EXHIBIT 4.9
EXECUTION COPY
AMENDED AND RESTATED COMMON AGREEMENT
among
XL CAPITAL ASSURANCE INC.
(XLCA)
XXXXXXX XXXXX MITSUI MARINE DERIVATIVE PRODUCTS, L.P.
(Swap Counterparty)
LAW DEBENTURE TRUST COMPANY OF NEW YORK
(Trustee)
THE BANK OF NEW YORK
(Collateral Agent)
NRG PEAKER FINANCE COMPANY LLC
(Issuer)
and
EACH PROJECT COMPANY PARTY HERETO
(Project Companies)
DATED AS OF JANUARY 6, 2004
TABLE OF CONTENTS
Page
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RECITALS................................................................................................ 1
ARTICLE 1 DEFINITIONS AND RULES OF INTERPRETATION....................................................... 3
1.1 Definitions.......................................................................... 3
1.2 Rules of Interpretation.............................................................. 3
1.3 Accounting Principles and Terms...................................................... 3
ARTICLE 2 AFFIRMATIVE COVENANTS OF ISSUER............................................................... 4
2.1 Use of Proceeds and Revenues......................................................... 4
2.2 Notices.............................................................................. 4
2.3 Financial Statements; Reports........................................................ 5
2.4 Inspection of Books and Records...................................................... 6
2.5 Compliance with Laws................................................................. 7
2.6 Existence, Conduct of Business, etc.................................................. 7
2.7 Calculation of Ratios and Other Compliance Calculations.............................. 7
2.8 Further Assurances................................................................... 8
2.9 Taxes................................................................................ 9
2.10 Notice of Redemption................................................................. 9
2.11 Swap Agreement....................................................................... 9
2.12 Corporate Services Agreement......................................................... 9
2.13 Annual Operations Budget; Request for Expenditures................................... 10
2.14 Excluded Project Subsidiary.......................................................... 11
ARTICLE 3 AFFIRMATIVE COVENANTS OF THE PROJECT COMPANIES................................................ 11
3.1 Use of Proceeds and Revenues......................................................... 11
3.2 Reporting Requirements............................................................... 11
3.3 Inspection of Books and Records; Access.............................................. 14
3.4 Plans and Specifications; Completion Tests........................................... 14
3.5 Compliance with Laws................................................................. 14
3.6 Existence; Conduct of Business, etc.................................................. 14
3.7 Project Documents.................................................................... 15
3.8 Permits.............................................................................. 15
3.9 Further Assurances................................................................... 15
3.10 Maintenance of Insurance............................................................. 16
3.11 Taxes................................................................................ 16
3.12 Title; Maintenance of Properties..................................................... 16
3.13 Market Based Rate Authority.......................................................... 16
3.14 Completion........................................................................... 17
3.15 Operation and Maintenance............................................................ 17
3.16 Condemnation Event................................................................... 17
3.17 Sterlington PPA Legal Opinion........................................................ 18
3.18 Energy Marketing Services Parameters................................................. 18
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3.19 Unrestricted Subsidiary; Excluded Project Subsidiary................................. 18
3.20 Energy Marketing Services Agreements................................................. 18
ARTICLE 4 NEGATIVE COVENANTS OF ISSUER.................................................................. 18
4.1 Contingent Liabilities............................................................... 18
4.2 Limitations on Liens................................................................. 19
4.3 Indebtedness......................................................................... 19
4.4 Sale of Assets....................................................................... 19
4.5 Distributions........................................................................ 19
4.6 Investments.......................................................................... 23
4.7 Transactions with Affiliates......................................................... 23
4.8 ERISA................................................................................ 23
4.9 Liquidation; Amendment of Organizational Documents................................... 24
4.10 Accounts............................................................................. 24
4.11 Name and Location; Fiscal Year....................................................... 24
4.12 Assignment........................................................................... 24
4.13 No SEC Registration.................................................................. 24
4.14 Annual Operations Budget............................................................. 24
4.15 Corporate Services Agreement......................................................... 25
ARTICLE 5 NEGATIVE COVENANTS OF PROJECT COMPANIES....................................................... 25
5.1 Contingent Liabilities............................................................... 25
5.2 Liens................................................................................ 25
5.3 Indebtedness......................................................................... 25
5.4 Asset Dispositions................................................................... 25
5.5 Business Activities.................................................................. 26
5.6 Subsidiaries, etc.; Investments...................................................... 26
5.7 Distributions........................................................................ 26
5.8 Transactions with Affiliates......................................................... 26
5.9 ERISA................................................................................ 27
5.10 Merger or Consolidation; Liquidation; Amendment of Organizational Documents.......... 27
5.11 Amendments to Project Documents; New Project Documents............................... 28
5.12 Accounts............................................................................. 28
5.13 Name and Location; Fiscal Year....................................................... 28
5.14 Assignment........................................................................... 29
5.15 Acquisition of Real Property......................................................... 29
5.16 Additional Project Documents......................................................... 30
5.17 Use of Project Site.................................................................. 30
5.18 Hazardous Substances................................................................. 30
5.19 Annual Operations Budget............................................................. 30
5.20 Operating Services Budget............................................................ 30
ARTICLE 6 GUARANTY...................................................................................... 31
6.1 Guaranty............................................................................. 31
6.2 Guaranty Absolute.................................................................... 31
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6.3 Rights and Obligations Absolute and Unconditional.................................... 32
6.4 Guaranty Continuing.................................................................. 33
6.5 Waivers.............................................................................. 33
6.6 Acknowledgments...................................................................... 34
6.7 Subordination........................................................................ 34
6.8 Subrogation.......................................................................... 34
6.9 Bankruptcy........................................................................... 35
6.10 Interest; Collection Expenses........................................................ 35
6.11 Reinstatement of Guaranty............................................................ 36
6.12 Termination of Guaranty.............................................................. 36
6.13 Survival............................................................................. 36
6.14 Contribution Obligations Among Project Companies..................................... 36
ARTICLE 7 EVENTS OF DEFAULT; REMEDIES................................................................... 37
7.1 Issuer Events of Default............................................................. 37
7.2 Project Events of Default............................................................ 40
7.3 Fundamental Project Event of Default................................................. 45
7.4 Controlling Party Agreement.......................................................... 47
7.5 Remedies............................................................................. 48
7.6 Notice to Trustee and Collateral Agent and Project Events of Default................. 49
7.7 Application of Proceeds.............................................................. 50
ARTICLE 8 SCOPE OF LIABILITY............................................................................ 50
ARTICLE 9 INDEMNIFICATION, AMENDMENTS AND WAIVERS....................................................... 51
9.1 Indemnification...................................................................... 51
9.2 Amendments and Waivers............................................................... 54
ARTICLE 10 INDEPENDENT CONSULTANTS...................................................................... 54
10.1 Removal and Fees..................................................................... 54
10.2 Duties............................................................................... 56
10.3 Certification of Dates............................................................... 56
ARTICLE 11 THE COLLATERAL AGENT......................................................................... 56
11.1 Appointment and Duties of Collateral Agent........................................... 56
11.2 Rights of Collateral Agent........................................................... 57
11.3 Lack of Reliance on the Agents....................................................... 59
11.4 Indemnification...................................................................... 60
11.5 Resignation or Removal of the Collateral Agent....................................... 60
11.6 Release of Collateral................................................................ 61
11.7 Assignment of Rights, Not Assumption of Duties....................................... 61
11.8 Appointment of Co-Collateral Agent................................................... 61
11.9 XLCA Confirmation Before Release of Certain Funds.................................... 62
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ARTICLE 12 MISCELLANEOUS................................................................................ 63
12.1 Addresses............................................................................ 63
12.2 Additional Security; Right to Set-Off................................................ 67
12.3 Delay and Waiver..................................................................... 67
12.4 Costs, Expenses and Attorneys' Fees.................................................. 68
12.5 Entire Agreement..................................................................... 68
12.6 Governing Law........................................................................ 68
12.7 Severability......................................................................... 69
12.8 Headings............................................................................. 69
12.9 No Partnership, etc.................................................................. 69
12.10 Limitation on Liability.............................................................. 69
12.11 Waiver of Jury Trial................................................................. 69
12.12 Consent to Jurisdiction.............................................................. 70
12.13 Usury................................................................................ 70
12.14 Successors and Assigns............................................................... 70
12.15 Counterparts......................................................................... 71
12.16 Term and Termination................................................................. 71
12.17 Reinstatement........................................................................ 71
12.18 Survival............................................................................. 71
12.19 Partial Termination.................................................................. 71
12.20 No XLCA Liability or Duties.......................................................... 72
12.21 Calculation of Net Annual Payment Pursuant to Swap Agreement......................... 72
INDEX OF ANNEXES AND EXHIBITS
Annex A Definitions
Schedule I Rockford II Spare Parts
Exhibit A Form of Monthly Affiliated Transaction Report
Exhibit B Form of Monthly Operations Report
Exhibit C Form of Monthly O&M Expense Report
Exhibit D Form of Monthly Power Marketing Performance Tracking Report
Exhibit E Form of Monthly Power Marketing Report
Exhibit F Form of Debt Service Coverage Ratio Certificate
Exhibit G Form of Experience Amount Percentage Certificate
Exhibit H Insurance Requirements
Exhibit I Completion Tests
Exhibit J Form of Annual Operations Report
Exhibit K Form of Annual Insurance Certificate
Exhibit L Intentionally Omitted
Exhibit M General Subordination Provisions
Exhibit N Subordination Provisions for Subordinated Bonds
Exhibit O Form of Major Maintenance Reserve Amount Certificate
Exhibit P Form of Annual Operations Budget
Exhibit Q Request for Expenditures
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This AMENDED AND RESTATED COMMON AGREEMENT (as amended,
amended and restated, supplemented or otherwise modified from time to time, this
"Agreement"), dated as of January 6, 2004, is entered into among (1) XL Capital
Assurance Inc., a New York stock insurance company ("XLCA"), (2) Xxxxxxx Xxxxx
Mitsui Marine Derivative Products, L.P., a Delaware limited partnership (the
"Swap Counterparty"), (3) Law Debenture Trust Company of New York, a New York
limited purpose trust company, not in its individual capacity but solely as
successor trustee to The Bank of New York for the benefit of the holders of the
Bonds (the "Bondholders") (in such capacity, the "Trustee"), (4) The Bank of New
York, as collateral agent for the benefit of the Secured Parties (in such
capacity, the "Collateral Agent"), (5) NRG Peaker Finance Company LLC, a
Delaware limited liability company, as Issuer (the "Issuer"), and (6) each party
hereto identified as a Project Company on the signature pages hereto (each a
"Project Company" and, collectively, the "Project Companies").
RECITALS
WHEREAS:
A. The Projects comprise five natural gas-fired electric
generation facilities located in Louisiana and Illinois. The electric
generation facilities comprising the Projects are peaker facilities
designed to generate electricity during periods of peak demand for
electricity.
B. Each Project is owned by an indirect wholly-owned
subsidiary of NRG Energy. The Issuer is an indirect wholly-owned
subsidiary of NRG Energy.
C. The Issuer issued and sold its Series A Bonds in an
offering in reliance on Rule 144A and Regulation S under the Securities
Act. All proceeds from the sale of the Series A Bonds were used by the
Issuer to loan specified amounts to the Bayou Cove Project Company, the
Rockford I Project Company and the Rockford II Project Company in
exchange for the Project Loan Agreements such Project Companies
executed and delivered to the Issuer.
D. The Project Companies used the proceeds from their
respective loans to (i) reimburse NRG Energy for NRG Energy's costs of
having constructed and/or acquired the Projects (including interest
incurred during construction), (ii) pay the Premium and all additional
amounts required to be paid to XLCA pursuant to the Policy and the
Insurance and Reimbursement Agreement (iii) deposit $11,279,588 in a
designated account pursuant to the original Depositary Agreement, dated
as of the Original Closing Date, among the Issuer, each Project
Company, the Collateral Agent and the Depository Agent (the "Original
Depositary Agreement") and (iv) pay transaction fees and costs.
E. The Issuer will pay the principal of and interest on
the Series A Bonds in accordance with the terms of the Indenture.
F. The Issuer has entered into the Swap Agreement with
the Swap Counterparty pursuant to which the Issuer will make fixed rate
interest rate payments to
the Swap Counterparty and the Swap Counterparty will make floating rate
interest payments to the Issuer.
G. Regularly scheduled payments of principal of and
interest on the Series A Bonds are unconditionally and irrevocably
guaranteed by XLCA pursuant to, and subject to, the Policy and the
Insurance and Reimbursement Agreement in exchange for the payment of
the Premium by the Issuer to XLCA as set forth in the Premium Letter.
H. Regularly scheduled payments of Swap Payment Amounts
are unconditionally and irrevocably guaranteed by XLCA pursuant to, and
subject to, the Swap Policy and the Insurance and Reimbursement
Agreement in exchange for the payment of the Swap Policy Premium by the
Issuer to XLCA as set forth in the Premium Letter.
I. Pursuant to and in accordance with the now terminated
Contingent Guaranty Agreement, dated as of the Original Closing Date by
NRG Energy in favor of the Collateral Agent (the "Contingent Guaranty
Agreement"), NRG Energy was obligated to make certain payments under
circumstances specified in the Contingent Guaranty Agreement.
J. Pursuant to and in accordance with the Insurance and
Reimbursement Agreement, the Issuer is obligated to reimburse XLCA in
respect of payments (if any) made by XLCA pursuant to the Policy and/or
the Swap Policy and in respect of other amounts specified in the
Insurance and Reimbursement Agreement.
K. Pursuant to the Issuer Collateral Documents, the
Issuer's obligations owed to the Secured Parties are secured by a first
priority lien for the benefit of the Secured Parties on the membership
interests in the Issuer and all of the property and assets of the
Issuer (including the Project Loan Notes).
L. Pursuant to the Guaranties, each of the Project
Companies guarantees unconditionally and irrevocably the obligations
and indebtedness of the Issuer in respect of the Guaranteed
Obligations, which Guaranties are, pursuant to the Project Company
Collateral Documents, secured by a first priority lien for the benefit
of the Secured Parties on the membership interests in each Project
Company (other than the Big Cajun Project Company and the Sterlington
Project Company) and on all or substantially all of the property and
assets of each Project Company.
M. As a condition precedent to the issuance of the
Series A Bonds, the Policy and the Swap Policy and the execution of the
Swap Agreement by the Swap Counterparty, the Parties hereto executed
and delivered the original Common Agreement, dated as of June 18, 2002,
among XLCA, the Swap Counterparty, the Original Trustee, the Collateral
Agent, the Issuer and each Project Company (the "Original Common
Agreement").
N. On May 12, 2003, as a consequence of certain Issuer
Events of Default under the Original Common Agreement, XLCA, as
Controlling Party, declared and made all sums of accrued and
outstanding principal, accrued
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but unpaid interest and accrued but unpaid premium remaining under the
Financing Documents, together with all unpaid amounts, fees, costs and
charges due under any Financing Documents, immediately due and payable
(the "Acceleration").
O. On May 14, 2003, NRG Energy and certain of its
subsidiaries filed voluntary petitions for bankruptcy under Chapter 11
of the United States Bankruptcy Code (the "NRG Bankruptcy").
P. Following the Acceleration and the NRG Bankruptcy,
NRG Energy, NRG Power Marketing, the Issuer, the Project Companies and
XLCA agreed to implement a financial restructuring of the Obligations
(the "Restructuring") substantially on the terms set forth in a
Restructuring Agreement, dated as of September 18, 2003, by and among
NRG Energy, NRG Power Marketing, the Issuer, the Project Companies and
XLCA (as amended, amended and restated, supplemented or otherwise
modified from time to time, the "Restructuring Agreement").
Q. On October 1, 2003, the United States District Court
for the Southern District of New York entered an order (the "Approval
Order") in the NRG Bankruptcy authorizing and approving the
transactions provided in the Restructuring Agreement including the
execution and delivery of this Agreement by the parties hereto. The
Approval Order became a Final Order on October 11, 2003.
R. It is a condition precedent to the consummation of
the Restructuring that the parties hereto shall have executed and
delivered this Agreement.
NOW THEREFORE, in consideration of the premises contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and as an inducement to
the consummation of the Restructuring, the parties hereto agree as
follows:
ARTICLE 1
DEFINITIONS AND RULES OF INTERPRETATION
1.1 Definitions. Capitalized terms defined in the preamble of this
Agreement shall have the meanings given to them in the preamble of this
Agreement and, except as otherwise expressly provided in this Agreement,
capitalized terms used in the preamble, the recitals and in this Agreement shall
have the meanings given in Annex A hereto.
1.2 Rules of Interpretation. Except as otherwise expressly
provided in this Agreement, the rules of interpretation set forth in Annex A
hereto shall apply to this Agreement.
1.3 Accounting Principles and Terms. Except as otherwise provided
in this Agreement, (a) all computations and determinations as to financial
matters, and all financial statements to be delivered under this Agreement,
shall be made or prepared in accordance with GAAP (including principles of
consolidation where appropriate but excluding footnote disclosure on interim
financial statements) and on a consistent basis (except to the extent approved
or required by the independent public accountants certifying such statements and
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disclosed therein), and (b) all accounting terms used in this Agreement shall
have the meanings respectively ascribed to such terms by GAAP.
ARTICLE 2
AFFIRMATIVE COVENANTS OF ISSUER
The Issuer covenants and agrees that it shall perform the
covenants set forth in this Article 2 (unless waived in accordance with Section
9.2 of this Agreement).
2.1 Use of Proceeds and Revenues.
(a) Proceeds. Unless otherwise expressly provided herein
or in the Depositary Agreement, the Issuer shall use all the proceeds from the
sale of the Series A Bonds to lend to each of the Bayou Cove Project Company,
the Rockford I Project Company and the Rockford II Project Company such Project
Company's Project Loan Amount pursuant to the Project Loan Agreement to which
such Project Company is a party.
(b) Revenues. Unless otherwise expressly provided herein
or in the Depositary Agreement, the Issuer shall deposit, or cause to be
deposited, all Project Revenues paid to or otherwise received by the Issuer in
the applicable Account in accordance with the terms of the Depositary Agreement.
2.2 Notices. The Issuer shall promptly, upon acquiring notice or
giving notice, as the case may be, or obtaining knowledge thereof, give written
notice (together with copies of any underlying notices or other documentation)
to the Collateral Agent, the Trustee, the Swap Counterparty and XLCA (if XLCA is
the Controlling Party) (it being acknowledged that XLCA shall have no obligation
to provide any such written notice received by it to any other Person) of:
(a) any action, suit, arbitration or litigation pending
or threatened against the Issuer and (i) involving claims against the Issuer or
(ii) involving any injunctive, declaratory or other equitable relief that, if
determined adversely to the Issuer, could reasonably be expected to have an
Issuer Material Adverse Effect, such notice to include, if reasonably requested
by the Controlling Party, copies of all material papers filed in such litigation
involving the Issuer, and, if reasonably requested by the Controlling Party,
such notice to be given monthly if any such papers have been filed since the
last notice given;
(b) (i) any action, suit, arbitration or litigation
pending or threatened against the Issuer involving any Governmental Authority or
(ii) any dispute or disputes which may exist between the Issuer and any
Governmental Authority and which involve (A) claims against the Issuer, or (B)
injunctive or declaratory relief that, if adversely determined, could reasonably
be expected to have an Issuer Material Adverse Effect;
(c) any Issuer Event of Default or Issuer Inchoate
Default, together with a description of any action being taken or proposed to be
taken with respect thereto;
(d) any matter which has had or, in the Issuer's
reasonable judgment, could reasonably be expected to have, an Issuer Material
Adverse Effect;
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(e) any change in ratings given to the Issuer by Xxxxx'x
or S&P, including the placement of the Issuer on "credit watch negative" or a
similar status, and, to the extent the Issuer, any Project Company or NRG Energy
has been notified in writing by any Rating Agency, any change in the Shadow
Ratings; and
(f) any other documentation or other information
reasonably requested by XLCA (if XLCA is the Controlling Party).
Notwithstanding the foregoing, the Issuer shall not be
required to give notice of any matter described in this Section 2.2 that is
described in any Form 10-K, 10-Q or 8-K or other form or document filed by the
Issuer or any of its Affiliates with the Securities and Exchange Commission and
available on the Securities and Exchange Commission's Electronic Data Gathering,
Analysis and Retrieval (XXXXX) system.
2.3 Financial Statements; Reports. The Issuer shall deliver or
cause to be delivered to the Collateral Agent, the Trustee, the Swap
Counterparty and XLCA (if XLCA is the Controlling Party) (it being acknowledged
that XLCA shall have no obligation to provide any financial statements or other
information provided to it under this Section 2.3 to any other Person):
(a) as soon as available and in any event within 120 days
after the end of each fiscal year of the Issuer, an audited combined and
combining balance sheet of the Issuer and each of the Project Companies as of
the end of such fiscal year and the related audited combined and combining
statements of income, retained earnings and cash flow for such fiscal year,
setting forth in each case in comparative form the figures for the previous
fiscal year, to the extent available, all reported on by an independent public
accountant of nationally recognized standing;
(b) as soon as available and in any event within 45 days
after the end of each fiscal quarter, unaudited combined and combining statement
of cash flow of the Issuer and each of the Project Companies as of and for such
fiscal quarter in reasonable detail and prepared in accordance with GAAP applied
on a consistent basis;
(c) on or before the last Business Day of each month,
unaudited combined and combining financial statements of the Issuer and each of
the Project Companies as of and for the preceding month, which shall include a
combined and combining balance sheet, a combined and combining statement of
income and an EBITDA Statement, each in reasonable detail and prepared in
accordance with GAAP applied on a consistent basis;
Each time financial statements are delivered under this
Section 2.3, along with such financial statements, the Issuer or the Project
Companies, as applicable, shall also deliver a certificate signed by a
Responsible Officer of the Issuer or the Project Companies, as applicable,
certifying, in such Responsible Officer's capacity as an officer of the Issuer
or the Project Companies, as applicable, that such officer has made or caused to
be made a review of the transactions and financial conditions of the Issuer or
each of the Project Companies during the relevant fiscal period and that such
review has not, to the best of such Responsible Officer's knowledge disclosed
the existence of any event or condition which constitutes an Issuer Event of
Default, an Issuer Inchoate Default, a Project Event of Default and/or a
Fundamental Project Event of Default and if any such event or condition existed
or exists, the certificate shall describe
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the nature thereof and the corrective actions that the Issuer and/or any of the
Project Companies, as applicable, has taken or proposes to take with respect
thereto. The Responsible Officer shall also certify, in such Responsible
Officer's capacity as an officer of the Issuer or the Project Companies, as
applicable, in such certificate that the Issuer or each of the Project Companies
is in compliance with all applicable material provisions of each Financing
Document to which the Issuer and/or any of the Project Companies are a party or,
if such is not the case, such certificates shall state the nature of such
non-compliance and the corrective actions which the Issuer and/or any of the
Project Companies, as applicable, has taken or proposes to take with respect
thereto.
(d) on or before the last Business Day of each month, the
following reports:
(i) a Monthly Affiliated Transaction Report for
the Issuer and each Project Company substantially in the form of
Exhibit A attached hereto;
(ii) a Monthly Operations Report for each Project
Company setting forth the information required under Exhibit B attached
hereto and any additional information reasonably requested by the
Independent Engineer;
(iii) a Monthly O&M Expense Report for each
Project Company substantially in the form of Exhibit C attached hereto;
(iv) a Monthly Power Marketing Performance
Tracking Report for each Project Company substantially in the form of
Exhibit D attached hereto;
(v) a Monthly Power Marketing Report for each
Project Company substantially in the form of Exhibit E attached hereto;
(vi) copies of all invoices for the month
immediately preceding such month delivered by, the provider(s) of
services under the O&M Agreements for the Big Cajun Project Company,
the Sterlington Project Company and the Bayou Cove Project Company;
(vii) copies of all invoices for the month
immediately preceding such month delivered by Indeck Operations, Inc.
with respect to the Xxxxxx XXX; and
(viii) copies of all invoices for the preceding
month delivered under the Energy Marketing Services Agreement.
(e) promptly upon receipt by the applicable Project
Company, any statement or documentation relating to the calculation of bonus or
penalty of, and any notice of amendment or modification to the methodology for
such calculation, delivered by the provider(s) of services under the O&M
Agreements for the Big Cajun Project Company, the Sterlington Project Company or
the Bayou Cove Project Company.
2.4 Inspection of Books and Records. The Issuer shall keep proper
books of accounts and records in accordance with GAAP and in compliance in all
material respects with all applicable Legal Requirements and make the same
available for inspection by the Controlling Party.
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2.5 Compliance with Laws. The Issuer shall comply with all
applicable Legal Requirements, except where non-compliance could not reasonably
be expected to have an Issuer Material Adverse Effect.
2.6 Existence, Conduct of Business, etc. The Issuer shall (a)
maintain and preserve (i) its existence as a limited liability company formed
under the laws of the State of Delaware (other than as permitted by Section 9.01
of the Indenture), and (ii) all rights, privileges and franchises necessary or
desirable in the normal conduct of its business, (b) perform all of its
contractual obligations under the Financing Documents and (c) engage only in the
businesses (i) contemplated by the Financing Documents as represented in Section
2.1(o)(ii)(C) of the Insurance and Reimbursement Agreement or (ii) otherwise
expressly permitted by the Financing Documents. Without limiting the generality
of clause (c) in the preceding sentence, the Issuer shall not (A) enter into any
Project Document or any Additional Project Document (other than in connection
with activities expressly permitted by the Financing Documents), (B) hold any
equity, voting or other interest in any Person, or (C) have any employees.
2.7 Calculation of Ratios and Other Compliance Calculations.
(a) Within 20 days after each Determination Date, the
Issuer shall deliver to the Collateral Agent, the Trustee, the Swap Counterparty
and XLCA (if XLCA is the Controlling Party) (it being acknowledged that XLCA
shall have no obligation to provide any such certificate received by it to any
other Person) a certificate in the form of Exhibit F providing the calculation
of the Debt Service Coverage Ratio for the Determination Period ending on such
Determination Date. If XLCA is the Controlling Party, XLCA shall notify the
Issuer of any errors in the calculation of the Debt Service Coverage Ratio
within 10 days after receipt of the Issuer's certificate and the Issuer and XLCA
shall diligently work to agree on the correction of any such errors. If the
Issuer and XLCA are unable to agree on the correction of any such errors within
5 days after notification by XLCA to the Issuer of any such errors, such dispute
shall be resolved by the Power and Fuel Market Consultant within 3 days after
submission of the dispute to the Power and Fuel Market Consultant. The Issuer
shall deliver a corrected certificate to the Collateral Agent and XLCA within 3
days after agreement by the Issuer and XLCA, or resolution by the Power and Fuel
Market Consultant, on the correction of any such errors. If XLCA is not the
Controlling Party, the certificate originally delivered by the Issuer to the
Collateral Agent shall be final and conclusive.
(b) Within 20 days after each Determination Date, the
Issuer shall deliver to the Collateral Agent, the Trustee, the Swap Counterparty
and XLCA (if XLCA is the Controlling Party) (it being acknowledged that XLCA
shall have no obligation to provide any such certificate received by it to any
other Person) a certificate in the form of Exhibit G with the calculation of the
Experience Amount Percentage for each Project Company for the Determination
Period ending on such Determination Date. If XLCA is the Controlling Party, XLCA
shall notify the Issuer of any errors in the calculation of the Experience
Amount Percentage within 10 days after receipt of the Issuer's certificate and
the Issuer and XLCA shall diligently work to agree on the correction of any such
errors. If the Issuer and XLCA are unable to agree on the correction of any such
errors within 5 days after notification by XLCA to the Issuer of any such
errors, such dispute shall be resolved by the Power and Fuel Market Consultant
within 3 days after submission of the dispute to the Power and Fuel Market
Consultant. The Issuer shall deliver a
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corrected certificate to the Collateral Agent and XLCA within 3 days after
agreement by the Issuer and XLCA, or resolution by the Power and Fuel Market
Consultant, on the correction of any such errors. If XLCA is not the Controlling
Party, the certificate originally delivered by the Issuer tot he Collateral
Agent shall be final and conclusive.
(c) Within 20 days after each Determination Date, the
Issuer shall deliver to the Collateral Agent, the Trustee, the Swap Counterparty
and XLCA (if XLCA is the Controlling Party) (it being acknowledged that XLCA
shall have no obligation to provide any such certificate received by it to any
other Person) a certificate in the form of Exhibit O providing the calculation
of the Major Maintenance Reserve Amount for the Determination Period ending on
such Determination Date. If XLCA is the Controlling Party, XLCA shall notify the
Issuer of any errors in the calculation of the Major Maintenance Reserve Amount
within 10 days after receipt of the Issuer's certificate and the Issuer and XLCA
shall diligently work to agree on the correction of any such errors. If the
Issuer and XLCA are unable to agree on the correction of any such errors within
5 days after notification by XLCA to the Issuer of any such errors, such dispute
shall be resolved by the Independent Engineer within 10 days after submission of
the dispute to the Independent Engineer. The Issuer shall deliver a corrected
certificate to the Collateral Agent and XLCA within 3 days after agreement by
the Issuer and XLCA, or resolution by the Independent Engineer, on the
correction of any such errors. If XLCA is not the Controlling Party, the
certificate originally delivered by the Issuer to the Collateral Agent shall be
final and conclusive.
(d) Commencing on the third anniversary of the Closing
Date, the Issuer may, no more than once in any three year period, request the
Independent Engineer to determine, in consultation with the Power and Fuel
Market Consultant, whether the Major Maintenance Reserve Account is overfunded
or underfunded to provide for the Major Maintenance Payment for all Projects. If
the Independent Engineer determines that the Major Maintenance Reserve Account
is materially underfunded, the Issuer shall amend the Major Maintenance Reserve
Account Funding Guideline attached to the Major Maintenance Reserve Certificate
only with respect to the amount of Major Maintenance Reserve Account funding
required for each Project per Factored Start, Equivalent Operating Hour or
Equivalent Start (as such terms are defined in the Major Maintenance Reserve
Account Funding Guideline) on a going forward basis as reasonably determined by
the Independent Engineer. If the Independent Engineer determines that the Major
Maintenance Reserve Account is overfunded and such over funding is greater than
$500,000 as of such determination date, such excess amount shall be transferred
from the Major Maintenance Reserve Account to the Revenue Account in accordance
with the Depositary Agreement.
2.8 Further Assurances.
(a) The Issuer shall preserve the security interests in
the Issuer Collateral and shall undertake all actions which are necessary or
advisable under applicable law in such manner and in such jurisdictions to (i)
perfect and maintain the Collateral Agent's security interest in the Issuer
Collateral in full force and effect at all times (including the priority
thereof) and (ii) preserve and protect the Issuer Collateral and protect and
enforce the Issuer's rights and title and the rights of the Collateral Agent to
the Issuer Collateral, including the preparation, making
8
or delivery of all filings and recordations, the payment of fees and other
charges and the issuance of supplemental documentation.
(b) The Issuer shall perform such reasonable acts as may
be necessary to carry out the intent of this Agreement and the other Financing
Documents.
(c) The Issuer shall cause its equity interests to be
"certificated securities" as defined in Article 8 of the UCC and include in its
limited liability company agreement language (consistent with Section 8-103(c)
of the UCC) to the effect that such equity interests are "securities" (as such
term is defined in Article 8 of the UCC) governed by Article 8 of the UCC.
2.9 Taxes. The Issuer shall pay and discharge promptly when due
all material Taxes and governmental charges imposed upon it or upon its income
or profits or in respect of its property, in each case before the same shall
become delinquent or in default and before penalties accrue thereon, unless and
to the extent the same are being contested in good faith by appropriate
proceedings and adequate reserves with respect thereto shall, to the extent
required by GAAP, have been set aside, and failure to pay or comply with the
contested item could not reasonably be expected to have an Issuer Material
Adverse Effect.
2.10 Notice of Redemption. The Issuer shall give notice to XLCA of
any redemption for any reason of any Bonds no later than the time a redemption
notice in respect of the redemption of such Bonds is given by the Issuer or the
Trustee in accordance with the Indenture.
2.11 Swap Agreement. The Issuer shall at all times be a party to an
interest rate swap agreement in respect of the Series A Bonds on the same or
similar terms (with adjustments to the aggregate notional amount as appropriate)
as the Swap Agreement and if for any reason the Issuer is not a party to the
Swap Agreement or if the Swap Agreement terminates, the Issuer shall ensure that
it is party to a Replacement Swap Agreement such that at no time shall the
Issuer not be a party to such an interest rate swap agreement, provided,
however, that the Issuer's obligations to enter into a Replacement Swap
Agreement pursuant to this Section 2.11 shall be expressly conditioned upon
XLCA's agreement to provide a financial guaranty to the replacement swap
provider on the same or similar terms as the Swap Policy. The Issuer shall be
required to apply any amounts received from any replacement swap provider in
connection with the Issuer's entry into a Replacement Swap Agreement (a) first,
toward the satisfaction of any Swap Breakage Costs due and owing to the original
Swap Counterparty under the Swap Agreement, and (b) second, to reimburse XLCA
for any payments made under the Swap Policy constituting termination payments in
connection with an early termination of the Swap Agreement to the extent not
previously reimbursed. The Issuer shall terminate or partially terminate the
Swap Agreement, in each case subject to its terms and conditions, such that at
no time shall the aggregate notional amount under the Swap Agreement exceed the
then outstanding aggregate principal amount of the Series A Bonds.
2.12 Corporate Services Agreement.
(a) The Issuer shall terminate the Corporate Services
Agreement pursuant to its terms upon any material default or material breach by
NRG Energy thereunder, if XLCA (as long as XLCA is the Controlling Party) so
directs.
9
(b) The Issuer agrees that in the event of a termination
pursuant to Section 2.12(a), XLCA (if XLCA is the Controlling Party) shall have
the right to consent to the selection of a replacement corporate service
provider, which consent shall not be unreasonably withheld.
2.13 Annual Operations Budget; Request for Expenditures.
(a) As soon as available and in any event no later than
45 days prior to the end of each fiscal year, the Issuer shall deliver, or cause
to be delivered, to the Independent Engineer and XLCA (if XLCA is the
Controlling Party) an Annual Operations Budget in the form of Exhibit P. The
Independent Engineer shall have 15 days to review the Annual Operations Budget
and shall notify the Issuer of any modifications required to be made to any item
or amount shown or reflected on such Annual Operations Budget (the "Required
Modifications"). If the Issuer disagrees in any respect with the Required
Modifications, it shall deliver, within 10 days of receipt of the Required
Modifications, to the Independent Engineer a notice setting forth, in reasonable
detail, each disputed item or amount and the basis for such disagreement (the
"Dispute Notice"). If no Dispute Notice is received by the Independent Engineer,
the Annual Operations Budget, as so modified, shall be deemed to be final. If a
Dispute Notice is delivered pursuant to this Section 2.13(a), the Issuer and the
Independent Engineer, during the 15 days following such delivery, shall use
their commercially reasonable efforts to reach agreement on the disputed items
or amounts and to finalize the Annual Operations Budget. The Issuer shall
deliver the final Annual Operations Budget to the Collateral Agent, the Trustee,
the Swap Counterparty, the Independent Engineer and XLCA (it being acknowledged
that XLCA shall have no obligation to provide any information provided to it
under this Section 2.13(a) to any other Person).
(b) As soon as available and in any event no later than
45 days prior to the end of each fiscal year, the Issuer shall deliver, or cause
to be delivered, to the Independent Engineer and XLCA (if XLCA is the
Controlling Party) the Request For Expenditures in the form of Exhibit Q. The
Independent Engineer shall have 15 days to review the Request For Expenditures
and shall notify the Issuer of any modifications required to be made to any item
or amount shown or reflected on such Request For Expenditures (the "Expenditures
Required Modifications"). The Independent Engineer shall review the Request For
Expenditures with respect to the Issuer's designation of such Request For
Expenditures as a Major Maintenance Operating Expenditure. If the Issuer
disagrees in any respect with the Expenditures Required Modifications, it shall
deliver, within 10 days of receipt of the Expenditures Required Modifications,
to the Independent Engineer a notice setting forth, in reasonable detail, each
disputed item or amount and the basis for such disagreement (the "Expenditures
Dispute Notice"). If no Dispute Notice is received by the Independent Engineer,
the Request For Expenditures, as so modified, shall be deemed to be final. If a
Expenditures Dispute Notice is delivered pursuant to this Section 2.13(b), the
Issuer and the Independent Engineer, during the 15 days following such delivery,
shall use their commercially reasonable efforts to reach agreement on the
disputed items or amounts and to finalize the Request For Expenditures. The
Issuer shall deliver the final Request For Expenditures to the Collateral Agent,
the Trustee, the Swap Counterparty, the Independent Engineer and XLCA (it being
acknowledged that XLCA shall have no obligation to provide any information
provided to it under this Section 2.13(b) to any other Person).
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2.14 Excluded Project Subsidiary. The Issuer shall maintain at all
times its designation as an "Excluded Project Subsidiary" (as such term is
defined in the NRG Credit Agreement and the Second Priority Senior Notes
Indenture or a similar defined term under any replacement or refinancing
thereof).
ARTICLE 3
AFFIRMATIVE COVENANTS OF THE PROJECT COMPANIES
Each Project Company covenants and agrees that it shall
perform the covenants set forth in this Article 3, only with respect to itself
and its Project (unless waived in accordance with Section 9.2 of this
Agreement). The covenants set forth in this Article 3 that expressly require
performance only by a specified Project Company shall be required to be
performed only by such Project Company (unless such performance is waived in
accordance with Section 9.2 of this Agreement).
3.1 Use of Proceeds and Revenues.
(a) Proceeds. Unless otherwise expressly provided herein
or in the Depositary Agreement, each Project Company party to a Project Loan
Agreement applied on the Original Closing Date, the proceeds from the sale of
the Series A Bonds borrowed from the Issuer pursuant to the Project Loan
Agreement to which such Project Company is a party to (i) reimburse NRG Energy
for NRG Energy's costs of having constructed and/or acquired the Projects
(including interest incurred during construction), (ii) pay the Premium and all
additional amounts required to be paid to XLCA pursuant to the Policy and the
Insurance and Reimbursement Agreement on the Original Closing Date, (iii)
deposit $11,279,588 in a designated account in accordance with Section 4.3.1 of
the Original Depositary Agreement, and (iv) pay the transaction fees and costs
due on the Original Closing Date in connection with the Transaction to the
relevant Persons.
(b) Revenues. Each Project Company shall deposit all
Project Revenues, Loss Proceeds and any other amounts due to it directly into
the applicable Accounts as required pursuant to the Depositary Agreement and the
other Financing Documents. Each Project Company shall use its good faith
reasonable efforts to cause all Project Revenues, Loss Proceeds and any other
amounts due to it to be paid or otherwise delivered by Persons making such
payment or delivery directly into the applicable Accounts as required pursuant
to the Depositary Agreement and the other Financing Documents.
3.2 Reporting Requirements.
(a) Notice of Material Events. Each Project Company shall
promptly, upon acquiring notice or giving notice, as the case may be, or
obtaining knowledge thereof, give written notice (together with copies of any
underlying notices or other documentation) to the Collateral Agent, the Trustee,
the Swap Counterparty and XLCA (if XLCA is the Controlling Party) (it being
acknowledged that XLCA shall have no obligation to provide any such written
notice received by it to any other Person) of:
(i) any action, suit, arbitration, litigation,
investigation or other proceeding or any dispute with any Governmental
Authority relating to it or its Project
11
and that involves (A) claims against it or its Project in excess of
$1,000,000 or potential claims against it or its Project in excess of
$2,000,000 in each case in the aggregate, (B) any injunctive,
declaratory or other equitable relief that, if determined adversely to
such Project Company, could reasonably be expected to have a Project
Material Adverse Effect, (C) revocation, modification, failure to renew
or the like of any material Permit or imposition of additional material
conditions with respect thereto, or (D) any Lien (other than a Project
Company Permitted Lien) related to its Project for taxes due and
payable but not paid;
(ii) any Project Event of Default or Project
Inchoate Default, together with a
description of any action being taken or proposed to be taken with
respect thereto;
(iii) any cancellation or suspension, or receipt
of written notice of threatened or potential cancellation or
suspension, of any insurance described in Exhibit H;
(iv) any matter which has had or, in such Project
Company's reasonable judgment, could reasonably be expected to have, a
Project Material Adverse Effect;
(v) any termination of, or delivery or receipt
of written notice of any material default under, any of such Project
Company's Major Project Documents;
(vi) any written notice received from or given to
any party to any of such Project Company's Major Project Documents (A)
that an event of force majeure has occurred thereunder or (B) in
respect of any claim in connection with an event of force majeure
thereunder;
(vii) the scheduled or proposed conduct of any of
the performance or other tests listed on Exhibit I (the "Completion
Tests"), which notice shall be given at least 10 Business Days prior to
the date on which such test is scheduled or proposed to occur, and a
copy of which notice shall be given to the Independent Engineer;
(viii) any (A) fact, circumstance, condition or
occurrence at, on or arising from, such Project Company's Site,
Improvements or other Mortgaged Property that results in material
noncompliance with, or material violation of, any Hazardous Substances
Law, (B) Release or threatened Release of Hazardous Substances in, on,
under or from or in connection with, such Project Company's Site,
Improvements or other Mortgaged Property that has resulted or could
reasonably be expected to result in material personal injury, material
property damage or a Project Material Adverse Effect, and (C) pending
or, to the knowledge of such Project Company, threatened Environmental
Claim against it or, to the knowledge of such Project Company, any of
its Affiliates, contractors, lessees or any other Persons, arising in
connection with the development, construction, ownership, leasing, use,
operation or maintenance of its Project, or such Project Company's
occupying or conducting operations on or at such Project Company's
Site, Improvements or other Mortgaged Property that has resulted or
12
could reasonably be expected to result in material personal injury,
material property damage or a Project Material Adverse Effect; and
(ix) any Casualty Event or Condemnation Event, or
the commencement of proceedings in connection therewith, with respect
to its Project involving a probable loss of $5,000,000 or more.
Notwithstanding the foregoing, such Project Company shall not
be required to give notice of any matter described in this Section 3.2(a) that
is described in any Form 10-K, 10-Q or 8-K or other form or document filed by
such Project Company or any of its Affiliates with the Securities and Exchange
Commission and available on the Commission's Electronic Data Gathering, Analysis
and Retrieval (XXXXX) system.
(b) Additional Documents, Periodic Reports, etc. Each
Project Company shall deliver, or cause to be delivered, to the Collateral
Agent, the Trustee, the Swap Counterparty and XLCA (if XLCA is the Controlling
Party) (it being acknowledged that XLCA shall have no obligation to provide any
notices or other information provided to it pursuant to this Section 3.2(b) to
any other Person):
(i) promptly, but in no event later than 10
Business Days after it has knowledge of the execution and delivery
thereof, a copy of each of its material Additional Project Documents;
(ii) promptly, but in no event later than 10
Business Days after the effective date thereof, a copy of each material
amendment, supplement or other modification to any of its Major Project
Documents;
(iii) promptly, but in no event later than 10
Business Days after receipt thereof by it, copies of any Permit listed
on Part II of the Permit Schedule and any other material Permit related
to its Project obtained by it after the date hereof;
(iv) with respect to the Bayou Cove Project only,
promptly, but in no event later than 10 Business Days after the
execution and delivery thereof, a copy of the transfer deed for the
transfer of a portion of the Site relating to the Bayou Cove Project
pursuant to Section 4.2.2 of the Bayou Cove EPC Agreement (Electric
Interconnection Facilities);
(v) within 20 days after each Determination
Date, an Annual Operations Report substantially in the form of Exhibit
J setting forth the information required therein;
(vi) within 20 days after each Determination
Date, a certificate, substantially in the form of Exhibit K certifying
that the insurance requirements set forth in Exhibit H have been
implemented and are being complied with in all material respects;
(vii) On or before the last Business Day of each
month, copies of the invoices for the preceding month issued in
connection with any power purchase agreement, tolling agreement or any
similar agreement or arrangement with respect to
13
sale of Power, including, without limitation, copies of invoices
delivered to Louisiana Generating under the Big Cajun PPA and the
Sterlington PPA and to Exelon under the Rockford I Tolling Agreement;
and
(viii) any other documentation or other information
reasonably requested by XLCA (if XLCA is the Controlling Party).
3.3 Inspection of Books and Records; Access.
(a) Each Project Company shall keep proper books of
accounts and records in accordance with GAAP and in compliance in all material
respects with all applicable Legal Requirements and make the same available for
inspection by the Controlling Party.
(b) Each Project Company shall permit representatives or
agents of XLCA (if XLCA is the Controlling Party) at reasonable times and upon
reasonable notice (i) to examine its books, records, accounts and other
financial records, (ii) upon reasonable request, to copy and make extracts from
the same, (iii) to inspect its Property, Project or Site, and (iv) to discuss
its affairs, business, finances and accounts with such Project Company's senior
officers.
3.4 Plans and Specifications; Completion Tests.
(a) Plans and Specifications. Each Project Company shall
cause a complete set of as-built plans and specifications (and all supplements
thereto) related to its Project to be maintained at the corporate office at such
Project Company's Site and available for inspection by the Controlling Party and
the Independent Engineer; provided that neither the Bayou Cove Project Company
nor the Rockford II Project Company shall be required to comply with this
covenant until the Completion Date for such Project Company's Project. Without
prejudice to the immediately preceding sentence, each of the Bayou Cove Project
Company and the Rockford II Project Company shall, not later than 8 months after
the Completion Date for its Project, cause an as-built survey to be prepared and
delivered to XLCA (if XLCA is the Controlling Party), the Collateral Agent, the
Trustee and the Independent Engineer.
(b) Completion Tests. Each Project Company shall permit
the Controlling Party and the Independent Engineer to witness the Completion
Tests in respect of its Project.
3.5 Compliance with Laws. Each Project Company shall comply with,
and shall ensure that its Project is operated in compliance with, and shall make
such alterations to its Project as may be required for compliance with, all
applicable Legal Requirements, except where non-compliance could not reasonably
be expected to have a Project Material Adverse Effect.
3.6 Existence; Conduct of Business, etc. Each Project Company
shall at all times maintain and preserve (a) its existence as a limited
liability company and its good standing under the laws of (i) in the case of the
Bayou Cove Project Company, the Big Cajun Project Company and the Sterlington
Project Company, the State of Delaware, or (ii) in the case of the Rockford I
Project Company and the Rockford II Project Company, the State of Illinois
(other than as permitted by Section 5.10), (b) its qualification to do business
in each jurisdiction in which the character of the properties owned or leased by
it or in which the transaction of its business as conducted or proposed to be
conducted makes such qualification necessary except to the extent
14
that the failure to do so could not reasonably be expected to have a Project
Material Adverse Effect and (c) its other material rights, privileges and
franchises necessary or desirable in the normal conduct of its business.
3.7 Project Documents. Each Project Company shall exercise,
preserve and defend all of its rights under its Project Documents, except to the
extent failure to so exercise, preserve or defend such rights could not
reasonably be expected to have a Project Material Adverse Effect.
3.8 Permits. Each Project Company shall obtain all Permits
required at any time and from time to time in connection with such Project
Company's development, construction, ownership, leasing, operation, maintenance
or use of its Project, except to the extent the failure to obtain such Permits
could not reasonably be expected to have a Project Material Adverse Effect.
3.9 Further Assurances.
(a) Each Project Company shall preserve the security
interests granted or purported to be granted under the Collateral Documents to
which it is a party and undertake all actions which are necessary or advisable
under applicable law in such manner and in such jurisdictions to (i) perfect and
maintain the Collateral Agent's valid and perfected security interests in its
Project Company Collateral in full force and effect at all times (including the
priority thereof), subject to no Liens other than Project Company Permitted
Liens and (ii) preserve and protect its Project Company Collateral and protect
and enforce its right, title and interest in and to, and the rights of the
Collateral Agent in and to, its Project Company Collateral, including the
preparation, making or delivery of all filings and recordations, the payment of
fees and other charges and the issuance of supplemental documentation.
(b) If a Project Company obtains any right, title or
interest in, to or under any real property (including leasehold interests) that
is material to the development, construction, ownership, leasing, operation,
maintenance or use of its Project and that is not covered by the Collateral
Documents to which it is a party, it shall (i) collaterally assign such right,
title or interest to the Collateral Agent for the benefit of the Secured
Parties, (ii) record a supplement to the Mortgage to which it is a party in form
and substance reasonably satisfactory to Collateral Agent encumbering such
right, title or interest by the Lien of such Mortgage, and (iii) obtain a
supplement to the applicable Title Policy insuring the first priority (subject
to Project Company Permitted Liens) of such Mortgage over such real property.
(c) Each Project Company shall perform such reasonable
acts as may be necessary to carry out the intent of this Agreement (including
its Guaranty) and the other Financing Documents to which it is a party.
(d) Each Project Company shall cause its equity interests
to be "certificated securities" as defined in Article 8 of the UCC and include
in its limited liability company agreement language (consistent with Section
8-103(c) of the UCC) to the effect that such equity interests are "securities"
(as such term is defined in Article 8 of the UCC) governed by Article 8 of the
UCC.
15
3.10 Maintenance of Insurance. Each Project Company shall maintain
or cause to be maintained on its behalf in effect at all times the types of
insurance required pursuant to Exhibit H in the amounts and on the terms and
conditions specified therein (including paragraph 5 of Exhibit H).
3.11 Taxes. Each Project Company will pay and discharge promptly
when due all material Taxes and governmental charges imposed upon it or upon its
income or profits or in respect of its property, in each case before the same
shall become delinquent or in default and before penalties accrue thereon,
unless and to the extent the same are being contested in good faith by
appropriate proceedings and adequate reserves with respect thereto shall, to the
extent required by GAAP have been set aside, and failure to pay or comply with
the contested item could not reasonably be expected to have a Project Material
Adverse Effect.
3.12 Title; Maintenance of Properties.
(a) Title. Each Project Company shall preserve and
maintain good and, with respect to real property, marketable and insurable,
title to its Project and all of its other assets and good, marketable and
insurable fee title to, or as applicable, a valid and subsisting leasehold
estate in, its Site and the Improvements and Easements related to its Project,
in each case free and clear of all Liens other than Project Company Permitted
Liens; provided that the covenant set forth in this Section 3.12 shall not serve
to prohibit any disposition of assets expressly permitted under Section 5.4 of
this Agreement.
(b) Bayou Cove. Specifically, notwithstanding the terms
of the Bayou Cove EPC Agreement (Electric Interconnection Facilities), the Bayou
Cove Project Company shall preserve and maintain good, marketable and insurable
title to its Site and the Improvements and Easements related to its Project, in
each case free and clear of all Liens other than its Project Company Permitted
Liens; provided that the covenant set forth in this Section 3.12(b) shall not
serve to prohibit any disposition of assets expressly permitted under Section
5.4 of this Agreement.
(c) Maintenance of Properties. Each Project Company shall
maintain in good repair, working order and condition, all of its material
properties used or useful in respect of the conduct of its business and from
time to time make all appropriate repairs, renewals and replacements thereof,
except to the extent that it shall determine in good faith not to maintain,
repair, renew or replace such property if such property is no longer useful in
the conduct of its business and the failure to do so could not reasonably be
expected to have a Project Material Adverse Effect; provided that the covenant
set forth in this Section 3.12(c) shall not serve to prohibit any disposition of
assets expressly permitted under Section 5.4 of this Agreement.
3.13 Market Based Rate Authority. To the extent market-based rates
are available to similarly situated generators selling Power, Ancillary Services
or some combination of the foregoing in the Applicable Markets, each Project
Company shall maintain at all times its authority to sell at market-based rates
wholesale Power, Ancillary Services and, to the extent permitted as an Exempt
Wholesale Generator or under its FERC tariff, Other Energy-Related Products and
Services in the Applicable Markets, not subject to any rate caps or mitigation
measures other than rate caps and mitigation measures generally applicable to
similarly situated
16
generators selling Power, Ancillary Services or some combination of the
foregoing in the Applicable Markets.
3.14 Completion.
(a) If the Completion of the Bayou Cove Project shall not
have occurred on or prior to the Closing Date, the Bayou Cove Project Company
shall take all actions commercially reasonable for the Completion of the Bayou
Cove Project to occur as soon as possible thereafter. In addition, the Bayou
Cove Project Company shall (i) up to a maximum aggregate cap of $2,000,000, pay
any and all Uncovered Warranty Costs that are incurred or identified during any
Warranty Period relating to the Bayou Cove Project, (ii) pay any and all
indemnity claims made against it arising out of any Bayou Cove Equipment and
Construction Contract relating to any actions or events which occurred or failed
to occur prior to Completion and (iii) pay any damages owing to any Bayou Cove
Contractor under any Bayou Cove Equipment and Construction Contract or any third
party claim made against it arising out of any actions or events related to any
work performed to achieve Completion under a Bayou Cove Equipment and
Construction Contract (the obligations contained in this Section 3.14(a), the
"Bayou Cove Completion Obligations").
(b) If the Completion of the Rockford II Project shall
not have occurred on or prior to the Closing Date, the Rockford II Project
Company shall take all actions commercially reasonable for the Completion of the
Rockford II Project to occur as soon as possible thereafter. In addition, the
Rockford II Project Company shall (i) pay any and all indemnity claims made
against it arising out of any Rockford II Equipment and Construction Contract
relating to any actions or events which occurred or failed to occur prior to
Completion, and (ii) pay any damages owing to any Rockford II Contractor under
any Rockford II Equipment and Construction Contract or any third party claim
made against it arising out of any actions or events related to any work
performed to achieve Completion under a Rockford II Equipment and Construction
Contract (the obligations contained in this Section 3.14(b), the "Rockford II
Completion Obligations").
(c) On or before the third anniversary of the Closing
Date, the Rockford II Project Company shall pay in full for, and shall have
received all of the Spare Parts. The payment for any Spare Parts shall be in all
respects in accordance with Section 4.3.2 of the Depositary Agreement.
3.15 Operation and Maintenance. Each Project Company shall, or
shall cause its Operator to, use, operate and maintain its Project in compliance
with Prudent Utility Practices, all Legal Requirements and the terms of its
Project Documents.
3.16 Condemnation Event. If a Condemnation Event occurs or
proceedings therefor commence with respect to a Project Company's Project, such
Project Company shall (i) diligently pursue all its rights to compensation
against the relevant Governmental Authority in respect of such Condemnation
Event except where failure to do so could not reasonably be expected to have a
Project Material Adverse Effect, and (ii) not, without the written approval of
XLCA (if XLCA is the Controlling Party) (which approval shall be in XLCA's
absolute discretion), compromise or settle any claim in excess of $5,000,000
against such Governmental
17
Authority. Each Project Company consents to the participation of the Controlling
Party in any condemnation proceedings, and each Project Company shall from time
to time deliver to the Controlling Party all documents and instruments requested
by it to permit such participation.
3.17 Sterlington PPA Legal Opinion. The Sterlington Project Company
shall deliver a legal opinion to the Secured Parties and the Depositary Agent in
respect of the Sterlington PPA within 30 days after its acceptance by FERC and
execution by the parties thereto, which legal opinion shall be in form and
substance substantially the same as the legal opinions delivered with respect to
the other Major Project Documents on the Original Closing Date.
3.18 Energy Marketing Services Parameters. Each Project Company
shall comply, in all material respects with the power marketing, fuel supply and
transmission and transportation service parameters set forth in Sections 2.8,
2.9, 3.6 and 9.2.6 of the Addendum to the Energy Marketing Services Agreement to
which such Project Company is a party.
3.19 Unrestricted Subsidiary; Excluded Project Subsidiary. Each of
the Bayou Cove Project Company, the Big Cajun Project Company, the Sterlington
Project Company, the Rockford I Project Company and the Rockford II Project
Company, respectively, shall maintain at all times its designation as an
"Excluded Project Subsidiary" (as such term is defined in the NRG Credit
Agreement and the Second Priority Senior Notes Indenture or a similar defined
term under any replacement or refinancing thereof).
3.20 Energy Marketing Services Agreements. Each Project Company
agrees that if XLCA (as long as XLCA is the Controlling Party), upon Reasonable
Cause, so directs, it shall terminate such Project Company's Energy Marketing
Services Agreement. Upon the termination of any Energy Marketing Services
Agreement, XLCA (if XLCA is the Controlling Party) shall select a new power
marketer not affiliated with NRG Energy, provided that if a Power and Fuel
Market Consultant is in place, such selection shall be in accordance with the
recommendation of the Power and Fuel Market Consultant. Following such
selection, the Project Company shall enter into a new Energy Marketing Services
Agreement with the new power marketer.
For purposes of this Section 3.20, "Reasonable Cause" shall
mean (i) the Project Company's performance falls below the annual performance
targets set forth in the Monthly Power Marketing Performance Tracking Report for
the applicable Determination Period, but only to the extent that such failure to
meet such annual performance targets is for reasons other than the Project
Company's ability to meet the Guaranteed Heat Rate, (ii) the reasonable
determination of the Power and Fuel Market Consultant that the Energy Marketing
Services Agreement should be terminated or (iii) a material default by NRG Power
Marketing under the Energy Marketing Services Agreement.
ARTICLE 4
NEGATIVE COVENANTS OF ISSUER
The Issuer covenants and agrees that the Issuer shall perform
the covenants set forth in this Article 4 (unless waived in accordance with
Section 9.2 of this Agreement).
4.1 Contingent Liabilities. Except for the consummation of the
transactions pursuant to this Agreement and the other Financing Documents, the
Issuer shall not become liable as a
18
surety, guarantor, accommodation endorser or otherwise, for or upon the
obligation of any other Person; provided, however, that this Section 4.1 shall
not be deemed to prohibit the incurrence, creation, assumption or existence of
Issuer Permitted Debt or Issuer Permitted Liens.
4.2 Limitations on Liens. The Issuer shall not create, assume or
suffer to exist any Lien securing a charge or obligation on any Issuer
Collateral, real or personal, whether now owned or hereafter acquired, except
Issuer Permitted Liens.
4.3 Indebtedness.
(a) The Issuer shall not incur, create, assume or permit
to exist any Debt, except Issuer Permitted Debt.
(b) Notwithstanding anything to the contrary in Section
4.3(a), and in addition to the requirements set forth in Section 3.02 of the
Indenture, Additional Bonds shall not be authenticated, delivered or issued
under the Indenture and no Debt shall be incurred by or on behalf of the Issuer
in respect of any Additional Bonds unless (i) no Issuer Event of Default or
Issuer Inchoate Default has occurred and is continuing or would occur as a
result of such authentication, delivery, issuance or incurrence, (ii) each of
Xxxxx'x and S&P has confirmed in writing that such authentication, delivery,
issuance or incurrence will not result in downgrade of (x) the ratings for the
Series A Bonds (after giving effect to the Policy) below Aaa by Xxxxx'x and AAA
by S&P, and (y) the Shadow Ratings for the Series A Bonds below Baa3 by Xxxxx'x
and BBB- by S&P, and (iii) XLCA shall have agreed, in its absolute discretion,
to the issuance of the Additional Bonds and to unconditionally and irrevocably
guaranty the scheduled payments of principal of and interest on such Additional
Bonds in the same manner and to the same extent as scheduled payments of
principal of and interest on the Series A Bonds are guaranteed under the Policy.
The Trustee shall execute such documents and take such other actions as
reasonably requested by, and at the expense of, the Issuer to effect and
evidence the issuance of Additional Bonds pursuant to Section 3.02 of the
Indenture.
4.4 Sale of Assets. The Issuer shall not sell, lease (as lessor),
assign, transfer or otherwise dispose of any of its material properties or
assets, whether now owned or hereafter acquired (other than in accordance with
Section 9.01 of the Indenture); provided that this Section 4.4 shall not be
deemed to prohibit the grant, creation or assumption of Issuer Permitted Liens.
The Issuer shall not sell, assign, transfer or otherwise dispose of any Project
Loan Note without XLCA's consent (so long as XLCA is the Controlling Party)
other than pursuant to, and in connection with, a Permitted Peaker Buyout.
4.5 Distributions.
(a) The Issuer shall not directly or indirectly (i) make
or declare any distribution (in cash, property or obligation) on, or make any
other payment on account of, any equity interest in the Issuer, (ii) make any
payment in respect of Subordinated Debt or (iii) make any other payment from the
Distribution Account (whether to a Project Company, any Affiliate of the Issuer
or any Project Company or any other Person) (each such distribution or payment,
a "Restricted Payment") unless:
19
(i) no Issuer Event of Default, Issuer Inchoate
Default or Project Event of Default pursuant to Section 7.2(n) of this
Agreement (Interconnection Solution) has occurred and is continuing and
such Restricted Payment will not result in an Issuer Event of Default
or an Issuer Inchoate Default;
(ii) the Equity Documents are in full force and
effect, including Section 2.1 of the Parent Agreement and no NRG Event
of Default has occurred pursuant to Section 12.1 of the Parent
Agreement;
(iii) subject to any reduction in the amount of
the Restricted Payment in accordance with Section 4.5(b) of this
Agreement, the amount of such Restricted Payment is limited to, and
such Restricted Payment is made from, Account Funds in the Distribution
Account in accordance with Section 4.6 of the Depositary Agreement;
(iv) the Restricted Payment is made on a
Restricted Payment Date;
(v) as of the Determination Date immediately
prior to such Restricted Payment Date, the Distribution Test shall have
been met;
(vi) as of the Restricted Payment Date, (A) the
Available Debt Service Reserve Funds equal or exceed the Debt Service
Reserve Amount as of such date and (B) the Available Major Maintenance
Reserve Funds equal or exceed the Major Maintenance Reserve Amount as
of such date; and
(vii) the Issuer shall have delivered to
Collateral Agent, the Trustee, the Swap Counterparty and XLCA, at least
5 Business Days prior to the proposed Restricted Payment Date, a
certificate dated as of the proposed Restricted Payment Date and duly
executed by a Responsible Officer of the Issuer, certifying, in such
Responsible Officer's capacity as an officer of the Issuer, to the
effect that, to the best of such Responsible Officer's knowledge, each
of the foregoing conditions and the other applicable conditions of this
Section 4.5 shall have been satisfied as of such date and XLCA (if XLCA
is the Controlling Party), acting in its absolute discretion, shall
have confirmed in writing to the Collateral Agent XLCA's agreement with
such certificate (provided that failure by XLCA to make such
confirmation prior to the proposed Restricted Payment Date shall be
deemed to be such confirmation).
(b) If there shall have occurred and be continuing a
Project Event of Default or an Inchoate Project Block Condition in respect of
any Project Company, the Issuer shall reduce the Restricted Payment to be made
by it pursuant to Section 4.5(a) of this Agreement by an amount equal to the
Project Company Blocked Amount for such Project Company. Subject to Section
4.5(d), if such Project Company Blocked Amount in the Distribution Account is
not disbursed within 30 days after an Annual Scheduled Payment Date, the
Collateral Agent shall direct the Depositary Agent to promptly transfer such
Project Company Blocked Amount to the Revenue Account to be applied in
accordance with the Depositary Agreement in the same manner as Account Funds in
the Distribution Account that are not disbursed in accordance with Section 4.6.2
of the Depositary Agreement by the 30th day following an Annual Scheduled
Payment Date.
20
(c) Notwithstanding anything to the contrary in Section
4.5(a), if the Issuer is not permitted to make a Restricted Payment pursuant to
Section 4.5(a) on any Initial Restricted Payment Date solely because of an
Inchoate Block Condition:
(i) the amount of the Restricted Payment that
the Issuer would have been permitted to make pursuant to Section 4.5(a)
had no such Inchoate Block Condition been continuing on such Initial
Restricted Payment Date (the "Blocked Restricted Payment Amount") shall
not be transferred from the Distribution Account to the Revenue Account
until the earlier of the end of the Subsequent Restricted Payment
Period and the occurrence of an Issuer Event of Default (at which time
the Blocked Restricted Payment Amount or any part thereof not
previously applied as permitted by Section 4.5(c)(ii) shall be deemed
to be Account Funds in the Distribution Account not disbursed within 30
days after an Annual Scheduled Payment Date and, accordingly, the
Collateral Agent shall direct the Depositary Agent to promptly transfer
the Blocked Restricted Payment Amount or such part thereof to the
Revenue Account to be applied in accordance with the Depositary
Agreement in the same manner as Account Funds in the Distribution
Account that are not disbursed in accordance with Section 4.6.2 of the
Depositary Agreement by the 30th day following an Annual Scheduled
Payment Date); and
(ii) prior to the end of the Subsequent
Restricted Payment Period, and only if such Inchoate Block Condition
shall have been cured by, or on behalf of, the Issuer or shall have
been waived by the Controlling Party prior to maturing into or becoming
an Issuer Event of Default, the Issuer may use the Blocked Restricted
Payment Amount to make a Restricted Payment; provided that the
conditions set forth in Section 4.5(a)(i) through (v) are satisfied
(the date upon which such payment is made, the "Subsequent Restricted
Payment Date").
(d) Notwithstanding anything to the contrary in Section
4.5(b), if the Issuer is not permitted to make a Restricted Payment pursuant to
Section 4.5(b) on any Initial Restricted Payment Date solely because of an
Inchoate Project Block Condition:
(i) the Project Company Blocked Amount shall not
be transferred from the Distribution Account to the Revenue Account
until the earlier of the end of the Subsequent Project Restricted
Payment Period and the occurrence of a Project Event of Default (at
which time the Project Company Blocked Amount or any part thereof not
previously applied as permitted by Section 4.5(d)(ii) shall be deemed
to be Account Funds in the Distribution Account not disbursed within 30
days after an Annual Scheduled Payment Date and, accordingly, the
Collateral Agent shall direct the Depositary Agent to promptly transfer
the Project Company Blocked Amount or such part thereof to the Revenue
Account to be applied in accordance with the Depositary Agreement in
the same manner as Account Funds in the Distribution Account that are
not disbursed in accordance with Section 4.6.2 of the Depositary
Agreement by the 30th day following an Annual Scheduled Payment Date);
and
(ii) prior to the end of the Subsequent Project
Restricted Payment Period, and only if such Inchoate Project Block
Condition shall have been cured by, or on behalf of, the relevant
Project Company or shall have been waived by the Controlling
21
Party prior to maturing into or becoming a Project Event of Default,
the Issuer may use the Project Company Blocked Amount to make a
Restricted Payment; provided that the conditions set forth in Section
4.5(a)(i) through (v) are satisfied (the date upon which such payment
is made, the "Subsequent Project Restricted Payment Date").
(e) Even if all of the conditions set forth in Section 4.5(a) or
4.5(b) of this Agreement have not been satisfied as of a proposed Restricted
Payment Date, the Issuer may make a Disbursement Request to make distributions
to its direct equity owners from the Distribution Account (such distributions,
the "Tax Distributions") equal to the currently due and payable aggregate
Federal, state or local income tax liability of NRG Energy (or its successor for
tax purposes) in respect of items of taxable income, gain, loss, deduction and
credit arising from the operations of the Issuer and the Project Companies
(together, the "Tax Group" and such liability, the "Tax Group Liability"), which
amount for each taxing jurisdiction shall be assumed to equal the product of (i)
the net taxable income of the Tax Group for applicable Federal, state or local
income tax purposes during the relevant tax period multiplied by (ii) the
highest marginal Federal, state or local income tax rate at the time actually
applicable to the relevant taxpayer for such period in the applicable
jurisdiction with respect to such income; provided that such Tax Group Liability
(A) shall be reduced by any taxes that are actually paid by the Issuer or the
Project Companies to the relevant taxing authorities and (B) shall be calculated
by excluding the items of taxable income, gain, loss, deduction and credit
arising from the operations of any entities not included in the Tax Group (such
as any income of NRG Energy not derived from the operations of the Tax Group)
and by assuming that all of the tax attributes and benefits attributable to the
operations of the Tax Group (including, without limitation, deductions, credits,
refunds, carryovers and carrybacks) shall be applied solely with respect to the
taxable income of the members of the Tax Group; provided, however, that tax
attributes of one member of the Tax Group shall not be deemed to offset the
income of another member of the Tax Group in a taxing jurisdiction if, under
applicable law in such jurisdiction, such attributes of the first member are not
in fact permitted to offset such income of the second member; and provided,
further, that no Tax Distribution pursuant to this Section 4.5(e) shall be
permitted if an Issuer Event of Default or Issuer Inchoate Default has occurred
and is continuing or would result from such Tax Distributions. In the event that
(w) any Tax Distribution exceeds (as reasonably determined by the Issuer or NRG
Energy) the amount of the actual Tax Group Liability in respect of the relevant
tax period, or (x) any entity that is not a member of the Tax Group receives a
refund of taxes from a Federal, state or local taxing authority that is
attributable (as reasonably determined by the Issuer or NRG Energy) in whole or
in part to a prior Tax Distribution, then either (y) the recipient of the
relevant Tax Distribution shall promptly return such excessive Tax Distribution
or tax refund to the Issuer or (z) future Tax Distributions that would have
otherwise been permitted under the preceding sentence of this Section 4.5(e)
shall be reduced by the amount of such excess or refund; provided that Issuer or
NRG Energy shall promptly make the determination described in (x) above and,
after making such determination, shall provide to XLCA a calculation supporting
such determination.
(f) Notwithstanding anything to the contrary in Section 4.5(e), if
the Issuer is not permitted to make a Tax Distribution pursuant to Section
4.5(e) solely because there shall be continuing an Issuer Inchoate Default:
22
(i) the amount of the Tax Distribution that the
Issuer would have been permitted to make pursuant to Section 4.5(e) had
no such Issuer Inchoate Default been continuing (the "Tax Distribution
Amount") shall not be transferred from the Distribution Account to the
Revenue Account until the earlier of the end of the Subsequent Tax
Payment Period and the occurrence of an Issuer Event of Default (at
which time the Tax Distribution Amount or any part thereof not
previously applied as permitted by Section 4.5(f)(ii) shall be deemed
to be Account Funds in the Distribution Account not disbursed within 30
days after an Annual Scheduled Payment Date and, accordingly, the
Collateral Agent shall direct the Depositary Agent to promptly transfer
the Tax Distribution Amount or such part thereof to the Revenue Account
to be applied in accordance with the Depositary Agreement in the same
manner as Account Funds in the Distribution Account that are not
disbursed in accordance with Section 4.6.2 of the Depositary Agreement
by the 30th day following an Annual Scheduled Payment Date); and
(ii) prior to the end of the Subsequent Tax
Payment Period, and only if such Issuer Inchoate Default shall have
been cured by, or on behalf of, the Issuer or shall have been waived by
the Controlling Party prior to maturing into or becoming an Issuer
Event of Default, the Issuer may use the Tax Distribution Amount to
make a Tax Distribution in the amount set forth, and in the manner
contemplated, in Section 4.5(e).
(g) Notwithstanding anything to the contrary herein or in
any other Financing Document, neither (i) Excluded Revenues nor (ii) amounts
payable to, or permitted to be disbursed to, NRG Energy pursuant to the
Depositary Agreement (other than those disbursed from the Distribution Account)
shall constitute Restricted Payments subject to this Section 4.5 and such
Excluded Revenues and amounts shall be permitted to be disbursed to NRG Energy
or any Affiliate thereof without regard for the conditions set forth in this
Section 4.5.
4.6 Investments. The Issuer shall not make any investments
(whether by purchase of stocks, bonds, notes or other securities, loan,
extension of credit, advance or otherwise) other than (a) Permitted Investments
made pursuant to Section 5.1 of the Depositary Agreement, and (b) the
investments provided for in the Financing Documents.
4.7 Transactions with Affiliates. The Issuer shall not enter into
any transaction or agreement (or any transaction under or pursuant to any
transaction or agreement) with any of its Affiliates other than (a) transactions
provided for in or expressly permitted by the Financing Documents, (b)
transactions or agreements certified by a Responsible Officer of the Issuer, in
such Responsible Officer's capacity as an officer of the Issuer, as having terms
that are not materially less favorable than the terms the Issuer would obtain in
an arm's-length transaction with a person that is not an Affiliate or (c)
transactions or agreements between or among only the Issuer and/or the Project
Companies not otherwise prohibited by the terms of any Financing Document.
4.8 ERISA. The Issuer shall not establish, maintain, contribute to
or become obligated to contribute to any ERISA Plan.
23
4.9 Liquidation; Amendment of Organizational Documents.
(a) The Issuer shall not liquidate or dissolve itself (or
suffer any liquidation or dissolution) or amend its organizational documents in
any material respect (except, in respect of such amendment of its organizational
documents, (i) as required to comply with the "special purpose entity"
requirements or similar criteria of any Rating Agency or (ii) in connection with
a Permitted Change of Control).
(b) Section 9.01 of the Indenture shall govern the
Issuer's rights in respect of the transactions expressly referred to in such
Section 9.01 (and reference is made herein to Section 9.01(4) of the Indenture
and the right of XLCA (if XLCA is the Controlling Party) (at any time when there
is no Insurer Default) to consent, in its absolute discretion, to any
transaction referred to therein prior to its consummation). Upon any
consolidation of the Issuer with, or merger of the Issuer into, any other Person
in accordance with Section 9.01 of the Indenture, the successor Person formed by
such consolidation or into which the Issuer is merged or to which any
conveyance, transfer or lease is made in accordance with Section 9.01 of the
Indenture shall succeed to, and be substituted for, and may exercise every right
and power of, the Issuer under this Agreement and the other Financing Documents
with the same effect as if such successor Person had been named as the Issuer in
this Agreement and the other Financing Documents, and thereafter, except in the
case of a lease, the predecessor Person shall be relieved of all obligations and
covenants under the Financing Documents.
4.10 Accounts. The Issuer shall not maintain, establish or use any
bank, deposit or securities accounts other than the Accounts.
4.11 Name and Location; Fiscal Year. The Issuer shall not (a)
change its name, the location of its principal place of business, the location
of the Issuer Collateral, its jurisdiction of organization or its organizational
identification number without notice to the Collateral Agent at least 30 days
prior to such change, or (b) for so long as XLCA is the Controlling Party,
change its fiscal year without XLCA's prior written consent.
4.12 Assignment. The Issuer shall not assign its rights or
obligations hereunder or under any other Financing Documents, except as
expressly permitted under this Agreement.
4.13 No SEC Registration. The Issuer shall not, and shall not
permit any Person acting on its behalf to, subject the offering, issuance or
sale of the Series A Bonds to Section 5 of the Securities Act.
4.14 Annual Operations Budget. For any month, (a) the cumulative
year-to-date amount of the O&M Expenses, other than the Major Maintenance
Payment, made by the Issuer in conjunction with the Project Companies for such
month shall not exceed the amount set forth for the O&M Expenses in the Annual
Operations Budget from the beginning of the year up to such month by more than
110% and (b) the cumulative year-to-date amount of the Major Maintenance Payment
made by the Issuer in conjunction with the Project Companies for such month
shall not exceed the amount set forth for the Major Maintenance Payment in the
Annual Operations Budget from the beginning of the year up to such month by more
than 105%, without XLCA's prior written consent (if XLCA is the Controlling
Party) (which consent shall not be
24
unreasonably withheld by XLCA), or in case XLCA is not the Controlling Party, if
such deviation from the Annual Operations Budget could reasonably be expected to
have an Issuer Material Adverse Effect.
4.15 Corporate Services Agreement. The Issuer shall not (a) enter
into any agreement replacing the existing Corporate Service Agreement without
the prior written consent of XLCA, (if XLCA is the Controlling Party), which
consent shall not be unreasonably withheld or (b) materially amend, modify or
supplement or permit or consent to the material amendment, modification or
supplement of, any provision of the Corporate Service Agreement without the
prior written consent of XLCA (if XLCA is the Controlling Party), which consent
shall not be unreasonable withheld.
ARTICLE 5
NEGATIVE COVENANTS OF PROJECT COMPANIES
Each Project Company covenants and agrees that it shall
perform the covenants set forth in this Article 5, only with respect to itself
and its Project (unless waived in accordance with Section 9.2 of this
Agreement). The covenants set forth in this Article 5 that expressly require
performance only by a specified Project Company shall be required to be
performed only by such Project Company (unless such performance is waived in
accordance with Section 9.2 of this Agreement).
5.1 Contingent Liabilities. Except for the consummation of the
transactions pursuant to this Agreement and the other Financing Documents, such
Project Company shall not become liable as a surety, guarantor, accommodation
endorser or otherwise, for or upon the obligation of any other Person; provided,
however, that this Section 5.1 shall not be deemed to prohibit the incurrence,
creation, assumption or existence of Project Company Permitted Debt or Project
Company Permitted Liens.
5.2 Liens. Such Project Company shall not create, assume or suffer
to exist any Lien securing a charge or obligation on any of its Project Company
Collateral, whether now owned or hereafter acquired, except Project Company
Permitted Liens.
5.3 Indebtedness. Such Project Company shall not incur, create,
assume or permit to exist any Debt, except Project Company Permitted Debt.
5.4 Asset Dispositions. Such Project Company shall not sell, lease
(as lessor), license (as licensor), assign, pledge, transfer or otherwise
dispose of any of its assets (including any Project Company Collateral), whether
now owned or hereafter acquired without XLCA's prior written consent (if XLCA is
the Controlling Party), other than (a) sales of goods, products and/or services
in the ordinary course of business as contemplated by its Project Documents, (b)
sales of assets that are replaced with substantially similar assets, (c) sales
for fair market value of worn out or obsolete assets, or of surplus assets or
land, that are not useful or necessary in connection with the development,
construction, ownership, leasing, operation, maintenance or use of its Project,
in an aggregate amount (over the entire term of this Agreement) not to exceed
$10,000,000 (provided that such aggregate amount shall be increased from time to
time by reference to the United States Department of Labor Consumer Price
Index), (d) sales or transfers
25
of assets required by the terms of its Project Documents (provided that the
Bayou Cove Project Company shall not be permitted to transfer the entire Site of
the Bayou Cove Project pursuant to the Bayou Cove EPC Agreement (Interconnection
Facilities)), or (e) in connection with a Permitted Peaker Buyout, provided that
this Section 5.4 shall not be deemed to prohibit the grant or creation of any
Project Company Permitted Liens. If a Project Company is permitted to dispose of
assets pursuant to this Section 5.4, as certified to the Collateral Agent by a
Responsible Officer of such Project Company, in such Responsible Officer's
capacity as an Officer of such Project Company, the Collateral Agent shall then
take all actions reasonably requested by such Project Company in writing in
order to release or subordinate the Liens of the Collateral Agent on such assets
(including the execution of UCC-3 termination statements and deeds of
reconveyance).
5.5 Business Activities. Such Project Company shall not engage in
any activities other than (a) the development, ownership, leasing, construction,
operation, maintenance and use of its Project as contemplated by the Operative
Documents, (b) other activities expressly permitted by the Financing Documents,
and (c) activities reasonably incidental thereto. Such Project Company shall not
make any alterations, modifications, renovations or improvements to its Project
other than those that (i) are required to comply with Legal Requirements or (ii)
are in accordance with Prudent Utility Practices.
5.6 Subsidiaries, etc.; Investments.
(a) Subsidiaries, etc. Such Project Company shall not (a)
create or acquire any Subsidiary, (b) become a general or limited partner in any
partnership or a member in any limited liability company, (c) become a joint
venturer in any joint venture, or (d) create or hold any equity interests in any
other Person.
(b) Investments. Such Project Company shall not make any
investments (whether by purchase of stocks, bonds, notes or other securities,
loan, extension of credit, advance or otherwise) other than (i) Permitted
Investments in accordance with Article V of the Depositary Agreement and (ii)
other investments expressly permitted in the Financing Documents.
5.7 Distributions. Such Project Company shall not directly or
indirectly (a) make or declare any distribution (in cash, property or
obligation) on, or make any other payment on account of, any equity interest in
Project Company, (b) make any payment in respect of Subordinated Debt, or (c)
make any other payment from the Distribution Account (whether to a Project
Company, any Affiliate of the Issuer or any Project Company or any other Person)
other than distributions or payments from the Distribution Account in accordance
with Section 4.6.2 of the Depositary Agreement and Section 4.5 of this
Agreement.
5.8 Transactions with Affiliates. Such Project Company shall not
enter into any transaction or agreement with any of its Affiliates, other than
(a) transactions provided for in or expressly permitted by the Operative
Documents, (b) transactions or agreements between or among only the Issuer
and/or the other Project Companies not otherwise prohibited by the terms of any
Financing Document, or (c) transactions or agreements certified to the
Controlling Party by a Responsible Officer of such Project Company, in such
Responsible Officer's capacity as an
26
officer of such Project Company, as having terms that are not materially less
favorable to such Project Company than the terms such Project Company would
obtain in an arm's-length transaction with a Person that is not its Affiliate;
provided that, in respect of each transaction or agreement permitted pursuant to
paragraph (c) of this Section 5.8, Project Company shall perform its obligations
and exercise its rights under any such transaction or agreement as if such
transaction or agreement was an arm's-length transaction with a Person that is
not its Affiliate.
5.9 ERISA. Such Project Company shall not establish, maintain,
contribute to or become obligated to contribute to any ERISA Plan.
5.10 Merger or Consolidation; Liquidation; Amendment of
Organizational Documents.
(a) Such Project Company shall not consolidate with or
merge into any other Person or permit any Person to consolidate with or merge
into such Project Company or convey, transfer or lease its properties and assets
substantially as an entirety to such Project Company, unless:
(i) immediately after giving effect to such
transaction, no Project Company Event of Default or Project Inchoate
Default with respect to such Project Company shall have occurred and be
continuing;
(ii) if, as a result of any such consolidation,
merger or conveyance, transfer or lease, properties or assets of such
Project Company other than the Collateral would become subject to a
mortgage, pledge, lien, security interest or other encumbrance that
would not be permitted by this Agreement, such Project Company or such
successor Person, as the case may be, shall take such steps as shall be
necessary effectively to secure the Bonds of each series equally and
ratably with (or prior to) all indebtedness secured thereby;
(iii) such Project Company has delivered to the
Trustee, with a copy to XLCA, an Officer's Certificate (as such term is
defined in the Indenture) and an Opinion of Counsel (as such term is
defined in the Indenture), each stating that such consolidation,
merger, conveyance, transfer or lease and, if a supplemental indenture
is required in connection with such transaction, such supplemental
indenture complies with Article Nine of the Indenture and that all
conditions precedent in this Agreement and the Indenture provided for
relating to such transaction have been complied with; and
(iv) at any time when XLCA is the Controlling
Party, XLCA consents in writing, in its absolute discretion, to such
transaction prior to the consummation thereof.
(b) Upon any consolidation of such Project Company with,
or merger of the Project Company into, any other Person in accordance with
Section 5.10(a), the successor Person formed by such consolidation or into which
such Project Company is merged shall succeed to, and be substituted for, and may
exercise every right and power of, such Project Company under this Agreement and
the other Financing Documents with the same effect as if such successor Person
had been named as such Project Company in this Agreement and the other Financing
27
Documents, and thereafter the predecessor Person shall be relieved of all
obligations and covenants under the Financing Documents.
(c) Such Project Company shall not liquidate or dissolve
itself (or suffer any liquidation or dissolution) or amend its organizational
documents in any material respect (except, in respect of such amendment of its
organizational documents, (i) as required to comply with the "special purpose
entity" requirements or similar criteria of any Rating Agency and (ii) in
connection with a Permitted Change of Control).
(d) Nothing in this Section 5.10 shall be deemed to
prohibit any Permitted Peaker Buyout or Permitted Change of Control.
5.11 Amendments to Project Documents; New Project Documents.
(a) Such Project Company shall not terminate, assign its
rights under, amend, modify, supplement or waive, or permit or consent to the
termination, amendment, modification, supplement or waiver of, any provision of,
or give any consent under (any such action, a "Project Document Action") (i)
Sections 2.8, 2.9, 3.6 or 9.2.6 of the Addendum to the Energy Marketing Services
Agreement to which such Project Company is a party or any requirement under such
Energy Marketing Services Agreement that such Project Company or NRG Power
Marketing comply with the sections specified above (x) if XLCA is the
Controlling Party, without the written consent of XLCA (which consent shall be
given or withheld in XLCA's absolute discretion), or (y) if XLCA is not the
Controlling Party, if such Project Document Action could reasonably be expected
to have a Project Material Adverse Effect, and (ii) any of its other Major
Project Documents if such Project Document Action could reasonably be expected
to have a Project Material Adverse Effect.
(b) Such Project Company shall not materially amend,
modify or supplement or permit or consent to the material amendment,
modification or supplement of, any provision of any Major Project Document and
the Corporate Services Agreement, without the prior written consent of XLCA (if
XLCA is the Controlling Party) (which consent shall not be unreasonable withheld
by XLCA).
(c) Such Project Company shall not enter into any
agreement replacing any of the existing Corporate Services Agreement, Energy
Marketing Services Agreement, or O&M Agreement (i) if XLCA is the Controlling
Party, without the prior written consent of XLCA (which consent shall not be
unreasonably withheld) or (ii) if XLCA is not the Controlling Party, if entering
into such agreement could reasonably be expected to have a Project Material
Adverse Effect.
5.12 Accounts. Project Company shall not maintain, establish or use
any bank, deposit or securities accounts other than the Accounts.
5.13 Name and Location; Fiscal Year. Such Project Company shall not
(a) change its name, the location of its principal place of business, the
location of its Project Company Collateral, its jurisdiction of organization or
its organizational identification number without notice to the Collateral Agent
at least 30 days prior to such change or (b) for so long as XLCA is the
Controlling Party, change its fiscal year without XLCA's written consent.
28
5.14 Assignment. Such Project Company shall not assign its rights
or obligations hereunder or under any of the other Financing Documents to which
it is a party, except as expressly permitted under this Agreement.
5.15 Acquisition of Real Property. Such Project Company shall not
acquire or lease any real property or other interest in real property (excluding
(x) the acquisition (but not the exercise) of any options to acquire any such
interests in real property and (y) the acquisition of any Easements related
thereto) unless: (a) it shall have delivered to the Collateral Agent (i) an
environmental indemnity agreement, in form and substance reasonably satisfactory
to XLCA (or if XLCA shall not be the Controlling Party, an independent
environmental consultant) on which the Collateral Agent may rely, pursuant to
which, among other things, an indemnitor reasonably satisfactory to XLCA (or if
XLCA shall not be the Controlling Party, an independent environmental
consultant)) indemnifies the Issuer, such Project Company and the Secured
Parties from any and all claims, losses, diminutions in value of such real
property, damages or other liabilities related to or arising from Hazardous
Substances then in, on or under such real property or otherwise caused by or
attributable to such indemnitor; or (ii) an environmental insurance policy, in
form and substance, and from an insurance carrier, reasonably satisfactory to
XLCA (or, if XLCA is not the Controlling Party, an independent environmental
consultant), which provides the same protection as described for the
environmental indemnity agreement above or (b) (i) it shall have delivered to
the Collateral Agent a Phase I environmental report prepared by an environmental
consultant reasonably satisfactory to XLCA (or if XLCA shall not be the
Controlling Party, an independent environmental consultant) on which the
Collateral Agent may rely with respect to such real property in accordance with
ASTM standards, (along with a corresponding reliance letter from the
environmental consultant in form and substance reasonably satisfactory to XLCA
(or if XLCA shall not be the Controlling Party, an independent environmental
consultant)), stating that there is no evidence of a Release or threatened
Release that could reasonably be expected to result in a future Release of any
Hazardous Substance in, on, under or at such real property and that no
additional investigation (including a Phase II environmental assessment) is
recommended, and (ii) if evidence was found of a Release or threatened Release
that could reasonably be expected to result in a future Release of any Hazardous
Substance in, on, under or at such real property or an additional investigation
(including a Phase II environmental assessment) is recommended in such Phase I
environmental report, it shall have delivered to the Collateral Agent a Phase II
environmental report (or other recommended investigation) with respect to such
real property, pursuant to a scope of work reasonably satisfactory to XLCA (or
if XLCA shall not be the Controlling Party, an independent environmental
consultant) (along with a corresponding reliance letter from the environmental
consultant in form and substance reasonably satisfactory to XLCA (or if XLCA
shall not be the Controlling Party, an independent environmental consultant)),
confirming, to the reasonable satisfaction of XLCA (or if XLCA shall not be the
Controlling Party, an independent environmental consultant)), either (A) that no
Release or threatened Release of any Hazardous Substance has occurred in, on,
under or at such real property, or (B) if a Release or threatened Release that
could reasonably be expected to result in a future Release of any Hazardous
Substance has occurred in, on, under or at such real property, that such Release
or threatened Release that could reasonably be expected to result in a future
Release of any Hazardous Substances either does not trigger any reporting or
remediation obligations under Hazardous Substances Law or has been remediated to
acceptable levels under Hazardous Substances Law.
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5.16 Additional Project Documents.
(a) Such Project Company shall not enter into or become a
party to any Additional Project Document to the extent that the execution,
delivery or performance of such Additional Project Document could reasonably be
expected to have a Project Material Adverse Effect.
(b) If such Project Company enters into any Major Project
Document, such Project Company shall deliver to the Collateral Agent a Consent
from the third party under such Major Project Document in substantially the form
of Exhibit 3.1(f)(ii) to the Insurance and Reimbursement Agreement.
(c) The Rockford I Project Company and the Rockford II
Project Company shall not enter into or become a party to any O&M Agreement
without XLCA's prior written consent (If XLCA is the Controlling Party), which
consent shall not be unreasonably withheld.
5.17 Use of Project Site. Such Project Company shall not use, or
permit to be used, its Site for any purpose other than as contemplated by the
Operative Documents to which it is a party.
5.18 Hazardous Substances. Such Project Company shall not, and
shall not allow any of its Affiliates, contractors or agents, or any other
Person with the consent, or under the control of, such Project Company or any of
its Affiliates, contractors or agents, to Release any Hazardous Substances in
violation of any Hazardous Substances Law or other Legal Requirement if such
Release could reasonably be expected to have a Project Material Adverse Effect.
5.19 Annual Operations Budget. For any month, (a) the cumulative
year-to-date amount of the O&M Expenses, other than the Major Maintenance
Payment, made by all Project Companies in conjunction with the Issuer for such
month shall not exceed the amount set forth for the O&M Expenses in the Annual
Operations Budget from the beginning of the year up to such month by more than
110% and (b) the cumulative year-to-date amount of the Major Maintenance Payment
made by all Project Companies in conjunction with the Issuer for such month
shall not exceed the amount set forth for the Major Maintenance Payment in the
Annual Operations Budget from the beginning of the year up to such month by more
than 105%, without XLCA's prior written consent (if XLCA is the Controlling
Party) (which consent shall not be unreasonably withheld by XLCA), or in case
XLCA is not the Controlling Party, if such deviation from the Annual Operations
Budget could reasonably be expected to have a Project Material Adverse Effect.
5.20 Operating Services Budget. All Project Companies shall approve
their respective Operating Services Budget under their respective O&M Agreements
only in accordance with the Annual Operations Budget and the Financing
Documents.
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ARTICLE 6
GUARANTY
6.1 Guaranty.
(a) Each Project Company, as primary obligor and not
merely as surety, absolutely, unconditionally and irrevocably and jointly and
severally with each other Project Company guarantees to the Secured Parties the
full and punctual payment when due, whether at stated maturity, by acceleration
or otherwise, of all of the Bond Obligations, the Reimbursement Obligations, the
Depositary Obligations and the Swap Obligations of the Issuer under the
Financing Documents, together with the payment in full of all fees and expenses
incurred by the Collateral Agent or any other Secured Party in enforcing any
such Obligations or the terms hereof, including reasonable fees and expenses of
its legal counsel and agents (collectively, the "Guaranteed Obligations"), and
agrees that if, for any reason, the Issuer shall fail to pay when due any of the
Guaranteed Obligations, such Project Company will pay the same forthwith. Each
Project Company waives notice of acceptance of its Guaranty and of any
obligation to which it applies or may apply under the terms hereof, and waives
promptness, diligence, presentment, demand of payment or performance, notice of
dishonor or non-payment or non-performance, protest, or notice of protest, of
any such obligations, suit or taking other action by any Secured Party against,
and giving any notice of default or other notice to, or making any demand on,
any party liable thereon (including any Project Company).
(b) If, notwithstanding the representation and warranty
set forth in Section 2.2(aa) of the Insurance and Reimbursement Agreement or
anything to the contrary herein, enforcement of the liability of any Project
Company under its Guaranty for the full amount of the Guaranteed Obligations
would be an unlawful or voidable transfer under any applicable fraudulent
conveyance or fraudulent transfer law or any comparable law, then the liability
of such Project Company hereunder shall be reduced to the highest amount for
which such liability may then be enforced without giving rise to an unlawful or
voidable transfer under any such law.
6.2 Guaranty Absolute. The Guaranty of each Project Company is a
primary obligation of such Project Company and is an absolute, unconditional,
continuing and irrevocable guaranty of payment in full in cash of the Guaranteed
Obligations and not of collectibility, and is in no way conditioned on or
contingent upon any attempt to enforce in whole or in part the Issuer's
liabilities and obligations to the Secured Parties. If the Issuer shall fail to
pay in full in cash any of the Guaranteed Obligations to any Secured Party as
and when they are due, the Project Companies shall forthwith pay such Guaranteed
Obligations immediately (in immediately available funds in Dollars) to an
account designated by the Collateral Agent. Each failure by the Issuer to pay
any Guaranteed Obligation strictly in accordance with the terms of each
Financing Document under which such Guaranteed Obligation arises, regardless of
any Legal Requirement now or hereafter in effect in any jurisdiction, shall give
rise to a separate cause of action herewith, and separate suits may be brought
hereunder as each cause of action arises.
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6.3 Rights and Obligations Absolute and Unconditional. All rights
of the Secured Parties and all obligations of each Project Company in respect of
its Guaranty hereunder shall be absolute and unconditional irrespective of:
(a) any lack of validity, legality or enforceability of
any Financing Document;
(b) the failure of any Secured Party:
(i) to assert any claim or demand or to enforce
any right or remedy against the Issuer, any Project Company or any
other Person (including any other guarantor) under the provisions of
any Financing Document or otherwise, or
(ii) to exercise any right or remedy against any
other guarantor of, or collateral securing, any of the Obligations;
(c) any change in the time, manner or place of payment
of, or in any other term of, any of the Obligations, or any other extension or
renewal of any obligation of the Issuer or any Project Company;
(d) any reduction, limitation, impairment or termination
of any of the Obligations for any reason (other than the written agreement of
all of the Secured Parties to terminate the Obligations in full), including any
claim of waiver, release, surrender, alteration or compromise, and shall not be
subject to, and Project Company hereby waives any right to or claim of, any
defense or setoff, counterclaim, recoupment or termination whatsoever by reason
of the invalidity, illegality, nongenuineness, irregularity, compromise,
unenforceability of, or any other event or occurrence affecting, any obligation
of the Issuer, any Project Company or otherwise, other than Project Company's
indefeasible payment in full of the Guaranteed Obligations;
(e) any amendment to, rescission, waiver or other
modification of, or any consent to departure from, any of the terms of any
Financing Document other than its Guaranty;
(f) any addition, exchange, release, surrender or
non-perfection of any collateral, or any amendment to or waiver or release or
addition of, or consent to departure from, any other security interest held by
any Secured Party securing any of the Obligations;
(g) any sale, exchange, release or surrender of,
realization upon or other manner or order of dealing with any property by
whomsoever pledged or mortgaged to secure or howsoever securing the Obligations
or any liabilities or obligations (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof and/or any offset there
against;
(h) the application of any sums by whomsoever paid or
howsoever realized to any obligations and liabilities of the Issuer or any
Project Company to the Secured Parties under the Financing Documents in the
manner provided therein regardless of what obligations and liabilities remain
unpaid;
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(i) any action or failure to act in any manner referred
to in this Guaranty which may deprive Project Company of its right to
subrogation against the Issuer or any other Project Company to recover full
indemnity for any payments or performances made pursuant to its Guaranty or of
its right of contribution against any other party; or
(j) any other circumstance which might otherwise
constitute a defense available to, or a legal or equitable discharge of, the
Issuer, any Project Company, any surety or any guarantor.
6.4 Guaranty Continuing. Each Project Company's Guaranty is a
continuing Guaranty and all obligations to which it applies or may apply under
the terms hereof shall be conclusively presumed to have been created in reliance
hereon. In the event that, notwithstanding the provisions of Section 6.1, any
Project Company's Guaranty shall be deemed revocable in accordance with
applicable Legal Requirements, then any such revocation shall become effective
only upon receipt by the Collateral Agent of written notice of revocation signed
by a Responsible Officer of such Project Company. No revocation or termination
hereof shall affect in any manner rights arising under any Project Company's
Guaranty with respect to Guaranteed Obligations arising prior to receipt by the
Collateral Agent of written notice of such revocation or termination.
6.5 Waivers. Each Project Company hereby waives and relinquishes
all rights and remedies accorded by applicable law to sureties or guarantors and
agrees not to assert or take advantage of any such rights or remedies, including
(a) any right to require the Collateral Agent or any other Secured Party to
proceed against the Issuer, any Project Company or any other Person or to
proceed against or exhaust any security held by the Collateral Agent or any
other Secured Party at any time or to pursue any other remedy in the Collateral
Agent's or any other Secured Party's power before proceeding against such
Project Company, (b) any defense that may arise by reason of the incapacity,
lack of power or authority, dissolution, merger, termination or disability of
the Issuer, any Project Company or any other Person or the failure of the
Collateral Agent or any other Secured Party to file or enforce a claim against
the estate (in administration, bankruptcy or any other proceeding) of the
Issuer, any Project Company or any other Person, (c) demand, presentment,
protest and notice of any kind except as provided herein, including notice of
the existence, creation or incurring of any new or additional indebtedness or
obligation or of any action or non-action on the part of the Issuer, any Project
Company, the Collateral Agent, any other Secured Party, any endorser or creditor
of the Issuer, any Project Company or on the part of any other Person under this
or any other instrument in connection with any obligation or evidence of
indebtedness held by the Collateral Agent or any other Secured Party as
collateral or in connection with any Guaranteed Obligation, (d) any defense
based upon an election of remedies by the Collateral Agent or any other Secured
Party, including an election to proceed by non-judicial rather than judicial
foreclosure, which destroys or otherwise impairs the subrogation rights of any
Project Company, the right of any Project Company to proceed against the Issuer
or any other Project Company for reimbursement, or both, (e) any defense based
on any offset against any amounts which may be owed by any Person to any Project
Company for any reason whatsoever, (f) any defense based on any act, failure to
act, delay or omission whatsoever on the part of the Issuer or any Project
Company or the failure by the Issuer or any Project Company to do any act or
thing or to observe or perform any covenant, condition or agreement to be
observed or performed by it under the Financing
33
Documents, (g) any defense based upon any statute or rule of law which provides
that the obligation of a surety must be neither larger in amount nor in other
respects more burdensome than that of the principal; provided that, upon payment
or performance in full of the Guaranteed Obligations, a Project Company's
Guaranty shall no longer be of any force or effect, (h) any defense, setoff or
counterclaim which may at any time be available to or asserted by the Issuer or
any Project Company against the Collateral Agent, any other Secured Party or any
other Person under the Financing Documents, (i) any duty on the part of the
Collateral Agent or any other Secured Party to disclose to any Project Company
any facts the Collateral Agent or any other Secured Party may now or hereafter
know about the Issuer or any Project Company, regardless of whether the
Collateral Agent or such Secured Party have reason to believe that any such
facts materially increase the risk beyond that which any Project Company intends
to assume, or have reason to believe that such facts are unknown to any Project
Company, or have a reasonable opportunity to communicate such facts to any
Project Company, since each Project Company acknowledges that it is fully
responsible for being and keeping informed of the financial condition of the
Issuer and the Project Companies and of all circumstances bearing on the risk of
non-payment or non-performance of any obligations and liabilities hereby
guaranteed, (j) any defense based on any change in the time, manner or place of
any payment or performance under, or in any other term of, the Financing
Documents or any other amendment, renewal, extension, acceleration, compromise
or waiver of or any consent or departure from the terms of the Financing
Documents, (k) any defense arising because of the Collateral Agent's or any
other Secured Party's election, in any proceeding instituted under the Federal
Bankruptcy Code, of the application of Section 1111(b)(2) of the Federal
Bankruptcy Code, and (l) any defense based upon any borrowing or grant of a
security interest under Section 364 of the Federal Bankruptcy Code.
6.6 Acknowledgments. Each Project Company acknowledges that it has
been provided with a copy of each of the Financing Documents and has read and is
familiar with the provisions of each of the Financing Documents.
6.7 Subordination. All existing and future indebtedness of, or
other obligation owed by, the Issuer or any Project Company to any other Project
Company is hereby subordinated to all of the Guaranteed Obligations on the same
terms as required in respect of subordinated Debt of the Issuer and the Project
Companies pursuant to this Agreement as set forth in Exhibit M to this
Agreement.
6.8 Subrogation. So long as the Financing Documents remain in
effect and until all of the Guaranteed Obligations have been paid in full, (a)
no Project Company shall have any right of subrogation and each Project Company
waives all rights to enforce any remedy which the Secured Parties now have or
may hereafter have against the Issuer or any other Project Company, and waives
the benefit of, and all rights to participate in, any security now or hereafter
held by the Collateral Agent or any other Secured Party from the Issuer or any
of the Project Companies, and (b) each Project Company waives any claim, right
or remedy which it may now have or hereafter acquire against the Issuer or any
other Project Company that arises hereunder and/or from the performance by it
hereunder, including any claim, remedy or right of subrogation, reimbursement,
exoneration, contribution, indemnification, or participation in any claim, right
or remedy of the Secured Parties against the Issuer or any Project Company, or
any security which the Secured Parties now have or hereafter acquire, whether or
not such claim,
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right or remedy arises in equity, under contract, by statute, under common law
or otherwise. Any amount paid to any Project Company on account of any such
subrogation rights prior to the indefeasible payment in full in cash of the
Obligations (including the Guaranteed Obligations) and the termination of all
other obligations of the Secured Parties under the Financing Documents shall be
held in trust for the benefit of the Collateral Agent and shall immediately
thereafter be paid to the Collateral Agent for the benefit of the Secured
Parties.
6.9 Bankruptcy.
(a) So long as the Financing Documents remain in effect
and until all of the Obligations have been paid in full, none of the Project
Companies shall, without the prior written approval of the Controlling Party,
commence, or join with any other Person in commencing, any bankruptcy,
reorganization, or insolvency proceeding against the Issuer or any other Project
Company. The obligations of each Project Company under its Guaranty shall not be
altered, limited or affected by any proceeding, voluntary or involuntary,
involving the bankruptcy, reorganization, insolvency, receivership, liquidation
or arrangement of the Issuer, NRG Energy or any Project Company, or by any
defense which the Issuer or any other Project Company may have by reason of any
order, decree or decision of any court or the administrative body resulting from
any such proceeding.
(b) So long as the Financing Documents remain in effect
and until all of the Guaranteed Obligations have been paid in full, to the
extent of any Guaranteed Obligation, each Project Company shall file, in any
bankruptcy or other proceeding in which the filing of claims is required or
permitted by Legal Requirements, all claims which such Project Company may have
against the Issuer or any other Project Company related to any indebtedness of
the Issuer or any Project Company to such Project Company, and hereby assigns to
the Collateral Agent, on behalf of the Secured Parties, all rights of such
Guarantor thereunder. If any Project Company fails to file any such claim, the
Collateral Agent, as attorney-in-fact for such Project Company, is hereby
authorized to do so in the name of such Project Company or, in the Collateral
Agent's discretion, to assign the claim to a nominee and to cause proofs of
claim to be filed in the name of the Collateral Agent's nominee. The foregoing
power of attorney is coupled with an interest and cannot be revoked. The
Collateral Agent or its nominee shall have the sole right to accept or reject
any plan proposed in any such proceeding and to take any other action which a
party filing a claim is entitled to take. In all such cases, whether in
administration, bankruptcy or otherwise, the person authorized to pay such a
claim shall pay the same to the Collateral Agent to the extent of any Guaranteed
Obligation which then remain unpaid, and, to the full extent necessary for that
purpose, each Project Company hereby assigns to the Collateral Agent all of such
Project Company's rights to all such payments or distributions to which such
Project Company would otherwise be entitled; provided, however, that such
Project Company's obligations hereunder shall not be satisfied except to the
extent that the Collateral Agent receives cash by reason of any such payment or
distribution. If the Collateral Agent receives anything hereunder other than
cash, the same shall be held as collateral for amounts due under this Guaranty.
6.10 Interest; Collection Expenses. Any amount required to be paid
by any Project Company pursuant to the terms of its Guaranty shall bear interest
at the Late Payment Rate or the maximum rate permitted by Legal Requirements,
whichever is less, from the date due until paid in full. If the Collateral Agent
or any other Secured Party is required to pursue any remedy
35
against any Project Company, such Project Company shall pay to the Collateral
Agent or such Secured Party, as the case may be, upon demand, all reasonable
attorneys' fees and expenses all other costs and expenses incurred by the
Collateral Agent or such Secured Party in enforcing its Guaranty.
6.11 Reinstatement of Guaranty. Each Project Company's Guaranty and
its obligations of the Guarantors shall automatically be reinstated if and to
the extent that for any reason any payment made pursuant to its Guaranty is
rescinded or otherwise restored to it, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise with respect to the Issuer or any
other Person or as a result of any settlement or compromise with any Person
(including any Project Company) in respect of such payment, and such Project
Company shall pay the Collateral Agent on demand all of its reasonable costs and
expenses (including reasonable fees of counsel) incurred by the Collateral Agent
in connection with such rescission or restoration.
6.12 Termination of Guaranty. The Guaranty of a Project Company
shall terminate in its entirety upon the occurrence of a Project Release Event
with respect to such Project Company.
6.13 Survival. The provisions of this Article 6 shall survive
satisfaction, discharge and/or termination of this Agreement and the other
Financing Documents.
6.14 Contribution Obligations Among Project Companies. In order to
provide for just and equitable contribution among the Project Companies, each
Project Company agrees that if any payment or distribution is made by a Project
Company (a "Funding Project Company") under its Guaranty, such Funding Project
Company shall be entitled to a contribution from the other Project Companies for
all such payments or distributions, or damages and expenses incurred by such
Funding Project Company in discharging any Guaranteed Obligations. Each Project
Company which is not a Funding Project Company (a "Non-Funding Project Company")
shall be liable to a Funding Project Company with respect to any such payments
or distributions, or damages and expenses, in an aggregate amount equal to (a)
the ratio of (i) the net worth of such Non-Funding Project Company, as
determined in accordance with the most recent balance sheet of such Non-Funding
Project Company at the time of such payment by a Funding Project Company, to
(ii) the aggregate net worth of all Project Companies, similarly determined,
multiplied by (b) the amount which the Funding Project Company paid on account
of the Guaranteed Obligations. If at any time there exists more than one Funding
Project Company, then payment from the other Non-Funding Project Companies
pursuant to this Section 6.14 shall be in an aggregate amount equal in
proportion to the total amount of money paid for or on account of the Guaranteed
Obligations by the Funding Project Companies pursuant to their Guaranties. If
the Funding Project Company is required to make any payment hereunder, such
Funding Project Company shall also be entitled to a right of subrogation in
respect of such payment from the other Project Companies. Notwithstanding
anything in this Section 6.14 to the contrary, the agreements in this Section
6.14 are to establish the relative rights of contribution of the Project
Companies and shall not modify the joint and several nature of the obligations
of each Project Company owed to or for the benefit of the Secured Parties or
impair the rights of the Collateral Agent for the benefit of the Secured Parties
to hold any of the Project Companies liable for payment of the full amount of
all Guaranteed Obligations.
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ARTICLE 7
EVENTS OF DEFAULT; REMEDIES
7.1 Issuer Events of Default. The occurrence of any of the
following events shall constitute an "Issuer Events of Default" hereunder:
(a) Failure to Make Payments. The Issuer shall fail to
pay, in accordance with the terms of the Financing Documents, (i) any principal
of any Bond Obligation on the date that such principal is due, (ii) any amount
in respect of any Reimbursement Obligation on the date that such amount is due,
(iii) any Swap Payment Amount in accordance with the Swap Agreement, (iv) any
interest on any Bond Obligation, Reimbursement Obligation, Swap Payment Amount
or any scheduled fee, cost, charge or sum due hereunder or under the other
Financing Documents within 3 Business Days after the date that such sum is due,
or (v) any other fee, cost, charge or other sum due hereunder or under the other
Financing Documents within 10 Business Days after the date that such sum is due;
provided that any such failure of the Issuer to pay the amounts described in
this Section 7.1(a) shall not be an Issuer Event of Default if such amounts are
paid (i) by one or more of the Project Companies pursuant to, and in accordance
with, their respective Guaranties, (ii) by NRG Energy (or any other Equity
Party) pursuant to, and in accordance with, the Parent Agreement (or other
Equity Document), or (iii) otherwise with Account Funds from the Debt Payment
Account in accordance with the terms of the Depositary Agreement.
(b) Judgments. One or more final judgments for the
payment of money (if such payments are not fully covered by insurance) in excess
of $5,000,000 in the aggregate shall be rendered against the Issuer, and the
Issuer shall not discharge the same or provide for its discharge in accordance
with its terms, or procure a stay of execution thereof, within 60 days after the
date of entry thereof; provided, however, that any such judgment shall not be
(and shall not constitute part of) an Issuer Event of Default under this Section
7.1(b) if and for so long as (i) the amount of such judgment is fully covered by
a valid and binding policy of insurance between the defendant and the insurer
covering payment thereof and (ii) such insurer has been notified of, and has not
disputed the claim made for payment of, the amount of such judgment.
(c) Misstatements; Omissions. Any representation or
warranty by the Issuer set forth in any Financing Document or in any document
entered into in connection therewith in favor of or for the benefit of any
Secured Party or in any certificate, financial statement or other document
delivered in connection therewith for the benefit of any Secured Party shall
prove to have been incorrect in any material respect when made (or deemed made)
and the facts or events underlying such incorrect representation or warranty
shall not be changed so as to correct such representation or warranty in all
material respects for a period of 30 days (or so long as the facts or events
underlying such incorrect representation or warranty are capable of being
changed so as to correct such incorrect representation or warranty in all
material respects and the Issuer is diligently proceeding to change such events
or facts, such longer period but in no event for an aggregate period in excess
of 90 days) after a Responsible Officer of the Issuer becomes aware thereof or
the Issuer first received a notice from or on behalf of the Controlling Party
(or XLCA if the proviso to this Section 7.1(c) applies) specifying such material
inaccuracy and requiring that the facts or events underlying such incorrect
representation or warranty be changed so as to correct such incorrect
representation or warranty in all material respects; provided, however, that
37
any Issuer Event of Default pursuant to this Section 7.1(c) arising solely from
any representation or warranty made by the Issuer for the benefit of XLCA under
the Insurance and Reimbursement Agreement shall be an Issuer Event of Default in
respect of which no Person other than XLCA shall have the rights given to the
parties to this Agreement in respect of Issuer Events of Default generally.
(d) Bankruptcy; Insolvency. The Issuer shall become
subject to a Bankruptcy Event.
(e) Debt Cross Default. The Issuer shall default for a
period beyond any applicable grace period (i) in the payment of any principal,
interest or other amount due on any Debt for Borrowed Money of the Issuer (other
than the Obligations) and such defaulted amount, together with any other
principal, interest or other amount due and unpaid on any Debt for Borrowed
Money of the Issuer (other than the Obligations) equals or exceeds $5,000,000 in
the aggregate, or (ii) in the payment of any amount then due or performance of
any obligation then required under any agreement evidencing Debt of the Issuer
(other than the Financing Documents) if, because of such default, the holder of
such Debt accelerates the payment thereof and such accelerated amount, together
with the amount of any other Debt of the Issuer then so accelerated (other than
the Obligations), equals or exceeds $5,000,000 in the aggregate.
(f) ERISA. With respect to any ERISA Plan which a member
of the Controlled Group sponsors, maintains, administers, contributes to,
participates in, or has any obligation to contribute to or any liability under,
an event has occurred or a condition exists which, together with all other such
events or conditions, would reasonably be expected to have an Issuer Material
Adverse Effect.
(g) Breach of Terms of Financing Documents.
(i) The Issuer shall fail to perform or observe
any of the covenants or other agreements set forth in Sections 2.1 (Use
of Proceeds and Revenues), 2.6(a)(i) and (c) (Existence, Conduct of
Business, etc.), or Article 4 (other than Section 4.6 (Investments),
4.8 (ERISA), 4.10 (Accounts) and 4.11 (Name and Location; Fiscal
Year)).
(ii) The Issuer shall fail to perform or observe
any of the covenants or other agreements set forth in the Financing
Documents which are not otherwise specifically provided for in Section
7.1(g)(i) or elsewhere in this Section 7.1 and such failure shall
continue unremedied for a period of 30 days after the Issuer becomes
aware thereof or receives written notice thereof from the Controlling
Party; provided, however, if (A) such failure does not consist of a
failure to pay money and cannot be cured within such 30 day period, (B)
such failure is susceptible of cure within 90 days, (C) the Issuer is
proceeding with diligence and in good faith to cure such failure, (D)
the existence of such failure has not had and, after considering the
nature of the cure, could not reasonably be expected to have an Issuer
Material Adverse Effect, and (E) the Controlling Party and the
Collateral Agent shall have received an officer's certificate signed by
a Responsible Officer of the Issuer, in such Responsible Officer's
capacity as an officer of the Issuer, to the effect of clauses (A),
(B), (C) and (D) above and stating
38
what action the Issuer is taking to cure such failure, then such 30 day
cure period shall be extended to such date, not to exceed a total of 90
days, as shall be necessary for the Issuer diligently to cure such
failure.
(h) Loss of Exemption. The Issuer shall become subject
to, or not exempt from, regulation under the FPA or PUHCA, other than Section
9(a)(2) of PUHCA, and such regulation, or loss of exemption from regulation,
shall have an Issuer Material Adverse Effect; provided that the Issuer shall
have 60 days after a Responsible Officer of the Issuer obtains knowledge of such
event to cure such event before it becomes an Issuer Event of Default so long as
the extension of time to cure such event could not reasonably be expected to
have an Issuer Material Adverse Effect.
(i) Issuer Collateral. (i) The grant of the Lien of any
of the Issuer Collateral Documents shall fail in any material respect to provide
a perfected Lien in favor of the Collateral Agent for the benefit of the Secured
Parties on any of the Issuer Collateral with the priority purported to be
created thereby, and the Issuer shall fail to cure any such failure within 15
days after the Issuer becomes aware thereof or receives written notice thereof
from the Collateral Agent, or (ii) the Collateral Agent shall receive a
Secretary of State report indicating that the Collateral Agent's security
interest in any of the Issuer Collateral is not prior to all other security
interests or other interests reflected in such report, other than Issuer
Permitted Liens, and the Issuer shall fail to cure such condition within 15 days
after the Issuer becomes aware thereof or receives written notice thereof from
the Collateral Agent.
(j) Loss of Control. (a) All or substantially all of the
assets of a Project Company shall be sold, leased, licensed, assigned, pledged,
transferred or otherwise disposed of by such Project Company without XLCA's
prior written consent (if XLCA is the Controlling Party), other than pursuant to
a Permitted Peaker Buyout, or (b) NRG Energy shall fail to directly or
indirectly own 100% of the membership interests in the Issuer or any Project
Company and control the fundamental management decisions of the Issuer or any
Project Company other than in connection with (i) a Permitted Peaker Buyout or
(ii) a Permitted Change of Control.
(k) Project Events of Default.
(i) A Fundamental Project Event of Default shall
have occurred and be continuing.
(ii) Any Project Event of Default shall have
occurred and be continuing and (A) has resulted in an Issuer Material
Adverse Effect, or (B) could reasonably be expected to result in an
Issuer Material Adverse Effect, provided that there shall be no Issuer
Event of Default under this Section 7.1(k)(ii) if the Issuer
consummates a Permitted Peaker Buyout (Peaker Sale/Project Event of
Default) or Peaker Collateralization in respect of the applicable
Project Company and/or its Project.
(l) Unenforceability of Financing Documents. At any time
after the execution and delivery thereof, any material provision of any
Financing Document shall cease to be in full force and effect (other than by
reason of a release of Collateral thereunder in accordance with the terms hereof
or thereof, the satisfaction in full of the Obligations or any
39
other termination of a Financing Document in accordance with the terms hereof
and thereof) or any Financing Document shall be declared null and void by a
Governmental Authority of competent jurisdiction.
(m) Equity Documents and Equity Parties.
(i) Any Equity Document shall fail to be in full
force and effect (other than due to a termination thereof in accordance
with the terms hereof and thereof) or any Equity Party shall repudiate
in writing any of its obligations thereunder.
(ii) Any Equity Party shall fail to make any
payment as and when due under any Equity Document to which it is a
party.
(iii) There shall have occurred and be continuing
an NRG Event of Default (other than pursuant to the matters referred to
in Section 7.1 (m)(i) or Section 7.1(m)(ii)).
(n) Intentionally Omitted.
(o) Significant Casualty Event or Significant
Condemnation Event.
(i) There shall have occurred a Significant
Casualty Event in respect of a Project or the Issuer shall not have
delivered to the Collateral Agent the Responsible Officer's certificate
required in respect of such Project under Section 4.7.2(a)(ii) of the
Depositary Agreement or XLCA (if XLCA is the Controlling Party) (or the
Independent Engineer) shall not have consented to, or confirmed the
statements set forth in, as the case may be, such certificate as
required by Section 4.7.2(a)(ii) of the Depositary Agreement, provided
that there shall be no Issuer Event of Default under this Section
7.1(o)(i) if the Issuer consummates a Permitted Peaker Buyout
(Completion/Loss Event) or Peaker Collateralization in respect of such
Project.
(ii) There shall have occurred a Significant
Condemnation Event in respect of a Project or the Issuer shall not have
delivered to the Collateral Agent the Responsible Officer's certificate
required in respect of such Project under Section 4.7.2(b)(ii) of the
Depositary Agreement or XLCA (if XLCA is the Controlling Party) (or the
Independent Engineer) shall not have consented to, or confirmed the
statements set forth in, as the case may be, such certificate as
required by Section 4.7.2(b)(ii) of the Depositary Agreement, provided
that there shall be no Issuer Event of Default under this Section
7.1(o)(ii) if the Issuer consummates a Permitted Peaker Buyout
(Completion / Loss Event) or Peaker Collateralization in respect of
such Project.
7.2 Project Events of Default. The occurrence of any of the
following events in respect of a Project Company shall constitute a "Project
Event of Default" with respect to such Project Company hereunder:
(a) Failure to Make Payments. Such Project Company shall
fail to pay, in accordance with the terms of its Guaranty, any amount due
thereunder on the date that such amount is due.
40
(b) Judgments. One or more final judgments for the
payment of money (if such payments are not fully covered by insurance) in excess
of $5,000,000 in the aggregate shall be rendered against such Project Company,
and such Project Company shall not discharge the same or provide for its
discharge in accordance with its terms, or procure a stay of execution thereof,
within 60 days after the day of entry thereof; provided, however, that any such
judgment shall not be (and shall not constitute part of) a Project Event of
Default under this Section 7.2(b) if and for so long as (i) the amount of such
judgment is fully covered by a valid and binding policy of insurance between the
defendant and the insurer covering payment thereof and (i) such insurer has been
notified of, and has not disputed the claim made for payment of, the amount of
such judgment.
(c) Misstatements; Omissions. Any representation or
warranty by such Project Company set forth in any Financing Document or in any
document entered into in connection therewith in favor of or for the benefit of
any Secured Party or in any certificate, financial statement or other document
delivered in connection therewith for the benefit of any Secured Party shall
prove to have been incorrect in any material respect when made (or deemed made)
and the facts or events underlying such incorrect representation or warranty
shall not be changed so as to correct such representation or warranty in all
material respects for a period of 30 days (or so long as the facts or events
underlying such incorrect representation or warranty are capable of being
changed so as to correct such incorrect representation or warranty in all
material respects and such Project Company is diligently proceeding to change
such events or facts, such longer period but in no event for an aggregate period
in excess of 90 days) after a Responsible Officer of such Project Company
becomes aware thereof or receives written notice thereof from or on behalf of
the Controlling Party (or XLCA if the proviso to this Section 7.2(c) applies)
specifying such material inaccuracy and requiring that the facts or events
underlying such incorrect representation or warranty be changed so as to correct
such incorrect representation or warranty in all material respects; provided,
however, that any Project Event of Default pursuant to this Section 7.2(c)
arising solely from any representation or warranty made by a Project Company for
the benefit of XLCA under the Insurance and Reimbursement Agreement shall be an
Issuer Event of Default in respect of which no Person other than XLCA shall have
the rights given to parties to this Agreement in respect of Issuer Events of
Default generally.
(d) Bankruptcy.
(i) Such Project Company shall become subject to
a Bankruptcy Event.
(ii) Any Major Project Participant (other than
such Project Company) in such Project Company's Project (so long as
such Major Project Participant has any remaining obligations (other
than indemnification obligations) under the Major Project Documents
related to such Project to which it is a party) shall become subject to
a Bankruptcy Event; provided that no Project Event of Default shall
occur as a result of such Bankruptcy Event if: (A) with respect to any
such Major Project Participant that is the only Person able to provide
the services that are being provided under the Major Project Document
to which it is a party on a commercially reasonable basis, (x) such
Major Project Participant is continuing to perform all of its
obligations under such Major Project Document in accordance with the
terms thereof and (y) the Controlling Party does
41
not, within 60 days after the occurrence of such Bankruptcy Event,
declare a Project Event of Default with respect thereto; and (B) with
respect to any Major Project Participant in such Project Company's
Project, (t) within 30 days after the occurrence of such Bankruptcy
Event, such Project Company notifies the Controlling Party and the
Collateral Agent in writing that it intends to replace the affected
Person in accordance with this clause (B), (u) within 135 days after
the occurrence of such Bankruptcy Event, such Project Company replaces
the affected Person with a Person that is reasonably satisfactory to
XLCA (if XLCA is then the Controlling Party) or whose replacement of
the affected Person could not reasonably be expected to have a Project
Material Adverse Effect (if XLCA is not then the Controlling Party)
pursuant to documentation that is reasonably satisfactory to XLCA (if
XLCA is then the Controlling Party) or that could not reasonably be
expected to have a Project Material Adverse Effect (if XLCA is not then
the Controlling Party), and (v) such Bankruptcy Event does not have a
Project Material Adverse Effect.
(e) Debt Cross Default. Such Project Company shall
default for a period beyond any applicable grace period (i) in the payment of
any principal, interest or other amount due on any Debt for Borrowed Money of
such Project Company (other than the Obligations) and such defaulted amount,
together with any other principal, interest or other amount due and unpaid on
any Debt for Borrowed Money of such Project Company (other than the Obligations)
equals or exceeds $5,000,000 in the aggregate, or (ii) in the payment of any
amount then due or performance of any obligation then required under any
agreement evidencing Debt of such Project Company (other than the Financing
Documents) if, because of such default, the holder of such Debt accelerates the
payment thereof and such accelerated amount, together with the amount of any
other Debt of such Project Company then so accelerated (other than the
Obligations), equals or exceeds $5,000,000 in the aggregate.
(f) Breach of Terms of Financing Documents.
(i) Such Project Company shall fail to perform
or observe any of the covenants set forth in Section 3.1 (Use of
Proceeds and Revenues), 3.6(a) (Maintenance of Existence and Business),
3.10 (Insurance), 3.18 (Energy Marketing Services Parameter) or Article
5 (other than Section 5.6(b) (Investments), 5.9 (ERISA), 5.13 (Name
Change, etc.) or 5.18 (Hazardous Substances)); provided that in the
case where such Project Company's failure to perform or observe the
covenants set forth in Section 3.1 is not an intentional failure, such
failure shall not become a Project Event of Default unless such Project
Company does not cure such failure within three Business Days after the
occurrence of such failure.
(ii) Such Project Company shall fail to perform
or observe any of the covenants or other agreements set forth hereunder
or in any other Financing Document which are not otherwise specifically
provided for in Section 7.2(f)(i) or elsewhere in this Section 7.2 and
such failure shall not be susceptible of cure or, if susceptible of
cure, shall continue unremedied for a period of 30 days after such
Project Company becomes aware thereof or receives written notice
thereof from, or on behalf of, the Controlling Party; provided,
however, if (A) such failure does not consist of a failure to pay money
and cannot be cured within such 30-day period, (B) such failure is
susceptible of cure
42
within 90 days, (C) such Project Company is proceeding with diligence
and in good faith to cure such failure, (D) the existence of such
failure has not had and, after considering the nature of the cure,
could not be reasonably expected to have, a Project Material Adverse
Effect, and (E) the Controlling Party and the Collateral Agent shall
have received an officer's certificate signed by a Responsible Officer
of such Project Company, in such Responsible Officer's capacity as an
officer of such Project Company, to the effect of clauses (A), (B), (C)
and (D) above and stating what action such Project Company is taking to
cure such failure, then such 30-day cure period shall be extended to
such date, not to exceed a total of 90 days, as shall be necessary for
such Project Company diligently to cure such failure.
(g) Major Project Documents.
(i) Any Person (other than a Secured Party)
shall be in breach of, or in default under, (A) a Major Project
Document relating to such Project Company's Project (after giving
effect to any applicable grace period set forth in such Major Project
Document), or (B) any Consent related to such Major Project Document,
and in each case such breach or default could reasonably be expected to
have a Project Material Adverse Effect, and such breach or default
shall not be susceptible of cure or, if susceptible of cure, shall
continue unremedied for a period of 45 days; provided that if (A) such
breach or default does not consist of a failure to pay money and cannot
be cured within such 45-day period, (B) such breach or default is
susceptible of cure within 90 days, (C) the breaching party is
proceeding with diligence and in good faith to cure such breach, and
(D) the existence of such breach or default does not have a Project
Material Adverse Effect and the extension of time to cure such breach
or default could not, after considering the nature of the cure, be
reasonably expected to have a Project Material Adverse Effect, then
such 45-day cure period shall be extended to such date, not to exceed a
total of 90 days, as shall be necessary for the breaching party
diligently to cure such breach or default; provided, further, that no
Project Event of Default shall be declared or deemed to exist as a
result of any such breach or default if: (y) within the 90-day cure
period referred to in this Section 7.2(g)(i) (or within the 45-day cure
period, if no extension is given), such Project Company replaces the
affected Person (other than such Project Company) with a Person that is
reasonably satisfactory to XLCA (if XLCA is the Controlling Party) or
whose replacement of the affected Person could not reasonably be
expected to have a Project Material Adverse Effect (if XLCA is not the
Controlling Party) pursuant to documentation that is reasonably
satisfactory to XLCA (if XLCA is the Controlling Party) or that could
not reasonably be expected to have a Project Material Adverse Effect
(if XLCA is not the Controlling Party), and (z) the existence of such
breach or default does not have a Project Material Adverse Effect and
the extension of time (if any) to obtain a replacement Person could not
reasonably be expected to have a Project Material Adverse Effect.
(ii) Any Major Project Document relating to such
Project Company's Project shall terminate, any material provision in
any such Major Project Document shall for any reason cease to be valid
and binding on any Person party thereto except upon fulfillment of such
Person's obligations thereunder (or any such Person shall so state in
writing), or shall be declared null and void, or the validity or
enforceability thereof shall
43
be contested by any party thereto or any Governmental Authority, or any
such Person shall deny in writing that it has any liability or
obligation thereunder, except upon fulfillment of its obligations
thereunder, and in each case such occurrence could reasonably be
expected to have a Project Material Adverse Effect; provided that no
Project Event of Default shall be declared or deemed to exist as a
result of the occurrence of such event if: (A) within 30 days after the
occurrence of such event, such Project Company notifies the Controlling
Party and the Collateral Agent in writing that it intends to cure such
event, (B) within 135 days after the occurrence of such event, such
Project Company (x) replaces the affected Person (other than Project
Company) with a Person that is reasonably satisfactory to XLCA (if XLCA
is then the Controlling Party) or whose replacement of the affected
Person could not reasonably be expected to have a Project Material
Adverse Effect (if XLCA is not then the Controlling Party) pursuant to
documentation that is reasonably satisfactory to XLCA (if XLCA is the
Controlling Party) or that could not reasonably be expected to have a
Project Material Adverse Effect (if XLCA is not the Controlling Party)
or (y) replaces the affected Major Project Document with a Project
Document that is reasonably satisfactory to XLCA (if XLCA is the
Controlling Party) or that could not reasonably be expected to have a
Project Material Adverse Effect (if XLCA is not then the Controlling
Party); and (C) the occurrence of such event does not have a Project
Material Adverse Effect and the extension of time to cure such event
could not reasonably be expected to have a Project Material Adverse
Effect.
(h) Loss of EWG Status. Such Project Company shall cease
to be an Exempt Wholesale Generator or its Project shall cease to be an Eligible
Facility, or such Project Company shall fail to take all actions required to
maintain such status (except if such Project Company or such Project, as the
case may be, is no longer required to hold such status in order to be exempt
from PUHCA), and such cessation or failure shall have a Project Material Adverse
Effect; provided that such Project Company shall have 60 days after a
Responsible Officer of such Project Company obtains knowledge of such cessation
or failure to cure such cessation or failure before it becomes a Project Event
of Default so long as the extension of time to cure such cessation or failure
could not reasonably be expected to have a Project Material Adverse Effect.
(i) Abandonment. At any time following the Completion
Date for its Project, such Project Company shall announce that it is abandoning
such Project or such Project shall be abandoned or operation thereof shall
substantially cease for a continuous period of more than 2 years for any reason.
(j) Permits. Any Permit shall be revoked, canceled, not
renewed or materially modified by the issuing agency or other Governmental
Authority having jurisdiction (excluding any revocation, cancellation,
non-renewal, or material modification at the request of the relevant Project
Company and with the prior written consent of the Controlling Party) and within
90 days thereafter the relevant Project Company is not able to demonstrate to
the reasonable satisfaction of XLCA (if XLCA is the Controlling Party) acting in
consultation with the Independent Engineer (or a Responsible Officer of such
Project Company is not able to certify to the Trustee (if XLCA is not then the
Controlling Party) that such revocation, cancellation or material modification
of, or failure to renew, such Permit could not reasonably be expected to have a
Project Material Adverse Effect.
44
(k) ERISA. With respect to any ERISA Plan which a member
of the Controlled Group sponsors, maintains, administers, contributes to,
participates in, or has any obligation to contribute to or any liability under,
an event has occurred or a condition exists which, together with all other such
events or conditions, could reasonably be expected to have a Project Material
Adverse Effect.
(l) Project Company Collateral. (i) The grant of the Lien
of such Project Company's Project Company Collateral Documents shall fail in any
material respect to provide a perfected Lien in favor of the Collateral Agent
for the benefit of the Secured Parties on any of such Project Company's Project
Company Collateral with the priority purported to be created thereby, and such
Project Company shall fail to cure any such failure within 15 days after it
becomes aware thereof or receives written notice thereof from the Collateral
Agent, or (ii) Collateral Agent shall receive a Secretary of State report
indicating that the Collateral Agent's security interest in any of such Project
Company Collateral is not prior to all other security interests or other
interests reflected in such report, other than Project Company Permitted Liens,
and such Project Company shall fail to cure such condition within 15 days after
it becomes aware thereof or receives written notice thereof from the Collateral
Agent.
(m) Liens of Certain Equity Interests. The membership
interests in the Big Cajun Project Company or the Sterlington Project Company
shall be, or shall become, subject to any Lien (whether or not existing before
or after the Closing Date but other than (i) a Lien in favor of the Secured
Parties pursuant to which any such membership interests become part of the
Collateral, or (ii) Project Company Permitted Liens as described in paragraphs
(b) and (d) of the definition of Project Company Permitted Liens) and such Lien
shall not be discharged within 15 days after such Project Company becomes aware
thereof or receives written notice thereof from the Collateral Agent.
(n) Interconnection Solution. The Interconnection
Solution shall fail to be in full force and effect prior to May 31, 2004.
7.3 Fundamental Project Event of Default. The occurrence of any of
the following Project Events of Default with respect to a Project Company shall
constitute a "Fundamental Project Event of Default" with respect to such Project
Company (provided that any such Project Event of Default shall not be a
Fundamental Project Event of Default with respect to a Project Company if the
Issuer consummates a Permitted Peaker Buyout (Peaker Sale / Project Event of
Default) or a Peaker Collateralization in respect of such Project Company and/or
its Project):
(a) the occurrence of a Project Event of Default under
Section 7.2(a) (Failure to Make Payments) with respect to such Project Company
with respect to amounts of $5,000,000 or more;
(b) the occurrence of a Project Event of Default under
Section 7.2(b) (Judgments) with respect to such Project Company with respect to
judgments in the aggregate amount of $10,000,000 or more;
(c) the occurrence of a Project Event of Default under
Section 7.2(d)(i) (Bankruptcy of Project Company) with respect to such Project
Company;
45
(d) the occurrence of a Project Event of Default under
Section 7.2(e) (Debt Cross Default) with respect to such Project Company with
respects to amounts of $10,000,000 or more;
(e) the occurrence of a Project Event of Default under
Section 7.2(f)(i) (Breach of Terms of Financing Documents) with respect to such
Project Company's failure to perform or observe the covenants set forth in:
(i) Section 3.1 (Use of Proceeds and Revenues),
if such failure shall continue unremedied for a period of 30 days;
(ii) Section 3.6(a) (Maintenance of Existence);
(iii) Section 3.10 (Insurance), if such failure
shall continue unremedied for a period of 30 days;
(iv) Section 3.12(a) (Title), if such failure is
in respect of all or substantially all of such Project Company's
assets;
(v) Section 3.18 (Energy Marketing Services
Parameter), if such failure shall continue unremedied for a period of
30 days;
(vi) Section 5.2 (Liens), in respect of Liens in
excess of $5,000,000, if such failure shall continue unremedied for a
period of 30 days;
(vii) Section 5.3 (Indebtedness);
(viii) Sections 5.4(a), (b), (c) or (d) (Asset
Dispositions), in respect of any asset that is material to the
ownership, leasing, operation, maintenance or use of such Project
Company's Project;
(ix) Section 5.7 (Distributions), if such failure
shall continue unremedied for a period of 30 days;
(x) Section 5.10 (Merger or Consolidation;
Liquidation), in respect of a merger, consolidation, liquidation or
dissolution; and
(xi) Section 5.12 (Accounts), if such failure
shall continue unremedied for a period of 30 days;
(xii) Section 5.14 (Assignment).
(f) the occurrence of a Project Event of Default under
Section 7.2(g) (Major Project Documents) with respect to such Project Company,
if such failure continues after all relevant cure periods provided for in
Section 7.2 shall have lapsed.
(g) the occurrence of a Project Event of Default under
Section 7.2(i) (Abandonment) with respect to such Project Company's Project;
46
(h) the occurrence of a Project Event of Default under
Section 7.2(h) (Loss of Exemption) with respect to such Project Company or its
Project;
(i) the occurrence of a Project Event of Default under
Section 7.2(j) (Permits) with respect to a Permit that is necessary to operate
such Project Company's Project on a commercially feasible basis, if such Project
Event of Default continues unremedied for a period of 90 days;
(j) the occurrence of a Project Event of Default under
Section 7.2(l) (Project Company Collateral) with respect to all or substantially
all of the Project Company Collateral of such Project Company; and
(k) the occurrence or continuation of a Project Event of
Default under Section 7.2(n) (Interconnection Solution).
7.4 Controlling Party Agreement.
(a) Each party to this Agreement agrees that the
Controlling Party shall, subject to Section 9.2 (b) as to matters referred to in
the proviso to Section 9.2(b), have the exclusive power to determine, control
and direct any request, demand, authorization, direction, notice, consent,
waiver or other action to be given, made or taken by any party to any Financing
Document. Notwithstanding anything to the contrary in any Financing Document,
each of the Swap Counterparty, the Collateral Agent and the Trustee (on behalf
of itself and the Bondholders) agrees not to give, make or take any such
request, demand, authorization, direction, notice, consent, waiver or other
action for so long as XLCA is the Controlling Party (unless, in each such case,
it is directed to do so by XLCA). Without prejudice to Section 2.11 of this
Agreement, this Section 7.4(a) shall not prohibit (a) notices by the Issuer to
the Swap Counterparty under the Swap Agreement from becoming effective if,
pursuant to the express terms of the Swap Agreement, such notices are to be
effective without XLCA's consent upon being given to XLCA, or (b) the Swap
Counterparty from designating an early termination of the Swap Agreement (as
expressly permitted by its terms) without XLCA's consent.
(b) Each party to this Agreement agrees that the
Controlling Party shall have the exclusive power to determine the exercise of
all rights and remedies in respect of any Issuer Event of Default or any other
default or event of default under any Financing Document howsoever arising.
Notwithstanding anything to the contrary in any Financing Document, each of the
Swap Counterparty, the Collateral Agent and the Trustee (on behalf itself and
the Bondholders) agrees not to exercise any rights or remedies granted in, or
pursuant to or in respect of any, Financing Document or available to it at law
or in equity in respect of any default or event of default under any Financing
Document for so long as XLCA is the Controlling Party (unless, in each such
case, it is directed to exercise such rights and remedies by XLCA). Without
prejudice to Section 2.11 of this Agreement, this Section 7.4(b) shall not
prohibit the Swap Counterparty from designating an early termination of the Swap
Agreement (as expressly permitted by its terms) without XLCA's consent.
(c) Without prejudice to the generality of Section 7.4(a)
or 7.4(b) of this Agreement, each of the Trustee, on behalf of itself and the
Bondholders, and the Swap
47
Counterparty, hereby assigns to XLCA the respective rights of the Trustee, the
Bondholders and the Swap Counterparty with respect to the Obligations to the
extent of any payments under the Policy or the Swap Policy. The foregoing
assignment is in addition to, and not in limitation of, rights of subrogation
otherwise available to XLCA in respect of the Policies (including pursuant to
Section 4.2 of the Insurance and Reimbursement Agreement), which subrogation
rights are acknowledged, and agreed to, by the other Secured Parties. Payments
to XLCA in respect of the foregoing assignment shall in all cases be subject to
and subordinate to the rights of the Bondholders to receive all scheduled
payments of interest and principal under the Bond Obligations. The Controlling
Party is hereby appointed agent and attorney-in-fact for each other Secured
Party in any legal proceeding in respect of the Obligations. Each Secured Party
agrees that the Controlling Party may at any time during the continuation of any
proceeding by or against any debtor with respect to which a claim seeking the
avoidance as a preferential transfer of any payment made with respect to the
Obligations (a "Preference Claim"), or other claim with respect to the
Obligations is asserted under any proceeding in connection with a Bankruptcy
Event, direct all matters relating to such proceeding, including, without
limitation, (i) all matters relating to any Preference Claim, (ii) the direction
of any appeal of any order relating to any Preference Claim and (iii) the
posting of any surety or performance bond pending any such appeal. The Trustee,
on behalf of itself and the Bondholders, and the Swap Counterparty each hereby
agrees that XLCA shall be subrogated to, and the Trustee, on behalf of itself
and the Bondholders, and the Swap Counterparty each hereby delegates and
assigns, to the fullest extent permitted by law, the respective rights of the
Trustee, the Bondholders and the Swap Counterparty in the conduct of any
proceeding in connection with a Bankruptcy Event, including, without limitation,
all rights of any party to an adversary proceeding or action with respect to any
court order issued in connection with any such proceeding.
(d) Each party to this Agreement agrees that in respect
of the matters set forth or contemplated in Sections 7.4, 7.5, 7.6 and 7.7 and
in respect of related matters set forth or contemplated in the Financing
Documents, the Swap Counterparty shall abide by the decisions, and follow and
comply with the requests, of the Controlling Party and shall have no voting or
other related rights in respect of any such matters.
7.5 Remedies. Upon the occurrence and during the continuation of
an Issuer Event of Default, the Controlling Party may, without any obligation to
do so and without further notice of default, presentment or demand for payment,
protest or notice of non-payment or dishonor, or other notices or demands of any
kind (all such notices and demands being waived), exercise any or all of the
following rights and remedies, in any combination or order, in addition (but
without prejudice to its rights as Controlling Party pursuant to Section 7.4) to
such other rights or remedies as the Secured Parties may have hereunder or under
the Collateral Documents or at law or in equity:
(a) Cure. Make disbursements to or on behalf of the
Issuer to cure any Issuer Event of Default hereunder and to cure any default or
render any performance under any Project Document as XLCA in its absolute
discretion may consider necessary or appropriate, whether to preserve and
protect the Collateral or the Secured Parties' interests therein or for any
other reason, and all sums so expended, together with interest on such total
amount at the Late Payment Rate (but in no event shall the rate exceed the
maximum lawful rate), shall be repaid by
48
the Issuer to Collateral Agent promptly upon demand therefor and shall be
secured by the Financing Documents.
(b) Acceleration. Declare and make all sums of accrued
and outstanding principal, accrued but unpaid interest and accrued but unpaid
premium remaining under the Financing Documents, together with all unpaid
amounts, fees, costs and charges due hereunder or under any other Financing
Document (including in respect of any Reimbursement Obligation, Depositary
Obligation or Bond Obligation) immediately due and payable, and require the
Issuer immediately, without presentment, demand, protest or other notice of any
kind, all of which the Issuer hereby expressly waives, to pay to the Collateral
Agent an amount in immediately available funds equal to the aggregate amount of
any such outstanding accelerated obligations; provided that XLCA, so long as it
shall be the Controlling Party, shall not cause such an acceleration upon the
occurrence and during the continuation of an Issuer Event of Default pursuant to
Section 7.1(a) (Failure to Make Payments) if at such time (i) the discounted
present value of the aggregate amount of all payments made under the Policies
for which XLCA has not been reimbursed under the Insurance and Reimbursement
Agreement (or otherwise) is less than $25,000,000 (such discounted present value
being calculated by discounting the value of such aggregate amount back to the
Closing Date at a discount rate of 6.672826%), and (ii) no Issuer Event of
Default or Issuer Inchoate Default shall have occurred or be continuing (other
than pursuant to or in respect of Section 7.1(a) of this Agreement); and
provided, further, that in the event of an Issuer Event of Default occurring
under Section 7.1(d) (Bankruptcy), all such amounts, notwithstanding anything to
the contrary in this Agreement, shall become immediately due and payable without
further act of any Secured Party.
(c) Cash Collateral. Apply to any Obligation then due any
amounts on deposit in any Account, any funds on deposit in any Cash Collateral
Account, any drawings made under any Acceptable Letter of Credit or any proceeds
or any other monies of the Issuer on deposit with Depositary Agent or any
Secured Party in the manner provided in this Agreement or in the Uniform
Commercial Code and other relevant statutes and decisions and interpretations
thereunder with respect to cash collateral.
(d) Possession of Projects. Enter into possession of any
Project and perform any and all work and labor necessary to complete such
Project or to operate and maintain such Project, and all sums expended in so
doing, together with interest on such total amount at the Late Payment Rate,
shall be repaid by the Issuer to the Secured Party or Parties expending such
sums promptly upon demand and shall be secured by the Financing Documents to the
extent provided herein.
(e) Remedies Under Collateral Documents. Exercise any and
all rights and remedies available to the Secured Parties under any of the
Collateral Documents, including judicial or non-judicial foreclosure or public
or private sale of any of the Collateral pursuant to the Collateral Documents.
7.6 Notice to Trustee and Collateral Agent and Project Events of
Default. In exercising its rights as Controlling Party in respect of remedies
under Section 7.5 under this Agreement, XLCA (if XLCA is the Controlling Party)
shall give the Trustee and the Collateral Agent notice of XLCA's exercise of
such remedies (provided that failure by XLCA to give such
49
notice shall in no way limit, prejudice or affect XLCA's ability to exercise any
remedies and XLCA shall have no liability of any kind to any Person for failure
to give such notice). Without limiting anything set forth in this Article 7,
upon the occurrence of a Project Event of Default hereunder, the remedies
available to the Controlling Party and the other Secured Parties shall not
include the remedies set forth in Section 7.5 unless an Issuer Event of Default
has also occurred and is continuing.
7.7 Application of Proceeds. If there shall have occurred an
Issuer Event of Default and such Issuer Event of Default is continuing, all
money, proceeds and other property received or held by the Collateral Agent
comprising Collateral or pursuant to the exercise by the Collateral Agent of
rights and remedies of the Secured Parties under any Financing Document in
respect of the Collateral shall be applied by the Collateral Agent as follows
(and if any Secured Party receives any such money, proceeds or property other
than as distributed pursuant to this Section 7.7, such Secured Party shall
promptly pay or transfer the same to the Collateral Agent for distribution in
accordance with this Section 7.7):
first: to the payment of all and any fees, costs and expenses owed to
the Collateral Agent and the Trustee in their respective trust capacities
pursuant to any Financing Document;
second: to the payment of fees costs, expenses or expenditures approved
for payment in writing by the Controlling Party and (i) accrued and unpaid in
connection with the management and operation of the Project Companies or any
Collateral or (ii) subject to reimbursement under any Financing Document;
third: to the payment of the whole amount then outstanding of all
Scheduled Debt Service and in case such proceeds are not sufficient to pay in
full the whole amount so outstanding, then to make pro rata payment without any
preference or priority, to each Secured Party (to which such Scheduled Debt
Service is payable) in respect of such Obligations;
fourth: to the payment of such remaining amount then outstanding
(including accrued interest, principal and premium (if any)) of the Obligations
(or if the Obligations shall only have been accelerated in part, the whole
amount then outstanding of such part) as the Controlling Party shall direct; and
fifth: after the payment in full of the Obligations, the remainder, if
any, shall be paid to the Issuer or as a court of competent jurisdiction may
direct.
ARTICLE 8
SCOPE OF LIABILITY
Except as set forth in this Article 8, notwithstanding
anything in this Agreement or the other Financing Documents to the contrary, the
Secured Parties shall have no claims with respect to the transactions
contemplated by the Operative Documents against NRG Energy or any of its
Affiliates (other than the Financing Parties), shareholders, officers, directors
or employees (collectively, the "Nonrecourse Persons"); provided that the
foregoing provision of this Article 8 shall not (a) constitute a waiver, release
or discharge of any of the indebtedness, or of any of the terms, covenants,
conditions, or provisions of this Agreement or any other Financing Document and
the same shall continue (but without personal liability to any
50
Nonrecourse Person except as provided herein and therein) until fully paid,
discharged, observed, or performed, (b) limit or restrict the right of any
Secured Party (or any assignee, beneficiary or successor to any of them) to name
the Issuer, any Project Company or any other Person as a defendant in any action
or suit for a judicial foreclosure or for the exercise of any other remedy under
or with respect to this Agreement or any other Financing Document, or for
injunction or specific performance, so long as no judgment in the nature of a
deficiency judgment shall be enforced against any Nonrecourse Person, except as
set forth in this Article 8, (c) limit or restrict any right or remedy of any
Secured Party (or any assignee or beneficiary thereof or successor thereto) with
respect to, and each of the Nonrecourse Persons shall remain fully liable to the
extent that such Person would otherwise be liable for its own actions with
respect to, any fraud (which shall not include innocent or negligent
misrepresentation), willful misrepresentation, or misappropriation of Project
Revenues or any other earnings, revenues, rents, issues, profits or proceeds
from or of the Collateral that should or would have been paid as provided herein
or paid or delivered to any Secured Party (or any assignee or beneficiary
thereof or successor thereto) towards any payment required under this Agreement
or any other Financing Document, (d) affect or diminish or constitute a waiver,
release or discharge of any specific written obligation, covenant, or agreement
made by any of the Nonrecourse Persons or any security granted by the
Nonrecourse Persons in support of the obligations of such Persons under any
Financing Document or as security for the obligations of the Issuer and the
Project Companies, and (e) limit the liability of (i) any Person who is a party
to any Project Document and has issued any certificate or other statement in
connection therewith with respect to such liability as may arise by reason of
the terms and conditions of such Project Document (but subject to any limitation
of liability in such Project Document), certificate or statement, (ii) any
Person rendering a legal opinion pursuant to this Agreement or (iii) NRG Energy
or any Acceptable Assignee under or pursuant to the Parent Agreement, in each
case under this clause (e) relating solely to such liability of such Person as
may arise under such referenced agreement, instrument or opinion. The
limitations on recourse set forth in this Article 8 shall survive the
termination of this Agreement and the full payment and performance of the
Obligations hereunder and under the other Financing Documents.
ARTICLE 9
INDEMNIFICATION, AMENDMENTS AND WAIVERS
9.1 Indemnification.
(a) The Issuer and each Project Company shall, on an
after-tax basis, jointly and severally indemnify, defend and hold harmless XLCA
and the Collateral Agent, and in their capacities as such, their respective
officers, directors, shareholders, controlling Persons, affiliates, employees,
agents, attorneys and servants (collectively, the "Indemnitees") from and
against any and all claims, obligations, liabilities, losses, costs or expenses
(including reasonable attorneys' fees and disbursements and reasonable fees and
disbursements of consultants and auditors and reasonable costs of
investigations), penalties, actions and suits which any of them incur or which
are claimed against any of them (collectively, "General Subject Claims"), in any
way arising out of or in connection with this Agreement (including the
enforcement of this Agreement), the other Operative Documents, any of the
transactions contemplated hereby or thereby, any Project, the actual or proposed
use of proceeds of the Bonds or any refund or
51
adjustment of any amount paid or payable to the Collateral Agent in respect of
any Collateral or any interest thereon which may be ordered by or otherwise
required by any Person.
(b) Without limiting the generality of clause (a) above,
the Issuer and each Project Company further agree to jointly and severally
indemnify, on an after-tax basis, and hold harmless each Indemnitee from and
against any and all claims, losses, liabilities, suits, obligations, fines,
damages, judgments, penalties, charges, costs and expenses (including reasonable
attorneys' fees and disbursements and reasonable fees and disbursements of
consultants and auditors and reasonable costs of investigations) (whether civil
or criminal, arising under a theory of negligence or strict liability, or
otherwise) which are imposed on, incurred or paid by or asserted against such
Indemnitee (collectively, "Environmental Subject Claims" and, together with
General Subject Claims, "Subject Claims") and (i) arising out of or resulting
from the development, construction, ownership, leasing, use, operation or
maintenance of any Site, Improvement or other Mortgaged Property, or (ii)
arising in connection with the Release or threatened Release or presence of any
Hazardous Substances in, on, under or at any Site of any Project, Improvement or
other Mortgaged Property.
(c) The foregoing indemnities shall not apply with
respect to an Indemnitee to the extent that any Subject Claim is found by a
final and non-appealable decision of a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of such Indemnitee, but
shall continue to apply to other Indemnitees.
(d) The Issuer and each Project Company agree that no
Indemnitee shall have any liability (whether direct or indirect, in contract,
tort or otherwise) to the Issuer, any Project Company or any of their respective
shareholders, affiliates or creditors for or in connection with this Agreement,
the other Operative Documents or any of the transactions contemplated hereby or
thereby, except to the extent such liability is found in a final, non-appealable
court of competent jurisdiction to have resulted from such Indemnitee's gross
negligence or willful misconduct.
(e) The provisions of this Section 9.1 shall survive
foreclosure of the Collateral Documents and satisfaction or discharge of the
Issuer's or each Project Company's obligations hereunder and under the other
Financing Documents, and shall be in addition to any other rights and remedies
of the Secured Parties.
(f) In case any action, suit or proceeding shall be
brought against any Indemnitee, such Indemnitee shall notify the Issuer and the
Project Companies of the commencement thereof, and the Issuer and the Project
Companies shall be entitled, at their expense, acting through counsel reasonably
acceptable to such Indemnitee, to participate in, and, to the extent that the
Issuer and the Project Companies desire, to assume and control the defense
thereof; provided, however, that the Issuer or any Project Company shall not
settle or compromise any Subject Claim on behalf of such Indemnitee without such
Indemnitee's prior written consent unless such settlement or compromise includes
an unconditional release of such Indemnitee from, and holds such Indemnitee
harmless against, all liability arising out of such claim, action, proceeding or
investigation. Such Indemnitee shall be entitled, at its expense, to participate
in any action, suit or proceeding the defense of which has been assumed by the
Issuer or the Project Companies. Notwithstanding the foregoing, neither the
Issuer nor any Project
52
Company shall be entitled to assume and control the defense of any such action,
suit or proceedings if and to the extent that, in the opinion of such Indemnitee
and its counsel, such action, suit or proceeding involves the potential
imposition of criminal liability upon such Indemnitee or a conflict of interest
between such Indemnitee and the Issuer or any Project Company or between such
Indemnitee and another Indemnitee (unless such conflict of interest is waived in
writing by the affected Indemnitees), and in such event (other than with respect
to disputes between such Indemnitee and another Indemnitee) the Issuer and each
Project Company shall pay the expenses of such Indemnitee in such defense and be
jointly and severally liable for such expenses.
(g) Upon payment of any Subject Claim by the Issuer or
any Project Company pursuant to this Section 9.1 or other similar indemnity
provisions contained herein to or on behalf of an Indemnitee, the Issuer or such
Project Company, without any further action, shall be subrogated to any and all
claims that such Indemnitee may have relating thereto, and such Indemnitee shall
cooperate with the Issuer and the Project Companies and give such further
assurances as are necessary or advisable to enable the Issuer and the Project
Companies vigorously to pursue such claims.
(h) Notwithstanding anything to the contrary set forth
herein, the Issuer shall not, in connection with any one legal proceeding or
claim, or separate but related proceedings or claims arising out of the same
general allegations or circumstances, in which the interests of the Indemnitees
do not materially differ, be liable to the Indemnitees (or any of them) under
any of the provisions set forth in this Section 9.1 for the fees and expenses of
more than one separate firm of attorneys (which firm shall be selected by the
affected Indemnitees or, upon failure to do so, by XLCA (if XLCA is the
Controlling Party) or the Collateral Agent (if XLCA is not the Controlling
Party)), exclusive of any appropriate local counsel; provided that this Section
9.1(h) shall not apply in respect of XLCA or the Collateral Agent if it
demonstrates to the reasonable satisfaction of the Issuer that there exists a
conflict of any sort with any other Indemnitee or that XLCA or the Collateral
Agent, as the case may be, is prejudiced by such representation of XLCA or the
Collateral Agent, as the case may be, and, accordingly, Issuer shall be liable
to XLCA and the Collateral Agent under the provisions of this Section 9.1 for
the fees and expenses of XLCA's and the Collateral Agent's separate legal
counsel (and any appropriate local counsel).
(i) Any amounts payable by the Issuer or any Project
Company pursuant to this Section 9.1 shall be regularly payable within 30 days
after the Issuer or any Project Company receives an invoice for such amounts
from any applicable Indemnitee, and if not paid within such 30-day period shall
bear interest at the Late Payment Rate.
(j) If, for any reason whatsoever, the indemnification
provided under this Section 9.1 is unavailable to any Indemnitee or is
insufficient to hold it harmless to the extent provided in this Section 9.1,
then provided such payment is not prohibited by or contrary to any applicable
Legal Requirement or public policy, the Issuer and each Project Company shall
contribute to the amount paid or payable by such Indemnitee as a result of the
Subject Claim in such proportion as is appropriate to reflect the relative
economic interests of the Issuer and each Project Company and their respective
Affiliates on the one hand, and such Indemnitee on the other hand, in the
matters contemplated by this Agreement as well as the relative fault of the
53
Issuer and each Project Company (and their respective Affiliates) and such
Indemnitee with respect to such Subject Claim, and any other relevant equitable
considerations.
9.2 Amendments and Waivers.
(a) In addition to, and subject to, the requirements set
forth in Section 9.2(b) below, neither this Agreement (including the Guaranties)
nor any of the terms hereof may be amended, supplemented, modified or waived,
other than in a writing signed by the Issuer, each Project Company and the
Controlling Party (and the consent of the other Secured Parties shall not be
required).
(b) Subject to the provisions of this Section 9.2(b),
unless otherwise specified in this Agreement or in any other Financing Document,
the Controlling Party (without the consent of any other Secured Party) may
approve in writing any amendment, supplement or other modification of, or
waiver, consent, approval, agreement or other action under or with respect to,
any Financing Document; provided, however, that no such amendment, supplement,
modification, waiver, consent, approval, agreement or action shall result in any
of the modifications described in Section 10.02(2) of the Indenture without the
consent of the Bondholders of each Outstanding (as such term is defined in the
Indenture) Bond affected thereby; and provided, further, that no such amendment
or supplement that results in the Swap Counterparty no longer being designated a
Secured Party or changes its rights to receive payments in respect of the Swap
Obligations in accordance with Section 2.11 of the Common Agreement or Section
4.1.2 of the Depository Agreement shall be made without the consent of the Swap
Counterparty; provided, however, that no such amendment, supplement,
modification, waiver, consent, approval, agreement or action that adversely
affects the rights of the Collateral Agent provided in Article 11 of the Common
Agreement in any material respect or its compensation or indemnity in any
material respect shall be made without the consent of the Collateral Agent.
ARTICLE 10
INDEPENDENT CONSULTANTS
10.1 Removal and Fees.
(a) Independent Engineer. For purposes of this Agreement,
the "Independent Engineer" shall be X.X. Xxxx, Inc. or such other replacement
engineering consulting firm selected in accordance with this Section 10.1(a).
The Independent Engineer may be removed by XLCA (if XLCA is the Controlling
Party) or the Issuer. If the Independent Engineer is removed or resigns and
thereby ceases to act as Independent Engineer for purposes of this Agreement,
the Issuer and XLCA (if XLCA is the Controlling Party) shall, within 30 days of
such removal or resignation, together (or the Issuer alone if XLCA is not the
Controlling Party) designate a replacement engineering consulting firm of
recognized national standing as Independent Engineer and, thereafter, the Issuer
shall promptly notify the Trustee and the Collateral Agent in writing of such
designation. If an Issuer Event of Default shall have occurred and be continuing
and XLCA is the Controlling Party, XLCA alone shall have the right to remove or
appoint an Independent Engineer pursuant to this Section 10.1(a).
54
At any time while the Obligations are outstanding, the
Controlling Party and the other Secured Parties shall have the right, but shall
not be obligated (other than as expressly provided herein or in the other
Financing Documents), to consult with the Independent Engineer on matters
related to this Agreement or any other Operative Document. All reasonable fees
and expenses of the Independent Engineer (whether the original one or
replacements) shall be paid by the Issuer; provided that any such fee or
expense, or related group of fees or expenses, in excess of $10,000 shall be
approved by the Issuer.
(b) Insurance Consultant. For purposes of this Agreement,
the "Insurance Consultant" shall be Xxxxx McLennan USA Inc. or such other
replacement insurance consulting firm selected in accordance with this Section
10.1(b). The Insurance Consultant may be removed by XLCA (if XLCA is the
Controlling Party) or the Issuer. If the Insurance Consultant is removed or
resigns and thereby ceases to act as Insurance Consultant for purposes of this
Agreement, the Issuer and XLCA (if XLCA is the Controlling Party) shall, within
30 days of such removal or resignation, together (or the Issuer alone if XLCA is
not the Controlling Party) designate a replacement insurance consulting firm of
recognized national standing as Insurance Consultant and, thereafter, the Issuer
shall promptly notify the Trustee and the Collateral Agent in writing of such
designation. If an Issuer Event of Default shall have occurred and be continuing
and XLCA is the Controlling Party, XLCA alone shall have the right to remove or
appoint an Insurance Consultant pursuant to this Section 10.1(b).
At any time while the Obligations are outstanding, the
Controlling Party and the other Secured Parties shall have the right, but shall
not be obligated (other than as expressly provided herein or in the other
Financing Documents), to consult with the Insurance Consultant on matters
related to this Agreement or any other Operative Document. All reasonable fees
and expenses of the Insurance Consultant (whether the original one or
replacements) shall be paid by the Issuer; provided that any such fee or
expense, or related group of fees or expenses, in excess of $10,000 shall be
approved by the Issuer.
(c) Power and Fuel Market Consultant. For purposes of
this Agreement, the "Power and Fuel Market Consultant" shall be X.X. Xxxx, Inc.
or such other replacement power market consulting firm selected in accordance
with this Section 10.1(c). The Power and Fuel Market Consultant may be removed
by XLCA (if XLCA is the Controlling Party) or the Issuer. If the Power and Fuel
Market Consultant is removed or resigns and thereby ceases to act as Power and
Fuel Market Consultant for purposes of this Agreement, the Issuer and XLCA (if
XLCA is the Controlling Party) shall, within 30 days of such removal or
resignation, designate a replacement power and fuel market consulting firm of
recognized national standing as Power and Fuel Market Consultant and,
thereafter, the Issuer shall promptly notify the Trustee and the Collateral in
writing of such designation. If an Issuer Event of Default shall have occurred
and be continuing and XLCA is the Controlling Party, XLCA alone shall have the
right to remove or appoint a Power and Fuel Market Consultant pursuant to this
Section 10.1(c).
At any time while the Obligations are outstanding, the
Controlling Party and the other Secured Parties shall have the right, but shall
not be obligated (other than as expressly provided herein or in the other
Financing Documents), to consult with the Power and Fuel Market Consultant on
matters related to this Agreement or any other Operative Document. All
reasonable fees and expenses of the Power and Fuel Market Consultant (whether
the original one
55
or replacements) shall be paid by the Issuer; provided that any such fee or
expense, or related group of fees or expenses, in excess of $10,000 shall be
approved by the Issuer.
10.2 Duties. Each Independent Consultant shall be contractually
obligated to the Controlling Party to carry out the activities required of it in
this Agreement and as otherwise requested by the Controlling Party and shall be
responsible solely to the Controlling Party. The Issuer acknowledges that it
will not have any cause of action or claim against any Independent Consultant
resulting from any decision made or not made, any action taken or not taken or
any advice given by such Independent Consultant in the due performance in good
faith of its duties to the Controlling Party, except to the extent arising from
such Independent Consultant's gross negligence or willful misconduct.
10.3 Certification of Dates. The Controlling Party will request
that the Independent Consultants act diligently in the issuance of all
certificates required to be delivered by the Independent Consultants hereunder,
if their issuance is appropriate. The Issuer shall provide the Independent
Consultants with reasonable notice of the expected occurrence of any such dates
or events requiring any such certification.
ARTICLE 11
THE COLLATERAL AGENT
11.1 Appointment and Duties of Collateral Agent.
(a) Appointment and Duties of Collateral Agent. Each of
XLCA, the Swap Counterparty and the Trustee hereby designates and appoints The
Bank of New York to act as the Collateral Agent for the Transaction, and XLCA,
the Swap Counterparty and the Trustee hereby authorize The Bank of New York, as
the Collateral Agent, to take such actions on its behalf under the provisions of
the Collateral Documents to which it is a party and to exercise such powers and
perform such duties as are expressly delegated to the Collateral Agent by the
terms thereof and this Agreement and each of the other Financing Documents to
which it is a party, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere in
this Agreement and the other Financing Documents, the Collateral Agent shall not
have any duties or responsibilities, except those expressly set forth in this
Agreement and the other Financing Documents to which it is a party, or any
fiduciary relationship with XLCA, the Swap Counterparty or the Trustee, and no
implied covenants, functions or responsibilities shall be read into this
Agreement, the other Financing Documents or otherwise exist against the
Collateral Agent. The Collateral Agent shall not be liable for any action taken
or omitted to be taken by it hereunder or under any other Financing Document, or
in connection herewith or therewith, or in connection with the Collateral,
unless caused by its gross negligence or willful misconduct as determined by a
court of competent jurisdiction.
Anything in this Agreement to the contrary notwithstanding, in
no event shall the Collateral Agent or the Trustee be liable under or in
connection with this Agreement for indirect, special, incidental, punitive or
consequential losses or damages of any kind whatsoever, including but not
limited to lost profits, whether or not foreseeable, even if the Collateral
Agent or the Trustee (in any of its capacities hereunder) has been advised of
the possibility thereof and regardless of the form of action in which such
damages are sought.
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(b) Notices to XLCA, the Swap Counterparty, the Trustee
and the Issuer. The Collateral Agent will give notice to XLCA, the Swap
Counterparty, the Trustee and the Issuer of any action taken by the Collateral
Agent or any Person acting at the direction of the Collateral Agent hereunder or
under any other Financing Document; such notice shall be given prior to the
taking of such action, and such action will be binding upon and deemed to be
taken at the direction of XLCA, the Swap Counterparty and the Trustee.
(c) Direction of Collateral Agent by the Controlling
Party. Notwithstanding anything to the contrary in this Agreement, the
Collateral Agent shall not be required to exercise any rights or remedies under
any of the Financing Documents, take or refrain from taking any discretionary
action thereunder or give any consent under any of the Financing Documents or
enter into any agreement amending, modifying, supplementing or waiving any
provision of any Financing Document unless it shall have been directed to do so
by the Controlling Party.
11.2 Rights of Collateral Agent.
(a) Collateral Agent May Act Through Agents. Each of the
Collateral Agent and the Trustee may execute or perform any of its duties or
powers hereunder either directly or by or through agents or attorneys, and
neither the Trustee nor the Collateral Agent shall be responsible for any
misconduct or negligence on the part of any agent or attorney appointed with due
care by it hereunder.
(b) Limitation of Liability. Neither the Collateral Agent
nor any of its respective officers, directors, employees, agents,
attorneys-in-fact or affiliates shall be (i) liable for any action lawfully
taken or omitted to be taken by it under or in connection with any Financing
Document (except for its gross negligence or willful misconduct as determined by
a court of competent jurisdiction), or (ii) responsible in any manner to XLCA,
the Swap Counterparty or the Trustee for any recitals, statements,
representations or warranties made by the Issuer, any Project Company or any
representative thereof contained in any Financing Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Collateral Agent under or in connection with, any Financing
Document or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of the Financing Documents or for any failure of the Issuer or
any Project Company to perform its obligations thereunder. The Collateral Agent
shall not be under any obligation to XLCA, the Swap Counterparty or the Trustee
to ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, any Financing Document, or to inspect
the properties, books or records of the Issuer.
(c) Reliance by the Collateral Agent. The Collateral
Agent shall be entitled to rely conclusively, and shall be fully protected in
relying, upon any note, writing, resolution, notice, consent, certificate,
affidavit, report (environmental or otherwise), letter, telecopy, telex or
teletype message, statement, order or other document or conversation believed by
it to be genuine and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including counsel to
the Issuer), independent accountants and other experts selected by the
Collateral Agent. In connection with any request of the Controlling Party, the
Collateral Agent shall be fully protected in relying conclusively on a
certificate of such Person, signed by an Responsible Officer of such Person. The
Collateral Agent shall be fully
57
justified in failing or refusing to take any action under any Financing Document
(i) if such action would, in the opinion of the Collateral Agent, be contrary to
law or the terms of this Agreement or the other Financing Documents, (ii) if
such action is not specifically provided for in such Financing Document and it
shall not have received any such advice or concurrence of the Controlling Party,
as it deems appropriate, or (iii) if, in connection with the taking of any such
action that would constitute an exercise of remedies under such Financing
Document, it shall not first be indemnified to its satisfaction by the Issuer
and the Controlling Party against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any such action. The
Collateral Agent shall in all cases be fully protected in acting, or in
refraining from acting, under any Financing Document in accordance with a
request of the Controlling Party, and such request and any action taken or
failure to act pursuant thereto shall be binding upon the Secured Parties.
(d) Ambiguity or Inconsistency in Financing Documents
with Proposed Actions. If, with respect to a proposed action to be taken by it,
the Collateral Agent shall determine in good faith that the provisions of this
Agreement or any other Financing Document relating to the functions,
responsibilities or powers of the Collateral Agent are or may be ambiguous or
inconsistent, the Collateral Agent shall notify the Controlling Party and the
Issuer, identifying the proposed action and the provisions that it considers are
or may be ambiguous or inconsistent, and may decline either to perform such
function or responsibility or to exercise such power unless it has received
written confirmation that the Controlling Party and, if no Issuer Event of
Default has occurred and is continuing, the Issuer concur in the circumstances
that the action proposed to be taken by the Collateral Agent is consistent with
the terms of this Agreement or is otherwise appropriate. The Collateral Agent
shall be fully protected in acting or refraining from acting upon, or from
omitting to act prior to, the confirmation of the Controlling Party, in this
respect, and such confirmation shall be binding upon the Collateral Agent.
(e) Knowledge of Event of Default. The Collateral Agent
shall not be deemed to have actual, constructive, direct or indirect knowledge
or notice of the occurrence of any Issuer Event of Default unless and until the
Collateral Agent has received a notice or a certificate from the Controlling
Party or the Issuer stating that an Issuer Event of Default has occurred. The
Collateral Agent shall have no obligation whatsoever either prior to or after
receiving such notice or certificate to inquire whether an Issuer Event of
Default has in fact occurred and shall be entitled to rely conclusively, and
shall be fully protected in so relying, on any notice or certificate so
furnished to a Responsible Officer of the Collateral Agent. No provision of this
Agreement shall require the Collateral Agent to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or indemnity
satisfactory to it against such risk or liability is not reasonably assured to
it. In the event that the Collateral Agent receives such a notice of the
occurrence of any Issuer Event of Default, the Collateral Agent shall give
notice thereof to the Issuer, the Swap Counterparty, XLCA and the Trustee.
Subject to the provisions of this Agreement, the Collateral Agent shall take
such action with respect to such Issuer Event of Default as so directed pursuant
to Section 11.1(c).
(f) No Liability for Clean-up of Hazardous Materials. In
the event the Collateral Agent (or the Trustee, if it is required to acquire
title for any reason) is required to take
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any managerial action of any kind with respect to the Collateral, in order to
carry out any fiduciary or trust obligation for the benefit of another, which in
the Collateral Agent's or the Trustee's sole discretion may cause the Collateral
Agent or the Trustee to be considered an "owner or Operator" under the
provisions of CERCLA, or otherwise cause the Collateral Agent or Trustee to
incur liability under CERCLA or any other federal, state or local law, each of
the Collateral Agent and the Trustee reserves the right to, instead of taking
such action, either resign or arrange for the transfer of the title or control
of the asset to a court appointed receiver.
Neither the Collateral Agent nor the Trustee shall be liable
to the Issuer or any Project Company or any other Person for any environmental
claims or contribution actions under any federal, state or local law, rule or
regulation by reason of the Collateral Agent's or the Trustee's actions and
conduct as authorized, empowered and directed hereunder or relating to the
discharge, release or threatened release of hazardous materials into the
environment, except in each case to the extent such claims or contribution
actions arise from the gross negligence, bad faith or willful misconduct on the
part of the Collateral Agent or the Trustee.
11.3 Lack of Reliance on the Agents.
(a) Each of XLCA and the Swap Counterparty expressly
acknowledges that neither the Collateral Agent nor any of its respective
officers, directors, employees, agents or attorneys-in-fact has made any
representations or warranties to it and that no act by the Collateral Agent
hereinafter taken, including any review of the Projects or of the affairs of the
Issuer, shall be deemed to constitute any representation or warranty by the
Collateral Agent to XLCA or the Swap Counterparty. Each of XLCA and the Swap
Counterparty represents to the Collateral Agent that it has, independently and
without reliance upon XLCA or the Swap Counterparty, based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Projects and the Issuer. Each of XLCA and
the Swap Counterparty also represents that it will, independently and without
reliance upon the Collateral Agent, and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action under this
Agreement, and to make such investigation as it deems necessary to inform itself
as to the business, operations, property, financial and other condition and
creditworthiness of the Projects and the Issuer. Except for notices, reports and
other documents expressly required to be furnished to XLCA, the Swap
Counterparty and the Trustee by the Collateral Agent hereunder, the Collateral
Agent shall not have any duty or responsibility to provide XLCA, the Swap
Counterparty or the Trustee with any credit or other information concerning the
business, operations, property, financial and other condition or
creditworthiness of the Projects and the Issuer which may come into the
possession of the Collateral Agent or any of its officers, directors, employees,
agents or attorneys-in-fact.
(b) Beyond the exercise of reasonable care in the custody
thereof or as otherwise provided for in the Financing Documents, the Collateral
Agent shall have no duty as to any Collateral in its possession or control or in
the possession or control of any agent or bailee or any income thereon or as to
preservation of rights against prior parties. The Collateral Agent shall be
deemed to have exercised reasonable care in the custody of the Collateral in its
possession if the Collateral is accorded treatment substantially equal to that
which the Collateral
59
Agent accords its own property, and the Collateral Agent shall not be liable or
responsible for any loss or diminution in the value of any of the Collateral by
reason of the act or omission of any carrier, forwarding agency or other agent
or bailee selected by the Collateral Agent in good faith.
(c) The Collateral Agent shall not be responsible for the
existence, genuineness or value of any of the Collateral or for the validity,
perfection, priority or enforceability of the liens in any of the Collateral,
whether impaired by operation of law or by reason of any action or omission to
act on its part hereunder, except to the extent such action or omission
constitutes gross negligence, bad faith or willful misconduct on the part of the
Collateral Agent, for the validity or sufficiency of the Collateral or any
agreement or assignment contained therein, for the validity of the title of the
Issuer to the Collateral, for insuring the Collateral or for the payment of
taxes, charges, assessments or liens upon the Collateral or otherwise as to the
maintenance of the Collateral. The Collateral Agent shall not be responsible for
filing any financing or continuation statements or recording any documents or
instruments in any public office at any time.
11.4 Indemnification. The Controlling Party agrees to indemnify and
hold harmless each of the Collateral Agent, and its officers, directors, agents
and attorneys, in their respective capacities as such (to the extent not
reimbursed by the Issuer and without limiting the obligation, if any, of the
Issuer to do so), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time be imposed on, incurred by or
asserted against the Collateral Agent in its capacity as such in any way
relating to or arising out of any Financing Document, or the performance of its
duties as Collateral Agent thereunder or any action taken or omitted by such
Collateral Agent in its capacity as such under or in connection with any of the
foregoing; provided that the Controlling Party shall not be liable for the
payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements to the
extent that any of the foregoing result from the Collateral Agent's gross
negligence or willful misconduct as determined by a court of competent
jurisdiction. The agreements in this Section 11.4 shall survive the payment or
satisfaction in full of the Obligations.
11.5 Resignation or Removal of the Collateral Agent. The Collateral
Agent may resign as Collateral Agent upon thirty (30) days' prior written notice
to XLCA, the Swap Counterparty, the Trustee and the Issuer. The Collateral Agent
may be removed at any time following such notice with or without cause by the
Controlling Party, with any such resignation or removal to become effective only
upon the appointment by the Controlling Party of a successor Collateral Agent
under this Section 11.5. If the Collateral Agent shall resign or be removed as
Collateral Agent, then the Controlling Party shall (and if no such successor
shall have been appointed within thirty (30) days of such Collateral Agent's
resignation or removal, such Collateral Agent may) appoint a successor
collateral agent, which successor collateral agent shall be reasonably
acceptable to the Issuer (and shall be deemed acceptable to the Controlling
Party and the Trustee), whereupon such successor collateral agent shall succeed
to the rights, powers and duties of the "Collateral Agent" and the term
"Collateral Agent" shall mean such successor collateral agent effective upon its
appointment, and the former Collateral Agent's rights, powers and duties as
Collateral Agent shall be terminated, without any other or further act
60
or deed on the part of such former Collateral Agent (except that the resigning
Collateral Agent shall deliver all Collateral, subject to Section 12.4, then in
its possession to the successor Collateral Agent) or the Controlling Party. If
the Issuer withholds its acceptance of such successor Collateral Agent or if an
instrument of acceptance by a successor Collateral Agent shall not have been
delivered to the Collateral Agent within 30 days after: (i) the giving by the
resigning Collateral Agent of such notice of resignation or (ii) the giving of
such notice of removal to the removed Collateral Agent, then the retiring
Collateral Agent may petition, at the expense of the Issuer, any court of
competent jurisdiction for the appointment of a successor Collateral Agent.
After any retiring Collateral Agent's resignation or removal hereunder as
Collateral Agent, the provisions of this Agreement shall inure to its benefit as
to any actions taken or omitted to be taken by it while it was Collateral Agent.
11.6 Release of Collateral. Notwithstanding anything to the
contrary contained herein, the Collateral Agent is authorized (without any
further action by any Secured Party) to release the Lien of the Collateral
Documents from any portion of the Collateral that is expressly permitted to be
sold, assigned, transferred or otherwise disposed of in accordance with the
terms of this Agreement and the other Financing Documents. The Collateral Agent
shall execute such documents and take such actions as reasonably requested by,
and at the expense of, the Issuer to effect or evidence such release. The
Collateral Agent shall be entitled to receive an Opinion of Counsel (as defined
in the Indenture) in connection with any such release to the effect that the
conditions precedent to such release under the Financing Documents have been
satisfied. Except as otherwise provided in this Agreement or in the other
Financing Documents, neither the Collateral Agent nor any Co-Collateral Agent
shall release any of the Collateral without the prior written consent of the
Controlling Party.
11.7 Assignment of Rights, Not Assumption of Duties. Anything
herein contained to the contrary notwithstanding, (a) the Issuer shall remain
liable under each of the Financing Documents to which it is a party to the
extent set forth therein to perform all of its duties and obligations
thereunder, (b) the exercise by the Collateral Agent or the Trustee of any of
their rights, remedies or powers hereunder shall not release the Issuer from any
of its duties or obligations under each of the Financing Documents to which it
is a party, and (c) neither the Collateral Agent nor the Trustee shall be
obligated to perform any of the obligations or duties of the Issuer thereunder
or, except as expressly provided herein, to take any action to collect or
enforce any claim for payment assigned hereunder or otherwise.
11.8 Appointment of Co-Collateral Agent. Notwithstanding any other
provisions of this Agreement, at any time, for the purpose of meeting any legal
requirement of any jurisdiction in which any Collateral may at the time be
located, the Collateral Agent shall have the power and may execute and deliver
all instruments to appoint one or more persons to act as its Co-Collateral Agent
of all or any part of the Collateral, and to vest in such persons, in such
capacity and for the benefit or on behalf of the Secured Parties, such title to
the Collateral, or any part thereof, and subject to the other provisions of this
Section 11.8, such powers, duties, obligations, rights and trusts as the
Collateral Agent may consider necessary or desirable, provided that the
appointment of such Co-Collateral Agent shall be subject to the approval of the
Issuer and the Controlling Party, which approval shall not be unreasonably
withheld, and provided further, that any Co-Collateral Agent shall agree to be
liable to the Secured Parties to the extent the Collateral Agent is so liable
pursuant to this Agreement.
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All rights and powers, conferred or imposed upon the
Collateral Agent may be conferred or imposed upon and may be exercised or
performed by a Co-Collateral Agent.
Any notice, request or other writing given to the Collateral
Agent shall be deemed to have been given to the Co-Collateral Agent, as
effectively as if given to such Co-Collateral Agent. Every instrument appointing
any Co-Collateral Agent shall refer to this Agreement and the conditions of this
section.
If any Co-Collateral Agent shall become incapable of acting,
resign or be removed, all of its estates, properties, rights, remedies and
trusts shall vest in and be exercised by the Collateral Agent to the extent
permitted by law.
The appointment of a Co-Collateral Agent shall not relieve the
Collateral Agent from any of its obligations hereunder.
The Collateral Agent shall not be responsible for any willful
misconduct or negligence on the part of any Co-Collateral Agent appointed with
due care and in good faith pursuant to this Section 11.8.
Delivery to the Collateral Agent and/or Trustee of the
financial statements and reports is for informational purposes only and the
Collateral Agent's and/or the Trustee's receipt of such shall not constitute
constructive notice of any information contained therein or determinable from
information contained therein, including the Issuer's compliance with any of its
covenants hereunder (as to which the Collateral Agent and/or the Trustee is
entitle to rely exclusively on officers' certificates).
11.9 XLCA Confirmation Before Release of Certain Funds.
Notwithstanding anything to the contrary in any Financing Document, if XLCA is
the Controlling Party, any funds, cash or obligations to be released in
accordance with the terms of the Depositary Agreement to any Financing Party or
any other Person upon the cure of any Funds Block Condition shall not be so
released (and the Collateral Agent shall not direct the Depositary Agent to
release such funds, cash or obligations) unless XLCA shall have confirmed, in
its absolute discretion, in writing to the Collateral Agent that such Funds
Block Condition has been cured; provided that if a certificate as to the cure of
a Funds Block Condition is delivered to the Collateral Agent and to XLCA in
accordance with the terms of the Financing Documents and requests a release of
funds, cash or obligations as of a specified date, the failure of XLCA to
confirm the cure of such Funds Block Condition on or prior to such specified
date shall, if (notwithstanding anything to the contrary in any Financing
Document) such certificate shall have been received by XLCA at least 5 Business
Days prior to such specified date, be deemed to be such confirmation.
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ARTICLE 12
MISCELLANEOUS
12.1 Addresses. Any communications between the parties hereto or
notices provided herein to be given may be given to the following addresses:
To XLCA:
XL Capital Assurance Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Surveillance
Telecopy: (000) 000-0000
Confirmation: (000) 000-0000
(IN EACH CASE IN WHICH NOTICE OR OTHER COMMUNICATION
TO XLCA REFERS TO AN ISSUER EVENT OF DEFAULT OR A
PROJECT EVENT OF DEFAULT, A CLAIM ON THE POLICY OR
THE SWAP POLICY OR WITH RESPECT TO WHICH FAILURE ON
THE PART OF XLCA TO RESPOND SHALL BE DEEMED TO
CONSTITUTE CONSENT OR ACCEPTANCE, THEN A COPY OF SUCH
NOTICE OR OTHER COMMUNICATION SHOULD ALSO BE SENT TO
THE ATTENTION OF EACH OF THE GENERAL COUNSEL AND
SURVEILLANCE AND SHALL BE MARKED TO INDICATE "URGENT
MATERIAL ENCLOSED.")
To the Trustee:
Law Debenture Trust Company of New York
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
To the Collateral Agent:
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 0 Xxxx
Xxx Xxxx, Xxx Xxxx 10286
Attention: Corporate Trust Department
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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To the Swap Counterparty:
Xxxxxxx Xxxxx Mitsui Marine Derivatives Products, L.P.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Swap Operations (with a copy to Treasury
Operations)
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
To the Issuer:
NRG Peaker Finance Company LLC
000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxxx, XX 00000-0000
Attention: General Counsel
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to (which shall not constitute notice):
Xxxxxxxx & Xxxxx LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Telephone: 000-000-0000
Telecopy: 212-446-4900
To the Project Companies:
To Big Cajun Project Company:
Big Cajun I Peaking Power LLC
000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxxx, XX 00000-0000
Attention: General Counsel
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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with a copy to (which shall not constitute notice):
Xxxxxxxx & Xxxxx LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Telephone: 000-000-0000
Telecopy: 212-446-4900
To Bayou Cove Project Company:
Bayou Cove Peaking Power, LLC
000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxxx, XX 00000-0000
Attention: General Counsel
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to (which shall not constitute notice):
Xxxxxxxx & Xxxxx LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Telephone: 000-000-0000
Telecopy: 212-446-4900
To Rockford I Project Company:
NRG Rockford LLC
000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxxx, XX 00000-0000
Attention: General Counsel
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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with a copy to (which shall not constitute notice):
Xxxxxxxx & Xxxxx LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Telephone: 000-000-0000
Telecopy: 212-446-4900
To Rockford II Project Company:
NRG Rockford II LLC
000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxxx, XX 00000-0000
Attention: General Counsel
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to (which shall not constitute notice):
Xxxxxxxx & Xxxxx LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Telephone: 000-000-0000
Telecopy: 212-446-4900
To Sterlington Project Company:
NRG Sterlington Power LLC
000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxxx, XX 00000-0000
Attention: General Counsel
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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with a copy to (which shall not constitute notice):
Xxxxxxxx & Xxxxx LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Telephone: 000-000-0000
Telecopy: 212-446-4900
All notices or other communications required or permitted to
be given hereunder shall be in writing and shall be considered as properly given
(a) if delivered in person, (b) if sent by overnight delivery service (including
Federal Express, UPS, ETA, Xxxxx, DHL, AirBorne and other similar overnight
delivery services), (c) in the event overnight delivery services are not readily
available, if mailed by first class United States Mail, postage prepaid,
registered or certified with return receipt requested, (d) if sent by prepaid
telegram or by facsimile or (e) other electronic means (including electronic
mail) confirmed by facsimile or telephone (except to the Collateral Agent).
Notice so given shall be effective upon receipt by the addressee, except that
communication or notice so transmitted by facsimile or other direct electronic
means shall be deemed to have been validly and effectively given on the day (if
a Business Day and, if not, on the next following Business Day) on which it is
transmitted if transmitted before 4:00 p.m., recipient's time, and if
transmitted after that time, on the next following Business Day; provided,
however, that if any notice is tendered to an addressee and the delivery thereof
is refused by such addressee, such notice shall be effective upon such tender.
Any party shall have the right to change its address for notice hereunder to any
other location within the continental United States by giving of 30 days' notice
to the other parties in the manner set forth above.
12.2 Additional Security; Right to Set-Off. Any deposits or other
sums at any time credited or due and any Project Revenues, securities or other
property of the Issuer in the possession of the Collateral Agent may at all
times be treated as collateral security for the payment of the Issuer's
obligations under the Insurance and Reimbursement Agreement, the Bonds, the Swap
Agreement and all other obligations of the Issuer under this Agreement and the
other Financing Documents, and the Issuer hereby pledges to the Collateral
Agent, for the benefit of the Secured Parties, and grants the Collateral Agent a
first priority security interest in and to all such deposits, sums, securities
or other property (subject to Issuer Permitted Liens). Regardless of the
adequacy of any other collateral, the Collateral Agent may execute or realize on
its security interest in any such deposits or other sums credited by or due from
the Collateral Agent to the Issuer, may apply any such deposits or other sums to
or set them off against Obligations at any time after the occurrence and during
the continuation of any Issuer Event of Default.
12.3 Delay and Waiver. No delay or omission to exercise any right,
power or remedy accruing to XLCA, the Swap Counterparty or the Trustee or any
other Secured Party upon the occurrence of any Issuer Event of Default or Issuer
Inchoate Default or any Project Event of Default or Project Inchoate Default or
any breach or default of any other Party under this Agreement or any other
Financing Document shall impair any such right, power or remedy of any Secured
Party, nor shall it be construed to be a waiver of any such breach or default,
or an acquiescence therein, or of or in any similar breach or default thereafter
occurring, nor shall any
67
waiver of any single Issuer Event of Default, Issuer Inchoate Default, Project
Event of Default or Project Inchoate Default or other breach or default be
deemed a waiver of any other Issuer Event of Default, Issuer Inchoate Default,
Project Event of Default or Project Inchoate Default or other breach or default
theretofore or thereafter occurring. Any waiver, permit, consent or approval of
any kind or character on the part of the Collateral Agent, XLCA, the Swap
Counterparty and/or the Trustee of any Issuer Event of Default, Issuer Inchoate
Default, Project Event of Default or Project Inchoate Default or other breach or
default under this Agreement or any other Financing Document, or any waiver on
the part of the Collateral Agent, XLCA, the Swap Counterparty and/or the Trustee
of any provision or condition of this Agreement or any other Financing Document,
must be in writing and shall be effective only to the extent in such writing
specifically set forth. All remedies, either under this Agreement or any other
Financing Document or by law or otherwise afforded to the Collateral Agent,
XLCA, the Swap Counterparty or the Trustee and the other Secured Parties shall
be cumulative and not alternative.
12.4 Costs, Expenses and Attorneys' Fees. Without duplication of
any other provision of any Financing Document regarding the payment of fees,
costs and/or expenses, the Issuer will pay to each of XLCA, the Swap
Counterparty, the Trustee and the Collateral Agent (a) all of their reasonable
costs and expenses in connection with the preparation, negotiation, closing and
administering of this Agreement and the other Financing Documents, and the
documents contemplated hereby or thereby, including the reasonable fees,
expenses and disbursements of attorneys and agents retained by such Persons in
connection with the preparation of such documents and any amendments hereof or
thereof, or the preparation, negotiation, closing, administration or enforcement
of any Financing Document or any rescission or restriction thereof, (b) the
reasonable fees, expenses and disbursements of the Independent Consultants and
any other engineering or insurance consultants to XLCA, the Swap Counterparty
and the Trustee and incurred in connection with the Financing Documents or the
Transaction prior to the Closing Date, and (c) the travel and out-of-pocket
costs incurred by such Persons following the Closing Date (provided that any
such costs described in this clause (c), or related group of such costs, in
excess of $10,000 shall be approved by the Issuer). Without limiting the
foregoing, the Issuer will reimburse XLCA, the Swap Counterparty, the Trustee
and the Collateral Agent for all costs and expenses, including reasonable
attorneys' fees and those of their agents, expended or incurred by such Persons
in enforcing this Agreement or the other Financing Documents in connection with
an Issuer Event of Default, in actions for declaratory relief in any way related
to this Agreement or in collecting any sum which becomes due to such Persons on
the Policy, the Swap Policy, the Bonds or otherwise under the Financing
Documents. The provisions of this Section 12.4 shall survive the termination of
this Agreement.
12.5 Entire Agreement. This Agreement and any agreement, document
or instrument attached hereto or referred to herein integrate all the terms and
conditions mentioned herein or incidental hereto and supersede all oral
negotiations and prior writings in respect to the subject matter hereof. In the
event of any conflict between the terms, conditions and provisions of this
Agreement and any such other agreement, document or instrument, the terms,
conditions and provisions of this Agreement shall prevail.
12.6 Governing Law. This Agreement, and any instrument or agreement
required hereunder (to the extent not otherwise expressly provided for therein),
shall be governed by, and
68
construed under, the laws of the State of New York, without reference to
conflicts of laws (other than Section 5-1401 of the New York General Obligations
Law).
12.7 Severability. In case any one or more of the provisions
contained in this Agreement should be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
shall not in any way be affected or impaired thereby.
12.8 Headings. Headings have been inserted in this Agreement as a
matter of convenience for reference only and such article and section headings
shall not be used in the interpretation of any provision of this Agreement.
12.9 No Partnership, etc. XLCA, the Swap Counterparty, the Trustee,
the Collateral Agent, the Issuer and the Project Companies intend that the
relationship between them shall be solely that of independent contracting
parties. Nothing contained in this Agreement, the Policy, the Swap Policy, the
Insurance and Reimbursement Agreement, the Bonds, the Indenture or any other
Financing Document shall be deemed or construed to create a partnership,
tenancy-in-common, joint tenancy, joint venture or co-ownership by or between
XLCA, the Swap Counterparty, the Trustee, the Collateral Agent, the Issuer, the
Project Companies or any other Person. XLCA, the Swap Counterparty, the
Collateral Agent and the Trustee shall not be in any way responsible or liable
for the debts, losses, obligations or duties of the Project Companies, the
Issuer or any other Person with respect to any Project or otherwise. All
obligations to pay real property or other taxes, assessments, insurance premiums
and all other fees and charges arising from the ownership, operation or
occupancy of any Project, and to perform all obligations and other agreements
and contracts relating to any Project or any other asset or liability of any
Project Company or the Issuer, shall be the sole responsibility of the Project
Companies and the Issuer.
12.10 Limitation on Liability. No claim shall be made by any Project
Company, the Issuer, NRG Energy or any of their Affiliates against XLCA, the
Swap Counterparty, the Trustee, the Collateral Agent, any other Secured Party or
any of their respective Affiliates, directors, employees, attorneys or agents
for any special, indirect, consequential or punitive damages in respect of any
breach or wrongful conduct (whether or not the claim therefor is based on
contract, tort or duty imposed by law), in connection with, arising out of or in
any way related to the transactions contemplated by this Agreement or the other
Operative Documents or any act or omission or event occurring in connection
therewith; and the Issuer hereby waives, releases and agrees not to xxx upon any
such claim for any such damages, whether or not accrued and whether or not known
or suspected to exist in its favor.
12.11 Waiver of Jury Trial. THE PARTIES HERETO HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH, THIS AGREEMENT OR ANY OTHER FINANCING DOCUMENT, OR ANY COURSE
OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS
OF THE PARTIES HERETO. THIS PROVISION IS A MATERIAL INDUCEMENT FOR XLCA AND THE
TRUSTEE TO ENTER INTO THIS AGREEMENT.
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12.12 Consent to Jurisdiction. XLCA, the Swap Counterparty, the
Trustee, the Collateral Agent, the Issuer and the Project Companies agree that
any legal action or proceeding by or against the Issuer or any Project Company
or with respect to or arising out of this Agreement, the Policy, the Swap
Policy, the Insurance and Reimbursement Agreement, the Bonds, the Indenture or
any other Financing Document may be brought in or removed to the courts of the
State of New York, in and for the County of New York, or of the United States of
America for the Southern District of New York, as XLCA, the Swap Counterparty,
the Trustee or the Collateral Agent may elect. By execution and delivery of this
Agreement, XLCA, the Trustee, the Collateral Agent, the Issuer and the Project
Companies accept, for themselves and in respect of their property, generally and
unconditionally, the jurisdiction of the aforesaid courts. XLCA, the Swap
Counterparty, the Trustee, the Collateral Agent, the Issuer and the Project
Companies irrevocably consent to the service of process out of any of the
aforementioned courts in any manner permitted by law. Nothing herein shall
affect the right of XLCA, the Trustee or the Collateral Agent to bring legal
action or proceedings in any other competent jurisdiction, including judicial or
non-judicial foreclosure of any Mortgage. XLCA, the Swap Counterparty the
Trustee, the Collateral Agent, the Issuer and the Project Companies further
agree that the aforesaid courts of the State of New York and of the United
States of America shall have exclusive jurisdiction with respect to any claim or
counterclaim of the Issuer based upon the assertion that the rate of interest
charged by XLCA or owing to the Bonds under this Agreement, the Policy, the Swap
Policy, the Insurance and Reimbursement Agreement, the Indenture and/or the
other Financing Documents is usurious. XLCA, the Swap Counterparty, the Trustee,
the Collateral Agent, the Issuer and the Project Companies hereby waive any
right to stay or dismiss any action or proceeding under or in connection with
any or all of any Project, this Agreement or any other Financing Document
brought before the foregoing courts on the basis of forum non-conveniens. The
Issuer and each Project Company hereby irrevocably appoints and designates
Corporation Service Company, as its true and lawful attorney and duly authorized
agent for acceptance of service of legal process, and agrees to maintain
Corporation Service Company as such. The Issuer and each Project Company agrees
that service of such process upon such person shall constitute personal service
of such process upon it.
12.13 Usury. Nothing contained in this Agreement or any other
Financing Document shall be deemed to require the payment of interest or other
charges by the Issuer or any other Person in excess of the amount which any
Secured Party may lawfully charge under any applicable usury laws. In the event
any Secured Party shall collect moneys which are deemed to constitute interest
which would increase the effective interest rate to a rate in excess of that
permitted to be charged by applicable Legal Requirements, all such sums deemed
to constitute interest in excess of the legal rate shall, upon such
determination, at the option of such Secured Party, be returned to the Issuer or
credited against the Obligations.
12.14 Successors and Assigns. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns. Neither the Issuer nor any Project Company
may assign or otherwise transfer any of its rights under this Agreement or any
Financing Document except as consented to in writing by the Controlling Party or
as otherwise expressly permitted by any Financing Document. XLCA may assign any
of its rights under this Agreement in connection with any assignment made
pursuant to Section 5.4 of the Insurance and Reimbursement Agreement. The
Trustee and Collateral Agent may assign their rights under this Agreement in
connection with the appointment of any
70
successor pursuant to this Agreement or the Indenture and the Swap Counterparty
may assign its rights under this Agreement in favor of any swap counterparty to
any Replacement Swap Agreement.
12.15 Counterparts. This Agreement and any amendments, waivers,
consents or supplements hereto or in connection herewith may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an original, but
all such counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.
12.16 Term and Termination. This Agreement and each other Financing
Document shall take effect on the Closing Date and shall remain in effect,
without prejudice to Section 12.17 or Section 12.18, until the date that is 366
days after all of the Obligations shall have been irrevocably performed or
satisfied in full in cash; provided that if NRG Energy shall have issued and
provided the Reinstatement Guaranty, the Issuer and each Project Company shall
be released from their respective obligations under the Financing Documents, and
all Collateral shall be released from the Lien of the Collateral Documents, at
the time such Reinstatement Guaranty is issued and provided by NRG Energy.
12.17 Reinstatement. The Issuer's and each Project Company's
obligations under the Financing Documents shall automatically be reinstated if
for any reason any payment made by or on behalf of the Issuer under any
Financing Document is rescinded or otherwise restored to it, whether as a result
of any proceedings in bankruptcy, reorganization or otherwise with respect to
the Issuer or any other Person or as a result of any settlement or compromise
with any Person (including any Project Company) in respect of such payment.
12.18 Survival. All representations, warranties, covenants and
agreements made herein and in the certificates or other instruments delivered in
connection with or pursuant to this Agreement and the other Financing Documents
shall be considered to have been relied upon by the parties hereto and shall
survive the execution and delivery of this Agreement and the other Financing
Documents and the issuance of the Policy, the Swap Policy and the Bonds.
Notwithstanding anything in this Agreement or implied by law to the contrary,
the agreements of the Issuer and the Project Companies set forth in Sections
9.1, 10.1 and 12.4 and Article 11 and the agreements of the Collateral Agent
contained in Article 11 shall survive the payment and performance of the Bonds
and other Obligations and the termination of this Agreement as shall such other
provisions in any Financing Document expressly stated to do so.
12.19 Partial Termination. Upon the occurrence of a Project Release
Event with respect to any Project Company, all of such Project Company's
obligations (including its Guaranty) hereunder and under the other Financing
Documents shall terminate and the Project Company Collateral of such Project
Company shall no longer be subject to the Lien of the Collateral Documents. A
Project Release Event with respect to the Rockford II Project Company shall be
deemed also to be a Project Release Event with respect to the Rockford II
Equipment Company. Notwithstanding anything to the contrary in this Agreement,
each Secured Party agrees to
71
execute such documents, and take such other actions, as reasonably requested by,
and at the expense of, the Issuer to effect and evidence such termination and
release.
12.20 No XLCA Liability or Duties. Neither XLCA nor any of its
officers, directors or employees shall be liable or responsible for: (a) the use
which may be made of each of the Policies by or for the Collateral Agent, the
Swap Counterparty, the Depositary Agent, the Trustee, any depositary, any bank,
any Bondholder or other purchaser of Bonds or any other Person or for any acts
or omissions of any such Person in connection therewith; (b) the validity,
sufficiency, accuracy or genuineness of documents or of any endorsements thereon
delivered to XLCA (or its Fiscal Agent) in connection with any claim under
either of the Policies, or of any signatures thereon, even if such documents or
signatures should in fact prove to be in any or all respects invalid,
insufficient, fraudulent or forged or (c) any acts or omissions to act of the
Issuer, any Project Company, the Swap Counterparty, the Collateral Agent, the
Depositary Agent, the Trustee, any Bondholder or any other person in connection
with the Collateral. In furtherance and not in limitation of the foregoing, XLCA
(or its Fiscal Agent) may accept documents that appear on their face to be in
order, without responsibility for further investigation. In making any decision
or determination, taking any action or omitting to take any action, giving or
withholding any consent, waiver or agreement (whether as Controlling Party or
otherwise) in respect of matters arising under or in connection with any
Financing Document and in each other respect, XLCA shall have no implied duty to
any other party to this Agreement or any other Person and shall act at all times
as it shall, in its absolute, discretion see fit.
12.21 Calculation of Net Annual Payment Pursuant to Swap Agreement.
Within 17 days after each Determination Date, the Swap Counterparty shall
deliver to the Collateral Agent a certificate of a Responsible Officer of the
Swap Counterparty setting forth the net payment amount payable by the Swap
Counterparty to the Issuer or by the Issuer to the Swap Counterparty, as the
case may be, pursuant to the Swap Agreement on the immediately succeeding Annual
Scheduled Payment Date.
[SIGNATURE PAGES FOLLOW]
72
IN WITNESS WHEREOF, the parties hereto, by their officers duly
authorized, intending to be legally bound, have caused this Common Agreement to
be duly executed and delivered as of the date first above written.
NRG PEAKER FINANCE COMPANY LLC,
as Issuer
By:____________________________________________________
Name:
Title:
BIG CAJUN I PEAKING POWER LLC,
as Project Company
By:____________________________________________________
Name:
Title:
BAYOU COVE PEAKING POWER, LLC,
as Project Company
By:____________________________________________________
Name:
Title:
NRG ROCKFORD LLC,
as Project Company
By:____________________________________________________
Name:
Title:
73
NRG ROCKFORD II LLC,
as Project Company
By:____________________________________________________
Name:
Title:
NRG STERLINGTON POWER LLC,
as Project Company
By:____________________________________________________
Name:
Title:
XL CAPITAL ASSURANCE INC.
By:____________________________________________________
Name:
Title:
LAW DEBENTURE TRUST COMPANY OF NEW YORK,
as Trustee
By:____________________________________________________
Name:
Title:
THE BANK OF NEW YORK,
as Collateral Agent
By:____________________________________________________
Name:
Title:
74
XXXXXXX XXXXX MITSUI MARINE
DERIVATIVE PRODUCTS, L.P.,
as Swap Counterparty
By:____________________________________________________
Name:
Title:
75
ANNEX A
DEFINITIONS
1
SCHEDULE I
ROCKFORD II SPARE PARTS
1. One complete set of Row 1 Blades for Siemens-Westinghouse V84.3A(2)
combustion turbine generator
2. One complete set of Row 1 Vanes for Siemens-Westinghouse V84.3A(2)
combustion turbine generator
1
EXHIBIT A
FORM OF MONTHLY AFFILIATED TRANSACTION REPORT
A-1
EXHIBIT B
FORM OF MONTHLY OPERATIONS REPORT
B-1
EXHIBIT C
FORM OF MONTHLY O&M EXPENSE REPORT
C-1
EXHIBIT D
FORM OF MONTHLY POWER MARKETING
PERFORMANCE TRACKING REPORT
D-1
EXHIBIT E
FORM OF MONTHLY POWER MARKETING REPORT
E-1
EXHIBIT F
FORM OF DEBT SERVICE COVERAGE RATIO CERTIFICATE
_______________ ___, _____ (1)
XL Capital Assurance Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Surveillance
Law Debenture Trust Company of New York, as Trustee
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
The Bank of New York, as Collateral Agent
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Department
Xxxxxxx Sachs Mitsui Marine Derivations Products, L.P., as Swap Counterparty
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Swap Administration (with a copy to Treasury Administration)
Re: NRG Peaker Finance Company LLC-
Debt Service Coverage Ratio
Ladies and Gentlemen:
NRG Peaker Finance Company LLC (the "Issuer") is delivering
this certificate pursuant to Section 2.7(a) of the Amended and Restated Common
Agreement, dated as of January 6, 2004 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "Common Agreement"),
among (1) XL Capital Assurance Inc., (2) Xxxxxxx Xxxxx Mitsui Marine Derivative
Products, L.P., as Swap Counterparty, (3) The Law Debenture Trust Company of New
York, as Trustee, (4) The Bank of New York, as Collateral Agent, (5) the Issuer,
and (6) each party thereto identified as a Project Company on the signature
pages
---------------------------
(1) Certificate to be dated and delivered within 20 days after the
applicable Determination Date.
F-1
thereto. Capitalized terms used but not defined herein shall have the meanings
given in Annex A to the Common Agreement.
1. Debt Service Coverage Ratio.
The Issuer hereby certifies, as of the date hereof, that the
Debt Service Coverage Ratio for the Determination Period from [November 1,
______ through and including October 31, _____] (2) (the "DSCR") is equal to
________________________.
2. Supporting Documentation.
The following documentation is attached hereto as Annex A in
support of the calculation of the DSCR set forth above: [INSERT DESCRIPTION OF
SUPPORTING DOCUMENTATION]
[SIGNATURE PAGE FOLLOWS]
------------------------
(2) Insert appropriate dates for each Determination Period.
F-2
IN WITNESS WHEREOF, the Issuer has caused this certificate to
be duly executed and delivered by a Responsible Officer of the Issuer as of the
date first above written.
NRG Peaker Finance Company LLC
By:____________________________________________________
Name:
Title:
F-3
EXHIBIT G
FORM OF EXPERIENCE AMOUNT PERCENTAGE CERTIFICATE
__________ ___, _____ (1)
XL Capital Assurance Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Surveillance
Law Debenture Trust Company of New York, as Trustee
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
The Bank of New York, as Collateral Agent
000 Xxxxxxx Xxxxxx, Xxxxx 0 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Department
Xxxxxxx Xxxxx Mitsui Marine Derivations Products, L.P., as Swap Counterparty
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Swap Administration (with a copy to Treasury Administration)
Re: Experience Amount Percentage
Ladies and Gentlemen:
NRG Peaker Finance Company LLC (the "Issuer") is delivering
this certificate pursuant to Section 2.7(b) of the Amended and Restated Common
Agreement, dated as of January 6, 2004 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "Common Agreement"),
among (1) XL Capital Assurance Inc., (2) Xxxxxxx Xxxxx Mitsui Marine Derivative
Products, L.P., as Swap Counterparty, (3) The Law Debenture Trust Company of New
York, as Trustee, (4) The Bank of New York, as Collateral Agent, (5) the Issuer,
and (6) each party thereto identified as a Project Company on the signature
pages
-------------------------
(1) Certificate to be dated and delivered no later than 20 days after the
applicable Determination Date and subsequently in accordance with Section 2.7(b)
of the Common Agreement.
G-1
thereto. Capitalized terms used but not defined herein shall have the meanings
given in Annex A to the Common Agreement.
1. Experience Amount Percentage.
(a) In respect of the Determination Date immediately
preceding the Annual Scheduled Payment Date falling on [INSERT DATE], the
Experience Amount Margin for each Project Company is as follows:
(1) Experience Amount Margin for the Bayou Cove
Project Company is $[PROVIDE EXPERIENCE AMOUNT MARGIN FOR THE BAYOU COVE PROJECT
COMPANY FOR THE DETERMINATION PERIOD ENDING ON SUCH DETERMINATION DATE];
(2) Experience Amount Margin for the Big Cajun
Project Company is $[PROVIDE EXPERIENCE AMOUNT MARGIN FOR THE BIG CAJUN PROJECT
COMPANY FOR THE DETERMINATION PERIOD ENDING ON SUCH DETERMINATION DATE];
(3) Experience Amount Margin for the Rockford I
Project Company is $[PROVIDE EXPERIENCE AMOUNT MARGIN FOR THE ROCKFORD I PROJECT
COMPANY FOR THE DETERMINATION PERIOD ENDING ON SUCH DETERMINATION DATE];
(4) Experience Amount Margin for the Rockford II
Project Company is $[PROVIDE EXPERIENCE AMOUNT MARGIN FOR THE ROCKFORD II
PROJECT COMPANY FOR THE DETERMINATION PERIOD ENDING ON SUCH DETERMINATION DATE];
and
(5) Experience Amount Margin for the Sterlington
Project Company is $[PROVIDE EXPERIENCE AMOUNT MARGIN FOR THE STERLINGTON
PROJECT COMPANY FOR THE DETERMINATION PERIOD ENDING ON SUCH DETERMINATION DATE].
(b) The Experience Amount Percentage for each Project
Company as of the date hereof is as follows:
(1) Experience Amount Percentage for the Bayou
Cove Project Company is [PROVIDE EXPERIENCE AMOUNT PERCENTAGE FOR THE BAYOU COVE
PROJECT COMPANY];
(2) Experience Amount Percentage for the Big
Cajun Project Company is [PROVIDE EXPERIENCE AMOUNT PERCENTAGE FOR THE BIG CAJUN
PROJECT COMPANY];
(3) Experience Amount Percentage for the
Rockford I Project Company is [PROVIDE EXPERIENCE AMOUNT PERCENTAGE FOR THE
ROCKFORD I PROJECT COMPANY];
(4) Experience Amount Percentage for the
Rockford II Project Company is [PROVIDE EXPERIENCE AMOUNT PERCENTAGE FOR THE
ROCKFORD II PROJECT COMPANY]; and
(5) Experience Amount Percentage for the
Sterlington Project Company is [PROVIDE EXPERIENCE AMOUNT PERCENTAGE FOR THE
STERLINGTON PROJECT COMPANY].]
G-2
2. Supporting Documentation.
The following documentation is attached hereto as Annex A in
support of the calculations described above: [INSERT DESCRIPTION OF SUPPORTING
DOCUMENTATION]
[SIGNATURE PAGE FOLLOWS]
G-3
IN WITNESS WHEREOF, the Issuer has caused this Experience
Amount Percentage Certificate to be duly executed and delivered by a Responsible
Officer of the Issuer as of the date first above written.
NRG Peaker Finance Company LLC
By:____________________________________________________
Name:
Title:
G-4
EXHIBIT H
INSURANCE REQUIREMENTS
Defined terms used but not defined in this Exhibit have the meanings
given to such terms in Annex A to the Common Agreement to which this Exhibit is
attached.
1. Each Project Company (the "Project Company") shall,
without cost to any Secured Party, maintain or cause to be maintained on its
behalf in effect at all times the types of insurance required by the following
provisions, with insurance companies authorized to do business in the state of
Illinois and Louisiana, as applicable, and rated "A-" or better, with a minimum
financial size rating of "VIII" by Best's Insurance Guide and Key Ratings (or an
equivalent rating by another nationally recognized insurance rating agency of
similar standing if Best's Insurance Guide and Key Ratings shall no longer be
published) or other insurance companies of recognized responsibility
satisfactory to the Controlling Party (if XLCA is the Controlling Party) or the
Trustee in consultation with the Insurance Consultant, but without any need for
the consent of the Bondholders (if XLCA is not the Controlling Party), until the
earlier of (a) the date on which all Obligations have been fully discharged and
(b) the date on which a Project Release Event occurs with respect to the Project
Company.
(a) All Risk Property: From and after the Closing Date
each Project Company will obtain and maintain all risk property insurance for
the Project, including boiler and machinery. All risk cover shall include but
not be limited to coverage for the perils of flood, earthquake including
sinkhole, collapse and subsidence. Flood, earthquake and windstorm may be
subject to a sublimit of $50,000,000. Other Policy coverages will also be
subject to sublimits in accordance with Policy terms and conditions. Boiler and
machinery cover shall be written on a comprehensive basis and include machinery
breakdown. The policy limits for physical damage shall be equivalent to the full
replacement value of the facility and shall contain no co-insurance provisions.
Transit and off-site coverage shall be for the full replacement cost of the
values at risk for any one conveyance subject to a sublimit of $5,000,000. The
policy/policies shall also contain coverage for demolition, increased costs of
construction including the undamaged portion, subject to a minimum of
$10,000,000. Terrorism coverage to be provided with sublimits equal to the
lesser of the Full Replacement cost or $50,000,000, if reasonably and
commercially available. The deductibles for such property insurance shall not be
greater than $1,500,000 per occurrence for physical damage for all perils,
except terrorism, which has a deductible of $11,000,000; losses associated with
the peril of windstorm at Bayou Cove, which deductible equals 2% of total
Property Damage/Total Insured Values, with a minimum of $1,000,000; a $2,500,000
per occurrence deductible with respect to Property Damage losses to the
respective NRG Rockford LLC and NRG Rockford II LLC Turbine/Generator Units;
and, a Business Interruption (BI) waiting period deductible of sixty (60) days,
which might exceed $1,500,000.
(b) Commercial general liability insurance on an
"occurrence" policy form or AEGIS, or equivalent, claims-first-made form,
including coverage for premises/operations, explosion, collapse and underground
hazards, products/completed operations, broad form property damage, blanket
contractual liability, independent contractor's, personal injury and sudden and
accidental pollution liability for the Project Company and for operators and
H-1
contractors, with primary coverage limits of no less than $1,000,000 for bodily
injury or death to one or more persons, or damage to property resulting from any
one occurrence, and a $1,000,000 aggregate limit.
The commercial general liability policy shall also include a
severability of interest/cross liability clause. Work performed by others for
the Project Company shall not commence until a certificate of insurance has been
delivered verifying current coverages as outlined above, and with the exception
of the Workers' Compensation and pollution liability coverages, shall include
the Project Company as insured or additional insured and the Secured Parties as
additional insureds. Proof of Workers' Compensation coverage shall be provided
to the Project Company, and such coverage shall include a waiver of subrogation
in favor of Project Company. Deductibles in excess of $1,000,000 shall be
subject to review and reasonable approval by the Controlling Party (if XLCA is
the Controlling Party) or the Trustee in consultation with the Insurance
Consultant, but without any need for the consent of the Bondholders (if XLCA is
not the Controlling Party).
(c) Automobile liability insurance, including coverage
for owned, non-owned and hired automobiles for both bodily injury and property
damage and containing appropriate no-fault insurance provisions or other
endorsements in accordance with state legal requirements, with limits of no less
than $1,000,000 per accident with respect to bodily injury, property damage or
death.
(d) Workers compensation insurance and employer's
liability, with a limit of not less than $1,000,000, disability benefits
insurance and such other forms of insurance which the Project Company is
required to provide by law, providing statutory benefits and other states'
endorsement and USL&H Act coverage and Xxxxx Act (if any exposure exists),
covering loss resulting from injury, sickness, disability or death of the
employees of the Project Company. Work performed by others for the Project
Company shall not commence until a certificate of insurance has been delivered
verifying coverages outlined above to be in place.
(e) Umbrella Excess Liability Insurance of not less than
$35,000,000 per occurrence and in the aggregate. Such coverages shall be on a
per occurrence policy form or the AEGIS, or equivalent, claims-first-made form
and shall respond excess of underlying limits provided by the policies described
in paragraphs (c), (d) and (e) above whose limits shall apply toward the
$35,000,000 limits set forth in this paragraph (f). The umbrella and/or excess
policies shall not contain endorsements which restrict coverages as set forth in
paragraphs (b), (c) and (d) above, and which are provided in the underlying
policies. If the policy or policies provided under this paragraph (f) contain(s)
aggregate limits applying to operations of Affiliates of NRG Energy or the
Issuer, other than the Project Companies, and such limits are diminished below
$25,000,000 by any incident, occurrence, claim, settlement or judgment against
such insurance which has caused the carrier to establish a reserve, the Project
Company shall take immediate steps to restore such aggregate limits or shall
provide other equivalent insurance protection for such aggregate limits.
(f) Watercraft liability and protection and indemnity, to
the extent exposure exists, in an amount not less than $10,000,000 for all
owned, non-owned and hired watercraft used in connection with the Project
Company's activities. Such coverage can be accomplished under policies provided
pursuant to general liability policies, protection and indemnity policies or
separate
H-2
watercraft liability policies. Total Limits can be maintained through
the use of any combination of primary and excess Marine Liability Policies.
(g) Aircraft liability, to the extent exposure exists, in
an amount not less than $10,000,000 for all owned, non-owned and hired aircraft,
fixed wing or rotary, used in connection with the Project Company's activities.
(h) Such other or additional insurance (as to risks
covered, policy amounts, policy provisions or otherwise) as, under Prudent
Utility Practices in the reasonable judgment of XLCA in consultation with the
Insurance Consultant (if XLCA is the Controlling Party) or the Trustee in
consultation with the Insurance Consultant, but without any need for the consent
of the Bondholders (if XLCA is not the Controlling Party), are from time to time
insured against for property and facilities similar in nature.
(i) All major contractors and subcontractors, shall,
prior to performing work for any Project Company, supply proper evidence of
insurance as set forth in paragraphs 1(b), 1(c), and 1(d), above. If required by
Contract, the contractor and/or subcontract may also be required to provide
coverage for the exposures noted in 1(a), above. If they are required to provide
those policies, then Project Company must be included on the Policy as a Loss
Payee, as its interest may appear. The Project Company shall use its discretion
in requiring higher limits should the exposure merit limits greater than those
set forth above. Such insurance, with the exception of workers compensation,
supplied by these parties shall:
(i) add the Project Company and the Secured
Parties as additional insureds;
(ii) be primary as respects insurance provided by
the Project Company and the Secured Parties;
(iii) waive rights of subrogation against the
Project Company and the Secured Parties;
(iv) continue in force until obligations of the
applicable contractor or subcontractor to the Project Company
are fulfilled.
With respect to the Workers' Compensation coverage of the
contractor/subcontractor, evidence of such coverage shall be satisfactory if
that evidence reflects that subrogation has been waived in favor of the Project
Company.
2. All policies wherein the Secured Parties have an
insurable interest shall insure the interests of the Collateral Agent for the
benefit of the Secured Parties as well as the Project Company and all policies,
with the exception of workers compensation insurance, shall name the Secured
Parties as additional insureds. Each policy shall provide for a waiver of
subrogation against the Secured Parties and the Project Company. Each such
policy shall provide that if any premium or installment is not paid when due, or
if such insurance is to be cancelled, terminated or materially changed in a
manner that adversely affects the Secured Parties , the insurers (or their
representatives) will promptly notify the Project Company and the Collateral
Agent and any such cancellation, termination or change shall not be effective
until 60
H-3
days after receipt of such notice by the Controlling Party and the additional
insureds, with the exception of non-payment of premium which will be 10 days
notice.
3. All policies of insurance required to be maintained
pursuant to Section 1(a) shall provide that the proceeds of such policies shall
be payable solely to the Collateral Agent pursuant to a standard first mortgage
endorsement substantially equivalent to the Lenders Loss Payable Endorsement
Form CP 1218019. All policies (other than in respect to liability or workers
compensation insurance) shall insure the interests of the Secured Parties
regardless of any breach or violation by the Project Company of warranties,
declarations or conditions contained in such policies, any action or inaction of
the Project Company or others, or any foreclosure relating to the Project or any
change in ownership of all or any portion of the Project, subject to the review
and approval of Underwriters (the foregoing may be accomplished by the use of
the Lender Loss Payable Endorsement required above).
4. In the event that the Project Company fails to
respond in a reasonable, timely and appropriate manner to take any steps
necessary or reasonably requested by the Controlling Party to collect from any
insurers for any loss covered by any insurance required to be maintained by this
Exhibit C, the Controlling Party may instruct the Collateral Agent to make all
proofs of loss, adjust all claims and/or receive all or any part of the proceeds
of the foregoing insurance policies, either in the name of the Collateral Agent,
on behalf of the Secured Parties, or the name of the Project Company; provided,
however, that the Project Company shall, upon request and at the Project
Company's own cost and expense, make all proofs of loss and take all other steps
necessary or reasonably requested to collect from insurers for any loss covered
by any insurance required to be obtained by this Exhibit C.
5. In the event any insurance (including the limits or
deductibles thereof) hereby required to be maintained, other than insurance
required by law to be maintained, shall not be available and commercially
feasible in the commercial insurance market, the Project Company shall not be
required to maintain such insurance if it delivers to the Controlling Party (a)
a certificate of the Insurance Consultant to the effect that such insurance is
not available and commercially feasible in the commercial insurance market and
(b) a certificate of a Responsible Officer of the Project Company to the effect
that the failure to maintain such insurance could not reasonably be expected to
have a Project Material Adverse Effect
6. In the event that any policy is written on a
"claims-made" basis and such policy is not renewed or the retroactive date of
such policy is to be changed, the Project Company shall obtain for each such
policy or policies the broadest basic and supplemental extended reporting period
coverage or "tail" reasonably available in the commercial insurance market for
each such policy or policies, and shall provide the Controlling Party with
evidence that such basic and supplemental extended reporting period coverage or
"tail" has been obtained.
H-4
EXHIBIT I
COMPLETION TESTS
I-1
EXHIBIT J
FORM OF ANNUAL OPERATIONS REPORT
J-1
EXHIBIT K
FORM OF ANNUAL INSURANCE CERTIFICATE
K-1
EXHIBIT M
GENERAL SUBORDINATION TERMS
All Debt incurred by the Issuer under paragraph (b) of the
definition of Issuer Permitted Debt or by a Project Company under paragraph (e)
of the definition of Project Company Permitted Debt shall be subject to the
following terms and conditions, which shall be incorporated in a written
agreement between the Issuer or such Project Company, as the case may be, and
the Person(s) to which any such Debt is owed:
(a) For purposes of these terms of subordination (these
"Subordination Terms"), the "Senior Debt" shall mean the Obligations. Unless
otherwise defined herein, capitalized terms used herein have the meanings
provided in the Common Agreement, (as amended, amended and restated,
supplemented or otherwise modified from time to time), dated as of June 18, 2002
among (1) XL Capital Assurance Inc., a New York stock insurance company, (2)
Xxxxxxx Xxxxx Mitsui Marine Derivative Products, L.P., a Delaware limited
liability company, (3) Law Debenture Trust Company of New York, as successor
trustee to The Bank of New York for the benefit of the Bondholders (the
"Trustee"), (4) The Bank of New York, as collateral agent for the benefit of the
Secured Parties (in such capacity, the "Collateral Agent"), (5) NRG Peaker
Finance Company LLC, a Delaware limited liability company, as Issuer (the
"Issuer"), and (6) each party thereto identified as a Project Company on the
signature pages thereto (each a "Project Company" and, collectively, the
"Project Companies").
(b) [INSERT "NRG PEAKER FINANCE COMPANY LLC" OR NAME OF
PROJECT COMPANY] (the "Debtor"), for itself and its successors and assigns,
covenants and agrees and each holder of the indebtedness evidenced by [DESCRIBE
INDEBTEDNESS DOCUMENTATION] ("Subordinated Debt") by its acceptance thereof
likewise covenants and agrees that the payment of the principal of, and interest
on, and all other amounts owing in respect of, the Subordinated Debt is hereby
expressly subordinated, to the extent and in the manner herein set forth, to the
prior payment in full in cash or discharge in full in cash of all Senior Debt.
The subordination provisions set forth herein shall constitute a continuing
offer to all persons who, in reliance upon such provisions, become holders of,
or continue to hold, Senior Debt, and such provisions are made for the benefit
of the holders of Senior Debt, and such holders are hereby made obligees
hereunder to the same extent as if their names were written herein as such, and
they and/or each of them may proceed to enforce such provisions as a third party
beneficiary.
(c) Unless and until all Senior Debt shall have been paid
in full in cash in accordance with its terms and all obligations in respect
thereof shall have terminated, the Debtor shall not, directly or indirectly,
make or agree to make any payment (in cash or property, by set-off or
otherwise), direct or indirect, of or on account of any Subordinated Debt (or
any Debt subordinated thereto), and no such payment shall be accepted by any
holder of Subordinated Debt, unless such payment is made with funds which the
Issuer or any Project Company is permitted to distribute from the Distribution
Account in accordance with Section 4.6 of the Depositary Agreement.
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(d) Upon (i) any acceleration of the principal amount due
on any Subordinated Debt or (ii) any payment or distribution of assets of the
Debtor of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution or winding up or total or partial liquidation or
reorganization of the Debtor, whether voluntary or involuntary or in bankruptcy,
insolvency, receivership or similar proceedings, then and in any such event all
principal and interest and all other amounts due or to become due upon all
Senior Debt (including, without limitation, all interest accruing after the
commencement of any bankruptcy, insolvency, receivership or similar proceeding
at the rate provided in the Financing Documents whether or not such interest is
an allowed claim in such proceeding) shall first be paid in full in cash and all
obligations in respect thereof shall have been terminated before any holder of
Subordinated Debt shall be entitled to retain any assets so paid or distributed
in respect of the Subordinated Debt (for principal, interest or otherwise); and,
upon any such dissolution or winding up or liquidation or reorganization, any
payment or distribution of assets of the Debtor of any kind or character,
whether in cash, property or securities, to which the holders of the
Subordinated Debt would be entitled, except as otherwise provided herein, shall
be paid by the Debtor or by any receiver, trustee in bankruptcy, liquidating
trustee, agent or other person, corporation, partnership or other entity making
such payment or distribution, or by the holders of the Subordinated Debt if
received by them, to the Trustee for distribution to the holders of Senior Debt
or their representatives, to the extent necessary to pay all Senior Debt in full
in cash, after giving effect to any concurrent payment or distribution to or for
the benefit of the holders of Senior Debt, before any payment or distribution is
made to the holders of the Subordinated Debt.
(e) The holders of the Subordinated Debt irrevocably
authorize and empower (without imposing any obligation on) each holder of Senior
Debt and such holder's representatives, under the circumstances set forth in
paragraph (d) above, to demand, xxx for, collect and receive every such payment
or distribution described therein and give acquittance therefor, to file claims
and proofs of claims in any statutory or nonstatutory proceeding, to vote such
Senior Debt holder's ratable share of the full amount of the Subordinated Debt
in its sole discretion in connection with any resolution, arrangement, plan of
reorganization, compromise, settlement or extension and to take all such other
action (including, without limitation, the right to participate in any
composition of creditors and the right to vote such Senior Debt holder's ratable
share of the Subordinated Debt at creditors' meetings for the election of
trustees, acceptances of plans and otherwise), in the name of the holders of the
Subordinated Debt or otherwise, as such Senior Debt holder or its
representatives may deem necessary or desirable for the enforcement of these
Subordination Terms. The holders of the Subordinated Debt shall execute and
deliver to each holder of Senior Debt and such Senior Debt holder's
representatives all such further instruments confirming the foregoing
authorization, and all such powers of attorney, proofs of claim, assignments of
claim and other instruments, and shall take all such other actions as may be
requested by such holder of Senior Debt or such holder's representatives in
order to enable such holder or such representative to enforce all claims upon or
in respect of such holder's ratable share of the Subordinated Debt.
(f) Should any payment or distribution be collected or
received by any holder of Subordinated Debt and such collection or receipt is
not expressly permitted by these Subordination Terms, such holder shall
forthwith turn over the same to the Trustee in the form received (except for the
endorsement or the assignment of such holder when necessary) and,
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until so turned over, the same shall be held in trust by such holder as the
property of the holders of Senior Debt.
(g) No holder of the Subordinated Debt shall, without the
prior written consent of the Controlling Party, have any right to demand payment
of, accelerate the maturity of, or otherwise enforce any right or remedy in
respect of any Subordinated Debt or commence or prosecute any action thereon
until all Senior Debt is paid in full in cash and all obligations in respect
thereof have been terminated.
(h) Until all Senior Debt has been paid in full in cash
and all obligations in respect thereof have been terminated, the holders of the
Subordinated Debt will not, without the prior written consent of the Controlling
Party, commence or join with any other person, corporation, partnership or other
entity in commencing any proceeding against the Debtor or any other person,
corporation, partnership or other entity with respect to the Subordinated Debt
under any bankruptcy, reorganization, readjustment of debt, dissolution,
receivership, liquidation or insolvency law or statute now or hereafter in
effect in any jurisdiction, nor shall the holders of the Subordinated Debt,
without the prior written consent of the Controlling Party, participate in any
assignment for benefit of creditors, compositions or arrangements with respect
to the Debtor's obligations with respect to the Subordinated Debt.
(i) Subject to the payment in full in cash of all Senior
Debt and the termination of all obligations in respect thereof, the holders of
the Subordinated Debt shall be subrogated (equally and ratably with the holders
of all indebtedness of the Debtor that by its express terms is subordinated to
Senior Debt to the same extent as the Subordinated Debt is subordinated and that
is entitled to like rights of subrogation) to the rights of the holders of
Senior Debt to receive payments or distributions of assets of the Debtor made on
the Senior Debt until the Subordinated Debt shall be paid in full; provided that
nothing herein contained shall be intended to assign or grant to any holder of
Subordinated Debt, or subrogate any such holder to, any right of a holder of
Senior Debt as a mortgagee, secured party or other lien or pledgeholder of any
property of the Debtor that secures any Senior Debt.
(j) The above provisions are not intended to impair as
between the Debtor, its creditors other than the holders of Senior Debt, and the
holders of the Subordinated Debt, the obligation of the Debtor, which is
absolute and unconditional, to pay to the holders of the Subordinated Debt, as
and when the same shall become due and payable in accordance with its terms,
principal and interest thereon, subject to the rights of the holders of Senior
Debt as provided in these Subordination Terms, or to affect the relative rights
of the holders of the Subordinated Debt and creditors of the Debtor other than
the holders of Senior Debt.
(k) Application of these Subordination Terms to the
Subordinated Debt, the subordination effected thereby and the rights of the
holders of the Senior Debt shall not be affected by (i) any amendment of or
addition or supplement to any Operative Document or any Senior Debt or any
instrument or agreement relating thereto or providing collateral security for
any Senior Debt, (ii) any exercise or non-exercise of any right, power or remedy
under or in respect of any Operative Document or any Senior Debt or any
instrument or agreement relating thereto, or any release of any collateral
securing any Senior Debt, or (iii) any waiver, consent, release, indulgence,
extension, renewal, modification, delay or any other action, inaction or
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omission in respect of any Operative Document or any Senior Debt or any
instrument or agreement relating thereto or providing collateral security for
any Senior Debt; in each case whether or not any holders of any Subordinated
Debt shall have had notice or knowledge of any of the foregoing.
(l) Upon any payment or distribution of assets of the
Debtor referred to in these Subordination Terms, the holders of Subordinated
Debt shall be entitled to rely upon any order or decree entered by any court of
competent jurisdiction in which such insolvency, bankruptcy, receivership,
liquidation, reorganization, dissolution, winding up or similar case or
proceeding is pending, or a certificate of the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee for the benefit of creditors, agent or
other Person making such payment or distribution, delivered to the holders of
Subordinated Debt, for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of Senior Debt and
other indebtedness of the Debtor, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to these Subordination Terms.
(m) The following provision shall at all times be part of
each instrument or debt security evidencing or representing any Subordinated
Debt:
"The principal of and interest on the indebtedness evidenced
hereby are postponed, subordinated and junior in right of
payment to certain "Senior Debt", as defined in the [IDENTIFY
THESE SUBORDINATION TERMS], on the terms set forth in such
Subordination Terms. The provisions of such Subordination
Terms used therein are hereby incorporated herein as if set
forth at length herein. Each subsequent holder and transferee
hereof shall be bound, to the extent of its interest herein,
by the obligations set forth in such provisions applicable to
a holder hereof."
(n) Notwithstanding anything to the contrary in these
Subordination Terms or the agreement into which they are incorporated, these
Subordination Terms may be waived, modified, amended or otherwise changed only
if and as set forth in a written agreement signed by the parties hereto and the
Controlling Party.
(o) These Subordination Terms shall be governed by, and
construed in accordance with, the laws of the State of New York.
(p) Each party hereto, for itself and its successors and
assigns, and each third party beneficiary hereof (by acceptance of the benefits
hereof) hereby (i) irrevocably and unconditionally submits, for itself and its
property, to the exclusive jurisdiction of the Supreme Court of the State of New
York sitting in New York County and of the United States District Court for the
Southern District of New York, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to these Subordination Terms,
(ii) irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding shall be heard and determined in such New York State
or, to the extent permitted by law, in such Federal court, and (iii) agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions and courts by suit on the judgment or in any
other manner provided by law; provided, that this clause (p) shall not impair or
diminish any right that any
M-4
party or third party beneficiary may otherwise have to bring any action or
proceeding relating to these Subordination Terms in the courts of any other
competent jurisdiction (i) to enforce or in aid of the judgment of the Supreme
Court of the State of New York sitting in New York County or of the United
States District Court for the Southern District of New York, (ii) as to any
claim in respect of which the Supreme Court of the State of New York sitting in
New York County determines that it does not have, or declines to exercise,
jurisdiction, or (iii) in respect of any matter as to which the agreement set
forth in this clause (p) is not enforceable as a matter of law.
(q) Each party hereto, for itself and its successors and
assigns, hereby irrevocably and unconditionally waives, to the fullest extent it
may legally and effectively do so, (i) any objection that it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to these Subordination Terms in the Supreme Court of the
State of New York sitting in New York County or the United States District Court
for the Southern District of New York and (ii) the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
(r) EACH PARTY HERETO, FOR ITSELF AND ITS SUCCESSORS AND
ASSIGNS, HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT TO TRIAL BY
JURY OF ANY ACTION, CLAIM, DEMAND OR PROCEEDING ARISING UNDER OR WITH RESPECT TO
THESE SUBORDINATION TERMS OR IN ANY WAY CONNECTED WITH, RELATED TO OR INCIDENTAL
TO THE DEALINGS BETWEEN THEM WITH RESPECT TO THESE SUBORDINATION TERMS OR THE
TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.
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EXHIBIT N
SUBORDINATION PROVISIONS FOR SUBORDINATED BONDS
N-1
EXHIBIT O
FORM OF MAJOR MAINTENANCE RESERVE AMOUNT CERTIFICATE
__________ ___, _____(1)
XL Capital Assurance Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Surveillance
Law Debenture Trust Company of New York, as Trustee
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
The Bank of New York, as Collateral Agent
000 Xxxxxxx Xxxxxx, Xxxxx 0 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Department
Xxxxxxx Xxxxx Mitsui Marine Derivations Products, L.P.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Swap Administration (with a copy to Treasury Administration)
Re: Major Maintenance Reserve Amount Certificate
Ladies and Gentlemen:
NRG Peaker Finance Company LLC (the "Issuer") is delivering
this certificate pursuant to Section 2.7(c) of the Amended and Restated Common
Agreement, dated as of January 6, 2004 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "Common Agreement"),
among (1) XL Capital Assurance Inc., (2) Xxxxxxx Xxxxx Mitsui Marine Derivative
Products, L.P., as Swap Counterparty, (3) The Law Debenture
---------------------------------------------
(1) Certificate to be dated and delivered no later than 20 days after the
applicable Determination Date and subsequently in accordance with Section 2.7(c)
of the Common Agreement.
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Trust Company of New York, as Trustee, (4) The Bank of New York, as Collateral
Agent, (5) the Issuer, and (6) each party thereto identified as a Project
Company on the signature pages thereto. Capitalized terms used but not defined
herein shall have the meanings given in Annex A to the Common Agreement.
1. Major Maintenance Reserve Amount ("MMRA").
As of the Determination Date on [INSERT DATE], the Major
Maintenance Reserve Amount for all Project Companies is: $[PROVIDE MAJOR
MAINTENANCE RESERVE AMOUNT FOR ALL PROJECT COMPANIES FOR THE DETERMINATION
PERIOD ENDING ON SUCH DETERMINATION DATE].
As of the Determination Date on [INSERT DATE], the Major
Maintenance Reserve Amount for each Project Company is: $[PROVIDE MAJOR
MAINTENANCE RESERVE AMOUNT FOR EACH PROJECT COMPANY FOR THE DETERMINATION PERIOD
ENDING ON SUCH DETERMINATION DATE].
BAYOU COVE
As of the Determination Date on [INSERT DATE], the amount of the total factored
starts for the Bayou Cove Project is [ ] and the cost per factored start for the
Bayou Cove Project for the Determination Period immediately preceding such
Determination Date is $[ ].
As of the Determination Date on [INSERT DATE], annual MMRA funding requirement
for the Bayou Cove Project is $[INSERT AN AMOUNT THAT IS (x) THE AMOUNT OF THE
TOTAL FACTORED STARTS FOR THE BAYOU COVE PROJECT MULTIPLIED BY (y) THE COST PER
FACTORED START FOR THE BAYOU COVE PROJECT FOR THE DETERMINATION PERIOD
IMMEDIATELY PRECEDING SUCH DETERMINATION DATE]
STERLINGTON
As of the Determination Date on [INSERT DATE], the amount of the total factored
starts for the Sterlington Project is [ ] and the cost per factored start for
the Sterlington Project for the Determination Period immediately preceding such
Determination Date is $[ ].
As of the Determination Date on [INSERT DATE], annual MMRA funding requirement
for the Sterlington Project is $[INSERT AN AMOUNT THAT IS (x) THE AMOUNT OF THE
TOTAL FACTORED STARTS FOR THE STERLINGTON PROJECT MULTIPLIED BY (y) THE COST PER
FACTORED START FOR THE STERLINGTON PROJECT FOR THE DETERMINATION PERIOD
IMMEDIATELY PRECEDING SUCH DETERMINATION DATE]
ROCKFORD I
As of the Determination Date on [INSERT DATE], the amount of the total
equivalent operating hours for the Rockford I Project is [ ] and the cost per
equivalent operating hour for the Rockford I Project for the Determination
Period immediately preceding such Determination Date is $[ ].
As of the Determination Date on [INSERT DATE], annual MMRA funding requirement
for the Rockford I Project is $[INSERT AN AMOUNT THAT IS (x) THE AMOUNT OF THE
TOTAL EQUIVALENT OPERATING HOURS FOR THE ROCKFORD I PROJECT MULTIPLIED BY (y)
THE COST PER EQUIVALENT OPERATING HOUR FOR THE ROCKFORD I PROJECT FOR THE
DETERMINATION PERIOD IMMEDIATELY PRECEDING SUCH DETERMINATION DATE].
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ROCKFORD II
As of the Determination Date on [INSERT DATE], the amount of the total
equivalent operating hours for the Rockford II Project is [ ] and the cost per
equivalent operating hour for the Rockford II Project for the Determination
Period immediately preceding such Determination Date is $[ ].
As of the Determination Date on [INSERT DATE], annual MMRA funding requirement
for the Rockford II Project on [INSERT DATE] is $[INSERT AN AMOUNT THAT IS (x)
THE AMOUNT OF THE TOTAL EQUIVALENT OPERATING HOURS FOR THE ROCKFORD II PROJECT
MULTIPLIED BY (y) THE COST PER EQUIVALENT OPERATING HOUR FOR THE ROCKFORD II
PROJECT FOR THE DETERMINATION PERIOD IMMEDIATELY PRECEDING SUCH DETERMINATION
DATE].
BIG CAJUN
As of the Determination Date on [INSERT DATE], the amount of the total
equivalent starts for the Big Cajun Project is [ ] and the cost per equivalent
start for the Big Cajun Project for the Determination Period immediately
preceding such Determination Date is $[ ].
As of the Determination Date on [INSERT DATE], annual MMRA funding requirement
for the Big Cajun Project is $[INSERT AN AMOUNT THAT IS (x) THE AMOUNT OF THE
TOTAL EQUIVALENT STARTS FOR THE BIG CAJUN PROJECT MULTIPLIED BY (y) THE COST PER
EQUIVALENT START FOR THE BIG CAJUN PROJECT FOR THE DETERMINATION PERIOD
IMMEDIATELY PRECEDING SUCH DETERMINATION DATE].
2. Supporting Documentation.
The following documentation is attached hereto as Annex A in
support of the calculation referred to above: [INSERT DESCRIPTION OF SUPPORTING
DOCUMENTATION]
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Issuer has caused this Major
Maintenance Reserve Amount Certificate to be duly executed and delivered by a
Responsible Officer of the Issuer as of the date first above written.
NRG Peaker Finance Company LLC
By:_______________________________________
Name:
Title:
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ANNEX A(2)
BAYOU COVE
Starts Trips Factored Starts
------ ----- ---------------
November ------- ------ ----------------
December ------- ------ ----------------
January ------- ------ ----------------
February ------- ------ ----------------
March ------- ------ ----------------
April ------- ------ ----------------
May ------- ------ ----------------
June ------- ------ ----------------
July ------- ------ ----------------
August ------- ------ ----------------
September ------- ------ ----------------
October ------- ------ ----------------
Total ------- ------ ----------------
STERLINGTON
Starts Part-Load Trip Part-Load Trip Peak-Load Trip Factored Starts
------ -------------- -------------- -------------- ---------------
Load 0%-25% 25%-80% 80%-100%
November ------ --------- -------- ---------- ----------
December ------ --------- -------- ---------- ----------
January ------ --------- -------- ---------- ----------
February ------ --------- -------- ---------- ----------
March ------ --------- -------- ---------- ----------
April ------ --------- -------- ---------- ----------
May ------ --------- -------- ---------- ----------
June ------ --------- -------- ---------- ----------
July ------ --------- -------- ---------- ----------
August ------ --------- -------- ---------- ----------
September ------ --------- -------- ---------- ----------
October ------ --------- -------- ---------- ----------
Total ------ --------- -------- ---------- ----------
----------------------------------
(2) Attach any other supporting documentation.
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ROCKFORD I
Equivalent Operating Hours Starts Operating Hours
-------------------------- ------ ---------------
November ------------------ ------- ---------------
December ------------------ ------- ---------------
January ------------------ ------- ---------------
February ------------------ ------- ---------------
March ------------------ ------- ---------------
April ------------------ ------- ---------------
May ------------------ ------- ---------------
June ------------------ ------- ---------------
July ------------------ ------- ---------------
August ------------------ ------- ---------------
September ------------------ ------- ---------------
October ------------------ ------- ---------------
Total ------------------ ------- ---------------
ROCKFORD II
Equivalent Operating Hours Starts Operating Hours
-------------------------- ------ ---------------
November ------------------ ------- ---------------
December ------------------ ------- ---------------
January ------------------ ------- ---------------
February ------------------ ------- ---------------
March ------------------ ------- ---------------
April ------------------ ------- ---------------
May ------------------ ------- ---------------
June ------------------ ------- ---------------
July ------------------ ------- ---------------
August ------------------ ------- ---------------
September ------------------ ------- ---------------
October ------------------ ------- ---------------
Total ------------------ ------- ---------------
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BIG CAJUN
Intermediate Fast Ramp Part-Load Part-Load Part-Load Peak-Load Equivalent
Normal Starts Ramp Starts Starts Trip Trip Trip Trip Start
------------- ---- ------ ------ ---- ---- ---- ---- -----
Load 0%-16% 16%-36% 36%-60% 60%-100%
November ----------- --------- -------- ------ ------- ------- -------- --------
December ----------- --------- -------- ------ ------- ------- -------- --------
January ----------- --------- -------- ------ ------- ------- -------- --------
February ----------- --------- -------- ------ ------- ------- -------- --------
March ----------- --------- -------- ------ ------- ------- -------- --------
April ----------- --------- -------- ------ ------- ------- -------- --------
May ----------- --------- -------- ------ ------- ------- -------- --------
June ----------- --------- -------- ------ ------- ------- -------- --------
July ----------- --------- -------- ------ ------- ------- -------- --------
August ----------- --------- -------- ------ ------- ------- -------- --------
September ----------- --------- -------- ------ ------- ------- -------- --------
October ----------- --------- -------- ------ ------- ------- -------- --------
Total ----------- --------- -------- ------ ------- ------- -------- --------
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MAJOR MAINTENANCE RESERVE ACCOUNT FUNDING GUIDELINES
The funds deposited in the Major Maintenance Reserve Account ("MMRA")
are to be used for three principal types of major maintenance ("MM") activities:
combustion inspections ("Cis"), hot gas path inspections ("HGPs") and major
overhauls or inspections ("Mos"). The manufacturers of combustion turbines
establish and periodically update the frequencies at which each of these
activities should be performed on each of the model types they manufacture.
These frequencies are defined in terms of either equivalent operating
hours/factored hours ("EOH" or "FH") or equivalent starts/factored starts ("ES"
or "FS"), or a combination of both (e.g., the measure that yields the most
frequent MM activity). The manufacturers also establish and periodically update
the equations that are to be used to calculate EOH and/or ES for each of their
models. Combining 1) the estimates of the cost of each MM activity with 2)
information about the actual operating hours and starts and the adjustment
variables (e.g., the actual number of trips) during a particular period yields
an estimate of the cost of the future MM activities to be incurred during the
specific period.
The amount of MMRA funding required for each Project per Factored
Start, Equivalent Operating Hour or Equivalent Start for fiscal year 2003 is set
forth in the table below. Equivalent Starts, Factored Starts or Equivalent
Operating Hours shall all be calculated in accordance with the equipment
manufacturer's most current maintenance guidelines.
Rockford I Rockford II
Bayou Cove Sterlington Funding Required Funding Required Big Cajun I
Funding Required Funding Required per Equivalent per Equivalent Funding Required
Fiscal Year per Factored Start per Factored Start Operating Hour Operating Hour per Equivalent Start
----------- ------------------ ------------------ ---------------- ---------------- --------------------
2003 $3,500 $900 $440 $440 $6,670
BAYOU COVE
Each Factored Start of a unit at the Bayou Cove Project requires a deposit of
$3,500 into the MMRA. This figure shall be adjusted annually at a rate pursuant
to the calculation in Exhibit A attached hereto.
As of 2003, major maintenance activity frequencies and EOH/ES definitions for GE
7EAs at the Bayou Cove Project are specified in Heavy-Duty Gas Turbine Operating
and Maintenance Considerations, published by GE Power Systems in January 2003
(Document GER-3620J). These frequencies are as follows (Document GER-3620J at
p. 32):
- CIs - 12,000 Factored Hours (FH; GE's label for EOH) or 450 Factored
Starts (FS), whichever yields the most frequent inspections.
- HGPs - 24,000 FHs or 1,200 FSs, whichever yields the most frequent
inspections.
- MOs - 48,000 FHs or 2,400 FSs, whichever yields the most frequent
inspections.
For the units of the Bayou Cove Project that burn gas without water/steam
injection, the definitions of FH and FS for the determination of HGP frequency
are as follows:
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- FH = base-load operating hours + 6 x peak-load operating hours
- FS = .5 x part-load starts + base-load starts + 1.3 x peak-load starts
+ 20 x emergency starts + 2 x fast-load starts +(Sigma) T(i) a(i)
Ti means the number of trips at each load level, and ai means the severity
factor for a trip at each load level. The severity factors are provided in a
graph on p. 13 of Document GER-3620J which are equal to the lesser of 8 or 2 + 5
* % Load (e.g., at 40% of load, the factor is 2 + 5 x .40 = 4). FH and FS for
the determination of CI and MO frequencies are defined in the same way.
STERLINGTON
Each Factored Start of a unit at the Sterlington Project requires a deposit of
$900 into the MMRA. This figure shall be adjusted annually at a rate pursuant to
the calculation in Exhibit A attached hereto.
As of 2003, the relevant manual for major maintenance activity frequencies and
EOH/ES definitions for GE Frame 5 CTs is Document GER-3620J as described above.
Although Document GER-3620J does not include specifications for frequencies and
definitions for these particular models, GE staff have verbally recommended that
the frequencies for Model 5001PA and the FH/FS definitions for Frame 6/7/9
models specified in Document GER-3620J be used for these units. These
frequencies are as follows (Document GER-3620J at p. 32):
- CIs - 12,000 FHs or 800 FSs, whichever yields the most frequent
inspections.
- HGPs - 1,200 FSs
- MOs - 48,000 FHs or 2,400 FSs, whichever yields the most frequent
inspections.
The definitions of FHs and FSs are the same as those for 7EA units at the Bayou
Cove Project.
ROCKFORD I AND ROCKFORD II
Each Equivalent Operating Hour for a unit at the Rockford I Project and the
Rockford II Project each requires a deposit of $440 into the MMRA. This figure
shall be adjusted annually at a rate pursuant to the calculation in Exhibit A
attached hereto.
As of 2003, major maintenance frequencies and EOH definitions for Siemens
V84.3A(2) CTs are specified in Siemens Document 970602GSR, Maintenance
Intervals/Equivalent Operating Hours as follows:
- Minor inspections (Siemens' label for CIs) - 4,000 EOHs
- HGPs - 25,000 EOHs
- MOs - 50,000 EOHs
For the units of the Rockford I Project and the Rockford II Project that burn
gas:
- EOH = 10 x starts + 10 x rapid temperature changes (including a trip) +
operating hours.
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BIG CAJUN
Each Equivalent Start of a unit at the Big Cajun Project requires a deposit of
$6,670 into the MMRA. This figure shall be adjusted annually at a rate pursuant
to the calculation in Exhibit A attached hereto.
As of 2003, major maintenance activity frequencies and EOH/ES definitions for
Siemens Westinghouse W501-D5A CTs are specified in Service Bulletin 36803:
Combustion Turbine Maintenance and Inspection Intervals, published by SW Power
Corporation in December 2000 (Service Bulletin 36803). These frequencies are as
follows (Service Bulletin 36803 at p. 12):
- CIs - 8,000 EOHs or 400 ESs, whichever yields the most frequent
inspections.
- HGPs - 24,000 EOHs or 800 ESs, whichever yields the most frequent
inspections.
- MOs - 48,000 EHs or 1,600 ESs, whichever yields the most frequent
inspections.
For the units of the Big Cajun Project that burn gas, EOH (Service Bulletin
36803 at p. 15) and ES (Service Bulletin 36803 at pp 17-18) are defined as
follows:
- EOH = base-load hours + 3 x peak-load hours
- ES = normal starts + 10 x intermediate starts + 20 x fast starts +
fired aborts + (SIGMA) T(i) a(i) + (SIGMA) C(i) b(i)
T(i) means the number of trips at various load levels, a(i) means the severity
factor associated with a trip from each load level, C(i) means a load change of
various magnitude, and b(i) means the severity factor associated with a load
change of each magnitude. The trip severity factors are as follows:
- From 51-100% of load - 20
- From 31-50% of load - 14
- From 16-20% of load - 7
- From 1-15% of load - 4
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EXHIBIT A
ADJUSTMENT OF DEPOSITS
The initial deposit into the MMRA for each Factored Start (with respect to the
Bayou Cove Project and Sterlington Project), each Equivalent Operating Hour
(with respect to the Rockford I Project and Rockford II Project) and each
Equivalent Start (with respect to the Big Cajun Project) shall be adjusted at
the beginning of each year by multiplying (i) the deposit for the prior year and
(ii) the composite price index (the "CPI"). The determination of the CPI is
based on an allocation of percentage weights for labor and materials pursuant to
the following formula:
CPI = [0.4 x (L(n)-L(i))/L(i)] + [0.6 x (M(n)-M(i))/M(i)] + 1]
Where:
L(n) = the Labor Index for the current year
L(i) = the Labor Index for the prior year
M(n) = the Material Index for the current year
M(i) = the Material Index for the prior year
The "Labor Index" means the "Average Hourly Earnings of Production Workers,
Turbine and turbine generator set units, Series Id CEU3133361106" as published
by the Bureau of Labor Statistics, United States Department of Labor, rounded to
the nearest hundredth.
The "Material Index" means the "Producer Price Indexes, Series Id PCU3511# (N),
Turbines and turbine generator sets" as published by the Bureau of Labor
Statistics, United States Department of Labor, rounded to the nearest tenth.
For each operating year, defined as November of one year through October of the
following year, index values for September of the first year and the previous
year shall be used in the above calculations.
For example, the September 2003 value of the Average Hourly Earnings of
Production Workers, Turbine and turbine generator set units, Series Id
CEU3133361106 was 23.09, and the value of this index in September 2002 was
22.55. The September 2003 value of the Producer Price Indexes, Series Id
PCU3511# (N), Turbines and turbine generator sets was 153.5 (Preliminary) and
the September 20023 value of this index was 153.1. The CPI for the November 2003
- October 2004 operating year would therefore be:
CPI = [0.4 x (23.09 -22.55)/22.55] + [0.6 x (153.5-153.1)/153.1] + 1]
= 1.011146
To continue the example, the deposit for Bayou Cove for the November 2002 -
October 2003 period was $3,500.00 per Factored Start. The deposit for the
November 2003 - October 2004 period is $3,539.01, equal to the multiplicative
product of 1.011146 and $3,500.00.
O-11
The United States Department of Labor may revise any of the data referred to
above for a period of up to four (4) months after initial publication. If such a
revision occurs, the deposit shall be adjusted for such year in accordance with
such revised data.
If the United States Department of Labor, by footnote, appendix or any other
method, discontinues or revises any of the data referred to above (other than
benchmark adjustments) or revises the methodology for obtaining such data, a
substitute for the adjustment of the revised or discontinued data shall be
agreed to and used; provided, that such substitute shall result in substantially
the same adjustment, insofar as possible, as would have been achieved by
continuing the use of the original data had it not been revised or discontinued.
O-12
EXHIBIT P
FORM OF ANNUAL OPERATIONS BUDGET
EXHIBIT P
FORM OF ANNUAL OPERATIONS BUDGET
OPERATING EXPENSES
Operational Labor-Regular
511100 Ops Labor-Regular
511200 Ops Employer Taxes
511300 Ops Pension
511410 Ops Health/Welfare
511420 Ops 401k Match
511430 Ops Worker's Comp
511440 Ops Retiree Medical
511450 Ops Severance
511460 Ops Paid Time Off
511470 Ops Bonus/Incentive
511480 Ops Deferred Compensation
511490 Ops Other Employee Benefits
511510 Ops Labor Cross Charge
511520 Ops Capitalized Labor
511610 Ops Labor-Overtime
511620 Ops Overtime Meals
511700 Ops Labor-Contract/Temporary
Normal Maintenance-Materials &Services
513100 Normal M&S-Land Maintenance
513125 Normal M&S-Buildings
513150 Normal M&S-Balance of Plant
513175 Normal M&S-Boiler
513200 Normal M&S-Steam Turbine
513225 Normal M&S-Generator
513250 Normal M&S-Diesel/Gas Engine
513275 Normal M&S-Gas Turbine
513300 Normal M&S-Expander Turbine
513325 Normal M&S-Pollution Control Equip
513350 Normal M&S-Hydro Turbine
513375 Normal M&S-Chilled Water Equip
513400 Normal M&S-Facilities
513425 Normal M&S-Res Recovery Equip
513450 Normal M&S-Gas Collection System
513475 Normal M&S-Rolling Stock
513500 Normal M&S-Transmission Assets
513525 Normal M&S-Steamlines
513550 Normal M&S-Automobiles
513700 Normal Maint-Consumables
P-1
513800 Normal Maint-Chemicals
Major Maintenance-Materials & Services
514100 Major M&S-Land Maintenance
514125 Major M&S-Buildings
514150 Major M&S-Balance of Plant
514175 Major M&S-Boiler
514200 Major M&S-Steam Turbine
514225 Major M&S-Generator
514250 Major M&S-Diesel/Gas Engine
514275 Major M&S-Gas Turbine
514300 Major M&S-Expander Turbine
514325 Major M&S-Pollution Control Equip
514350 Major M&S-Hydro Turbine
514375 Major M&S-Chilled Water Equip
514400 Major M&S-Facilities
514425 Major M&S-Res Recovery Equip
514450 Major M&S-Gas Collection System
514475 Major M&S-Rolling Stock
514500 Major M&S-Transmission Assets
514525 Major M&S-Steamlines
514550 Major M&S-Automobiles
514700 Major Maint-Consumables
514800 Major Maint-Chemicals
Environmental/Security/Safety
515100 Environmental Permits
515200 Exceedance Fees/Penalties
515300 Hazardous Mat Disposal&Storage
515400 Environmental Remediation Cost
515500 Site Security
515600 Employee Safety & Protection Materials
515900 Other Environmental&Safety Exp
Plant Utilities & Auxiliary Power
516100 Water & Sewer Utilities
516200 Plant Electric Utilities
516300 Natural Gas Utilities
516900 Other Utilities & Aux Power
Ops/Mgmt/Admin Fee Expense
517100 O&M Fee Expense
517200 Admin/Services Fee Expense
517900 Other Admin/Mgmt/Admin Fee Exp
Other Operations Expenses
519100 Plant Equip Lease/Rent Expense
519200 Freight
P-2
519300 Inventory Adjust
519410 RDF-Transportation Expense
519420 RDF-Pass Through Expense
519500 Ash Disposal Expense
519910 Turbine Storage Costs
519990 Other Operating Expenses
Property & Other Tax Expense
551110 Real Property Tax Expense
551120 Personal Property Tax Expense
551200 Sales & Use Tax
551900 Other Taxes Non Income Based
General & Administrative Expense
General & Administrative Labor
611100 G&A Labor-Regular Salaries and wages
611200 G&A Employer Taxes
611300 G&A Pension
611410 G&A Health/Welfare Employee insurances
611420 G&A 401k Match
611430 G&A Workers Comp
611440 G&A Retiree Medical
611450 G&A Severance
611460 G&A Paid Time Off
611470 G&A Bonus/Incentive
611480 G&A Deferred Comp
611490 G&A Other Employee Benefits
611510 G&A Labor Cross Charge
611520 G&A Capitalized Labor
611600 G&A Labor-Overtime
611700 G&A Labor-Contract/Temporary
611900 Medical Tracker Holding account
Employee Expense
612100 Relocation Expense
612200 Seminars & Training
612300 Tuition Reimbursement
612400 Subscription/Professional Dues
612500 Club Dues
612600 Auto Expense
612700 Expat Expense
612800 Health Physicals & Testing Expenses
612900 Other Employee Expense
External Consultant Expense
613100 External Legal Support
613200 Financial (Tax, Bank, Audit) Consultants
613300 Engineering Consultants
P-3
613400 Environmental & Regulatory Consultants
613500 Information Tech Consultants
613600 Communications Consultants
613700 Human Res/Recruit Consultants
613800 Commercial Market Advisors
613900 Other External Consult/Support
Travel & Entertainment Expense
614100 Airfare Airfare and related ticketing fees
614200 Lodging Hotel/motel costs
614300 Ground Transportation Expenses
614410 Meals&Entertain-Regular Meals and/or events/entertainment
614420 Meals&Entertain-Empl Function Costs
614430 Meals&Entertain-Non Employees Meals and/or entertainment
614900 Other Travel/Entertainment Expenses
Office Expense
615100 Office Rent/Lease Expense
615200 Office Utilities
615300 Office Supplies
615400 Office Furniture/Equipment
615500 Postage Office Mailings Only
615600 Document Storage
615700 Printing
615800 Misc Technology/Software Expense
615900 Other Office Expense
Administrative Fee Expense
616100 Insurance
616200 Bank Fees
616300 Corporate Sec. Fees
616400 Tax Penalties
616500 Association Dues
616600 Capital/Franchise Tax
616900 Other Admin Fee Expense
Other General & Administrative Expense
618210 Telephone
618220 Cell Phone/Pager
618230 Internet Access
618310 Charitable Contributions
618320 Political Contributions
618330 Media/Public Relations Expense
618400 Misc Marketing Expense
618900 Other G&A Expense
P-4
EXHIBIT P
FORM OF ANNUAL OPERATIONS BUDGET
CAPITAL EXPENDITURES (1)
Construction In Progress
151100 CIP-Land
151100 CIP-Land Maintenance
151100 CIP-Buildings
151100 CIP-Balance of Plants
151100 CIP-Boiler
151100 CIP-Fuel Handling Equip
151100 CIP-Steam Turbine
151100 CIP-Generator
151100 CIP-Diesel Engine
151100 CIP-Gas Turbine
151100 CIP-Expander Turbine
151100 CIP-Pollution Control E
151100 CIP-Hydro Turbine
151100 CIP-Chilled Water Equip
151100 CIP-Facilities
151100 CIP-Res Recovery Equip
151100 CIP-Gas Collections Systems
151100 CIP-Rolling Stock
151100 CIP-Transmission Assets
151100 CIP-Steamlines
151100 CIP-Automobiles
151100 CIP-Computer,Network,Phone
151100 CIP-Software
151100 CIP-Leasehold Improvements
151100 Contra CIP-Reclass to F/A
Property, Plant & Equipment
152200 PP&E-Land
152200 PP&E-Land Improvements
152200 PP&E-Buildings
152200 PP&E-Plant Equipment
152200 PP&E-Rolling Stock
152200 PP&E-Transmission Assets
152200 PP&E-Steam Lines
152200 PP&E-Capital Spares
152200 PP&E-Furniture & Office Equipm
152200 PP&E-Automobiles
152200 PP&E-Computer,Network,Phone
152200 PP&E-Software
152200 PP&E-Leasehold Improvements
152200 PP&E-Asset Retirement Obligations
P-5
-----------------------------------------
(1) The form of this exhibit is not final and subject to change. Further,
the Capital Expenditures portion of the 2004 Annual Operations Budget
may be provided in a different form than above.
P-6
EXHIBIT Q
REQUEST FOR EXPENDITURES
Q-1
ANNEX A
DEFINITIONS
"Acceleration" has the meaning given in the Recitals.
"Acceptable Assignee" has the meaning given in Section 10 of
the Parent Agreement.
"Acceptable Assumption" means, with respect to any agreement,
the assumption of such agreement, without modifications (i) pursuant to a Final
Order approving the assumption of such agreement under Section 365(a) of the
United States Bankruptcy Code, 11 U.S.C. Section 365(a), or (ii) pursuant to a
plan of reorganization that has been confirmed under Section 1129 of thE Federal
Bankruptcy Code, 11 U.S.C. Section 1129, and become effective.
"Acceptable Letter of Credit" means a letter of credit that
(a) is issued by a bank or other financial institution rated at least A2 by
Xxxxx'x and at least A by S&P, (b) has no account party that is a Financing
Party or any Affiliate of any Financing Party, and (c) is in the form attached
as Exhibit B to the Depositary Agreement.
"Acceptable PPA" means, with respect to a Project, an
agreement for the sale of Power generated by such Project that (a) does not
require the applicable Project Company to accept fuel price market risk (e.g., a
tolling agreement, fuel pass-through, energy prices indexed to fuel prices,
prices otherwise structured to limit negative spark spread risk), (b) has an
initial term of at least one year, (c) provides for annual Net Operating
Revenues that equal or exceed such Project Company's Allocation Percentage
multiplied by the aggregate amount of Scheduled Debt Service payments on the
Series A Bonds Outstanding (as such term is defined in the Indenture) for each
year during the term of such agreement for the sale of Power, (d) provides for
the counterparty credit support that complies with the credit support criteria
contained in the NRG Credit Risk Policy, and (e) is not entered into with NRG
Power Marketing as the offtaker; provided that with respect to any such
agreement entered into by NRG Power Marketing as principal under the Energy
Marketing Services Agreement to which such Project Company is a party, such
agreement will be an Acceptable PPA with respect to such Project Company only if
such Project Company and NRG Power Marketing have entered into a written
agreement evidencing and/or attaching the terms and conditions of the agreement
that is being passed through to such Project Company as contemplated by Section
5.3 of such Energy Marketing Services Agreement.
"Account Funds" means all cash, cash equivalents, financial
assets, instruments, investments, investment property, securities and other
property, including Permitted Investments, on deposit in or credited to an
Account in accordance with the Depositary Agreement.
"Accounts" has the meaning given in Section 2.1 of the
Depositary Agreement.
"Accrued Insurer Loss Amount (Bond)" means, as of any Annual
Scheduled Payment Date, the aggregate amount then due and owing to XLCA by the
Issuer under the Insurance and Reimbursement Agreement in respect of the
Reimbursement Obligations relating to the Policy.
"Accrued Insurer Loss Amount (Swap)" means, as of any Annual
Scheduled Payment Date, the aggregate amount then due and owing to XLCA by the
Issuer under the Insurance and Reimbursement Agreement in respect of the
Reimbursement Obligations relating to the Swap Policy.
"Acquisition Agreements" means the Bayou Cove Membership
Interest Purchase Agreement, the Bayou Cove Assignment and Assumption Agreement,
the Rockford Acquisition Agreement, the Rockford Assignment and Assumption
Agreement, the Sterlington Project Development Agreement, the Sterlington
Supplement and Modification to Project Development Agreement, and the
Sterlington and NRG South Central Assignment and Assumption Agreement.
"Acquisition Indemnity Payment" means, for any Project, any
and all amounts paid as indemnification payments to an Affiliate of the Project
Company owning such Project pursuant to an Acquisition Agreement relating to
such Project in order to compensate the relevant acquirer of such Project (or
Affiliate of such acquirer) for any devaluation of such Project due to a breach
of any representation, warranty or covenant contained in such Acquisition
Agreement.
"Acquisition Indemnity/Performance LD Reserve Account" has the
meaning given in Section 2.1 of the Depositary Agreement.
"Addendum" has the meaning given in the Energy and Marketing
Services Agreement.
"Additional Bonds" has the meaning given in the Indenture.
"Additional Parent Agreement" means any parent agreement,
substantially in the form of the Parent Agreement or as otherwise in form and
substance satisfactory to the Controlling Party, provided by an Acceptable
Assignee in connection with a Permitted Change of Control pursuant to Section 10
of the Parent Agreement (as may be amended, amended and restated, supplemented
or otherwise modified from time to time).
"Additional Project Document" means, with respect to any
Project, any Project Document entered into with respect to such Project after
the Closing Date.
"Affiliate" means, with respect to a specified Person, any
other Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by or is under common control with the Person specified,
or who holds or beneficially owns 10% or more of the equity interest in the
Person specified or 10% or more of any class of voting securities of the Person
specified. For the purposes of this definition "control" (including with
correlative meanings, the terms "controlling," "controlled by" and "under common
control with"), as used with respect to any Person, means the possession,
directly or indirectly, of the power to direct or to cause the direction of the
management or policies of such Person, whether through the ownership of voting
securities, by agreement or otherwise. When used with respect to the Issuer,
"Affiliate" shall include NRG Energy and each Project Company.
A-2
"Affiliated Major Project Participant" means any Major Project
Participant that is an Affiliate of the applicable Project Company (in each case
to the extent such Person has remaining obligations under the Major Project
Documents).
"Allocation Increased Percentage" means, in connection with a
Permitted Peaker Buyout and with respect to a Project Company that is not
subject to such Permitted Peaker Buyout, a percentage amount that is equal to
100% multiplied by (a) the product in Dollars of (x) such Project Company's
Allocation Percentage immediately prior to the consummation of such Permitted
Peaker Buyout multiplied by (y) the aggregate principal amount of all Series A
Bonds Outstanding (as such term is defined in the Indenture) immediately prior
to such consummation, divided by, (b) the aggregate principal amount of all
Series A Bonds Outstanding (as such term is defined in the Indenture)
immediately after such consummation.
"Allocation Percentage" means (a) in respect of the Bayou Cove
Project Company, 18%, (b) in respect of the Big Cajun Project Company, 14%, (c)
in respect of the Rockford I Project Company, 39%, (d) in respect of the
Rockford II Project Company, 19%, and (e) in respect of the Sterlington Project
Company, 10%; provided that upon a Permitted Peaker Buyout, the Allocation
Percentage for the Project Company subject to such Permitted Peaker Buyout shall
be reduced to 0% and the Allocation Percentage for each other Project Company
not subject to such Permitted Peaker Buyout shall be increased to its Allocation
Increased Percentage.
"Allocation Percentage Buyout Amount" means, in respect of a
Project Company, an amount equal to the Allocation Percentage for such Project
Company multiplied by the aggregate principal amount of Series A Bonds then
Outstanding (as such term is defined in the Indenture).
"Alternate Big Cajun PPA" means, with respect to the Big Cajun
Project, any Acceptable PPA which has been entered into by the Big Cajun Project
Company as a replacement for the Big Cajun PPA; provided that (i) such
Acceptable PPA specifies the same delivery point for electricity as the Big
Cajun PPA and (ii) the counterparty to such Acceptable PPA has entered into a
Consent on terms and conditions similar to those contained in the Consent
relating to the Big Cajun PPA delivered on the Closing Date.
"Ancillary Services" means, in respect of a Project Company,
the ancillary services that FERC has authorized to be sold at market-based rates
in the Applicable Markets for such Project Company's Project.
"Annual Operations Budget" means the annual operations budget
delivered by the Issuer to XLCA (if XLCA is the Controlling Party) in accordance
with Section 2.13 of the Common Agreement substantially in the form of Exhibit P
to the Common Agreement; provided that until an Annual Operations Budget is
deemed final in accordance with Section 2.13 of the Common Agreement for a
fiscal year, the Annual Operations Budget for such fiscal year shall be the
Annual Operations Budget for the fiscal year immediate preceding such fiscal
year, provided further that (a) no major maintenance items shall be a part of
such temporary budget and (b) provisions allowing for funding in excess of 100%
of such budget shall not be applicable to such temporary budget.
A-3
"Annual Operations Report" means, in respect of each Project,
an annual operations report for such Project substantially in the form of
Exhibit J to the Common Agreement.
"Annual Scheduled Payment Date" means each (a) December 10th
commencing on December 10, 2002 and ending on, and including, December 10, 2018,
and (b) June 10, 2019.
"Applicable Markets" means, with respect to any Project, any
of the markets for Energy Products and Services in which such Project is
interconnected or in which such Project Company buys, sells or offers for
delivery such products or services.
"Approval Order" has the meaning given in the Recitals.
"Associated Parent Obligations" means, with respect to a
Project in connection with a Permitted Change of Control, the product of (a) the
percentage of such Project, or the membership interests in the applicable
Project Company, purchased by the Acceptable Assignee multiplied by (b) the sum
of (i) the product of (A) the Allocation Percentage of the applicable Project
Company multiplied by (B) the obligations of NRG Energy under Section 2 of the
Parent Agreement (to the extent such obligations have not been already satisfied
by NRG Energy), prior to giving effect to such Permitted Change of Control
(excluding NRG Energy's obligations under Sections 2.2 through 2.7 and 2.10 of
the Parent Agreement) plus (ii) if such Project is Big Cajun I Units 3 & 4
Project, 100% of NRG Energy's obligations under Sections 2.2, 2.3(b) and 2.10 of
the Parent Agreement, plus (iii) if such Project is Rockford II Project, 100% of
NRG Energy's obligations under Sections 2.4 and 2.5(a) of the Parent Agreement
plus (iv) if such Project is the Sterlington Project, 100% of NRG Energy's
obligations under Sections 2.2 and 2.10 of the Parent Agreement plus (v) if such
Project is Bayou Cove Project, 100% of NRG Energy's obligations under Section
2.5(b) of the Parent Agreement plus (vi) if such Project is the Rockford I
Project, 100% of NRG Energy's obligations under Section 2.4 of the Parent
Agreement.
"Authorized Signatory" has the meaning given in Section 6.5 of
the Depositary Agreement.
"Available Debt Service Reserve Funds" means, as of any date,
the aggregate amount of Account Funds on deposit in the Debt Service Reserve
Account on such date and amounts available for drawing on such date under any
Acceptable Letter of Credit posted for the Debt Service Reserve Account.
"Available Fuel Funds" means, as of any date, in respect of a
Project Company, the aggregate amount of Account Funds on deposit in the Fuel
Account of such Project Company on such date.
"Available Operating Funds" means, as of any date, in respect
of a Project Company, the aggregate amount of Account Funds on deposit in the
Operating Account of such Project Company on such date.
"Bankruptcy" means, in respect of any Person, a Bankruptcy
Event of such Person.
A-4
"Bankruptcy Event" shall be deemed to occur with respect to
any Person if (a) such Person shall institute a voluntary case seeking
liquidation or reorganization under Bankruptcy Law, or shall consent to the
institution of an involuntary case thereunder against it; (b) such Person shall
file a petition or consent or shall otherwise institute any similar proceeding
under any other applicable Federal or state law, or shall consent thereto; (c)
such Person shall apply for, or by consent there shall be an appointment of, a
receiver, liquidator, sequestrator, trustee or other officer with similar powers
for itself or any substantial part of its assets; (d) such Person shall make an
assignment for the benefit of its creditors; (e) such Person shall admit in
writing its inability to pay its debts generally as they become due; (f) an
involuntary case shall be commenced seeking liquidation or reorganization of
such Person under Bankruptcy Law or any similar proceedings shall be commenced
against such Person under any other applicable Federal or state law and (i) the
petition commencing the involuntary case is not timely controverted, (ii) the
petition commencing the involuntary case is not dismissed within 60 days of its
filing, (iii) an interim trustee is appointed to take possession of all or a
portion of the property, and/or to operate all or any part of the business, of
such Person and such appointment is not vacated within 60 days or (iv) an order
for relief shall have been issued or entered therein; (g) a decree or order of a
court having jurisdiction in the premises for the appointment of a receiver,
liquidator, sequestrator, trustee or other officer having similar powers of such
Person or all or a part of its property shall have been entered; or (h) any
other similar relief shall be granted against such Person under any applicable
Federal or state law.
"Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Code, and any
other state or federal insolvency, reorganization, moratorium or similar law for
the relief of debtors, or any successor statute and, additionally, with respect
to XLCA, Article 74 of the New York Insurance Law.
"Base Case Project Projections" means a projection of
operating results for the Projects delivered pursuant to Section 3.1(n) of the
Insurance and Reimbursement Agreement.
"Bayou Cove Assignment and Assumption Agreement" means the
Assignment and Assumption Agreement between NRG Bayou Cove LLC and El Paso
Merchant Energy Company, dated as of September 10, 2002.
"Bayou Cove Completion Obligations" has the meaning given in
Section 3.14(a) of the Common Agreement.
"Bayou Cove Construction Costs" means, collectively, any and
all costs (other than Uncovered Warranty Costs), expenses, fees, taxes or
reimbursement obligations incurred by or on behalf of the Bayou Cove Project
Company under or in connection with a Bayou Cove Equipment and Construction
Contract or otherwise in connection with achieving Project Completion of the
Bayou Cove Project, in each case on or prior to Completion of the Bayou Cove
Project.
"Bayou Cove Contractors" means, collectively, each of the
contractors, service providers and/or suppliers providing equipment and/or
services to the Bayou Cove Project pursuant to the terms of any Bayou Cove
Equipment and Construction Contract or any agent or subcontractor thereof.
A-5
"Bayou Cove Electric Interconnection Agreement" means the
Interconnection and Operating Agreement between the Bayou Cove Project Company
and Entergy Gulf States, Inc., effective as of October 18, 2001.
"Bayou Cove Electric Interconnection Facilities" means,
collectively, the electric interconnection facilities, including any system
upgrades, contemplated to be engineered, constructed, installed, tested,
commissioned and completed pursuant to the Bayou Cove EPC Agreement (Electric
Interconnection Facilities), the Bayou Cove Electric Interconnection Agreement
and any sub-contract related thereto.
"Bayou Cove EMS Agreement" means the Energy Marketing Services
Agreement by and between NRG Power Marketing and the Bayou Cove Project Company,
dated as of the Closing Date (as amended, amended and restated, supplemented or
otherwise modified from time to time).
"Bayou Cove EPC Agreement (Balance of Plant)" means the
Turnkey Contract among Stone & Xxxxxxx, Inc., Xxxx Constructors, Inc. and the
Bayou Cove Project Company, dated as of November 21, 2001.
"Bayou Cove EPC Agreement (Electric Interconnection
Facilities)" means the Agreement for Engineering, Procurement and Construction
between the Bayou Cove Project Company and Entergy Louisiana, dated as of
October 31, 2001.
"Bayou Cove Equipment and Construction Contracts" means,
collectively, (i) the Bayou Cove Turbine Purchase Agreement, (ii) the Bayou Cove
Generator Step-Up Transformers Purchase Agreement, (iii) the Bayou Cove EPC
Agreement (Balance of Plant), (iv) the Bayou Cove EPC Agreement (Electric
Interconnection Facilities), (v) the Bayou Cove Electric Interconnection
Agreement and (vi) any other agreement or document (including any subcontracts)
entered into with respect to achieving Project Completion for the Bayou Cove
Project.
"Bayou Cove Gas Interconnection Agreement" means the
Reimbursement, Construction, Ownership and Operating Agreement between the Bayou
Cove Project Company and Xxxx Hub Partners, L.P., dated as of February 8, 2002.
"Bayou Cove Generator Step-Up Transformers Purchase Agreement"
means the Generator Step-Up Transformers Contract Agreement between the Bayou
Cove Project Company and ABB Power T&D Company, Inc., dated as of June 1, 2001.
"Bayou Cove Major Project Documents" means, collectively, (a)
the Bayou Cove Electric Interconnection Agreement, the Bayou Cove Gas
Interconnection Agreement, the Bayou Cove EMS Agreement and the Bayou Cove OMA,
(b) any Additional Project Document for the Bayou Cove Project that replaces any
of the agreements described in clause (a), (c) any Major Power Purchase
Agreement, Major FSA or Major FTA for the Bayou Cove Project and (d) any
Additional Project Document for the Bayou Cove Project that constitutes a
material ground lease agreement, material electric interconnection agreement or
material sharing agreement.
"Bayou Cove Membership Interest Purchase Agreement" means the
Membership Interest Purchase Agreement between NRG Bayou Cove LLC and El Paso
Remediation
A-6
Company, dated as of September 10, 2001, by which NRG Bayou Cove LLC purchased
all of El Paso Remediation Company's membership interests in the Bayou Cove
Project Company, constituting 100% of the membership interests in the Bayou Cove
Project Company.
"Bayou Cove OMA" means the Operation and Maintenance Agreement
between the Bayou Cove Project Company and NRG Operating Services dated as of
the Closing Date (as amended, amended and restated, supplemented or otherwise
modified from time to time).
"Bayou Cove Project" means the natural gas-fired electric
generation facility owned by the Bayou Cove Project Company currently under
construction near Jennings, Louisiana in Acadia Parish which, upon Completion,
is expected to generate 295 MW (summer capacity) / 345 MW (winter capacity).
"Bayou Cove Project Company" means Bayou Cove Peaking Power,
LLC, a Delaware limited liability company.
"Bayou Cove Project Documents" means all Project Documents for
the Bayou Cove Project.
"Bayou Cove Turbine Purchase Agreement" means the Turbine
Purchase Site Specific Agreement between NRG Energy and General Electric
Company, dated as of December 5, 2001, as assigned by NRG Energy to the Bayou
Cove Project Company.
"Big Cajun Act of Cash Sale and Grant of Servitude" means the
Act of Cash Sale and Grant of Servitude signed by Louisiana Generating and the
Big Cajun Project Company on the Closing Date.
"Big Cajun Act of Subordination" means the Act of
Subordination of Act of Mortgage, Pledge and Assignment of Leases and Rents
executed by JPMorgan Chase Bank on June 13, 2002.
"Big Cajun EMS Agreement" means the Energy Marketing Services
Agreement by and between NRG Power Marketing and the Big Cajun Project Company,
dated as of the Closing Date (as amended, amended and restated, supplemented or
otherwise modified from time to time).
"Big Cajun OMA" means the Operation and Maintenance Agreement
between the Big Cajun Project Company and NRG Operating Services dated as of the
Closing Date (as amended, amended and restated, supplemented or otherwise
modified from time to time).
"Big Cajun PPA" means the Power Purchase Agreement among the
Big Cajun Project Company, Louisiana Generating and NRG South Central, dated as
of February 15, 2002.
"Big Cajun PPA Shortfall" means, for any calendar month, the
excess, if any, of (i) the amount of the payment for capacity that Big Cajun
Project Company would have been entitled to receive from Louisiana Generating
for such calendar month under the Big Cajun PPA, over (ii) the amount of the
payment for capacity that Big Cajun Project Company actually received for such
calendar month in respect of the Big Cajun PPA on or before the date such
payment is due under the Big Cajun PPA.
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"Big Cajun Project Company" means Big Cajun I Peaking Power
LLC, a Delaware limited liability company.
"Big Cajun I Xxxxx 0&0 Xxxxx Project Documents" means,
collectively, (a) the Big Cajun EMS Agreement, the Big Cajun PPA, any Alternate
Big Cajun PPA, Big Cajun OMA, the Big Cajun Shared Facilities Agreement, the Big
Cajun Sale of Moveables in Place, the Big Cajun Switchyard Servitude Agreement
and the Big Cajun Act of Cash Sale and Grant of Servitude, (b) any Additional
Project Document for the Big Cajun I Units 3&4 Project that replaces any of the
agreements described in clause (a), (c) any Major Power Purchase Agreement,
Major FSA or Major FTA for the Big Cajun I Units 3&4 Project and (d) any
Additional Project Document for the Big Cajun I Units 3&4 Project that
constitutes a material ground lease agreement, material electric interconnection
agreement or material sharing agreement.
"Big Cajun I Units 3&4 Project Documents" means all Project
Documents for the Big Cajun I Units 3&4 Project.
"Big Cajun I Units 1&2 Project" means the approximately 220 MW
natural gas-fired electric generation facility owned by Louisiana Generating,
which is located in New Roads, Louisiana, adjacent to the Big Cajun I Units 3&4
Project.
"Big Cajun I Units 3&4 Project" means the approximately 204 MW
(summer capacity) / 239 MW (winter capacity) natural gas-fired electric
generation facility owned by the Big Cajun Project Company, which is located in
New Roads, Louisiana adjacent to the Big Cajun I Units 1&2 Project.
"Big Cajun Sale of Moveables in Place" means the sale of
Moveables in Place signed by Louisiana Generating and the Big Cajun Project
Company on the Original Closing Date.
"Big Cajun Shared Facilities Agreement" means the Amended and
Restated Shared Facilities Agreement to be entered into substantially in the
form appearing in Exhibit B to the Parent Agreement between the Big Cajun
Project Company and Louisiana Generating.
"Big Cajun Switchyard Servitude Agreement" means the
Switchyard Servitude Agreement between NRG New Roads Holding LLC and the Big
Cajun Project Company on the Original Closing Date.
"Blocked Restricted Payment Amount" has the meaning given in
Section 4.5(c)(i) of the Common Agreement.
"Bond Obligations" means each payment and performance
obligation of the Issuer (monetary or otherwise and whether arising by
acceleration or otherwise) arising under or in connection with the Indenture and
the Series A Bonds, including in respect of payment of principal of, premium, if
any, and interest on the Series A Bonds when due and payable and all other
amounts or performances due or to become due under or in connection therewith.
"Bondholders" has the meaning given in the preamble to the
Common Agreement.
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"Bonds" means, collectively, the Series A Bonds and any
Additional Bonds.
"Business Day" means any day other than a Saturday, Sunday,
legal holiday or other day on which commercial banking institutions in New York
are authorized or obligated by law, executive order or governmental decree to be
closed.
"Calculation Agent" means The Bank of New York, or any
successor Calculation Agent as appointed by the Issuer with the consent of XLCA
(if XLCA is the Controlling Party) and the Swap Counterparty.
"Capital Lease Obligations" means, for any Person, all
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) property to the extent such
obligations are classified and accounted for as a capital lease on a balance
sheet for such Person under GAAP, and, for purposes of the Financing Documents,
the amount of such obligations shall be the capitalized amount thereof,
determined in accordance with GAAP.
"Capital Stock" means, with respect to any Person, any common
stock, preferred stock and any other capital stock of such Person and shares,
interests, participations or other ownership interest (however designated), of
any Person and any rights (other than debt securities convertible into, or
exchangeable for, capital stock or such other ownership interests), warrants,
options or other rights to purchase any of the foregoing, including each class
of common stock and preferred stock of such Person if such Person is a
corporation and each general and/or limited partnership interest of such Person
if such Person is a partnership and/or limited liability company interest of
such Person if such Person is a limited liability company.
"Cash Available for Debt Service" means, for any period, all
Operating Revenues received, or projected to be received (in accordance with
revenue projections prepared by the Power and Fuel Market Consultant within 3
months prior to the determination of Cash Available for Debt Service for such
period), during such period minus all Operating Costs paid, or projected to be
paid (in accordance with cost projections prepared by the Power and Fuel Market
Consultant within 3 months prior to the determination of Cash Available for Debt
Service for such period), during such period.
"Cash Collateral Accounts" has the meaning given in Section
6.4 of the Parent Agreement.
"Cash Collateral Deposits" has the meaning given in Section
12.3 of the Parent Agreement.
"Casualty Event" means any damage to or destruction of a
Project.
"Casualty Insurance Proceeds" means any and all proceeds of
any insurance, indemnity, warranty or guaranty payable from time to time with
respect to any Casualty Event, other than business interruption insurance
proceeds and similar proceeds.
"CERCLA" means the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, 42 U.S.C. Sections 9601 et seq., as
amended by the Superfund Amendments and Reauthorization Act of 1986, and all
rules and regulations thereunder.
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"Closing Date" means January 6, 2004.
"Co-Collateral Agent" means the co-collateral agent appointed
pursuant to Section 11.8 of the Common Agreement.
"Code" means the Internal Revenue Code of 1986, as amended,
and any successor statute.
"Collateral" means, collectively, the Issuer Collateral and
all Project Company Collateral.
"Collateral Agent" has the meaning given in the preamble to
the Common Agreement.
"Collateral Documents" means, collectively, the Issuer
Collateral Documents and all Project Company Collateral Documents.
"ComEd" means Commonwealth Edison Company, an Illinois
corporation.
"Common Agreement" means that certain Amended and Restated
Common Agreement, dated as of the Closing Date, among XLCA, the Swap
Counterparty, the Trustee, the Collateral Agent, the Issuer and each Project
Company (as amended, amended and restated, supplemented or otherwise modified
from time to time).
"Complete" or "Completion" means, with respect to each of the
Bayou Cove Project and the Rockford II Project, the earliest date on which all
of the following shall have occurred:
(a) such Project shall have achieved Project Completion
and the Controlling Party shall have received a certificate of the
Independent Engineer to that effect, which certificate will be in form
and substance reasonably satisfactory to XLCA (if XLCA is the
Controlling Party); and
(b) each of Bayou Cove Project Company or Rockford II
Project Company, as applicable, shall have delivered a Completion
certificate in form and substance reasonably satisfactory to XLCA (if
XLCA is the Controlling Party) certifying that:
(i) with respect to the Bayou Cove Project only,
either (i) all Completion Items and the Completion Expenses
for the Bayou Cove Project have been paid for in full or (ii)
the Bayou Cove Project Company has itemized all Completion
Items for the Bayou Cove Project, which list has been
confirmed by the Independent Engineer, and the deposit into
the Completion Account required pursuant to Section 4.8 of the
Depositary Agreement with respect to such Completion Items and
the Completion Expenses has been made in full;
(ii) with respect to the Rockford II Project
only, either (i) all Completion Items and the Completion
Expenses for the Rockford II Project have been completed and
paid for in full, or (ii) the Rockford II Project Company has
itemized all Completion Items for the Rockford II Project,
which list shall have
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been confirmed by the Independent Engineer, and the deposit
into the Completion Account required pursuant to Section 4.8
of the Depositary Agreement with respect to such Completion
Items and the Completion Expenses has been made in full;
(iii) all material Permits required for operation
of such Project (including all certificates of occupancy for
such Project) have been obtained and are in full force and
effect and not subject to any pending appeal, intervention, or
similar proceeding that could reasonably be expected to have a
Project Material Adverse Effect, and XLCA (if XLCA is the
Controlling Party) has received copies of all such Permits and
all fees and charges associated therewith shall have been paid
in full;
(iv) with respect to the Bayou Cove Project only,
(i) all Bayou Cove Construction Costs have been paid in full
(other than those subject to a good faith dispute and for
which adequate reserves in accordance with GAAP have been set
aside), (ii) either (x) all performance guarantees under the
Bayou Cove Equipment and Construction Contracts have been
satisfied in full or (y) the minimum performance standards
specified therein have been satisfied and all Performance
Liquidated Damages to be paid (including by way of NRG Energy
or any Affiliate thereof making payments into the Acquisition
Indemnity/Performance LD Reserve Account) pursuant to the
Bayou Cove Equipment and Construction Contracts have been paid
in full to the Bayou Cove Project Company without regard for
any limitations placed on the payment of Liquidated Damages in
the Bayou Cove Equipment and Construction Contracts (other
than those subject to a good faith dispute in an amount not to
exceed $5,000,000 in the aggregate, taking into account any
and all retainage amounts also subject to a good faith
dispute), (iii) any retainage or other amounts withheld from
payment to any Bayou Cove Contractor under a Bayou Cove
Equipment and Construction Contract have been paid over in
full to the relevant Bayou Cove Contractor (other than those
which are (A) deposited into the Completion Account or (B)
subject to a good faith dispute in an amount not to exceed
$5,000,000 in the aggregate, taking into account any and all
Performance Liquidated Damages also subject to a good faith
dispute) and (iv) any lien or encumbrance over any portion of
the Bayou Cove Project in favor of a Bayou Cove Contractor has
been released and discharged in full (other than Project
Company Permitted Liens); and
(v) with respect to the Rockford II Project
only, (i) the Rockford II Construction Costs have been paid in
full (other than those subject to a good faith dispute and for
which adequate reserves in accordance with GAAP have been set
aside), (ii) either (x) all performance guarantees under the
Rockford II Equipment and Construction Contracts have been
satisfied in full or (y) the minimum performance standards
specified therein has been satisfied and all Performance
Liquidated Damages to be paid (including by way of NRG Energy
or any Affiliate thereof making payments into the Acquisition
Indemnity/Performance LD Reserve Account) by the Rockford II
Contractors pursuant to the Rockford II Equipment and
Construction Contracts have been paid to the Rockford II
Project Company without regard for any limitations placed on
the payment of Liquidated
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Damages in the Rockford II Equipment and Construction
Contracts (other than those subject to a good faith dispute in
an amount not to exceed $5,000,000 in the aggregate, taking
into account any and all retainage amounts also subject to a
good faith dispute), (iii) any retainage or other amounts
withheld from payment to any Rockford II Contractor under a
Rockford II Equipment and Construction Contract have been paid
over in full to the relevant Rockford Contractor (other than
those which are (A) deposited into the Completion Account or
(B) subject to a good faith dispute in an amount not to exceed
$5,000,000 in the aggregate taking into account any and all
Performance Liquidated Damages also subject to a good faith
dispute), (iv) any lien or encumbrance over any portion of the
Rockford II Project in favor of a Rockford II Contractor has
been released and discharged in full (other than Project
Company Permitted Liens) and (v) title to all equipment
acquired for the Rockford II Project under the Rockford II
Equipment and Construction Contracts has been duly transferred
to the Rockford II Project Company free and clear of all liens
(other than Project Company Permitted Liens).
"Completion Account" has the meaning given in Section 2.1 of
the Depositary Agreement.
"Completion Date" means, in respect of the Bayou Cove Project
and the Rockford II Project, the date upon which such Project achieves
Completion.
"Completion Expenses" means any costs associated with
Completion of the Bayou Cove Project or the Rockford II Project (other than the
Completion Items) including, without limitation, any liabilities, obligations,
commitments, losses, fines, penalties, sanctions, expenses, costs or damages
(whether absolute, accrued, conditional or otherwise and whether or not
resulting from third-party claims), including out-of-pocket expenses and
reasonable fees and expenses of attorneys, accountants, consultants, arising in
connection with the failure to comply with the Bayou Cove EPC Agreement
(Electric Interconnection Facilities).
"Completion Items" means, in connection with Completion of the
Bayou Cove Project and the Rockford II Project, such items as contemplated by
the Construction Contracts for each Project.
"Completion Tests" has the meaning given in Section 3.2(a)(vii) of the
Common Agreement.
"Condemnation Event" means any Project (or any portion
thereof) is condemned, confiscated, requisitioned, captured, seized or subjected
to forfeiture, or title thereto is taken, by any Governmental Authority.
"Condemnation Proceeds" means any and all payments (in any
form whatsoever) made or due and payable from time to time in connection with
any Condemnation Event by any Governmental Authority (or any person acting under
color of Governmental Authority).
"Consents" means, collectively, the third-party consents and
assignments required pursuant to Section 3.1(f)(ii) of the Insurance and
Reimbursement Agreement or Section 5.16(b) of the Common Agreement.
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"Construction Contractors" means, as applicable, the Bayou
Cove Contractors or the Rockford II Contractors.
"Construction Contracts" means, as applicable, the Bayou Cove
Equipment and Construction Contracts or the Rockford II Equipment and
Construction Contracts.
"Contingent Guaranty Agreement" has the meaning given in the
Recitals.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Issuer or any Project Company, are
treated as a single employer under Section 414(b), (c), (m) or (o) of the Code
or under Section 4001(b)(1) of ERISA.
"Controlling Party" means XLCA for so long as either of the
Policies shall be effective and there shall not have occurred and be continuing
an Insurer Default and, at all other times, the requisite number or percentage
of Bondholders acting pursuant to the Indenture.
"Corporate Services Accumulation Amount" means the cumulative
amount of all Corporate Services Payment Shortfall up to $2,500,000 at any one
time accumulated, as set forth in the Equity Reimbursement Certificate as of the
relevant Determination Date.
"Corporate Services Agreement" means the Corporate Services
Agreement by and among NRG Energy, the Issuer and each of the Project Companies,
dated as of the Closing Date (as amended, amended and restated, supplemented or
otherwise modified from time to time).
"Corporate Services Annual Fee" has the meaning given in the
Corporate Services Agreement.
"Corporate Services Payment" means the payment of the
Corporate Services Annual Fee and the Corporate Services Accumulation Amount
under the Corporate Services Agreement.
"Corporate Services Payment Account" has the meaning given in
Section 2.1 of the Depositary Agreement.
"Corporate Services Payment Shortfall" means with respect to
each year, the difference, if any, between $1,000,000 and the Corporate Services
Annual Fee paid under the Corporate Services Agreement.
"Debt" of any Person at any date means, without duplication,
(a) such Person's Debt for Borrowed Money, (b) all obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments, (c) all
obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of
business (which exception is intended to encompass ordinary course obligations
under the Project Documents), (d) all Capitalized Lease Obligations of such
Person, (e) all obligations of such Person to purchase securities (or other
property) which arise out of or in connection with the sale of the same or
substantially similar securities (or property), (f) all deferred obligations of
such Person to reimburse any bank or other Person in respect of amounts paid or
advanced under
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a letter of credit or other instrument, (g) all Debt of others secured by a Lien
on any asset of such Person, whether or not such Debt is assumed by such Person,
and (h) all Debt (or other obligations) of others guaranteed directly or
indirectly by such Person or as to which such Person has an obligation
substantially the economic equivalent of a guaranty (provided that, for purposes
determining the amount of any Debt of the type described in this clause (h), if
the amount of such guaranty or similar obligation is less than the full amount
of the Debt or other obligation guaranteed, the amount of such Debt shall be
limited to the amount of such guaranty or similar obligation).
"Debt for Borrowed Money" means, with respect to any Person,
all obligations of such person for borrowed money.
"Debt Payment Account" has the meaning given in Section 2.1 of
the Depositary Agreement.
"Debt Service Coverage Ratio" means for any period, the ratio
of (a) all Cash Available for Debt Service for such period to (b) all Scheduled
Debt Service due during such period, provided that when calculated for a
Determination Period, the Debt Service Coverage Ratio means the ratio of (a) all
Cash Available for Debt Service for such Determination Period to (b) (x)
Scheduled Debt Service due on the next Annual Scheduled Payment Date plus (y)
any regularly scheduled payments of interest accrued during the Determination
Period and not otherwise included in (x) for such Determination Period.
"Debt Service Coverage Ratio Certificate" means an annual
certificate delivered by the Issuer to XLCA (if XLCA is the Controlling Party)
in accordance with Section 2.7 of the Common Agreement substantially in the form
of Exhibit F to the Common Agreement.
"Debt Service Reserve Account" has the meaning given in
Section 2.1 of the Depositary Agreement.
"Debt Service Reserve Amount" means, as of any Annual
Scheduled Payment Date, the sum of the Debt Service Reserve Amount (Project) for
all Projects as of such Annual Scheduled Payment Date, provided, however, that
if either (a) NRG Energy's ratings or the Shadow Ratings for the Series A Bonds
fall below Investment Grade from Xxxxx'x or S&P, or (b) the Debt Service
Coverage Ratio for the Determination Period ending on the Determination Date
immediately preceding such Annual Scheduled Payment Date is below 1.20 to 1.00,
then the Debt Service Reserve Amount as of such Annual Scheduled Payment Date
shall be equal to 200% of Scheduled Debt Service due on the next Annual
Scheduled Payment Date; provided, further, that if the event described in clause
(b) of the foregoing proviso occurs and NRG Energy's ratings as of such Annual
Scheduled Payment Date are at least Baa2 from Xxxxx'x and BBB from S&P, then the
Debt Service Reserve Amount as of such Annual Scheduled Payment Date shall be
equal to 150% of Scheduled Debt Service due on the next Annual Scheduled Payment
Date.
"Debt Service Reserve Amount (Project)" means, as of any
Annual Schedule Payment Date, with respect to a Project, the product of (x)
Scheduled Debt Service due on the next Annual Scheduled Payment Date multiplied
by (y) the Allocation Percentage for the applicable Project Company; provided,
however, that during a Tolling Period with respect to such Project, the Debt
Service Reserve Amount (Project) with respect to such Project shall be an
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amount equal to 50% of the product of (x) Scheduled Debt Service due on the next
Annual Scheduled Payment Date and (y) the Allocation Percentage for the
applicable Project Company.
"Debt Service Shortfall" means, with respect to any Annual
Scheduled Payment Date, the amount, if any, by which (a) Scheduled Debt Service
on such date exceeds (b) funds in the Debt Payment Account available therefor in
accordance with the terms of Section 4.2 of the Depositary Agreement, without
giving effect to funding sources other than those described in priorities First
through Seventh of Section 4.2.3 of the Depositary Agreement.
"Delay Amounts" means Delay Liquidated Damages, proceeds under
delay in start-up or similar insurance and other similar amounts.
"Delay Liquidated Damages" means all amounts paid under a
Project Document as liquidated damages for failure to complete all or a portion
of a Project, or failure to deliver equipment for a Project, by the date set
forth for completion or delivery thereof in such Project Document, including
amounts paid under guaranties, letters of credit and other support instruments
for such purposes.
"Depositary Agent" means The Bank of New York, in its capacity
as depositary agent and securities intermediary under the Depositary Agreement,
or its successor appointed pursuant to the terms of the Depositary Agreement.
"Depositary Agreement" means the Amended and Restated Security
Deposit Agreement, dated as of the Closing Date, among the Issuer, each Project
Company, the Collateral Agent and the Depositary Agent (as amended, amended and
restated, supplemented or otherwise modified from time to time).
"Depositary Obligations" means each payment and performance
obligation of the Issuer and the Project Companies under the Depositary
Agreement.
"Designated Annual Date" means any date specified by the
Issuer in a Disbursement Request. The Designated Annual Date may vary year by
year, but there shall not be more than one Designated Annual Date by the Issuer
in any given year.
"Designated Monthly Date" means any date specified by the
Issuer in a Disbursement Request. The Designated Monthly Date may vary from time
to time, but there shall not be more than one Designated Monthly Date by the
Issuer in any given month.
"Determination Date" means October 31 of each year with the
first such date being October 31, 2004, and the last such date being October 31,
2018.
"Determination Period" means (a) the period from the Closing
Date through and including October 31, 2004, and (b) thereafter, each period
from November 1 of each year through and including October 31 of the following
year.
"Disbursement Project Event of Default" means a Project Event
of Default with respect to a Project for which a disbursement of Loss Proceeds
is being requested pursuant to Section 4.7.2 of the Depositary Agreement.
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"Disbursement Request" means a Disbursement Request
substantially in the form of Exhibit A to the Depositary Agreement.
"Dispute Notice" has the meaning given in Section 2.13 of the
Common Agreement.
"Distribution Account" has the meaning given in Section 2.1 of
the Depositary Agreement.
"Distribution Test" means, as of any Determination Date, the
determination as to whether the Debt Service Coverage Ratio for the
Determination Period ending on such Determination Date exceeds 1.20.
"Dollars" and "$" mean United States dollars or such coin or
currency of the United States of America as at the time of payment shall be
legal tender for the payment of public and private debts in the United States of
America.
"Easements" means, with respect to any parcel of real
property, (a) all agreements, easements, rights of way or use, rights of ingress
or egress, privileges, appurtenances, tenements, hereditaments and other rights
and benefits appurtenant, belonging or pertaining to such parcel, including the
use of any streets, ways, alleys, vaults or strips of land adjoining, abutting,
adjacent or contiguous to such parcel and (b) all permits, licenses and rights,
whether or not of record, appurtenant to such parcel.
"EBITDA Statement" means a statement setting forth the
combined and combining earnings before interest, taxes, depreciation and
amortization.
"Effective Date" means the date on which the Policies were
issued.
"Eligible Facility" means an eligible facility within the
meaning of Section 32(a)(2) of PUHCA.
"Emissions Credit" means the authorization from any state that
is a signatory to or subject to the Ozone Transport Commission Memorandum of
Understanding dated September 27, 1994 to emit one ton of nitrogen oxide ("NOx")
(May through September) or the authorization by the Administrator of the
Environmental Protection Agency or any successor agency with similar
jurisdiction ("EPA") to emit one ton of sulfur dioxide ("SO(2)") under Title IV
of The Clean Air Act Amendments of 1990, as the same may be amended) or
supplemented, or any successor statutes which are the basis for The Federal Air
Pollution Control Program for Sulfur Dioxide Emissions, in the vintaged year of
issue or in subsequent control periods (subject to restrictions on banked
allowances).
"Emissions Credit Costs" means all costs, as incurred,
associated with the procurement of Emissions Credits, including the commodity
price of such credits, broker fees, and any other additional costs associated
with the procurement of such credits, such additional costs subject to approval
by XLCA (if XLCA is the Controlling Party), which approval shall not be
unreasonably withheld.
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"EMS Letter of Credit" has the meaning given in Section 2.11
of the Parent Agreement.
"EMS Letter of Credit Account" has the meaning given in
Section 2.1 of the Depositary Agreement.
"Energy Manager" means NRG Power Marketing or any successor
power marketer under the Energy Marketing Services Agreement.
"Energy Manager Fee" means the annual fee due and payable to
NRG Power Marketing, or any successor energy manager pursuant to the Energy
Marketing Services Agreement.
"Energy Marketing Services Agreement" means, individually or
collectively, as the context requires, (i) the Bayou Cove EMS Agreement, (ii)
the Big Cajun EMS Agreement, (iii) the Rockford I EMS Agreement, (iv) the
Rockford II EMS Agreement and (v) the Sterlington EMS Agreement or any other
agreement that provides for similar power marketing services for a Project (as
each may be amended, amended and restated, supplemented or otherwise modified).
"Energy Products and Services" means, collectively, Power,
Ancillary Services, Fuel Products and Other Energy-Related Products and
Services.
"Energy Transaction Costs" means Fuel Costs, Emissions Credit
Costs, Transmission Costs, Hedging Costs and any additional costs, such
additional costs subject to approval by XLCA (if XLCA is the Controlling Party),
which approval shall not be unreasonably withheld, the amount of which is
determined as provided in the Energy Marketing Services Agreement.
"Entergy Louisiana" means Entergy Louisiana, Inc., a Louisiana
corporation.
"Environmental Claim" means any claim, notice of claim,
complaint, notice of violation, letter or other written assertion of any kind
concerning any asserted or actual violation of or liability under any Hazardous
Substances Law or any asserted or actual violation or liability relating to any
Hazardous Substance.
"Environmental Consultant" means (a) if XLCA is the
Controlling Party, an environmental consultant reasonably acceptable to XLCA
(which shall include URS Corporation and X.X. XxXxxxxx & Associates, Inc.), and
(b) if XLCA is not the Controlling Party, an independent nationally recognized
environmental consultant.
"Environmental Reports" means, with respect to a Project, the
environmental reports delivered to XLCA (if XLCA is the Controlling Party) in
accordance with Section 3.1(v) of the Insurance and Reimbursement Agreement for
such Project.
"Environmental Subject Claims" has the meaning given in
Section 9.1(b) of the Common Agreement.
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"Equity Documents" means the Parent Agreement and any
Additional Parent Agreement.
"Equity Party" means NRG Energy and any Acceptable Assignee.
"Equity Reimbursement Amount" means an amount equal to the
aggregate of (i) all amounts paid to NRG Energy under the Corporate Services
Agreement plus (ii) all amounts distributed to NRG Energy from the Distribution
Account minus (iii) the aggregate amount of all Equity Reimbursement Payments
made by NRG Energy.
"Equity Reimbursement Certificate" means, an annual
certificate delivered by NRG Energy to the Collateral Agent in accordance with
Section 4.5 of the Parent Agreement substantially in the form of Exhibit A to
the Parent Agreement.
"Equity Reimbursement Obligation" has the meaning given in
Section 2.1 of the Parent Agreement.
"Equity Reimbursement Payments" means any payment made by NRG
Energy pursuant to Section 2.1 of the Parent Agreement.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"ERISA Plan" means any employee benefit plan covered by Title
IV of ERISA or to which Section 412 of the Code applies.
"Excess Cash Flow Account" has the meaning given in Section
2.1 of the Depositary Agreement.
"Excluded Revenues" means, collectively, all Delay Amounts,
all payments by NRG Energy to any Project Company pursuant to Section 2.5 of the
Parent Agreement, Peaker Buyout Profits and all proceeds received in connection
with a Permitted Change of Control.
"Exelon" means Exelon Generating Company, LLC, a Delaware
limited liability company.
"Exempt Wholesale Generator" means an exempt wholesale
generator within the meaning of Section 32(a)(1) of PUHCA.
"Expenditures Dispute Notice" has the meaning given in Section
2.13(b) of the Common Agreement.
"Expenditures Required Modifications" has the meaning given in
Section 2.13(b) of the Common Agreement.
"Experience Amount Margin" means as of any Determination Date,
for any Project Company, such Project Company's Experience Revenue from June 18,
2002 through such Determination Date minus such Project Company's Operating
Costs from June 18, 2002 through such Determination Date.
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"Experience Amount Percentage" means, for each Project
Company, a percentage equal to (x) the Experience Amount Margin for such Project
Company divided by (y) the sum of the Experience Amount Margins for all Project
Companies.
"Experience Amount Percentage Certificate" means, an annual
certificate delivered by the Issuer to XLCA (if XLCA is the Controlling Party)
in accordance with Section 2.7 of the Common Agreement substantially in the form
of Exhibit G to the Common Agreement.
"Experience Revenue" means, with respect to any Project
Company, income derived from the sale, resale or other use of Energy Products
and Services by, or on behalf of, such Project Company plus, to the extent not
included in the calculation of such income, any PPA Shortfall Payments for such
Project Company.
"FERC" means the Federal Energy Regulatory Commission and any
successor thereto.
"Final Order" means an order or judgment of a court of
competent jurisdiction, as entered on the docket thereof, that has not been
reversed, stayed, modified, or amended, and as to which (x) the time to appeal,
seek review or rehearing or petition for certiorari has expired and no
timely-filed appeal or petition for review, rehearing, remand or certiorari (or
any motion seeking extension of time to file such appeal, petition or other
pleading) is pending or (y) any appeal taken or petition for certiorari filed
has been resolved by the highest court to which the order or judgment was
appealed or from which certiorari was sought.
"Final Scheduled Payment Date" means June 10, 2019.
"Financing Documents" means the Common Agreement (including
the Guaranty of each Project Company), the Policy, the Swap Policy, the Premium
Letter, the Insurance and Reimbursement Agreement, the Indenture, the Bonds, the
Swap Agreement, the Equity Documents, the Collateral Documents, the Depositary
Agreement, the Project Loan Agreements, the Project Loan Notes, the Consents,
the Lease Estoppels, the Nondisturbance Agreements, the Rockford I Lien
Subordination Agreement, the Big Cajun Act of Subordination, the Master
Reafirmation to the Security Documents, and each other agreement, document,
certificate or instrument entered into or delivered in connection therewith by
any Financing Party or any Equity Party and any Secured Party in connection with
the Transaction, whether or not specifically mentioned therein, provided that
neither the Purchase Agreement nor any other agreement between a Financing Party
and the Initial Purchaser shall be a "Financing Document."
"Financing Parties" means the Issuer and each Project Company.
"Fiscal Agent" means the fiscal agent, if any, designated
pursuant to the terms of the Policies.
"FPA" means the Federal Power Act, as amended.
"Fuel Account" means, individually or collectively, as the
context requires, the (i) Bayou Cove Fuel Account, (ii) Big Cajun Fuel Account,
(iii) Rockford I Fuel Account, (iv)
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Rockford II Fuel Account and/or (v) Sterlington Fuel Account set forth in
Section 2.1 of the Depositary Agreement.
"Fuel Costs" means all costs associated with Fuel Products,
including the commodity cost of fuel, imbalance charges, delivery charges,
storage, cost of pipeline transportation and applicable taxes and any additional
costs requested from time to time, such additional costs to be approved by XLCA
(if XLCA is the Controlling Party) in its reasonable discretion, as incurred.
"Fuel Products" means Natural Gas supply and transportation
and other fuel and fuel-related products and services.
"Fuel and Operating Accounts Disbursement Request" means a
disbursement request substantially in the form of Exhibit C to the Depositary
Agreement.
"Fundamental Project Event of Default" has the meaning given
in Section 7.3 of the Common Agreement.
"Funding Project Company" has the meaning given to in Section
6.14 of the Common Agreement.
"Funds Block Condition" means, in each case as applicable, any
Issuer Event of Default, Issuer Inchoate Default, Project Event of Default,
Project Inchoate Default, Inchoate Block Condition or Inchoate Project Block
Condition.
"GAAP" means generally accepted accounting principles in the
United States of America consistently applied.
"General Subject Claims" has the meaning given in Section
9.1(a) of the Common Agreement.
"Governmental Authority" means any applicable national, state
or local government (whether domestic or foreign), any political subdivision
thereof or any other governmental, quasi-governmental, judicial, public or
statutory instrumentality, authority, body, agency, bureau or entity (including
any zoning authority, FERC and the applicable PUC) or any arbitrator with
authority to bind a party at law.
"Governmental Rule" means any applicable law, rule,
regulation, ordinance, order, code interpretation, treaty, judgment, decree,
directive, guideline, policy or similar form of decision of any Governmental
Authority.
"Ground Lease" means each of the Rockford I Ground Lease, the
Rockford II Ground Lease and the Sterlington Ground Lease.
"Guaranteed Obligations" has the meaning given in Section
6.1(a) of the Common Agreement.
"Guaranteed Heat Rate" has the meaning given to it in Exhibit
D to the Common Agreement.
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"Guaranty" means, in respect of a Project Company, its
guaranty pursuant to Article 6 of the Common Agreement.
"Hazardous Substance" means any of the following: (a) any
petroleum or petroleum product, explosives, radioactive materials, asbestos,
formaldehyde, polychlorinated biphenyls, lead or radon gas; or (b) any
substance, material, product, derivative, compound or mixture, mineral,
chemical, waste, gas, medical waste or pollutant that is regulated under or that
could reasonably be expected to support the assertion of a claim under any
Hazardous Substances Law, whether or not defined as hazardous under any
Hazardous Substances Laws.
"Hazardous Substances Law" means, any applicable law, statute,
ordinance, code, rule, regulation, license, permit, authorization, approval,
covenant, administrative or court order, judgment, decree, injunction, code or
requirement of or any agreement with, any Governmental Authority:
(a) relating to pollution (or the cleanup, removal or
remediation thereof, or any other response thereto), human health,
safety, natural resources or the environment, including ambient or
indoor air, water vapor, surface water, groundwater, drinking water,
land (including surface or subsurface), plant, aquatic and animal life;
or
(b) concerning exposure to, or the use, containment,
storage, recycling, treatment, generation, Release or threatened
Release, transportation, processing, handling, labeling, containment,
production, disposal or remediation of any Hazardous Substance,
in each case as amended and as now or hereafter in effect, and any common law or
equitable doctrine (including injunctive relief and tort doctrines such as
negligence, nuisance, trespass and strict liability) that may impose liability
or obligations for injuries (whether personal or property) or damages due to or
threatened as a result of the presence of, exposure to, or ingestion of, any
Hazardous Substance, whether such common law or equitable doctrine is now or
hereafter recognized or developed. "Hazardous Substances Laws" include CERCLA;
the Resource Conservation and Recovery Act of 1976, 42 U.S.C. Sections 6901 et
seq.; the Federal Water Pollution Control Act, 33 U.S.C. Sections 1251 et seq.;
the Clean Air Act, 42 U.S.C. Sections 7401 et seq.; the Refuse Act, 33 U.S.C.
Sections 401 et seq.; the Hazardous Materials Transportation Act of 1975, 49
U.S.C. Sections 1801-1812; the Toxic Substances Control Act, 15 U.S.C. Sections
2601 et seq.; the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C.
Sections 136 et seq.; the Safe Drinking Water Act, 42 U.S.C. Sections 300 et
seq.; and the Occupational Safety and Health Act of 1970.
"Hedge" means a transaction, including swaps, options,
physical transactions, or other similar transactions, entered into by the Energy
Manager to manage the risks associated with the discharge of its obligations
under the Energy Marketing Services Agreement consistently with the NRG Credit
Policy.
"Hedging Costs" means the cost of any non-speculative Hedge
undertaken by the Energy Manager (physical or financial) under the Energy
Marketing Services Agreement consistently with the terms of the Energy Marketing
Services Agreement and the NRG Credit Policy.
"Improvements" has the meaning given in the applicable
Mortgage.
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"Inchoate Block Conditions" means, as of any date, that there
shall have occurred and be continuing an Issuer Inchoate Default or that an
Issuer Inchoate Default would have occurred if a Restricted Payment would have
been made on such date.
"Inchoate Project Block Condition" means, as of any date, that
there shall have occurred and be continuing a Project Inchoate Default or that a
Project Inchoate Default would have occurred if a Restricted Payment would have
been made on such date.
"Xxxxxx XXX" means the Operation and Maintenance Agreement
between NRG-Rockford, LLC and Indeck Operations, Inc., dated as of April 24,
2002 (as amended, amended and restated, supplemented or otherwise modified from
time to time).
"Indemnitee" has the meaning given in Section 9.1(a) of the
Common Agreement.
"Indenture" means the Indenture, dated as of the Original
Closing Date, among the Issuer, the Project Companies, XLCA and the Original
Trustee (as may be amended, amended and restated, supplemented or otherwise
modified from time to time).
"Independent Consultants" means, collectively, the Insurance
Consultant, the Independent Engineer and the Power and Fuel Market Consultant.
"Independent Engineer" has the meaning given in Section
10.1(a) of the Common Agreement.
"Initial Purchaser" means Xxxxxxx Xxxxx International.
"Initial Restricted Payment Date" means any Annual Scheduled
Payment Date or any date within 30 days thereafter.
"Insurance and Reimbursement Agreement" means the Financial
Guaranty Insurance and Reimbursement Agreement, dated as of the Original Closing
Date, among XLCA, the Issuer and the Project Companies (as may be amended,
amended and restated, supplemented or otherwise modified from time to time).
"Insurance Consultant" has the meaning given in Section
10.1(b) of the Common Agreement.
"Insurer Default" means the existence and continuance of any
of the following: (a) a failure by XLCA to make a payment when or as required
under the Policy in accordance with its terms or under the Swap Policy in
accordance with its terms; or (b)(i) XLCA (A) files any petition or commences
any case or proceeding under any provision or chapter of the Bankruptcy Law or
any other similar federal or state law relating to insolvency, bankruptcy,
rehabilitation, liquidation or reorganization, (B) makes a general assignment
for the benefit of its creditors, or (C) has an order for relief entered against
it under the Bankruptcy Law or any other similar federal or state law relating
to insolvency, bankruptcy, rehabilitation, liquidation or reorganization which
is final and nonappealable; or (ii) a court of competent jurisdiction, the New
York Department of Insurance or other competent regulatory authority enters a
final and nonappealable order, judgment or decree (A) appointing a custodian,
trustee, agent or receiver for XLCA or for all or any material portion of its
property or (B) authorizing the taking of
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possession by a custodian, trustee, agent or receiver of XLCA (or the taking of
possession of all or any material portion of the property of the XLCA).
"Intercompany Account Balances" means (i) the outstanding
accounts receivable balances and accounts payable balances among NRG Energy, NRG
Power Marketing, the Issuer, the Project Companies and their Affiliates to the
extent that such Intercompany Account Balances with such Affiliates relate to
the Issuer and/or any of the Project Companies or (ii) any transaction that
gives rise to outstanding accounts receivable, balances or accounts payable
balances among NRG Energy, NRG Power Marketing, the Issuer, the Project
Companies and their Affiliates to the extent that such Intercompany Account
Balances with such Affiliates relate to the Issuer and/or any of the Project
Companies.
"Interconnection Solution" means, with respect to the Big
Cajun I Units 3&4 Project, the implementation and effectiveness, in a manner
satisfactory to XLCA in its absolute discretion (if XLCA is the Controlling
Party), of any of the following methods for obtaining direct contractual
electric interconnection access rights for the Big Cajun I Units 3&4 Project
with the Entergy transmission system (or any successor transmission system): (i)
the assignment of a portion of Louisiana Generating's rights under the Louisiana
Generating Interconnection Agreement to the Big Cajun Project Company; (ii) the
amendment of the Louisiana Generating Interconnection Agreement, as appropriate,
to include the Big Cajun I Units 3&4 Project and the Big Cajun Project Company;
(iii) the execution of a separate interconnection agreement directly between the
Big Cajun Project Company and Entergy or its relevant Affiliate (or any
successor thereto); or (iv) any other method of obtaining such direct
contractual electric interconnection access rights, in each case effected by
assignments, amendments or new agreements, as the case may be, and such other
documentation as XLCA (if XLCA is the Controlling Party) shall reasonably
request.
"Investment Grade" means, with respect to any debt instrument
or Person, a rating of at least Baa3 by Moody's and at least BBB- by S&P (or, in
each case, an equivalent rating by another nationally recognized credit rating
agency if either of such rating agencies is not then rating the subject debt
instrument or Person).
"Issuer" has the meaning given in the preamble to the Common
Agreement.
"Issuer Collateral" means, collectively, all real, personal
and mixed property which is subject or is intended to become subject to the
security interests or Liens granted pursuant to any of the Issuer Collateral
Documents; provided that "Issuer Collateral" shall not include any Released
Assets (as defined in any Issuer Collateral Document).
"Issuer Collateral Documents" means, collectively, the
Depositary Agreement, the Issuer Security Agreement, the Issuer Pledge
Agreement, any other agreement or instrument granting a Lien on the real,
personal and/or mixed property of Issuer in favor of the Collateral Agent for
the benefit of the Secured Parties, and any financing statements, notices and
the like filed, recorded or delivered in connection with the foregoing.
"Issuer Event of Default" has the meaning given in Section 7.1
of the Common Agreement.
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"Issuer Inchoate Default" means any occurrence, circumstance
or event, or any combination thereof, which, with the lapse of time and/or the
giving of notice, would constitute an Issuer Event of Default.
"Issuer Material Adverse Effect" means:
(a) a material adverse change in the business, property,
results of operation or financial condition of the Issuer and the
Project Companies (taken as a whole); or
(b) any event or occurrence of whatever nature which
could reasonably be expected to materially and adversely effect (i) the
ability of the Issuer or the Project Companies (taken as a whole) to
perform their respective obligations under any of the Financing
Documents, or (ii) the validity or enforceability of the Operative
Documents (taken as a whole); or
(c) any event or occurrence of whatever nature which
could reasonably be expected to materially and adversely effect the
validity and priority of the Secured Parties' security interests in the
Collateral (taken as a whole);
provided that (i) any adverse change in the Natural Gas supply market or the
Power market after the Closing Date which could cause a change in the conditions
or market forecasts as of the Closing Date shall not be deemed to, in and of
itself, have an "Issuer Material Adverse Effect," and (ii) a downgrade in any
rating assigned to the Issuer, any Project Company, any Affiliate thereof, the
Obligations, the Transaction or any Tranche shall not be deemed to, in and of
itself, be an "Issuer Material Adverse Effect."
"Issuer Permitted Debt" means (a) any Debt of the Issuer under
the Financing Documents (including Additional Bonds), (b) any unsecured Debt
which is subordinated to the Obligations in accordance with the terms set forth
in Exhibit M to the Common Agreement, (c) any unsecured guaranties by the Issuer
of the obligations of the Project Companies to pay Energy Transaction Costs, (d)
the Subordinated Bonds, and (e) Project Company Permitted Debt incurred by the
Issuer and lent to the Project Companies.
"Issuer Permitted Liens" means, collectively, (a) the Lien,
security interests and related rights and interests of the Secured Parties as
provided in the Financing Documents (including Liens securing Additional Bonds);
(b) any Liens for any tax, assessment or other governmental charge either not
yet due or being contested in good faith and by appropriate proceedings, so long
as (i) such proceedings shall not involve any substantial danger of the sale,
forfeiture or substantial loss of a Project, the related Site or any related
Easements, title thereto or any material interest therein and shall not
interfere in any material respect with the use or disposition of such Project,
Site or Easements, or (ii) a bond or other security reasonably acceptable to the
Collateral Agent has been posted or provided in such manner and amount as to
reasonably assure the Collateral Agent that any taxes, assessments or other
charges reasonably determined to be due will be promptly paid in full when such
contest is determined; (c) any Liens arising out of judgments or awards so long
as an appeal or proceeding for review is being prosecuted in good faith and for
the payment of which adequate reserves, bonds or other security reasonably
acceptable to the Collateral Agent have been provided or the payment of which is
fully covered by insurance reasonably acceptable to the Collateral Agent; (d)
any Liens securing the Subordinated Bonds on terms set forth in Exhibit N to the
Common Agreement; (e) any
A-24
Liens securing the Issuer Permitted Debt referred to in paragraph (e) of the
definition of Issuer Permitted Debt to the extent the applicable Project Company
Permitted Debt is permitted to be secured; and (f) any Liens contemplated in
Section 9.01(2) of the Indenture.
"Issuer Pledge Agreement" means (a) the Issuer Pledge
Agreement, dated as of the Original Closing Date, among the Issuer, NRG Capital
II LLC and the Collateral Agent (as amended, amended and restated, supplemented
or otherwise modified from time to time) and (b) the Master Reaffirmation.
"Issuer Security Agreement" means (a) the Issuer Security
Agreement, dated as of the Original Closing Date, between the Issuer and the
Collateral Agent (as amended, amended and restated, supplemented or otherwise
modified from time to time) and (b) the Master Reaffirmation.
"Late Payment Rate" means the lesser of (a) the greater of the
per annum rate of interest, publicly announced from time to time by The Bank of
New York in New York City, as its prime rate plus 2%, and (b) the maximum rate
permissible under applicable usury or similar laws limiting interest rates. The
Late Payment Rate shall be computed on the basis of a 360 day year for the
actual number of days elapsed for such period. The Late Payment Rate shall be
calculated, in good faith, by the Calculation Agent.
"Lease Estoppels" means, collectively, the Rockford I Lease
Estoppel, the Rockford II Lease Estoppel and the Sterlington Lease Estoppel.
"Legal Requirement" means, as to any Person, the articles of
incorporation, bylaws or other organizational or governing documents of such
Person, and any requirement under a Permit, and any Governmental Rule, in each
case applicable to or binding upon such Person or any of its properties or to
which such Person or any of its property is subject.
"Lien" means, with respect to an asset, any mortgage, deed of
trust, lien, pledge, charge, security interest, easement or encumbrance of any
kind in respect of such asset, whether or not filed, recorded or otherwise
perfected or effective under applicable law, as well as the interest of a vendor
or lessor under any conditional sale agreement, capital lease or other title
retention agreement relating to such asset.
"Liquidated Damages" means, collectively, Delay Liquidated
Damages and Performance Liquidated Damages.
"LOC Substitution Date" means any date upon which an
Acceptable Letter of Credit is provided to the Collateral Agent instead of, or
in replacement of, cash on deposit in any Account or Cash Collateral Account, as
the case may be.
"Loss Proceeds" means, collectively, Casualty Insurance
Proceeds and Condemnation Proceeds.
"Loss Proceeds Account" has the meaning given in Section 2.1
of the Depositary Agreement.
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"Louisiana Generating" means Louisiana Generating LLC, a
Delaware limited liability company.
"Louisiana Generating Interconnection Agreement" means the
Interconnection and Operating Agreement between Louisiana Generating and Entergy
Gulf States, Inc. filed with FERC on June 11, 2002.
"MAIN Market Region" means the region covered by the
Mid-America Interconnected Network regional reliability council.
"Major FSAs" with respect to a Project Company, has the
meaning given in the Energy Marketing Services Agreements.
"Major FTAs" with respect to a Project Company, has the
meaning given in the Energy Marketing Services Agreements.
Major Maintenance Operating Expenditure" means the designation
given to a Request For Expenditures by the Independent Engineer under Section
2.13(b) of the Common Agreement approving a Request For Expenditure to be paid
from the Major Maintenance Reserve Account.
"Major Maintenance Payment" means any expenses incurred as
part of a Combustion Inspection, Hot Gas Path Inspection or Major Inspection, as
defined in the equipment manufacturer's most current maintenance guidelines (or
their equivalent).
"Major Maintenance Reserve Account" has the meaning given in
Section 2.1 of the Depositary Agreement.
"Major Maintenance Reserve Account Funding Guidelines" means
the guidelines for funding the Major Maintenance Reserve Account attached to the
Major Maintenance Reserve Amount Certificate.
"Major Maintenance Reserve Amount" means an amount equal to
(i) the annual funding amount as specified in the Major Maintenance Reserve
Amount Certificate plus (ii) any amounts previously required to be funded into
the Major Maintenance Reserve Account and not so funded minus (iii) any amount
of Major Maintenance Payments made for such year.
"Major Maintenance Reserve Amount Certificate" means, an
annual certificate delivered by the Issuer to XLCA (if XLCA is the Controlling
Party) in accordance with Section 2.7 of the Common Agreement substantially in
the form of Exhibit O to the Common Agreement.
"Major Power Purchase Agreement" with respect to a Project
Company, has the meaning given in the Energy Marketing Services Agreements.
"Major Project Documents" means (a) in respect of the Bayou
Cove Project and the Bayou Cove Project Company, the Bayou Cove Major Project
Documents, (b) in respect of the Big Cajun I Units 3&4 Project and the Big Cajun
Project Company, the Big Cajun Xxxxx 0&0 Xxxxx Project Documents, (c) in respect
of the Sterlington Project and the Sterlington Project
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Company, the Sterlington Major Project Documents, (d) in respect of the Rockford
I Project and the Rockford I Project Company, the Rockford I Major Project
Documents, and (e) in respect of the Rockford II Project and the Rockford II
Project Company, the Rockford II Major Project Documents.
"Major Project Participants" means, with respect to a Project,
the Project Company that owns such Project and each other party to the Major
Project Documents entered into for such Project.
"Master Reaffirmation" means the Master Reaffirmation to
Collateral Documents, dated as of the Closing Date, among the Project Companies,
the Issuer, NRG Capital II LLC, NRG Bayou Cove LLC, NRG Ilion Limited
Partnership, NRG Rockford Acquisition LLC, the Rockford Equipment II Company and
the Collateral Agent.
"Mezzanine Tranche" means the portion of the Policy initially
insuring $332,352,000 of principal and interest in respect of the Series A Bonds
representing the second loss layer of the Policy to be drawn in the event of a
Policy Payment.
"Monthly Affiliated Transaction Report" means, in respect of
the Issuer or each Project Company, a monthly report on the transactions with
its Affiliates substantially in the form of Exhibit A to the Common Agreement.
"Monthly Date" means the 10th day of each month.
"Monthly O&M Expense Report" means, in respect of each Project
Company, a monthly report on Total O&M Expenses for such Project Company
substantially in the form of Exhibit C to the Common Agreement.
"Monthly Operations Report" means, in respect of each Project
Company, a monthly operations report for such Project Company setting forth the
information required under Exhibit B to the Common Agreement.
"Monthly Power Marketing Performance Tracking Report" means,
in respect of each Project Company, a monthly report regarding the performance
of NRG Power Marketing for such Project Company, setting forth in detail the
performance of such Project Company relative to applicable market indices,
substantially in the form of Exhibit D to the Common Agreement.
"Monthly Power Marketing Report" means, in respect of each
Project Company, a monthly report regarding power marketing activities of such
Project substantially in the form of Exhibit E to the Common Agreement.
"Moody's" means Xxxxx'x Investors Service, Inc., or any
successor thereto, and, if such corporation shall for any reason no longer
perform the functions of a securities rating agency, "Moody's" shall be deemed
to refer to any other nationally recognized rating agency designated by the
Issuer; provided, that with respect to the rating of the Bonds, the designation
shall be with the consent of XLCA (if XLCA is the Controlling Party).
"Mortgaged Properties" has the meaning given in the applicable
Mortgage.
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"Mortgages" means, collectively, each of the mortgages
encumbering the Sites and/or Easements related to the Projects as security for
the Guaranteed Obligations.
"Natural Gas" means any mixture of hydrocarbons and
non-combustible gases as a gaseous state consisting primarily of methane.
"Net Operating Revenues" means, for any period, all Operating
Revenues for such period minus all Operating Costs for such period.
"Net Peaker Buyout Proceeds" means Peaker Buyout Proceeds
minus Peaker Buyout Profits.
"New Credit Agreement" means a new credit facility entered
into by NRG Energy or any of its Affiliates which refinances all outstanding
loans and commitments under the NRG Credit Agreement or any New Credit
Agreement.
"Nondisturbance Agreements" means, collectively, the Rockford
I Non-Disturbance Agreement and the Rockford II Non-Disturbance Agreement.
"Non-Funding Project Company" has the meaning given in Section
6.14 of the Common Agreement.
"Nonrecourse Persons" has the meaning given in Article 8 of
the Common Agreement.
"Notice" has the meaning assigned to such term in the
Policies.
"NRG Bankruptcy" has the meaning given in the Recitals.
"NRG Claim Settlement Account" has the meaning given in
Section 2.1 of the Depositary Agreement.
"NRG Credit Agreement" means the Credit Agreement, dated as of
December 23, 2003, among NRG Energy, NRG Power Marketing, the lenders from time
to time party thereto, Credit Suisse First Boston, as administrative agent and
as collateral agent, Xxxxxx Brothers Inc., as joint lead book runners and joint
lead arrangers and Xxxxxx Commercial Paper Inc., as syndication agent (as
amended, amended and restated, supplemented or otherwise modified from time to
time).
"NRG Credit Risk Policy" with respect to a Project Company,
has the meaning given in the Energy Marketing Services Agreement to which such
Project Company is a party.
"NRG Energy" means NRG Energy, Inc., a Delaware corporation.
"NRG Energy Material Adverse Effect" means:
(a) a material adverse change in the business, property,
results of operations or financial condition of NRG Energy; or
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(b) any event or occurrence of whatever nature which
could reasonably be expected to materially and adversely effect (i) the
ability of NRG Energy to perform its obligations under the Parent
Agreement or (ii) the validity or enforceability of the Parent
Agreement;
provided that a downgrade in any rating assigned to NRG Energy or its debt
obligations shall not be deemed, in and of itself, to be a "NRG Energy Material
Adverse Effect."
"NRG Event of Default" has the meaning given in Section 13 of
the Parent Agreement.
"NRG Operating Services" means NRG Operating Services, Inc., a
Delaware corporation.
"NRG Permitted Liens" means, collectively, (a) Liens for any
tax, assessment or other governmental charge either not yet due or being
contested in good faith and by appropriate proceedings, so long as (i) such
proceedings shall not involve any substantial danger of the sale, forfeiture or
substantial loss of a Project, the related Site or any related Easements, title
thereto or any material interest therein and shall not interfere in any material
respect with the use or disposition of such Project, Site or Easements, or (ii)
a bond or other security reasonably acceptable to the Collateral Agent has been
posted or provided in such manner and amount as to reasonably assure the
Collateral Agent that any taxes, assessments or other charges reasonably
determined to be due will be promptly paid in full when such contest is
determined; and (b) Liens arising out of judgments or awards so long as an
appeal or proceeding for review is being prosecuted in good faith and for the
payment of which adequate reserves, bonds or other security reasonably
acceptable to the Collateral Agent have been provided or the payment of which is
fully covered by insurance reasonably acceptable to the Collateral Agent.
"NRG Plan of Reorganization" means a plan of reorganization in
the bankruptcy cases of NRG Energy and its Affiliates that has been confirmed
under Section 1129 of the Federal Bankruptcy Code, 11 U.S.C. 1129, and become
effective.
"NRG Power Marketing" means NRG Power Marketing Inc., a
Delaware corporation.
"NRG South Central" means NRG South Central Generating LLC, a
Delaware limited liability company.
"O&M Agreement" means, individually or collectively, as the
context requires, (i) the Bayou Cove OMA, (ii) the Big Cajun OMA, (iii) the
Xxxxxx XXX and (iv) the Sterlington OMA and any other similar agreement that
provides for operation and maintenance services of a similar scope for the
Projects (as each may be amended, amended and restated, supplemented or
otherwise modified from time to time).
"O&M Expenses" means any of the monthly operating and
maintenance expenses as provided in the Annual Operations Budget.
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"Obligations" means the Bond Obligations, the Reimbursement
Obligations, the Depositary Obligations, the Swap Obligations and the
obligations of each Project Company under its Guaranty.
"Offering Circular" means the final offering circular, dated
June 14, 2002, in respect of the Series A Bonds and, unless otherwise stated,
the Preliminary Offering Circular.
"Operating Account" means, individually or collectively, as
the context requires, the (i) Bayou Cove Operating Account, (ii) Big Cajun
Operating Account, (iii) Rockford I Operating Account, (iv) Rockford II
Operating Account and/or (v) Sterlington Operating Account set forth in Section
2.1 of the Depositary Agreement.
"Operating Costs" means, collectively, Total O&M Expenses, any
costs and expenses relating to the major maintenance of a Project (excluding
such expenses which are provided for in the Major Maintenance Reserve Account)
and any Energy Transaction Costs.
"Operating Revenues" means, collectively, (a) all payments
received by the Project Companies under the Project Documents (excluding Loss
Proceeds required to be deposited in the Loss Proceeds Account), (b) all income
derived from the sale, resale or other use of Energy Products and Services by,
or on behalf of, the Project Companies, (c) all proceeds of business
interruption insurance or similar insurance, and (d) all earnings on Permitted
Investments, in each case as determined in conformity with cash accounting
principles and subject to netting requirements (if any) contained in the Project
Documents; provided that "Operating Revenues" shall not include Excluded
Revenues.
"Operating Services Budget" means any budget prepared by the
Operator under the O&M Agreements.
"Operative Documents" means the Financing Documents and the
Project Documents.
"Operator" has the meaning given in the O&M Agreements.
"Optional Redemption" has the meaning given in the Indenture.
"Original Closing Date" means June 18, 2002.
"Original Common Agreement" has the meaning given in the
Recitals.
"Original Depositary Agreement" has the meaning given in the
Recitals.
"Original Trustee" means The Bank of New York.
"Other Energy-Related Products and Services" means ancillary
services, emissions credits, conversion services and other related products and
services.
"Parent Agreement" means the NRG Parent Agreement, dated as of
the Closing Date by NRG Energy in favor of the Collateral Agent (as amended,
amended and restated, supplemented or otherwise modified from time to time).
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"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under Title IV of ERISA.
"Peaker Buyout" means either (a) the sale, transfer or other
disposition by a Project Company of all or substantially all of its assets or
(b) the sale, transfer or other disposition by NRG Energy of 100% of its direct
or indirect interests in any Project Company.
"Peaker Buyout Proceeds" means all proceeds received by NRG
Energy or any of its Affiliates in connection with a Peaker Buyout.
"Peaker Buyout Profits" means, in connection with a Peaker
Buyout, (i) Peaker Buyout Proceeds associated therewith, minus (ii) the
aggregate amount of payments required to be made by the Issuer and the Project
Companies under the Financing Documents in connection with such Peaker Buyout
(including such payments as are set out in the definition of Permitted Peaker
Buyout (Completion / Loss Event) and clause (i) of the definition of Permitted
Peaker Buyout (Peaker Sale / Project Event of Default) but excluding such
payments as are set out in clause (ii) of the definition of Permitted Peaker
Buyout (Peaker Sale / Project Event of Default)).
"Peaker Collateralization" means, with respect to a Project
Company, the deposit into the Peaker Collateralization Account of an amount in
cash or an Acceptable Letter of Credit equal to at least the Allocation
Percentage Buyout Amount, using Loss Proceeds and/or other funds not comprising
the Collateral.
"Peaker Collateralization Account" has the meaning given in
Section 2.1 of Depositary Agreement.
"Performance Liquidated Damages" means all amounts paid under
a Project Document as liquidated damages for failure of a Project to meet the
performance or other guarantees (excluding schedule guarantees) specified in
such Project Document, including amounts paid under guaranties, letters of
credit and other support instruments for such purposes.
"Permit" means any applicable permit, authorization,
registration, notice to and declaration of or with, consent, approval, waiver,
exception, variance, order, judgment, decree, license, exemption or filing,
required by or from any Governmental Authority, or required by any Legal
Requirement, and shall include any environmental or operating permit or license
that is required for the full use, occupancy, zoning and operation of a Project.
"Permit Schedule" has the meaning given in Section 3.1(bb)(i)
of the Insurance and Reimbursement Agreement.
"Permitted Change of Control" means a sale, transfer or other
disposition of no more than 50% of NRG Energy's direct or indirect interests in
the Issuer or any Project Company in respect of which the Permitted Change of
Control Conditions have been satisfied.
"Permitted Change of Control Conditions" means, in respect of
any sale, transfer or other disposition of no more than 50% of NRG Energy's
direct or indirect interests in the Issuer or any Project Company, that after
giving effect to such sale, transfer or other disposition, (i) each Project, and
all other Collateral, remains part of the Collateral, (ii) NRG Energy shall
directly or indirectly control (or control equally and jointly with another
Person) the fundamental
A-31
management decisions of the Project Companies (it being acknowledged that the
possession by a Person other than NRG Energy of a veto power over material
events with respect to such Project Company (e.g., dissolution of such Project
Company, merger or consolidation of such Project Company, sale of all or
substantially all assets of such Project Company, material amendments to such
Project Company's organizational documents) shall not in and of itself
constitute a failure by NRG Energy to directly or indirectly control the
fundamental management decisions of such Project Company), (iii) each Project
Company remains obligated under its Guaranty, and (iv) either (x) NRG Energy
shall remain obligated to the Collateral Agent on behalf of the Secured Parties
under the Parent Agreement, or (y) the buyer (A) shall have assumed the
Associated Parent Obligations (if any) with respect to the transferred ownership
interests by executing an assignment and assumption agreement in form and
substance reasonably satisfactory to XLCA (if XLCA is the Controlling Party)
substantially in the form of the Additional Parent Agreement with respect
thereto, (B) if XLCA is the Controlling Party, shall have provided opinions of
counsel (which may be in-house counsel) to XLCA in respect of customary matters
(i.e., formation, requisite authority, due authorization, execution and
delivery, enforceability, the absence of conflicts, consents and litigation)
relating to it and such assignment and assumption and (C) such buyer is either
(x) rated at least A3 by Moody's and A- by S&P, or (y) is rated at least Baa2 by
Moody's and BBB by S&P and has provided cash, Acceptable Letters of Credit or
other credit support acceptable to XLCA (if XLCA is the Controlling Party)
(acting in its sole discretion) in the amount of the Equity Reimbursement Amount
assumed by the buyer.
"Permitted Encumbrances" means, with respect to a Project,
those liens, encumbrances or other exceptions to title specified on a Title
Policy delivered pursuant to Section 3.1(dd) of the Insurance and Reimbursement
Agreement (it being understood that the exceptions to title appearing on said
Title Policy shall be reasonably acceptable to XLCA (if XLCA is the Controlling
Party)).
"Permitted Investments" means any of the following:
(a) any securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the
United States of America is pledged in support thereof) having a
maturity not exceeding one year from the date of issuance;
(b) any time deposits and certificates of deposit of any
domestic commercial bank rated at least A-1 or the equivalent thereof
by S&P or at least P-1 or the equivalent thereof by Moody's having
capital and surplus in excess of $250,000,000;
(c) any fully secured repurchase obligations with a term
of not more than 7 days for underlying securities of the types
described in clause (a) above entered into with any bank meeting the
qualifications established in clause (b) above;
(d) any commercial paper of any corporation rated at
least A-1 or the equivalent thereof by S&P or at least P-1 or the
equivalent thereof by Moody's and in each case, having a maturity not
exceeding 90 days from the date of acquisition;
(e) any commercial paper of any domestic corporation
rated at least A-2 or the equivalent thereof by S&P or at least P-2 or
the equivalent thereof by Moody's and, in each case having a maturity
not exceeding 90 days from the date of acquisition
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(provided that the aggregate amount of any such commercial paper of any
single issuer thereof shall not exceed $3,000,000);
(f) any fully secured repurchase obligations with a term
of not more than 7 days for underlying securities of the types
described in clause (a) above entered into with any bank meeting the
qualifications established in clause (b) above; and
(g) any money market mutual funds;
provided, however, that Permitted Investments shall not include any commercial
paper, notes, bonds or other securities of any kind of NRG Energy or any
Affiliate of NRG Energy.
"Permitted Liens" means Issuer Permitted Liens and Project
Company Permitted Liens.
"Permitted Peaker Buyout" means a Permitted Peaker Buyout
(Completion / Loss Event) or a Permitted Peaker Buyout (Peaker Sale / Project
Event of Default), as applicable.
"Permitted Peaker Buyout (Loss Event)" means a Peaker Buyout
for which the following conditions are satisfied:
(i) such Peaker Buyout is effected to cure an Issuer
Event of Default under Section 7.1(o) of the Common Agreement; and
(ii) the Issuer redeems Series A Bonds in accordance with
Article 12 of the Indenture in a principal amount equal to at least the
Allocation Percentage Buyout Amount for such Project Company and pays
all Swap Breakage Costs associated with such redemption, using Peaker
Buyout Proceeds from such Peaker Buyout (if any) and/or other funds not
comprising the Collateral.
"Permitted Peaker Buyout (Peaker Sale / Project Event of
Default)" means a Peaker Buyout for which the following conditions are
satisfied:
(i) (A) if the Allocation Percentage for the applicable
Project Company is greater than the Experience Amount Percentage for
such Project Company, the Issuer redeems Series A Bonds in accordance
with Article 12 of the Indenture in a principal amount equal to at
least the Allocation Percentage Buyout Amount, and pays the Redemption
Premium and all Swap Breakage Costs associated with such redemption,
using Peaker Buyout Proceeds from such Peaker Buyout (if any) and/or
other funds not comprising the Collateral, or (B) if the Experience
Amount Percentage for such Project Company is greater than the
Allocation Percentage for such Project Company, the Issuer redeems
Series A Bonds in accordance with Article 12 of the Indenture in a
principal amount equal to the Experience Amount Percentage for such
Project Company multiplied by the aggregate principal amount of Series
A Bonds then Outstanding (as defined in the Indenture), and pays the
Redemption Premium and all Swap Breakage Costs associated with such
redemption, using Peaker Buyout Proceeds from such Peaker Buyout (if
any) and/or other funds not comprising the Collateral;
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(ii) (A) if on the date of the consummation of such Peaker
Buyout, the amount of Available Debt Service Reserve Funds is less than
the Debt Service Reserve Amount as of the immediately preceding Annual
Scheduled Payment Date (or as of the Closing Date if the first Annual
Scheduled Payment Date after the Closing Date has not occurred), an
amount of funds equal to the lesser of (x) the amount of such
deficiency in the Debt Service Reserve Account and (y) the amount of
Peaker Buyout Profits received in connection with such Peaker Buyout is
deposited into the Debt Service Reserve Account, and (B) if on the date
of the consummation of such Peaker Buyout, the amount of Available
Major Maintenance Reserve Funds is less than the Major Maintenance
Reserve Amount as of the immediately preceding Annual Scheduled Payment
Date (or as of the Closing Date if the first Annual Scheduled Payment
Date after the Closing Date has not occurred), an amount of funds equal
to the lesser of (x) the amount of such deficiency in the Major
Maintenance Reserve Account and (y) the amount of Peaker Buyout Profits
received in connection with such Peaker Buyout is deposited into the
Major Maintenance Reserve Account, provided that, if the aggregate
amount of such deficiency in the Debt Service Reserve Account and the
Major Maintenance Reserve Account is less than the amount of Peaker
Buyout Profits, the remaining amount of Peaker Buyout Profits shall be
used to redeem Series A Bonds in accordance with Article 12 of the
Indenture and pay the Redemption Premium and all Swap Breakage Costs
associated with such redemption;
(iii) after giving effect to such Peaker Buyout, (A) the
number of Projects comprising the Collateral is at least three and (B)
at least one remaining Project comprising the Collateral is located in
each of the MAIN Market Region and the SERC Market Region;
(iv) no Issuer Event of Default has occurred and is
continuing (other than an Issuer Event of Default relating solely to
the Project or Project Company involved in such Peaker Buyout which is
cured or eliminated by such Peaker Buyout); and
(v) if XLCA is the Controlling Party and such Peaker
Buyout is with respect to the Rockford I Project, Rockford I Project
Company, Rockford II Project or Rockford II Project Company, such
agreements for the sharing of facilities for the Rockford I Project and
the Rockford II Project as reasonably requested by XLCA are entered
into by the Rockford I Project Company and the Rockford II Project
Company on or prior to the consummation of such Peaker Buyout.
"Person" means any natural person, corporation, partnership,
limited liability company, firm, association, Governmental Authority or any
other entity whether acting in an individual, fiduciary or other capacity.
"Pledgor" means any Person pledging its interests (a) in a
Project Company or in the Rockford II Equipment Company under a Project Company
Pledge Agreement, or (b) in the Issuer under the Issuer Pledge Agreement
(collectively, the "Pledgors").
"Policies" means the Policy and the Swap Policy.
"Policy" means the Financial Guaranty Insurance Policy,
including any endorsements thereto, issued by XLCA with respect to the Series A
Bonds, dated as of the
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Original Closing Date, substantially in the form of Appendix I to the Insurance
and Reimbursement Agreement.
"Policy Payment" has the meaning given in Section 4.1(a) of
the Insurance and Reimbursement Agreement.
"Policy Termination Date" means the Termination Date as
defined in the Policy.
"Power" means electric capacity, electric energy and/or
ancillary services.
"Power and Fuel Market Consultant" has the meaning given in
Section 10.1(c) of the Common Agreement.
"PPA Shortfall Payment" has the meaning given in Section 2.2
of the Parent Agreement.
"Preference Claim" has the meaning given in Section 7.4(c) of
the Common Agreement.
"Preliminary Offering Circular" means the first preliminary
offering circular, dated May 24, 2002, and the second preliminary offering
circular, dated June 13, 2002, each in respect of the Series A Bonds.
"Premium" means the insurance premium (including any
additional premium) payable in respect of the Policy by the Issuer in accordance
with the Premium Letter and the Insurance and Reimbursement Agreement.
"Premium Letter" means the side letter, dated as of the
Original Closing Date, among XLCA, the Issuer and the Project Companies entered
into in consideration of the issuance of the Policies.
"Premiums" means the Policy Premium and the Swap Policy
Premium.
"Pricing Date" means the date of the Purchase Agreement.
"Project Companies" means, collectively, the Bayou Cove
Project Company, the Big Cajun Project Company, the Rockford I Project Company,
the Rockford II Project Company, and the Sterlington Project Company (each,
individually, a "Project Company"); provided that upon the occurrence of a
Project Release Event with respect to a Project Company, such Project Company
will no longer be a "Project Company" under the Financing Documents.
"Project Company Blocked Amount" means, in respect of a
Project Company and in connection with a proposed Restricted Payment pursuant to
Section 4.5 of the Common Agreement, an amount in Dollars equal to the Account
Funds that would have been available for the making of a Restricted Payment
pursuant to Section 4.5(a) of the Common Agreement had no Project Event of
Default or Project Inchoate Default occurred and be continuing multiplied by
such Project Company's Allocation Percentage.
"Project Company Collateral" means, with respect to a Project
Company or the Rockford II Equipment Company, all real, personal and mixed
property which is subject or is
A-35
intended to become subject to the security interests or Liens granted pursuant
to the Project Company Collateral Documents for such Project Company or the
Rockford II Equipment Company; provided that "Project Company Collateral" shall
not include any Released Assets (as defined in each Project Company Collateral
Document).
"Project Company Collateral Documents" means, collectively,
the Mortgages, the Depositary Agreement, the Project Company Security
Agreements, the Project Company Pledge Agreements, any other agreement or
instrument granting a Lien on the real, personal and/or mixed property of a
Project Company or the Rockford II Equipment Company in favor of the Collateral
Agent for the benefit of the Secured Parties, and any subordination agreements,
financing statements, notices and the like filed, recorded or delivered in
connection with the foregoing.
"Project Company Permitted Debt" means, with respect to a
Project Company, (a) any Debt under the Operative Documents to which such
Project Company is a party (including guarantees of the Additional Bonds), (b)
any trade accounts payable (other than for borrowed money) arising, and accrued
expenses incurred, in the ordinary course of business so long as such trade
accounts payable or accrued expenses incurred are (i) payable within 90 days of
the date the respective goods are delivered or the respective services are
rendered or (ii) being contested in good faith by appropriate proceedings and
adequate reserves with respect thereto shall, to the extent required by GAAP,
have been set aside, (c) any purchase money obligations and Capital Lease
Obligations incurred to finance discrete items of equipment not comprising an
integral part of its Project that extend only to the equipment being financed in
an aggregate not exceeding $5,000,000 at any one time outstanding for such
Project Company, (d) any obligations in respect of surety bonds or similar
instruments in an aggregate amount not exceeding $5,000,000 at any one time
outstanding for such Project Company, (e) any unsecured Debt which is
subordinated to the Obligations in accordance with the terms set forth in
Exhibit M to the Common Agreement, and (f) any guaranties of Issuer Permitted
Debt and Project Company Permitted Debt.
"Project Company Permitted Liens" means, in respect of a
Project Company or the Rockford II Equipment Company, (a) the Lien, security
interests and related rights and interests of the Secured Parties as provided in
the Financing Documents (including Liens securing Additional Bonds); (b) any
Liens for any tax, assessment or other governmental charge either not yet due or
being contested in good faith and by appropriate proceedings, so long as (i)
such proceedings shall not involve any substantial danger of the sale,
forfeiture or substantial loss of its Project, the related Site or any related
Easements, title thereto or any material interest therein and shall not
interfere in any material respect with the use or disposition of such Project,
Site or Easements, or (ii) a bond or other security (including funds that have
been withheld or reserved) reasonably acceptable to the Collateral Agent has
been posted or provided in such manner and amount as to reasonably assure the
Collateral Agent that any taxes, assessments or other charges determined to be
due will be promptly paid in full when such contest is determined; (c) any
materialmen's, mechanics', workers', repairmen's, employees' or other like
Liens, junior in right of payment to the Lien of the Project Company Collateral
Documents or for which the Secured Parties are otherwise indemnified, arising in
the ordinary course of business or in connection with the construction of the
Project, either for amounts not yet due or for amounts being contested in good
faith and by appropriate proceedings, so long as (i) such proceedings shall not
involve any substantial danger of the sale, forfeiture or substantial loss of
A-36
such Project, the related Site or any related Easements, title thereto or any
material interest therein and shall not interfere in any material respect with
the use or disposition of such Project, Site or Easements, or (ii) a bond or
other security reasonably acceptable to the Collateral Agent has been posted or
provided in such manner and amount as to reasonably assure the Collateral Agent
that any amounts determined to be due will be promptly paid in full when such
contest is determined; (d) any Liens arising out of judgments or awards so long
as an appeal or proceeding for review is being prosecuted in good faith and for
the payment of which adequate reserves, bonds or other security reasonably
acceptable to the Collateral Agent have been provided or the payment of which is
fully covered by insurance reasonably acceptable to the Collateral Agent; (e)
any Permitted Encumbrances; (f) any Liens, deposits or pledges to secure
statutory obligations or performance of bids, tenders, contracts (other than for
the repayment of borrowed money) or leases, or for purposes of like general
nature in the ordinary course of its business, not to exceed $5,000,000 in the
aggregate at any time for such Project Company, and with any such Lien to be
released as promptly as practicable; (g) any other Liens incident to the
ordinary course of business that are not incurred in connection with the
obtaining of any loan, advance or credit and that do not in the aggregate
materially impair the use of the property or assets of Project Company or the
value of such property or assets for the purposes of such business; (h) any
Liens securing Project Company Permitted Debt described to in paragraph (c) of
the definition thereof; (i) any Liens securing the Project Company Permitted
Debt described in paragraph (f) of the definition thereof to the extent the
applicable Issuer Permitted Debt or Project Company Permitted Debt is permitted
to be secured; (j) any Liens contemplated in Section 5.10 (a)(ii) of the Common
Agreement; and (k) any Liens disclosed on Schedule 3.1 of the Insurance and
Reimbursement Agreement.
"Project Company Pledge Agreements" means (a) the Project
Company Pledge Agreements, dated as of the Original Closing Date, among the
applicable Pledgor, the applicable Project Company and, as applicable, the
Rockford II Equipment Company, and the Collateral Agent (each as may be amended,
amended and restated, supplemented or otherwise modified from time to time) and
(b) the Master Reaffirmation.
"Project Company Security Agreements" means (a) the Project
Company Security Agreements, dated as of the Original Closing Date, between the
applicable Project Company and the Collateral Agent (each as may be amended,
amended and restated, supplemented or otherwise modified from time to time), (b)
the Rockford II Equipment Security Agreement, dated as of the Original Closing
Date, between Rockford II Equipment Company and the Collateral Agent (as
amended, amended and restated, supplemented or otherwise modified from time to
time) and (c) the Master Reaffirmation.
"Project Completion" means:
(a) with respect to the Bayou Cove Project, the
occurrence of each of (i) the Acceptance of the Facilities (as defined
in the Bayou Cove EPC Agreement (Balance of Plant)), (ii) the final
acceptance and commissioning of the Project (as defined in) Bayou Cove
EPC Agreement (Electric Interconnection Facilities)), (iii) the
construction, installation, testing, commissioning and completion of
the Bayou Cove Electric Interconnection Facilities and the
Interconnecting Facilities (as defined in the Bayou Cove Gas
Interconnection Agreement), to the extent not covered in the Bayou Cove
EPC Agreement (Balance of Plant), (iv) the construction, installation,
testing, commissioning
A-37
and completion of the water well required to supply the Bayou Cove
Project with water, and (v) the completion of any other work relating
to the engineering, procurement, construction, installation, testing,
and commissioning of the Bayou Cove Project, inclusive of all gas and
electric interconnection points and water supply and wastewater
discharge arrangements, such that the Bayou Cove Project is capable of
(A) receiving all Natural Gas required to operate in accordance with
the Bayou Cove Project Documents, and (B) delivering electricity to the
point of interconnection designated in the Bayou Cove Project
Documents, in each case while in compliance with all applicable Legal
Requirements, Permits and the Bayou Cove Project Documents; and
(b) with respect to the Rockford II Project, the
occurrence of each of (i) Final Acceptance (as defined in the Rockford
II Combustion Turbine Equipment Supply Contract), (ii) the delivery of
all equipment required to be delivered pursuant to the Rockford II
Transformer Purchase Documents, (iii) the delivery of the Notice of
Completion (as defined in the Rockford II Construction Contract) by the
Rockford II Project Company, (iv) the termination of the Rockford II
Construction Management Services Agreement, (v) the design,
construction, installation, testing, commissioning and completion of
the Interconnection Facilities (as defined in the Rockford II Electric
Interconnection Agreement), (vi) the delivery of the Mechanical
Acceptance notice (as defined in the Rockford II Gas Interconnection
Agreement) by the Rockford II Project Company, and (vii) the completion
of any other work relating to the engineering, procurement,
construction, installation, testing, and commissioning of the Rockford
II Project, inclusive of all gas and electric interconnection points
and water supply and wastewater discharge arrangements, such that the
Rockford II Project is capable of (A) receiving all Natural Gas
required to operate in accordance with the Rockford II Project
Documents, and (B) delivering electricity to the point of
interconnection designated in the Rockford II Project Documents, in
each case while in compliance with all applicable Legal Requirements,
Permits and the Rockford II Project Documents.
"Project Document Action" has the meaning given in Section
5.11(a) of the Common Agreement.
"Project Documents" means, with respect to a Project, all
Major Project Documents for such Project and all other contracts, agreements,
instruments and other documents related to the development, design, engineering,
construction, use, operation, maintenance, improvement, ownership and/or
acquisition of such Project.
"Project Event of Default" has the meaning given in Section
7.2 of the Common Agreement.
"Project Inchoate Default" means any occurrence, circumstance
or event, or any combination thereof, which, with the lapse of time or giving of
notice, would constitute a Project Event of Default.
"Project Loan Agreements" means, collectively, (a) the Project
Loan Agreement, dated as of the Original Closing Date, between the Issuer and
the Bayou Cove Project Company, (b) the Project Loan Agreement, dated as of the
Original Closing Date, between the Issuer and the Rockford I Project Company,
and (c) the Project Loan Agreement, dated as of the Original
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Closing Date, between the Issuer and the Rockford II Project Company (each as
may be amended, amended and restated, supplemented or otherwise modified from
time to time).
"Project Loan Amount" means (a) in respect of the Bayou Cove
Project Company, $107,353,000, (b) in respect of the Rockford I Project Company,
$111,867,000, and (c) in respect of the Rockford II Project Company
$105,780,000.
"Project Loan Notes" means, collectively, (a) the promissory
note issued by the Bayou Cove Project Company to the Issuer on the Original
Closing Date pursuant to the Project Loan Agreement to which the Bayou Cove
Project Company is a party, (b) the promissory note issued by the Rockford I
Project Company to the Issuer on the Original Closing Date pursuant to the
Project Loan Agreement to which the Rockford I Project Company is a party, and
(c) the promissory note issued by the Rockford II Project Company to the Issuer
on the Original Closing Date pursuant to the Project Loan Agreement to which the
Rockford II Project Company is a party.
"Project Material Adverse Effect" means, with respect to an
individual Project and the related Project Company:
(a) a material adverse change in the business, property,
results of operations or financial condition of such Project or Project
Company;
(b) any event or occurrence of whatever nature which could
reasonably be expected to materially and adversely effect (i) the
ability of such Project Company to perform its obligations under any of
the Financing Documents, or (ii) the validity or enforceability of the
Financing Documents and the Major Project Documents to which such
Project Company is a party or by which it or any of its assets is bound
(taken as a whole); or
(c) any event or occurrence of whatever nature which could
reasonably be expected to materially and adversely effect the validity
and priority of Secured Parties' security interests in the Project
Company Collateral related to such Project;
provided that (i) any adverse change in the Natural Gas supply market or the
Power market after the Closing Date which could cause a change in the conditions
or market forecasts as of the Closing Date shall not be deemed to, in and of
itself, have a "Project Material Adverse Effect," and (ii) a downgrade in any
rating assigned to such Project Company, any Affiliate thereof, the Obligations
or the Transaction or any Tranche shall not be deemed to, in and of itself, be a
"Project Material Adverse Effect."
"Project Release Event" means, with respect to a Project
Company, the earlier to occur of (a) the indefeasible payment or satisfaction in
full in cash of all the Obligations and (b) the occurrence of a Permitted Peaker
Buyout with respect to such Project Company and/or its Project. A Project
Release Event with respect to the Rockford II Project Company shall be deemed
also to be a Project Release Event with respect to the Rockford II Equipment
Company.
"Project Revenues" means, collectively, (a) income and
receipts of the Project Companies derived from the ownership or operation of the
Projects and other payments received by the Project Companies under the Project
Documents (including Loss Proceeds), (b) proceeds
A-39
of any business interruption insurance or other insurance, (c) income derived
from the sale, resale or other use of Energy Products and Services by, or on
behalf of, the Project Companies, (d) unscheduled payments received by the
Issuer under the Swap Agreement, (e) receipts derived from the sale of any
property pertaining to the Projects or incidental to the operation of the
Projects, (f) earnings on Permitted Investments, (g) to the extent not already
included in the foregoing the PPA Shortfall Payments and (h) proceeds from the
Collateral Documents with respect to the Projects, in each case as determined in
conformity with cash accounting principles and subject to netting requirements
(if any) contained in the Project Documents; provided that "Project Revenues"
shall not include Excluded Revenues.
"Projects" means, collectively, the Bayou Cove Project, the
Big Cajun I Units 3&4 Project, the Rockford I Project, the Rockford II Project
and the Sterlington Project (each, individually, a "Project"); provided that
upon the occurrence of a Project Release Event with respect to a Project, such
Project will no longer be a "Project" under the Financing Documents.
"Property" means any right or interest in or to property of
any kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.
"Prudent Utility Practices" means those practices, methods,
equipment, specifications and standards of safety and performance, as the same
may change from time to time, as are commonly used by electric generation
stations owned by independent power producers utilizing comparable fuels in the
state where a Project is located, as applicable, of a type and size similar to
the applicable Project as good, safe and prudent engineering practices in
connection with the design, construction, operation, maintenance, repair and use
of electrical and other equipment, facilities and improvements of such
electrical station, with commensurate standards of safety, performance,
dependability, efficiency and economy. Prudent Utility Practices does not
necessarily mean one particular practice, method, equipment specification or
standard in all cases, but is instead intended to encompass a broad range of
acceptable practices, methods, equipment specifications and standards.
"PUC" means, with respect to a Project, the Public Utility
Commission, Public Service Commission or equivalent Government Authority in the
state where such Project is located.
"PUHCA" means the Public Utility Holding Company Act of 1935,
as amended, and all rules and regulations adopted thereunder.
"Purchase Agreement" means the Purchase Agreement, dated June
14, 2002, among the Issuer, the Project Companies and the Initial Purchaser.
"Rating Agency" means Moody's or S&P or, if Moody's and S&P
cease to exist, any nationally recognized statistical rating organization or
other comparable Person designated by the Issuer and acceptable to XLCA (if XLCA
is the Controlling Party), notice of which designation shall have been given to
the Trustee.
"Redemption Premium" has the meaning given in the Indenture.
"Reimbursement Obligation" means each payment and performance
obligation of the Issuer under the Insurance and Reimbursement Agreement
(including the Issuer's obligation
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to pay the Premiums pursuant to Section 3.2 of the Insurance and Reimbursement
Agreement and to cash collateralize its reimbursement obligations pursuant to
Section 6.2(b) of the Insurance and Reimbursement Agreement).
"Reinstatement Guaranty" means a guaranty from NRG Energy in
form and substance reasonably satisfactory to XLCA guaranteeing the Obligations
upon reinstatement thereof at any time during the period following the payment
or other satisfaction in full of the Obligations until the date which is 366
days after such payment or other satisfaction.
"Release" means any release, pumping, pouring, emptying,
injecting, escaping, leaching, dumping, seepage, spill, leak, flow, discharge,
disposal or emission of a Hazardous Substance.
"Replacement Swap Agreement" means any replacement swap
agreement approved by XLCA (acting in its absolute discretion) that replaces the
Swap Agreement and that is with a replacement swap provider that is approved by
XLCA (acting in its absolute discretion).
"Request For Expenditures" mean the approved request for
expenditure used to budget the Major Maintenance Payment expenses and delivered
in accordance with Section 2.13(b) of the Common Agreement substantially in the
form of Exhibit Q to the Common Agreement; provided that until the Annual
Operating Budget is deemed final in accordance with Section 2.13(a) of the
Common Agreement for a fiscal year, the Request for Expenditure shall not be
included in any temporary budget in effect.
"Required Modifications" has the meaning given in Section 2.13
of the Common Agreement.
"Reseller" means a power marketing company or any wholesale
buyer of electric products.
"Responsible Officer" means, as to any Person, its president,
chief executive officer, treasurer or secretary (or assistant secretary), any of
its vice presidents, or any managing general partner or managing member of such
Person that is a natural person (or any of the preceding with regard to any
managing general partner or managing member of such Person that is not a natural
person); provided that, with respect to the Collateral Agent, Responsible
Officer shall mean any officer within the corporate trust department of the
Collateral Agent, including any vice president, assistant vice president,
assistant treasurer, trust officer or any other officer who customarily performs
functions similar to those who would be such officers.
"Restricted Payment" has the meaning given in Section 4.5 of
the Common Agreement.
"Restricted Payment Date" means any Initial Restricted Payment
Date, any Subsequent Restricted Payment Date or any Subsequent Project
Restricted Payment Date, as applicable.
"Restructuring" has the meaning given in the Recitals.
"Restructuring Agreement" has the meaning given in the
Recitals.
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"Revenue Account" has the meaning given in Section 2.1 of the
Depositary Agreement.
"Rockford Acquisition Agreement" means the Purchase Agreement
among NRG Energy, Indeck Energy Services, Inc., Indeck Energy Services of Ilion,
Inc., and Indeck-Ilion Cogeneration Corporation, dated as of May 4, 2001.
"Rockford Assignment and Assumption Agreement" means the
General Assignment and Assumption Agreement among NRG Energy, NRG Rockford
Acquisition LLC, and NRG Ilion LP LLC, dated as of July 13, 2001.
"Rockford Compressors" has the meaning given in Section 2.4 of
the Parent Agreement.
"Rockford I Electric Interconnection Agreement" means the
Interconnection Agreement between ComEd and the Rockford I Project Company,
dated as of June 20, 2000.
"Rockford I EMS Agreement" means the Energy Marketing Services
Agreement by and between NRG Power Marketing and the Rockford I Project Company
dated as of the Closing Date (as amended, amended and restated, supplemented or
otherwise modified from time to time).
"Rockford I Gas Interconnection Agreement" means the
Interconnection Agreement between the Rockford I Project Company and Northern
Illinois Gas Company, dated as of March 16, 2000.
"Rockford I Ground Lease" means the Ground Lease by and
between Rock River Valley Industrial Park, Inc. and the Rockford I Project
Company, dated as of January 1, 2000, as amended.
"Rockford I Lease Estoppel" means the estoppel letter dated
the Original Closing Date addressed to the Collateral Agent from Rock River
Valley Industrial Park, Inc. with respect to the Rockford I Ground Lease.
"Rockford I Lien Subordination Agreement" means that certain
lien subordination agreement between the Rockford I Project Company, the
Collateral Agent and Rock River Valley Industrial Park, Inc. dated the Original
Closing Date.
"Rockford I Major Project Documents" means, collectively, (a)
the Rockford I Electric Interconnection Agreement, the Rockford I Gas
Interconnection Agreement, the Rockford I EMS Agreement, the Xxxxxx XXX, the
Rockford I Tolling Agreement and the Rockford I Ground Lease, (b) any Additional
Project Document for the Rockford I Project that replaces any of the agreements
described in clause (a), (c) any Major Power Purchase Agreement, Major FSA or
Major FTA for the Rockford I Project and (d) any Additional Project Document for
the Rockford I Project that constitutes a material ground lease agreement,
material electric interconnection agreement or material sharing agreement.
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"Rockford I Non-Disturbance Agreement" means the
Subordination, Non-Disturbance, and Attornment Agreement dated the Original
Closing Date between Northwest Bank of Rockford and the Collateral Agent.
"Rockford I Project" means the 294 MW (summer capacity) / 310
MW (winter capacity) natural gas-fired electric generation facility owned by the
Rockford I Project Company and located in Rockford, Illinois.
"Rockford I Project Company" means NRG Rockford LLC, an
Illinois limited liability company formerly known as Indeck-Rockford, L.L.C.
"Rockford I Project Documents" means all Project Documents for
the Rockford I Project.
"Rockford I Tolling Agreement" means the Sales Agreement
between Exelon (as assignee of ComEd) and the Rockford I Project Company, dated
as of January 7, 2000 and amended as of June 23, 2000.
"Rockford II Combustion Turbine Equipment Supply Contract"
means the Contract for Combustion Turbine Equipment Supply (Unit I) between the
Rockford II Equipment Company (as assignee of Indeck Equipment Company, L.L.C.)
and Siemens Westinghouse Power Corporation, dated as of November 27, 2000, as
amended by Change Orders No. 1 through 6.
"Rockford II Completion Obligation" means the meaning given in
Section 3.14(b) of the Common Agreement.
"Rockford II Construction Agreement" means the Construction
Agreement by and between the Rockford II Project Company and Xxxxxx Xxxxxx,
Inc., dated as of August 2, 2001.
"Rockford II Construction Costs" means, collectively, any and
all costs, expenses, fees, taxes, or reimbursement obligations incurred by or on
behalf of the Rockford II Project Company, under or in connection with a
Rockford II Equipment and Construction Contract or otherwise in connection with
achieving Project Completion of the Rockford II Project, in each case on or
prior to Completion of the Rockford II Project.
"Rockford II Construction Management Services Agreement" means
the Construction Management Services Agreement by and between the Rockford II
Project Company and Indeck Energy Services, Inc. dated as of September 1, 2001.
"Rockford II Contractors" means, collectively, each of the
contractors and/or services providers providing equipment and/or services to the
Rockford II Project pursuant to the terms of any Rockford II Equipment and
Construction Contract or any agent or subcontractor thereof.
"Rockford II Electric Interconnection Agreement" means the
Interconnection Agreement between ComEd and the Rockford II Project Company,
dated as of September 14, 2001.
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"Rockford II EMS Agreement" means the Energy Marketing
Services Agreement by and between NRG Power Marketing and the Rockford II
Project Company, dated as of the Closing Date (as amended, amended and restated,
supplemented or otherwise modified from time to time).
"Rockford II Engineering Services Agreement" means the
Agreement for Engineering Services between the Rockford II Project Company and
Xxxxxxx Professional Group, dated as of March 14, 2001.
"Rockford II Equipment and Construction Contracts" means,
collectively, (i) the Rockford II Combustion Turbine Equipment Supply Contract,
(ii) the Rockford II Transformer Purchase Documents, (iii) the Rockford II
Engineering Services Agreement, (iv) the Rockford II Construction Agreement, (v)
the Rockford II Construction Management Services Agreement, (vi) the Rockford II
Electric Interconnection Agreement, (vii) the Rockford II Gas Interconnection
Agreement and (viii) any other agreement or document (including any subcontract)
entered into with respect to achieving Project Completion for the Rockford II
Project.
"Rockford II Equipment Company" means NRG Rockford Equipment
II LLC, an Illinois limited liability company formerly known as Indeck-Equipment
Company II, L.L.C.
"Rockford II Gas Interconnection Agreement" means the
Interconnection Agreement between the Rockford II Project Company and Northern
Illinois Gas Company, dated as of April 1, 2002.
"Rockford II Ground Lease" means the Ground Lease by and
between Rock River Valley Industrial Park, Inc. and the Rockford II Project
Company, dated as of March 20, 2001, as amended.
"Rockford II Lease Estoppel" means the estoppel letter dated
the Original Closing Date addressed to the Collateral Agent from Rock River
Valley Industrial Park, Inc. with respect to the Rockford II Ground Lease.
"Rockford II Major Project Documents" means, collectively, (a)
the Rockford II EMS Agreement, the Rockford II Electric Interconnection
Agreement, the Rockford II Gas Interconnection Agreement, the Xxxxxx XXX or any
other O&M Agreement to which the Rockford II Project Company is a party to and
the Rockford II Ground Lease, (b) any Additional Project Document for the
Rockford II Project that replaces any of the agreements described in clause (a),
(c) any Major Power Purchase Agreement, Major FSA or Major FTA for the Rockford
II Project and (d) any Additional Project Document for the Rockford II Project
that constitutes a material ground lease agreement, material electric
interconnection agreement or material sharing agreement.
"Rockford II Non-Disturbance Agreement" means the
Subordination, Non-Disturbance and Attornment Agreement dated the Original
Closing Date between Northwest Bank of Rockford and the Collateral Agent.
"Rockford II Project" means the natural gas-fired electric
generation facility owned by the Rockford II Project Company currently under
construction in Rockford, Illinois on
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a site adjacent to the Rockford I facility which, upon Completion, is expected
to generate 153 MW (summer capacity) / 171 MW (winter capacity).
"Rockford II Project Company" means NRG Rockford II LLC, an
Illinois limited liability company formerly known as Indeck-Rockford II, LLC.
"Rockford II Project Documents" means all Project Documents
for the Rockford II Project.
"Rockford II Transformer Purchase Documents" means the
purchase order No 105079 between Waukesha Electric Systems and Indeck-Pleasant
Valley, L.L.C. (together with annexes, general conditions and technical
requirements), dated as of May 2, 2000, as assigned to the Rockford II Equipment
Company.
"S&P" means Standard & Poor's Rating Services, a division of
The XxXxxx-Xxxx Companies, Inc., or any successor thereto, and, if such
corporation shall for any reason no longer perform the functions of a securities
rating agency, "S&P" shall be deemed to refer to any other nationally recognized
rating agency designated by the Issuer; provided, that with respect to the
rating of the Bonds, the designation shall be with the consent of XLCA (if XLCA
is the Controlling Party).
"Scheduled Debt Service" means, collectively, (a) all
regularly scheduled payments of principal of and interest on outstanding Series
A Bonds and all scheduled payments made by the Issuer to the Swap Counterparty
under the Swap Agreement, less (b) all scheduled payments received by the Issuer
from the Swap Counterparty under the Swap Agreement.
"Scheduled Payment Date" means each March 10, June 10,
September 10 and December 10 (the Annual Scheduled Payment Date) of each year
commencing on September 10, 2002 and ending on and including June 10, 2019.
"Second Priority Senior Notes Indenture" means the Indenture,
dated as of December 23, 2003 among NRG Energy, each of the guarantors party
thereto and the Law Debenture Trust Company of New York, entered in connection
with NRG Energy's $1,250,000 8% Second Priority Senior Secured Notes, due
December 15, 2013 (as the same may be amended, amended and restated,
supplemented or otherwise modified from time to time).
"Secured Parties" means XLCA, the Bondholders, the Swap
Counterparty, the Collateral Agent (for the benefit of itself and the Secured
Parties) and the Trustee (for the benefit of itself and the Bondholders) (each,
a "Secured Party").
"Securities Act" means the Securities Act of 1933, including,
unless the context otherwise requires, the rules and regulations thereunder, as
amended from time to time.
"Securities Exchange Act" means the Securities Exchange Act of
1934, including, unless the context otherwise requires, the rules and
regulations thereunder, as amended from time to time.
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"Senior Tranche" means the portion of the Policy initially
insuring $129,684,000 of principal and interest in respect of the Series A Bonds
representing the third loss layer of the Policy to be drawn in the event of a
Policy Payment.
"SERC Main Market Region" means the region covered by the
Southern Electric Reliability Council.
"Series A Bonds" means the Series A Floating Rate Senior
Secured Bonds due 2019 issued by the Issuer on the Original Closing Date
pursuant to the Indenture in an aggregate principal amount of $325,000,000.
"Shadow Ratings" means any or all, as applicable of the
ratings issued by the Rating Agencies for (a) the Series A Bonds (rated Baa3 by
Moody's and BBB- by S&P at the Closing Date), (b) the Senior Tranche (rated Aa2
by Moody's and AA- by S&P at the Closing Date), (c) the Mezzanine Tranche (rated
Baa2 by Moody's and BBB+ by S&P at the Closing Date), and (d) the Subordinated
Tranche (rated Ba3 by Moody's and BBB- by S&P at the Closing Date), in each case
without giving effect to the Policies.
"Significant Casualty Event" means, with respect to a Project,
any of the following events or conditions: (a) the actual total loss of such
Project; (b) a constructive total loss of such Project under applicable
insurance policies or an agreed or a compromised total loss of such Project; or
(c) such Project shall be either substantially destroyed or irreparably damaged
to an extent rendering restoration impracticable or uneconomical.
"Significant Condemnation Event" means any Condemnation Event
with respect to a Project that in the reasonable, good faith judgment of the
applicable Project Company (as evidenced by an officer's certificate of such
Project Company) (a) renders such Project unsuitable for its intended use, (b)
is such that restoration of such Project to substantially its condition as
existed immediately prior to such Condemnation Event would be impracticable or
impossible or (c) constitutes a taking of the applicable Project Company's title
to such Project.
"Site" means the "Premises" described in the applicable
Mortgage.
"Spare Parts" means the spare parts for the Rockford II
Project that are listed on Schedule I to the Common Agreement.
"Spare Parts Disbursement Request" means a disbursement
request substantially in the form of Exhibit D to the Depositary Agreement.
"Specified Financial Covenants" means the covenants set forth
in Section 6.11 ("Consolidated Interest Coverage Ratio"), Section 6.12
("Consolidated Leverage Ratio"), Section 6.13 ("Parent Interest Coverage Ratio")
and Section 6.14 ("Parent Leverage Ratio") of the NRG Credit Agreement or any
comparable provisions contained in any New Credit Agreement, as applicable,
together with, in each case, all related definitions and ancillary provisions.
"Stated Amount" means with respect to any Acceptable Letter of
Credit, the total amount to be drawn thereunder at the time in question in
accordance with the terms of such Acceptable Letter of Credit.
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"Sterlington and NRG South Central Assignment and Assumption
Agreement" means the Assignment and Assumption Agreement between Xxxx Power,
Inc. and NRG South Central, dated as of August 17, 2000.
"Sterlington Electric Interconnection Agreement" means the
Interconnection and Operating Agreement between the Sterlington Project Company
and Entergy Louisiana, dated as of May 5, 2000.
"Sterlington EMS Agreement" means the Energy Marketing
Services Agreement by and between NRG Power Marketing and the Sterlington
Project Company, dated as of the Closing Date (as amended, amended and restated,
supplemented or otherwise modified from time to time).
"Sterlington Gas Interconnection Agreement" means the
Interconnect Agreement between Xxxx Gateway Pipeline Company and the Sterlington
Project Company, dated as of May 3, 2000.
"Sterlington Ground Lease" means the Lease Agreement between
Xxxx Nitrogen Company and the Sterlington Project Company, dated as of July 1,
2000.
"Sterlington Lease Estoppel" means the Ground Lessor Estoppel
Certificate dated the Original Closing Date executed by Xxxx Nitrogen Company
with respect to the Sterlington Ground Lease.
"Sterlington Major Project Documents" means, collectively, (a)
the Sterlington Electric Interconnection Agreement, the Sterlington Utilities
and Services Agreement, the Sterlington EMS Agreement, the Sterlington OMA, the
Sterlington Gas Interconnection Agreement, the Sterlington PPA and the
Sterlington Ground Lease, (b) any Additional Project Document for the
Sterlington Project that replaces any of the agreements described in clause (a),
(c) any Major Power Purchase Agreement, Major FSA or Major FTA for the
Sterlington Project and (d) any Additional Project Document for the Sterlington
Project that constitutes a material ground lease agreement, material electric
interconnection agreement or material sharing agreement.
"Sterlington OMA" means the Operation and Maintenance
Agreement between the Sterlington Project Company and NRG Operating Services
dated as of the Closing Date (as amended, amended and restated, supplemented or
otherwise modified from time to time).
"Sterlington PPA" means the Power Purchase Agreement among
Louisiana Generating, the Sterlington Project Company and NRG South Central,
dated as of May 15, 2002.
"Sterlington PPA Shortfall" means, for any calendar month, the
excess, if any, of (i) the amount of the payment for capacity that Sterlington
Project Company would have been entitled to receive from Louisiana Generating
for such calendar month under the Sterlington PPA, over (ii) the amount of the
payment for capacity that the Sterlington Project Company actually received for
such calendar month in respect of the Sterlington PPA on or before the date such
payment is due under the Sterlington PPA.
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"Sterlington Project" means the 170 MW (summer capacity) / 193
MW (winter capacity) natural gas-fired electric generation facility owned by the
Sterlington Project Company and located in Sterlington, Louisiana.
"Sterlington Project Company" means NRG Sterlington Power LLC,
a Delaware limited liability company formerly known as Xxxx Power Louisiana,
L.L.C.
"Sterlington Project Development Agreement" means the Project
Development Agreement between NRG Energy and Xxxx Power, Inc., dated as of April
14, 1999.
"Sterlington Project Documents" means all Project Documents
for the Sterlington Project.
"Sterlington Supplement and Modification to Project
Development Agreement" means the Supplement and Modification to Project
Development Agreement between NRG Energy and Xxxx Power, Inc., dated as of May
25, 2000 and the Letter Agreement Re: Supplement and Modification to Project
Development Agreement between NRG Energy, and Xxxx Power, Inc., dated as of
August 17, 2000.
"Sterlington Utilities and Services Agreement" means the
Utilities and Services Agreement between Xxxx Nitrogen Company and the
Sterlington Project Company, dated as of July 1, 2000.
"Subject Claims" has the meaning given in Section 9.1(b) of
the Common Agreement.
"Subordinated Bonds" means Debt for Borrowed Money of the
Issuer issued after the Closing Date pursuant to a note in favor of any Person
other than a Financing Party or any of its Affiliates, which Debt for Borrowed
Money and note are (a) subordinated in all respects to the Obligations in
accordance with the terms set forth in Exhibit N to the Common Agreement, (b)
not secured other than by a security interest that is subordinated in all
respects to the security interest of the Secured Parties in the Collateral and
as additionally set forth in Exhibit N to the Common Agreement, (c) not
guarantied other than by a guaranty that is subordinated in all respects to the
Guaranties as set forth in Exhibit N to the Common Agreement (and any Lien
securing such guaranty is subordinated in all respects to the security interest
of the Secured Parties in the Collateral as set forth in Exhibit N to the Common
Agreement), and (d) not entitled to the benefit of the Parent Agreement or any
other Financing Document.
"Subordinated Debt" means Debt of the Issuer or any Project
Company that is subordinated to the Obligations in accordance with the terms set
forth in Exhibit M or N to the Common Agreement.
"Subordinated Tranche" means the portion of the Policy
initially insuring $104,764,000 of principal and interest in respect of the
Series A Bonds representing the first loss layer of the Policy to be drawn in
the event of a Policy Payment.
"Subsequent Project Restricted Payment Date" has the meaning
given in Section 4.5(d) of the Common Agreement.
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"Subsequent Project Restricted Payment Period" means, for the
purposes of Section 4.5 of the Common Agreement, the period prior to any Project
Event of Default and commencing on the occurrence of an Inchoate Project Block
Condition and ending on the 30th day following the cure (prior to such Inchoate
Project Block Condition maturing into or becoming a Project Event of Default) of
such Inchoate Project Block Condition.
"Subsequent Restricted Payment Date" has the meaning give to
it in Section 4.5(c) of the Common Agreement.
"Subsequent Restricted Payment Period" means, for the purposes
of Section 4.5 of the Common Agreement, the period prior to any Issuer Event of
Default and commencing on the occurrence of an Inchoate Block Condition and
ending on the 30th day following the cure (prior to such Inchoate Block
Condition maturing into or becoming an Issuer Event of Default) of such Inchoate
Block Condition.
"Subsequent Tax Payment Period" means, for the purposes of
Section 4.5 of the Common Agreement, the period prior to any Issuer Event of
Default and commencing on the occurrence of an Issuer Inchoate Default and
ending on the 30th day following the cure (prior to such Inchoate Block
Condition maturing into or becoming an Issuer Event of Default) of such Issuer
Inchoate Default.
"Subsidiary" means, with respect to any Person, (a) any
corporation, association, or other business entity (other than a partnership or
a limited liability company) of which 50% or more of the total voting power of
shares of capital stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time of determination owned or controlled, directly or indirectly, by
such Person or one or more of the other Subsidiaries of that Person or a
combination thereof, and (b) any partnership or limited liability company of
which 50% or more of the partnership's or limited liability company's, as the
case may be, capital accounts, distribution rights or general or limited
partnership interests or limited liability company membership interests, as the
case may be, are owned or controlled, directly or indirectly, by such Person or
one or more of the other Subsidiaries of that Person or a combination thereof.
"Summer Month" means any of May, June, July, August or
September.
"Swap Agreement" means the ISDA Master Agreement, dated as of
June 18, 2002, between the Issuer and the Swap Counterparty, including the
Schedule and the Confirmation thereto and any Replacement Swap Agreement (as
amended, amended and restated, supplemented or otherwise modified from time to
time).
"Swap Breakage Costs" means any breakage costs and/or
termination costs which became due under the Swap Agreement.
"Swap Counterparty" has the meaning given in the preamble to
the Common Agreement, together with any replacement swap provider thereafter
approved by XLCA (if XLCA is the Controlling Party) under a Replacement Swap
Agreement.
"Swap Obligations" means each payment obligation of the Issuer
under the Swap Agreement including in respect of Swap Payment Amounts and Swap
Breakage Costs.
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"Swap Payment Amount" has the meaning given in the Swap
Policy.
"Swap Policy" means the Financial Guaranty Insurance Policy,
including any endorsements thereto, issued by XLCA with respect to the Swap
Payment Amounts, dated as of the Original Closing Date, substantially in the
form of Appendix II to the Insurance and Reimbursement Agreement.
"Swap Policy Premium" means the insurance premium (including
any additional premium) payable in respect of the Swap Policy by the Issuer in
accordance with the Premium Letter and the Insurance and Reimbursement
Agreement.
"Swap Policy Termination Date" means the Termination Date as
defined in the Swap Policy.
"Tax Distribution Amount" has the meaning given in Section
4.5(f) of the Common Agreement.
"Tax Distributions" has the meaning given in Section 4.5(e) of
the Common Agreement.
"Tax Group" has the meaning given in Section 4.5(e) of the
Common Agreement.
"Tax Group Liability" has the meaning given in Section 4.5(e)
of the Common Agreement.
"Taxes" means all present or future income, excise, stamp,
documentary, property or franchise taxes and other taxes, fees, duties, levies,
imposts, deductions, withholdings or other charges of any nature whatsoever (but
excluding franchise taxes and taxes imposed on or measured by net income or
receipts) imposed by any taxing authority, including, without limitation, any
penalties, interest or additions to tax with respect thereto.
"Title Insurer" means (a) with respect to the Bayou Cove
Project, the Big Cajun I Units 3&4 Project and the Sterlington Project, First
American Title Insurance Company (or any affiliate thereof), and (b) with
respect to the Rockford I Project and the Rockford II Project, Chicago Title
Insurance Company (or any affiliate thereof).
"Title Policy" means any title policy delivered by Issuer
pursuant to Section 3.1(dd) of the Insurance and Reimbursement Agreement.
"Tolling Period" means:
(A) with respect to any Project, any period during which
the applicable Project Company has entered into an Acceptable PPA with
a Reseller;
(B) with respect to the Rockford I Project, the period
commencing on the Closing Date and ending on the date on which the
Rockford I Tolling Agreement terminates;
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(C) with respect to the Sterlington Project, the period
commencing on the date after the Closing Date and ending on the date on
which the Sterlington PPA terminates; and
(D) with respect to the Big Cajun Project, the period
commencing on the Closing Date and ending on the date on which the Big
Cajun PPA terminates;
provided, in each case, (i) if the Reseller is an Affiliate of the Issuer (a)
such Reseller (or any Affiliate guaranteeing its obligations) maintains a
rating, independent of NRG Energy, of at least Investment Grade from each of S&P
and Xxxxx'x and (b) such rating is affirmed as "stable" Investment Grade (or the
equivalent) or better if NRG Energy is downgraded or placed on credit review or
watch by either of S&P or Moody's and (ii) the applicable power purchase
agreement, tolling agreement or other contractual arrangement has not been
terminated, otherwise ceases to be in full force and effect or the Reseller
thereunder has defaulted thereunder, which default has not been cured within the
time period provided for such cure under such agreement.
"Total O&M Expenses" means any of the O&M Expenses and any
other costs and expenses incurred in connection with the operation and
maintenance of a Project.
"Tranche" means the Senior Tranche, the Mezzanine Tranche
and/or the Subordinated Tranche, as applicable.
"Transaction" means the portfolio financing transaction in
respect of the Projects contemplated by the Financing Documents.
"Transmission Costs" means all costs associated with the
transmission of electricity from the product delivery point to the purchaser's
point of receipt, including, transmission capacity charges, imbalance charges,
independent system operator charges, and any additional costs requested from
time to time, such additional costs to be approved by XLCA (if XLCA is the
Controlling Party) in its reasonable discretion, as incurred by the Energy
Manager.
"Trustee" has the meaning given in the preamble to the Common
Agreement.
"UCC" means the Uniform Commercial Code as the same may, from
time to time, be in effect in the State of New York; provided, however, in the
event that, by reason of mandatory provisions of law, any or all of the
perfection or priority of the security interest in any Collateral is governed by
the Uniform Commercial Code as in effect in a jurisdiction other than the State
of New York, the term "UCC" shall mean the Uniform Commercial Code as in effect
in such other jurisdiction for purposes of the provisions hereof relating to
such perfection or priority and for purposes of definitions related to such
provisions.
"Uncovered Warranty Costs" means any costs relating to repair
work performed during any Warranty Period under either the Bayou Cove EPC
Agreement (Balance of Plant) or Bayou Cove EPC Agreement (Electric
Interconnection Facilities) which are not paid for or otherwise covered by the
relevant Bayou Cove Contractor as the result of any limits on liability under
the Bayou Cove EPC Agreement (Balance of Plant) or Bayou Cove EPC Agreement
(Electric Interconnection Facilities), as applicable.
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"Warranty Period" means, with respect to the Bayou Cove EPC
Agreement (Balance of Plant) and the Bayou Cove EPC Agreement (Electric
Interconnection Facilities), the warranty period or periods specified therein,
as such periods may be extended pursuant to the terms thereof.
"Winter Month" means any of October, November, December,
January, February, March or April.
"XLCA" has the meaning given in the preamble to the Common
Agreement.
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RULES OF INTERPRETATION
A. The singular includes the plural and the plural includes the singular.
B. "or" is not exclusive.
C. A reference to a Governmental Rule includes any amendment or
modification to such Governmental Rule, and all regulations, rulings
and other Governmental Rules promulgated under such Governmental Rule.
D. A reference to a Person includes its permitted successors and permitted
assigns.
E. Accounting terms have the meanings assigned to them by GAAP, as applied
by the accounting entity to which they refer.
F. The words "include," "includes" and "including" are not limiting.
G. A reference in a document to an Article, Section, Exhibit, Schedule,
Annex or Appendix is to the Article, Section, Exhibit, Schedule, Annex
or Appendix of such document unless otherwise indicated. Exhibits,
Schedules, Annexes or Appendices to any document shall be deemed
incorporated by reference in such document. In the event of any
conflict between the provisions of a Financing Document (exclusive of
the Exhibits, Schedules, Annexes and Appendices thereto) and any
Exhibit, Schedule or Annex thereto, the provisions of such Financing
Document shall control. A reference to any Exhibit, Schedule, Annex or
Appendix of a Financing Document shall mean such Exhibit, Schedule,
Annex or Appendix as, amended, modified or supplemented from time to
time in accordance with such Financing Document; provided that no
Exhibit, Schedule, Annex or Appendix may be amended, modified or
supplemented by Issuer except to the extent specifically permitted in
such Financing Document.
H. References to any document, instrument or agreement (i) shall include
all exhibits, schedules and other attachments thereto, (ii) shall
include all documents, instruments or agreements issued or executed in
replacement thereof, and (iii) shall mean such document, instrument or
agreement, or replacement or predecessor thereto, as amended, amended
and restated, supplemented or otherwise modified from time to time and
in effect at any given time.
I. The words "hereof," "herein" and "hereunder" and words of similar
import when used in any document shall refer to such document as a
whole and not to any particular provision of such document.
J. The word "will" shall be construed to have the same meaning and effect
as the word "shall."
K. The use in this Agreement of the words "asset" and "property" shall be
construed to have the same meaning and effect and to refer to any and
all tangible and intangible assets and properties, including cash,
securities, accounts and contract rights.
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L. Any consent, approval, satisfaction or similar acquiescence to be
granted under any provision of any Operative Document shall not be
unreasonably withheld or delayed unless otherwise provided therein.
M. References to "days" shall mean calendar days, unless the term
"Business Days" shall be used. References to "years" shall mean
calendar years, unless otherwise specified. References to a time of day
shall mean such time in New York, unless otherwise specified.
N. The Financing Documents are the result of negotiations between, and
have been reviewed by the Financing Parties, NRG Energy, XLCA, the Swap
Counterparty, the Trustee, the Collateral Agent, the Depositary Agent
and their respective counsel. Accordingly, the Financing Documents
shall be deemed to be the product of all parties thereto, and no
ambiguity shall be construed in favor of or against any Financing
Party, any Equity Party, XLCA, the Swap Counterparty, the Trustee, the
Collateral Agent or the Depositary Agent solely as a result of any such
Person having drafted or proposed the ambiguous provision.
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