Exhibit 10.27.11
SUPPLEMENTAL LOAN AGREEMENT
dated as of December 10, 1997
between
NRG ENERGY, INC.,
as Lender,
and
NRG GENERATING (U.S.) INC.
and
NRGG Funding Inc.
as Borrowers
THIS SUPPLEMENTAL LOAN AGREEMENT, dated as of December 10,
1997, is between NRG GENERATING (U.S.) INC., a Delaware corporation
("NRGG"), NRGG Funding, Inc., a Delaware corporation ("Funding") and
NRG Energy, Inc., a Delaware corporation (the "Lender").
W I T N E S S E T H:
WHEREAS, NRGG and Funding (each, a "Borrower" and
collectively, the "Borrowers") wish to borrow up to $22,000,000 to meet
their joint and several obligation to fund equity commitments to NRG
(▇▇▇▇▇▇) ▇▇▇▇▇, LLC, a Delaware limited liability company ("▇▇▇▇▇▇
▇▇▇▇▇"), and the Lender agrees to lend such amount to the Borrowers on
the terms and conditions set forth below;
NOW, THEREFORE, the Borrowers and the Lender agree as
follows:
ARTICLE 1
Definitions
SECTION 1.01. Defined Terms. As used in this Agreement, the
terms defined in the caption hereto shall have the meanings set forth
therein, and the following terms have the following meanings:
"Affiliate" of any specified person means (i) any other
Person, directly or indirectly, controlling or controlled by or under
direct or indirect common control with such specified Person or (ii)
any Person who is a director or officer (a) of such Person, (b) of any
Subsidiary of such Person or (c) of any Person described in clause (i)
above. For the purposes of this definition, "control" when used with
respect to any Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the
foregoing.
"Agreement" means this Supplemental Loan Agreement, as
amended, supplemented or modified from time to time.
"Amortization Schedule" shall have the meaning assigned
thereto in Section 2.05(b).
"Assignment and Assumption Agreement" shall have the meaning
assigned thereto in Section 2.02.
"Bankruptcy Law" shall mean any applicable liquidation,
dissolution, conservatorship, bankruptcy, moratorium, rearrangement,
insolvency, reorganization, readjustment of debt or similar laws
affecting the rights and remedies of creditors generally, as in effect
from time to time.
"Base Rate" means, for any date, a rate per annum equal to
the prime rate for that date plus one and one-half percent (1.5%).
"Borrower" and "Borrowers" mean the parties named as such in
this Agreement until one or more successors replace the Borrowers, and
thereafter such successor(s).
"Business Day" means a day other than a Saturday, Sunday or
other day on which commercial banks in New York City, New York or
Minneapolis, Minnesota are authorized or required by law to close.
"Chase Pledge Agreement" shall have the meaning assigned
thereto in Section 8.01.
"Closing Date" means the date this Agreement is executed and
delivered by each party hereto.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" shall mean all assets of Funding and NRG ▇▇▇▇▇▇
Inc. in which the Lender is granted a security interest under the
Pledge Agreement.
"Credit Documents" means the collective reference to this
Agreement, the Note and the Security Documents.
"Default" means any event which is, or after notice or
passage of time or both would be, an Event of Default.
"Distributions" shall mean dividends or other payments of any
kind, whether in cash, in kind, or in securities or other property.
"Dollars" and "$" means dollars in lawful currency of the
United States of America.
"Environmental Approval" shall have the meaning assigned
thereto in Section 5(u)(ii).
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"Environmental Claim" shall have the meaning assigned
thereto in Section 5(u).
"Environmental Laws" shall have the meaning assigned thereto
in Section 5(u).
"Equity Commitment Agreement" shall have the meaning
assigned thereto in Section 2.02.
"ERISA" means the Employment Retirement Income Security Act
of 1974, as amended.
"ERISA Affiliate" means a trade or business (whether or not
incorporated) which is under common control with either of the
Borrowers within the meaning of Sections 414(b), (c), (m) or (o) of the
Code.
"Event of Default" shall have the meaning assigned thereto in
Section 7.01.
"Funding Date" means the date not later than the date equity
must be infused into ▇▇▇▇▇▇ ▇▇▇▇▇ pursuant to the Equity Commitment
Agreement, upon which the Borrowers shall request that the Loan be made
available.
"GAAP" means generally accepted accounting principles in the
Unites States of America as in effect from time to time.
"Good Faith Contest" means the contest of an item if the item
is diligently contested in good faith by appropriate proceedings timely
instituted and (i) adequate cash reserves (or at the applicable
entity's option, bonds or other security reasonably satisfactory to the
Lender) are established with respect to the contested item, and (ii)
during the period of such contest, the enforcement of any contested
item is effectively stayed.
"Governmental Authority" means the United States Federal
Government, any state or other political subdivision thereof, including
any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to such government.
"Highest Lawful Rate" shall have the meaning assigned thereto
in Section 9.09.
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"Indemnified Liabilities" shall have the meaning assigned
thereto in Section 9.04.
"Indebtedness" means, with respect to any Person at any date
of determination (without duplication), (i) all indebtedness of such
Person for borrowed money, (ii) all obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person in respect of letters of credit or
other similar instruments (including reimbursement obligations with
respect thereto), (iv) all obligations of such Person to pay the
deferred and unpaid purchase price of property or services, which
purchase price is due more than six months after the date of placing
such property in service or taking delivery thereof or the completion
of such services, except trade payables, (v) all obligations on account
of principal of such Person as lessee under capitalized leases, (vi)
all indebtedness of other Persons secured by a lien on any asset of
such Person, whether or not such indebtedness is assumed by such
Person; provided that the amount of such indebtedness shall be the
lesser of (a) the fair market value of such asset at such date of
determination and (b) the amount of such indebtedness, and (vii) all
indebtedness of other Persons guaranteed by such Person to the extent
such indebtedness is guaranteed by such Person. The amount of
Indebtedness of any Person at any date shall be the outstanding balance
at such date of all unconditional obligations as described above and,
with respect to contingent obligations, the maximum liability upon the
occurrence of the contingency giving rise to the obligation, provided
that the amount outstanding at any time of any indebtedness issued with
original issue discount is the face amount of such indebtedness less
the remaining unamoritized portion of the original issue discount of
such indebtedness at such time as determined in conformity with GAAP;
and provided further that Indebtedness shall not include any liability
for current or deferred federal, state, local or other taxes, or any
trade payables; provided, however, in the case of the Borrowers,
"Indebtedness" shall not include (i) any Lien granted by the Borrowers
on any equity interest of Borrowers in any Subsidiary of a Borrower
(other than Funding, NRG ▇▇▇▇▇▇, Inc. or ▇▇▇▇▇▇ ▇▇▇▇▇) as security for
any debt of such Subsidiary in respect of any energy project acquired
or developed after the date hereof or any debt with respect to such
Subsidiary's project or project owner in respect of any such project,
or (ii) subject to the limitations set forth herein, any equity funding
commitment made or guaranteed by either of the Borrowers, regardless of
whether such equity funding commitment is assigned or otherwise pledged
as security for any debt of any Subsidiary in respect of any energy
project acquired or developed after the date hereof or any debt with
respect to such Subsidiary's project or project owner in respect of any
energy project acquired or developed after the date hereof. For
purposes of calculating the amount of any Indebtedness hereunder, there
shall be no double-counting of direct obligations, guarantees and
reimbursement obligations for letter of credit.
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"Interest Payment Date" means each principal reduction date
set forth on Schedule B hereto, and, for periods after the last date
reflected thereon, the last day of each fiscal quarter of the
Borrowers.
"Investments" in any Person means (i) any loan, extension of
credit or advance to such Person, (ii) any purchase or other
acquisition of any capital stock, warrants, rights, options,
obligations or other securities of such Person, or (iii) any capital
contribution to such Person.
"Lender" means the party named in this Agreement until one or
more successors replace it, and thereafter means the successor or
successors.
"Loan" shall have the meaning assigned thereto in Section
2.01.
"Material Adverse Effect" means a material adverse effect on
(i) the ability of either Borrower or NRG ▇▇▇▇▇▇ Inc. to perform its
obligations to the Lender under this Agreement, the Note or any of the
Security Documents or (ii) the business, property, assets, liabilities,
operations or condition (financial or otherwise) of the Borrowers and
their respective Subsidiaries, taken as a whole.
"Material Governmental Approvals" means all Governmental
Approvals which are required under applicable law in connection with
the operation, maintenance, ownership or leasing of the facility other
than such Governmental Approvals as are immaterial in nature.
"Maturity Date" shall have the meaning assigned thereto in
Section 2.04.
"Maximum Amount" shall have the meaning assigned thereto in
Section 2.05(c).
"Membership Interest Purchase Agreement" shall have the
meaning assigned thereto in Section 3.01(d).
"▇▇▇▇▇▇ ▇▇▇▇▇" shall have the meaning assigned thereto in the
first recital hereto.
"Notes" means the joint and several Note of the Borrowers
substantially in the form attached hereto as Exhibit A.
"NRG Equity Guaranty" shall have the meaning assigned thereto
in Section 2.02.
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"NRGG Equity Guaranty" shall have the meaning assigned
thereto in Section 2.03.
"Permitted Liens" means any Liens that are: (a) Liens for
taxes, or other governmental levies and assessments that (i) do not
arise under ERISA or Environmental Laws and (ii) are not yet due or
which are subject to a Good Faith Contest; (b) carriers,'
warehousemen's, mechanics,' materialmen's, repairmen's or other like
Liens arising in the ordinary course of business which are not past due
for a period of more than 90 days or which are subject to a Good Faith
Contest; (c) pledges or deposits in connection with workmen's
compensation, unemployment insurance and other social security
legislation; (d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business; (e) easements, rights-of-way, restrictions (including
landmarking and zoning restrictions), royalties, leasehold and fee
interest covenants and other similar encumbrances incurred or imposed
in the ordinary course of business which are not of the nature of a
Lien for security purposes and which do not in any case materially
detract from the value of the property subject thereto or interfere
with the ordinary conduct of the business of either Borrower, NRG
▇▇▇▇▇▇ Inc. or ▇▇▇▇▇▇ ▇▇▇▇▇; (f) liens in favor of MeesPierson Capital
Corporation in connection with a certain Credit Agreement for NRGG to
be arranged by MeesPierson Capital Corporation, (the "Proposed
MeesPierson Credit Agreement); (g) liens for purchase money
obligations, provided that any such lien encumbers only the asset so
purchased; (h) liens arising from legal proceedings, as long as such
proceedings are being contested in a Good Faith Contest and so long as
execution is stayed on all judgments resulting from any such
proceedings; (i) liens arising on the title insurance policies to be
delivered in connection with the Proposed MeesPierson Credit Agreement;
(j) liens securing indebtedness of NRGG permitted under this Agreement,
including without limitation pledges by NRGG of its equity interest in
any electrical cogeneration project(s) hereafter owned and operated, in
whole or in part, by NRGG or any Subsidiary of NRGG (other than
Funding) as security for such indebtedness; and (k) the Lien in favor
of the Lender on the shares of stock of O'Brien Schuykill owned by NRGG
pursuant to that certain NRG Subordinated Stock Pledge Agreement dated
as of March 1, 1996 among the Lender, NRGG, O'Brien Schuykill and The
Chase Manhattan Bank.
"Person" means any individual, corporation, partnership,
joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agent or political subdivision thereof
or any other entity.
"Plan" means any employee benefit plan covered by Title IV of
ERISA.
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"Pledge Agreement" shall have the meaning assigned thereto in
Section 3.01(b).
"Pledged Interests" means the membership interests pledged to
the Lender by Funding and NRG ▇▇▇▇▇▇ Inc. pursuant to the Pledge
Agreement.
"Project Agreement" means any agreements, contracts or leases
of any kind whatsoever pursuant to which, NRG ▇▇▇▇▇▇ Inc. or ▇▇▇▇▇▇
▇▇▇▇▇ is entitled directly, indirectly, by assignment or otherwise to
receive payments in respect the ▇▇▇▇▇▇ ▇▇▇▇▇ facility.
"PURPA" means the Public Utility Regulatory Policies Act of
1978, as amended from time to time, and all rules and regulations
adopted thereunder .
"Register" shall have the meaning assigned thereto in Section
2.11(b).
"Security Documents" shall have the meaning assigned in
Section 3.01(b).
"Subsidiary" of any Person means any corporation,
association, partnership or other business entity of which more than
50% of the total voting power of shares of capital stock or other
interests (including partnership interests) entitled (without regard to
the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by (i) such Person or (ii) one or
more Subsidiaries of such Person.
"Uniform Commercial Code" means the Minnesota Uniform
Commercial Code as in effect from time to time.
SECTION 1.02. Rules of Construction. Unless the context
otherwise requires:
1. a term has the meaning assigned to it;
2. "or" is not exclusive;
3. "including" means including without limitation;
4. words in the singular include the plural and words in the plural
include the singular;
7
5. unless otherwise specified therein, all terms defined in this
Agreement shall have the defined meanings when used in the Note or any
certificate or other document made or delivered pursuant hereto; and
6. the words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and
section, Section, schedule and exhibit references are to this Agreement
unless otherwise specified.
ARTICLE 2
Loan
SECTION 2.01. Loan. Subject to the terms and conditions
hereof, the Lender agrees to make a loan in Dollars to the Company on
the Funding Date, in an aggregate principal amount of up to
$22,000,000, (if drawn upon, the "Loan").
SECTION 2.02. Use of Proceeds; Manner of Funding. The
proceeds of the Loan shall be used exclusively to make equity
contributions to ▇▇▇▇▇▇ ▇▇▇▇▇ in accordance with and in satisfaction of
the obligations of Funding under the Equity Commitment Agreement among
the Lender, ▇▇▇▇▇▇ ▇▇▇▇▇ and The Chase Manhattan Bank, as Agent Bank
and as Collateral Agent, dated as of September 15, 1997 which have been
assumed by Funding (as so assumed, the "Equity Commitment Agreement")
pursuant to that certain Assignment and Assumption Agreement dated as
of December 10, 1997 between the Lender and Funding (the "Assignment
and Assumption Agreement") or to satisfy the obligations of NRGG under
the Equity Commitment Guaranty executed by NRGG in favor of the Lender
dated as of December 10, 1997 (the "NRGG Equity Guaranty"). The
proceeds of the Loan shall be transferred by wire in immediately
available funds directly to an account of ▇▇▇▇▇▇ ▇▇▇▇▇ as directed by
the Borrowers pursuant to Section 2.07 or to such other account as the
Lender may specify in accordance with Section 2.03.
SECTION 2.03. Deemed Borrowing. If any amount becomes due
and owing under the Equity Commitment Agreement or the Equity
Commitment Guaranty dated December 10, 1997 by the Lender in favor of
▇▇▇▇▇▇ ▇▇▇▇▇ and The Chase Manhattan Bank, as Collateral Agent, (the
"NRG Equity Guaranty"), the Lender may elect, in its sole discretion,
to fund the Loan in the manner contemplated by Section 2.02, without
receiving a notice of borrowing pursuant to Section 2.07. In such
cases, notice of borrowing shall be deemed to have been given upon the
Lender receiving notice that amounts are due under the Equity
Commitment Agreement or the NRG Equity Guaranty. The Lender may, in
its sole discretion, elect to direct that all or a portion of the
proceeds
8
of the Loan be deposited in its own account to repay amounts under the
NRG Equity Guaranty Such elections shall be in addition to and shall
not affect the remedies of the Lender hereunder, or under the other
Credit Documents, the Equity Commitment Guaranty or the NRG Equity
Guaranty.
SECTION 2.04. Maturity. The Loan will mature on the date
that is six years following the Funding Date (the "Maturity Date").
SECTION 2.05. Optional and Mandatory Prepayments; Repayments
of Loan.
(a) The Borrowers may at any time and from time to time prepay the
Loan, in whole or in part, without premium or penalty, upon at least
five days irrevocable notice to the Lender. If such notice is given,
the Borrowers shall make such prepayment, and the payment amount
specified in such notice shall be due and payable, on the date
specified therein.
(b) The Borrowers shall pay, in reduction of the principal amount of
the Loan then outstanding, the principal amounts set forth on the
amortization schedule attached hereto as Exhibit B (the "Amortization
Schedule") on the dates specified on the Amortization Schedule.
(c) In the event that, on any date, the outstanding principal of the
Loan outstanding exceeds the maximum permitted amount of the Loan set
forth on the Amortization Schedule for such date (the "Maximum
Amount"), then Funding shall pay in reduction of the principal and
interest then outstanding, promptly after receipt, an amount equal to
the amount of any Distributions thereafter received by Funding in
respect of the Pledged Interests until the outstanding principal does
not exceed such Maximum Amount. The Borrowers shall give the Lender at
least one Business Day's notice of each mandatory prepayment pursuant
to this Section 2.05(c) setting forth the date and amount thereof.
(d) Accrued interest on the amount of any prepayments shall be paid
on the date of such prepayment.
SECTION 2.06. Interest Rate and Payment Dates.
(a) The Loan shall bear interest for the period from and including
the date the Loan is made to, but excluding, the maturity date thereof on
the unpaid principal thereof at a rate per annum equal to the Base
Rate.
9
(b) If all or a portion of (i) the principal amount of the Loan or
(ii) any interest payable thereon shall not be paid when due, whether
at the stated maturity (including, without limitation, amortization
payments as required by Section 2.05(b)), by acceleration or otherwise,
the Loan shall, without limiting the rights of the Lender under Article
7, bear interest at a rate per annum which is 2.00% above the Base Rate
from the date of such non-payment until paid in full (as well after as
before judgment).
(c) Interest shall be payable in arrears on each Interest Payment
Date.
SECTION 2.07. Notice of Loan. The Loan shall be made upon
written notice, by way of a notice of borrowing executed by an officer
of each of the Borrowers, given by telecopy, mail, or personal service,
delivered to the Lender at its office at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ (Attn: Treasurer) at least three Business Days
prior to the day on which the Loan to be made and such notice shall
specify that the Loan is requested and state the amount thereof
(subject to the provisions of this Article 2) and shall specify the
account of ▇▇▇▇▇▇ ▇▇▇▇▇ to which the proceeds of the Loan shall be
deposited, with wire transfer instructions.
SECTION 2.08. Computation of Interest and Fees. Interest in
respect of the Loan shall be calculated on the basis of a 365 (or 366,
as the case may be) day year for the actual days elapsed.
SECTION 2.09. Treatment of Payments.
(a) Whenever any payment received by the Lender under this Agreement
or the Note is insufficient to pay in full all amounts then due and
payable to the Lender under this Agreement or the Note, including,
without limitation, any amount outstanding in excess of the Maximum
Amount, such payment shall be applied by the Lender in the following
order: First, to the payment of fees and expenses due and payable to
the Lender under and in connection with this Agreement and the Note,
including the payment of all expenses due and payable under Section
9.04; Second, to the payment of interest then due and payable on the
Loan; and Third, to the payment of the principal amount of the Loan
which is then due and payable; or
(b) All payments (including prepayments) to be made by the Borrowers
on account of principal, interest and fees shall be made without set-
off or counterclaim and shall be made to the Lender, for the account of
the Lender at its office located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ (or by wire transfer to: LaSalle National Bank, Chicago,
Illinois; ABA No.: ▇▇▇-▇▇▇-▇▇▇; Account No.: ▇▇▇▇-▇▇-▇▇▇▇; Recipient:
NRG Energy, Inc.), in lawful money of the United States of America and
in immediately available funds. If any payment hereunder would become
due and payable on a day other
10
than a Business Day, such payment shall become due and payable the next
succeeding Business Day and, with respect to payments of principal,
interest thereon shall be payable at the then applicable rate during
such extension.
SECTION 2.10. Indemnity. The Borrowers agree jointly and
severally to indemnify the Lender and to hold the Lender harmless from
any loss or expense (but without duplication of any amounts payable as
default interest and excluding lost profits; provided, for the
avoidance of doubt that interest and/or default interest accruing prior
to payment in full of the Loan shall not be deemed to be `lost
profits') which the Lender may sustain or incur as a consequence of
default by the Borrowers in making any prepayment after Borrowers have
given a notice in accordance with Section 2.05. Any amounts payable
hereunder shall be due within thirty (30) days following receipt by the
Borrowers of a certificate signed by an officer of the Lender showing
in reasonable detail the calculation of such costs and expenses, which
certificate shall constitute prima facie evidence of such amounts.
This covenant shall survive termination of this Agreement and repayment
of the Loan; provided, that the Borrowers shall not be liable to the
Lender for any costs or expense incurred more than ninety (90) days
prior to the delivery of the applicable certificate pursuant to this
Section 2.10.
SECTION 2.11. Repayment of the Loan; Evidence of Debt.
(a) Each Borrower hereby jointly, severally, and unconditionally
promises to pay to the Lender the then unpaid principal amount of the
Loan in accordance with the terms hereof and the Note. Each Borrower
hereby further agrees, jointly, severally and unconditionally, to pay
interest on the unpaid principal amount of the Loan from time to time
outstanding from the date hereof until payment in full thereof at the
rates per annum, and on the dates, set forth in Section 2.06.
(b) The Lender shall maintain a Register (the "Register") in which
shall be recorded (i) the amount of the Loan made hereunder, (ii) the
amount of any principal or interest due and payable or to become due
and payable from Borrowers to the Lender hereunder and (iii) the amount
of any sum received by the Lender hereunder from Borrowers.
(c) The entries made in the Register to the extent permitted by
applicable law, shall be prima facie evidence of the existence and
amounts of the obligations of Borrowers therein recorded; provided,
however, that the failure of the Lender to maintain the Register, or
any error therein, shall not in any manner affect the obligation of
Borrowers to repay (with applicable interest) the Loan made to
Borrowers by the Lender in accordance with the terms of this Agreement.
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ARTICLE 3
Conditions Precedent
SECTION 3.01. Conditions to Loan. The obligation of the
Lender to make the Loan on the Funding Date is subject to the
satisfaction, or waiver by the Lender, immediately prior to or
concurrently with the making of the Loan, of the following conditions:
(a) Note. The Lender shall have received the Note conforming to the
requirements hereof and executed by a duly authorized officer of each
Borrower.
(b) Security Documents. The Lender shall have received the
Subordinated Pledge and Security Agreement dated as of December 10,
1997 by Funding and NRG ▇▇▇▇▇▇ Inc. in favor of the Lender (the "Pledge
Agreement") and the other documents and instruments referenced therein
or to be delivered in connection therewith (the "Security Documents")
conforming to the requirements hereof and executed by a duly authorized
officer of each of Funding and NRG ▇▇▇▇▇▇ Inc.
(c) Opinion of Counsel. The Lender shall have received the opinion
of counsel to the Borrowers in form and substance satisfactory to the
Lender.
(d) Purchase. Funding shall have consummated the purchase of the
membership interests in ▇▇▇▇▇▇ ▇▇▇▇▇ in accordance with that certain
Membership Interest Purchase Agreement dated December 10, 1997 among
the Lender, Funding and NRGG (the "Membership Interest Purchase
Agreement"), and an equity contribution by Funding to ▇▇▇▇▇▇ ▇▇▇▇▇
shall be payable pursuant to the Equity Commitment Agreement.
(d) Representations True; No Default. Each representation
and warranty of the Borrowers hereunder and under the Pledge Agreement
and the other Credit Documents shall be accurate and complete in all
material respects as of the Funding Date and no Default or Event of
Default shall have occurred hereunder.
(e) Fees and Expenses. The Borrowers shall have paid to the Lender
the fees and expenses set forth in Section 9.04.
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ARTICLE 4
Security Interest
To secure the obligations of the Borrowers hereunder and the
other obligations described therein, Funding and NRG ▇▇▇▇▇▇ Inc. have
executed the Pledge Agreement and the other Security Documents.
ARTICLE 5
Representations and Warranties
In order to induce the Lender to enter into this Agreement
and to make the Loan available, each Borrower hereby represents and
warrants to the Lender (which representations and warranties shall
survive the execution and delivery of this Agreement and the Note and
the drawdown of the Loan hereunder) that, as of the Funding Date:
(a) Due Organization and Power. Each Borrower is duly organized and
is validly existing in good standing under the laws of its jurisdiction
of organization and is properly qualified to do business and in good
standing in every jurisdiction where the failure to maintain such
qualification or good standing could reasonably be expected to result
in a Material Adverse Effect. Each Borrower has full power to carry on
its business as now being conducted and has complied with all
statutory, regulatory and other requirements relative to such business
and such agreements, except where non-compliance could not reasonably
be expected to result in a Material Adverse Effect. Each of the
Borrowers and NRG ▇▇▇▇▇▇ Inc. has full power and authority to enter
into and perform its obligations under the Credit Documents to which it
is a party.
(b) Capitalization. The authorized capital stock or other equity
interests of Funding, NRG ▇▇▇▇▇▇ Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇ are held as set
forth on Schedule 5(b) and except as set forth thereon. No other
shares of the capital stock or other equity interests of Funding, NRG
▇▇▇▇▇▇ Inc. or ▇▇▇▇▇▇ ▇▇▇▇▇ are issued and outstanding. All of the
issued and outstanding shares of capital stock of Funding, NRG ▇▇▇▇▇▇
Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇ are duly authorized and validly issued, fully
paid, nonassessable, and free and clear of all Liens (other than
Permitted Liens), and such shares were issued in compliance with all
applicable state, federal and foreign laws concerning the issuance of
securities. Except as set forth in the Energy Services Agreement
between ▇▇▇▇▇▇ ▇▇▇▇▇ and Millennium Petrochemicals Inc. dated June 6,
1997, there are no preemptive or other outstanding rights, options,
warrants, conversion rights or similar agreements or understandings for
the
13
purchase or acquisition of shares of capital stock or other securities
or equity interests of Funding, NRG ▇▇▇▇▇▇ Inc. or ▇▇▇▇▇▇ ▇▇▇▇▇.
(c) Authorization and Consents. All necessary corporate action has
been taken to authorize, and all necessary consents and authorities
have been obtained and remain in full force and effect to permit, each
of the Borrowers and NRG ▇▇▇▇▇▇ Inc. to enter into and perform
obligations under the Credit Documents to which it is a party and, in
the case of the Borrowers, to borrow and repay the Loan. No further
consents or authorities are necessary for the repayment of the Loan or
any part thereof, including, without limitation, any consent or
approval of, or notice to, or other action with or by, any Governmental
Authority, regulatory body or any other Person which has not been made
or obtained and is in full force and effect.
(d) Binding Obligations. Each Credit Document constitutes or when
executed and delivered, will constitute the legal, valid and binding
obligations of each of the Borrowers and NRG ▇▇▇▇▇▇ Inc. as is a party
thereto, enforceable against such parties in accordance with their
respective terms, except to the extent that such enforcement may be
limited by equitable principles, principles of public policy or
applicable bankruptcy, insolvency, reorganization, moratorium or other
laws affecting generally the enforcement of creditors' rights.
(e) No Violation. The execution and delivery of, and the performance
of the provisions of, each Credit Document to which it is or will be a
party by each of the Borrowers and NRG ▇▇▇▇▇▇ Inc. do not contravene
any applicable law or regulation existing at the date hereof, any
Governmental Approval or any contractual restriction binding on such
party or the certificate of incorporation or by-laws (or equivalent
instruments) thereof.
(f) Litigation. Except as set forth on Schedule 5(f), no action,
suit or proceeding is pending or, to the Borrowers' knowledge, threatened
against either Borrower, NRG ▇▇▇▇▇▇ Inc. or ▇▇▇▇▇▇ ▇▇▇▇▇ before any
court, board of arbitration or administrative agency which could
reasonably be expected to result in any Material Adverse Effect. There
is no injunction, writ, preliminary restraining order or any order of
any nature issued by an arbitrator or other Governmental Authority
directing that any material aspect of the transactions provided for in
this Agreement not be consummated as herein or therein provided.
(g) No Default. None of the Borrowers, NRG ▇▇▇▇▇▇ Inc. and ▇▇▇▇▇▇
▇▇▇▇▇ are in default under any material agreement by which it is bound,
or is in default in respect of any financial commitment or obligation,
in either case the default of which could reasonably be expected to
result in a Material Adverse Effect.
14
(h) Project Agreements. Upon the Funding Date:
(i) Each Material Governmental Approval required in connection with
the ▇▇▇▇▇▇ ▇▇▇▇▇ facility has been obtained, is validly issued,
is in full force and effect, is not subject to appeal by any
Person, and, to the knowledge of the Borrowers, is free from
conditions or requirements compliance with which could
reasonably be expected to result in a Material Adverse
Effect. There is no proceeding pending or, to the
knowledge of the Borrowers, threatened which is reasonably
likely to result in the rescission, revocation, material
modification, suspension, determination of invalidity or
limitation of effectiveness of any Material Governmental
Approval. To the knowledge of the Borrowers, the information
set forth in each application and other written material
submitted by or on behalf of the Borrowers, NRG ▇▇▇▇▇▇
Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇ to the applicable Governmental Authority in
connection with such Material Governmental Approval was
accurate and complete in all material respects at the time
such application or other written material was submitted.
Each of the Borrowers, NRG ▇▇▇▇▇▇ Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇
complies in all material respects with all covenants,
conditions, restrictions and reservations in the Material
Governmental Approvals relating to the facilities of ▇▇▇▇▇▇
▇▇▇▇▇ and the Project Agreements applicable thereto and all
laws applicable thereto, except to the extent any non-
compliance could not reasonably be expected to result in a
Material Adverse Effect;
(ii) Each Project Agreement to which the Borrowers, NRG ▇▇▇▇▇▇
Inc. or ▇▇▇▇▇▇ ▇▇▇▇▇ is a party is a legal, valid and binding
agreement of such party enforceable against such party in
accordance with its terms, except to the extent
enforceability may be limited by applicable bankruptcy,
insolvency, moratorium, reorganization or other similar
laws affecting the enforcement of creditors' rights and
subject to general equitable principles;
(iii) All representations and warranties set forth in each
Project Agreement by any of the Borrowers, NRG ▇▇▇▇▇▇ Inc.
or ▇▇▇▇▇▇ ▇▇▇▇▇ which is a party thereto are true and
correct in all material
15
respects (the determination of such material truth and correctness
to be made by the Lender in good faith) as though made as of the date
hereof, except to the extent any such representation or warranty
relates to a prior date;
(iv) The facilities of ▇▇▇▇▇▇ ▇▇▇▇▇ will be able to be operated on
a safe and commercially sound basis in compliance with all Governmental
Approvals and applicable Project Agreements and laws, so that the
performance and facility guarantees and specifications provided for in
the applicable Project Agreements and Governmental Approvals can be
substantially met during the term of this Agreement and each of NRG
▇▇▇▇▇▇ Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇ can duly and punctually meet its
obligations under the applicable Project Agreements and Governmental
Approvals in accordance with the terms thereof, except to the extent
any inadvertent non-compliance with such Governmental Approvals and
Project Agreements could not reasonably be expected to have a Material
Adverse Effect; provided, however, that such inadvertent noncompliance
must be remedied or cured within 30 days of NRG ▇▇▇▇▇▇ Inc. or ▇▇▇▇▇▇
▇▇▇▇▇ obtaining knowledge thereof. ▇▇▇▇▇▇ ▇▇▇▇▇ has adequate
inventories and spare parts to operate its facility in accordance with
the Project Agreements, Governmental Approvals and applicable law;
(v) ▇▇▇▇▇▇ ▇▇▇▇▇ has facilities for the storage of alternative fuel
sufficient to meet its obligations under the Project Agreements,
Governmental Approvals and laws applicable thereto; and
(i) Funding is the sole owner of 99% of the outstanding equity of
▇▇▇▇▇▇ ▇▇▇▇▇, free and clear of all Liens (other than Permitted Liens
and except as set forth in the Energy Services Agreement between ▇▇▇▇▇▇
▇▇▇▇▇ and Millennium Petrochemicals Inc. dated June 6, 1997), and NRG
▇▇▇▇▇▇ Inc. is the sole owner of 1% of the outstanding equity of ▇▇▇▇▇▇
▇▇▇▇▇, free and clear of all liens (other than Permitted Liens).
Insurance. Schedule 5(i) (which shall be updated by the Borrowers and
provided to the Lender not less often than annually) sets forth a
complete and accurate description of all material policies of insurance
that will be in effect as of the Funding Date. To the knowledge of the
Borrowers, such policies are with companies rated "A-" or better by
Best's Insurance Guide and Key Rating or other insurance companies of
recognized responsibility satisfactory to the Lender and the coverages
provided by such policies are in amounts and cover such risks as are
usually carried by companies engaged in similar businesses and owning
similar properties in the same general areas in which ▇▇▇▇▇▇ ▇▇▇▇▇
operates and,
16
in any event, other than to account for amortization of loan
repayments, the insurance coverages shall not be less than the
insurance coverages set forth in Schedule 5(i).
(j) Financial Information. Except as otherwise disclosed in writing
to the Lender on or prior to the date hereof, all financial statements,
information and other data furnished by the Borrowers to the Lender are
complete and correct, such financial statements have been prepared in
accordance with GAAP (except, in the case of interim financial
statements, for the absence of footnotes) and accurately and fairly
present the financial condition of the parties covered thereby as of
the respective dates thereof and the results of the operations thereof
for the period or respective periods covered by such financial
statements and since such date or dates, there has been no Material
Adverse Effect as to any of such parties and none thereof has any
contingent obligations, liabilities for taxes or other outstanding
financial obligations which are material in the aggregate except as
disclosed in such statements, information and data.
(k) Tax Returns. Each Borrower, NRG ▇▇▇▇▇▇ Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇,
has filed all material tax returns required to be filed thereby and has
paid all taxes payable thereby which have become due, other than those
not yet delinquent or the nonpayment of which would not have a Material
Adverse Effect on such party and except for those taxes the amount or
validity of which is currently being contested in a Good Faith Contest.
(l) ERISA. The execution and delivery of the Credit Documents and
the consummation of the transactions hereunder will not involve any
prohibited transaction within the meaning of ERISA or Section 4975 of
the Code and no condition exists or event or transaction has occurred
in connection with any Plan maintained or contributed to by a Borrower,
NRG ▇▇▇▇▇▇ Inc. or ▇▇▇▇▇▇ ▇▇▇▇▇ or any ERISA Affiliate resulting from
the failure of any thereof to comply with ERISA insofar as ERISA
applies hereto which is reasonably likely to result in such party or
any ERISA Affiliate incurring any liability, fine or penalty which
individually or in the aggregate would have a Material Adverse Effect.
Prior to the Funding Date, the Borrowers have delivered to the Lender a
list of all Plans to which a Borrower, NRG ▇▇▇▇▇▇ Inc. or ▇▇▇▇▇▇ ▇▇▇▇▇
or any ERISA Affiliate is a "party in interest" (within the meaning of
Section 2(14) of ERISA) or a "disqualified person" (within the meaning
of Section 4975(e)(2) of the Code).
(m) Margin Regulations. Neither Borrower is engaged in the business
of extending credit for the purpose of purchasing or carrying margin
stock (within the meaning of Regulation G, T, U, or X of the Board of
Governors of the Federal Reserve System) and no proceeds of any Loan
will be used in a manner which would violate or result in a violation
of, such Regulation, G, T, U, or X.
17
(n) Investment Company Act. Neither Borrower is an "investment
company" nor a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
(o) Security Interests. Except for the consents set forth on
Schedule 5(o), no consents are required to create a second priority perfected
security interest in the Collateral under and as that term is defined
in the Pledge Agreement, and the security interests created in favor of
the Lender under the Security Documents are valid and perfected, second
priority security interests (subject only to Permitted Liens) superior
and prior to the rights of all Persons (except those rights of the
holders of Permitted Liens), whether the property subject to the
security interests is now owned by the party granting such security
interest or is hereafter acquired. The Security Documents (including
Uniform Commercial Code financing statements) have been filed, recorded
and/or registered in each office and in each jurisdiction where
required to create and perfect the lien and security interest described
above. The chief executive office and chief place of business of
Funding and NRG ▇▇▇▇▇▇ Inc. and the office in which the records
relating to the earnings and other receivables of each such party are
kept is located, as of the date hereof, at the locations set forth on
Schedule 5(o) for such party. Such locations are the sole offices or
places of business maintained by each such party as of the date hereof.
To the knowledge of the Borrowers, no such party has transacted any
business during the five year period prior to the date of this
Agreement under any name other than those set forth on Schedule 5(o).
(p) Business of Project Entities. None of Funding, NRG ▇▇▇▇▇▇ Inc.
and ▇▇▇▇▇▇ ▇▇▇▇▇ have engaged in any business other than the operation
of the ▇▇▇▇▇▇ ▇▇▇▇▇ facilities nor is any such party a party to any
contract, operating lease, agreement or commitment which, either
individually, or in the aggregate is material to the operation of the
▇▇▇▇▇▇ ▇▇▇▇▇ project other than the Project Agreements applicable
thereto.
(q) Qualifying Cogeneration Facility Status. All necessary filings
have been made to establish and maintain "qualifying facility" status
under PURPA for the ▇▇▇▇▇▇ ▇▇▇▇▇ project, provided that ▇▇▇▇▇▇ ▇▇▇▇▇
will promptly file a recertification certificate with the Federal
Energy Regulatory Commission. The ▇▇▇▇▇▇ ▇▇▇▇▇ project is owned and
will be operated in the manner contemplated by the certificate
conferring upon it "qualifying facility" status.
(r) Title to and Sufficiency of Assets. Except as set forth on
Schedule 5(r)), each of the Borrowers, NRG ▇▇▇▇▇▇ Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇
has good, valid and sufficient title to (or a leasehold interest in)
its assets and properties. Each of the Borrowers, NRG ▇▇▇▇▇▇ Inc. and
▇▇▇▇▇▇ ▇▇▇▇▇ has good, marketable, indefeasible and insurable title in
fee simple (or its equivalent under applicable law) to the real
property owned by it. None of
18
the real property owned or leased by either Borrowers, NRG ▇▇▇▇▇▇ Inc.
or ▇▇▇▇▇▇ ▇▇▇▇▇ is located within any federal, state or municipal flood
plain. All leases necessary for the conduct of the business of each
Borrower, NRG ▇▇▇▇▇▇ Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇ as presently conducted and
as proposed to be conducted are valid and subsisting and are in full
force and effect. Each of the Borrowers, NRG ▇▇▇▇▇▇ Inc. and ▇▇▇▇▇▇
▇▇▇▇▇ enjoy peaceful and undisturbed possession under all material
leases to which they are parties. The services to be performed, the
materials to be supplied and the easements, licenses and other rights
granted or to be granted to Funding, NRG ▇▇▇▇▇▇ Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇,
pursuant to the Project Agreements and Governmental Approvals
applicable thereto provide or will provide such party with all rights
and property interests required to enable such party to obtain all
services, materials or rights (including access) required for the
operation and maintenance of the ▇▇▇▇▇▇ ▇▇▇▇▇ project, including such
party's full and prompt performance of its obligations, and full and
timely satisfaction of all conditions precedent to the performance by
others of their obligations under such Project Agreements and
Governmental Approvals.
(s) Labor Matters. There are no strikes or other material labor
disputes or grievances, charges or complaints with respect to any
employee or group of employees pending or, to the knowledge of the
Borrowers, threatened against Funding, NRG ▇▇▇▇▇▇ Inc. or ▇▇▇▇▇▇ ▇▇▇▇▇.
(t) Transactions with Affiliates. Set forth on Schedule 5(t) is a
true, accurate and complete description of all transactions between
Funding, NRG ▇▇▇▇▇▇ Inc. or ▇▇▇▇▇▇ ▇▇▇▇▇ and any Affiliate of any such
party (other than the Lender or Power Operations, Inc. or any
subsidiary of Power Operations, Inc.) which required or which will
require in the case of Funding, NRG ▇▇▇▇▇▇ Inc. or ▇▇▇▇▇▇ ▇▇▇▇▇ the
payment by such party of an aggregate amount equal to or greater than
$100,000 during any twelve-month period.
(u) Environmental Matters and Claims.
(i) Each of NRG ▇▇▇▇▇▇ Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇ is in compliance with
all applicable United States federal, state and local laws,
regulations, rules and orders relating to pollution prevention or
protection of the environment or exposure to Materials of Environ-
mental Concern (including, without limitation, ambient air, surface
water, ground water, navigable waters, waters of the contiguous
zone, ocean waters and international waters), including, without
limitation, laws, regulations, rules and orders ("Environmental
Laws") relating to (A) emissions, discharges, releases or
threatened releases of substances defined as
19
"hazardous substances," "hazardous materials," "contaminants,"
"pollutants," "hazardous wastes" or "toxic substances" in (1) the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended by the Superfund Amendments and Reauthorization Act,
42 U.S.C. 9601 et seq., (2) the Hazardous Materials Transportation
Act, 49 U.S.C. 1801 et seq., (3) the Resource Conservation and
Recovery Act, 42 U.S.C. 6901 et seq., (4) the Federal Water Pollution
Control Act, as amended, 33 U.S.C. 1251 et seq., (5) the Clean Air
Act, 33 U.S.C. 7401 et seq., (6) the Toxic Substances Control Act, 15
U.S.C. 2601 et seq. or (7) the Safe Drinking Water Act, 42 U.S.C.
300f et seq. (collectively, "Materials of Environmental Concern"), or
(B) the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Materials of Environmental Concern,
all except to the extent the failure to comply with Environmental Laws
could not reasonably be expected to have a Material Adverse Effect;
(ii) each of NRG ▇▇▇▇▇▇ Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇ has all permits,
licenses, approvals , consents or other authorizations required under
applicable Environmental Laws ("Environmental Approvals") and is in
compliance with all Environmental Approvals required to operate its
respective business as then being conducted, all except to the extent
the failure to maintain or comply with an Environmental Approval could
not reasonably be expected to have a Material Adverse Effect;
(iii) none of NRG ▇▇▇▇▇▇ Inc. or ▇▇▇▇▇▇ ▇▇▇▇▇ has received any
notice of any claim, action, cause of action, investigation or demand
by any person, entity, enterprise or government, or any political
subdivision, intergovernmental body or agency, department or
instrumentality thereof, alleging potential liability for, or a
requirement to incur, material investigatory costs, cleanup costs,
response and/or remedial costs (whether incurred by governmental entity
or otherwise), natural resources damages, property damages, personal
injuries, attorneys' fees and expenses, or fines or penalties, in each
case arising out of, based on or resulting from (A) the presence, or
release or threat of release into the environment, of any Materials of
Environmental Concern at any location, whether or not owned by such
person, or (B) circumstances forming the basis of any violation, or
20
alleged violation, of any Environmental Law or Environmental
Approval, and in each case which could reasonably be expected to have
Material Adverse Effect ("Environmental Claim") (other than
Environmental Claims that have been fully and finally adjudicated or
otherwise determined and all fines, penalties and other costs, if any,
payable by NRG ▇▇▇▇▇▇ Inc. or ▇▇▇▇▇▇ ▇▇▇▇▇ in respect thereof have
been paid in full or which are fully covered by insurance (including
permitted deductibles));
(iv) there are no circumstances that may prevent or interfere with
such compliance in the future, except to the extent the same could not
reasonably be expected to have a Material Adverse Effect;
(v) no Materials of Environmental Concern are currently located at,
in, or under or about or are being released from any of the properties
on which the ▇▇▇▇▇▇ ▇▇▇▇▇ project is located (or any other property
with respect to which any of Funding, NRG ▇▇▇▇▇▇ Inc. or ▇▇▇▇▇▇ ▇▇▇▇▇
has or may have liability either contractually or by operation of law)
in a manner which violates any applicable Environmental Law, or for
which cleanup or corrective action of any kind is required under any
applicable Environmental Law where such violation, cleanup or
corrective action could reasonably be expected to have a Material
Adverse Effect;
(vi) no notice of violation, Lien, complaint, suit, order or other
notice with respect to the environmental condition of any of the
properties on which the NRG ▇▇▇▇▇▇ facility is located (or any other
property with respect to which either NRG ▇▇▇▇▇▇ Inc. or ▇▇▇▇▇▇ ▇▇▇▇▇
has or may have liability either contractually or by operation of law)
is outstanding or, to either such Person's knowledge, threatened
against any such party which could reasonably be expected to result in
a Material Adverse Effect.
To the extent the representations and warranties in this Article 5
specifically relating to (i) NRG ▇▇▇▇▇▇ Inc. or ▇▇▇▇▇▇ ▇▇▇▇▇,
including, without limitation those concerning the Project Agreements
of NRG ▇▇▇▇▇▇ Inc. or ▇▇▇▇▇▇ ▇▇▇▇▇, or Environmental Approvals,
Environmental Claims or Environmental Laws specifically relating to NRG
▇▇▇▇▇▇ Inc. or ▇▇▇▇▇▇ ▇▇▇▇▇ or (ii) the representations and warranties
concerning the assets and properties of NRG ▇▇▇▇▇▇ Inc. and ▇▇▇▇▇▇
▇▇▇▇▇ are untrue or
21
incorrect on the Funding Date due to facts, circumstances, conditions
or events that exist on or occurred prior to the date hereof, the same
shall not be considered to be, and shall not be, a breach of
representation or warranty or of the Agreement.
ARTICLE 6
Covenants
The Borrowers hereby covenant and undertake with the Lender
that, from the date hereof and so long as any principal, interest or
other moneys are owing in respect of this Agreement, under the Note or
under any of the Security Documents:
SECTION 6.01. The Borrowers will, and will procure that NRG
▇▇▇▇▇▇ Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇ will:
(a) Performance of Credit Documents. Duly perform and observe, and
procure the observance and performance by all other parties thereto
(other than the Lender) of, the terms of the Credit Documents;
(b) Notice of Default, Etc. Promptly upon obtaining knowledge thereof
(and in any event within ten (10) days thereof), inform the Lender of
the occurrence of (i) any Event of Default or of any event which, with
the giving of notice or lapse of time, or both, would constitute an
Event of Default, (ii) any litigation or governmental proceeding
pending or threatened against it or against any Affiliate of a Borrower
which could reasonably be expected to have a Material Adverse Effect,
and (iii) any other event or condition which is reasonably likely to
have a Material Adverse Effect on its ability, or the ability of NRG
▇▇▇▇▇▇ Inc. to perform its obligations under the Credit Documents;
(c) Obtain Consents. Obtain every consent and do all other acts and
things which may from time to time be necessary or advisable for the
continued due performance of all obligations of each Borrower and NRG
▇▇▇▇▇▇ Inc. under the Credit Documents;
(d) Financial Information. At the expense of the Borrowers, deliver
to the Lender:
(i) as soon as available but not later than 105 days after the end of
each fiscal year of the Borrowers complete copies of the consolidated
financial reports of the Borrowers, all in reasonable detail, which
shall include at least the consolidated balance sheet of such entity
and its Subsidiaries as of the end of such year and
22
the related consolidated statements of income and sources and uses
of funds for such year, which shall be audited reports prepared by an
accounting firm reasonably acceptable to the Lender;
(ii) as soon as available but not less than 60 days after the end
of each of the first three quarters of each fiscal year of the
Borrowers a quarterly interim consolidated balance sheet of the
Borrowers and their Subsidiaries and the related consolidated profit
and loss statements and sources and uses of funds, all in reasonable
detail, unaudited, but certified to be true and complete by the chief
financial officer of NRGG;
(iii) within 30 days of the filing thereof, copies of all
registration statements and reports on Forms 10-K, 10-Q and 8-K (or
their equivalents) and other material filings which either Borrower
shall have filed with the Securities and Exchange Commission or any
similar governmental authority;
(iv) promptly upon the mailing thereof to the shareholders of the
Borrowers, copies of all financial statements, reports, proxy
statements and other communications provided to the Borrowers'
shareholders; and
(v) such other statements (including, without limitation, monthly
consolidated statements of operating revenues and expenses), operating
logs for the ▇▇▇▇▇▇ ▇▇▇▇▇ facilities, lists of assets and accounts,
budgets, forecasts, reports and other financial information with
respect to the business of the Borrowers as the Lender may from time to
time reasonably request, certified to be true and complete by the chief
financial officer of NRGG;
(e) Corporate Existence. Do or cause to be done, and procure that NRG
▇▇▇▇▇▇ Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇ shall do or cause to be done, all things
necessary to: (a) preserve and keep in full force and effect its
corporate or limited liability company existence; and (b) preserve and
keep in full force and effect all licenses, franchises, permits and
assets necessary to the conduct of its business, except, in the case of
clause (b) only, where the failure to do so could not reasonably be
expected to result in a Material Adverse Effect;
23
(f) Books and Records. Keep, and cause NRG ▇▇▇▇▇▇ Inc. and ▇▇▇▇▇▇
▇▇▇▇▇ to keep, proper and accurate books of record and account in
accordance with GAAP;
(g) Taxes and Assessments. Pay and discharge, and cause NRG ▇▇▇▇▇▇
Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇ to pay and discharge, all material taxes,
assessments and governmental charges or levies imposed upon it or upon
its income or property prior to the date upon which penalties attach
thereto; provided, however, that it shall not be required to pay and
discharge, or cause to be paid and discharged, any such tax,
assessment, charge or levy so long as the legality thereof shall be
contested in good faith and by appropriate proceedings or other acts
and it shall set aside on its books adequate reserves with respect
thereto;
(h) Inspection. Allow, and cause NRG ▇▇▇▇▇▇ Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇ to
allow, any representative or representatives designated by the Lender,
subject to applicable laws and regulations, to visit and inspect any of
its properties, and, on the reasonable request thereof, to examine (at
a location where normally kept) its books of account, records, reports
and other papers and to discuss its affairs, finances and accounts with
its officers, at reasonable times and upon reasonable prior notice;
(i) Compliance with Statutes, Etc. Do or cause to be done, and cause
NRG ▇▇▇▇▇▇ Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇ to do and cause to be done, all things
necessary to comply in all material respects with all material laws,
and the rules and regulations thereunder, applicable to either
Borrower, NRG ▇▇▇▇▇▇ Inc. or ▇▇▇▇▇▇ ▇▇▇▇▇, including, without
limitation, those laws, rules and regulations relating to employee
benefit plans and environmental matters;
(j) Environmental Matters. Promptly upon the occurrence of any of the
following conditions, provide to the Lender a certificate of an officer
thereof, specifying in detail the nature of such condition and its
proposed response or the response of its Affiliates:
(i) its receipt or the receipt by NRG ▇▇▇▇▇▇ Inc. or ▇▇▇▇▇▇ ▇▇▇▇▇ of
any written communication whatsoever that alleges that such person is
not in compliance with any applicable Environmental Law or
Environmental Approval, if such noncompliance could reasonably be
expected to have a Material Adverse Effect,
(ii) knowledge by it, or by NRG ▇▇▇▇▇▇ Inc. or ▇▇▇▇▇▇ ▇▇▇▇▇ that
there exists any Environmental Claim pending or threatened against any
such person, which could reasonably be expected to have a Material
Adverse Effect, or
24
(iii) any release, emission, discharge or disposal of any Material
of Environmental Concern that could form the basis of any Environmental
Claim against it, NRG ▇▇▇▇▇▇ Inc. or ▇▇▇▇▇▇ ▇▇▇▇▇ under applicable
Environmental Law, if such Environmental Claim could reasonably be
expected to have a Material Adverse Effect. Upon the written request
by the Lender, it will submit to the Lender at reasonable intervals, a
report providing an update of the status of any issue or claim
identified in any notice or certificate required pursuant to this
subsection;
(k) ERISA. Forthwith upon learning of the occurrence of any material
liability of the Borrower, NRG ▇▇▇▇▇▇ Inc. or ▇▇▇▇▇▇ ▇▇▇▇▇ or any ERISA
Affiliate pursuant to ERISA in connection with the termination of any
Plan or withdrawal or partial withdrawal of any multi-employer plan (as
defined in ERISA) or of a failure to satisfy the minimum funding
standards of Section 412 of the Code or Part 3 of Title I of ERISA by
any Plan for which the Borrower, NRG ▇▇▇▇▇▇ Inc. or ▇▇▇▇▇▇ ▇▇▇▇▇ or any
ERISA Affiliate is plan administrator (as defined in ERISA), furnish or
cause to be furnished to the Lender written notice thereof;
(l) Maintenance of Properties, Etc. Preserve and maintain good and
marketable title to all of its properties and assets which are
necessary in the conduct of its business in good working order and
condition, ordinary wear and tear excepted, subject to no Liens other
than Permitted Liens;
(m) Distributions. Cause ▇▇▇▇▇▇ ▇▇▇▇▇ to make all permissible
Distributions and cause all such Distributions to be paid by Funding
when funds are needed to reduce the Loan hereunder to the extent
required by Section 2.05(c).
(n) Performance of Project Agreements. Cause ▇▇▇▇▇▇ ▇▇▇▇▇ to (i)
perform and observe all of its covenants and agreements contained in
the Governmental Approvals and any of the Project Agreements to which
it is a party, unless the failure to perform or observe such covenants
and agreements could not reasonably be expected to result in a Material
Adverse Effect, (ii) preserve, protect and defend its rights contained
in the Governmental Approvals and any of the Project Agreements to
which it is a party, unless the failure to preserve, protect or defend
such rights could not reasonably be expected to result in a Material
Adverse Effect and (iii) maintain in full force and effect each of the
Project Agreements to which it is a party and all contracts, permits
and Governmental Approvals relating thereto which are necessary for the
maintenance and operation of its facilities.
25
(o) Operating Logs. Cause ▇▇▇▇▇▇ ▇▇▇▇▇ at its sole cost and expense
to (i) maintain daily operating logs showing, among other things, the
electrical output of its facilities, (ii) keep maintenance and repair
reports in sufficient detail to indicate the nature and date of all
work done, (iii) maintain a current operating manual and complete set
of plans, accounting records and specifications reflecting all
alterations and (iv) maintain all other records, logs and other
materials required by the relevant Project Agreements or any
Governmental Approval;
(p) Maintenance of Insurance. Maintain or cause to be maintained with
insurance companies rated "A-" or better by Best's Insurance Guide and
Key Ratings or other insurance companies of recognized responsibility
reasonably satisfactory to the Lender, insurance in such amounts and
covering such risks as are usually carried by companies engaged in
similar businesses and owning similar properties in the same general
areas in which ▇▇▇▇▇▇ ▇▇▇▇▇ operates, and in any event the insurance
coverages shall not be less than the insurance coverages set forth on
Schedule 5(i). The Borrowers shall, upon the request of the Lender,
promptly provide a schedule indicating the policies maintained by each
of the Borrowers, NRG ▇▇▇▇▇▇ Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇, coverage limits of
liability, effective dates of coverage, insurance carrier names and
policy numbers. Prior to the Funding Date, the Borrowers shall cause
the Lender to be named as an insured party in respect of the ▇▇▇▇▇▇
▇▇▇▇▇ project, for the account of the Lender. Evidence of payment of
premiums for such insurance policies shall be delivered to the Lender
at least thirty (30) days prior to the expiration thereof and such
insurance policies shall be delivered to the Lender promptly upon its
request therefor;
(q) Use of Proceeds. Use the proceeds of the Loan only as set forth
in Section 2.02.
(r) Additional Documents; Filings and Recordings. Execute and deliver
from time to time as reasonably requested by the Lender, at the
Borrowers' expense, such other documents in connection with the rights
and remedies provided for by the Security Documents, as applicable,
which are necessary to consummate the transactions contemplated
therein. Each Borrower and NRG ▇▇▇▇▇▇ Inc. shall, at its own expense,
take all reasonable actions that have been or shall be requested by the
Lender to establish, maintain, protect, perfect and continue the
perfection of the security interests of the Lender created by the
Security Documents including the execution of such instruments, and
providing such other information as may be required to enable the
Lender to effect any such action. Without limiting the generality of
the foregoing, each Borrower and NRG ▇▇▇▇▇▇ Inc. shall execute or cause
to be executed and shall file or cause to be filed such financing
statements, continuation statements, fixture filings, assignments,
mortgages or deed of trust in all places necessary or advisable (in the
opinion of counsel for the
26
Lender) to establish, maintain and perfect such security interests and
in all other places that the Lender shall reasonably request.
SECTION 6.02. Each Borrower will not, and will procure that
NRG ▇▇▇▇▇▇ Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇ will not, without the prior written
consent of the Lender:
(a) Liens. Create, assume or permit to exist, any mortgage, pledge,
lien, charge, encumbrance or any security interest whatsoever upon any
Collateral or the assets of Funding, NRG ▇▇▇▇▇▇ Inc. or ▇▇▇▇▇▇ ▇▇▇▇▇
except Permitted Liens;
(b) Capital Expenditures. Make any capital expenditures (excluding
ordinary or scheduled maintenance) in any calendar year, exceeding
$1,000,000 other than those contemplated by the Project Agreements
relating to the ▇▇▇▇▇▇ ▇▇▇▇▇ facility;
(c) Indebtedness. Incur any Indebtedness except (i) Indebtedness
existing as of the Closing Date, or (ii) so long as no Event of Default
occurs and is continuing: (A) if non-recourse to the Borrowers,
Indebtedness of any Subsidiary of the Borrowers which is formed after
the Funding Date; (B) Indebtedness of Subsidiaries of the Borrowers of
up to $1,000,000 during each calendar year; (C) unsecured Indebtedness
of a Borrower, if subordinated, pursuant to a subordination agreement,
to the Borrower's obligations under the Credit Documents, the terms of
any such Indebtedness to be acceptable to the Lender; (D) Indebtedness
of any Subsidiary of the Borrowers (other than Funding and ▇▇▇▇▇▇
▇▇▇▇▇) if non-recourse to the Borrowers, under interest rate swap
agreements to hedge interest rate exposure for permitted non-recourse
financings; and (E) Indebtedness owing by NRGG under a certain Credit
Agreement expected to be arranged by MeesPierson Capital Corporation
(d) Change in Business. Materially change the nature of its business
or commence any business materially different from its current
business;
(e) Sale or Pledge of Shares. Sell, assign, transfer, pledge or
otherwise convey or dispose of any of the shares or direct or indirect
interest (including by way of spin-off, installment sale or otherwise)
of the capital stock of or other equity interests in Funding, NRG
▇▇▇▇▇▇ Inc. or ▇▇▇▇▇▇ ▇▇▇▇▇, other than in respect of Permitted Liens;
(f) Sale of Assets. Sell, or otherwise dispose of, the assets of
▇▇▇▇▇▇ ▇▇▇▇▇ or any other asset (including by way of spin-off,
installment sale or otherwise) which is substantial in relation to its
assets taken as a whole, except for sales and dispositions of obsolete,
worn or replaced property not used or useful in a Borrower's or any
Subsidiary's business;
(g) Changes in Offices or Names. Change the location of the chief
executive office of the Borrowers, NRG ▇▇▇▇▇▇ Inc. or ▇▇▇▇▇▇ ▇▇▇▇▇, the
office of the
27
chief place of business any such parties, the office of such parties in
which the records relating to the earnings or insurances of or relating
to ▇▇▇▇▇▇ ▇▇▇▇▇ are kept unless the Lender shall have received thirty
(30) days prior written notice of such change;
(h) Consolidation and Merger. Consolidate with, or merge into, any
corporation or other entity, or merge any corporation or other entity
into either Borrower, NRG ▇▇▇▇▇▇ Inc. or ▇▇▇▇▇▇ ▇▇▇▇▇;
(i) Limitation on Dividends. Directly or indirectly declare or pay
any dividend or make any Distribution on its capital stock or to
members, as the case may be; provided, however, that (A) ▇▇▇▇▇▇ ▇▇▇▇▇
shall make Distributions when permissible to Funding; and (B)
Distributions may be paid by Funding to NRGG and by NRGG to its
shareholders if; not less than thirty (30) days prior to the proposed
date of payment of such Distribution the Borrowers shall have delivered
to the Lender a certificate signed by the chief financial officer of
each Borrower stating that principal and interest outstanding on the
Loan does not exceed the Maximum Amount and is not reasonably projected
to exceed the Maximum Amount of the next two Interest Payment Dates and
that after giving effect to such proposed Distribution, no Default or
Event of Default would occur or reasonably be anticipated to occur
and/or be continuing. Distributions may be made to NRGG if the
Certificate contemplated by clause (B) above is delivered;
(j) Amendment, Termination, Etc. of Project Agreements. Terminate,
cancel or suspend, or permit or consent to any termination,
cancellation or suspension of, or enter into or consent to or permit
the assignment of the rights or obligations of any party to, any of the
Project Agreements or Governmental Approvals (other than assignment
thereof to the Collateral Agent). The Borrowers shall not permit
Funding, NRG ▇▇▇▇▇▇ Inc. or ▇▇▇▇▇▇ ▇▇▇▇▇ to, directly or indirectly,
amend, modify, supplement or waive, or permit or consent to the
amendment, modification, supplement or waiver of, any of the provisions
of, or give any consent under, any of the Project Agreements without
(i) first submitting to the Lender a copy of such proposed amendment,
modification, supplement, waiver or consent and (ii) if in the
reasonable judgment of the Lender, such proposed amendment,
modification, supplement, waiver or consent could reasonably be
expected to result in a Material Adverse Effect, the express prior
written consent of the Lender;
(k) Fiscal Year. Change its fiscal year;
(l) Transactions with Affiliates. Enter into any transaction,
including, without limitation, the purchase, sale or exchange of
property or the rendering of any service, with any Affiliate except for
(A) transactions contemplated by existing operations and maintenance
agreements and/or management agreements in respect of the ▇▇▇▇▇▇ ▇▇▇▇▇
facility; (B) transactions contemplated by the April 30, 1996
Management Services
28
Agreement between NRGG and the Lender, and (C) other transactions in
the ordinary course of business and pursuant to the reasonable
requirements of business and upon fair and reasonable terms no less
favorable than would be obtained in an comparable arm's length
transaction with a Person not an Affiliate; and
(m) Investments. Make any Investments, other than Investments made by
NRGG when no Default or Event of Default exists hereunder.
ARTICLE 7
Defaults and Remedies
SECTION 7.01. Events of Default. An "Event of Default"
occurs if:
1. Borrowers default in any payment of interest of any other amount
(other than those specified in (2) below) with respect to the Loan when
the same becomes dues and payable and such default continues for a
period of 30 days;
2. Borrowers default in the payment of the principal of the Loan when
the same become due and payable on the Maturity Date, upon mandatory
prepayment, or otherwise; provided, however, that so long as Borrowers
comply with Section 2.05(c) hereof, no failure to make a scheduled
amortization payment pursuant to Section 2.05(b) shall constitute a
default.
3. Any representation or warranty made by a Borrower, herein, in the
Credit Documents, the Membership Interest Purchase Agreement, the
Assignment and Assumption Agreement or the NRGG Equity Guaranty fails
to be accurate or complete in any material respect or a Borrower fails
to comply with any of its respective agreements contained herein, the
Credit Documents (other than those referred to in (1) or (2) above),
the Membership Interest Purchase Agreement, the Equity Commitment
Agreement or the NRGG Equity Guaranty and such failure continues for 30
days after the notice specified below;
4. An event occurs which entitles the holders of Indebtedness
aggregating in excess of $2,000,000 of a Borrower or any Subsidiary of
a Borrower to accelerate such Indebtedness;
5. A Borrower or any Subsidiary of a Borrower pursuant to or within
the meaning of any Bankruptcy Law;
(a) commences a voluntary case;
29
(b) consents to the entry of an order for relief against it in an
involuntary case;
(c) consents to the appointment of a custodian of it or for any
substantial part of its property; or
(d) makes a general assignment for the benefit of its creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
6. A court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(a) is for relief against a Borrower or any Subsidiary of a Borrower
in an involuntary case;
(b) appoints a custodian of a Borrower of any Subsidiary of a Borrower
or for any substantial part of its property; or
(c) orders the winding up or liquidation of a Borrower or any
Subsidiary of a Borrower;
or any similar relief is granted under any foreign laws and the
order or decree remains unstayed and in effect for 60 days;
7. Any judgment or decree for payment of money in excess of
$2,000,000 or its foreign currency equivalent at the time is entered
against a Borrower or any Subsidiary of a Borrower and is not
discharged and either (a) an enforcement proceeding has been commenced
by any creditor upon such judgment or decree of (b) there is a period
of 60 days following the entry of such judgment or decree during which
such judgment or decree is not discharged, waived or the execution
thereof stayed; or
8. This Agreement, any Credit Document, the Membership Interest
Purchase Agreement, the Equity Commitment Agreement or the NRGG Equity
Guaranty shall cease, for any reason, to be in full force and effect or
a Borrower or any Subsidiary of a Borrower shall so assert in writing.
The foregoing will constitute Events of Default whatever the
reason for any such Event of Default and whether it is voluntary or
involuntary or is effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body.
30
A Default under clause (3) is not an Event of Default until
the Lender notifies a Borrower of the Default and the Borrowers do not
cure such Default within the time specified after receipt of such
notice. Such notice must specify the Default, demand that it be
remedied and state that such notice is a "Notice of Default".
SECTION 7.02. Acceleration. If an Event of Default (other
than an Event of Default specified in Section 7.01(5) or (6) with
respect to a Borrower) occurs and is continuing, the Lender by notice
to a Borrower may declare the principal of and accrued interest on the
Loan to be due and payable. Upon such a declaration, such principal
and interest shall be due and payable immediately. If an Event of
Default specified in Section 7.01(5) or (6) with respect to a Borrower
occurs, the principal of and interest on the Loans shall ipso facto
become and be immediately due and payable without any declaration or
other act on the part of the Lender. The Lender by notice to a
Borrower may rescind an acceleration and its consequences. No such
rescission shall affect any subsequent Default or impair any right
consequent thereto.
SECTION 7.03. Default and Remedies.
(a) If, following the Funding Date, and so long as there shall remain
outstanding any Indebtedness hereunder, an Event of Default occurs and
is continuing, the Lender shall have all of the remedies of a secured
party under the Uniform Commercial Code, including, without limitation,
the right, to notify ▇▇▇▇▇▇ ▇▇▇▇▇ to pay directly to the Lender any
amount payable to either Borrower in respect of the Pledged Interests.
In addition to and not in derogation of any or all of the rights and
remedies granted hereunder to the Lender or otherwise available to the
Lender under applicable law, following the Funding Date and such an
Event of Default, so long as there shall remain any outstanding
Indebtedness hereunder, the Lender shall have the further right and
power, at its sole option, to sell, or otherwise dispose of, the
Collateral (other than Collateral consisting of cash), or any part
thereof, at any one or more public or private sales as permitted by
applicable law, and for that purpose the Lender may take immediate and
exclusive possession of such Collateral, or any part thereof, to the
extent capable of possession.
(b) To the fullest extent permitted by law, each Borrower irrevocably
and expressly waives any right to receive any notice of sale or notice
of any other disposition of all or any part of the Collateral that does
not consist of cash, except that to the extent a Borrower may be
entitled by applicable law to any notice of sale or other disposition
of such Collateral, each Borrower agrees that if such notice is mailed,
postage prepaid, to a Borrower at such Borrower's address hereinafter
specified not less than five (5) days before the time of the sale or
other disposition contemplated therein, such notice shall conclusively
be deemed commercially reasonable and shall fully satisfy any
requirement for giving of said notice. The Lender shall not be
obligated to make any sale of Collateral regardless of notice of sale
having been given. The Lender may adjourn any public or
31
private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at
the time and place which it was so adjourned.
(c) The proceeds realized upon any such disposition, after deduction
for the expenses of retaking, holding, preparing for sale, selling or
the like and reasonable attorneys' fees, legal expenses and costs
incurred by the Lender, shall be applied in accordance with Section
7.06.
(d) The remedies of the Lender hereunder are cumulative and the
exercise of any one or more of the remedies provided herein, or under
the Uniform Commercial Code, shall not be construed as a waiver of any
other rights or remedies of the Lender so long as any part of the
indebtedness evidenced by the Note remains unsatisfied or unperformed.
The making of this Agreement shall not waive or impair any other
security the Lender may have or hereafter acquire for the payment or
performance of the indebtedness evidenced by the Note, nor shall the
making of any such additional security waive or impair this Agreement;
but the Lender may resort to any security it may have in the order it
may be deemed proper.
SECTION 7.04. Other Remedies. If, following the Funding
Date, and so long as there shall remain outstanding any indebtedness
hereunder, an Event of Default occurs and is continuing, the Lender may
pursue any available remedy to collect the payment of principal of or
interest on the Note or to enforce the performance of any provision of
the Note or this Agreement. The Lender may maintain a proceeding even
if it does not possess the Note or does not produce it in the
proceeding. A delay or omission by the Lender in exercising any right
or remedy accruing upon an Event of Default shall not impair the right
or remedy or constitute a waiver of or acquiescence in the Event of
Default. No remedy is exclusive of any other remedy. All available
remedies are cumulative.
SECTION 7.05. Waiver of Past Defaults. The Lender by notice
to Borrowers may waive an existing Default and its consequences. When
a Default is waived, it is deemed cured, but no such waiver shall
extend to any subsequent or other Default or impair any consequent
right.
SECTION 7.06. Priorities. If the Lender collects any money
or property pursuant to this Article 7, it shall pay out the money or
property in the following order:
FIRST: to itself in accordance with the priority set forth
in Section 2.09; and
SECOND: to the extent of any excess, to NRGG.
32
SECTION 7.07. Undertaking for Costs. In any suit for the
enforcement of any right of remedy under this Agreement a court in its
discretion may require the filing by any party litigant in the suit of
an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in the suit, having due regard to the
merits and good faith of the claims or defenses made by the party
litigant.
SECTION 7.08. Waiver of Stay or Extension Laws. The
Borrowers (to the extent permitted by applicable law) shall not at any
time insist upon, or plead, or in any manner whatsoever claim or take
the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Agreement; and each Borrower (to
the extent that it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law, and shall not hinder, delay or
impede the execution of any power herein granted to the Lender, but
shall suffer and permit the execution of every such power as though no
such law had been enacted.
ARTICLE 8
Subordination; Waivers
SECTION 8.01. Subordination. The Indebtedness evidenced by
the Note is subordinate in certain respects to (a) the Secured
Obligations under and as that term is defined in the Pledge and
Security Agreement by Funding and NRG ▇▇▇▇▇▇ Inc. in favor of the
Collateral Agent under and as that term is defined in the Construction
and Term Loan Agreement dated as of September 15, 1997 by and between
▇▇▇▇▇▇ ▇▇▇▇▇, The Chase Manhattan Bank, as Collateral Agent and as
Agent Bank, and the other Banks party thereto, to the extent and in
the manner provided in that certain Subordination Agreement dated as of
December 10, 1997 by and between The Chase Manhattan Bank as Collateral
Agent and the Lender, and (b) the Indebtedness (the "MeesPierson
Obligations") under and as that term is defined in that certain Credit
Agreement expected to be entered into by and between NRGG, MeesPierson
Capital Corporation and the other Lenders party thereto (collectively
the "MeesPierson Lenders"), to the extent and in the manner provided
in that certain Subordination Agreement by and between those parties
and the Lender dated as of December 10, 1997. Each Borrower shall
cause all other Indebtedness incurred by it to be subordinated on terms
and conditions satisfactory to the Lender, to the prior payment in full
of the Note and that the subordination is for the benefit of and
enforceable by the holders of the Note. Each Borrower acknowledges and
agrees that the terms of the subordination agreements contemplated in
this paragraph define the relative rights of its creditors between such
creditors and in no way affect the obligations of the Borrowers to the
Lender.
33
SECTION 8.02. Waiver of Contribution, Subrogation, Other Rights.
Each Borrower hereby agrees that, from the date of this Agreement until
the MeesPierson Obligations have each been indefeasibly paid in full,
or this Agreement has been earlier terminated, it will not exercise
any rights which it may have or acquire, at law or in equity, by way of
contribution, subrogation, indemnity or similar principles as a result
of payments made by either Borrower to the Lender hereunder. Each
Borrower expressly acknowledges that it will benefit directly from the
Loan hereunder and that the obligations hereunder are intended to be
direct obligations and not a guarantee or in the nature of a guarantee.
If, notwithstanding the express intention of the parties to the
contrary, all or any portion of the obligations of either Borrower
hereunder are deemed a guarantee or in the nature of a guarantee, then
each Borrower hereby agrees that, from the date of this Agreement until
the MeesPierson Obligations have each been indefeasibly paid in full,
or this Agreement has been earlier terminated it will not exercise any
suretyship and similar defenses and rights arising as a result of the
Loan hereunder. This Section 8.02 shall inure to the benefit of the
Lender and to the benefit of the MeesPierson Lenders.
ARTICLE 9
Miscellaneous
SECTION 9.01. Amendments and Waivers. Except as otherwise
expressly set forth in this Agreement, no Credit Document nor any terms
thereof may be amended, supplemented, waived or modified except in
writing signed by the Lender and the Borrowers.
SECTION 9.02. Notices. All notices, requests and demands to
or upon the respective parties hereto to be effective shall be in
writing (including by telecopy or telex, if one is listed), and, unless
otherwise expressly provided herein, shall be deemed to have been duly
given or made when delivered by hand, or three Business Days after
being deposited in the mail, postage prepaid, or, in the case of
telecopy notice, when sent, confirmation of receipt received, or, in
the case of telex notice, when sent, answer back received, address as
follows, or to such other address as may be hereafter notified by the
respective parties hereto and any further holders of the Note:
If to NRGG: NRG Generating (U.S.) Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President and Chief Executive
Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier:(▇▇▇) ▇▇▇-▇▇▇▇
34
With a copy to: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
NationsBank Plaza, Suite 5200
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: M. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier:(▇▇▇) ▇▇▇-▇▇▇▇
If to NRGG Funding: NRG Generating (U.S.) Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President and Chief Executive
Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier:(▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
NationsBank Plaza, Suite 5200
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: M. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier:(▇▇▇) ▇▇▇-▇▇▇▇
If to Lender: NRG Energy, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Treasurer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier:(▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: NRG Energy, Inc.
Legal Department
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Vice President and General
Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier (▇▇▇) ▇▇▇-▇▇▇▇
provided that any notice, request or demand to or upon the Lender
pursuant to Section 2.05 shall not be effective until received.
35
SECTION 9.03. No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the Lender, any
right, remedy, power or privilege hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise
thereof or the exercise or any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and
privileges provided by law.
SECTION 9.04. Payment of Expenses and Taxes. The Borrowers
jointly and severally agree (a) to pay the Lender on the Funding Date a
fee in the amount of $100,000; (b) to pay the Lender on the Funding
Date and on each anniversary of the Funding Date the amount of $50,000
in respect of expenses incurred in connection with the development,
preparation and the execution and general administration of the Credit
Documents and in addition, to pay or reimburse the Lender for all its
reasonable costs and expenses incurred in connection with any
amendment, supplement or modification to the Credit Documents,
including the reasonable fees and disbursements of counsel to the
Lender, (c) to pay or reimburse the Lender for all its costs and
expenses incurred in connection with, and to pay, indemnify, and hold
the Lender harmless from and against, any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever
arising out of or in connection with the enforcement or preservation of
any rights under any Credit Document, including reasonable fees and
disbursements of counsel to the Lender incurred in connection with the
foregoing, (d) to pay, indemnify, and to hold the Lender harmless from
any and all recording and filing fees and any and all liabilities with
respect to, or resulting from any delay in paying, stamp, excise and
other similar taxes (other than withholding taxes), if any, which may
be payable or determined to be payable in connection with the execution
and delivery of, or consummation of any of the transactions
contemplated by, or any amendment, supplement or modification of, or
any waiver or consent under or in respect of, any Credit Document and
any such other documents, and (e) to pay, indemnify, and hold the
Lender and its respective Affiliates, officers and directors harmless
from and against any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever (including reasonable
fees and disbursements of counsel) which may be incurred by or asserted
against the Lender or such Affiliates, officers or directors arising
out of or in connection with any investigation, litigation or
proceeding related to this Agreement, the other Credit Documents, the
proceeds of the Loan and the transactions contemplated by or in respect
of such use of proceeds, or any of the other transactions contemplated
hereby, whether or not the Lender or such Affiliates, officers or
directors is a party thereto, including any of the foregoing relating
to the violation of, noncompliance with or liability under, any
environmental law or regulation applicable to the operations of a
Borrower or any Subsidiary of a Borrower or any of the facilities and
properties owned,
36
leased or operated by a Borrower or any Subsidiary of a Borrower (all
the foregoing, collectively, the "Indemnified Liabilities"); provided
that the Borrowers shall have no obligation hereunder with respect to
indemnified liabilities of the Lender or any of its respective
Affiliates, officers and directors arising from (i) the gross
negligence or willful misconduct of the Lender or its directors or
officers or (ii) legal proceedings commenced against the Lender by any
security holder or creditor thereof arising out of and based upon
rights afforded any such security holder or creditor solely in its
capacity as such. The agreements in this Section 9.04 shall survive
repayment of the Note and all other documents payable hereunder.
SECTION 9.05. Successors and Assigns; Participations and
Assignments. This Agreement shall be binding upon and insure to the
benefit of the Borrowers, the Lender, all future holders of the Note
and the Loan, and their respective successors and assigns, except that
no party hereto may assign or transfer any of its rights or obligations
under this Agreement without the prior written consent of the other
parties hereto.
SECTION 9.06. Counterparts. This Agreements may be executed
by one or more of the parties to this Agreement on any number of
separate counterparts and all of said counterparts taken together shall
be deemed to constitute one and the same instrument.
SECTION 9.07. Governing Law; No Third Party Rights. This
Agreement and the Note and the rights and obligations of the parties
under this Agreement and the Note shall be governed by, and construed
and interpreted in accordance with, the law of the State of Minnesota
and applicable laws of the United States of America. This Agreement is
solely for the benefit of the parties hereto and their respective
successors and assigns, and, except as expressly provided in Section
8.02, no other Person shall have any right, benefit, priority or
interest under, or because of the existence of, this Agreement.
SECTION 9.08. Submission to Jurisdiction; Waivers.
9
(a) Each party to this Agreement hereby irrevocably and
unconditionally;
(i) submits for itself and its property in any legal action or
proceedings relating to this Agreement or any of the other Credit
Documents, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the
courts of the State of Minnesota, the courts of the United States of
America for Minnesota and appellate courts from any thereof;
37
(ii) consents that any such action or proceeding may be brought in
such courts, and waives any objection that it may now or hereafter have
to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to such party at its address et forth in Section 9.02; and
(iv) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit
the right to ▇▇▇ in any other jurisdiction.
(b) Each party hereto unconditionally waives trial by jury in any
legal action or proceeding referred to in paragraph (a) above and any
counterclaim therein.
SECTION 9.09. Interest. Each provision in this Agreement
and each other Credit Document is expressly limited so that in no event
whatsoever shall the amount paid, or otherwise agreed to be paid, by
the Borrowers for the use, forbearance or detention of the money to be
loaned under this Agreement or any other Credit Document or otherwise
(including any sums paid as required by any covenant or obligation
contained herein or in any other Credit Document which is for the use,
forbearance or detention of such money), exceed that amount of money
which would cause the effective rate of interest to exceed the highest
lawful rate permitted by applicable law (the "Highest Lawful Rate"),
and all amounts owed under this Agreement and each other Credit
Document shall be held to be subject to reduction to the effect that
such amounts so paid or agreed to be paid which are for the use,
forbearance or detention of money under this Agreement or such Credit
Document shall in no event exceed that amount of money which would
cause the effective rate of interest to exceed the Highest Lawful Rate.
Notwithstanding any provision in this Agreement or any other Credit
Document to the contrary, if the maturity of the Loan or the
obligations in respect of the other Credit Documents are accelerated
for any reason, or in the event of any prepayment of all or any portion
of the Loan or the obligations in respect of the other Credit Documents
by the Borrowers or in any other event, earned interest on the Loan and
such other obligations of the Borrowers may never exceed the Highest
Lawful Rate, and any unearned interests otherwise payable on the Loan
or the obligations in respect of the other Credit Documents that is in
excess of the Highest Lawful Rate shall be canceled automatically as
of the date of such acceleration or prepayment or other such event and
(if theretofore paid) shall, at the option of the holder
38
of the Loan or such other obligations, be either refunded to the
Borrowers or credited on the principal of the Loan. In determining
whether or not the interest paid or payable, under any specific
contingency, exceeds the Highest Lawful Rate, the Borrowers and the
Lender shall, to the maximum extent permitted by applicable law,
amortize, prorate, allocate and spread, in equal parts during the
period of the actual term of this Agreement, all interest at any time
contracted for, charged, received or reserved in connection with this
Agreement.
39
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly
authorized officers as of the day and year first above written.
NRG GENERATING (U.S.) INC.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
President and Chief Executive Officer
NRGG FUNDING INC.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
President and Chief Executive Officer
NRG ENERGY, INC.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Chairman, President and Chief Executive
Officer
40
EXHIBIT A
December 10, 1997
NOTE
FOR VALUE RECEIVED, the undersigned, NRG GENERATING (U.S.)
INC., a Delaware corporation ("NRGG") and NRGG Funding Inc., a Delaware
corporation ("Funding"), hereby jointly, severally and unconditionally
promise to pay to the order of NRG ENERGY, INC., a Delaware
corporation, or registered assigns (the "Lender"), at the office of the
Lender at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ or by
wire transfer in accordance with such instructions as the Lender may
require, in lawful money of the United States of America and in
immediately available funds, the principal amount of up to $22,000,000
or, if less, the aggregate unpaid principal amount of the Loan made by
the Lender pursuant to Section 2.01 of the Loan Agreement referred to
below (in either case, to be paid together with any accrued interest
not required to be paid currently in cash), which sum shall be due and
payable in such amounts and on such dates as are set forth in the
Supplemental Loan Agreement, dated as of December 10, 1997among NRGG
and Funding (each a "Borrower" and collectively the "Borrowers") and
the Lender (the "Loan Agreement"; terms defined therein being used
herein as so defined). The undersigned further agrees to pay interest
at said office or to such account, in like money, from the date hereof
on the unpaid principal amount hereof from time to time outstanding at
the rates and on the dates specified in Section 2.06 of the Loan
Agreement.
All parties now and hereafter liable with respect to this
Note, whether maker, principal, surety, guarantor, endorser or
otherwise, hereby waive diligence, presentment, demand, protest and
notice of any kind whatsoever. The nonexercise by the holder of this
Note of any of its rights hereunder in any particular instance shall
not constitute a waiver thereof in that of any subsequent instance.
This Note is the Note referred to in the Loan Agreement,
which Loan Agreement, among other things, contains provisions for the
acceleration of the maturity hereof upon the happening of certain
events, for optional and mandatory prepayment of the principal hereof
prior to the maturity hereof and for the amendment or waiver of certain
provisions of the Loan Agreement, all upon the terms and conditions
therein specified.
This Note shall be construed in accordance with and governed
by the laws of the State of Minnesota and any applicable laws of the
United States of America.
THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH
THE TERMS OF THE LOAN AGREEMENT. TRANSFERS OF THIS NOTE MUST BE
RECORDED IN THE REGISTER MAINTAINED BY THE LENDER PURSUANT TO THE TERMS
OF THE LOAN AGREEMENT.
THIS NOTE IS SUBJECT TO THE SUBORDINATION AGREEMENT, DATED AS
OF DECEMBER 10, 1997, AMONG NRGG, THE LENDER AND MEESPIERSON CAPITAL
CORPORATION UNDER WHICH THIS NOTE AND NRGG'S OBLIGATIONS HEREUNDER ARE,
SUBORDINATED IN THE MANNER SET FORTH THEREIN TO THE PRIOR PAYMENT OF
CERTAIN OBLIGATIONS TO THE HOLDERS OF SENIOR INDEBTEDNESS AS DEFINED
THEREIN.
THIS NOTE IS FURTHER SUJECT TO THE SUBORDINATION PROVISIONS
SET FORTH IN THE SUBORDINATION AGREEMENT, DATED AS OF DECEMBER 10,
1997, BETWEEN THE LENDER AND THE CHASE MANHATTAN BANK IN ITS CAPACITY
AS COLLATERAL AGENT. A COPY OF THAT SUBORDINATION AGREEMENT IS ON
FILE WITH NRGG, FUNDING AND NRG ▇▇▇▇▇▇ INC. AND IS AVAILABLE FOR
INSPECTION AT THEIR RESPECTIVE OFFICES.
NRG GENERATING (U.S.) INC.
______________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
President and Chief Executive Officer
NRGG FUNDING INC.
______________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
President and Chief Executive Officer
2
EXHIBIT B
AMORTIZATION SCHEDULE
Principal Reduction
Date Reduction Amount Maximum Amount
3/31/99 $927,190.45 $21,070,441.55
6/30/99 $950,370.21 $20,120,071.34
9/30/99 $974,129.47 $19,145,941.87
12/31/99 $998,482.70 $18,147,459.17
3/31/00 $1,226,559.77 $16,920,899.40
6/30/00 $1,257,223.77 $15,663,675.63
9/30/00 $1,288,654.36 $14,375,021.27
12/31/00 $1,320,870.72 $13,054,150.56
3/31/01 $666,826.74 $12,387,323.82
6/30/01 $683,497.40 $11,703,826.42
9/30/01 $700,584.84 $11,003,241.58
12/31/01 $718,099.46 $10,285,142.12
3/31/02 $623,366.45 $9,661,775.67
6/30/02 $638,950.61 $9,022,825.06
9/30/02 $654,924.37 $8,367,900.69
12/31/02 $671,297.48 $7,696,603.20
3/31/03 $570,433.67 $7,126,169.53
6/30/03 $584,694.51 $6,541,475.02
9/30/03 $599,311.87 $5,942,163.15
12/31/03 $614,294.67 $5,327,868.48
3/31/04 $626,391.54 $4,701,476.94
6/30/04 $642,051.33 $4,059,425.61
9/30/04 $658,102.61 $3,401,323.00
12/31/04 $3,401,323.00 $0.00
Schedule 5(b)
Capitalization
NRG Generating (U.S.) Inc.
20,000,000 shares of $.01 par value preferred stock are authorized
None of these shares of preferred stock are issued or outstanding
50,000,000 shares of $.01 par value common stock are authorized
6,871,069 shares of $.01 par value common stock are issued
6,836,769 shares of $.01 par value common stock are outstanding
34,300 shares of $.01 par value common stock held as treasury stock
NRGG Funding Inc.
1000 shares of common stock without par value are authorized
1000 shares are issued and outstanding to NRG Generating (U.S.) Inc.
As of the date of the consummation of the transactions contemplated by
the Membership Interest Purchase Agreement:
NRG ▇▇▇▇▇▇ Inc.
1,000 shares of common stock with $1.00 par value are authorized
1,000 shares are issued are issued and outstanding to NRGG Funding
Inc.
NRG (▇▇▇▇▇▇) ▇▇▇▇▇, LLC
Indeterminate number of membership interests
99% of such interests are owned by NRGG Funding Inc.
1% of such interests are owned by NRG ▇▇▇▇▇▇ Inc.
Schedule 5(f)
Litigation
NRG Generating (U.S.) Inc.
1. ▇▇▇▇▇▇▇, et al. ▇. ▇'▇▇▇▇▇ Environmental Energy, Inc., et al.,
United States District Court for the Eastern District of Pennsylvania,
Civil Action No. 94-cv-4577, filed July 27, 1997.
This action was filed by certain purchaser's of NRG Generating
(U.S.) Inc.'s (the "Company") Class A Common Stock (the "Common Stock")
during the class period who allege various violations of the Federal
securities laws. The plaintiffs claim that certain material
misrepresentations and nondisclosures concerning the Company's
financial conditions and prospects allegedly caused the price of the
Common Stock to be artificially inflated during the class period.
Plaintiff's counsel has been engaging in discovery. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ LLP entered an appearance on behalf of the Company. Motions to
dismiss by the director defendants remain pending.
2. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇, United States District Court,
Eastern District of Pennsylvania, Civil Action No. 94-CV-5686, filed
October 25, 1995.
This action was filed by purchasers of O'Brien debentures during
the class period. The plaintiffs object to treatment of the class
under the bankruptcy plan. This matter has been consolidate with the
▇▇▇▇▇▇▇ class action case described in paragraph number 1 above.
Plaintiff's counsel has been engaging in discovery. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
LLP entered an appearance on behalf of the Company. Motions to dismiss
by the director defendants remain pending.
3. ▇▇▇▇▇▇▇ Coal & Disposal, Inc. v. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., O'Brien
Energy Systems, Inc., and ▇▇▇▇▇ Corporation, Court of Common Pleas of
Allegheny County, Pennsylvania, Civil action No. GD96-2005, filed
February 2, 1996.
This action arises out of a permanent consent decree in ▇▇▇▇▇
Corporation ▇. ▇'▇▇▇▇▇ Energy Services, Inc. and ▇▇▇▇▇▇▇ Coal &
Disposal, Inc., Court of Common Pleas of Allegheny County,
Pennsylvania, Civil Action No. GD94-5785 in which the parties agreed to
a certain payment schedule for the extraction of gas from a landfill
site. The decree contemplated an escrow/lockbox arrangement (the
"Arrangement") whereby the Company made payments to the escrow/lockbox
instead of to ▇▇▇▇▇ for collection by the landfill owner, ▇▇▇▇▇▇▇. The
Arrangement was not implemented due to O'Brien's
2
bankruptcy; however, the Company advises that all payments due were
paid to ▇▇▇▇▇. The plaintiff and co-defendants are in agreement as to
this fact and the Company appears to be named simply as a party to the
prior consent decree. Plaintiff's counsel's staff reports that this
matter has been resolved, and the Company is awaiting confirmation of
the final order.
4. ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ Operations, Inc. v. NRG Generating (U.S.)
Inc.; NRG Generating (Newark) Cogeneration Inc.; NRG Generating
(▇▇▇▇▇▇) Cogeneration Inc.; NRG Energy, Inc., Superior Court of New
Jersey, Middlesex County, No. L-5071-97
The suit alleges a claim based on contract and tort seeking to
recover for allegedly wrongful termination of the operations and
maintenance contracts of the Newark and ▇▇▇▇▇▇ facilities. ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇ Operations, Inc.. ("SSOI") is seeking $300,000 in special
damages and an unspecified amount in general and punitive damages. NRG
Generating (U.S.) Inc. ("NRGG") has counterclaim for damages due to
permit violations and the Newark and ▇▇▇▇▇▇ facilities while SSOI was
the operator in those facilities.
5. In re: O'Brien Environmental Energy, Case No. 94-26723, U.S.
Bankruptcy Court
The confirmation plan in the O'Brien Environmental Energy, Inc.
bankruptcy was consummated on April 30, 1996. Subsequent to
consummation, the reorganized debtor and the unsecured creditors'
committee have been working to conclude certain matters still pending
before the bankruptcy court. Such matters include objections to claims
and the payment of professional fees. Presently, there are still a few
claims and objections which have to be litigated. In addition, several
orders of the bankruptcy court are under appeal including the order
confirming the reorganization plan and an order denying compensation to
the unsuccessful bidder at the January 1996 auction.
6. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ v. NRG Generating (U.S.) Inc., NRG Energy, Inc.,
and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Superior Court of New Jersey, Camden County,
Docket No. L-4283-97, filed on or about May 20, 1997.
Plaintiff alleges sexual harassment in violation of the New Jersey
Law Against Discrimination, intentional infliction of emotional
distress, negligent infliction of emotional distress, invasion of
privacy, negligent supervision, and negligent retention. Defendant
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ was Plaintiff's supervisor and is her alleged
harasser. An Answer was filed on behalf of NRG Generating (U.S.) Inc.
on or about July 18, 1997, and a Motion to Dismiss was filed on behalf
on NRG Energy, Inc. on that same date. The Motion to Dismiss was
denied, and NRG Energy, Inc. subsequently filed its answer in early
October.
7. Additional Potential Litigation
3
NRG Generating (U.S.) Inc. has been contacted by a lawyer in
Philadelphia regarding a possible slip and fall claim from ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, a former O'Brien employee, based upon an accident which
occurred in front of the former O'Brien headquarters in January 1996
while she was on her way to work.
8. Litigation Defended by Insurer
NRG Generating (U.S.) Inc. has other litigation that is being
defended by its insurer.
NRGG Funding Inc.
None.
NRG ▇▇▇▇▇▇ Inc. and NRG (▇▇▇▇▇▇) Cogen, LLC
To the Borrowers' knowledge, except as set forth on Schedule 4.5
to the Membership Interest Purchase Agreement, there is no pending
litigation against either NRG ▇▇▇▇▇▇ Inc. or NRG (▇▇▇▇▇▇) Cogen, LLC.
4
Schedule 5(i)
Insurance
A list of NRG Generating (U.S.) Inc.'s material insurance policies is
attached.
NRGG Funding has no material insurance policies.
As wholly-owned subsidiaries of NRG Energy, Inc., NRG ▇▇▇▇▇▇ Inc. and
NRG (▇▇▇▇▇▇) Cogen, LLC have the following insurance policies:
1. Commercial General Liability for $1 million/$2 million is with
Federal Insurance Company;
2. Excess Liability for $25 million is with Associated Electric & Gas
Insurance Services Limited;
3. Auto is with Federal Insurance Company; and
4. Workers Compensation is with Lumberman's Underwriting Alliance.
5
Schedule 5(o)
Security Interests
1. Required Consents
(a) Consent of The Chase Manhattan Bank and such other banks as
required by the Construction and Term Loan Agreement dated as
of September 15, 1997 among NRG (▇▇▇▇▇▇) ▇▇▇▇▇, LLC, the
Banks (as defined by that agreement), The Chase Manhattan
Bank, as Agent Bank and The Chase Manhattan Bank, as
Collateral Agent.
(b) Expiration or early termination of the applicable waiting
period under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act, consent of The Chase
Manhattan Bank and such other banks as are necessary to
effectuate the arrangements contemplated in Sections 2.2(a)
through 2.2(d) of the Membership Interest Purchase Agreement,
completion of the arrangement contemplated in Section 2.2(b)
of the Membership Interest Purchase Agreement regarding the
ESA Obligations, and completion of the arrangement
contemplated in Section 2.2(d) of the Membership Purchase
Agreement regarding the Supplemental Loan Agreement.
(c) Execution of one or more Subordination Agreements in
connection with a certain Credit Agreement to be entered into
among NRGG, MeesPiersen Capital Corporation and the other
Lenders party thereto.
2. Principal Place of Business
(a) NRGG Funding Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(b) As of the date of the consummation of the transactions
contemplated by the Membership Interest Purchase Agreement:
NRG ▇▇▇▇▇▇ Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
3. Corporate and Trade Names
(a) NRGG Funding Inc.
None
6
(b) NRG ▇▇▇▇▇▇ Inc.
To the Borrowers' knowledge, NRG ▇▇▇▇▇▇ Inc. has not
transacted any business during the five year period prior to
the date of this Agreement under any other name than NRG
▇▇▇▇▇▇ Inc.
7
Schedule 5(r)
Assets
1. Exemptions to valid and sufficient title:
(a) Permitted Liens
(b) The option in favor of Millennium Petrochemicals Inc. under
the Energy Services Agreement between it and NRG (▇▇▇▇▇▇)
Cogen, LLC dated June 6, 1997.
(c) Exceptions to valid and sufficient title on real property
leased or owned by the Borrowers include all encumbrances
listed on this schedule, all matters of public record as of
the date hereof, and all taxes for 1997 and subsequent years.
2. Other security interests in the collateral :
(a) Security Interests granted in connection with Permitted
Liens.
8
Schedule 5(t)
Transactions
None.
9