section 7.11)
1. Net book value of assets sold
during this fiscal year $_______________
(Line B1 not to exceed 10% of Consolidated Net Tangible Assets)
C. Consolidated Net Worth (Section 7.12)
1. Consolidated stockholders' equity $____________
2. Less currency translation account $____________
3. Consolidated Net Worth
(Line C1 minus Line C2) $____________
D. Consolidated Capitalization
1. Consolidated Net Worth (Line C3) $____________
2. Indebtedness of the Borrower $____________
3. Consolidated Capitalization (Sum of line D1 and D2) $____________
E. ___ to ___
(ratio must be at least 0.32 to 1.00)
4
51
EXHIBIT C
FORM OF LEGAL OPINION OF COUNSEL TO THE ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇, ▇▇▇▇
▇▇▇ AMRO Bank N.V.,
in its individual capacity as
a Bank and as Agent
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
I am Vice President and General Counsel of NRG Energy, Inc., a Delaware
corporation ("Borrower"), and have represented the Borrower in connection with
the transactions to be effected pursuant to the terms and conditions of that
certain 364-Day Revolving Credit Agreement dated as of the date hereof among the
Borrower, the Banks party thereto and ABN AMRO Bank, N.V., individually as a
Bank and as Agent (the "Credit Agreement").
This opinion is delivered to you pursuant to Section 6.1(a) of the
Credit Agreement. Capitalized terms used in this opinion and not otherwise
defined herein shall have the meanings ascribed thereto in the Credit Agreement.
In connection with this opinion I have examined:
A. the Credit Agreement;
B. the Notes; and
C. the Fee Letter.
The foregoing documents, together with the other documents executed and
delivered by the Borrower to the Agent in connection with the Credit Agreement,
are sometimes referred to herein as the "Loan Documents."
I have also examined such corporate documents and records of the
Borrower and such certificates of public officials and officers of the Borrower
as I have deemed necessary or appropriate for purposes of rendering this
opinion. In stating my opinion, I have assumed the genuineness of all signatures
(except the Borrower), the authority of persons signing the Loan Documents on
behalf of all parties thereto (except the Borrower), the authenticity of all
documents submitted to us as originals and the conformity to authentic original
documents of all documents submitted to us as certified, conformed or
photostatic copies.
Based on the foregoing, and subject to the qualifications set forth
herein, we are of the opinion that:
1. The Borrower is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware.
2. The Borrower has the corporate power and authority to execute,
deliver and perform the
52
Loan Documents and all corporate action necessary to authorize the execution,
delivery and performance of the Loan Documents has been taken.
3. The Loan Documents have been duly executed and delivered on behalf
of the Borrower and constitute valid and binding obligations of the Borrower
enforceable against the Borrower in accordance with their respective terms,
except as limited by applicable bankruptcy, insolvency, moratorium or other
similar laws affecting the rights of creditors or the application of general
principles of equity (whether considered in a proceeding in equity or at law).
4. The Execution, delivery and performance by the Borrower of the Loan
Documents do not: (i) result in a breach or other violation of any of the terms,
conditions or provisions of any indenture, loan or credit agreement or any other
agreement, lease or instrument to which the Borrower is a party or by which it
or any of its properties may be bound; (ii) result in a breach or other
violation of any of the terms, conditions or provisions of any order, writ,
injunction or decree of any court or other governmental authority or
instrumentality to which the Borrower is subject; or (iii) result in the
creation or imposition of any lien, charge, security interest or encumbrance
upon any property of the Borrower under any indenture, loan or credit agreement
or any other material agreement, lease, instrument, order, writ, injunction or
decree referred to in clauses (i) and (ii) above; where any such breach,
violation or lien could have a Material Adverse Effect. The execution, delivery
and performance by the Borrower of the Loan Documents and the transactions
contemplated thereby do not result in a breach or other violation of any of the
terms, conditions or provisions of any applicable federal, or Delaware statute
or regulation where such breach or violation could have a Material Adverse
Effect.
5. Except as set forth on Schedule 5.5 to the Credit Agreement, no
judgments are outstanding against the Borrower, nor is there pending or, to the
best of our knowledge, threatened, any litigation, investigation, contested
claim or governmental proceeding by or against the Borrower which could have a
Material Adverse Effect.
6. The extension, arranging and obtaining of the credit represented by
the Credit Agreement do not result in any violation of Regulation G. T, U or X
of the Board of Governors of the Federal Reserve System.
7. Neither the Borrower nor any Subsidiary is an "investment company"
within the meaning of the Investment Company Act of 1940, as amended. No
approvals by the SEC under the Public Utility Holding Company Act of 1935, as
amended ("PUHCA") are required in connection with the execution by the Borrower
of the Loan Documents or the performance by the Borrower of any of the
transactions contemplated thereby.
8. No authorization, consent, license, order or approval of, or other
action by, any governmental authority is required to be obtained or made in
connection with the due execution, delivery and performance of the Loan
Documents.
9. I am a member of the bar of the State of Minnesota, and I am not
licensed to practice in the States of Delaware or New York. I express no opinion
on the law of any other jurisdiction other than the State of Minnesota and the
provisions of the Delaware General Corporation Law and the federal laws of the
United States applicable therein or thereto. The opinions expressed herein are
based upon the law and circumstances as they are in effect or exist on the date
hereof, and I assume no obligation to revise or supplement this letter in the
event of future changes in the law or interpretations thereof with respect to
circumstances or events that may occur subsequent to the date hereof. I express
no opinion as to the effect of the laws of any other jurisdiction.
For purposes of the opinion rendered in paragraph 3, I have assumed
that the laws of the State of New York are substantially the same as the laws of
the State of Minnesota.
2
53
Minnesota Statutes ss.290.371, Subd. 4, provides that any corporation
required to file a Notice of Business Activities Report does not have a cause of
action upon which it may bring suit under Minnesota law unless the corporation
has filed a Notice of Business Activities Report and provides that the use of
the courts of the State of Minnesota for all contracts executed and all causes
of action that arose before the end of any period for which a corporation failed
to file a required report is precluded. Insofar as our opinion may relate to the
valid, binding and enforceable character of any agreement under Minnesota law or
in a Minnesota court, we have assumed that any party seeking to enforce such
agreement has at all times been, and will continue at all times to be, exempt
from the requirement of filing a Notice of Business Activities Report or, if not
exempt, has duly filed, and will continue to duly file, all Notice of Business
Activities Report or, if not exempt, has duly filed, and will continue to duly
file, all Notice of Business Activities Reports.
This opinion is furnished by me as General Counsel of the Borrower to
you pursuant to the Agreement. This opinion is solely for your benefit and may
not be relied upon by any other person or by you in any other context. This
opinion may not be quoted, in whole or in part, or copies hereof furnished, to
any other person without my prior express written consent.
Very truly yours,
3
54
SCHEDULE 1
PRICING GRID
IF THE BORROWER'S THE
SENIOR UNSECURED DEBT RATING ANNUAL
IS (▇▇▇▇▇'▇\STANDARD AND FACILITY
POOR'S, RESPECTIVELY) FEE IS THE THE BASE
EUROCURRENCY RATE
LEVEL MARGIN IS MARGIN IS
----------------------------------------------------------------------------------------------------------------
I Greater than or equal to 0.125% 0.250% 0.000%
Baa2/BBB
----------------------------------------------------------------------------------------------------------------
II Below Level I, but greater 0.175% 0.275% 0.000%
than or equal to Baa3/BBB-
----------------------------------------------------------------------------------------------------------------
III Below Level II, but greater 0.325% 0.550% 0.000%
than or equal to Bal/BB+
----------------------------------------------------------------------------------------------------------------
IV Below Level III 0.450% 1.050% 0.550%
----------------------------------------------------------------------------------------------------------------
Any change in Rating (and in any fees or interest payable hereunder based
on Ratings) shall be effective as of the date on which S&P or ▇▇▇▇▇'▇, as the
case may be, announces the applicable change in such Rating. In the event of a
split rating, the lower rating shall prevail.
55
SCHEDULE 5.2
SUBSIDIARIES
SUBSIDIARY STATE OF INCORPORATION
------------------------------------------- -----------------------
Cobee Holdings Inc. Delaware
Elk River Resource Recovery, Inc. Minnesota
Fresh Kills Cogen Inc. Delaware
Graystone Corporation Minnesota
NEO Corporation (NEO) Minnesota
NRG Asia-Pacific, Ltd. Delaware
NRG Cadillac Inc. Delaware
NRG del Corondo Inc. Delaware
NRG El Segundo Inc. Delaware
NRG Energy Center, Inc. Minnesota
NRG Energy ▇▇▇▇▇▇▇ Valley I, Inc. California
NRG Energy ▇▇▇▇▇▇▇ Valley II, Inc. California
NRG International, Inc. Delaware
NRG International Services Company Delaware
NRG Latin America Inc. Delaware
NRG Long Beach Inc. Delaware
NRG Operating Services, Inc. Delaware
NRG PacGen Inc. Delaware
NRG ▇▇▇▇▇▇ Inc. Delaware
NRG Power Marketing Inc. Delaware
NRG San Diego Inc. Delaware
NRG Services Corporation Delaware
NRG Sunnyside Inc. Delaware
NRG Sunnyside Operations GP Inc. Delaware
NRG Sunnyside Operations LP Inc. Delaware
NRG Pittsburgh Thermal Inc. Delaware
New Roads Generating, LLC Delaware
O'Brien Cogeneration, Inc. II Delaware
Okeechobee Power I, Inc. Delaware
Okeechobee Power II, Inc. Delaware
Okeechobee Power III, Inc. Delaware
Oklahoma Loan Acquisition Corporation Delaware
Power Operations, Inc. Delaware
San ▇▇▇▇▇▇▇ Valley Energy I, Inc. California
San ▇▇▇▇▇▇▇ Valley Energy IV, Inc. California
Scoria Incorporated Minnesota
Updated 3/16/1998
56
SCHEDULE 5.5
LITIGATION SUMMARY
Sunnyside
NRG Energy, Inc. (the "Company") and its subsidiary NRG Sunnyside, Inc., along
with certain other parties, are plaintiffs in an action filed on May 2, 1996 in
the Seventh District Court for Carbon County, Utah, against Environmental Power
Corporation, Sunnyside Power Corporation, ▇▇▇▇▇▇ Systems, Inc. and Kaiser Power
of Sunnyside, Inc. in connection with a Purchase and Sale Agreement by and among
the plaintiffs and defendants. The plaintiffs are seeking damages for breach of
certain representations and warranties and indemnification obligations included
in the Purchase and Sale Agreement, as well as a declaration that the related
Promissory Note executed by NRG Sunnyside, Inc. is subject to NRG Sunnyside,
Inc.'s defenses and/or setoffs for any and all claims arising under or in
connection with the Purchase and Sale Agreement, thereby reducing the principal
amount due under said note to zero.
The defendants have filed an answer denying liability and asserting
counterclaims against plaintiffs, seeking an award of unspecified compensatory
and punitive damages and the entry of a preliminary permanent injunction
requiring the plaintiffs to pay the entire balance of the Promissory Note
($1,750,000) plus interest at a rate of 13 percent. The plaintiffs deny the
defendants' counterclaims and intend to prosecute their action and contest the
case vigorously.
NRG Generating (U.S.), Inc. ("NRGG")
NRGG has commenced arbitration with the Company regarding a dispute arising out
of a Co-Investment Agreement dated April 30, 1996, executed by the Company and
NRGG. NRGG asserts, in that arbitration, that the Company violated its
obligations under the Co-Investment Agreement by entering into a Stock Purchase
Agreement with OGE Energy Corp. ("OGE", the parent of Oklahoma Gas & Electric
Company), pursuant to which the Company has agreed to sell its interest in the
Mid-Continent Power Company project ("MCPC") to OGE. NRGG asserts that, under
the Co-Investment Agreement, NRG has a right of first refusal with respect to
any sale of MCPC. NRGG is seeking to enjoin the sale of MCPC to OGE and has
claimed unspecified damages. The Company vigorously disputes NRGG's claims. The
arbitration hearing is scheduled for May 1998, and the Company expects the
arbitration to be completed before the sale of MCPC to OGE is consummated.
LABOR DISPUTE SUMMARY
None.
57
SCHEDULE 7.9
EXISTING LIENS
MARCH 17, 1998
TOTAL LIENS AMOUNT $
----------- --------
Norwest Bank Minnesota, N.A. Certificate of Deposit
Held by Lumbermans Insurance Underwriters 150,000
U.S. Treasury Bills
Collateral for foreign exchange forward contracts with
Salomon Brothers 0
TOTAL LIEN BALANCE 150,000
EXISTING LIENS AT 2/1/96
Norwest Bank Minnesota, N.A. Certificate of Deposit 150,000
U.S. Treasury Bills- 3% of Notional Value of Contracts 3,665,745
---------
TOTAL EXISTING LIENS 3,815,745
BALANCE OF LIENS (3,665,745)