1
EXHIBIT 4.20
--------------------------------------------------------------------------------
364-DAY REVOLVING CREDIT AGREEMENT
DATED AS OF
MARCH 9, 2001
AMONG
NRG ENERGY, INC.
THE FINANCIAL INSTITUTIONS PARTY HERETO,
AND
ABN AMRO BANK N.V.
AS AGENT
--------------------------------------------------------------------------------
2
TABLE OF CONTENTS
SECTION 1. DEFINITIONS; INTERPRETATION............................................................1
Section 1.1 Definitions...................................................................1
Section 1.2 Interpretation...............................................................10
SECTION 2. THE REVOLVING CREDIT..................................................................10
Section 2.1 The Loan Commitment..........................................................10
Section 2.2 [Intentionally Omitted]......................................................10
Section 2.3 Applicable Interest Rates....................................................10
Section 2.4 Minimum Borrowing Amounts....................................................12
Section 2.5 Manner of Borrowing Loans and Designating
Interest Rates Applicable to Loans...........................................12
Section 2.6 Interest Periods.............................................................14
Section 2.7 Maturity of Loans............................................................15
Section 2.8 Prepayments..................................................................15
Section 2.9 Default Rate.................................................................16
Section 2.10 The Notes....................................................................16
Section 2.11 Funding Indemnity............................................................16
Section 2.12 Commitment Terminations......................................................17
SECTION 3. FEES..................................................................................17
Section 3.1 Fees.........................................................................17
SECTION 4. PLACE AND APPLICATION OF PAYMENTS.....................................................18
Section 4.1 Place and Application of Payments............................................18
SECTION 5. REPRESENTATIONS AND WARRANTIES........................................................18
Section 5.1 Corporate Organization and Authority.........................................18
Section 5.2 Subsidiaries.................................................................19
Section 5.3 Corporate Authority and Validity of Obligations..............................19
Section 5.4 Financial Statements.........................................................19
Section 5.5 No Litigation; No Labor Controversies........................................19
Section 5.6 Taxes........................................................................20
Section 5.7 Approvals....................................................................20
Section 5.8 Validity of Notes............................................................20
Section 5.9 ERISA........................................................................20
Section 5.10 Government Regulation........................................................20
Section 5.11 Margin Stock; Use of Proceeds................................................21
Section 5.12 Licenses and Authorizations; Compliance Laws.................................21
Section 5.13 Ownership of Property Liens..................................................21
Section 5.14 No Burdensome Restrictions; Compliance with
Agreements...................................................................21
Section 5.15 Full Disclosure..............................................................21
Section 5.16 Year 2000 Problem............................................................21
SECTION 6. CONDITIONS PRECEDENT..................................................................22
Section 6.1 Initial Credit Event.........................................................22
Section 6.2 All Credit Events............................................................23
i
3
SECTION 7. COVENANTS.............................................................................23
Section 7.1 Corporate Existence; Subsidiaries............................................23
Section 7.2 Maintenance..................................................................23
Section 7.3 Taxes........................................................................24
Section 7.4 ERISA........................................................................24
Section 7.5 Insurance....................................................................24
Section 7.6 Financial Reports and Other Information......................................24
Section 7.7 Bank Inspection Rights.......................................................26
Section 7.8 Conduct of Business..........................................................27
Section 7.9 Liens........................................................................27
Section 7.10 Use of Proceeds; Regulation U................................................27
Section 7.11 Mergers, Consolidations and Sales of Assets..................................27
Section 7.12 Consolidated Net Worth.......................................................28
Section 7.13 Indebtedness to Consolidated Capitalization..................................28
Section 7.14 Compliance with Laws.........................................................28
Section 7.15 PUHCA........................................................................29
SECTION 8. EVENTS OF DEFAULT AND REMEDIES........................................................29
Section 8.1 Events of Default............................................................29
Section 8.2 Non-Bankruptcy Defaults......................................................31
Section 8.3 Bankruptcy Defaults..........................................................31
Section 8.4 [Intentionally Omitted]......................................................31
Section 8.5 Notice of Default............................................................31
Section 8.6 Expenses.....................................................................31
SECTION 9. CHANGE IN CIRCUMSTANCES...............................................................31
Section 9.1 Change of Law................................................................31
Section 9.2 Unavailability of Deposits or Inability to Ascertain,
or Inadequacy of, LIBOR......................................................32
Section 9.3 Increased Cost and Reduced Return............................................32
Section 9.4 Lending Offices..............................................................34
Section 9.5 Discretion of Bank as to Manner of Funding...................................34
SECTION 10. THE AGENT.............................................................................34
Section 10.1 Appointment and Authorization of Agent.......................................34
Section 10.2 Agent and its Affiliates.....................................................35
Section 10.3 Action by Agent..............................................................35
Section 10.4 Consultation with Experts....................................................35
Section 10.5 Liability of Agent; Credit Decision..........................................35
Section 10.6 Indemnity....................................................................36
Section 10.7 Resignation of Agent and Successor Agent.....................................36
SECTION 11. MISCELLANEOUS.........................................................................37
Section 11.1 Withholding Taxes............................................................37
Section 11.2 No Waiver of Rights..........................................................38
Section 11.3 Non-Business Day.............................................................38
Section 11.4 Documentary Taxes............................................................38
Section 11.5 Survival of Representations..................................................38
ii
4
Section 11.6 Survival of Indemnities......................................................39
Section 11.7 Set-Off......................................................................39
Section 11.8 Notices......................................................................39
Section 11.9 Counterparts.................................................................41
Section 11.10 Successors and Assigns.......................................................41
Section 11.11 Participants and Note Assignees..............................................41
Section 11.12 Assignment of Commitments by Banks...........................................42
Section 11.13 Amendments...................................................................42
Section 11.14 Headings.....................................................................43
Section 11.15 Legal Fees, Other Costs and Indemnification..................................43
Section 11.16 Entire Agreement.............................................................43
Section 11.17 Construction.................................................................43
Section 11.18 Governing Law................................................................44
Section 11.19 Submission to Jurisdiction; Waiver of Jury Trial.............................44
iii
5
364-DAY REVOLVING CREDIT AGREEMENT
364-DAY REVOLVING CREDIT AGREEMENT, dated as of March 9, 2001 among NRG
Energy, Inc., a Delaware corporation (the "Borrower"), the financial
institutions from time to time party hereto (each a "Bank," and collectively the
"Banks") and ABN AMRO Bank N.V. in its capacity as agent for the Banks hereunder
(in such capacity, the "Agent").
WITNESSETH THAT:
WHEREAS, the Borrower desires to obtain the several commitments of the
Banks to make available a revolving credit for loans (the "Revolving Credit"),
as described herein; and
WHEREAS, the Banks are willing to extend such commitments subject to
all of the terms and conditions hereof and on the basis of the representations
and warranties hereinafter set forth;
NOW, THEREFORE, in consideration of the recitals set forth above and
for other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS; INTERPRETATION.
Section 1.1 Definitions. The following terms when used herein have the
following meanings:
"Adjusted LIBOR" is defined in Section 2.3(b) hereof.
"Affiliate" means, as to any Person, any other Person which directly or
indirectly controls, or is under common control with, or is controlled by, such
Person. As used in this definition, "control" (including, with their correlative
meanings, "controlled by" and "under common control with") means possession,
directly or indirectly, of power to direct or cause the direction of management
or policies of a Person (whether through ownership of securities or partnership
or other ownership interests, by contract or otherwise), provided that, in any
event for purposes of this definition: (i) any Person which owns directly or
indirectly 5% or more of the securities having ordinary voting power for the
election of directors or other governing body of a corporation or 5% or more of
the partnership or other ownership interests of any other Person (other than as
a limited partner of such other Person) will be deemed to control such
corporation or other Person; and (ii) each director and executive officer of the
Borrower or any Subsidiary shall be deemed an Affiliate of the Borrower and each
Subsidiary.
"Agent" is defined in the first paragraph of this Agreement and
includes any successor Agent pursuant to Section 10.7 hereof.
"Agreement" means this 364-Day Revolving Credit Agreement, including
all Exhibits and Schedules hereto, as it may be amended, supplemented or
otherwise modified from time to time in accordance with the terms hereof.
6
"Applicable Margin" means, at any time (i) with respect to Base Rate
Loans, the Base Rate Margin and (ii) with respect to Eurocurrency Loans, the
Eurocurrency Margin.
"Applicable Telerate Page" is defined in Section 2.3(b) hereof.
"Authorized Representative" means those persons shown on the list of
officers provided by the Borrower pursuant to Section 6.1(e) hereof, or on any
updated such list provided by the Borrower to the Agent, or any further or
different officer of the Borrower so named by any Authorized Representative of
the Borrower in a written notice to the Agent.
"Bank" is defined in the first paragraph of this Agreement.
"Base Rate" is defined in Section 2.3(a) hereof.
"Base Rate Loan" means a Loan bearing interest prior to maturity at a
rate specified in Section 2.3(a) hereof.
"Base Rate Margin" means the percentage set forth in Schedule 1 hereto
beside the then applicable Rating.
"Borrower" is defined in the first paragraph of this Agreement.
"Borrowing" means the total of Loans of a single type advanced,
continued for an additional Interest Period, or converted from a different type
into such type by the Banks on a single date and for a single Interest Period.
Borrowings of Loans are made and maintained ratably from each of the Banks
according to their Percentages. A Borrowing is "advanced" on the day Banks
advance funds comprising such Borrowing to the Borrower, is "continued" on the
date a new Interest Period for the same type of Loan commences for such
Borrowing, and is "converted" when such Borrowing is changed from one type of
Loan to the other, all as requested by the Borrower pursuant to Section 2.5(a).
"Business Day" means any day other than a Saturday or Sunday on which
Banks are not authorized or required to close in Chicago, Illinois or New York,
New York and, if the applicable Business Day relates to the borrowing or payment
of a Eurocurrency Loan, on which dealings in U.S. Dollars may be carried on by
the Agent in the interbank eurodollar market.
"Capital Lease" means at any date any lease of Property which, in
accordance with GAAP, would be required to be capitalized on the balance sheet
of the lessee.
"Capitalized Lease Obligations" means, for any Person, the amount of
such Person's liabilities under Capital Leases determined at any date in
accordance with GAAP.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commitments" means the Revolving Credit Commitments.
2
7
"Compliance Certificate" means a certificate in the form of Exhibit B
hereto.
"Consolidated Capitalization" means Consolidated Net Worth plus
Indebtedness of the Borrower.
"Consolidated Current Liabilities" means such liabilities of the
Borrower on a consolidated basis as shall be determined in accordance with GAAP
to constitute current liabilities.
"Consolidated Net Income" means, for any period, the net income (or net
loss) of the Borrower for such period computed on a consolidated basis in
accordance with GAAP.
"Consolidated Net Tangible Assets" means, as of the date of
determination thereof, Consolidated Total Assets as of such date less the sum of
(i) Consolidated Current Liabilities and (ii) Intangible Assets.
"Consolidated Net Worth" means, as of the date of determination
thereof, the amount which would be reflected as stockholders' equity upon a
consolidated balance sheet of the Borrower (determined in accordance with GAAP)
prior to making any adjustment thereto (i) as a result of application of the
Financial Accounting Standards Board's Statement of Financial Accounting
Standards No. 133, Accounting for Derivative Instruments and Hedging Activities
or (ii) in connection with the account entitled "currency translation account"
on such balance sheet.
"Consolidated Total Assets" means, as of the date of determination
thereof, the total amount of all assets of the Borrower determined on a
consolidated basis in accordance with GAAP.
"Contingent Performance Guarantee" means a Performance Guarantee as to
which (i) the guarantor's obligation cannot be reasonably quantified, and (ii)
neither the Borrower nor any Subsidiary has information which raises a
reasonable possibility that a demand under such Performance Guarantee may be
made prior to, or within 18 months after, the Termination Date. A Contingent
Performance Guarantee which for any reason fails to meet the criteria set forth
in either clause (i) or (ii) of this definition shall immediately cease to be
deemed a Contingent Performance Guarantee for purposes of this Agreement.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or undertaking to
which such Person is a party or by which it or any of its Property is bound.
"Controlled Group" means all members of a controlled group of
corporations and all trades and businesses (whether or not incorporated) under
common control that, together with the Borrower or any of its Subsidiaries, are
treated as a single employer under Section 414 of the Code.
"Credit Documents" means this Agreement, the Notes and the Fee Letter.
3
8
"Credit Event" means the advancing of any Loan or the continuation of
or conversion into a Eurocurrency Loan.
"Default" means any event or condition the occurrence of which would,
with the passage of time or the giving of notice, or both, constitute an Event
of Default.
"Effective Date" means March 9, 2001.
"Environmental Law" means the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section 9601 et seq., the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq., the Hazardous
Materials Transportation Act, 49 U.S.C. Section 1802 et seq., the Toxic
Substances Control Act, 15 S.C. Section 2601 et seq., the Federal Water
Pollution Control Act, 33 U.S.C. Section 1252 et seq., the Clean Water Act, 33
U.S.C. Section 1321 et seq., the Clean Air Act, 42 U.S.C. Section 7401 et seq.,
and any other federal, state, county, municipal, local or other statute, law,
ordinance or regulation which may relate to or deal with human health or the
environment, all as may be from time to time amended.
"ERISA" is defined in Section 5.9 hereof.
"Eurocurrency Loan" means a Loan bearing interest prior to maturity at
the rate specified in Section 2.3(b) hereof.
"Eurocurrency Margin" means the percentage set forth in Schedule 1
hereto beside the then applicable Rating.
"Eurocurrency Reserve Percentage" is defined in Section 2.3(b) hereof.
"Event of Default" means any of the events or circumstances specified
in Section 8.1 hereof.
"Existing Credit Agreement" means that certain 364-Day Revolving Credit
Agreement dated as of March 10, 2000 among NRG Energy, Inc., ABN AMRO Bank N.V.,
as administrative agent, and the banks from time-to-time party thereto, as
amended or otherwise modified from time to time.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Facility Fee Rate" means the percentage set forth in Schedule 1 hereto
beside the then applicable Rating.
"Federal Funds Rate" means the fluctuating interest rate per annum
described in part (x) of clause (ii) of the definition of Base Rate set forth in
Section 2.3(a) hereof.
"Fee Letter" means that certain letter between the Agent and the
Borrower dated as of the date hereof pertaining to fees to be paid by the
Borrower to the Agent for the Agent's sole account and benefit.
4
9
"XxxXx" means NRG Finance Company I LLC, a Delaware special purpose
limited liability company which is a Wholly-Owned Subsidiary of the Borrower and
whose sole purpose is to facilitate the financing of a revolving working
capital, acquisition and construction loan facility.
"XxxXx Revolving Loan Facility" means a revolving working capital,
acquisition and construction loan facility (i) under which XxxXx is the sole
borrower, (ii) as to which XxxXx'x obligations are or may be Guaranteed by some
or all of the Borrower's Project Finance Subsidiaries whose projects or turbines
are being financed by XxxXx and for which there is no other financing on a
senior basis being provided by any other Person, and (iii) which is unsecured by
any assets of, or stock or other equity interest of or owned by, the Borrower or
its Subsidiaries, other than (x) assets and/or the stock or other equity
interest of XxxXx, and (y) assets and/or the stock or other equity interest of
such Project Finance Subsidiaries; provided, however, that any Guaranty of the
Indebtedness of XxxXx or any security therefor given by or in respect of a
Project Finance Subsidiary to the extent permitted hereunder may continue in
existence only until the financing received by the Project Finance Subsidiary
from XxxXx has been repaid.
"GAAP" means generally accepted accounting principles as in effect in
the United States from time to time, applied by the Borrower and its
Subsidiaries on a basis consistent with the preparation of the Borrower's
financial statements furnished to the Banks.
"Guaranty" by any Person means all obligations (other than endorsements
in the ordinary course of business of negotiable instruments for deposit or
collection) of such Person guaranteeing or in effect guaranteeing any
Indebtedness, dividend or other obligation (including, without limitation,
limited or full recourse obligations in connection with sales of receivables or
any other Property and Performance Guarantees) of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, all obligations incurred through an agreement, contingent or
otherwise, by such Person: (i) to purchase such Indebtedness or obligation or
any Property or assets constituting security therefor, (ii) to advance or supply
funds (x) for the purchase or payment of such Indebtedness or obligation, or (y)
to maintain working capital or other balance sheet condition, or otherwise to
advance or make available funds for the purchase or payment of such Indebtedness
or obligation, or (iii) to lease property or to purchase Securities or other
property or services primarily for the purpose of assuring the owner of such
Indebtedness or obligation of the ability of the primary obligor to make payment
of the Indebtedness or obligation, or (iv) otherwise to assure the owner of the
Indebtedness or obligation of the primary obligor against loss in respect
thereof. For the purpose of all computations made under this Agreement, the
amount of a Guaranty in respect of any obligation shall be deemed to be equal to
the maximum aggregate amount of such obligation or, if the Guaranty is limited
to less than the full amount of such obligation, the maximum aggregate potential
liability under the terms of the Guaranty. Notwithstanding anything in this
definition to the contrary, a Person's support of its subsidiary's obligation to
(a) make equity contributions or (b) pay liquidated damages under an operating
and maintenance agreement should such subsidiary fail to comply with the terms
thereof shall not be considered a "Guaranty" by such Person.
5
10
"Hazardous Material" means any substance or material which is hazardous
or toxic, and includes, without limitation, (a) asbestos, polychlorinated
biphenyls, dioxins and petroleum or its by-products or derivatives (including
crude oil or any fraction thereof) and (b) any other material or substance
classified or regulated as "hazardous" or "toxic" pursuant to any Environmental
Law.
"Indebtedness" means and includes, for any Person, all obligations of
such Person, without duplication, which are required by GAAP to be shown as
liabilities on its balance sheet, and in any event shall include all of the
following whether or not so shown as liabilities: (i) obligations of such Person
for borrowed money, (ii) obligations of such Person representing the deferred
purchase price of property or services, (iii) obligations of such Person
evidenced by notes, acceptances, or other instruments of such Person or arising
out of letters of credit issued for such Person's account, (iv) obligations,
whether or not assumed, secured by Liens or payable out of the proceeds or
production from Property now or hereafter owned or acquired by such Person, (v)
Capitalized Lease Obligations of such Person and (vi) obligations for which such
Person is obligated pursuant to a Guaranty, provided that Contingent Performance
Guarantees of the Borrower shall not be deemed "Indebtedness" for purposes of
this Agreement. All calculations of the Indebtedness of any Person (and the
components thereof) shall be performed on a consolidated basis, provided, that
Indebtedness shall not include obligations which are required by GAAP to be
shown as liabilities on such Person's balance sheet, but which are non-recourse
to such Person.
"Interest Period" is defined in Section 2.6 hereof.
"Intangible Assets" means, as of the date of determination thereof, all
assets of the Borrower properly classified as intangible assets determined on a
consolidated basis in accordance with GAAP.
"Investment Grade Rating" means, with respect to any Person, that its
(i) Xxxxx'x Rating is at least Baa3 and (ii) S&P Rating is at least BBB-. If
either clause (i) or (ii) is not satisfied, such Person shall not be deemed to
have an "Investment Grade Rating".
"Lending Office" is defined in Section 9.4 hereof.
"LIBOR" is defined in Section 2.3(b) hereof.
"LIBOR Index Rate" is defined in Section 2.3(b) hereof.
"Lien" means any interest in Property securing an obligation owed to,
or a claim by, a Person other than the owner of the Property, whether such
interest is based on the common law, statute or contract, including, but not
limited to, the security interest lien arising from a mortgage, encumbrance,
pledge, conditional sale, security agreement or trust receipt, or a lease,
consignment or bailment for security purposes. The term "Lien" shall also
include reservations, exceptions, encroachments, easements, rights of way,
covenants, conditions, restrictions, leases and other title exceptions and
encumbrances affecting Property. For the purposes of this
6
11
definition, a Person shall be deemed to be the owner of any Property which it
has acquired or holds subject to a conditional sale agreement, Capital Lease or
other arrangement pursuant to which title to the Property has been retained by
or vested in some other Person for security purposes, and such retention of
title shall constitute a "Lien."
"Loan" is defined in Section 2.1(a) hereof and, as so defined, includes
a Base Rate Loan or Eurocurrency Loan, each of which is a "type" of Loan
hereunder.
"Material Adverse Effect" means any material adverse change in, or any
adverse development which materially affects or could reasonably be expected to
affect, the business, financial position or results of operations of the
Borrower and its Subsidiaries, taken as a whole, or the ability of the Borrower
to perform its obligations under the Credit Documents.
"Material Subsidiary" means a Subsidiary of the Borrower whose total
assets represent at least 5% of the total assets of the Borrower and its
Subsidiaries determined based upon the most recent financial statements
delivered pursuant to Section 7.6 (as determined in accordance with GAAP).
"Minimum Consolidated Net Worth" means an amount, as of any
determination thereof, equal to the sum of $1,000,000,000 plus 25% of
Consolidated Net Income for the period from and including January 1, 2001 to
such determination date but which amount shall in no event be less than
$1,000,000,000.
"Xxxxx'x Rating" means the rating assigned by Xxxxx'x Investors
Service, Inc. and any successor thereto that is a nationally recognized rating
agency to the outstanding senior unsecured non-credit enhanced long-term debt
obligations of a Person (or if neither Xxxxx'x Investors Service, Inc. nor any
such successor shall be in the business of rating long-term indebtedness, a
nationally recognized rating agency in the U.S. as mutually agreed between the
Required Banks and Holdings). Any reference in this Agreement to any specific
rating is a reference to such rating as currently defined by Xxxxx'x Investors
Service, Inc. (or such a successor) and shall be deemed to refer to the
equivalent rating if such rating system changes.
"Non-Conforming Period" is defined in Section 7.13 hereof.
"Note" is defined in Section 2.10(a) hereof.
"Obligations" means all fees payable hereunder, all obligations of the
Borrower to pay principal or interest on Loans and all other payment obligations
of the Borrower arising under or in relation to any Credit Document.
"Percentage" means, for each Bank, the percentage of the Revolving
Credit Commitments represented by such Bank's Revolving Credit Commitment or, if
the Revolving Credit Commitments have been terminated, the percentage held by
such Bank of the aggregate principal amount of all outstanding Obligations.
7
12
"Performance Guarantee" means a guarantee issued by the Borrower or a
Subsidiary that the Borrower or such Subsidiary will cause some action (other
than the payment of money) to be performed, whether by performing the action
itself or paying others to perform such action.
"Person" means an individual, partnership, corporation, association,
trust, unincorporated organization or any other entity or organization,
including a government or any agency or political subdivision thereof.
"Plan" means at any time an employee pension benefit plan covered by
Title IV of ERISA or subject to the minimum funding standards under Section 412
of the Code that is either (i) maintained by a member of the Controlled Group or
(ii) maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and to which
a member of the Controlled Group is then making or accruing an obligation to
make contributions or has within the preceding five plan years made
contributions.
"PBGC" is defined in Section 5.9 hereof.
"Project Finance Subsidiary" means any special purpose Subsidiary of
the Borrower formed solely to facilitate the financing of the assets of such
Subsidiary, and as to which the recourse of any creditors of such Subsidiary is
limited solely to such assets and the stock or other equity interest of such
Subsidiary.
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible, whether now owned or
hereafter acquired.
"Rating" means the rating given to senior unsecured non-credit enhanced
debt obligations of the Borrower by Xxxxx'x Investors Service, Inc. and Standard
& Poor's Ratings Services, a division of The XxXxxx-Xxxx Companies, Inc. and any
successors thereto.
"Reference Banks" means ABN AMRO Bank N.V., and one other
representative of the Banks. In the event that any of such Banks ceases to be a
"Bank" hereunder or fails to provide timely quotations of interest rates to the
Agent as and when required by this Agreement, then such Bank shall be replaced
by a new reference bank jointly designated by the Agent and the Borrower.
"Replaceable Bank" is defined in Section 11.13(iii).
"Replacement Bank" is defined in Section 11.13(iii).
"Required Banks" means, as of the date of determination thereof, Banks
holding at least 66 2/3% of the Percentages.
"Revolving Credit Commitment" is defined in Section 2.1 hereof.
"SEC" means the Securities and Exchange Commission.
8
13
"Security" has the same meaning as in Section 2(l) of the Securities
Act of 1933, as amended.
"S&P Rating" means the rating assigned by Standard & Poor's Ratings
Group, a division of The XxXxxx-Xxxx Companies, Inc. and any successor thereto
that is a nationally recognized rating agency to the outstanding senior
unsecured non-credit enhanced long-term debt obligations of a Person (or, if
neither such division nor any successor shall be in the business of rating
long-term indebtedness, a nationally recognized rating agency in the U.S. as
mutually agreed between the Required Banks and Holdings). Any reference in this
Agreement to any specific rating is a reference to such rating as currently
defined by Standard & Poor's Ratings Group, a division of The XxXxxx-Xxxx
Companies, Inc. (or such a successor) and shall be deemed to refer to the
equivalent rating if such rating system changes.
"Subsidiary" means, as to the Borrower, any active, domestic
corporation or other entity of which one hundred percent (100%) of the
outstanding stock or comparable equity interests having ordinary voting power
for the election of the Board of Directors of such corporation or similar
governing body in the case of a non corporation (irrespective of whether or not,
at the time, stock or other equity interest of any other class or classes of
such corporation or other entity shall have or might have voting power by reason
of the happening of any contingency) is at the time directly owned by the
Borrower.
"Telerate Service" means the Dow Xxxxx Telerate Service.
"Termination Date" means March 8, 2002.
"Unfunded Vested Liabilities" means, with respect to any Plan at any
time, the amount (if any) by which (i) the present value of all vested
nonforfeitable accrued benefits under such Plan exceeds (ii) the fair market
value of all Plan assets allocable to such benefits, all determined as of the
then most recent valuation date for such Plan, but only to the extent that such
excess represents a potential liability of a member of the Controlled Group to
the PBGC or the Plan under Title IV of ERISA.
"Utilization" means the percentage obtained by dividing the aggregate
outstanding principal amount of Loans on any date (after giving effect to any
Borrowings and repayments occurring on such date) by the Commitments in effect
on such date (after giving effect to any reductions thereof on such date).
"U.S. Dollars" and "$" each means the lawful currency of the United
States of America.
"Voting Stock" of any Person means capital stock of any class or
classes or other equity interests (however designated) having ordinary voting
power for the election of directors or similar governing body of such Person.
"Welfare Plan" means a "welfare plan," as defined in Section 3(1) of
ERISA.
9
14
"Wholly-Owned" when used in connection with any Subsidiary of the
Borrower means a Subsidiary of which all of the issued and outstanding shares of
stock or other equity interests (other than directors' qualifying shares as
required by law) shall be owned by the Borrower and/or one or more of its
Wholly-Owned Subsidiaries.
Section 1.2 Interpretation. The foregoing definitions shall be equally
applicable to both the singular and plural forms of the terms defined. All
references to times of day in this Agreement shall be references to Chicago,
Illinois time unless otherwise specifically provided. Where the character or
amount of any asset or liability or item of income or expense is required to be
determined or any consolidation or other accounting computation is required to
be made for the purposes of this Agreement, the same shall be done in accordance
with GAAP, to the extent applicable, except where such principles are
inconsistent with the specific provisions of this Agreement.
SECTION 2. THE REVOLVING CREDIT.
Section 2.1 The Loan Commitment. General Terms. Subject to the terms
and conditions hereof, each Bank severally and not jointly agrees to make a loan
or loans (individually a "Loan" and collectively "Loans") to the Borrower from
time to time on a revolving basis in U.S. Dollars up to the amount of its
revolving credit commitment set forth on the applicable signature page hereof
(such amount, as reduced pursuant to Section 2.12 or changed as a result of one
or more assignments under Section 11.12 or 11.13(iii), its "Revolving Credit
Commitment" and, cumulatively for all the Banks, the "Revolving Credit
Commitments") before the Termination Date. The aggregate amount of Loans at any
time outstanding shall not exceed the Revolving Credit Commitments in effect at
such time. Each Borrowing of Loans shall be made ratably from the Banks in
proportion to their respective Percentages. As provided in Section 2.5(a)
hereof, the Borrower may elect that each Borrowing of Loans be either Base Rate
Loans or Eurocurrency Loans. Loans may be repaid and the principal amount
thereof reborrowed before the Termination Date, subject to all the terms and
conditions hereof. The initial amount of Revolving Credit Commitments under this
Agreement equals $500,000,000.
Section 2.2 [Intentionally Omitted].
Section 2.3 Applicable Interest Rates.
(a) Base Rate Loans. Each Base Rate Loan made or maintained by
a Bank shall bear interest during each Interest Period it is
outstanding computed on the basis of a year of 365 or 366 days, as
applicable, and actual days elapsed on the unpaid principal amount
thereof from the date such Loan is advanced, continued or created by
conversion from a Eurocurrency Loan until maturity (whether by
acceleration or otherwise) at a rate per annum equal to the sum of the
Applicable Margin plus the Base Rate from time to time in effect,
payable on the last day of its Interest Period and at maturity (whether
by acceleration or otherwise).
"Base Rate" means for any day the greater of:
10
15
(i) the rate of interest announced by the Agent at
its offices in Chicago, Illinois, from time to time as its
prime rate, or equivalent, for U.S. Dollar loans as in effect
on such day, with any change in the Base Rate resulting from a
change in said prime rate to be effective as of the date of
the relevant change in said prime rate; and
(ii) the sum of (x) the rate determined by the Agent
to be the prevailing rate per annum (rounded upwards, if
necessary, to the nearest one hundred-thousandth of a
percentage point) at approximately 10:00 a.m. (New York time)
(or as soon thereafter as is practicable) on such day (or, if
such day is not a Business Day, on the immediately preceding
Business Day) for the purchase at face value of overnight
Federal funds, as published by the Federal Reserve bank of New
York, in an amount comparable to the principal amount owed to
the Agent for which such rate is being determined, plus (y)
1/2 of 1% (0.50%).
(b) Eurocurrency Loans. Each Eurocurrency Loan made or
maintained by a Bank shall bear interest during each Interest Period it
is outstanding (computed on the basis of a year of 360 days and actual
days elapsed) on the unpaid principal amount thereof from the date such
Loan is advanced, continued, or created by conversion from a Base Rate
Loan until maturity (whether by acceleration or otherwise) at a rate
per annum equal to the sum of the Applicable Margin plus the Adjusted
LIBOR applicable for such Interest Period, payable on the last day of
the Interest Period and at maturity (whether by acceleration or
otherwise), and, if the applicable Interest Period is longer than three
months, on each day occurring every three months after the commencement
of such Interest Period. All payments of principal and interest on a
Loan (whether a Base Rate Loan or Eurocurrency Loan) shall be made in
U.S. Dollars.
"Adjusted LIBOR" means, for any Borrowing of Eurocurrency
Loans, a rate per annum determined in accordance with the following
formula:
Adjusted LIBOR = LIBOR
------------------------------------
1 - Eurocurrency Reserve Percentage
"LIBOR" means, for an Interest Period, (a) the LIBOR Index
Rate for such Interest Period as from time to time quoted by the
Telerate Service, if such rate is available, and (b) if the LIBOR Index
Rate is not quoted by the Telerate Service, the arithmetic average of
the rates of interest per annum (rounded upwards, if necessary, to the
nearest one-sixteenth of one percent) at which deposits in U.S. Dollars
in immediately available funds are offered to each Reference Bank at
11:00 a.m. (London, England time) two (2) Business Days before the
beginning of such Interest Period by major banks in the interbank
eurocurrency market for delivery on the first day of and for a period
equal to such Interest Period in an amount equal or comparable to the
principal amount of the Eurocurrency Loan scheduled to be made by the
Agent as part of such Borrowing.
11
16
"LIBOR Index Rate" means, for any Interest Period, the rate
per annum (rounded upwards, if necessary, to the next higher
one-sixteenth of one percent) for deposits in U.S. Dollars for delivery
on the first day of and for a period equal to such Interest Period in
an amount equal or comparable to the principal amount of the Loan
scheduled to be made by the Agent as part of such Borrowing, which
appears on the Applicable Telerate Page, as of 11:00 a.m. (London,
England time) on the day two (2) Business Days before the commencement
of such Interest Period.
"Applicable Telerate Page" means the display page designated
as "Page 3750" on the Telerate Service (or such other page as may
replace such pages, as appropriate, on that service or such other
service as may be nominated by the British Bankers' Association as the
information vendor for the purpose of displaying British Bankers'
Association Interest Settlement Rates for deposits in U.S. Dollars).
"Eurocurrency Reserve Percentage" means the daily average for
the applicable Interest Period of the maximum rate, expressed as a
decimal, at which reserves (including, without limitation, any
supplemental, marginal and emergency reserves) are imposed during such
Interest Period by the Board of Governors of the Federal Reserve System
(or any successor) on "eurocurrency liabilities," as defined in such
Board's Regulation D (or in respect of any other category of
liabilities that includes deposits by reference to which the interest
rate is determined or any category of extensions of credit or other
assets that include loans by non-United States offices of any Bank to
United States residents), subject to any amendments of such reserve
requirement by such Board or its successor, taking into account any
transitional adjustments thereto. For purposes of this definition, the
Eurocurrency Loans shall be deemed to be "eurocurrency liabilities" as
defined in Regulation D without benefit or credit for any prorations,
exemptions or offsets under Regulation D.
(c) Rate Determinations. The Agent shall determine each
interest rate applicable to Obligations, and a determination thereof by
the Agent shall be conclusive and binding except in the case of
manifest error.
Section 2.4 Minimum Borrowing Amounts. Each Borrowing of Base Rate
Loans and Eurocurrency Loans denominated in U.S. Dollars shall be in an amount
not less than $1,000,000 and in integral multiples of $1,000,000.
Section 2.5 Manner of Borrowing Loans and Designating Interest Rates
Applicable to Loans.
(a) Notice to the Agent. The Borrower shall give written
notice to the Agent by no later than 10:00 a.m. (Chicago time) (i) at
least three (3) Business Days before the date on which the Borrower
requests the Banks to advance a Borrowing of Eurocurrency Loans and
(ii) on the date the Borrower requests the Banks to advance a Borrowing
of Base Rate Loans. The Loans included in each Borrowing shall bear
interest initially at the type of rate specified in such notice of a
new Borrowing. Thereafter, the Borrower
12
17
may from time to time elect to change or continue the type of interest
rate borne by each Borrowing or, subject to Section 2.4's minimum
amount requirement for each outstanding Borrowing, a portion thereof,
as follows: (i) if such Borrowing is of Eurocurrency Loans, on the last
day of the Interest Period applicable thereto, the Borrower may
continue part or all of such Borrowing as Eurocurrency Loans for an
Interest Period or Interest Periods specified by the Borrower or
convert part or all of such Borrowing into Base Rate Loans, (ii) if
such Borrowing is of Base Rate Loans, on any Business Day, the Borrower
may convert all or part of such Borrowing into Eurocurrency Loans for
an Interest Period or Interest Periods specified by the Borrower. The
Borrower shall give all such notices requesting the advance,
continuation, or conversion of a Borrowing to the Agent by telephone or
telecopy (which notice shall be irrevocable once given and, if by
telephone, shall be promptly confirmed in writing). Notices of the
continuation of a Borrowing of Eurocurrency Loans for an additional
Interest Period or of the conversion of part or all of a Borrowing of
Eurocurrency Loans into Base Rate Loans or of Base Rate Loans into
Eurocurrency Loans must be given by no later than 10:00 a.m. (Chicago
time) at least three (3) Business Days before the date of the requested
continuation or conversion. All such notices concerning the advance,
continuation, or conversion of a Borrowing shall specify the date of
the requested advance, continuation or conversion of a Borrowing (which
shall be a Business Day), the amount of the requested Borrowing to be
advanced, continued, or converted, the type of Loans to comprise such
new, continued or converted Borrowing and, if such Borrowing is to be
comprised of Eurocurrency Loans, the Interest Period applicable
thereto. The Borrower agrees that the Agent may rely on any such
telephonic or telecopy notice given by any person it in good faith
believes is an Authorized Representative without the necessity of
independent investigation, and in the event any such notice by
telephone conflicts with any written confirmation, such telephonic
notice shall govern if the Agent has acted in reliance thereon. There
may be no more than five different Interest Periods in effect at any
one time.
(b) Notice to the Banks. The Agent shall give prompt
telephonic or telecopy notice to each Bank of any notice from the
Borrower received pursuant to Section 2.5(a) above. The Agent shall
give notice to the Borrower and each Bank by like means of the interest
rate applicable to each Borrowing of Eurocurrency Loans and the amount
thereof.
(c) Borrower's Failure to Notify. Any outstanding Borrowing of
Base Rate Loans shall, subject to Section 6.2 hereof, automatically be
continued for an additional Interest Period on the last day of its then
current Interest Period unless the Borrower has notified the Agent
within the period required by Section 2.5(a) that it intends to convert
such Borrowing into a Borrowing of Eurocurrency Loans or notifies the
Agent within the period required by Section 2.8(a) that it intends to
prepay such Borrowing. If the Borrower fails to give notice pursuant to
Section 2.5(a) above of the continuation or conversion of any
outstanding principal amount of a Borrowing of Eurocurrency Loans
before the last day of its then current Interest Period within the
period required by Section 2.5(a) and has not notified the Agent within
the period required by Section 2.8(a) that it
13
18
intends to prepay such Borrowing, such Borrowing shall automatically be
converted into a Borrowing of Base Rate Loans, subject to Section 6.2
hereof.
(d) Disbursement of Loans. Not later than 11:00 a.m. (Chicago
time) on the date of any requested advance of a new Borrowing of
Eurocurrency Loans, and not later than 12:00 noon (Chicago time) on the
date of any requested advance of a new Borrowing of Base Rate Loans,
subject to Section 6 hereof, each Bank shall make available its Loan
comprising part of such Borrowing in funds immediately available at the
principal office of the Agent in Chicago, Illinois. The Agent shall
make available to the Borrower Loans at the Agent's principal office in
Chicago, Illinois or such other office as the Agent has previously
agreed to, in writing, with the Borrower.
(e) Agent Reliance on Bank Funding. Unless the Agent shall
have been notified by a Bank before the date on which such Bank is
scheduled to make payment to the Agent of the proceeds of a Loan (which
notice shall be effective upon receipt) that such Bank does not intend
to make such payment, the Agent may assume that such Bank has made such
payment when due and the Agent may in reliance upon such assumption
(but shall not be required to) make available to the Borrower the
proceeds of the Loan to be made by such Bank and, if any Bank has not
in fact made such payment to the Agent, such Bank shall, on demand, pay
to the Agent the amount made available to the Borrower attributable to
such Bank together with interest thereon in respect of each day during
the period commencing on the date such amount was made available to the
Borrower and ending on (but excluding) the date such Bank pays such
amount to the Agent at a rate per annum equal to the Federal Funds
Rate. If such amount is not received from such Bank by the Agent
immediately upon demand, the Borrower will, on demand, repay to the
Agent the proceeds of the Loan attributable to such Bank with interest
thereon at a rate per annum equal to the interest rate applicable to
the relevant Loan.
Section 2.6 Interest Periods. As provided in Section 2.5(a) hereof, at
the time of each request to advance, continue, or create by conversion a
Borrowing of Eurocurrency Loans, the Borrower shall select an Interest Period
applicable to such Loans from among the available options. The term "Interest
Period" means the period commencing on the date a Borrowing of Loans is
advanced, continued, or created by conversion and ending: (a) in the case of
Base Rate Loans, on the last Business Day of the calendar quarter in which such
Borrowing is advanced, continued, or created by conversion (or on the last day
of the following calendar quarter if such Loan is advanced, continued or created
by conversion on the last Business Day of a calendar quarter), and (b) in the
case of Eurocurrency Loans, 1, 2, 3, or 6 months thereafter; provided, however,
that:
(a) any Interest Period for a Borrowing of Base Rate Loans
that otherwise would end after the Termination Date shall end on the
Termination Date;
(b) for any Borrowing of Eurocurrency Loans, the Borrower may
not select an Interest Period that extends beyond the Termination Date;
14
19
(c) whenever the last day of any Interest Period would
otherwise be a day that is not a Business Day, the last day of such
Interest Period shall be extended to the next succeeding Business Day,
provided that, if such extension would cause the last day of an
Interest Period for a Borrowing of Eurocurrency Loans to occur in the
following calendar month, the last day of such Interest Period shall be
the immediately preceding Business Day; and
(d) for purposes of determining an Interest Period for a
Borrowing of Eurocurrency Loans, a month means a period starting on one
day in a calendar month and ending on the numerically corresponding day
in the next calendar month; provided, however, that if there is no
numerically corresponding day in the month in which such an Interest
Period is to end or if such an Interest Period begins on the last
Business Day of a calendar month, then such Interest Period shall end
on the last Business Day of the calendar month in which such Interest
Period is to end.
Section 2.7 Maturity of Loans. Unless an earlier maturity is provided
for hereunder (whether by acceleration or otherwise), each Loan shall mature and
become due and payable by the Borrower on the Termination Date.
Section 2.8 Prepayments.
(a) The Borrower may prepay without premium or penalty and in
whole or in part (but, if in part, then: (i) if such Borrowing is of
Base Rate Loans, in an amount not less than $1,000,000, (ii) if such
Borrowing is of Eurocurrency Loans in an amount not less than
$1,000,000, and (iii) in an amount such that the minimum amount
required for a Borrowing pursuant to Section 2.4 hereof remains
outstanding) any Borrowing of Eurocurrency Loans upon three Business
Days prior notice to the Agent or, in the case of a Borrowing of Base
Rate Loans, notice delivered to the Agent no later than 10:00 a.m.
(Chicago time) on the date of prepayment, such prepayment to be made by
the payment of the principal amount to be prepaid and accrued interest
thereon to the date fixed for prepayment. In the case of Eurocurrency
Loans, such prepayment may only be made on the last day of the Interest
Period then applicable to such Loans. The Agent will promptly advise
each Bank of any such prepayment notice it receives from the Borrower.
Any amount paid or prepaid before the Termination Date may, subject to
the terms and conditions of this Agreement, be borrowed, repaid and
borrowed again.
(b) If the aggregate principal amount of outstanding Loans
shall at any time for any reason exceed the Revolving Credit
Commitments then in effect, the Borrower shall, immediately and without
notice or demand, pay the amount of such excess to the Agent for the
ratable benefit of the Banks as a prepayment of the Loans. Immediately
upon determining the need to make any such prepayment the Borrower
shall notify the Agent of such required prepayment.
(c) Each such prepayment shall be accompanied by a payment of
all accrued and unpaid interest on the Loans prepaid and shall be
subject to Section 2.11.
15
20
Section 2.9 Default Rate. If any payment of any Obligation is not made
when due (whether by acceleration or otherwise), such Obligation shall bear
interest, computed on the basis of a year of 360 days and actual days elapsed
(except for Base Rate Loans bearing interest based on the rate described in
clause (i) of the definition of Base Rate, in which case such Loan shall bear
interest computed on the basis of a year of 365 or 366 days, as applicable, and
the actual number of days elapsed) from the date such payment was due until paid
in full, payable on demand, at a rate per annum equal to:
(a) for any Obligation other than a Eurocurrency Loan, the sum
of two percent (2%) plus the Base Rate Margin plus the Base Rate from
time to time in effect; and
(b) for any Eurocurrency Loan, the sum of two percent (2%)
plus the rate of interest in effect thereon at the time of such default
until the end of the Interest Period applicable thereto and,
thereafter, at a rate per annum equal to the sum of two percent (2%)
plus the Base Rate Margin plus the Base Rate from time to time in
effect.
Section 2.10 The Notes.
(a) The Loans made to the Borrower by a Bank shall be
evidenced by a single promissory note of the Borrower issued to such
Bank in the form of Exhibit A hereto. Each such promissory note is
hereinafter referred to as a "Note" and collectively such promissory
notes are referred to as the "Notes."
(b) Each Bank shall record on its books and records or on a
schedule to its Note the amount of each Loan advanced, continued, or
converted by it, all payments of principal and interest and the
principal balance from time to time outstanding thereon, the type of
such Loan, and, for any Eurocurrency Loan, the Interest Period and the
interest rate applicable thereto. The record thereof, whether shown on
such books and records of a Bank or on a schedule to any Note, shall be
prima facie evidence as to all such matters; provided, however, that
the failure of any Bank to record any of the foregoing or any error in
any such record shall not limit or otherwise affect the obligation of
the Borrower to repay all Loans made to it hereunder together with
accrued interest thereon. At the request of any Bank and upon such Bank
tendering to the Borrower the Note to be replaced, the Borrower shall
furnish a new Note to such Bank to replace any outstanding Note, and at
such time the first notation appearing on a schedule on the reverse
side of, or attached to, such Note shall set forth the aggregate unpaid
principal amount of all Loans, if any, then outstanding thereon.
Section 2.11 Funding Indemnity. If any Bank shall incur any loss, cost
or expense (including, without limitation, any loss of profit, and any loss,
cost or expense incurred by reason of the liquidation or re-employment of
deposits or other funds acquired by such Bank to fund or maintain any
Eurocurrency Loan or the relending or reinvesting of such deposits or amounts
paid or prepaid to such Bank) as a result of:
16
21
(a) any payment (whether by acceleration or otherwise),
prepayment or conversion of a Eurocurrency Loan on a date other than
the last day of its Interest Period,
(b) any failure (because of a failure to meet the conditions
of Section 6 or otherwise) by the Borrower to borrow or continue a
Eurocurrency Loan, or to convert a Base Rate Loan into a Eurocurrency
Loan, on the date specified in a notice given pursuant to Section
2.5(a) or established pursuant to Section 2.5(c) hereof,
(c) any failure by the Borrower to make any payment of
principal on any Eurocurrency Loan (x) when due (whether by
acceleration or otherwise), or (y) on the date specified in a notice of
prepayment, or
(d) any acceleration of the maturity of a Eurocurrency Loan as
a result of the occurrence of any Event of Default hereunder,
then, upon the demand of such Bank, the Borrower shall pay to such Bank such
amount as will reimburse such Bank for such loss, cost or expense. If any Bank
makes such a claim for compensation, it shall provide to the Borrower, with a
copy to the Agent, a certificate executed by an officer of such Bank setting
forth the amount of such loss, cost or expense in reasonable detail (including
an explanation of the basis for and the computation of such loss, cost or
expense) and the amounts shown on such certificate if reasonably calculated
shall be conclusive absent manifest error.
Section 2.12 Commitment Terminations. The Borrower shall have the right
at any time and from time to time, upon five (5) Business Days prior written
notice to the Agent, to terminate the Revolving Credit Commitments without
premium or penalty, in whole or in part, any partial termination to be (i) in an
amount not less than $5,000,000, and (ii) allocated ratably among the Banks in
proportion to their respective Percentages, provided that the Revolving Credit
Commitments may not be reduced to an amount less than the amount of all Loans
then outstanding. The Agent shall give prompt notice to each Bank of any such
termination of Commitments. Any termination of Revolving Credit Commitments
pursuant to this Section 2.12 may not be reinstated.
SECTION 3. FEES.
Section 3.1 Fees.
(a) Certain Fees. The Borrower shall pay, or cause to be paid,
to the Agent certain fees set forth in the Fee Letter at the time
specified in the Fee Letter for payment of such amounts.
(b) Facility Fee. For the period from the Effective Date to
and including the Termination Date, the Borrower shall pay to the Agent
for the ratable account of the Banks in accordance with their
Percentages a facility fee accruing at a rate per annum equal to the
Facility Fee Rate on the average daily amount of the Commitments
(whether
17
22
used or unused), or if the Commitments have expired or terminated, on
the principal amount of Loans. Such facility fee is payable in arrears
on the last Business Day of each calendar quarter and on the
Termination Date, unless the Revolving Credit Commitments are
terminated in whole on an earlier date, in which event the fee for the
period to but not including the date of such termination shall be paid
in whole on the date of such termination.
(c) Closing Fees. On the Effective Date the Borrower shall pay
to the Agent for the account of each Bank a closing fee of 0.05% on the
amount of such Bank's Revolving Credit Commitment in effect on the
Effective Date.
(d) Fee Calculations. All fees payable under this Agreement
shall be payable in U.S. Dollars and shall be computed on the basis of
a year of 360 days, for the actual number of days elapsed. All
determinations of the amount of fees owing hereunder (and the
components thereof) shall be made by the Agent and shall be conclusive
absent manifest error.
SECTION 4. PLACE AND APPLICATION OF PAYMENTS.
Section 4.1 Place and Application of Payments. All payments of
principal of and interest on the Loans, and of all other amounts payable by the
Borrower under this Agreement, shall be made by the Borrower to the Agent by no
later than 12:00 Noon (Chicago time) on the due date thereof at the principal
office of the Agent in Chicago, Illinois (or such other location in the United
States as the Agent may designate to the Borrower). Any payments received after
such time shall be deemed to have been received by the Agent on the next
Business Day. All such payments shall be made free and clear of, and without
deduction for, any set-off, counterclaim, levy, withholding or any other
deduction of any kind in U.S. Dollars, in immediately available funds at the
place of payment. The Agent will promptly thereafter cause to be distributed
like funds relating to the payment of principal or interest on Loans or
applicable fees ratably to the Banks and like funds relating to the payment of
any other amount payable to any Person to such Person, in each case to be
applied in accordance with the terms of this Agreement.
SECTION 5. REPRESENTATIONS AND WARRANTIES.
The Borrower hereby represents and warrants to each Bank as to itself
and, where the following representations and warranties apply to Subsidiaries,
as to each of its Subsidiaries, as follows:
Section 5.1 Corporate Organization and Authority. The Borrower and each
of its Subsidiaries is duly organized, validly existing and in good standing
under the laws of its jurisdiction of organization, except where such failure to
be in good standing would not, individually or in the aggregate, have a Material
Adverse Effect. Each is duly qualified to transact business in each jurisdiction
in which such qualification is required, whether by reason of ownership or
leasing of property or the conduct of business or otherwise, except where
failure
18
23
to be so qualified would not, individually or in the aggregate, have a
Material Adverse Effect. Each has the power and authority required to own, lease
and operate its properties and to conduct its business as currently conducted,
except where failure to have such power and authority would not, individually or
in the aggregate, have a Material Adverse Effect.
Section 5.2 Subsidiaries. Schedule 5.2 (as updated quarterly pursuant
to Section 7.6(b) hereof or otherwise from time to time in writing by the
Borrower) hereto identifies each Subsidiary and the jurisdiction of its
incorporation. All of the issued and outstanding shares of capital stock of each
Subsidiary are validly issued and outstanding and fully paid and nonassessable
except as set forth on Schedule 5.2 hereto. All such shares owned by the
Borrower are owned beneficially, and of record, and, except in the case of (i)
Liens granted in connection with the XxxXx Revolving Loan Facility, and (ii) any
Project Finance Subsidiary, free of any Lien.
Section 5.3 Corporate Authority and Validity of Obligations. The
Borrower has full right and authority to enter into this Agreement and the other
Credit Documents to which it is a party, to make the borrowings herein provided
for, to issue its Notes in evidence thereof, and to perform all of its
obligations under the Credit Documents to which it is a party. Each Credit
Document to which it is a party has been duly authorized, executed and delivered
by the Borrower and constitutes valid and binding obligations of the Borrower
enforceable in accordance with its terms. No Credit Document, nor the
performance or observance by the Borrower of any of the matters or things
therein provided for, contravenes any provision of law or any charter or by-law
provision of the Borrower or any material Contractual Obligation of or affecting
the Borrower or any of its Properties or results in or requires the creation or
imposition of any Lien on any of the Properties or revenues of the Borrower.
Section 5.4 Financial Statements. All financial statements heretofore
delivered to the Banks showing historical performance of the Borrower for each
of the Borrower's fiscal years ending on or before December 31, 1999, and for
the Borrower's quarter ended September 30, 2000 have been prepared in accordance
with generally accepted accounting principles applied on a basis consistent,
except as otherwise noted therein, with that of the previous fiscal year. Each
of such financial statements fairly presents on a consolidated basis the
financial condition of the Borrower as of the dates thereof and the results of
operations for the periods covered thereby. The Borrower and its Subsidiaries
have no material contingent liabilities other than those disclosed in such
financial statements referred to in this Section 5.4 or in comments or footnotes
thereto, or in any report supplementary thereto, heretofore furnished to the
Banks. Since December 31, 1999, there has been no material adverse change in the
business, operations, Property or financial or other condition, or business
prospects, of the Borrower or any of its Subsidiaries.
Section 5.5 No Litigation; No Labor Controversies.
(a) Except as set forth on Schedule 5.5 (as updated quarterly
pursuant to Section 7.6(b) hereof or otherwise from time to time in
writing by the Borrower), there is no litigation or governmental
proceeding pending, or to the knowledge of the Borrower,
19
24
threatened, against the Borrower or any Subsidiary which, if adversely
determined, could (individually or in the aggregate) have a Material
Adverse Effect.
(b) Except as set forth on Schedule 5.5 (as updated quarterly
pursuant to Section 7.6(b) hereof or otherwise from time to time in
writing by the Borrower), there are no labor controversies pending or,
to the best knowledge of the Borrower, threatened against the Borrower
or any Subsidiary which could have a Material Adverse Effect.
Section 5.6 Taxes. The Borrower and its Subsidiaries have filed all
United States federal tax returns, and all other tax returns, required to be
filed and have paid all taxes due pursuant to such returns or pursuant to any
assessment received by the Borrower or any Subsidiary, except such taxes, if
any, as are being contested in good faith and for which adequate reserves have
been provided. No notices of tax liens have been filed and no claims are being
asserted concerning any such taxes, which liens or claims are material to the
financial condition of the Borrower or any of its Subsidiaries (individually or
in the aggregate). The charges, accruals and reserves on the books of the
Borrower and its Subsidiaries for any taxes or other governmental charges are
adequate.
Section 5.7 Approvals. Except as contemplated by Section 7.14, no
authorization, consent, license, exemption, filing or registration with any
court or governmental department, agency or instrumentality, nor any approval or
consent of the stockholders of the Borrower or any Subsidiary or from any other
Person, is necessary to the valid execution, delivery or performance by the
Borrower or any Subsidiary of any Credit Document to which it is a party.
Section 5.8 Validity of Notes. When executed, authenticated and
delivered pursuant to the provisions of this Agreement against payment of the
consideration therefor, the Notes will be duly issued and will constitute legal,
valid and binding obligations of the Borrower, enforceable in accordance with
their terms, except for the effect of bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to or affecting the rights of
creditors generally, and will rank pari passu with all other outstanding
unsecured indebtedness of the Borrower.
Section 5.9 ERISA. With respect to each Plan, the Borrower and each
other member of the Controlled Group has fulfilled its obligations under the
minimum funding standards of and is in compliance in all material respects with
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and
with the Code to the extent applicable to it and has not incurred any liability
to the Pension Benefit Guaranty Corporation ("PBGC") or a Plan under Title IV of
ERISA other than a liability to the PBGC for premiums under Section 4007 of
ERISA. The Borrower does not have any contingent liabilities for any
post-retirement benefits under a Welfare Plan, other than liability for
continuation coverage described in Part 6 of Title I of ERISA.
Section 5.10 Government Regulation. Neither the Borrower nor any
Subsidiary is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
20
25
Section 5.11 Margin Stock; Use of Proceeds. Neither the Borrower nor
any Subsidiary is engaged principally, or as one of its primary activities, in
the business of extending credit for the purpose of purchasing or carrying
margin stock ("margin stock" to have the same meaning herein as in Regulation U
of the Board of Governors of the Federal Reserve System). The proceeds of the
Loans are to be used solely for the purposes set forth in and permitted by
Section 7.10. The Borrower will not use the proceeds of any Loan in a manner
that violates any provision of Regulation U or X of the Board of Governors of
the Federal Reserve System.
Section 5.12 Licenses and Authorizations; Compliance Laws. The Borrower
and each of its Subsidiaries has all necessary licenses, permits and
governmental authorizations to own and operate its Properties and to carry on
its business as currently conducted and contemplated. The Borrower and each of
its Subsidiaries is in compliance with all applicable laws, regulations,
ordinances and orders of any governmental or judicial authorities except for any
such law, regulation, ordinance or order which, the failure to comply therewith,
could not reasonably be expected to have a Material Adverse Effect.
Section 5.13 Ownership of Property Liens. The Borrower and each
Subsidiary has good title to or valid leasehold interests in all its Property.
None of the Borrower's Property is subject to any Lien, except as permitted in
Section 7.9.
Section 5.14 No Burdensome Restrictions; Compliance with Agreements.
Neither the Borrower nor any Subsidiary is (a) party or subject to any law,
regulation, rule or order, or any Contractual Obligation that (individually or
in the aggregate) could have a Material Adverse Effect or (b) in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in, nor has any event occurred (and is continuing) that
constitutes or would (whether or not with the giving of notice and/or with the
passage of time and/or the fulfillment of any other requirement) constitute, to
the knowledge of the Borrower, a default or any breach or failure to perform by
the Borrower under any indenture, mortgage, loan agreement, lease or other
agreement or instrument to which it is a party, which default could have a
Material Adverse Effect.
Section 5.15 Full Disclosure. All information heretofore furnished by
the Borrower to the Agent or any Bank for purposes of or in connection with the
Credit Documents or any transaction contemplated thereby is, and all such
information hereafter furnished by the Borrower to the Agent or any Bank will
be, true and accurate in all material respects and not misleading on the date as
of which such information is stated or certified.
Section 5.16 Year 2000 Problem. On the basis of a comprehensive review
and assessment of the Borrower's and its Subsidiaries' systems and equipment and
inquiry made of the Borrower's and its Subsidiaries' material suppliers, vendors
and customers, and based on its operations since January 1, 2000, the Borrower
has no reason to believe that the Year 2000 Problem, including costs of
remediation, has resulted or will result in a Material Adverse Effect. As used
herein, "Year 2000 Problem" means any significant risk that computer hardware,
software or equipment containing embedded microchips essential to the businesses
or operations of the Borrower and its Subsidiaries will not, in the case of
dates or time periods occurring after
21
26
December 31, 1999, function at least as effectively as in the case of dates or
time periods occurring prior to January 1, 2000.
SECTION 6. CONDITIONS PRECEDENT.
The obligation of each Bank to advance, continue, or convert any Loan
shall be subject to the following conditions precedent:
Section 6.1 Initial Credit Event. Before or concurrently with the
initial Credit Event:
(a) The Agent shall have received for each Bank (i) the
favorable written opinion of counsel to the Borrower in form and
substance satisfactory to the Agent and its counsel, and (ii) the
closing fee referred to in Section 3.1(c) hereof;
(b) The Agent shall have received for each Bank copies of (i)
the Articles of Incorporation, together with all amendments, and a
certificate of good standing, for the Borrower, both certified as of a
date not earlier than 20 days prior to the date hereof by the
appropriate governmental officer of the Borrower's jurisdiction of
incorporation and (ii) the Borrower's bylaws (or comparable constituent
documents) and any amendments thereto, certified in each instance by
its Secretary or an Assistant Secretary;
(c) The Agent shall have received for each Bank copies of
resolutions of the Borrower's Board of Directors authorizing the
execution and delivery of the Credit Documents and the consummation of
the transactions contemplated thereby together with specimen signatures
of the persons authorized to execute such documents on the Borrower's
behalf, all certified in each instance by its Secretary or Assistant
Secretary;
(d) The Agent shall have received for each Bank such Bank's
duly executed Note of the Borrower dated the date hereof and otherwise
in compliance with the provisions of Section 2.10(a) hereof;
(e) The Agent shall have received for each Bank a list of the
Borrower's Authorized Representatives and such other documents as any
Bank may reasonably request;
(f) All legal matters incident to the execution and delivery
of the Credit Documents shall be satisfactory to the Banks;
(g) The Existing Credit Agreement shall have terminated and
the Borrower shall have no further obligations thereunder (except
obligations which by their terms survive the termination of the
Existing Credit Agreement).
(h) The Agent shall have received a certificate by the chief
financial officer, treasurer, vice president of finance or corporate
controller of the Borrower, stating that on the date of such initial
Credit Event no Default or Event of Default has occurred and is
continuing.
22
27
Section 6.2 All Credit Events. As of the time of each Credit Event
hereunder (including the initial Credit Event):
(a) The Agent shall have received the notice required by
Section 2.5 hereof;
(b) Each of the representations and warranties set forth in
Section 5 hereof shall be and remain true and correct in all material
respects as of said time, taking into account any amendments to such
Section (including, without limitation, any amendments to the Schedules
referenced therein) made after the date of this Agreement in accordance
with its provisions, except that if any such representation or warranty
relates solely to an earlier date it need only remain true as of such
date, provided that solely for purposes of this Section 6.2(b) the
representations relating to the Borrower's Subsidiaries set forth in
Section 5.2 hereof shall be deemed representations relating only to the
Borrower's Material Subsidiaries;
(c) The Borrower shall be in full compliance with all of the
terms and conditions hereof, and no Default or Event of Default shall
have occurred and be continuing or would occur as a result of such
Credit Event;
(d) No event of default by the Borrower has been declared and
is continuing under any existing debt agreements; and
(e) Such Credit Event shall not violate any order, judgment or
decree of any court or other authority or any provision of law or
regulation applicable to any Bank (including, without limitation,
Regulation U of the Board of Governors of the Federal Reserve System).
Each request for a Borrowing hereunder shall be deemed to be a
representation and warranty by the Borrower on the date of such Credit Event as
to the facts specified in paragraphs (b) and (c) of this Section 6.2, provided,
that solely in the case of a Credit Event which is a continuation of a previous
Borrowing, the Borrower shall not be deemed to have made any representation or
warranty with regard to the matters set forth in Section 5.5(a) and (b) hereof.
SECTION 7. COVENANTS.
The Borrower covenants and agrees that, so long as any Loan is
outstanding hereunder, or any Commitment is available to or in use by the
Borrower hereunder, except to the extent compliance in any case is waived in
writing by the Required Banks:
Section 7.1 Corporate Existence; Subsidiaries. The Borrower shall, and
shall cause each of its Subsidiaries to, preserve and maintain its corporate
existence, subject to the provisions of Section 7.11 hereof.
Section 7.2 Maintenance. The Borrower will maintain, preserve and keep
its plants, Properties and equipment necessary to the proper conduct of its
business in reasonably good repair, working order and condition and will from
time to time make all reasonably necessary
23
28
repairs, renewals, replacements, additions and betterments thereto so that at
all times such plants, Properties and equipment shall be reasonably preserved
and maintained, and the Borrower will cause each of its Subsidiaries to do so in
respect of Property owned or used by it; provided, however, that nothing in this
Section 7.2 shall prevent the Borrower or a Subsidiary from discontinuing the
operation or maintenance of any such Properties if such discontinuance is not
disadvantageous to the Banks or the holders of the Notes, and is, in the
judgment of the Borrower, desirable in the conduct of its business or the
business of its Subsidiary.
Section 7.3 Taxes. The Borrower will duly pay and discharge, and will
cause each of its Subsidiaries duly to pay and discharge, all taxes, rates,
assessments, fees and governmental charges upon or against it or against its
Properties, in each case before the same becomes delinquent and before penalties
accrue thereon, unless and to the extent that the same is being contested in
good faith by appropriate proceedings and reserves in conformity with GAAP have
been provided therefor on the books of the Borrower.
Section 7.4 ERISA. The Borrower will promptly pay and discharge all
obligations and liabilities arising under ERISA of a character which if unpaid
or unperformed might result in the imposition of a Lien against any of its
properties or assets and will promptly notify the Agent of (i) the occurrence of
any reportable event (as defined in ERISA) affecting a Plan, other than any such
event of which the PBGC has waived notice by regulation, (ii) receipt of any
notice from PBGC of its intention to seek termination of any Plan or appointment
of a trustee therefor, (iii) its intention to terminate or withdraw from any
Plan, and (iv) the occurrence of any event affecting any Plan which could result
in the incurrence by the Borrower of any material liability, fine or penalty, or
any material increase in the contingent liability of the Borrower under any
post-retirement Welfare Plan benefit. The Agent will promptly distribute to each
Bank any notice it receives from the Borrower pursuant to this Section 7.4.
Section 7.5 Insurance. The Borrower will insure, and keep insured, and
will cause each of its Subsidiaries to insure, and keep insured, with good and
responsible insurance companies, all insurable Property owned by it of a
character usually insured by companies similarly situated and operating like
Property. To the extent usually insured (subject to self-insured retentions) by
companies similarly situated and conducting similar businesses, the Borrower
will also insure, and cause each of its Subsidiaries to insure, employers' and
public and product liability risks with good and responsible insurance
companies. The Borrower will upon request of the Agent furnish to the Agent a
summary setting forth the nature and extent of the insurance maintained pursuant
to this Section 7.5.
Section 7.6 Financial Reports and Other Information.
(a) The Borrower will maintain a system of accounting in
accordance with GAAP and will furnish to the Banks and their respective
duly authorized representatives such information respecting the
business and financial condition of the Borrower and its subsidiaries
as any Bank may reasonably request; and without any request, the
Borrower will furnish each of the following to each Bank:
24
29
(i) within 120 days after the end of each fiscal
year of the Borrower, (A) a copy of the Borrower's audited
financial statements for such fiscal year, including the
consolidated balance sheet of the Borrower for such year and
the related statement of income and statement of cash flow, as
certified by independent public accountants of recognized
national standing selected by the Borrower in accordance with
GAAP with such accountants unqualified opinion to the effect
that the financial statements have been prepared in accordance
with GAAP and present fairly in all material respects in
accordance with GAAP the consolidated financial position of
the Borrower and its subsidiaries as of the close of such
fiscal year and the results of their operations and cash flows
for the fiscal year then ended and that an examination of such
accounts in connection with such financial statements has been
made in accordance with generally accepted auditing standards
and accordingly, such examination included such tests of the
accounting records and such other auditing procedures as were
considered necessary in the circumstances; (B) a copy of the
Borrower's unaudited consolidating financials for such fiscal
year, including a consolidating unaudited balance sheet of the
Borrower, and the related statement of income and shall use
its best efforts to provide a statement of cash flow in a
format acceptable to the Agent; all of the foregoing prepared
by the Borrower in reasonable detail in accordance with GAAP
and certified by the Borrower's chief financial officer,
treasurer, vice president of finance or corporate controller
as fairly presenting the financial condition as at the dates
thereof and the results of operations for the periods covered
thereby;
(ii) within 60 days after the end of each of the
first three quarterly fiscal periods of the Borrower, a
condensed consolidated unaudited balance sheet of the
Borrower, and the related statement of income and statement of
cash flow, as of the close of such period, all of the
foregoing prepared by the Borrower in reasonable detail in
accordance with GAAP and certified by the Borrower's chief
financial officer, treasurer, vice president of finance or
corporate controller as fairly presenting the financial
condition as at the dates thereof and the results of
operations for the periods covered thereby (subject to year
end adjustments):
(iii) within the period provided in subsection (i)
above, the written statement of the accountants who certified
the audit report thereby required that in the course of their
audit they have obtained no knowledge of any Default or Event
of Default, or, if such accountants have obtained knowledge of
any such Default or Event of Default, they shall disclose in
such statement the nature and period of the existence thereof;
(iv) promptly after the sending or filing thereof,
copies of all proxy statements, financial statements and
reports the Borrower sends to its shareholders, and copies of
all other regular, periodic and special reports and all
registration statements the Borrower files with the SEC or any
successor thereto, or with any national securities exchanges.
25
30
(b) Each financial statement furnished to the Banks pursuant
to subsection (i) or (ii) of Section 7.6(a) shall be accompanied by (A)
a written certificate signed by the Borrower's chief financial officer,
vice president of finance, corporate controller or treasurer (i) to the
effect that no Default or Event of Default has occurred during the
period covered by such statements or, if any such Default or Event of
Default has occurred during such period, setting forth a description of
such Default or Event of Default and specifying the action, if any,
taken by the Borrower to remedy the same, (ii) to the effect that the
representations and warranties contained in Section 5 hereof are true
and correct in all material respects as though made on the date of such
certificate (other than those made solely as of an earlier date, which
need only remain true as of such date), taking into account any
amendments to such Section (including, without limitation, any
amendments to the Schedules referenced therein) made after the date of
this Agreement in accordance with its provisions and except as
otherwise described therein, (iii) notifying the Banks (x) of any
litigation or governmental proceeding of the type described in Section
5.5 hereof or (y) of any change in the information set forth on the
Schedules hereto and (B) a Compliance Certificate in the form of
Exhibit B hereto showing the Borrower's compliance with the covenants
set forth in Sections 7.9, 7.11, 7.12 and 7.13 hereof.
(c) The Borrower will (i) promptly (and in any event within
three Business Days after an officer of the Borrower has knowledge
thereof) give notice to the Agent and each Bank (x) of the occurrence
of any Default or Event of Default or (y) of any payment default or
payment event of default aggregating $50,000,000 or more under any
Contractual Obligation of the Borrower and (ii) promptly (and in any
event within ten Business Days after an officer of the Borrower has
knowledge thereof) give notice to the Agent and each Bank of any
material adverse change in the business, operations, Property or
financial or other condition of the Borrower and its Subsidiaries
(individually or in the aggregate).
Section 7.7 Bank Inspection Rights. Upon reasonable notice from any
Bank, the Borrower will, at the Borrower's expense (such expenses to be
reasonably incurred), permit such Bank (and such Persons as any Bank may
designate) during normal business hours to visit and inspect, under the
Borrower's guidance, any of the properties of the Borrower or any of its
Subsidiaries, to examine all of their books of account, records, reports and
other papers, to make copies and extracts therefrom, and to discuss their
respective affairs, finances and accounts with their respective officers,
employees and with their independent public accountants (and by this provision
the Borrower authorizes such accountants to discuss with the Banks (and such
Persons as any Bank may designate subject to confidentiality agreements
reasonably acceptable to the Borrower) the finances and affairs of the Borrower
and its Subsidiaries) all at such reasonable times and as often as may be
reasonably requested; provided, however, that except upon the occurrence and
during the continuation of any Default or Event of Default, not more than one
such set of visits and inspections may be conducted each calendar quarter.
26
31
Section 7.8 Conduct of Business. The Borrower will not engage in any
line of business other than business associated with or related to energy
generation, transmission, marketing and distribution or other infrastructure
lines of business.
Section 7.9 Liens. The Borrower shall cause the Obligations to at all
times rank at least pari passu with all other senior unsecured obligations of
the Borrower. The Borrower will not create, incur, permit to exist or to be
incurred any Lien of any kind on any Property owned by the Borrower; provided,
however, that this Section 7.9 shall not apply to nor operate to prevent:
(a) Liens upon any Property acquired by the Borrower to secure
any Indebtedness (which for purposes of this Section 7.9(a) shall
include non-recourse obligations) of the Borrower incurred to finance
or refinance the purchase price of such Property (including Property
which was initially purchased with equity), provided that any such Lien
shall apply only to the Property that was so acquired and the aggregate
principal amount of Indebtedness secured by such Liens shall not exceed
the cost or value of the acquired Property;
(b) Other Liens not to exceed 10% of Consolidated Net Tangible
Assets;
(c) Liens on the stock or other equity interests (i) granted
in connection with the XxxXx Revolving Loan Facility and (ii) of
Project Finance Subsidiaries; and
(d) Any extension, renewal or replacement (or successive
extensions, renewals or replacements) in whole or in part of any Lien
referred to in the foregoing paragraphs (a) through (c), inclusive.
Section 7.10 Use of Proceeds; Regulation U. The proceeds of each
Borrowing will be used by the Borrower to repay indebtedness outstanding under
the Existing Credit Agreement, and for working capital and general corporate
purposes. The Borrower will not use any part of the proceeds of any of the
Borrowings directly or indirectly to purchase or carry any margin stock (as
defined in Section 5.11 hereof) or to extend credit to others for the purpose of
purchasing or carrying any such margin stock.
Section 7.11 Mergers, Consolidations and Sales of Assets.
(a) The Borrower will not consolidate with or merge into any
other Person or sell, convey, transfer or lease its properties and
assets substantially as an entirety to any Person, and the Borrower
shall not permit any Person to consolidate with or merge into the
Borrower, unless: (i) immediately prior to and immediately following
such consolidation, merger, sale or lease, and after giving effect
thereto, no Default or Event of Default shall have occurred and be
continuing; and (ii) the Borrower is the surviving or continuing
corporation, or the surviving or continuing corporation that acquires
by sale, conveyance, transfer or lease (a) has a Rating equal to or
better than the Rating of the Borrower in effect prior to such
consolidation or merger and (y) is incorporated in the
27
32
United States and expressly assumes the payment and performance of all
Obligations of the Borrower under the Credit Documents pursuant to
documentation in form and substance satisfactory to the Required Banks.
(b) Except for the sale of the properties and assets of the
Borrower substantially as an entirety pursuant to subsection (a) above,
and other than assets required to be sold to conform with governmental
regulations, the Borrower shall not sell or otherwise dispose of any
assets (other than short-term, readily marketable investments purchased
for cash management purposes with funds not representing the proceeds
of other asset sales) if on a pro forma basis, the aggregate net book
value of all such sales during the most recent 12-month period would
exceed ten percent (10%) of Consolidated Net Tangible Assets computed
as of the end of the most recent fiscal quarter preceding such sale;
provided, however, that any such sales shall be disregarded for
purposes of this ten percent (10%) limitation if the proceeds are
invested in assets in similar or related lines of business of the
Borrower and, provided further, that the Borrower may sell or otherwise
dispose of assets in excess of such ten percent (10%) if the proceeds
from such sales or dispositions, which are not reinvested as provided
above, are retained by the Borrower as cash or cash equivalents at all
times until invested in assets in similar or related lines of business
of the Borrower.
Section 7.12 Consolidated Net Worth. The Borrower will at all times
cause its Consolidated Net Worth to be equal to or greater than the Minimum
Consolidated Net Worth.
Section 7.13 Indebtedness to Consolidated Capitalization. The Borrower
will at the end of each of its fiscal quarters maintain a ratio of its
Indebtedness to Consolidated Capitalization of not more than 0.68 to 1.00,
provided that for not more than two consecutive months in any six month period
(any such two month period being referred to herein as a "Non-Conforming
Period"), the ratio of the Borrower's Indebtedness to Consolidated
Capitalization may increase to not more than 0.72 to 1.00 so long as the
Borrower delivers to the Agent within 30 days after the end of any such
Non-Conforming Period written affirmation from Xxxxx'x Investors Service, Inc.
and Standard and Poor's Ratings Service, Inc. that the respective Ratings which
were in effect prior to such Non-Conforming Period remains in effect and that
the Borrower has not been placed in any "credit-watch with negative
implications" or similar type of category. For purposes of this covenant, only
fifty percent (50%) of any Indebtedness of the Borrower constituting Performance
Guarantees of obligations of the Borrower's Affiliates shall be deemed
Indebtedness, provided that if any demand has been made on such guarantee, the
full amount of such guarantee shall be included in calculating Indebtedness.
Section 7.14 Compliance with Laws. Without limiting any of the other
covenants of the Borrower in this Section 7, the Borrower will conduct its
business, and otherwise be, in compliance with all applicable laws, regulations,
ordinances, writs, judgments, injunctions, decrees, awards and orders of any
governmental or judicial authorities; provided, however, that the Borrower shall
not be required to comply with any such law, rule, regulation, ordinance, writ,
judgments, injunction, decree, award or order if the failure to comply therewith
could not reasonably be expected to have a Material Adverse Effect.
28
33
Section 7.15 PUHCA. The Borrower has obtained, and will maintain in
full force and effect, all necessary approvals, if any, under the Public Utility
Holding Company Act of 1935, as amended, in connection with the Borrower's
performance under the Credit Documents.
SECTION 8. EVENTS OF DEFAULT AND REMEDIES.
Section 8.1 Events of Default. Any one or more of the following shall
constitute an Event of Default:
(a) The Borrower shall (i) fail to make when due any payment
of principal on the Notes, or (ii) fail to make when due, and
continuance of such failure for three or more Business Days, payment of
interest on the Notes or any fee or other amount required to be made to
the Agent pursuant to the Credit Documents;
(b) Any representation or warranty made or deemed to have been
made by or on behalf of the Borrower in the Credit Documents or on
behalf of the Borrower in any certificate, statement, report or other
writing furnished by or on behalf of the Borrower to the Agent pursuant
to the Credit Documents or any other instrument, document or agreement
shall prove to have been false or misleading in any material respect on
the date as of which the facts set forth are stated or certified or
deemed to have been stated or certified;
(c) The Borrower shall fail to comply with Section 7 hereof
and such failure to comply shall continue for 30 calendar days after
the earlier to occur of (i) notice thereof to the Borrower by the Agent
and (ii) first actual knowledge thereof by an officer of the Borrower;
(d) The Borrower shall fail to comply with any agreement,
covenant, condition, provision or term contained in the Credit
Documents (and such failure shall not constitute an Event of Default
under any of the other provisions of this Section 8) and such failure
to comply shall continue for 30 calendar days after the earlier to
occur of (i) notice thereof to the Borrower by the Agent and (ii) first
actual knowledge thereof by an officer of the Borrower;
(e) The Borrower shall become insolvent or shall generally not
pay its debts as they mature or shall apply for, shall consent to, or
shall acquiesce in the appointment of a custodian, trustee or receiver
of the Borrower or for a substantial part of the property thereof or,
in the absence of such application, consent or acquiescence, a
custodian, trustee or receiver shall be appointed for the Borrower or
for a substantial part of the property thereof and shall not be
discharged within 90 days;
(f) Any bankruptcy, reorganization, debt arrangement or other
proceedings under any bankruptcy or insolvency law shall be instituted
by or against the Borrower, and, if instituted against the Borrower,
shall have been consented to or acquiesced in by the Borrower, or shall
remain undismissed for 90 days, or an order for relief shall have
29
34
been entered against the Borrower, or the Borrower shall take any
corporate action to approve institution of, or acquiescence in, such a
proceeding;
(g) Any dissolution or liquidation proceeding shall be
instituted by or against the Borrower and, if instituted against the
Borrower, shall be consented to or acquiesced in by the Borrower or
shall remain for 90 days undismissed, or the Borrower shall take any
corporate action to approve institution of, or acquiescence in, such a
proceeding;
(h) A judgment or judgments, decrees or orders of any court,
tribunal, arbitrator, administrative or other governmental body or
entity for the payment of money in excess of the sum of $50,000,000 in
the aggregate shall be rendered against the Borrower (excluding the
amount thereof covered by insurance) or any of the Borrower's
properties and such judgment, decree or order shall remain unvacated
and undischarged and unstayed for 90 consecutive days, except while
being contested in good faith by appropriate proceedings;
(i) The institution by the Borrower of steps to terminate any
Plan if in order to effectuate such termination, the Borrower would be
required to make a contribution to such Plan, or would incur a
liability or obligation to such Plan, in excess of $50,000,000, or the
institution by the PBGC of steps to terminate any Plan;
(j) Either (A) a default shall occur under that certain Credit
Agreement dated as of November 30, 1999 among NRG Energy, Inc., the
banks party thereto and Australia and New Zealand Banking Group
Limited, as Administrative Agent, as such agreement may from time to
time be restated, amended or otherwise modified or any substitute or
replacement credit agreement with respect thereto (the "LC Agreement"),
and as a result of such default is (x) the termination of the
commitments under the LC Agreement, (y) the Borrower is required to
provide cash collateral pursuant to the LC Agreement, or (z) the bank
and/or the agent under the LC Agreement exercise any right or remedy
thereunder, or (B) (i) a default in payment of any principal of or any
interest aggregating $50,000,000 or more on any bond, debenture, note
or other evidence of indebtedness of the Borrower or under any
indenture or other instrument under which any such evidence of
indebtedness has been issued or (ii) a default shall occur under any
bond, debenture, note or other evidence of indebtedness of the Borrower
or under any indenture or other instrument under which any such
evidence of indebtedness has been issued and such default shall
continue for a period of time sufficient to permit the holder or
beneficiary of such indebtedness or a trustee therefor to cause the
acceleration of the maturity of any such indebtedness of principal of
or any interest aggregating $50,000,000 or more or any mandatory
unscheduled prepayment, purchase or funding thereof; or
(k) if at any time both (i) Xcel Energy Inc., a Minnesota
corporation, or its successors, ceases to own a majority of the
outstanding Voting Stock of the Borrower and (ii) the Borrower does not
have an Investment Grade Rating.
30
35
Section 8.2 Non-Bankruptcy Defaults. When any Event of Default other
than those described in subsections (e), (f) or (g) of Section 8.1 hereof has
occurred and is continuing, the Agent shall, by written notice to the Borrower:
(a) if so directed by the Required Banks, terminate the remaining Commitments
and all other obligations of the Banks hereunder on the date stated in such
notice (which may be the date thereof); and (b) if so directed by the Required
Banks, declare the principal of and the accrued interest on all outstanding
Notes to be forthwith due and payable and thereupon all outstanding Notes,
including both principal and interest thereon, shall be and become immediately
due and payable together with all other amounts payable under the Credit
Documents without further demand, presentment, protest or notice of any kind.
The Agent, after giving notice to the Borrower pursuant to Section 8.1(c),
8.1(d) or this Section 8.2, shall also promptly send a copy of such notice to
the other Banks, but the failure to do so shall not impair or annul the effect
of such notice.
Section 8.3 Bankruptcy Defaults. When any Event of Default described in
subsections (e), (f) or (g) of Section 8.1 hereof has occurred and is
continuing, then all outstanding Notes shall immediately and automatically
become due and payable together with all other amounts payable under the Credit
Documents without presentment, demand, protest or notice of any kind and the
obligation of the Banks to extend further credit pursuant to any of the terms
hereof shall immediately and automatically terminate.
Section 8.4 [Intentionally Omitted]
Section 8.5 Notice of Default. The Agent shall give notice to the
Borrower under Section 8.1(c) or 8.1(d) hereof promptly upon being requested to
do so by any Bank and shall thereupon notify all the Banks thereof.
Section 8.6 Expenses. The Borrower agrees to pay to the Agent and each
Bank, and any other holder of any Note outstanding hereunder, all reasonable
costs and expenses incurred or paid by the Agent or such Bank or any such
holder, including attorneys' fees and court costs, in connection with any
Default or Event of Default by the Borrower hereunder or in connection with the
enforcement of any of the Credit Documents.
SECTION 9. CHANGE IN CIRCUMSTANCES.
Section 9.1 Change of Law. Notwithstanding any other provisions of this
Agreement or any Note if at any time after the date hereof any change in
applicable law or regulation or in the interpretation thereof makes it unlawful
for any Bank to make or continue to maintain Eurocurrency Loans or to perform
its obligations as contemplated hereby, such Bank shall promptly give notice
thereof to the Borrower and such Bank's obligations to make or maintain
Eurocurrency Loans under this Agreement shall terminate until it is no longer
unlawful for such Bank to make or maintain Eurocurrency Loans. The Borrower
shall prepay on demand the outstanding principal amount of any such affected
Eurocurrency Loans, together with all interest accrued thereon at a rate per
annum equal to the interest rate applicable to such Loan; provided, however,
subject to all of the terms and conditions of this Agreement, the Borrower may
then elect to borrow the principal amount of the affected Eurocurrency Loans
from such Bank by
31
36
means of Base Rate Loans from such Bank, which Base Rate Loans shall not be made
ratably by the Banks but only from such affected Bank.
Section 9.2 Unavailability of Deposits or Inability to Ascertain, or
Inadequacy of, LIBOR. If on or prior to the first day of any Interest Period for
any Borrowing of Loans:
(a) the Agent determines that deposits in U.S. Dollars (in the
applicable amounts) are not being offered to it in the federal funds or
eurocurrency interbank market, as applicable, for such Interest Period,
or that by reason of circumstances affecting the federal funds or
interbank eurocurrency market, as applicable, adequate and reasonable
means do not exist for ascertaining the applicable Federal Funds Rate
or LIBOR; or
(b) Banks having 25% or more of the aggregate amount of the
Revolving Credit Commitments reasonably determine and so advise the
Agent that the Federal Funds Rate or LIBOR, as applicable, as
reasonably determined by the Agent will not adequately and fairly
reflect the cost to such Banks or Bank of funding their or its Loans or
Loan for such Interest Period;
then the Agent shall forthwith give notice thereof to the Borrower and the
Banks, whereupon until the Agent notifies the Borrower that the circumstances
giving rise to such suspension no longer exist, the obligations of the Banks or
of the relevant Bank to make Base Rate Loans bearing interest at the Federal
Funds Rate or Eurocurrency Loans in the currency so affected, as applicable,
shall be suspended.
Section 9.3 Increased Cost and Reduced Return.
(a) If, on or after the date hereof, the adoption of any
applicable law, rule or regulation, or any change therein, or any
change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with
the interpretation or administration thereof, or compliance by any Bank
(or its Lending Office) with any request or directive (whether or not
having the force of law but, if not having the force of law, compliance
with which is customary in the relevant jurisdiction) of any such
authority, central bank or comparable agency:
(i) shall subject any Bank (or its Lending Office) to
any tax, duty or other charge with respect to its Eurocurrency
Loans, its Notes, or its obligation to make Eurocurrency
Loans, or shall change the basis of taxation of payments to
any Bank (or its Lending Office) of the principal of or
interest on its Eurocurrency Loans, or any other amounts due
under this Agreement in respect of its Eurocurrency Loans or
its obligation to make Eurocurrency Loans (except for changes
in the rate of tax on the overall net income or profits of
such Bank or its Lending Office imposed by the jurisdiction in
which such Bank or its lending office is incorporated in which
such Bank's principal executive office or Lending Office is
located); or
32
37
(ii) shall impose, modify or deem applicable any
reserve, special deposit or similar requirement (including,
without limitation, any such requirement imposed by the Board
of Governors of the Federal Reserve System, but excluding with
respect to any Eurocurrency Loans any such requirement
included in an applicable Eurocurrency Reserve Percentage)
against assets of, deposits with or for the account of, or
credit extended by, any Bank (or its Lending Office) or shall
impose on any Bank (or its Lending Office) or on the interbank
market any other condition affecting its Eurocurrency Loans,
its Notes, or its obligation to make Eurocurrency Loans;
and the result of any of the foregoing is to increase the cost to such Bank (or
its Lending Office) of making or maintaining any Eurocurrency Loan, or to reduce
the amount of any sum received or receivable by such Bank (or its Lending
Office) under this Agreement or under its Notes with respect thereto, by an
amount deemed by such Bank to be material, then, within fifteen (15) days after
demand by such Bank (with a copy to the Agent), the Borrower shall be obligated
to pay to such Bank such additional amount or amounts as will compensate such
Bank for such increased cost or reduction. In the event any law, rule,
regulation or interpretation described above is revoked, declared invalid or
inapplicable or is otherwise rescinded, and as a result thereof a Bank is
determined to be entitled to a refund from the applicable authority for any
amount or amounts which were paid or reimbursed by Borrower to such Bank
hereunder, such Bank shall, so long as no Event of Default has occurred and is
then continuing, refund such amount or amounts to Borrower without interest.
(b) If, after the date hereof, any Bank or the Agent shall
have determined that the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change therein
(including, without limitation, any revision in the Final Risk-Based
Capital Guidelines of the Board of Governors of the Federal Reserve
System (12 CFR Part 208, Appendix A; 00 XXX Xxxx 000, Xxxxxxxx X) or of
the Office of the Comptroller of the Currency (12 CFR Part 3, Appendix
A), or in any other applicable capital rules heretofore adopted and
issued by any governmental authority), or any change in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Lending
Office) with any request or directive regarding capital adequacy
(whether or not having the force of law but, if not having the force of
law, compliance with which is customary in the applicable jurisdiction)
of any such authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on such Bank's capital,
or on the capital of any corporation controlling such Bank, as a
consequence of its obligations hereunder to a level below that which
such Bank could have achieved but for such adoption, change or
compliance (taking into consideration such Bank's policies with respect
to capital adequacy) by an amount deemed by such Bank to be material,
then from time to time, within fifteen (15) days after demand by such
Bank (with a copy to the Agent), the Borrower shall pay to such Bank
such additional amount or amounts as will compensate such Bank for such
reduction.
33
38
(c) Each Bank that determines to seek compensation under this
Section 9.3 shall notify the Borrower and the Agent of the
circumstances that entitle the Bank to such compensation pursuant to
this Section 9.3 and will designate a different Lending Office if such
designation will avoid the need for, or reduce the amount of, such
compensation and will not, in the sole judgment of such Bank, be
otherwise disadvantageous to such Bank. A certificate of any Bank
claiming compensation under this Section 9.3 and setting forth the
additional amount or amounts to be paid to it hereunder shall be
conclusive in the absence of manifest error. In determining such
amount, such Bank may use any reasonable averaging and attribution
methods.
(d) If any Bank (other than ABN AMRO Bank N.V.) has demanded
compensation or given notice of its intention to demand compensation
under this Section 9.3 or the Borrower is required to pay any
additional amount to any Bank under Section 9.3, the Borrower shall
have the right, with the assistance of the Agent, to seek a substitute
Bank or Banks reasonably satisfactory to the Agent (which may be one or
more of the Banks) to replace such Bank under this Agreement and on the
date of replacement, the Borrower shall pay all accrued interest and
fees to the Bank being replaced. The Bank to be so replaced shall
cooperate with the Borrower and substitute Bank to accomplish such
substitution, provided that all of such Bank's Loan Commitment is
replaced.
Section 9.4 Lending Offices. Each Bank may, at its option, elect to
make its Loans hereunder at the branch, office or affiliate specified on the
appropriate signature page hereof or in the assignment agreement which any
assignee bank executes pursuant to Section 11.12 hereof (each a "Lending
Office") for each type of Loan available hereunder or at such other of its
branches, offices or affiliates as it may from time to time elect and designate
in a written notice to the Borrower and the Agent.
Section 9.5 Discretion of Bank as to Manner of Funding. Notwithstanding
any other provision of this Agreement, each Bank shall be entitled to fund and
maintain its funding of all or any part of its Loans in any manner it sees fit,
it being understood, however, that for the purposes of this Agreement all
determinations hereunder shall be made as if each Bank had actually funded and
maintained each Eurocurrency Loan through the purchase of deposits of U.S.
Dollars in the eurocurrency interbank market having a maturity corresponding to
such Loan's Interest Period and bearing an interest rate equal to LIBOR for such
Interest Period.
SECTION 10. THE AGENT.
Section 10.1 Appointment and Authorization of Agent. Each Bank hereby
appoints ABN AMRO Bank N.V. as the Agent under the Credit Documents and hereby
authorizes the agent to take such action as Agent on its behalf and to exercise
such powers under the Credit Documents as are delegated to the Agent by the
terms thereof, together with such powers as are reasonably incidental thereto.
The Agent shall have no duties or responsibilities except those expressly set
forth in this Agreement and the Credit Documents. The duties of the Agent shall
be mechanical and administrative in nature; the Agent shall not have by reason
of this
34
39
Agreement or any other Credit Document a fiduciary relationship in respect of
any Bank, the holder of any Note or any other Person; and nothing in this
Agreement or any other Credit Document, expressed or implied, is intended to or
shall be so construed as to impose upon the Agent any obligations in respect of
this Agreement or any other Credit Document except as expressly set forth herein
or therein.
Section 10.2 Agent and its Affiliates. The Agent shall have the same
rights and powers under this Agreement and the other Credit Documents as any
other Bank and may exercise or refrain from exercising the same as though it
were not the Agent, and the Agent and its affiliates may accept deposits from,
lend money to, and generally engage in any kind of business with the Borrower or
any Affiliate of the Borrower as if it were not the Agent under the Credit
Documents. The term "Bank" as used herein and in all other Credit Documents,
unless the context otherwise clearly requires, includes the Agent in its
individual capacity as a Bank. References in Section 2 hereof to the Agent's
Loans, or to the amount owing to the Agent for which an interest rate is being
determined, refer to the Agent in its individual capacity as a Bank.
Section 10.3 Action by Agent. If the Agent receives from the Borrower a
written notice of an Event of Default pursuant to Section 7.6(c)(i) hereof, the
Agent shall promptly give each of the Banks written notice thereof. The
obligations of the Agent under the Credit Documents are only those expressly set
forth therein. Without limiting the generality of the foregoing, the Agent shall
not be required to take any action hereunder with respect to any Default or
Event of Default, except as expressly provided in Sections 8.2 and 8.5. In no
event, however, shall the Agent be required to take any action in violation of
applicable law or of any provision of any Credit Document, and the Agent shall
in all cases be fully justified in failing or refusing to act hereunder or under
any other Credit Document unless it shall be first indemnified to its reasonable
satisfaction by the Banks against any and all costs, expense, and liability
which may be incurred by it by reason of taking or continuing to take any such
action. The Agent shall be entitled to assume that no Default or Event of
Default exists unless notified to the contrary by a Bank or the Borrower. In all
cases in which this Agreement and the other Credit Documents do not require the
Agent to take certain actions, the Agent shall be fully justified in using its
discretion in failing to take or in taking any action hereunder and thereunder.
Section 10.4 Consultation with Experts. The Agent may consult with
legal counsel, independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be taken by it in
good faith in accordance with the advice of such counsel, accountants or
experts.
Section 10.5 Liability of Agent; Credit Decision. Neither the Agent nor
any of its directors, officers, agents, or employees shall be liable for any
action taken or not taken by it in connection with the Credit Documents (i) with
the consent or at the request of the Required Banks or (ii) in the absence of
its own gross negligence or willful misconduct. Neither the Agent nor any of its
directors, officers, agents or employees shall be responsible for or have any
duty to ascertain, inquire into or verify: (i) any statement, warranty or
representation made in connection with this Agreement, any other Credit Document
or any Credit Event; (ii) the performance or observance of any of the covenants
or agreements of the Borrower or any other party contained
35
40
herein or in any other Credit Document; (iii) the satisfaction of any condition
specified in Section 6 hereof, except receipt of items required to be delivered
to the Agent; or (iv) the validity, effectiveness, genuineness, enforceability,
perfection, value, worth or collectability hereof or of any other Credit
Document or of any other documents or writing furnished in connection with any
Credit Document; and the Agent makes no representation of any kind or character
with respect to any such matter mentioned in this sentence. The Agent may
execute any of its duties under any of the Credit Documents by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Banks, the Borrower, or any other Person for the default or misconduct of any
such agents or attorneys-in-fact selected with reasonable care. The Agent shall
not incur any liability by acting in reliance upon any notice, consent,
certificate, other document or statement (whether written or oral) believed by
it to be genuine or to be sent by the proper party or parties. In particular and
without limiting any of the foregoing, the Agent shall have no responsibility
for confirming the accuracy of any Compliance Certificate or other document or
instrument received by it under the Credit Documents. The Agent may treat the
payee of any Note as the holder thereof until written notice of transfer shall
have been filed with the Agent signed by such payee in form satisfactory to the
Agent. Each Bank acknowledges that it has independently and without reliance on
the Agent or any other Bank, and based upon such information, investigations and
inquiries as it deems appropriate, made its own credit analysis and decision to
extend credit to the Borrower in the manner set forth in the Credit Documents.
It shall be the responsibility of each Bank to keep itself informed as to the
creditworthiness of the Borrower and any other relevant Person, and the Agent
shall have no liability to any Bank with respect thereto.
Section 10.6 Indemnity. The Banks shall ratably, in accordance with
their respective Percentages, indemnify and hold the Agent, and its directors,
officers, employees, agents and representatives harmless from and against any
liabilities, losses, costs or expenses suffered or incurred by it under any
Credit Document or in connection with the transactions contemplated thereby,
regardless of when asserted or arising, except to the extent they are promptly
reimbursed for the same by the Borrower and except to the extent that any event
giving rise to a claim was caused by the gross negligence or willful misconduct
of the party seeking to be indemnified. The obligations of the Banks under this
Section 10.6 shall survive termination of this Agreement.
Section 10.7 Resignation of Agent and Successor Agent. The Agent may
resign at any time by giving written notice thereof to the Banks and the
Borrower. Upon any such resignation of the Agent, the Required Banks shall have
the right to appoint a successor Agent with the consent of the Borrower,
provided, that at any time an Event of Default has occurred and is continuing,
no such consent shall be required. If no successor Agent shall have been so
appointed by the Required Banks, and shall have accepted such appointment,
within thirty (30) days after the retiring Agent's giving of notice of
resignation, then the retiring Agent may, on behalf of the Banks, with the
consent of the Borrower, appoint a successor Agent, which shall be any Bank
hereunder or any commercial bank organized under the laws of the United States
of America or of any State thereof and having a combined capital and surplus of
at least $200,000,000. Upon the acceptance of its appointment as the Agent
hereunder, such successor Agent shall thereupon succeed to and become vested
with all the rights and duties of the retiring or removed Agent under the Credit
Documents, and the retiring Agent shall be discharged from
36
41
its duties and obligations thereunder. After any retiring Agent's resignation
hereunder as Agent, the provisions of this Section 10 and all protective
provisions of the other Credit Documents shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent.
SECTION 11. MISCELLANEOUS.
Section 11.1 Withholding Taxes.
(a) Payments Free of Withholding. Subject to Section 11.1(b)
hereof, each payment by the Borrower under this Agreement or the other
Credit Documents shall be made without withholding for or on account of
any present or future taxes (other than overall net income taxes on the
recipient). If any such withholding is so required, the Borrower shall
make the withholding, pay the amount withheld to the appropriate
governmental authority before penalties attach thereto or interest
accrues thereon and forthwith pay such additional amount as may be
necessary to ensure that the net amount actually received by each Bank
and the Agent free and clear of such taxes (including such taxes on
such additional amount) is equal to the amount which that Bank or the
Agent (as the case may be) would have received had such withholding not
been made. If the Agent or any Bank pays any amount in respect of any
such taxes, penalties or interest the Borrower shall reimburse the
Agent or that Bank for that payment on demand in the currency in which
such payment was made. If the Borrower pays any such taxes, penalties
or interest, it shall deliver official tax receipts evidencing that
payment or certified copies thereof to the Bank or Agent on whose
account such withholding was made (with a copy to the Agent if not the
recipient of the original) on or before the thirtieth day after
payment. If any Bank or the Agent determines it has received or been
granted a credit against or relief or remission for, or repayment of,
any taxes paid or payable by it because of any taxes, penalties or
interest paid by the Borrower and evidenced by such a tax receipt, such
Bank or Agent shall, to the extent it can do so without prejudice to
the retention of the amount of such credit, relief, remission or
repayment, pay to the Borrower such amount as such Bank or Agent
determines is attributable to such deduction or withholding and which
will leave such Bank or Agent (after such payment) in no better or
worse position than it would have been in if the Borrower had not been
required to make such deduction or withholding. Nothing in this
Agreement shall interfere with the right of each Bank and the Agent to
arrange its tax affairs in whatever manner it thinks fit nor oblige any
Bank or the Agent to disclose any information relating to its tax
affairs or any computations in connection with such taxes.
(b) U.S. Withholding Tax Exemptions. Each Bank that is not a
United States person (as such term is defined in Section 7701(a)(30) of
the Code) shall submit to the Borrower and the Agent on or before the
earlier of the date the initial Borrowing is made hereunder and thirty
(30) days after the date hereof, two duly completed and signed copies
of either Form W8BEN (relating to such Bank and entitling it to a
complete exemption from withholding under the Code on all amounts to be
received by such Bank, including fees, pursuant to the Credit Documents
and the Loans) or Form W8ECI (relating to all amounts to be received by
such Bank, including fees, pursuant to the
37
42
Credit Documents and the Loans) of the United States Internal Revenue
Service. Thereafter and from time to time, each Bank shall submit to
the Borrower and the Agent such additional duly completed and signed
copies of one or the other of such Forms (or such successor forms as
shall be adopted from time to time by the relevant United States taxing
authorities) as may be (i) requested by the Borrower in a written
notice, directly or through the Agent, to such Bank and (ii) required
under then-current United States law or regulations to avoid or reduce
United States withholding taxes on payments in respect of all amounts
to be received by such Bank, including fees, pursuant to the Credit
Documents or the Loans.
(c) Inability of Bank to Submit Forms. If any Bank determines,
as a result of any change in applicable law, regulation or treaty, or
in any official application or interpretation thereof, that it is
unable to submit to the Borrower or Agent any form or certificate that
such Bank is obligated to submit pursuant to subsection (b) of this
Section 11.1 or that such Bank is required to withdraw or cancel any
such form or certificate previously submitted or any such form or
certificate otherwise becomes ineffective or inaccurate, such Bank
shall promptly notify the Borrower and Agent of such fact and the Bank
shall to that extent not be obligated to provide any such form or
certificate and will be entitled to withdraw or cancel any affected
form or certificate, as applicable.
Section 11.2 No Waiver of Rights. No delay or failure on the part of
the Agent or any Bank or on the part of the holder or holders of any Note in the
exercise of any power or right under any Credit Document shall operate as a
waiver thereof, nor as an acquiescence in any default, nor shall any single or
partial exercise thereof preclude any other or further exercise of any other
power or right, and the rights and remedies hereunder of the Agent, the Banks
and the holder or holders of any Notes are cumulative to, and not exclusive of,
any rights or remedies which any of them would otherwise have.
Section 11.3 Non-Business Day. If any payment of principal or interest
on any Loan or of any other Obligation shall fall due on a day which is not a
Business Day, interest or fees (as applicable) at the rate, if any, such Loan or
other Obligation bears for the period prior to maturity shall continue to accrue
on such Obligation from the stated due date thereof to and including the next
succeeding Business Day, on which the same shall be payable.
Section 11.4 Documentary Taxes. The Borrower agrees that it will pay
any documentary, stamp or similar taxes payable in respect to any Credit
Document, including interest and penalties, in the event any such taxes are
assessed, irrespective of when such assessment is made and whether or not any
credit is then in use or available hereunder.
Section 11.5 Survival of Representations. All representations and
warranties made herein or in certificates given pursuant hereto shall survive
the execution and delivery of this Agreement and the other Credit Documents, and
shall continue in full force and effect with respect to the date as of which
they were made as long as any credit is in use or available hereunder.
38
43
Section 11.6 Survival of Indemnities. All indemnities and all other
provisions relative to reimbursement to the Banks of amounts sufficient to
protect the yield of the Banks with respect to the Loans, including, but not
limited to, Section 2.11, Section 9.3 and Section 11.15 hereof, shall survive
the termination of this Agreement and the other Credit Documents and the payment
of the Loans and all other Obligations.
Section 11.7 Set-Off.
(a) In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon
the occurrence of any Event of Default, each Bank, each Affiliate of a
Bank, and each subsequent holder of any Note is hereby authorized by
the Borrower at any time or from time to time, without notice to the
Borrower or to any other Person, any such notice being hereby expressly
waived, to set off and to appropriate and to apply any and all deposits
(general or special, including, but not limited to, Indebtedness
evidenced by certificates of deposit, whether matured or unmatured, and
in whatever currency denominated) and any other Indebtedness at any
time held or owing by that Bank, its Affiliate or that subsequent
holder to or for the credit or the account of the Borrower, whether or
not matured, against and on account of the obligations and liabilities
of the Borrower to that Bank, its Affiliate or that subsequent holder
under the Credit Documents, including, but not limited to, all claims
of any nature or description arising out of or connected with the
Credit Documents, irrespective of whether or not (a) that Bank, its
Affiliate or that subsequent holder shall have made any demand
hereunder or (b) the principal of or the interest on the Loans or Notes
and other amounts due hereunder shall have become due and payable
pursuant to Section 8 and although said obligations and liabilities, or
any of them, may be contingent or unmatured.
(b) Each Bank agrees with each other Bank a party hereto that
if such Bank shall receive and retain any payment, whether by set-off
or application of deposit balances or otherwise, on any of the Loans in
excess of its ratable share of payments on all such obligations then
outstanding to the Banks, then such Bank shall purchase for cash at
face value, but without recourse, ratably from each of the other Banks
such amount of the Loans, or participations therein, held by each such
other Bank (or interest therein) as shall be necessary to cause such
Bank to share such excess payment ratably with all the other Banks;
provided, however, that if any such purchase is made by any Bank, and
if such excess payment or part thereof is thereafter recovered from
such purchasing Bank, the related purchases from the other Banks shall
be rescinded ratably and the purchase price restored as to the portion
of such excess payment so recovered, but without interest unless the
purchasing Bank is required to pay interest thereon, in which case each
Bank returning funds to such purchasing Bank shall pay its pro rata
share of such interest.
Section 11.8 Notices. Except as otherwise specified herein, all notices
under the Credit Documents shall be in writing (including telecopy or other
electronic communication) and shall be given to a party hereunder at its address
or telecopier number set forth below or such other address or telecopier number
as such party may hereafter specify by notice to the Agent and the Borrower,
given by courier, by United States certified or registered mail, or by other
39
44
telecommunication device capable of creating a written record of such notice and
its receipt. Notices under the Credit Documents to the Banks shall be addressed
to their respective addresses, telecopier or telephone numbers set forth on the
signature pages hereof or in the assignment agreement which any assignee bank
executes pursuant to Section 11.12 hereof, and to the Borrower and to the Agent
to:
If to the Borrower:
NRG Energy, Inc.
0000 Xxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxxx, XX 00000-0000
Attention: Treasurer
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
If to the Agent:
ABN AMRO Bank
Agency Services
1325 Avenue of the Xxxxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
With copies to:
ABN AMRO Bank N.V.
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
ABN AMRO Bank N.V.
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxx Xxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
40
45
Each such notice, request or other communication shall be effective (i) if given
by telecopier, when such telecopy is transmitted to the telecopier number
specified in this Section 11.8 or on the signature pages hereof and a
confirmation of receipt of such telecopy has been received by the sender, (ii)
if given by courier, when delivered, (iii) if given by mail, three business days
after such communication is deposited in the mail, registered with return
receipt requested, addressed as aforesaid or (iv) if given by any other means,
when delivered at the addresses specified in this Section 11.8; provided that
any notice given pursuant to Section 2 hereof shall be effective only upon
receipt.
Section 11.9 Counterparts. This Agreement may be executed in any number
of counterpart signature pages, and by the different parties on different
counterparts, each of which when executed shall be deemed an original but all
such counterparts taken together shall constitute one and the same instrument.
Section 11.10 Successors and Assigns. This Agreement shall be binding
upon the Borrower and its successors and assigns, and shall inure to the benefit
of each of the Banks and the benefit of their respective successors and assigns,
including any subsequent holder of any Note. The Borrower may not assign any of
its rights or obligations under any Credit Document without the written consent
of all of the Banks.
Section 11.11 Participants and Note Assignees. Each Bank shall have the
right at its own cost to grant participations (to be evidenced by one or more
agreements or certificates of participation) in the Loans made and/or Revolving
Credit Commitments held by such Bank at any time and from time to time, and to
assign its rights under such Loans or the Note evidencing such Loans to a
federal reserve bank; provided that (i) no such participation or assignment
shall relieve any Bank of any of its obligations under this Agreement, (ii) no
such assignee or participant shall have any rights under this Agreement except
as provided in this Section 11.11, and (iii) the Agent shall have no obligation
or responsibility to such participant or assignee, except that nothing herein is
intended to affect the rights of an assignee of a Note to enforce the Note
assigned. Any party to which such a participation or assignment has been granted
shall have the benefits of Section 2.11 and Section 9.3, but shall not be
entitled to receive any greater payment under either such Section than the Bank
granting such participation would have been entitled to receive in connection
with the rights transferred. Any agreement pursuant to which any Bank may grant
such a participating interest shall provide that such Bank shall retain the sole
right and responsibility to enforce the obligations of the Borrower hereunder,
including, without limitation, the right to approve any amendment, modification
or waiver of any provision of this Agreement; provided that such participation
agreement may provide that such Bank will not agree to any modification,
amendment or waiver of this Agreement that would (A) increase any Revolving
Credit Commitment of such Bank if such increase would also increase the
participant's obligations, (B) forgive any amount of or postpone the date for
payment of any principal of or interest on any Loan or of any fee payable
hereunder in which such participant has an interest or (C) reduce the stated
rate at which interest or fees in which such participant has an interest accrue
hereunder.
41
46
Section 11.12 Assignment of Commitments by Banks. Each Bank shall have
the right at any time, with the written consent (except in the case of an
assignment to (i) an Affiliate of such Bank, or (ii) another Bank) of the
Borrower and Agent (which consent shall not be unreasonably withheld), to assign
all or any part of its Revolving Credit Commitment (including the same
percentage of its Note and outstanding Loans) to one or more other Persons;
provided that such assignment is in an amount of at least $10,000,000 or the
entire Revolving Credit Commitment of such Bank, and if such assignment is not
for such Bank's entire Revolving Credit Commitment then such Bank's Revolving
Credit Commitment after giving effect to such assignment shall not be less than
$10,000,000; and provided further that neither the consent of the Borrower nor
of the Agent shall be required for any Bank to assign all or part of its
Revolving Credit Commitment to any Affiliate of the assigning Bank. Each such
assignment shall set forth the assignee's address for notices to be given under
Section 11.8 hereof hereunder and its designated Lending Office pursuant to
Section 9.4 hereof. Upon any such assignment, delivery to the Agent of an
executed copy of such assignment agreement and the forms referred to in Section
11.1 hereof, if applicable, and, except in the case of an assignment to an
Affiliate of the assigning Bank, the payment of a $3,500 recordation fee to the
Agent, the assignee shall become a Bank hereunder, all Loans and the Revolving
Credit Commitment it thereby holds shall be governed by all the terms and
conditions hereof and the Bank granting such assignment shall have its Revolving
Credit Commitment, and its obligations and rights in connection therewith,
reduced by the amount of such assignment; provided, however, in the event a Bank
assigns all of its Revolving Credit Commitment to an Affiliate or at the request
of the Borrower, pursuant to Section 11.13(iii), no recordation fee shall be
required hereunder. Notwithstanding any other provision set forth in this
Agreement, any Bank may at any time create a security interest in all or any
portion of its rights under this Agreement (including, without limitation, the
Loans owing to it and the Note held by it) in favor of any Federal Reserve Bank
in accordance with Regulation A of the Board of Governors of the Federal Reserve
System.
Section 11.13 Amendments. Any provision of the Credit Documents may be
amended or waived if, but only if, such amendment or waiver is in writing and is
signed by (a) the Borrower, (b) the Required Banks, and (c) if the rights or
duties of the Agent are affected thereby, the Agent; provided that:
(i) no amendment or waiver pursuant to this Section
11.13 shall (A) increase any Commitment of any Bank without
the consent of such Bank or (B) reduce the stated rate at
which interest or fees accrue or reduce the amount of or
postpone any fixed date for payment of any principal of or
interest on any Loan or of any fee payable hereunder without
the consent of each Bank; and
(ii) no amendment or waiver pursuant to this Section
11.13 shall, unless signed by each Bank, change this Section
11.13, or the definition of Required Banks, or affect the
number of Banks required to take any action under the Credit
Documents.
If the Borrower requests an amendment to this Agreement which requires
the approval of all of the Banks and one of the Banks (a "Replaceable Bank")
does not approve it, the Borrower
42
47
may propose that another bank which is reasonably acceptable to the Agent (a
"Replacement Bank") be substituted for and replace the Replaceable Bank for
purposes of this Agreement. If a Replacement Bank is so substituted for the
Replaceable Bank, the Replaceable Bank shall enter into an assignment agreement
with the Replacement Bank, the Borrower and the Agent to assign and transfer to
the Replacement Bank, the Replaceable Bank's Commitment hereunder, which shall
provide, among other things, for the payment of all Obligations owing to the
Replaceable Bank; provided, however, if a Replacement Bank cannot be found, then
the Borrower may elect to take out the Replaceable Bank and reduce the facility
accordingly by making a prepayment in the amount of such Replaceable Bank's
outstanding Loans plus all accrued and unpaid interest thereon and all fees and
all other Obligations due and owing to the Replaceable Bank on the date of
replacement. Notwithstanding anything to the contrary contained herein, in no
event shall the Agent be a Replaceable Bank.
Section 11.14 Headings. Section headings used in this Agreement are for
reference only and shall not affect the construction of this Agreement.
Section 11.15 Legal Fees, Other Costs and Indemnification. The Borrower
agrees to pay all reasonable costs and expenses of the Agent in connection with
the preparation and negotiation of the Credit Documents, including, without
limitation, the reasonable fees and disbursements of counsel to the Agent, in
connection with the preparation and execution of the Credit Documents and any
amendment, waiver or consent related hereto, whether or not the transactions
contemplated herein are consummated. The Borrower further agrees to indemnify
each Bank, the Agent, and their respective Affiliates, directors, agents,
officers and employees, against all losses, claims, damages, penalties,
judgments, liabilities and expenses (including, without limitation, all expenses
of litigation or preparation therefor, whether or not the indemnified Person is
a party thereto) which any of them may incur or reasonably pay arising out of or
relating to any Credit Document or any of the transactions contemplated thereby
or the direct or indirect application or proposed application of the proceeds of
any Loan other than those which arise from the gross negligence or willful
misconduct of the party claiming indemnification. The Borrower, upon demand by
the Agent or a Bank at any time, shall reimburse the Agent or Bank for any
reasonable legal or other expenses incurred in connection with investigating or
defending against any of the foregoing except if the same is directly due to the
gross negligence or willful misconduct of the party to be indemnified.
Section 11.16 Entire Agreement. The Credit Documents constitute the
entire understanding of the parties thereto with respect to the subject matter
thereof and any prior or contemporaneous agreements, whether written or oral,
with respect thereto are superseded thereby.
Section 11.17 Construction. The parties hereto acknowledge and agree
that neither this Agreement nor the other Credit Documents shall be construed
more favorably in favor of one than the other based upon which party drafted the
same, it being acknowledged that all parties hereto contributed substantially to
the negotiation of this Agreement and the other Credit Documents.
43
48
Section 11.18 Governing Law. This Agreement and the other Credit
Documents, and the rights and duties of the parties hereto, shall be construed
and determined in accordance with the internal laws of the State of New York.
Section 11.19 Submission to Jurisdiction; Waiver of Jury Trial. EACH OF
THE BORROWER, EACH BANK AND THE AGENT HEREBY SUBMITS TO THE NONEXCLUSIVE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN THE CITY OF NEW YORK FOR
PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT,
THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
EACH OF THE BORROWER, EACH BANK AND THE AGENT IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM
THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. EACH OF THE BORROWER, EACH BANK AND THE AGENT HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO ANY CREDIT DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED THEREBY.
[SIGNATURE PAGE FOLLOWS]
44
49
In Witness Whereof, the parties hereto have caused this Agreement to be
duly executed and delivered in New York, New York by their duly authorized
officers as of the day and year first above written.
NRG ENERGY, INC.
By: ______________________
Name: Xxxxx X. Xxxx
Title: Vice President & Treasurer
45
50
Commitment: $20,000,000.00 ABN AMRO BANK N.V., in its individual
capacity as a Bank and as Agent
By: ___________________________
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
By: ___________________________
Name: Xxxx X. Qais
Title: Assistant Vice President
Address for notices:
ABN AMRO Bank N.V.
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
With copy to:
CREDIT ADMINISTRATION
ABN AMRO Bank N.V.
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxx Xxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Lending Offices:
Base Rate Loans:
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Loan Administration
Eurocurrency Loans:
Same as for Base Rate Loans
51
EXHIBIT A
NOTE
March 9, 2001
For Value Received, the undersigned, NRG Energy, Inc., a Delaware
corporation (the "Borrower"), promises to pay to the order of
_______________________________(the "Bank") on the Termination Date of the
hereinafter defined Credit Agreement, at the principal office of ABN AMRO Bank
N.V., Chicago Branch, in Chicago, Illinois, in U.S. Dollars, the aggregate
unpaid principal amount of all Loans made by the Bank to the Borrower pursuant
to the Credit Agreement, together with interest on the principal amount of each
Loan from time to time outstanding hereunder at the rates, and payable in the
manner and on the dates, specified in the Credit Agreement.
The Bank shall record on its books or records or on a schedule attached
to this Note, which is a part hereof, each Loan made by it pursuant to the
Credit Agreement, together with all payments of principal and interest and the
principal balances from time to time outstanding hereon, whether the Loan is a
Base Rate Loan or a Eurocurrency Loan, the interest rate and Interest Period
applicable thereto, provided that prior to the transfer of this Note all such
amounts shall be recorded on a schedule attached to this Note. The record
thereof, whether shown on such books or records or on a schedule to this Note,
shall be prima facie evidence of the same, provided, however, that the failure
of the Bank to record any of the foregoing or any error in any such record shall
not limit or otherwise affect the obligation of the Borrower to repay all Loans
made to it pursuant to the Credit Agreement together with accrued interest
thereon.
This Note is one of the Notes referred to in the 364-Day Revolving
Credit Agreement dated as of March 9, 2001, among the Borrower, ABN AMRO Bank
N.V., as Agent, and the Banks party thereto (the "Credit Agreement"), and this
Note and the holder hereof are entitled to all the benefits provided for thereby
or referred to therein, to which Credit Agreement reference is hereby made for a
statement thereof. All defined terms used in this Note, except terms otherwise
defined herein, shall have the same meaning as in the Credit Agreement. This
Note shall be governed by and construed in accordance with the internal laws of
the State of New York.
Prepayments may be made hereon and this Note may be declared due prior
to the expressed maturity hereof, all in the events, on the terms and in the
manner as provided for in the Credit Agreement.
The Borrower hereby waives demand, presentment, protest or notice of
any kind hereunder.
NRG ENERGY, INC.
By: ______________________
Name: Xxxxx X. Xxxx
Title: Vice President & Treasurer
A-1
52
EXHIBIT B
COMPLIANCE CERTIFICATE
This Compliance Certificate is furnished to ABN AMRO Bank N.V., as
Agent pursuant to the 364-Day Revolving Credit Agreement (the "Credit
Agreement") dated as of March 9, 2001, by and among NRG Energy, Inc., the
financial institutions from time to time party thereto and ABN AMRO Bank N.V.,
as Agent. Unless otherwise defined herein, the terms used in this Compliance
Certificate have the meanings ascribed thereto in the Credit Agreement.
The undersigned hereby certifies that:
1. I am the duly elected or appointed ___________ of NRG Energy,
Inc.;
2. I have reviewed the terms of the Credit Agreement and I have
made, or have caused to be made under my supervision, a
detailed review of the transactions and conditions of NRG
Energy, Inc. and its Subsidiaries during the accounting period
covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose,
and I have no knowledge of, the existence of any condition or
event which constitutes a Default or an Event of Default
during or at the end of the accounting period covered by the
attached financial statements or as of the date of this
Compliance Certificate, except as set forth below; and
4. Schedule B-1 attached hereto sets forth financial data and
computations evidencing compliance with certain covenants of
the Credit Agreement, all of which data and computations are
true, complete and correct. All computations are made in
accordance with the terms of the Credit Agreement.
Described below are the exceptions, if any, to paragraph 3 by listing,
in detail, the nature of the condition or event, the period during which it has
existed and the action which the Borrower has taken, is taking, or proposes to
take with respect to each such condition or event:
____________________________________________________________
____________________________________________________________
____________________________________________________________
The foregoing certifications, together with the computations set forth
in Schedule 1 hereto and the financial statements delivered with this Compliance
Certificate in support hereof
are made and delivered this ___________day of ____________, ______.
__________________________________________
B-1
53
COMPLIANCE CERTIFICATE
SCHEDULE B-1
COMPLIANCE CALCULATIONS FOR CREDIT AGREEMENT
CALCULATION AS OF __________, 20_____
A. Liens (Section 7.9)
1. Total Liens $_______
(Line A1 not to exceed 10% of Consolidated Net Tangible
Assets)
B. Sale of Assets (Section 7.11)
1. Net book value of assets sold
during this fiscal year $_______
(Line B1 not to exceed 10% of Consolidated Net Tangible
Assets)
C. Consolidated Net Worth (Section 7.12)
1. Consolidated stockholders equity $_______
2. Effect of currency translation account on consolidated
stockholders equity $_______
3. Effect of application FASB's Statement of Financial Accounting
Standards No. 133, Accounting for Derivative Instruments and
Hedging Activities on consolidated stockholders equity
$_______
4. Consolidated Net Worth
(Line C1 adjusted by Lines C2 and C3) $_______
D. Consolidated Capitalization
1. Consolidated Net Worth (Line C4) $_______
2. Indebtedness of the Borrower (excluding performance guarantees
under which demand has not been made) $_______
3. 50% of Indebtedness of Borrower consisting of performance
guarantees under which demand has not been made
$_______________
B-2
54
4. Adjusted Indebtedness of Borrower (line D2-D3)
$_______________
5. Consolidated Capitalization
(Sum of line D1 and D4) $_______
E. Indebtedness to Consolidated Capitalization
1. Adjusted Indebtedness of the Borrower (line D4)
$__________________
2. Consolidated Capitalization (line D5) $_________________
3. Ratio of Adjusted Indebtedness of Consolidated Capitalization
__ to __
(Line E1 to E2)
(ratio not to exceed 0.68 to 1.00 unless a Non-Conforming
Period, in which case ratio can not exceed 0.72 to 1.00)
B-3
55
SCHEDULE 1
PRICING GRID
---------- ------------------- --------- --------------- ---------------- -------------- ------------ --------------- -------------
Level If the Borrower's The If the If the If the If the If the If the
Xxxxx'x/S&P Annual Utilization Utilization is Utilization Utilization Utilization Utilization
Rating Is: Facility is equal to greater than is greater is equal is greater is greater
Fee is: or less than 33% but less than 66%, to or less than 33% but than 66%,
33%, the than or equal the than 33%, less than or the Base
Eurocurrency to 66%, the Eurocurrency the Base equal to 66%, Rate Margin
Margin is: Eurocurrency Margin is: Rate the Base Rate is:
Margin is: Margin is: Margin is:
---------- ------------------- --------- --------------- ---------------- -------------- ------------ --------------- -------------
I Greater than or 0.10% 0.400% 0.475% 0.525% 0.000% 0.075% 0.125%
equal to A3/A-
---------- ------------------- --------- --------------- ---------------- -------------- ------------ --------------- -------------
II Below Level I, 0.125% 0.500% 0.575% 0.625% 0.000% 0.075% 0.125%
but greater than
or equal to
Baa1/BBB+
---------- ------------------- --------- --------------- ---------------- -------------- ------------ --------------- -------------
III Below Level II, 0.150% 0.600% 0.725% 0.850% 0.000% 0.125% 0.250%
but greater than
or equal to
Baa2/BBB
---------- ------------------- --------- --------------- ---------------- -------------- ------------ --------------- -------------
IV Below Level III, 0.175% 0.825% 0.950% 1.075% 0.000% 0.125% 0.250%
but greater than
or equal to
Baa3/BBB-
---------- ------------------- --------- --------------- ---------------- -------------- ------------ --------------- -------------
V Below Level IV 0.375% 1.375% 1.500% 1.625% 0.000% 0.125% 0.250%
---------- ------------------- --------- --------------- ---------------- -------------- ------------ --------------- -------------
provided, that (A) the Facility Fee shall be increased by 0.075% over the
Facility Fee set forth in the above grid during any Non-Conforming Period and
(B) the Eurocurrency Margins and the Base Rate Margins shall be increased by
0.175% over the Eurocurrency Margins and the Base Rate Margins set forth in the
above grid during any Non-Conforming Period.
Any change in the Borrower's Xxxxx'x Rating or S&P Rating (and in any
fees or interest payable hereunder based on such Ratings) shall be effective as
of the date on which Xxxxx'x or S&P, as the case may be, announces the
applicable change in such Rating. Any change in the Utilization shall be
effective as of the date of such change. In the event of a split Rating (i.e.
the Xxxxx'x Rating and the S&P Rating fall into different Levels in the above
grid), the lower Rating shall prevail. In the event neither a Xxxxx'x Rating nor
a S&P Rating is in effect, Level V pricing shall prevail unless otherwise agreed
by the Required Banks.
56
SCHEDULE 5.2
SUBSIDIARIES
-----------------------------------------------------------------------------------------------------------
SUBSIDIARY NAME STATE OF INCORPORATION/
FORMATION
------------------------------------------------------------------------------------------------------------
1. NRG Connecticut Ancillary Assets LLC Delaware
------------------------------------------------------------------------------------------------------------
2. Cobee Holdings Inc. Delaware
------------------------------------------------------------------------------------------------------------
3. Elk River Resource Recovery, Inc. Minnesota
------------------------------------------------------------------------------------------------------------
4. Graystone Corporation Minnesota
------------------------------------------------------------------------------------------------------------
5. Meriden Gas Turbines LLC Delaware
------------------------------------------------------------------------------------------------------------
6. MidAtlantic Generation Holding LLC Delaware
------------------------------------------------------------------------------------------------------------
7. NEO Corporation Minnesota
------------------------------------------------------------------------------------------------------------
8. NRG Connecticut Power Assets LLC Delaware
------------------------------------------------------------------------------------------------------------
9. Northeast Generation Holding LLC Delaware
------------------------------------------------------------------------------------------------------------
10. NRG Affiliate Services Inc. Delaware
------------------------------------------------------------------------------------------------------------
11. NRG Asia-Pacific, Ltd. Delaware
------------------------------------------------------------------------------------------------------------
12. NRG Cadillac Inc. Delaware
------------------------------------------------------------------------------------------------------------
13. NRG Central U.S. LLC Delaware
------------------------------------------------------------------------------------------------------------
14. NRG ComLease LLC Delaware
------------------------------------------------------------------------------------------------------------
15. NRG Connecticut Affiliate Services Inc. Delaware
------------------------------------------------------------------------------------------------------------
16. NRG del Coronado Inc. Delaware
------------------------------------------------------------------------------------------------------------
17. NRG Eastern LLC Delaware
------------------------------------------------------------------------------------------------------------
18. NRG El Segundo Inc. Delaware
------------------------------------------------------------------------------------------------------------
19. NRG Energy Center, Inc. Minnesota
------------------------------------------------------------------------------------------------------------
20. NRG Energy Xxxxxxx Valley I, Inc. California
------------------------------------------------------------------------------------------------------------
21. NRG Energy Xxxxxxx Valley II, Inc. California
------------------------------------------------------------------------------------------------------------
22. NRG Granite Acquisition LLC Delaware
------------------------------------------------------------------------------------------------------------
23. NRG International Services Company Delaware
------------------------------------------------------------------------------------------------------------
24. NRG International Development Inc. Delaware
------------------------------------------------------------------------------------------------------------
25. NRG International, Inc. Delaware
------------------------------------------------------------------------------------------------------------
26. NRG Xxxxxxx LLC Delaware
------------------------------------------------------------------------------------------------------------
27. NRG Lakefield Inc. Delaware
------------------------------------------------------------------------------------------------------------
28. NRG Latin America Inc. Delaware
------------------------------------------------------------------------------------------------------------
57
29. NRG Louisiana LLC Delaware
------------------------------------------------------------------------------------------------------------
30. NRG Mextrans Inc. Delaware
------------------------------------------------------------------------------------------------------------
31. NRG MidAtlantic LLC Delaware
------------------------------------------------------------------------------------------------------------
32. NRG Mesquite LLC Delaware
------------------------------------------------------------------------------------------------------------
33. NRG Northeast Affiliate Services Inc. Delaware
------------------------------------------------------------------------------------------------------------
34. NRG Operating Services, Inc. Delaware
------------------------------------------------------------------------------------------------------------
35. NRG PacGen Inc. Delaware
------------------------------------------------------------------------------------------------------------
36. NRG Power Marketing Inc. Delaware
------------------------------------------------------------------------------------------------------------
37. NRG Processing Solutions LLC Delaware
------------------------------------------------------------------------------------------------------------
38. NRG San Diego Inc. Delaware
------------------------------------------------------------------------------------------------------------
39. NRG San Francisco Thermal Inc. Delaware
------------------------------------------------------------------------------------------------------------
40. NRG Services Corporation Delaware
------------------------------------------------------------------------------------------------------------
41. NRG Sunnyside Operations GP Inc. Delaware
------------------------------------------------------------------------------------------------------------
42. NRG Sunnyside Operations LP Inc. Delaware
------------------------------------------------------------------------------------------------------------
43. NRG Thermal Corporation Delaware
------------------------------------------------------------------------------------------------------------
44. NRG Valmy Power LLC Delaware
------------------------------------------------------------------------------------------------------------
45. NRG Valmy Power Holdings LLC
------------------------------------------------------------------------------------------------------------
46. NRG West Coast Inc. Delaware
------------------------------------------------------------------------------------------------------------
47. NRG Western Affiliate Services Inc. Delaware
------------------------------------------------------------------------------------------------------------
48. O Brien Cogeneration, Inc. II Delaware
------------------------------------------------------------------------------------------------------------
49. Okeechobee Power I, Inc. Delaware
------------------------------------------------------------------------------------------------------------
50. Okeechobee Power II, Inc. Delaware
------------------------------------------------------------------------------------------------------------
51. Okeechobee Power III, Inc. Delaware
------------------------------------------------------------------------------------------------------------
52. Power Operations, Inc. Delaware
------------------------------------------------------------------------------------------------------------
53. San Xxxxxxx Valley Energy I, Inc. California
------------------------------------------------------------------------------------------------------------
54. San Xxxxxxx Valley Energy IV, Inc. California
------------------------------------------------------------------------------------------------------------
55. Scoria Incorporated Minnesota
------------------------------------------------------------------------------------------------------------
56. South Central Generation Holding LLC Delaware
------------------------------------------------------------------------------------------------------------
58
SCHEDULE 5.5
LITIGATION/GOVERNMENTAL PROCEEDINGS SUMMARY
Fortistar (Oswego)
In July 1999, Fortistar Capital, Inc. ("Fortistar") commenced an action against
NRG Energy, Inc. (the "Company") in Hennepin County (Minnesota) District Court,
seeking damages in excess of $100 million and an order restraining the Company
from consummating the acquisition of Niagara Mohawk Power Corporation's Oswego
generating station. Fortistar's motion for a temporary restraining order was
denied. A temporary injunction hearing was held on September 27, 1999. The
acquisition was consummated in October 1999. On January 14, 2000, the court
denied Fortistar's request for a temporary injunction. In April and December
2000, the Company filed summary judgment motions to dispose of the litigation
respecting both liability and damages, and a hearing on these motions was held
on January 26, 2001. No ruling has been issued to date. A trial date has been
scheduled for early April 2001. The Company has asserted numerous counterclaims
against Fortistar and will continue to vigorously defend the suit.
New York Environmental Investigation
In May 2000, the New York Department of Environmental Conservation issued a
Notice of Violation to the Company and the prior owner of the Company's Xxxxxxx
and Dunkirk facilities in New York, relating to physical changes made at those
facilities prior to our assumption of ownership. The Notice of Violation alleges
that these changes represent major modifications undertaken without the proper
permits having been obtained. Although the Company has a right to
indemnification by the previous owner for fines, penalties, assessments and
related losses resulting from the previous owner's failure to comply with
environmental laws and regulations, if these facilities did not comply with the
applicable permit requirements, the Company could be required, among other
things, to install specified pollution control technology to further reduce
pollutant emissions from the Xxxxxxx and Dunkirk facilities, and the Company
could become subject to fines and penalties associated with the current and
prior operation of the facilities. The Company is currently in settlement
discussions with the Department of Environmental Conservation and the State
Attorney General's Office.
Station Power Litigation
Niagara Mohawk Power Corporation, the former owner of the Company's Xxxxxxx,
Dunkirk and Oswego Harbor generating stations, has asserted that it can require
these facilities to obtain power for these stations under a retail tariff,
rather than allowing the plants to treat station power as net/negative
generation at wholesale prices.
On September 21, 2000, the Company filed an action before the Federal Energy
Regulatory Commission ("FERC"), seeking its declaration that these facilities
are entitled to station power at wholesale prices. On September 28, 2000,
Niagara Mohawk instituted separate actions against
59
Xxxxxxx Power LLC, Dunkirk Power LLC and Oswego Harbor Power LLC in the State
Supreme Court of New York, seeking approximately $8 million plus late payment
fees accrued, less payments received, which produces a current balance in
dispute of approximately $7 million. The Company has pending in the New York
State Supreme Court a motion to stay these state court actions pending a ruling
by the FERC on the Company's claims, and Niagara Mohawk has pending a partial
summary judgment motion, in which it is claiming that the Company has already
been heard on these arguments before the New York Public Service Commission and
is therefore collaterally estopped to again assert that FERC has exclusive
jurisdiction over these disputes.
EEOC Claims
Approximately thirty-four former employees of Cajun Electric Power Cooperative
are claiming that race discrimination and/or sex discrimination caused the
termination of their employment at the Cajun facilities following the Company's
acquisition of these facilities. The Equal Employment Opportunity Commission has
issued "Dismissal and Notice of Rights" (right to xxx) letters to several of the
claimants and the Company expects that the EEOC will issue such letters to all
of the claimants. These letters afford the claimants the opportunity to assert
in either federal or state court both federal and state claims. The federal
claims have a cumulative cap on punitive and compensatory damages of $300,000
per claim, and there are no caps on state claims. Prevailing parties in such
claims are entitled to attorneys' fees. The Company denies that race
discrimination or sex discrimination prompted any of the employee dismissals.
Fortistar Methane LLC v. NEO Corporation
In May 2000, Fortistar Methane LLC sued NEO Corporation in New York Federal
District Court, requesting an injunction barring NEO from claimed interference
with the management activities of Minnesota Methane LLC's Executive Financial
Officer, Xxxxx Xxxxxxx of Fortistar; declaring NEO to be in default of the
Operating Agreement between the parties; requiring NEO to turn over all books
and records; and awarding damages. Minnesota Methane is 50% owned by the
Company's subsidiary NEO Corporation, and 50% owned by Fortistar Methane LLC. In
August 2000, the case was transferred to the Minnesota Federal District Court.
On January 5, 2001, the judge ruled from the bench, granting NEO's motions to
dismiss the claims of Fortistar. This ruling was confirmed by the court's
written order of January 19, 2000. On January 8, 2001, NEO Corporation, on its
own behalf and on behalf of Minnesota Methane, brought suit against Fortistar in
Hennepin County District Court in Minnesota, claiming breach of contract, breach
of covenant of good faith and fair dealing, fraud, defamation, and business
disparagement. Fortistar's response to this complaint is due at the end of
January 2001.
60
California Actions
The Company has been named as a defendant in certain private plaintiff class
actions filed in the Superior Court of the State of California for the County of
San Diego in San Diego, California on November 27, 2000 (Xxxxxx X. Xxxxxx v.
Reliant Energy, Inc., et al.) and November 29, 2000 (Xxxx Xxxxxxxxx v. Dynegy
Power Marketing Inc., et al.), and in the Superior Court of the State of
California, City and County of San Francisco (Pier 23 Restaurant v. PG&E Energy
Trading, et al., filed January 24, 2001). The Company has also been named in
another suit filed on January 16, 2001 in the Superior Court of the State of
California for the County of San Diego, brought by three California water
districts, as consumers of electricity (Sweetwater Authority v. Dynegy Inc., et
al.), and in a suit filed on January 18, 2001 in Superior Court of the State of
California, County of San Francisco, brought by the San Francisco City Attorney
on behalf of the People of the State of California (The People of the State of
California v. Dynegy Power Marketing, Inc., et al.). Although the complaints
contain a number of allegations, the basic claim is that, by underbidding
forward contracts and exporting electricity to surrounding markets, the
defendants, acting in collusion, were able to drive up wholesale prices on the
Real Time and Replacement Reserve markets, through the Western Systems
Coordinating Council and otherwise. The complaints allege that the conduct
violated California antitrust and/or unfair competition laws. The Company does
not believe that it has engaged in any illegal activities, and intends to
vigorously defend these lawsuits.
LABOR DISPUTE SUMMARY
None.
