Exhibit 10.8.7
ASSIGNMENT AND SECURITY AGREEMENT
by and between
NRG GENERATING (XXXXXX) COGENERATION INC.
and
CREDIT SUISSE, as Agent
Dated as of June 28, 1996
TABLE OF CONTENTS
Page
1. Definitions 1
2. Creation of Security Interest 2
3. Delivery of Collateral; Perfection and Use
of Accounts 6
4. Representations and Warranties 6
5. Covenants and Agreements 7
6. Use of the Accounts 10
7. Debtors' Obligations upon Event of Default 10
8. Remedies; Rights Upon Event of Default 10
9. Application of Proceeds 13
10. Assignment of Permits 13
11. Security Interest Absolute 13
12. Agent Appointed Attorney-in-Fact 14
13. Agent May Perform 15
14. No Duty on Agent's Part; Limitation
on Agent's Obligations 16
15. Reasonable Care 16
16. Role of Agent 17
17. Absence of Fiduciary Relation 17
18. Survival of Representations and Warranties 17
19. Notices 17
20. No Waiver; Cumulative Remedies 17
21. Severability 18
22. Exculpatory Provisions; Reliance by Agent 18
23. Amendment 19
24. Successors and Assigns 19
25. Number and Gender 19
26. Headings Descriptive 19
27. Governing Law; Jurisdiction 19
28. Counterparts 19
29. Continuing Security Interest; Xxxxxxxxxxx 00
00. Payments Set Aside 20
Schedule
Schedule A: Financing Statement Filings
(i)
ASSIGNMENT AND SECURITY AGREEMENT
This ASSIGNMENT AND SECURITY AGREEMENT (this "Security
Agreement"), dated as of June 28, 1996 by and between NRG GENERATING
(XXXXXX) COGENERATION INC., a Delaware corporation ("Debtor"), and
CREDIT SUISSE, as agent ("Agent"), on behalf of and for the benefit of
the Secured Parties under the Credit Agreement (as defined below).
W I T N E S S E T H :
WHEREAS, Debtor is the owner of a power plant located in
Xxxxxx, New Jersey;
WHEREAS, Debtor has entered into the Credit Agreement, dated
as of May 17, 1996, by and among (i) Debtor and NRG Generating (Newark)
Cogeneration Inc., a Delaware corporation ("NRG Newark"), (ii) Credit
Suisse, Greenwich Funding Corporation and each Purchasing Lender and
(iii) Agent (as the same may be amended, modified or supplemented from
time to time, the "Credit Agreement"), pursuant to which the Lenders
are willing to provide the Loans and the Commitments to Debtor and NRG
Newark on the terms and subject to the conditions set forth in the
Credit Agreement;
WHEREAS, it is a condition precedent to the making of the
Additional Loan by the Lenders under the Credit Agreement that Debtor
shall have granted the security interest contemplated by this Security
Agreement to Agent for the equal and ratable benefit of the Secured
Parties to secure the obligations of Debtor and NRG Newark under the
Credit Agreement and the other Loan Instruments;
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, and in order to induce the Lenders to make the
Additional Loan and to make available the Debt Service Line of Credit
Facility Commitment under the Credit Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. Definitions.
For purposes of this Security Agreement and unless the
context otherwise requires, all capitalized terms used herein which are
defined in the Credit Agreement (and not otherwise defined herein)
shall have their respective meanings as therein defined. For purposes
of this Security Agreement, all other terms used herein and not
otherwise defined herein which are defined in Article 9 of the Uniform
Commercial Code (as the same may be in effect in the State of New York
or any other applicable jurisdiction, the "Code"), shall have their
respective meanings as therein defined.
2. Creation of Security Interest.
(a) As security for the full payment or performance when due
(whether at stated maturity, by acceleration or otherwise) of any and
all of the Obligations (as defined below) now existing or hereafter
arising, Debtor hereby grants to and creates in favor of Agent, for the
equal and ratable benefit of the Secured Parties, a lien on and first
priority security interest (the "Security Interest") in all right,
title and interest of Debtor in, to and under the following collateral,
whether now existing or hereafter acquired (the "Collateral"):
(A) The following agreements:
(i) the Xxxxxx Power Purchase Agreement;
(ii) the Xxxxxx Steam Agreement;
(iii) the Xxxxxx Ground Lease;
(iv) the Xxxxxx Operations and Maintenance
Agreement;
(v) the Wholesale Power Purchase Agreement;
(vi) the Agreement, dated as of May 1, 1996, by
and among Xxxxxxx & Xxxxxxxxx Operations, Inc.,
NRG Generating (Newark) Cogeneration Inc., Debtor,
NRG Generating (U.S.) Inc. and Xxxxxxx & Xxxxxxxxx
Services, Inc.;
(vii) the Xxxxxx Operating Guaranty;
(viii) the consent of each party (other than
Debtor) to each of the Project Documents, where
applicable, to the assignment thereof by either
Debtor to Agent for the benefit of the Secured
Parties;
(ix) the Insurance Policies applicable to the
Xxxxxx Project;
(x) each Xxxxxx Permitted Contract which does
not, by its terms, prohibit the assignment thereof
as security in the manner contemplated herein or
the assignment of which (as contemplated herein)
would constitute a breach of or a default under
such Xxxxxx Permitted Contract;
(xi) the Tax Indemnification Agreement;
(xii) each Interest Rate Hedge Agreement; and
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(xiii) any other agreement, commitment or
understanding executed by (or on behalf of) Debtor
in connection with the Xxxxxx Project or any of
the Xxxxxx Project Documents (other than Xxxxxx
Permitted Contracts not assigned pursuant to
clause (x) above);
as each such document may be amended, supplemented or otherwise
modified from time to time (said documents, as amended,
supplemented or modified, being individually referred to herein as
an "Assigned Agreement" and collectively referred to herein as the
"Assigned Agreements"), including, without limitation, (1) all
rights of Debtor to receive moneys due and to become due under or
pursuant to the Assigned Agreements, (2) all rights of Debtor to
receive proceeds of any performance or payment bond, insurance,
indemnity, warranty or guaranty with respect to the Assigned
Agreements, (3) all claims of Debtor for damages arising out of or
for breach of or default under the Assigned Agreements and (4) all
rights of Debtor to take any action to terminate, amend,
supplement, modify or waive performance of the Assigned
Agreements, to perform thereunder and to compel performance and
otherwise exercise all remedies thereunder; provided, however,
unless an Event of Default shall have occurred and be continuing,
Debtor may exercise all rights, interests and benefits under the
Assigned Agreements to which it is a party in any lawful manner
not inconsistent with this Security Agreement, the Credit
Agreement or any of the other Loan Instruments;
(B) (i) the Accounts (and any sub-accounts opened within any
Account) and each cash collateral account or other bank account,
if any, established by Agent (and designated by Agent as an
Account) on behalf of Debtor in connection with the Loan
Instruments, all sums of money, from any source whatsoever, now or
hereafter transferred to and comprising the Accounts, including,
without limitation, all credit balances therein, any and all
funds, cash, investments, instruments and securities at any time
on deposit in the Accounts, and any and all interest and dividends
or other income derived from any such monies, credit balances,
funds, cash, investments, instruments and securities, and (ii) all
statements, certificates, passbooks and instruments representing
the Accounts and all other property from time to time received,
receivable or otherwise distributed in respect of or in exchange
for the Accounts;
(C) All automobiles, trucks, boats and other rolling stock
or moveable personal property ("Rolling Stock"), including Rolling
Stock for which the title thereto is evidenced by a certificate of
title issued by the United States or a state which permits or
requires a lien thereon to be evidenced upon such certificate, in
which Debtor now or at any time in the future may have an
interest;
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(D) All authorizations, consents, approvals, waivers,
exemptions, variances, registrations, leases, tariffs,
certifications, franchises, permissions, permits and licenses now
or hereafter of, and filings and declarations now or hereafter
with, and rulings now or hereafter by, any Governmental Authority
(including, without limitation, the QF Certificate), including
those with respect to the reconstruction, repair, alteration,
addition, improvement, replacement, use, operation or management
of the Xxxxxx Project (including, without limitation, all
Government Approvals now or hereafter held in the name or for the
benefit of Debtor) (collectively, the "Permits"); provided that
any of the Permits which by their terms or by operation of law
would become void, voidable, terminable or revocable or would
constitute a breach or default thereunder if pledged or assigned
hereunder or if a security interest therein were granted hereunder
are expressly excepted and excluded from the lien and terms of
this Security Agreement to the extent necessary to avoid such
voidness, violability, terminability or revocability;
(E) All equipment, machinery, apparatus, installations,
facilities and other tangible property (the "Equipment") in which
Debtor has an interest in on the date hereof or which is hereafter
acquired by Debtor;
(F) All accounts (other than the Accounts) now or hereafter
owned by Debtor, including, without limitation, any and all of
Debtor's currently existing and future accounts receivable and
contract rights and all agreements, rights, interests, inventory,
goods, chattel paper, documents, instruments, general intangibles,
fixtures, trade fixtures, consumer goods, money and other assets
owned by Debtor on the date hereof or hereafter arising or
acquired, including, without limitation, the improvements and
equipment associated with the Xxxxxx Project, and designs, plans
and specifications relating to the Xxxxxx Project owned by Debtor
on the date hereof or hereafter acquired, all acid rain allowances
under the Clean Air Act Amendments of 1990 and any implementing
state Laws and any right, title or interest of Debtor under any
insurance, indemnity, warranty or guaranty in respect of the
Xxxxxx Project or of any of the foregoing and any rents, revenues,
incomes and profits in respect of the Xxxxxx Project; and
(G) To the extent not included in the foregoing, all
Permitted Investments of Debtor and proceeds, products and
accessions of and to any and all of the foregoing, including,
without limitation, "proceeds," as defined in Section 9-306(1) of
the Code, including, without limitation, whatever is received upon
any collection, exchange, sale or other disposition of any of the
Collateral, and any property into which any of the Collateral is
converted, whether cash
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or non-cash proceeds, and any and all other amounts paid or
payable under or in connection with any of the Collateral.
It is the intention of the parties that the foregoing
description of the Collateral be sufficient, together with the
description of the Mortgaged Property (as defined in the Xxxxxx
Mortgage), to enable Agent on behalf of the Secured Parties to
take possession of, or foreclose upon, all of the right, title and
interest of Debtor in and to the Xxxxxx Project and any and all
real property and personal property, tangible and intangible, used
or usable in connection therewith, and to enable Agent or its
designee to operate, sell or otherwise dispose of the entire
interest of Debtor in and to the Xxxxxx Project or any part
thereof, in each case upon the occurrence and during the
continuance of an Event of Default; provided, however, that all of
the Collateral is hereby assigned to Agent solely as security, and
Agent shall have no duty, liability or obligation whatsoever with
respect to any of the Collateral, unless Agent so elects in
writing consistent with its rights under this Security Agreement.
(b) This Security Agreement secures, in accordance with the
provisions hereof, the following obligations, now existing or hereafter
arising (collectively, the "Obligations"):
(i) payment and performance of each and every obligation,
indebtedness, covenant and agreement of Debtor now or hereafter
existing contained in the Credit Agreement and any of the other
Loan Instruments, including, without limitation, any obligation to
any of the Secured Parties pursuant to any Interest Rate Hedge
Agreement with a Secured Party, in each case whether for
principal, interest, fees, expenses or otherwise pursuant thereto,
and any amendments or supplements thereto, extensions or renewals
thereof or replacements therefor;
(ii) payment of all sums advanced in accordance herewith or
in accordance with the other Xxxxxx Security Documents by or on
behalf of the Secured Parties (or any of them) to protect any of
the collateral purported to be covered hereby or thereby, with
interest thereon at a rate per annum equal to the Default Interest
Rate from the date of demand therefor;
(iii) performance of every obligation, indebtedness,
covenant and agreement of Debtor contained in any agreement now or
hereafter executed by Debtor which recites that the obligations
thereunder are secured by this Security Agreement or any of the
other Xxxxxx Security Documents; and
(iv) payment of all sums, with interest thereon at a rate
per annum equal to the Default Interest Rate that may become due
and payable to or for the benefit of the Secured
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Parties (or any of them) pursuant to the terms of this Security
Agreement or any of the other Xxxxxx Security Documents;
in each case whether direct or indirect, joint or several, absolute or
contingent, liquidated or unliquidated, now or hereafter existing,
renewed or restructured, reinstated, created or incurred, and
including, without limitation, all indebtedness of Debtor under any
instrument now or hereafter evidencing or securing any of the
foregoing.
3. Delivery of Collateral; Perfection and Use
of Accounts.
(a) Delivery of Collateral. All sums of money, funds and
cash, from time to time constituting the Collateral together with all
certificates, instruments, investments and securities representing or
evidencing such Collateral, shall be delivered to, dealt with and held
by Agent pursuant to the terms of the Credit Agreement and the terms
hereof. All such certificates, investments, securities and instruments
shall be in suitable form for transfer by delivery or otherwise, or
shall be accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance satisfactory to Agent.
(b) Perfection of Accounts. For the purpose of perfecting the
Security Interest of the Secured Parties in and to the Accounts and all
funds, cash, investments, instruments and securities at any time on deposit
in the Accounts, the Agent shall be deemed to be holding the Accounts and
all such funds, cash, investments, instruments and securities as agent for
Agent and the Secured Parties (other than the Local Bank Accounts (if any)
and all funds, cash, investments, instruments and securities therein, which
shall be held by the Local Bank as agent for Agent and the Secured
Parties).
4. Representations and Warranties.
Debtor hereby represents and warrants as follows:
(a) Debtor is the legal and beneficial owner of the Collateral
in existence on the date hereof and will be the only owners of the
Collateral hereafter acquired, free and clear of any and all Liens or
claims of others except for Permitted Liens, and Debtor has full power and
authority to grant the liens and security interests in and to the
Collateral hereunder. Except with respect to the Secured Parties and with
respect to National Westminster Bank PLC, New York Branch and otherwise as
required or permitted under this Security Agreement, no security agreement,
financing statement or other public notice with respect to all or any part
of the Collateral is on file or of record in any public office which could
reasonably be expected to result in a Material Adverse Effect.
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(b) Chief Executive Office and Principal Place of Business.
Debtor's chief executive office and principal place of business and the
place where Debtor's records concerning the Collateral and the originals of
the Assigned Agreements to which it is a party are kept is:
0000 Xxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Telecopy: (000) 000-0000
(c) Perfection. Financing Statements or other appropriate
instruments have been filed pursuant to the Code in the public offices set
forth in Schedule A as may be necessary to perfect any Security Interest
granted or purported to be granted hereby to the extent any such Security
Interest may be perfected by the filing of a Financing Statement. All
other action requested by Agent which is necessary or desirable to protect
and perfect the Security Interest in each item of the Collateral has been
duly taken. Subject to the requirements contained in the Code with respect
to the filing of continuation statements, this Security Agreement
constitutes a valid and continuing Lien on and perfected Security Interest
in the Collateral in favor of the Agent for the equal and ratable benefit
of the Secured Parties, prior to all other Liens (other than Permitted
Liens), and is enforceable as such against creditors of and purchasers from
Debtor and against any owner, lessee or mortgagee of the real property
where any of the Collateral is located or to which any of the Collateral
relates and against any purchaser of such real property and any present or
future creditor obtaining a Lien on such real property.
5. Covenants and Agreements. Debtor hereby covenants and
agrees that it shall faithfully observe and fulfill, and shall cause to be
observed and fulfilled, each and all of the following covenants until all
Obligations to be paid or performed by Debtor under the Loan Instruments
have been paid and performed in full:
(a) Notice of Adverse Claims. Debtor shall, promptly and in no
event later than five days after Debtor becomes aware of any information or
has knowledge of any adverse claim against the Collateral which could have
a Material Adverse Effect, deliver to Agent and each of the Lenders notice
of each such claim.
(b) Further Assurances. Debtor shall, from time to time at
Debtor's expense, and upon request by Agent on behalf of the Secured
Parties, promptly execute and deliver all further instruments and
documents, and take all further action, that may be necessary or advisable,
or that Agent determines may be necessary, in order to perfect and protect
any Security Interest granted or purported to be granted hereby or to
enable Agent to exercise and enforce its rights and remedies hereunder with
respect to the Collateral. Without limiting the generality of the
foregoing, Debtor shall (i) if any Collateral shall be evidenced by a
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promissory note or other instrument, deliver and pledge to Agent hereunder
such note or instrument duly endorsed and accompanied by duly executed
instruments of transfer or assignment, all in form and reasonable substance
satisfactory to Agent and (ii) execute and file such financing and
continuation statements, or amendments thereto, and such other instruments,
endorsements and notices, as may be necessary, or as Agent may request, in
order to perfect and preserve the Security Interest granted or purported to
be granted hereby, including, without limitation, consents, assignments,
notices and other documentation reasonably requested by Agent.
(c) Prohibition Against Transfer of Collateral. Debtor shall
not sell, transfer, lease or otherwise dispose of any of the Equipment, or
attempt, offer or contract to do so except as permitted pursuant to the
Credit Agreement.
(d) Fees and Expenses. Debtor shall upon demand pay to Agent
the amount of any and all out-of-pocket costs and expenses (including,
without limitation, the fees and expenses of its counsel and of any
experts, any special consultants engaged, and any local counsel who might
be retained by Agent, in connection with the transactions contemplated
hereby) which Agent may incur in connection with (i) the sale of,
collection from, custody or preservation of or other realization upon, any
of the Collateral pursuant to the exercise or enforcement of any of the
rights of Agent hereunder or (ii) the failure by Debtor to perform or
observe any of the provisions hereof, together with interest thereon at the
Default Interest Rate. Any amounts payable by Debtor pursuant to this
Section 5(e) shall be payable on demand and shall constitute Obligations.
(e) Filing Fees, Taxes, etc. Debtor shall pay all filing,
registration and recording fees or re-filing, re-registration and re-
recording fees, and all federal, state, county and municipal stamp taxes
and other similar taxes, duties, imposts, assessments and charges arising
out of or in connection with the execution and delivery of this Security
Agreement, any agreement supplemental hereto and any instruments of further
assurance.
(f) Maintenance of Records; Inspection. At all times Debtor
shall keep and maintain at its own cost and expense records of the
Collateral in accordance with prudent industry practice as determined in
the reasonable judgment of Agent. Such records will be kept at Debtor's
principal place of business set forth in Section 4(c) or at the Xxxxxx
Project. Debtor shall notify Agent immediately in writing of any change in
the location of its chief executive office, principal place of business or
the office where such records and the originals of the Assigned Agreements
to which it is a party are kept, or the establishment by Debtor of any
other office or place of business, or the adoption or change of its name or
any trade name or fictitious business name and, upon written request of
Agent, shall execute any additional documents or certificates necessary to
reflect the adoption of or change in its name or any trade name or
fictitious business name. Debtor shall
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furnish to Agent statements and schedules further identifying and
describing the Collateral and such other reports in connection with the
Collateral as Agent may reasonably request, all in reasonable detail.
Subject to Section 5.10 of the Credit Agreement, Agent and the Secured
Parties may inspect the Collateral.
(g) Limitation on Liens on the Collateral. Debtor shall not
create, incur or permit to exist, shall defend the Collateral against, and
shall take such other action as is necessary to remove, any Lien or claim
on or to the Collateral, other than Permitted Liens, and shall defend the
right, title and interest of Agent in and to any of the Collateral against
the claims and demands of all Persons whomsoever.
(h) Additional Collateral. Debtor shall notify Agent promptly
and in no event later than five Business Days after Debtor becomes aware
that any of the Equipment, or any items that are to become Equipment (other
than Rolling Stock), are to be stored for any length of time (other than
temporary storage incident to transportation to the Xxxxxx Project or
repair or maintenance of such Collateral) in any location other than the
Xxxxxx Project. The notice shall specify, in such detail as is reasonably
required by Agent (i) the items that are to be stored, (ii) the location at
which such items are to be stored and the name and addresses of the owner
and operator of the storage facility, (iii) the approximate length of time
that such items are to be stored at that location and (iv) the name of the
Person or entity who is the owner of such items. If required by Agent,
Debtor shall execute additional financing statements and other related
documents, all in form reasonably satisfactory to Agent, covering the items
of Equipment that are to be stored at such other location. If for any
reason Agent, on behalf and for the benefit of the Secured Parties, cannot
perfect a first priority security interest in the items stored or to be
stored at such other location, then upon instructions from Agent, Debtor
shall promptly transport such items to the Xxxxxx Project or to another
location with respect to which Agent will be able to so perfect its
security interest upon the request of Agent. Upon instructions from Agent,
Debtor shall obtain such additional insurance on the Collateral stored at
any location other than the Xxxxxx Project as Agent deems reasonably
necessary consistent with the requirements of the Credit Agreement to
protect the Secured Parties' interests in the Collateral.
(i) Indemnification. Debtor shall defend, indemnify and hold
harmless Agent and each of the Secured Parties and their officers,
directors and employees, from and against any and all costs, expenses,
disbursements, liabilities, obligations, losses, damages, injunctions,
judgments, suits, actions, causes of action, fines, penalties, claims and
demands, of every kind or nature (including, without limitation, attorney's
fees and expenses) (herein collectively called, the "Indemnified
Liabilities") which are occasioned by or result from (i) any failure by
Debtor or any party thereto to perform any of the terms, agreements, or
covenants
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to be performed by it under this Security Agreement or under any Assigned
Agreement and (without duplication) (ii) this Security Agreement or any
Assigned Agreement other than Indemnified Liabilities resulting from such
Secured Party's gross negligence or willful misconduct.
(j) Consents to Assignment. Debtor has obtained and provided to
Agent executed copies of all consents to this Security Agreement from each
of the parties (other than Debtor) to the Assigned Agreements to which
Debtor is a party requested by Agent (the "Consenting Parties"), and agrees
to obtain such consents from each future or successor Consenting Party
requested by Agent, which consents shall be in form and substance
satisfactory to Agent.
6. Use of the Accounts. Agent shall have exclusive possession
of and sole dominion and control over the Accounts (with respect to any
Local Bank Account, such possession, dominion and control shall be
exercised through the Local Bank, as agent for Agent and the Secured
Parties); provided, however, if no Event of Default shall have occurred and
be continuing, Agent shall direct the disbursement of, and permit the
disbursement by any Local Bank of, funds from each of the Accounts in
accordance with the terms providing for the use of each of the Accounts set
forth in the Credit Agreement or any other Loan Instrument. Upon the
occurrence and during the continuance of an Event of Default, Agent shall
have no further obligation to disburse or direct or permit the disbursement
by any Local Bank of funds from the Accounts and any Local Bank Account.
7. Debtor's Obligations upon Event of Default. If an Event of
Default shall occur and be continuing (a) all payments received by Debtor
under or in connection with any of the Collateral shall be held by Debtor
in trust for Agent, shall be segregated from other funds of Debtor and
shall, forthwith upon receipt by Debtor, be turned over to Agent or its
designee in the same form as received by Debtor (duly endorsed by Debtor to
Agent, if requested), and (b) any and all such payments so received by
Agent or its designee (whether from Debtor or otherwise) may, in the sole
discretion of Agent or its designee, be held by Agent or such designee as
collateral security for, and/or then or at any time thereafter be applied,
subject only to the relevant provisions of the Credit Agreement or as
otherwise may be required by applicable law, in whole or in part by Agent
or its designee in the manner specified in Section 9 hereof, unless
otherwise agreed to by the Majority Lenders in a writing delivered to
Agent.
8. Remedies; Rights Upon Event of Default. Upon the occurrence
and during the continuance of an Event of Default Agent, for the equal and
ratable benefit of and on behalf of the Secured Parties, may do one or more
of the following:
(a) Declare, without presentment, demand, protest or notice of
any kind, all of which Debtor hereby expressly
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waives, the entire amount of Obligations to be immediately due and
payable, whereupon all of such Obligations declared due and payable
shall be and become immediately due and payable; provided, however, if
an Event of Default occurs pursuant to Section 6.1(h), (i) or (t) of
the Credit Agreement, the acceleration provided for in this Section
8(a) shall be deemed to have been made upon the occurrence of such
Event of Default without declaration or any other action by Agent;
(b) Take all cash held by it and by any Local Bank as agent for
Agent and the Secured Parties (including any resulting from the
liquidation of Permitted Investments) as Collateral, including any
credit balances in the Accounts, and all cash proceeds received or
receivable by it and by any Local Bank as agent for Agent and the
Secured Parties in respect of the Collateral and, at the Majority
Lenders' option, use such cash for such purposes as Agent and the
Majority Lenders deem appropriate and in the interest of either
Project and/or apply the same, in whole or in part, for the equal and
ratable benefit of the Secured Parties in satisfaction of all or any
part of the Obligations (whether or not due and payable) in the manner
specified in Section 9 hereof, unless otherwise agreed to by the
Majority Lenders in a writing delivered to Agent;
(c) Upon notice to Debtor, which notice need not be in writing,
make such payments and do such acts as Agent may deem necessary to
protect, perfect or continue the perfection of the Security Interest,
including, without limitation, paying, purchasing, contesting or
compromising any Lien which is, or purports to be, prior to or
superior to the Security Interest granted hereunder, and commencing,
appearing or otherwise participating in or controlling any action or
proceeding purporting to affect the Security Interest in or ownership
of the Collateral;
(d) Foreclose on the Collateral as herein provided or in any
manner permitted by law and exercise any and all of the rights and
remedies conferred upon the Secured Parties by any of the Xxxxxx
Project Agreements either concurrently or in such order as Agent may
determine without affecting the rights or remedies to which the
Secured Parties may be entitled under the Credit Agreement or any
other Loan Instrument. Debtor hereby waives, to the extent permitted
by applicable law, notice and judicial hearing in connection with
Agent's taking possession or collection, recovery, receipt,
appropriation, repossession, retention, set-off, sale, leasing,
conveyance, assignment, transfer or other disposition of or
realization upon any or all of the Collateral, including, without
limitation, any and all prior notice and hearing for any prejudgment
remedy or remedies and any such right which Debtor would otherwise
have under the constitution or any statute or other law of the United
States of America or of any state;
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(e) Require Debtor to, and Debtor hereby agrees that it shall,
at its expense and upon request of Agent, forthwith assemble as
directed by Agent such part of the Collateral as may be reasonably
assembled and make it available to Agent at a place to be designated
by Agent;
(f) Without notice or demand or legal process, enter upon any
premises of Debtor and take possession of the Collateral;
(g) Without notice, except as specified below, sell the
Collateral, or any part thereof, in one or more parcels at public or
private sale, at any of Agent's offices or elsewhere, at such time or
times, for cash, on credit or for future delivery, and at such price
or prices and upon such other terms as Agent may deem commercially
reasonable. Debtor agrees that, to the extent notice of sale shall be
required by law, at least 10 days' notice to Debtor of the time and
the place of any public sale or the time after which any private sale
is to be made shall constitute reasonable notification. At any sale
of the Collateral, if permitted by law, Agent may bid (which bid may
be, in whole or in part, in the form of cancellation of indebtedness)
for the purchase of the Collateral or any portion thereof for the
account of Agent on behalf of the Secured Parties. Agent shall not be
obligated to make any sale of the Collateral regardless of notice of
sale having been given. Agent may adjourn any public or 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 to which it was so adjourned. Agent shall incur no
liability as a result of the manner of sale of the Collateral, or any
part thereof, at any private sale conducted in a commercially
reasonable manner. Debtor hereby waives, to the extent permitted by
applicable law, any claims against Agent arising by reason of the fact
that the price at which the Collateral, or any part thereof, may have
been sold at a private sale was less than the price which might have
been obtained at public sale or was less than the aggregate amount of
the Obligations, even if Agent accepts the first offer received which
Agent in good xxxxx xxxxx to be commercially reasonable under the
circumstances and does not offer the Collateral to more than one
offeree. To the full extent permitted by law, Debtor shall have the
burden of proving that any such sale of the Collateral was conducted
in a commercially unreasonable manner. To the extent permitted by
law, Debtor hereby specifically waives all rights of redemption, stay
or appraisal which it has or may have under any law now existing or
hereafter enacted. Debtor authorizes Agent, at any time and from time
to time, to execute, in connection with a sale of the Collateral
pursuant to the provisions of this Security Agreement, any
endorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral; and
(h) Exercise in respect of the Collateral, in addition to other
rights and remedies provided for herein or otherwise
12
available to it, all the rights and remedies of a secured party after
default under the Code.
9. Application of Proceeds. The net proceeds of any
foreclosure, collection, recovery, receipt, appropriation, realization or
sale of the Collateral shall be applied in the following order:
(a) To the repayment of the costs and expenses of retaking,
holding and preparing for the sale and the selling of the Collateral
(including, without limitation, reasonable attorneys' fees and
expenses and court costs and those amounts payable to Agent pursuant
to Section 5(f)) and the discharge of all assessments, encumbrances,
charges or liens, if any, on the Collateral prior to the lien hereof;
(b) To the payment in full of the Obligations in accordance with
the priority of application specified in Section 2.10(c) of the Credit
Agreement; and
(c) If all Obligations have been indefeasibly paid, satisfied
and discharged in full, any surplus then remaining shall be paid to
Debtors, subject, however, to the rights under applicable law of the
holders of any then existing liens on the Collateral of which Agent
has actual notice (without investigation).
10. Assignment of Permits. Debtor shall, upon the occurrence
and during the continuance of an Event of Default at the request of Agent,
contemporaneously with and at any other time in connection with any
foreclosure by Agent on any part of the Xxxxxx Project covered by the
Xxxxxx Mortgage assign, transfer or otherwise furnish to Agent or to any
transferee of the interest of Agent (to the extent so assignable or
transferable), all of Debtor's rights and interest in, to and under all
Governmental Approvals, including, without limitation, all offsets,
allowances and similar rights issued under or in connection with
Governmental Requirements (including, without limitation, with respect to
Environmental Requirements), which are required to permit the Xxxxxx
Project to be operated in accordance with all Governmental Requirements.
Upon the request of Agent upon the occurrence and during the continuance of
an Event of Default following foreclosure by Agent on the Xxxxxx Project,
Debtor agrees to use its diligent efforts to have renewed or extended in
the name of Agent (or any other Person operating the Xxxxxx Project) or
otherwise to obtain for Agent (or any such other Person) the benefits of
all of the Governmental Approvals and other rights referred to in the
immediately preceding sentence to the extent that such Governmental
Approvals and other rights shall not be assignable or transferable.
11. Security Interest Absolute. All the rights of Agent and the
Secured Parties hereunder and the Security Interest and all
13
obligations of Debtor hereunder shall be absolute and unconditional
irrespective of:
(i) any lack of validity or enforceability of any of the Project
Agreements or any of the Collateral or any other agreement or
instrument relating thereto;
(ii) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations, or any other
amendment or waiver of or any consent to any departure from any
Project Agreement or any of the Collateral or any other agreement or
instrument related thereto;
(iii) any exchange or release of any Collateral or any other
collateral, or the non-perfection of any of the Security Interest, or
any release or amendment or waiver of or consent to or departure from
any guaranty, for all or any of the Obligations; or
(iv) to the full extent permitted by law, any other circumstance
that might otherwise constitute a defense available to, or a discharge
of, Debtor or any third party pledgor other than payment and
performance in full of the Obligations.
12. Agent Appointed Attorney-in-Fact.
(a) Powers. Debtor hereby irrevocably constitutes and appoints
Agent and any officer or agent thereof, with full power of substitution, as
its true and lawful attorney-in-fact (which appointment as attorney-in-fact
shall be coupled with an interest), with full authority in the place and
stead of Debtor and in the name of Debtor or otherwise, from time to time
upon the occurrence and during the continuance of an Event of Default in
Agent's discretion, to take any action and to execute any and all documents
and instruments which Agent may deem necessary or advisable to accomplish
the purposes of this Security Agreement, without notice to Debtor,
including, without limitation:
(i) to receive, endorse and collect all instruments made payable
to Debtor representing any dividends, interest payments or other
distributions constituting Collateral or any part thereof and to give full
discharge for the same and to file any claim or to take any other action or
proceeding in any court of law or equity or otherwise deemed appropriate by
Agent for the purpose of collecting any and all of such dividends, payments
or other distributions;
(ii) to enforce any provision of any Assigned Agreement;
(iii) to pay or discharge taxes and liens levied or placed on
the Collateral; and
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(iv) (A) to direct any party liable for any payment under or in
respect of or arising out of any of the Collateral to make payment of any
and all moneys due or to become due thereunder or with respect thereto
directly to Agent or as Agent shall direct, (B) to ask or demand for,
collect, receive payment of and receipt for, any and all moneys, claims and
other amounts due or to become due at any time in respect of or arising out
of any Collateral, (C) to commence and prosecute any suits, action or
proceedings at law or in equity in any court of competent jurisdiction to
collect the Collateral or any part thereof and to enforce any other right
in respect of any Collateral, (D) to defend any suit, action or proceeding
brought against Debtor with respect to any Collateral, (E) to settle,
compromise or adjust any suit, action or proceeding described in clauses
(C) and (D) above and, in connection therewith, to give such discharges or
releases as Agent acting in good faith may deem appropriate, (F) generally,
to sell, transfer, pledge and make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely as though
Agent were the absolute owner thereof for all purposes, and (G) to do, at
Agent's option and at Debtor's expense, at any time, or from time to time,
all acts and things which Agent deems necessary to protect, preserve or
realize upon the Collateral and the Security Interest granted herein and to
effectuate the intent of this Security Agreement, all as fully and
effectively as Debtor might do.
(b) Other Powers. Debtor further authorizes Agent, at any time
and from time to time to (i) to execute, in connection with any sale
provided for hereunder, any endorsements, assignments or other instruments
of conveyance or transfer with respect to the Collateral, (ii) communicate
in its own name with any party to any agreement or instrument included in
the Collateral, at any time, with regard to any matter relating to such
agreement or instrument and (iii) to the full extent permitted by
applicable law, to file one or more financing or continuation statements,
and amendments thereto, relative to all or any part of the Collateral
without the signature of Debtor.
13. Agent May Perform. Upon the occurrence and during the
continuance of an Event of Default, Agent, without releasing Debtor from
any obligation, covenant or condition hereof, may itself make any payment
or perform, or cause the performance of, any such obligation, covenant,
condition or agreement or any other action in such manner and to such
extent as Agent may deem necessary to protect, perfect or continue the
perfection of the Security Interest. Any costs or expenses incurred by
Agent in connection with the foregoing shall be governed by the Loan
Instruments, constitute a part of the Debt secured by the Xxxxxx Security
Documents, shall bear interest at a rate per annum equal to the Default
Interest Rate and be payable by Debtor upon demand by Agent.
15
14. No Duty on Agent's Part; Limitation on Agent's Obligations.
(a) No Duty on Agent's Part. The powers conferred on Agent
hereunder are solely to protect Agent's and the other Secured Parties'
interests in the Collateral and shall not impose any duty upon Agent to
exercise any such powers. Agent shall be accountable only for amounts that
it receives as a result of the exercise of such powers.
(b) Limitations on Obligations. Anything herein to the contrary
notwithstanding, Debtor shall remain liable under the Assigned Agreements
and any other agreements to which it is a party included in the Collateral
to the extent set forth therein to perform all of its duties and
obligations thereunder to the same extent as if this Security Agreement had
not been executed. The exercise by Agent of any of the rights or remedies
hereunder shall not release Debtor from any of its duties or obligations
under the Assigned Agreements or any other Project Agreement to which it is
a party. All of the Collateral is hereby assigned to Agent solely as
security, and Agent shall have no duty, liability or obligation whatsoever
with respect to any of the Collateral, unless Agent so elects in writing
consistent with its rights under this Security Agreement.
15. Reasonable Care. Agent shall exercise the same degree of
care hereunder as it exercises in connection with similar transactions for
its own account. Agent shall be deemed to have exercised reasonable care
in the custody and preservation of the Collateral in its possession if the
Collateral is accorded treatment substantially equal to that which Agent
accords or would accord collateral held by Agent in similar transactions
for its own account; provided, however, in respect of any Collateral
constituting "instruments" or "chattel paper" under the Code, Agent shall
have no duty to preserve any rights therein against prior parties. Without
limiting the generality of the foregoing and except as otherwise provided
by applicable law, Agent shall not be required to xxxxxxxx any collateral,
including, without limitation, the Collateral subject to the Security
Interest created hereby and any guaranties of the Obligations, or to resort
to any item of Collateral or guaranties in any particular order; and all of
Agent's rights hereunder and in respect of such Collateral and guaranties
shall be cumulative and in addition to all other rights, however existing
or arising. To the extent that Debtor lawfully may, Debtor hereby (a)
agrees that it will not invoke any law relating to the marshalling of
collateral which might cause delay in or impede the enforcement of Agent's
rights under this Security Agreement or under any other instrument
evidencing any of the Obligations or under which any of the Obligations is
outstanding or by which any of the Obligations is secured or guaranteed and
(b) irrevocably waives the benefits of all Laws and any and all rights to
equity of redemption or other rights of redemption that it may have in
equity or at law with respect to the Xxxxxxxxxx.
00
00. Role of Agent. The rights, duties, liabilities and
immunities of Agent and its appointment and replacement hereunder shall be
governed by Article 7 of the Credit Agreement.
17. Absence of Fiduciary Relation. Agent undertakes to perform
or to observe only such of its agreements and obligations as are
specifically set forth in this Security Agreement or any other Loan
Instrument, and no implied agreements, covenants or obligations with
respect to Debtor, any Affiliate of Debtor or any other party to any of the
Project Agreements shall be read into this Security Agreement against Agent
or any of the Secured Parties. Neither Agent nor any of the Secured
Parties in its and their capacity as such is a fiduciary of and shall not
owe or be deemed to owe any fiduciary duty to Debtor, any Affiliate of
Debtor or any other party to any of the Project Agreements, except as
otherwise specifically required by applicable law.
18. Survival of Representations and Warranties. All agreements,
representations and warranties made herein or incorporated by reference
herein shall survive the execution and delivery of this Security Agreement
and the other Loan Instruments and repayment of the Obligations, and shall
be deemed to be material and to have been relied upon by Agent and the
Secured Parties, regardless of any investigation made by or on behalf of
Agent or the Secured Parties.
19. Notices. All notices, demands, requests and other
communications required or permitted hereunder shall be in writing and
shall be given and deemed to have been given in accordance with Section 8.1
of the Credit Agreement.
20. No Waiver; Cumulative Remedies. By exercising or failing to
exercise any of its rights, options or elections hereunder (without also
expressly waiving the same in writing), Agent, on behalf of the Secured
Parties, shall not be deemed to have waived any breach or default on the
part of Debtor or to have released Debtor from any of its obligations
secured hereby. No failure on the part of Agent to exercise, and no delay
in exercising (without also expressly waiving the same in writing) any
right, power or privilege hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right, power or privilege
preclude any other or further exercise thereof, or the exercise of any
other right, power or privilege. The remedies provided herein are
cumulative and not exclusive of any remedies provided by law. Agent,
acting on behalf of the Secured Parties, shall have all of the rights and
remedies granted under the Credit Agreement or any other Loan Instrument,
and available at law or in equity, and these same rights and remedies may
be pursued separately, successively or concurrently against Debtor or any
Collateral, at the discretion of Agent with the consent of the Majority
Lenders. The application of the Collateral to satisfy the Obligations
pursuant to the terms hereof shall not operate to
17
release Debtor from the Obligations until payment in full of any deficiency
has been made in cash.
21. Severability. Any provision of this Security Agreement
which is prohibited, unenforceable or not authorized in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition, unenforceability or non-authorization, without invalidating
the remaining provisions hereof or affecting the validity, enforceability
or legality of such provision in any other jurisdiction. Where provisions
of any law or regulation resulting in such prohibition or unenforceability
may be waived they are hereby waived by Debtor and Agent to the full extent
permitted by law so that this Security Agreement shall be deemed a valid,
binding agreement, and the Security Interest created hereby shall
constitute a continuing first lien on and first perfected security interest
in the Collateral, in each case enforceable in accordance with its terms.
22. Exculpatory Provisions; Reliance By Agent.
(a) Exculpatory Provisions. Neither Agent nor any Secured
Party, nor any of their respective officers, directors, employees, agents,
attorneys-in-fact or affiliates shall be liable to either Debtor for any
action taken or omitted to be taken by it or them under or in connection
with this Security Agreement or any other Project Agreement, or responsible
in any manner to any Person for any recitals, statements, representations
or warranties made by Debtor or any officer thereof contained in this
Security Agreement or any other Project Agreement or in any certificate,
report, statement or other document referred to or provided for in, or
received by Agent or any Secured Party under or in connection with, this
Security Agreement or any other Project Agreement or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Security Agreement or any other Project Agreement or for any failure of
Debtor to perform any of the Obligations. Neither Agent nor any Secured
Party shall be under any obligation to any Person to ascertain or to
inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Security Agreement or any other
Project Agreement, or to inspect the properties or records of Debtor.
(b) Reliance by Agent. Agent shall be entitled to rely, and
shall be fully protected in relying, upon any note, writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram,
telecopy, telex or teletype message, statement, order or other document or
conversation believed by it in good faith to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel (including, without limitation,
counsel to Debtor), independent accountants and other experts selected by
Agent. Agent shall have no obligation to any Person to act or refrain from
acting or exercising any of its rights under this Security Agreement.
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23. Amendment. This Security Agreement may be amended, modified
or rescinded only by a writing expressly referring to this Security
Agreement and signed by all the parties hereto.
24. Successors and Assigns. This Security Agreement shall be
binding upon and inure to the benefit of Debtor and Agent for the benefit
of the Secured Parties and their respective successors and permitted
assigns. In the event of any assignment or transfer by any Secured Party
of any instrument evidencing all or any part of the Obligations, the holder
of such instrument shall, subject to the Credit Agreement, be entitled to
the benefits of this Security Agreement.
25. Number and Gender. Whenever used in this Security
Agreement, the singular number shall include the plural and the plural the
singular, and the use of any gender shall be applicable to all genders.
26. Headings Descriptive. The captions or headings of the
several sections and subsections and the table of contents of this Security
Agreement are inserted for convenience only and shall not in any way affect
the meaning or construction of any provision of this Security Agreement.
27. Governing Law; Jurisdiction.
(a) Governing Law. This Security Agreement shall be governed by
and construed in accordance with the internal laws of the State of New York
as to interpretation, enforcement, validity, construction, effect and in
all other respects, but excluding perfection, which shall be governed by
the laws of the jurisdiction relevant thereto.
(b) Jurisdiction. With respect to any legal action or
proceeding brought by Agent or the Secured Parties against Debtor arising
out of or in connection with this Security Agreement, Debtor hereby
irrevocably (i) consents to the jurisdiction of any state or federal court
located in the State of New York, (ii) consents to the service of process
outside the territorial jurisdiction of said courts in any such action or
proceeding by mailing copies thereof by registered United States mail,
postage prepaid, to the address specified by Debtor for the receipt of
notices if such address is outside such territorial jurisdiction and (iii)
waives any objection to the venue of the aforesaid courts.
28. Counterparts. This Security Agreement may be executed in
several counterparts, each of which shall be an original, but all of which
together shall constitute one and the same agreement.
29. Continuing Security Interest; Termination. This Security
Agreement shall create a continuing assignment, pledge and first priority
security interest in the Collateral and shall remain
19
in full force and effect for the benefit of Agent and the Secured Parties
until all Obligations to be paid or performed by Debtor under the Loan
Instruments have been paid and performed in full. Upon the happening of
such event, the Security Interest granted hereby shall terminate. Upon
such termination, Agent shall, upon the request and at the expense of
Debtor, execute and deliver to Debtor such documents as Debtor shall
reasonably request to evidence such termination or expiration.
30. Payments Set Aside. To the extent that Debtor or any other
Person on behalf of Debtor makes a payment or payments to Agent and/or any
Secured Party, or Agent and/or any Secured Party enforce their security
interests or exercise their rights of set-off, and such payment or payments
or the proceeds of such enforcement or set-off or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set
aside and/or required to be repaid to a trustee, receiver or any other
party under any bankruptcy law, state or federal law, common law or
equitable cause, then to the extent of such recovery, the Obligations or
any part thereof originally intended to be satisfied, and this Security
Agreement and all Liens, rights and remedies therefor, shall be revived and
continued in full force and effect as
20
if such payment had not been made or such enforcement or set-off had not
occurred.
IN WITNESS WHEREOF, the parties hereto have caused this Security
Agreement to be duly executed as of the day and year first written above.
NRG GENERATING (XXXXXX)
COGENERATION INC.
By: /s/ Xxxxxxx Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: President
CREDIT SUISSE, as Agent
By: /s/ Xxxxx Xxxxxxxxx
Name: Xxxxx X. Xxxxxxxxx
Title: Associate
By: /s/ Xxxxxx Xxxx
Name: Xxxxxx Xxxx
Title: Associate
Schedule A to
Assignment and
Security Agreement
FINANCING STATEMENT FILINGS
1. Secretary of State, Delaware
2. Secretary of State, Minnesota
3. County Clerk, Hennepin County, Minnesota
4. Secretary of State, New Jersey
5. County Clerk, Middlesex County, New Jersey
6. Secretary of State, New York
7. County Clerk, New York County, New York
8. Secretary of the Commonwealth, Pennsylvania
9. Prothanatary, Philadelphia County, Pennsylvania
