Exhibit 10.5.1
LOAN AGREEMENT
dated as of April 30, 1996
$45,000,000
_______________________
Between
NRG ENERGY, INC.
and
NRG GENERATING (U.S.) INC.
LOAN AGREEMENT, dated as of April 30, 1996, between NRG GENERATING (U.S.)
INC., a Delaware corporation (the "Company") and NRG ENERGY, INC., a
Delaware corporation (the "Lender").
W I T N E S S E T H:
WHEREAS, immediately prior to the execution and delivery of this Agreement,
the Company was the debtor and the debtor in possession in Chapter 11 case
number 94-26723 (the "Case") pending before the United States Bankruptcy
Court for the District of New Jersey (the "Bankruptcy Court");
WHEREAS, pursuant to the Composite Fourth Amended and Restated Plan of
Reorganization for the Company proposed by the Lender, Wexford Management
Corp. and the Official Committee of Equity Security Holders dated January
31, 1995 (as amended and confirmed by order of the Bankruptcy Court entered
on February 22, 1996, the "NRG Plan"; capitalized terms used herein without
definition shall have the respective meanings assigned to them in the NRG
Plan), and subject to the terms and conditions of the Amended and Restated
Stock Purchase and Reorganization Agreement dated as of January 31, 1996
between the Lender and the Company, the Lender is acquiring on the date
hereof 41.86% of the outstanding shares of Common Stock of the Company and
in that connection has agreed to make certain loans to the Company;
WHEREAS, the NRG Plan contemplates that the Company would issue New Notes
in the initial principal amount of $45,000,000 in the aggregate to third
party purchasers but that the Lender would be required to purchase any of
such New Notes not so purchased by such purchasers; and
WHEREAS, in lieu of arranging for the issuance of the New Notes pursuant to
the NRG Plan and possibly purchasing some or all of such New Notes, the
Lender has committed to lend the Company $45,000,000 pending the
refinancing by the Company of the Loan (as defined below).
NOW, THEREFORE, the Company and the Lender agree as follows:
ARTICLE 1
Definitions
SECTION 1.01. Defined Terms. As used in this Agreement, the terms defined
in the caption hereto shall have
the meanings set forth therein, and the following terms have the following
meanings:
"Acquisition" means the acquisition by the Company pursuant to the
Acquisition Agreement of 41.86% of the issued and outstanding capital stock
of the Company as reorganized under the NRG Plan and all of the capital
stock of each of certain of the Company's subsidiaries.
"Acquisition Agreement" means the Amended and Restated Stock Purchase and
Reorganization Agreement, dated as of January 31, 1996, between the Lender
and O'Brien Environmental Energy, Inc., a Delaware corporation, the
predecessor in interest to the Company.
"Additional Assets" means (i) any property or assets (other than
Indebtedness and Capital Stock) to be used by the Company or a Restricted
Subsidiary in a Related Business; (ii) the Capital Stock of a Person that
becomes a Restricted Subsidiary as a result of the acquisition of such
Capital Stock by the Company or another Restricted Subsidiary; or
(iii) Capital Stock constituting a minority interest in any Person that at
such time is a Restricted Subsidiary; provided, however, that, in the case
of clauses (ii) and (iii), such Restricted Subsidiary is primarily engaged
in a Related Business.
"Affiliate" of any specified Person means (i) any other Person, directly or
indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person or (ii) any Person who is a director or
officer (a) of such Person, (b) of any Subsidiary of such Person or (c) of
any Person described in clause (i) above. For the purposes of this
definition, "control" when used with respect to any Person means the power
to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing. For purposes of Sections 6.04 and 6.05 only,
"Affiliate" shall also mean any beneficial owner of shares representing 5%
or more of the total voting power of the Voting Stock (on a fully diluted
basis) of the Company or of rights or warrants to purchase such Voting
Stock (whether or not currently exercisable) and any Person who would be an
Affiliate of any such beneficial owner pursuant to the first sentence
hereof.
"Affiliate Transaction" shall have the meaning assigned thereto in Section
6.05(a).
"Agreement" means this Loan Agreement, as amended, supplemented or modified
from time to time.
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"Asset Disposition" means any sale, lease, transfer or other disposition of
shares of Capital Stock of a Restricted Subsidiary (other than directors'
qualifying shares), property or other assets (each referred to for the
purposes of this definition as a "disposition") by the Company or any of
its Restricted Subsidiaries (including any disposition by means of a
merger, consolidation or similar transaction) other than (i) a disposition
by a Restricted Subsidiary to the Company or by the Company or a Restricted
Subsidiary to a Wholly Owned Subsidiary, (ii) a disposition of property or
assets in the ordinary course of business, (iii) for purposes of
Section 6.04 only, a disposition subject to Section 6.02 and (iv) a
disposition of Liquidating Assets in accordance with and pursuant to the
terms of the Liquidating Asset Management Agreement.
"Average Life" means, as of the date of determination, with respect to any
Indebtedness or Preferred Stock, the quotient obtained by dividing (i) the
sum of the products of the numbers of years from the date of determination
to the dates of each successive scheduled principal payment of such
Indebtedness or redemption or similar payment with respect to such
Preferred Stock multiplied by the amount of such payment by (ii) the sum of
all such payments.
"Bankruptcy Court" shall have the meaning assigned thereto in the Recitals.
"Bankruptcy Law" shall have the meaning assigned thereto in Section 8.01.
"Base Rate" means for any day, a rate per annum equal to 9.5%.
"Board of Directors" means the Board of Directors of the Company or any
committee thereof duly authorized to act on behalf of such Board.
"Business Day" means a day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law
to close.
"Capital Stock" of any Person means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any
Preferred Stock, but excluding any debt securities convertible into such
equity.
"Capitalized Lease Obligations" means an obligation that is required to be
classified and accounted for as a
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capitalized lease for financial reporting purposes in accordance with GAAP,
and the amount of Indebtedness represented by such obligation shall be the
capitalized amount of such obligation determined in accordance with GAAP;
and the Stated Maturity thereof shall be the date of the last payment of
rent or any other amount due under such lease.
"Case" shall have the meaning assigned thereto in the Recitals.
"Closing Date" means the date, which shall be on the Effective Date, on
which the Lender makes the Loan.
"Code" means the Internal Revenue Code of 1986, as amended.
"Co-Investment Agreement" shall mean that certain Co-Investment Agreement
dated the date hereof between the Lender and the Company and as provided
for by the NRG Plan.
"Co-Investment Indebtedness" means Indebtedness incurred by the Company to
finance the Company's investment in a project offered to the Company
pursuant to the terms of the Co-Investment Agreement.
"Commercial L/C" means a commercial documentary letter of credit under
which the issuer agrees to make payments in Dollars for the account of the
Company, on behalf of the Company or a Subsidiary thereof, in respect of
obligations of the Company or such Subsidiary in connection with the
purchase of goods or services in the ordinary course of business.
"Commonly Controlled Entity" means an entity, whether or not incorporated,
which is under common control with the Company within the meaning of
Section 414(b) or (c) of the Code.
"Company" means the party named as such in this Agreement until a successor
replaces it and, thereafter, means the successor.
"Consolidated Coverage Ratio" as of any date of determination means the
ratio of (i) the aggregate amount of EBITDA for the period of the most
recent four consecutive fiscal quarters ending prior to the date of such
determination to (ii) Consolidated Interest Expense for such four fiscal
quarters; provided, however, that (1) if the Company or any Restricted
Subsidiary has Incurred any Indebtedness since the beginning of such period
that remains outstanding on such date of determination or if the
transaction giving rise to the need to calculate the Consolidated Coverage
Ratio is an Incurrence
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of Indebtedness, EBITDA and Consolidated Interest Expense for such period
shall be calculated after giving effect on a pro forma basis to such
Indebtedness as if such Indebtedness had been Incurred on the first day of
such period and the discharge of any other Indebtedness repaid,
repurchased, defeased or otherwise discharged with the proceeds of such new
Indebtedness as if such discharge had occurred on the first day of such
period, (2) if since the beginning of such period the Company or any
Restricted Subsidiary shall have made any Asset Disposition, the EBITDA for
such period shall be reduced by an amount equal to the EBITDA (if positive)
directly attributable to the assets which are the subject of such Asset
Disposition for such period or increased by an amount equal to the EBITDA
(if negative) directly attributable thereto for such period and
Consolidated Interest Expense for such period shall be reduced by an amount
equal to the Consolidated Interest Expense directly attributable to any
Indebtedness of the Company or any Restricted Subsidiary repaid,
repurchased, defeased or otherwise discharged with respect to the Company
and its continuing Restricted Subsidiaries in connection with such Asset
Disposition for such period (or, if the Capital Stock of any Restricted
Subsidiary is sold, the Consolidated Interest Expense for such period
directly attributable to the Indebtedness of such Restricted Subsidiary to
the extent the Company and its continuing Restricted Subsidiaries are no
longer liable for such Indebtedness after such sale), (3) if since the
beginning of such period the Company or any Restricted Subsidiary (by
merger or otherwise) shall have made an Investment in any Restricted
Subsidiary (or any Person which becomes a Restricted Subsidiary) or an
acquisition of assets, including any acquisition of assets occurring in
connection with a transaction causing a calculation to be made hereunder,
which constitutes all or substantially all an operating unit of a business,
EBITDA and Consolidated Interest Expense for such period shall be
calculated after giving pro forma effect thereto (including the Incurrence
of any Indebtedness) as if such Investment or acquisition occurred on the
first day of such period and (4) if since the beginning of such period any
Person (that subsequently became a Restricted Subsidiary or was merged with
or into the Company or any Restricted Subsidiary since the beginning of
such period) shall have made any Asset Disposition or any Investment or
acquisition of assets that would have required an adjustment pursuant to
clause (2) or (3) above if made by the Company or a Restricted Subsidiary
during such period, EBITDA and Consolidated Interest Expense for such
period shall be calculated after giving pro forma effect thereto as if such
Asset Disposition, Investment or acquisition assets occurred on the first
day of such period. For purposes of this definition, whenever pro forma
effect is to be given to an acquisition of assets, the amount of income or
earnings relating thereto and the amount of Consolidated Interest
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Expense associated with any Indebtedness Incurred in connection therewith,
the pro forma calculations shall be determined in good faith by a
responsible financial or accounting Officer of the Company. If any
Indebtedness bears a floating rate of interest and is being given pro forma
effect, the interest expense on such Indebtedness shall be calculated as if
the rate in effect on the date of determination had been the applicable
rate for the entire period (taking into account any Interest Rate
Protection Agreement applicable to such Indebtedness if such Interest Rate
Protection Agreement has a remaining term as at the date of determination
in excess of 12 months).
"Consolidated Interest Expense" means, for any period, the total interest
expense of the Company and its consolidated Subsidiaries, plus, to the
extent incurred by the Company and its Subsidiaries in such period but not
included in such interest expense, (i) interest expense attributable to
Capitalized Lease Obligations, (ii) amortization of debt discount and debt
issuance cost, (iii) capitalized interest, (iv) non-cash interest expense,
(v) commissions, discounts and other fees and charges attributable to
letters of credit and bankers' acceptance financing, (vi) interest actually
paid by the Company or any such Subsidiary under any Guarantee of
Indebtedness or other obligation of any other Person, (vii) net costs
associated with Hedging Obligations (including amortization of fees),
(viii) the product of (a) all Preferred Stock dividends in respect of all
Preferred Stock of Subsidiaries of the Company and Redeemable Stock of the
Company held by Persons other than the Company or a Wholly Owned Subsidiary
multiplied by (b) a fraction, the numerator of which is one and the
denominator of which is one minus the then current combined federal, state
and local statutory tax rate of the Company, expressed as a decimal, in
each case, determined on a consolidated basis in accordance with GAAP and
(ix) the cash contributions to any employee stock ownership plan or similar
trust to the extent such contributions are used by such plan or trust to
pay interest or fees to any Person (other than the Company) in connection
with Indebtedness Incurred by such plan or trust; provided, however, that
there shall be excluded therefrom any such interest expense of any
Unrestricted Subsidiary to the extent the related Indebtedness is not
Guaranteed or paid by the Company or any Restricted Subsidiary.
"Consolidated Net Income" means, for any period, the net income (loss) of
the Company and its consolidated Subsidiaries; provided, however, that
there shall not be included in such Consolidated Net Income:
(i) any net income (loss) of any Person if such Person is not a
Restricted Subsidiary, except that
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(A) subject to the limitations contained in clause (iv) below, the
Company's equity in the net income of any such Person for such period
shall be included in such Consolidated Net Income up to the aggregate
amount of cash actually distributed by such Person during such period
to the Company or a Restricted Subsidiary as a dividend or other
distribution (subject, in the case of a dividend or other distribution
to a Restricted Subsidiary, to the limitations contained in
clause (iii) below) and (B) the Company's equity in a net loss of any
such Person (other than an Unrestricted Subsidiary) for such period
shall be included in determining such Consolidated Net Income,
(ii) any net income (loss) of any person acquired by the Company
or a Subsidiary in a pooling of interests transaction for any period
prior to the date of such acquisition,
(iii) any net income (loss) of any Restricted Subsidiary if such
Subsidiary is subject to restrictions, directly or indirectly, on the
payment of dividends or the making of distributions by such Restricted
Subsidiary, directly or indirectly, to the Company, except that
(A) subject to the limitations contained in (iv) below, the Company's
equity in the net income of any such Restricted Subsidiary for such
period shall be included in such Consolidated Net Income up to the
aggregate amount of cash that could have been distributed by such
Restricted Subsidiary during such period to the Company or another
Restricted Subsidiary as a dividend (subject, in the case of a
dividend that could have been made to another Restricted Subsidiary,
to the limitation contained in this clause) and (B) the Company's
equity in a net loss of any such Restricted Subsidiary for such period
shall be included in determining such Consolidated Net Income,
(iv) any gain (but not loss) realized upon the sale or other
disposition of any asset of the Company or its consolidated
Subsidiaries (including pursuant to any sale/leaseback transaction)
which is not sold or otherwise disposed of in the ordinary course of
business and any gain (but not loss) realized upon the sale or other
disposition of any Capital Stock of any Person,
(v) any extraordinary gain or loss, and
(vi) the cumulative effect of a change in accounting principles.
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"Consolidated Net Worth" means the total of the amounts shown on the
balance sheet of the Company and the Restricted Subsidiaries, determined on
a Consolidated basis, as of the end of the most recent fiscal quarter of
the Company ending prior to the taking of any action for the purpose of
which the determination is being made, as (i) the par or stated value of
all outstanding Capital Stock of the Company plus (ii) paid-in capital or
capital surplus relating to such Capital Stock plus (iii) any retained
earnings or earned surplus less (A) any accumulated deficit and (B) any
amounts attributable to Disqualified Stock.
"Contingent Obligation" means as to any Person, any obligation of such
Person guaranteeing or in effect guaranteeing any Indebtedness, dividends
or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including
any obligation of such Person, whether or not contingent (a) to purchase
any such primary obligation or any property constituting direct or indirect
security therefor, (b) to advance or supply funds (i) for the purchase or
payment of any such primary obligation or (ii) to maintain working capital
or equity capital of the primary obligor or otherwise to maintain the net
worth or solvency of the primary obligor, (c) to purchase property,
securities or services primarily for the purpose of assuring the owner of
any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation or (d) otherwise to assure or hold
harmless the owner of any such primary obligation against loss in respect
thereof; provided, however, that the term Contingent Obligation shall not
include endorsements of instruments for deposit or collection in the
ordinary course of business. The amount of any Contingent Obligation shall
be deemed to be an amount equal to the stated or determinable amount (based
upon the maximum reasonably anticipated net liability in respect thereof as
determined by the Company in good faith) of the primary obligation or
portion thereof in respect of which such Contingent Obligation is made or,
if not stated or determinable, the maximum reasonably anticipated net
liability in respect thereof (assuming such Person is required to perform
thereunder) as determined by the Company in good faith.
"Contractual Obligation" means as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of the
property owned by it is bound.
"Credit Documents" means the collective reference to this Agreement and the
Note.
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"Currency Agreement" means in respect of a Person any foreign exchange
contract, currency swap agreement or other similar agreement as to which
such Person is a party or a beneficiary.
"Custodian" shall have the meaning assigned thereto in Section 8.01.
"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"Disqualified Stock" means, with respect to any Person, any Capital Stock
which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable or exercisable) or upon the
happening of any event (i) matures or is mandatorily redeemable pursuant to
a sinking fund obligation or otherwise, (ii) is convertible or exchangeable
for Indebtedness or Disqualified Stock or (iii) is redeemable at the option
of the holder thereof, in whole or in part, in each case on or prior to the
first anniversary of the Stated Maturity of the Notes.
"Dollars" and "$" means dollars in lawful currency of the United States of
America.
"EBITDA" means, for any period the Consolidated Net Income for such period,
plus the following to the extent deducted in calculating such Consolidated
Net Income: (i) income tax expense, (ii) Consolidated Interest Expense,
(iii) depreciation expense and (iv) amortization expense, in each case for
such period.
"Effective Date" shall have the meaning assigned thereto in the NRG Plan
which definition is incorporated herein by this reference.
"Environmental Laws" means any and all Federal, state, local or municipal
laws, rules, orders, regulations, statutes, ordinances, codes, decrees or
requirements of any Governmental Authority or requirements of law
(including court-ordered requirements of common law) regulating or imposing
liability or standards of conduct concerning environmental or public health
protection matters, including Hazardous Materials, as now or may at any
time hereafter be in effect.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Event of Default" shall have the meaning assigned thereto in Section 8.01.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fee Property" shall have the meaning assigned thereto in Section 3.10.
"Fiscal Date" means the Saturday closest to February 1, May 1, August 1 or
November 1, as the case may be, in any calendar year.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect from time to time.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof or any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guarantee" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Indebtedness or other obligation of
any other Person and any obligation, direct or indirect, contingent or
otherwise, of such Person (i) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or other obligation
of such other Person (whether arising by virtue of partnership
arrangements, or by agreement to keep-well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) entered into for purposes of assuring in
any other manner the obligee of such Indebtedness or other obligation of
the payment thereof or to protect such obligee against loss in respect
thereof (in whole or in part); provided, however, that the term "Guarantee"
shall not include endorsements for collection or deposit in the ordinary
course of business. The term "Guarantee" used as a verb has a
corresponding meaning.
"Hazardous Materials" means any hazardous materials, hazardous wastes,
hazardous pesticides, hazardous or toxic substances, defined, listed,
classified or regulated as such in or under any Environmental Law,
including asbestos, petroleum, any other petroleum products (including
gasoline, crude oil or any fraction thereof) polychlorinated biphenyls and
urea-formaldehyde insulation.
"Hedging Obligations" of any Person means the obligations of such Person
pursuant to any Interest Rate Agreement or Currency Agreement.
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"Highest Lawful Rate" shall have the meaning assigned thereto in
Section 9.10.
"Incur" means issue, assume, Guarantee, incur or otherwise become liable
for; provided, however, that any Indebtedness or Capital Stock of a Person
existing at the time such person becomes a Subsidiary (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be Incurred by
such Subsidiary at the time it becomes a Subsidiary.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication):
(i) the principal of and premium (if any) in respect of
indebtedness of such Person for borrowed money,
(ii) the principal of and premium (if any) in respect of
obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments,
(iii) all obligations of such Person in respect of letters of
credit or other similar instruments (including reimbursement
obligations with respect thereto),
(iv) all obligations of such Person to pay the deferred and
unpaid purchase price of property or services (except Trade Payables),
which purchase price is due more that six months after the date of
placing such property in service or taking delivery and title thereto
or the completion of such services,
(v) all Capitalized Lease Obligations of such Person,
(vi) the amount of all obligations of such Person with respect
to the redemption, repayment or other repurchase of any Disqualified
Stock or, with respect to any Subsidiary of the Company, any Preferred
Stock (but excluding, in each case, any accrued dividends),
(vii) all Indebtedness of other Persons secured by a Lien on any
asset of such Person, whether or not such Indebtedness is assumed by
such Person; provided, however, that the amount of Indebtedness of
such Person shall be the lesser of (A) the fair market value of such
asset at such date of determination and (B) the amount of such
Indebtedness of such other Persons,
(viii) all Indebtedness of other Persons to the extent Guaranteed
by such Person, and
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(ix) to the extent not otherwise included in this definition,
Hedging Obligations of such Person.
The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as
described above and the maximum liability, upon the occurrence of the
contingency giving rise to the obligation, of any contingent obligations at
such date.
"indemnified liabilities" shall have the meaning assigned thereto in
Section 9.05(d).
"Insolvency" means, with respect to a Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of such term as used in
Section 4245 of ERISA.
"Interest Payment Date" means the last day of each March, June, September
and December, commencing on the first such day to occur after the Loan is
made.
"Interest Rate Agreement" means with respect to any Person any interest
rate protection agreement, interest rate future agreement, interest rate
option agreement, interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedge agreement or
other similar agreement or arrangement as to which such Person is party or
a beneficiary.
"Investment" in any Person means any direct or indirect advance, loan
(other than advances to customers in the ordinary course of business that
are recorded as accounts receivable on the balance sheet of such Person) or
other extension of credit (including by way of Guarantee or similar
arrangement) or capital contribution to (by means of any transfer of cash
or other property to others or any payment for property or services for the
account or use of others), or any purchase or acquisition of Capital Stock,
Indebtedness or other similar instruments issued by such Person. For
purposes of the definition of "Unrestricted Subsidiary" and Section 6.02,
(i) "Investment" shall include the portion (proportionate to the Company's
equity interest in such Subsidiary) of the fair market value of the net
assets of any Subsidiary of the Company at the time that such Subsidiary is
designated an Unrestricted Subsidiary; provided, however, that upon a
redesignation of such Subsidiary as a Restricted Subsidiary, the Company
shall be deemed to continue to have a permanent "Investment" in an
Unrestricted Subsidiary in an amount (if positive) equal to (x) the
Company's "Investment" in such Subsidiary at the time of such redesignation
less (y) the portion (proportionate to the Company's equity interest in
such Subsidiary) of the fair market value of the net assets of such
Subsidiary at the time of such
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redesignation; and (ii) any property transferred to or from an
Unrestricted Subsidiary shall be valued at its fair market value at the
time of such transfer, in each case as determined in good faith by the
Board of Directors.
"Leased Properties" shall have the meaning assigned thereto in Section
3.10.
"Lender" means the party named in this Agreement until one or more
successors replace it, and thereafter means the successor or successors.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind (including any conditional sale or other title retention
agreement or lease in the nature thereof).
"Liquidating Assets" shall have the meaning assigned thereto in the
Liquidating Asset Management Agreement which definition shall be
incorporated herein by this reference.
"Liquidating Asset Management Agreement" means that certain Liquidating
Asset Management Agreement dated the date hereof by and between the Company
and Wexford Management Corp., a Delaware corporation and as provided for by
the NRG Plan.
"Loan" shall have the meaning set forth in Section 2.01.
"Loan Refinancing" shall mean Indebtedness that is incurred to enable the
Company to prepay the Loan in whole or in part.
"Maturity Date" shall have the meaning assigned thereto in Section 2.04.
"Multiemployer Plan" means a Plan which is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"Net Available Cash" from an Asset Disposition means cash payments received
(including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise, but
only as and when received, but excluding any other consideration received
in the form of assumption by the acquiring person of Indebtedness or other
obligations relating to the properties or assets that are the subject of
such Asset Disposition or received in any other noncash form) therefrom, in
each case net of (i) all legal, title and recording tax expenses,
commissions and other fees and expenses incurred, and all Federal, state,
provincial, foreign and local taxes required to be paid or
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accrued as a liability under GAAP, as a consequence of such Asset
Disposition, (ii) all payments made on any Indebtedness which is secured by
any assets subject to such Asset Disposition in accordance with the terms
of any Lien upon such assets, or which must by its terms, or in order to
obtain a necessary consent to such Asset Disposition, or by applicable law
be repaid out of the proceeds from such Asset Disposition, (iii) all
distributions and other payments required to be made to minority interest
holders in Subsidiaries or joint ventures as a result of such Asset
Disposition and (iv) appropriate amounts to be provided by the seller as a
reserve, in accordance with GAAP, against any liabilities associated with
the assets disposed of in such Asset Disposition and retained by the
Company or any Restricted Subsidiary after such Asset Disposition.
"Net Cash Proceeds" means, with respect to any issuance or sale of New
Notes by the Company or any Subsidiary, the cash proceeds of such issuance
or sale net of attorneys' fees, accountants' fees, underwriters' or
placement agents' fees, discounts or commissions and brokerage, consultant
and other fees actually incurred in connection with such issuance or sale
and net of taxes paid or payable as a result thereof.
"Note" means the Note substantially in the form attached hereto as
Exhibit A.
"Notice Event" shall have the meaning assigned thereto in Section 5.08.
"NRG Plan" shall have the meaning assigned thereto in the Recitals.
"Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer or the Secretary or Clerk of the Company.
"Officers' Certificate" means a certificate signed by two Officers.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Lender. The counsel may be an employee of or counsel to
the Company or the Lender.
"PBGC" means the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA or any successor.
"Permitted Investment" means an Investment by the Company or any Restricted
Subsidiary in (i) a Restricted Subsidiary, the Company or a Person which
will, upon the
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making of such Investment, become a Restricted Subsidiary; provided,
however, that the primary business of such Restricted Subsidiary is a
Related Business; (ii) another Person if as a result of such Investment
such other Person is merged or consolidated with or into, or transfers or
conveys all or substantially all its assets to, the Company or a Restricted
Subsidiary; provided, however, that such Person's primary business is a
Related Business; (iii) Temporary Cash Investments; (iv) receivables owing
to the Company or any Restricted Subsidiary, if created or acquired in the
ordinary course of business and payable or dischargeable in accordance with
customary trade terms; provided, however, that such trade terms may include
such concessionary trade terms as the Company or any such Restricted
Subsidiary deems reasonable under the circumstances; (v) payroll, travel
and similar advances to cover matters that are expected at the time of such
advances ultimately to be treated as expenses for accounting purposes and
that are made in the ordinary course of business; (vi) loans or advances to
employees made in the ordinary course of business consistent with past
practices of the Company or such Restricted Subsidiary; (vii) stock,
obligations or securities received in settlement of debts created in the
ordinary course of business and owing to the Company or any Restricted
Subsidiary or in satisfaction of judgments; and (viii) any Investment
pursuant to and in accordance with the terms of the Co-Investment
Agreement.
"Permitted Liens" means:
(a) Liens for taxes, assessments or other governmental charges
not yet delinquent or which are being contested in good faith and by
appropriate proceedings if adequate reserves with respect thereto are
maintained on the books of the Company or such Subsidiary, as the case
may be, in accordance with GAAP;
(b) carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's or other like Liens arising in the ordinary
course of business in respect of obligations which are not yet due or
which are bonded or which are being contested in good faith and by
appropriate proceedings if adequate reserves with respect thereto are
maintained on the books of the Company or such Subsidiary, as the case
may be, in accordance with GAAP;
(c) pledges or deposits in connection with workmen's
compensation, unemployment insurance and other social security
legislation;
(d) deposits to secure the performance of bids, tenders, trade
or government contracts (other than for
15
borrowed money), leases, licenses, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(e) easements (including reciprocal easement agreements),
rights-of-way, building, zoning and similar restrictions, utility
agreements, covenants, reservations, restrictions, encroachments,
changes, and other similar encumbrances or title defects incurred, or
leases or subleases granted to others, in the ordinary course of
business, which do not in the aggregate materially detract from the
aggregate value of the properties of the Company and its Subsidiaries,
taken as a whole or in the aggregate materially interfere with or
adversely affect in any material respect the ordinary conduct of the
business of the Company and its Subsidiaries on the properties subject
thereto, taken as a whole;
(f) Bankers' liens arising by operation of law;
(g) Liens on documents of title and the property covered
thereby securing Indebtedness in respect of any Commercial L/Cs;
(h) (i) mortgages, liens, security interests, restrictions or
encumbrances that have been placed by any developer, landlord or other
third party on property over which the Company or any Subsidiary of
the Company has easement rights or on any Leased Property and
subordination or similar agreements relating thereto and (ii) any
condemnation or eminent domain proceedings affecting any real
property;
(i) Liens on goods (and Proceeds thereof) held by the Company
or any of its Subsidiaries to be sold on a consignment basis in the
ordinary course of business;
(j) leases or subleases to third parties;
(k) Liens in connection with workmen's compensation obligations
and general liability exposure of the Company and its Subsidiaries;
and
(l) Liens securing Indebtedness Incurred under Section
6.01(b)(ii) or (iii).
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof or any other
entity.
16
"Plan" means at any particular time, any employee benefit plan as defined
in Section 3(3) of ERISA and not excluded by Section 4(b) of ERISA and in
respect of which the Company or a Commonly Controlled Entity is (or, if
such plan were terminated at such time, would under Section 4069 of ERISA
be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Preferred Stock" as applied to the Capital Stock of any corporation means
Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"principal" of a Note means the principal of the Note plus the premium, if
any, payable on the Note which is due or overdue or is to become due at the
relevant time.
"Refinancing Indebtedness" means Indebtedness that is Incurred to refund,
refinance, replace, renew, repay or extend (including pursuant to any
defeasance or discharge mechanism) (collectively, "refinances" and
"refinanced" shall have a correlative meaning) any Indebtedness existing on
the Closing Date or Incurred in compliance with this Agreement (including
Indebtedness of the Company that refinances Indebtedness of any Restricted
Subsidiary (to the extent permitted in this Agreement) and Indebtedness of
any Restricted Subsidiary that refinances Indebtedness of another
Restricted Subsidiary) including Indebtedness that refinances Refinancing
Indebtedness; provided, however, that (i) the Refinancing Indebtedness has
a Stated Maturity no earlier than the Stated Maturity of the Indebtedness
being refinanced, (ii) the Refinancing Indebtedness has an Average Life at
the time such Refinancing Indebtedness is Incurred that is equal to or
greater than the Average Life of the Indebtedness being refinanced and
(iii) such Refinancing Indebtedness is Incurred in an aggregate principal
amount (or if issued with original issue discount, an aggregate issue
price) that is equal to or less than the aggregate principal amount (or if
issued with original issue discount, the aggregate accreted value) then
outstanding of the Indebtedness being refinanced; provided further,
however, that Refinancing Indebtedness shall not include (x) Indebtedness
of a Restricted Subsidiary that refinances Indebtedness of the Company or
(y) Indebtedness of the Company or a Restricted Subsidiary that refinances
Indebtedness of an Unrestricted Subsidiary.
"Register" shall have the meaning assigned thereto in Section 2.10(b).
17
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System, as from time to time in effect.
"Related Business" means those businesses in which the Company or any of
its Subsidiaries is engaged on the date of this Agreement, or which are
directly related thereto.
"Reorganization" means with respect to a Multiemployer Plan, the condition
that such Plan is in reorganization as such term is used in Section 4241 of
ERISA.
"Reportable Event" means any of the events set forth in Section 4043(b) of
ERISA other than those events as to which the thirty day notice period is
waived under Sections .l3, .14, .16, .18, .19 or .20 of PBGC Reg. 2615.
"Requirement of Law" means, as to any Person, the Articles or Certificate
of Incorporation and By-Laws or other organizational or governing documents
of such Person, and any law, treaty, rule or regulation, order, or
determination of an arbitrator or a court or other Governmental Authority,
in each case applicable to or binding upon such Person or any of its
property, or to which such Person or any of its property is subject.
"Responsible Officer" means, with respect to any Person, the president,
chief executive officer, the chief operating officer, the chief financial
officer, treasurer, controller or any vice president of such Person.
"Restricted Payment" shall have the meaning assigned thereto in Section
6.02(a).
"Restricted Subsidiary" means any Subsidiary of the Company other than an
Unrestricted Subsidiary.
"Single Employer Plan" means any Plan which is covered by Title IV of ERISA
and which is not a Multiemployer Plan.
"Stated Maturity" means, with respect to any security, the date specified
in such security as the fixed date on which the payment of principal of
such security is due and payable, including pursuant to any mandatory
redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency beyond the control of the issuer unless such
contingency has occurred).
"Subordinated Obligation" means any Indebtedness of the Company (whether
outstanding on the Closing Date or
18
thereafter Incurred) which is subordinate or junior in right of payment to
the Note pursuant to a written agreement.
"Subsidiary" of any Person means any corporation, association, partnership
or other business entity of which more than 50% of the total voting power
of shares of Capital Stock or other interests (including partnership
interests) entitled (without regard to the occurrence of any contingency)
to vote in the election of directors, managers or trustees thereof is at
the time owned or controlled, directly or indirectly, by (i) such Person or
(ii) one or more Subsidiaries of such Person.
"Successor Company" shall have the meaning assigned hereto in Section
7.01(i).
"Temporary Cash Investments" means any of the following: (i) any
investment in direct obligations of the United States of America or any
agency thereof or obligations Guaranteed by the United States of America or
any agency thereof, (ii) investments in time deposit accounts, certificates
of deposit and money market deposits maturing within 180 days of the date
of acquisition thereof issued by a bank or trust company which is organized
under the laws of the United States of America, any state thereof or any
foreign country recognized by the United States of America having capital,
surplus and undivided profits aggregating in excess of $300,000,000 (or the
foreign currency equivalent thereof), (iii) repurchase obligations with a
term of not more than seven days for underlying securities of the types
described in clause (i) or (ii) above entered into with a bank meeting the
qualifications described in clause (ii) above, and (iv) investments in
commercial paper, maturing not more than six months after the date of
acquisition, issued by the Lender or the parent corporation of the Lender,
and commercial paper with a rating at the time as of which any investment
therein is made of "P-1" (or higher) according to Xxxxx'x Investors
Service, Inc. or A-1" (or higher) according to Standard and Poor's Ratings
Group.
"Trade Payables" means, with respect to any Person, any accounts payable or
any indebtedness or monetary obligation to trade creditors created, assumed
or Guaranteed by such Person arising in the ordinary course of business in
connection with the acquisition of goods or services.
"Transferee" shall have the meaning set forth in Section 9.06(b).
"Uniform Commercial Code" means the New York Uniform Commercial Code as in
effect from time to time.
19
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that at
the time of determination shall be designated an Unrestricted Subsidiary by
the Board of Directors in the manner provided below and (ii) any Subsidiary
of an Unrestricted Subsidiary. The Board of Directors may designate any
Subsidiary of the Company (including any newly acquired or newly formed
Subsidiary of the Company) to be an Unrestricted Subsidiary unless such
Subsidiary or any of its Subsidiaries owns any Capital Stock or
Indebtedness of, or owns or holds any Lien on any property of, the Company
or any other Subsidiary of the Company that is not a Subsidiary of the
Subsidiary to be so designated; provided, however, that either (A) the
Subsidiary to be so designated has total consolidated assets of $1,000 or
less or (B) if such Subsidiary has consolidated assets greater than $1,000,
then such designation would be permitted under Section 6.02. The Board of
Directors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided, however, that immediately after giving effect to such
designation (x) the Company's Consolidated Coverage Ratio would exceed
1.6:1.00 and (y) no Default shall have occurred and be continuing. Any
such designation by the Board of Directors shall be evidenced to the Lender
by promptly filing with the Lender a copy of the resolution of the Board of
Directors giving effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing provisions.
"Voting Stock" of a corporation means all classes of Capital Stock of such
corporation then outstanding and normally entitled to vote in the election
of directors.
"Wholly Owned Subsidiary" means a Restricted Subsidiary of the Company all
the Capital Stock of which (other than directors' qualifying shares) is
owned by the Company or another Wholly Owned Subsidiary.
SECTION 1.02. Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) as used herein and in the Note and any certificate or other
document made or delivered pursuant hereto, accounting terms relating
to the Company and its Subsidiaries not defined in Section 1.01 and
accounting terms partly defined in Section 1.01 to the extent not
defined shall have the respective meanings given to them under GAAP.
All computations determining compliance with financial covenants or
terms, including definitions used therein, shall be prepared in
accordance with generally accepted accounting principles in effect at
the time of the preparation of, and in conformity with those used to
20
prepare, the historical financial statements of the Company;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the
plural include the singular;
(6) unsecured Indebtedness shall not be deemed to be
subordinate or junior to secured Indebtedness merely by virtue of its
nature as unsecured indebtedness;
(7) the principal amount of any noninterest bearing or other
discount security at any date shall be the principal amount thereof
that would be shown on a balance sheet of the issuer dated such date
prepared in accordance with GAAP and accretion of principal on such
security shall be deemed to be the Incurrence of Indebtedness;
(8) the principal amount of any Preferred Stock shall be
(i) the maximum liquidation value of such Preferred Stock or (ii) the
maximum mandatory redemption or mandatory repurchase price with
respect to such Preferred Stock, whichever is greater;
(9) unless otherwise specified therein, all terms defined in
this Agreement shall have the defined meanings when used in the Note
or any certificate or other document made or delivered pursuant
hereto;
(10) the words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement, and section, Section, schedule and exhibit references are
to this Agreement unless otherwise specified; and
(11) as used in this Agreement, references to a fiscal year of
the Company identified only by a year refer to the fiscal year of the
Company ended on the Fiscal Date at the end of the fourth fiscal
quarter of the Company which falls in the immediately succeeding
calendar year. References to the last day of any fiscal year or
fiscal quarter of the Company, or to a fiscal year or quarter ended on
a certain date, shall be deemed to refer to the Fiscal Date at the end
of such fiscal year or quarter.
21
ARTICLE 2
Loan
SECTION 2.01. Loan. Subject to the terms and conditions hereof, the
Lender agrees to make a loan in Dollars (the "Loan") to the Company on the
Closing Date, in an aggregate principal amount of forty-five million
dollars ($45,000,000).
SECTION 2.02. Use of Proceeds. The proceeds of the Loan shall be used for
the purposes set forth in the NRG Plan and shall be applied in accordance
with the NRG Plan.
SECTION 2.03. Borrowing. The Company shall borrow the entire amount of
the Loan on the Closing Date.
SECTION 2.04. Maturity; Refinancing.
(a) The Loan will mature on the date that is sixty months following the
Closing Date (the "Maturity Date").
(b) The Company hereby covenants and agrees to use its reasonable best
efforts to obtain Loan Refinancing the Net Cash Proceeds of which will
enable and permit the Company to prepay the Loan in its entirety, including
principal and interest thereon.
SECTION 2.05. Optional and Mandatory Prepayments; Repayments of Loans.
(a) The Company may at any time and from time to time prepay the Loan, in
whole or in part, without premium or penalty, upon at least five days
irrevocable notice to the Lender. If such notice is given, the Company
shall make such prepayment, and the payment amount specified in such notice
shall be due and payable, on the date specified therein. Partial
prepayments of the Loan shall be in an aggregate principal amount equal to
the lesser of (A) $2,000,000, or a whole multiple of $1,000,000 in excess
thereof and (B) the aggregate unpaid principal amount of the Loan.
(b) (i) If, subsequent to the Closing Date, the Company or any of its
Subsidiaries shall obtain any Loan Refinancing, 100% of the Net Cash
Proceeds thereof shall be promptly applied toward the prepayment of the
Loan.
(ii) The Company shall give the Lender at least one Business Day's notice
of each prepayment or mandatory reduction pursuant to this Section 2.05(b)
setting forth the date and amount thereof.
22
(c) Accrued interest on the amount of any prepayments shall be paid on the
date of such prepayment.
SECTION 2.06. Interest Rate and Payment Dates.
(a) The Loan shall bear interest for the period from and including the
date the Loan is made to, but excluding, the maturity date thereof on the
unpaid principal thereof at a rate per annum equal to the Base Rate.
(b) If all or a portion of (i) the principal amount of the Loan or
(ii) any interest payable thereon shall not be paid when due (whether at
the stated maturity, by acceleration or otherwise) the Loan, and any such
overdue amount shall, without limiting the rights of the Lender under
Section 8, bear interest at a rate per annum which is 2.00% above the Base
Rate from the date of such non-payment until paid in full (as well after as
before judgment).
(c) Interest shall be payable in arrears on each Interest Payment Date.
SECTION 2.07. Computation of Interest and Fees. Interest in respect of
the Loan, shall be calculated on the basis of a 365 (or 366 as the case may
be) day year for the actual days elapsed.
SECTION 2.08. Treatment of Payments.
(a) Whenever any payment received by the Lender under this Agreement or
the Note is insufficient to pay in full all amounts then due and payable to
the Lender under this Agreement or the Note such payment shall be applied
by the Lender in the following order: First, to the payment of fees and
expenses due and payable to the Lender under and in connection with this
Agreement and the Note including the payment of all expenses due and
payable under Section 9.05; Second, to the payment of interest then due and
payable on the Loan; and Third, to the payment of the principal amount of
the Loan which is then due and payable; or
(b) All payments (including prepayments) to be made by the Company on
account of principal, interest and fees shall be made without set-off or
counterclaim and shall be made to the Lender, for the account of the Lender
at the office of the Lender located at 0000 Xxxxxxxx Xxxx, Xxxxx 000,
Xxxxxxxxxxx, XX 00000 in lawful money of the United States of America and
in immediately available funds. If any payment hereunder would become due
and payable on a day other than a Business Day, such payment shall become
due and payable on the next succeeding Business Day and, with respect to
payments of
23
principal, interest thereon shall be payable at the then applicable rate
during such extension.
SECTION 2.9. Indemnity. The Company agrees to indemnify the Lender and to
hold the Lender harmless from any loss or expense (but without duplication
of any amounts payable as default interest) which the Lender may sustain or
incur as a consequence of default by the Company in making any prepayment
after the Company has given a notice in accordance with Section 2.05. This
covenant shall survive termination of this Agreement and repayment of the
Loan.
SECTION 2.10. Repayment of the Loan; Evidence of Debt.
(a) The Company hereby unconditionally promises to pay to the Lender the
then unpaid principal amount of the Loan in accordance with the terms
hereof and the Note. The Company hereby further agrees to pay interest on
the unpaid principal amount of the Loan from time to time outstanding from
the date hereof until payment in full thereof at the rates per annum, and
on the dates, set forth in Section 2.06.
(b) The Lender shall maintain a Register (the "Register") in which shall
be recorded (i) the amount of the Loan made hereunder, (ii) the amount of
any principal or interest due and payable or to become due and payable from
the Company to the Lender hereunder and (iii) the amount of any sum
received by the Lender hereunder from the Company.
(c) The entries made in the Register to the extent permitted by applicable
law, shall be prima facie evidence of the existence and amounts of the
obligations of the Company therein recorded; provided, however, that the
failure of the Lender to maintain the Register, or any error therein, shall
not in any manner affect the obligation of the Company to repay (with
applicable interest) the Loan made to the Company by the Lender in
accordance with the terms of this Agreement.
(d) The Company agrees that, upon the request of the Lender, the Company
will execute and deliver to the Lender the Note evidencing the Loan, with
appropriate insertions as to date and principal amount.
ARTICLE 3
Representations and Warranties
In order to induce the Lender to enter into this Agreement and to make the
Loan, the Company hereby represents and warrants to the Lender, as follows
(all representations
24
and warranties are made as of the Closing Date and with respect to the
entire period following the Closing Date during which any amounts are due
and owing from the Company to the Lender hereunder, as if made at any time
during such period):
SECTION 3.01. No Change. There has been no change, and no development or
event involving a prospective change, which has had or could reasonably be
expected to have a material adverse effect on the business, assets,
condition (financial or otherwise) or results of operations of, the Company
and its Subsidiaries taken as a whole.
SECTION 3.02. Corporate Existence; Compliance with Law. Except for those
exceptions to the following which the Lender has actual knowledge of on the
Closing Date, each of the Company and its Subsidiaries (a) is a corporation
duly organized and validly existing under the laws of the jurisdiction of
its incorporation, (b) has full corporate power and authority and possesses
all governmental franchises, licenses, permits, authorizations and
approvals necessary to enable it to use its corporate name and to own,
lease or otherwise hold its properties and assets and to carry on its
business as presently conducted other than such franchises, licenses,
permits, authorizations and approvals the lack of which, individually or in
the aggregate, would not have a material adverse effect on the business,
assets, condition (financial or otherwise) or results of operations of the
Company and its Subsidiaries, taken as a whole, (c) is duly qualified and
in good standing to do business in each jurisdiction in which the nature of
its business or the ownership, leasing or holding of its properties makes
such qualification necessary, except such jurisdictions where the failure
so to qualify would not have a material adverse effect on the business,
assets, condition (financial or otherwise) or results of operations of the
Company and its Subsidiaries, taken as a whole, and (d) is in compliance
with all applicable statutes, laws, ordinances, rules, orders, permits and
regulations of any Governmental Authority (including those related to
Hazardous Materials and substances), except where noncompliance would not
have a material adverse effect on the business, assets, condition
(financial or otherwise) or results of operations of the Company and its
Subsidiaries, taken as a whole. Neither the Company nor any of its
Subsidiaries has received any written communication from a Governmental
Authority that alleges that the Company or any of its Subsidiaries is not
in compliance, in all material respects, with all material federal, state,
local or foreign laws, ordinances, rules and regulations.
SECTION 3.03. Corporate Power; Authorization. Each of the Company and its
Subsidiaries has the corporate power and authority to make, deliver and
perform each of the Credit
25
Documents to which it is a party, and the Company has the corporate power
and authority and legal right to borrow hereunder. Each of the Company and
its Subsidiaries has taken all necessary corporate action to authorize the
execution, delivery and performance of each of the Credit Documents to
which it is or will be a party and the Company has taken all necessary
corporate action to authorize the borrowings hereunder. No consent or
authorization of, or filing with, any Person (including any Governmental
Authority) is required in connection with the execution, delivery or
performance by the Company or any of the Company's Subsidiaries, or for the
validity or enforceability against the Company or any of the Company's
Subsidiaries, of any Credit Document except for consents, authorizations
and filings (a) which have been obtained or made and are in full force and
effect, and except such consents, authorizations and filings, the failure
to obtain or perform (i) which would not have a material adverse effect on
the business, assets, condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries taken as a whole and
(ii) which would not adversely affect the validity or enforceability of any
of the Credit Documents or the rights or remedies of the Lender thereunder.
SECTION 3.04. Enforceable Obligations. This Agreement, and each of the
other Credit Documents has been, duly executed and delivered on behalf of
the Company. This Agreement and each of the other Credit Documents
constitutes the legal, valid and binding obligation of the Company, and is
enforceable against the Company in accordance with its terms, except as may
be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, or similar laws affecting creditors' rights generally and by
general principles of equity (regardless of whether enforcement is sought
in a proceeding in equity or at law).
SECTION 3.05. No Legal Bar. The execution, delivery and performance of
each Credit Document and the incurrence or issuance of and use of the
proceeds of the Loan do not violate any Requirement of Law or any
Contractual Obligation applicable to or binding upon the Company or any
Subsidiary of the Company or any of their respective properties or assets,
in any manner which, individually or in the aggregate, (i) would have a
material adverse effect on the ability of the Company or any such
Subsidiary to perform its obligations under the Credit Documents to which
it is a party, (ii) would give rise to any liability on the part of the
Lender, or (iii) would have a material adverse effect on the business,
assets, condition (financial or otherwise) or results of operations of the
Company and its Subsidiaries taken as a whole, and do not result in the
creation or imposition of any Lien on any of its properties or assets
26
pursuant to any Requirement of Law applicable to it, as the case may be,
or any of its Contractual Obligations, except for Permitted Liens.
SECTION 3.06. No Material Litigation. No litigation by, investigation
known to the Company by, or proceeding of, any Governmental Authority is
pending against the Company or any of its Subsidiaries with respect to the
validity, binding effect or enforceability of any Credit Document, the Loan
made hereunder or the use of proceeds thereof. No lawsuits, claims,
proceedings or investigations pending or, to the best knowledge of the
Company, threatened against or affecting the Company or a Subsidiary of the
Company or any of their respective properties, assets, operations or
businesses, in which there is a probability of an adverse determination
that is reasonably likely, if adversely decided, to have a material adverse
effect on the business, assets, condition (financial or otherwise) or
results of operations of the Company and its Subsidiaries, taken as a
whole.
SECTION 3.07. Investment Company Act. Neither the Company nor any
Subsidiary of the Company is an "investment company" or a company
"controlled" by an "investment company" (as each of the quoted terms is
defined or used in the Investment Company Act of 1940, as amended).
SECTION 3.08. Federal Regulation. No part of the proceeds of the Loan are
being or are to be used for any purpose which violates the provisions of
Regulation G, T, U or X of the Board of Governors of the Federal Reserve
System. Neither the Company nor any of its Subsidiaries is engaged or will
engage, principally or as one of its important activities, in the business
of extending credit for the purpose of "purchasing" or "carrying" any
"margin stock" within the respective meanings of each of the quoted terms
under said Regulation U.
SECTION 3.09. No Default. The Company and each of its Subsidiaries have
performed all material obligations required to be performed by them under
their respective Contractual Obligations on and after the Closing Date and
they are not (with or without the lapse of time or the giving of notice, or
both) in breach or default in any respect thereunder, except to the extent
that such breach or default would not have a material adverse effect on the
business, assets, condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries taken as a whole. Neither
the Company nor any of its Subsidiaries is in default under any material
judgment, order or decree of any court, administrative agency or commission
or other governmental authority or instrumentality, domestic or
27
foreign, applicable to it or any of its respective properties, assets,
operations or business, except to the extent that any such defaults would
not, in the aggregate, have a material adverse effect on the business,
assets, condition (financial or otherwise) or results of operations of the
Company and its Subsidiaries, taken as a whole.
SECTION 3.10. Ownership of Property; Liens. Each of the Company and its
Subsidiaries has good and valid title to all of its material tangible and
intangible personal property, in each case free and clear of all mortgages,
liens, security interests or encumbrances of any nature whatsoever except
Permitted Liens. With respect to real property or interests in real
property, as of the Closing Date, each of the Company and its Subsidiaries
has (i) fee title to all of the real property listed on Schedule 3.10
(each, a "Fee Property"), and (ii) good and valid title to the leasehold
estates in all of the real property leased by it and listed on Schedule
3.10 under the heading "Leased Properties" (each, a "Leased Property"), in
each case free and clear of all mortgages, liens, security interests,
easements, covenants, rights-of-way and other similar restrictions of any
nature whatsoever, except (A) Permitted Liens, (B) any conditions that may
be shown by a current, accurate survey or physical inspection of any Fee
Property or Leased Property, (C) as to Leased Property, the terms and
provisions of the respective lease therefor and any matters affecting the
fee title and any estate superior to the leasehold estate related thereto,
and (D) title defects, or leases or subleases granted to others, which are
not material to the Fee Properties or the Leased Properties, as the case
may be, taken as a whole. The Fee Properties and the Leased Properties
(collectively the "Real Properties") constitute, as of the Closing Date,
all of the real property owned in fee or leased by the Company and its
Subsidiaries.
SECTION 3.11. ERISA. None of the Company, any Subsidiary of the Company
or any Commonly Controlled Entity would be liable for any amount pursuant
to Section 4062, 4063, 4064 or 4069 of ERISA, if any Single Employer Plan
were to terminate. Neither the Company nor any Commonly Controlled Entity
has been involved in any transaction that would cause the Company to be
subject to liability with respect to a Plan to which the Company or any
Commonly Controlled Entity contributed or was obligated to contribute
during the six-year period ending on the date this representation is made
or deemed made under Section 4062, 4069 or 4212(c) of ERISA. Neither the
Company nor any Commonly Controlled Entity has incurred any material
liability under Title IV of ERISA which could become or remain a liability
of the Company after the Closing Date. None of the Company, any Subsidiary
of the Company, or any director, officer or employee thereof, or any
28
of the Plans (to the best knowledge of the Company with respect to any
Multiemployer Plan), or any trust created thereunder, or any fiduciary
thereof, has engaged in a transaction or taken any other action or omitted
to take any action involving any Plan which could constitute a prohibited
transaction within the meaning of Section 406 of ERISA which is not
otherwise exempted, or would cause it to be subject to either a material
liability or civil penalty assessed pursuant to Section 409 or 502 of ERISA
or a material tax imposed pursuant to Section 4975 or 4976 of the Code.
Each of the Plans (to the best knowledge of the Company with respect to any
Multiemployer Plan) has been operated and administered in all material
respects in accordance with applicable laws, including but not limited to
ERISA and the Code. There are no material pending or, to the best
knowledge of the Company, threatened claims by or on behalf of any of the
Plans or any fiduciary, by any employee or beneficiary covered under any
such Plan, or otherwise involving any such Plan or fiduciary (other than
routine claims for benefits). No condition exists and no event has
occurred with respect to any Multiemployer Plan which presents a material
risk of a complete or partial withdrawal under Subtitle E of Title IV of
ERISA, nor has the Company or any Commonly Controlled Entity been notified
that any such Multiemployer Plan is insolvent or in reorganization within
the meaning of Section 4241 of ERISA. Neither the Company nor any Commonly
Controlled Entity nor any Subsidiary has been a party to any transaction or
agreement to which the provisions of Section 4204 of ERISA were applicable.
Neither the Company nor any Commonly Controlled Entity nor any Subsidiary
is obligated to contribute to a Multiemployer Plan, on behalf of any
current or former employee of the Company, any Commonly Controlled Entity
or any Subsidiary. None of the Plans or any trust established thereunder
has incurred any "accumulated funding deficiency" (as defined in Section
302 of ERISA and Section 412 of the Code), whether or not waived, as of the
last day of the most recent fiscal year of each of the Plans. No
contribution failure has occurred with respect to any Plan sufficient to
give rise to a lien under Section 302(f) of ERISA.
SECTION 3.12. Copyrights, Patents, Trademarks and Licenses. The Company
or a Subsidiary of the Company owns or has the right to use, without
payment to any other party, all material patents, patent applications,
trademarks (registered or unregistered), trade names, service marks and
copyrights owned, used or filed by or licensed to the Company and its
Subsidiaries. To the best knowledge of the Company, no claims are pending
by any Person with respect to the ownership, validity, enforceability or
the Company's or any Subsidiary's use of any such patents, patent
applications, trademarks (registered or unregistered), trade names, service
marks, copyrights challenging or questioning the validity or
29
effectiveness of any of the foregoing, in any jurisdiction, domestic or
foreign.
SECTION 3.13. Environmental Matters.
(a) To the best knowledge of the Company, the Real Properties do not
contain in, on or under including the soil and groundwater thereunder, any
Hazardous Materials in amounts or concentrations that constitute or
constituted a material violation of, or could reasonably give rise to
material liability under, Environmental Laws.
(b) To the best knowledge of the Company, the Real Properties and all
operations and facilities at the Real Properties are in material compliance
with all Environmental Laws, and there is no contamination or violation of
any Environmental Law which could materially interfere with the continued
operation of, or materially impair the fair salable value of, the Real
Properties.
(c) To the best knowledge of the Company, neither the Company nor any of
its Subsidiaries has received or is aware of any complaint, notice of
violation, alleged violation, or notice of investigation or of potential
liability under Environmental Laws with regard to the Real Properties or
the operations of the Company or its Subsidiaries, nor does the Company or
any of its Subsidiaries have knowledge that any such action is being
contemplated, considered or threatened.
(d) To the best knowledge of the Company, Hazardous Materials have not
been generated, treated, stored, disposed of, at, on or under the Real
Properties, nor have any Hazardous Materials been transported from the Real
Properties, in material violation of or in a manner that could reasonably
give rise to liability under any Environmental Laws.
(e) There are no governmental administrative actions or judicial
proceedings pending or, to the knowledge of the Company and its
Subsidiaries, threatened, under any Environmental Law to which the Company
or any of its Subsidiaries is a party with respect to the Real Properties,
nor are there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or judicial
requirements, other than permits authorizing operations at facilities at
the Real Properties, outstanding under any Environmental Law with respect
to the Real Properties.
30
ARTICLE 4
Conditions Precedent
SECTION 4.01. Conditions to Loans. The obligation of the Lender to make
the Loan on the Closing Date is subject to the satisfaction, or waiver by
the Lender, immediately prior to or concurrently with the making of the
Loan, of the following conditions:
(a) Note. The Lender shall have received the Note conforming to the
requirements hereof and executed by a duly authorized officer of the
Company.
(b) Consummation of Acquisition and NRG Plan. The Acquisition shall have
been consummated at the Closing (as defined in the Acquisition Agreement)
and concurrently therewith the NRG Plan shall have been consummated on the
Effective Date (as defined in the NRG Plan).
(c) Fees. The Lender shall have received all fees, expenses and other
consideration as required to be paid or delivered pursuant to Section 9.05
on or before the Closing Date.
ARTICLE 5
Affirmative Covenants
The Company hereby agrees that, so long as the Loan remains outstanding and
unpaid, or any other amount is owing to the Lender hereunder or under any
of the other Credit Documents, it shall, and, in the case of the agreements
contained in Sections 5.04 through 5.07 and 5.09, the Company shall cause
each of its Subsidiaries to:
SECTION 5.01. Financial Statements. Furnish to the Lender:
(a) as soon as available after the end of each fiscal year of
the Company, but in any event within 10 days of filing them with the
Securities and Exchange Commission, a copy of the consolidated balance
sheet of the Company and its consolidated Subsidiaries as at the end
of such fiscal year and the related consolidated statements of
stockholders' equity and cash flows and the consolidated statements of
income of the Company and its Subsidiaries for such fiscal year,
setting forth in each case (other than for the financial statements
delivered with respect to the first fiscal year of the Company ended
following the Closing Date) in comparative form the figures for the
previous year, reported on by independent
31
certified public accountants of nationally recognized standing; and
(b) as soon as available after the end of each of the first
three quarterly periods of each fiscal year of the Company, but in any
event within 10 days of filing them with the Securities and Exchange
Commission, the unaudited consolidated balance sheet of the Company
and its Subsidiaries as at the end of each such quarter and the
related unaudited consolidated statements of income and cash flows of
the Company and its Subsidiaries for such quarterly period and the
portion of the fiscal year of the Company through such date, setting
forth in each case (other than for the financial statements delivered
with respect to fiscal quarters occurring during the first fiscal year
of the Company ended following the Closing Date) in comparative form
the figures for the corresponding quarter in, and year to date portion
of, the previous year; together with a comparison showing the figures
for such periods in the budget prepared by the Company and furnished
to the Lender, certified by the chief financial officer, controller or
treasurer of the Company as being fairly stated in all material
respects.
SECTION 5.02. Certificates; Other Information. Furnish to the Lender:
(a) concurrently with the delivery of the consolidated
financial statements referred to in Section 5.01(a), so long as not
contrary to the then current recommendations of the American Institute
of Certified Accountants, a letter from the independent certified
public accountants reporting on such financial statements stating that
in making the examination necessary to express their opinion on such
financial statements, nothing has come to their attention which would
lead them to believe that there exists any Default or Event of Default
under Sections 6.01 and 6.02, except as specified in such letter;
(b) within 15 days of the delivery of the financial statements
referred to in Sections 5.01(a) and (b) (except that the certificate
referred to in clause (i) below shall be delivered concurrently with
such financial statements), a certificate of the chief financial
officer of the Company (i) stating that, to the best of such officer's
knowledge, each of the Company and its respective Subsidiaries has
observed or performed all of its covenants and other agreements, and
satisfied every material condition, contained in this Agreement and
the other Credit Documents to be observed, performed or satisfied by
it, and that such officer has obtained no
32
knowledge of any Default or Event of Default except as specified in
such certificate, (ii) showing in detail as of the end of the related
fiscal period the figures and calculations supporting such statement
in respect of Sections 6.02 and 6.05 and (iii) if not specified in the
financial statements delivered pursuant to Section 5.01, specifying
the aggregate amount of interest paid or accrued by the Company and
its Subsidiaries, and the aggregate amount of depreciation, depletion
and amortization charged on the books of the Company and its
Subsidiaries, during such accounting period; and
(c) promptly, such additional financial and other information
as the Lender may from time to time reasonably request.
SECTION 5.03. SEC Reports. The Company shall furnish to the Lender,
promptly upon their becoming available, copies of all financial statements,
reports, notices and proxy statements sent or made available to the public
generally by the Company or any of its Subsidiaries, if any, and all
regular and periodic reports and all final registration statements and
final prospectuses, if any, filed by the Company or any of its Subsidiaries
with any securities exchange or with the Securities and Exchange Commission
or any Governmental Authority succeeding to any of its functions.
SECTION 5.04. Payment of Obligations. Pay, discharge or otherwise satisfy
at or before maturity or before they become delinquent, as the case may be,
all its obligations and liabilities of whatever nature, except (a) when the
amount or validity thereof is currently being contested in good faith by
appropriate proceedings and reserves in conformity with GAAP with respect
thereto have been provided on the books of the Company or any of its
Subsidiaries, as the case may be, (b) for delinquent obligations which do
not have a material adverse effect on the business, assets, condition
(financial or otherwise) or results of operations of the Company and its
Subsidiaries taken as a whole and (c) for trade and other accounts payable
in the ordinary course of business which are not overdue for a period of
more than 90 days or, if overdue for more than 90 days, as to which a
dispute exists and adequate reserves in conformity with GAAP have been
established on the books of the Company or any of its Subsidiaries, as the
case may be.
SECTION 5.05. Conduct of Business and Maintenance of Existence. Except as
otherwise contemplated or permitted by the Co-Investment Agreement or the
Liquidating Asset Management Agreement, continue to engage in business of
the same general type as now conducted by it, and preserve, renew and keep
in full force and effect its corporate existence and
33
take all reasonable action to maintain all material rights, material
privileges, franchises, patents, patent applications, copyrights,
trademarks and trade names, necessary or desirable in the normal conduct of
its business except for rights, privileges, franchises, patents, patent
applications, copyrights, trademarks and tradenames the loss of which would
not in the aggregate have a material adverse effect on the business,
assets, condition (financial or otherwise) or results of operations of the
Company and its Subsidiaries taken as a whole, and comply with all
applicable Requirements of Law except to the extent that the failure to
comply therewith would not, in the aggregate, have a material adverse
effect on the business, assets, condition (financial or otherwise) or
results of operations of the Company and its Subsidiaries taken as a whole.
SECTION 5.06. Maintenance of Property; Insurance.
(a) Keep all property useful and necessary in its business in good working
order and condition (ordinary wear and tear excepted); and
(b) Maintain with financially sound and reputable insurance companies
insurance on all its property in at least such amounts and with only such
deductibles as are usually maintained by, and against at least such risks
(but including, in any event, public liability insurance) as are usually
insured against in the same general area, by companies engaged in the same
or a similar business and furnish to the Lender, upon written request of
the Lender, full information as to the insurance carried; provided that the
Company may implement programs of self-insurance in the ordinary course of
business and in accordance with industry standards for a company of similar
size so long as reserves are maintained in accordance with GAAP for the
liabilities associated therewith.
SECTION 5.07. Inspection of Property; Books and Records; Discussions.
Keep proper books of record and account in which full, true and correct
entries are made of all dealings and transactions in relation to its
business and activities which permit financial statements to be prepared in
conformity with GAAP and all Requirements of Law; and permit
representatives of the Lender upon reasonable notice (but no more
frequently than monthly), to visit and inspect any of its properties and
examine and make abstracts from any of its books and records at any
reasonable time and as often as may reasonably be requested upon reasonable
notice, and to discuss the business, operations, assets and financial and
other condition of the Company and its Subsidiaries with officers and
employees thereof and with their independent certified public accountants.
34
SECTION 5.08. Notices. Subject to the last sentence of this section
promptly give notice to the Lender of any of the following (a "Notice
Event"):
(a) of the occurrence of any Default or Event of Default;
(b) of any (i) default or event of default under any instrument
or other agreement, guarantee or collateral document of the Company or
any of its Subsidiaries which default or event of default has not been
waived and would have a material adverse effect on the business,
assets, condition (financial or otherwise) or results of operations of
the Company and its Subsidiaries taken as a whole, or (ii) litigation,
investigation or proceeding which may exist at any time between the
Company or any of its Subsidiaries and any Governmental Authority, or
receipt of any notice of any environmental claim or assessment against
the Company or any of its Subsidiaries by any Governmental Authority
which in any such case would have a material adverse effect on the
business, assets, condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries taken as a whole;
(c) of any litigation or proceeding against the Company or any
of its Subsidiaries (i) in which more than $500,000 of the amount
claimed is not covered by insurance or (ii) in which injunctive or
similar relief is sought which if obtained would have a material
adverse effect on the business, assets, condition (financial or
otherwise) or results of operations of the Company and its
Subsidiaries taken as a whole;
(d) of the following events, as soon as practicable after, and
in any event within 30 days after, the Company knows or has reason to
know thereof: (i) the occurrence of any Reportable Event with respect
to any Plan which Reportable Event could reasonably result in material
liability to the Company and its Subsidiaries taken as a whole, or
(ii) the institution of proceedings or the taking of any other action
by PBGC, the Company or any Commonly Controlled Entity to terminate,
withdraw or partially withdraw from any Plan and, with respect to a
Multiemployer Plan, the Reorganization or Insolvency of the Plan, in
each of the foregoing cases which could reasonably result in material
liability to the Company and its Subsidiaries taken as a whole, and in
addition to such notice, deliver to the Lender whichever of the
following may be applicable: (A) a certificate of a Responsible
Officer of the Company setting forth details as to such Reportable
Event and the action that the
35
Company or such Commonly Controlled Entity proposes to take with
respect thereto, together with a copy of any notice of such Reportable
Event that may be required to be filed with PBGC, or (B) any notice
delivered by PBGC evidencing its intent to institute such proceedings
or any notice to PBGC that such Plan is to be terminated, as the case
may be; and
(e) of a material adverse change known to the Company or its
Subsidiaries in the business, assets, condition (financial or
otherwise) or results of operations of the Company and its
Subsidiaries taken as a whole.
Each notice pursuant to this Section 5.08 shall be accompanied by a
statement of a Responsible Officer setting forth details of the occurrence
referred to therein and (in the cases of clauses (a) through (d)) stating
what action the Company proposes to take with respect thereto. The Company
shall not be deemed in breach or default of its obligations under this
Section 5.08 due to the failure to notify the Lender of any Notice Event of
which the Lender shall have had actual knowledge as of the date notice of
such Notice Event was to have been provided.
SECTION 5.09. Environmental Laws.
(a) Comply with, and use all reasonable efforts to insure compliance by
all tenants and subtenants, if any, with, all applicable Environmental Laws
and obtain and comply with and maintain, and require that all tenants and
subtenants obtain and comply with and maintain, any and all licenses,
approvals, registrations or permits required by Environmental Laws, except
to the extent that failure to do so would not have any reasonable
likelihood of having a material adverse effect on the business, assets,
condition (financial or otherwise) or results of operations of the Company
and its Subsidiaries taken as a whole or on the validity or enforceability
of any of the Credit Documents or the rights and remedies of the Lender
thereunder;
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions, required under
applicable Environmental Laws, and promptly comply with all lawful orders
and directives of all Governmental Authorities respecting Environmental
Laws, except to the extent that the same are being contested in good faith
by appropriate proceedings; and
(c) In regard to this Agreement or in any way relating to the Company or
its Subsidiaries or their current or former operations, defend, indemnify
and hold harmless the
36
Lender, and its respective employees, agents, officers and directors, from
and against any claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature known
or unknown, contingent or otherwise, arising out of, or in any way relating
to Hazardous Material or Environmental Laws, including any orders,
requirements or demands of Governmental Authorities related thereto,
including reasonable attorney's and consultant's fees, investigation and
laboratory fees, remediation costs, court costs and litigation expenses,
except to the extent that any of the foregoing arise out of the gross
negligence or willful misconduct of the party seeking indemnification
therefor. The agreements in this Section 5.09(c) shall survive repayment
of the Loan and all other amounts payable hereunder.
SECTION 5.10. Further Instruments and Acts. Upon request of the Lender,
the Company will execute and deliver such further instruments and do such
further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Agreement.
SECTION 5.11 Taxes. Each of the Company and its Subsidiaries will file or
cause to be filed all material tax returns which, to the knowledge of the
Company, are required to be filed and will pay all taxes shown to be due
and payable on said returns or on any assessments made against it or any of
its property and all other taxes, fees or other charges imposed on it or
any of its property by any Governmental Authority (other than any amount of
which is currently being contested in good faith by appropriate proceeds
and with respect to which reserves (or other sufficient provisions) in
conformity with GAAP have been provided on the books of the Company or its
Subsidiaries, as the case may be).
ARTICLE 6
Negative Covenants
So long as the Loan remains outstanding and unpaid, or any other amount is
owing to the Lender hereunder or under any other Credit Document (it being
understood that each of the permitted exceptions to each of the covenants
in this Article 6 is in addition to, and not overlapping with, any other of
such permitted exceptions except to the extent expressly provided):
37
SECTION 6.01. Limitation on Indebtedness.
(a) The Company shall not, and shall not permit any Restricted Subsidiary
to, Incur any Indebtedness; provided, however, that on or after the first
anniversary of the Closing Date the Company may Incur Indebtedness if on
the date thereof the Consolidated Coverage Ratio would be greater than
1.6:1.0.
(b) Notwithstanding Section 6.01(a), the Company and its Restricted
Subsidiaries may Incur the following Indebtedness:
(i) Indebtedness (A) of the Company to any Subsidiary, and (B)
of any Subsidiary to the Company or any other Subsidiary;
(ii) Indebtedness represented by (w) the Loan, (x) any
Indebtedness outstanding or to be issued or made pursuant to the NRG
Plan, (y) any Co-Investment Indebtedness and (z) any Refinancing
Indebtedness Incurred in respect of any Indebtedness described in this
clause (ii) or Section 6.01(a);
(iii) Indebtedness of the Company or any of its Subsidiaries in
an aggregate principal amount at any one time outstanding (excluding
Indebtedness that is permitted to be incurred pursuant to clause (ii)
of this Section 6.01(b)) not in excess of $5,000,000;
(iv) Indebtedness in connection with workmen's compensation
obligations and related general liability exposure of the Company and
its Subsidiaries; and
(v) Capitalized Lease Obligations in respect of (A) sale/leaseback
transactions of property owned by the Company on the Closing Date, and (B)
fixtures and equipment and other personal property acquired after the
Closing Date.
(c) The Company shall not Incur any Indebtedness pursuant to
Section 6.01(b) if the proceeds thereof are used, directly or indirectly,
to repay, prepay, redeem, defease, retire, refund or refinance any
Subordinated Obligations unless such Indebtedness shall be subordinated to
the Loan to at least the same extent as such Subordinated Obligations.
SECTION 6.02. Limitation on Restricted Payments.
(a) The Company shall not, and shall not permit any Restricted Subsidiary,
directly or indirectly, to (i) declare or pay any dividend or make any
distribution on or in respect of its Capital Stock (including any payment
in connection with any merger or consolidation involving the Company)
except
38
dividends or distributions payable solely in its Capital Stock (other than
Disqualified Stock) and except dividends or distributions payable to the
Company or another Restricted Subsidiary (and, if such Restricted
Subsidiary is not wholly owned, to its other shareholders on a pro rata
basis), (ii) purchase, redeem, retire or otherwise acquire for value any
Capital Stock of the Company or any Restricted Subsidiary held by Persons
other than the Company or another Restricted Subsidiary, (iii) purchase,
repurchase, redeem, defease or otherwise acquire or retire for value, prior
to scheduled maturity, scheduled repayment or scheduled sinking fund
payment, any Subordinated Obligations (other than the purchase, repurchase
or other acquisition of Subordinated Obligations purchased in anticipation
of satisfying a sinking fund obligation, principal installment or final
maturity, or (iv) make any Investment (other than a Permitted Investment)
in any Person (any such dividend, distribution, purchase, redemption,
repurchase, defeasance, other acquisition, retirement or Investment being
herein referred to as a "Restricted Payment") if at the time the Company or
such Restricted Subsidiary makes such Restricted Payment:
(1) a Default shall have occurred and be continuing (or would
result therefrom);
(2) the Consolidated Coverage Ratio of the Company would be
less than 1.6:1.0; or
(3) the aggregate amount of such Restricted Payment and all
other Restricted Payments (the amount so expended, if other than in
cash, to be determined in good faith by the Board of Directors, whose
determination shall be conclusive and evidenced by a resolution of the
Board of Directors) declared or made subsequent to the Closing Date
would exceed the sum of:
(A) 25% of the Consolidated Net Income accrued during the
period (treated as one accounting period) from the beginning of
the fourth fiscal quarter in 1995, to the end of the most recent
fiscal quarter ending at least 45 days prior to the date of such
Restricted Payment (or, in case such Consolidated Net Income
shall be a deficit, minus 100% of such deficit); and
(B) the aggregate Net Cash Proceeds received by the Company
from the issue or sale of its Capital Stock (other than
Disqualified Stock) subsequent to the Closing Date (other than an
issuance or sale to a Subsidiary of the Company or an employee
stock ownership plan or other trust established by the Company or
any of its Subsidiaries).
39
(b) The provisions of Section 6.02(a) shall not prohibit:
(i) any purchase or redemption of Capital Stock of the Company
or Subordinated Obligations made by exchange for, or out of the
proceeds of the substantially concurrent sale of, Capital Stock of the
Company (other than Disqualified Stock and other than Capital Stock
issued or sold to a Subsidiary or an employee stock ownership plan or
other trust established by the Company or any of its Subsidiaries);
provided, however, that (A) such purchase or redemption shall be
excluded in the calculation of the amount of Restricted Payments and
(B) the Net Cash Proceeds from such sale shall be excluded from clause
(3)(B) of Section 6.02(a);
(ii) any purchase or redemption of Subordinated Obligations made
by exchange for, or out of the proceeds of the substantially
concurrent sale of, Indebtedness of the Company which is permitted to
be Incurred pursuant to Section 6.01; provided, however, that such
purchase or redemption shall be excluded in the calculation of the
amount of Restricted Payments;
(iii) any purchase or redemption of Subordinated Obligations from
Net Available Cash to the extent permitted by Section 6.04; provided,
however, that such purchase or redemption shall be excluded in the
calculation of the amount of Restricted Payments;
(iv) dividends paid within 60 days after the date of declaration
thereof if at such date of declaration such dividend would have
complied with Section 6.02(a); provided, however, that such dividend
shall be included in the calculation of the amount of Restricted
Payments; or
(v) so long as the entire amount of the outstanding principal
and accrued interest on the Loan shall not have been accelerated and
become due and payable pursuant to Section 8.02 or so long as such
acceleration shall have been rescinded, the payment of dividends upon
or the redemption of the Company's Class A Preferred Stock in
accordance with the terms of such stock.
SECTION 6.03. Limitation on Restrictions on Distributions from
Subsidiaries. The Company shall not, and shall not permit any Restricted
Subsidiary to, create or otherwise cause or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to (i) pay dividends or make any other distributions
on its Capital Stock or pay any Indebtedness or
40
other obligations owed to the Company, (ii) make any Loan or advances to
the Company or (iii) transfer any of its property or assets to the Company,
except:
(1) any encumbrance or restriction pursuant to an agreement in
effect at or entered into on the Closing Date;
(2) any encumbrance or restriction pursuant to an agreement
effecting a Refinancing of Indebtedness Incurred pursuant to an
agreement referred to in clause (1) of this Section or this clause (2)
or contained in any amendment to an agreement referred to in clause
(1) of this Section or this clause (2); provided, however, that the
encumbrances and restrictions contained in any such refinancing
agreement or amendment are no less favorable to the Lender than
encumbrances and restrictions contained in such agreements;
(3) in the case of clause (iii), any encumbrance or restriction
(A) that restricts in a customary manner the subletting, assignment or
transfer of any property or asset that is subject to a lease, license
or similar contract or (B) contained in security agreements securing
Indebtedness of a Restricted Subsidiary to the extent such encumbrance
or restrictions restrict the transfer of the property subject to such
security agreements; and
(4) any restriction with respect to a Restricted Subsidiary
imposed pursuant to an agreement entered into for the sale or
disposition of all or substantially all the Capital Stock or assets of
such Restricted Subsidiary pending the closing of such sale or
disposition.
SECTION 6.04. Limitation on Sales of Assets and Subsidiary Stock.
(a) The Company shall not, and shall not permit any Restricted Subsidiary
to, make any Asset Disposition unless (i) the Company or such Restricted
Subsidiary receives consideration (including by way of relief from, or by
any other Person assuming sole responsibility for, any liabilities,
contingent or otherwise) at the time of such Asset Disposition at least
equal to the fair market value of the shares and assets subject to such
Asset Disposition, (ii) at least 80% of the consideration thereof received
by the Company or such Restricted Subsidiary is in the form of cash and
(iii) an amount equal to 100% of the Net Available Cash from such Asset
Disposition is applied by the Company (or such Restricted Subsidiary, as
the case may be) (A) first, to the extent the Company elects (or is
required by the terms of any Senior Indebtedness or Indebtedness of a
Wholly Owned
41
Subsidiary), to prepay, repay or purchase such Indebtedness of a Wholly
Owned Subsidiary (in each case other than Indebtedness owed to the Company
or an Affiliate of the Company) within 6 months after the later of the date
of such Asset Disposition or the receipt of such Net Available Cash; (B)
second, to the extent of the balance of Net Available Cash after
application in accordance with clause (A), to the extent the Company or
such Restricted Subsidiary elects, to reinvest in Additional Assets
(including by means of an Investment in Additional Assets by a Restricted
Subsidiary with Net Available Cash received by the Company or another
Restricted Subsidiary) within 6 months from the later of such Asset
Disposition or the receipt of such Net Available Cash; and (C) third, to
the extent of the balance of such Net Available Cash after application in
accordance with clauses (A) and (B), to repay the Loan, provided, however,
that in connection with any prepayment, repayment or purchase of
Indebtedness pursuant to clause (A) or (C) above, the Company or such
Restricted Subsidiary shall retire such Indebtedness and shall cause the
related loan commitment (if any) to be permanently reduced in an amount
equal to the principal amount so prepaid, repaid or purchased.
Notwithstanding the foregoing provisions of this Section, the Company and
the Restricted Subsidiaries shall not be required to apply any Net
Available Cash in accordance with this Section except to the extent that
the aggregate Net Available Cash from all Asset Dispositions which are not
applied in accordance with this Section exceed $500,000.
For the purposes of this Section, the following are deemed to be cash: (x)
the assumption of Indebtedness of the Company (other than Disqualified
Stock of the Company) or any Restricted Subsidiary and the release of the
Company or such Restricted Subsidiary from all liability on such
Indebtedness in connection with such Asset Disposition and (y) securities
received by the Company or any Restricted Subsidiary from the transferee
that are promptly converted by the Company or such Restricted Subsidiary
into cash.
SECTION 6.05. Limitation on Transactions with Affiliates.
(a) The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, enter into or conduct any transaction
(including the purchase, sale, lease or exchange of any property or the
rendering of any service) with any Affiliate of the Company (an "Affiliate
Transaction") on terms (i) that are less favorable to the Company or such
Restricted Subsidiary, as the case may be, than those that could be
obtained at the time of such transaction in arm's-length dealings with a
Person who is not such an Affiliate and (ii) that, in the event such
Affiliate Transaction involves an aggregate amount in excess of
42
$500,000, are not in writing and have not been approved by a majority of
the members of the Board of Directors having no personal stake in such
Affiliate Transaction.
(b) The provisions of Section 6.05(a) shall not prohibit (i) any
Restricted Payment permitted to be paid pursuant to Section 6.02, (ii) the
performance of the Company's or Subsidiary's obligations under any
employment contract, collective bargaining agreement, employee benefit
plan, related trust agreement or any other similar arrangement heretofore
or hereafter entered into in the ordinary course of business, (iii) payment
of compensation to employees, officers, directors or consultants in the
ordinary course of business, (iv) maintenance in the ordinary course of
business of benefit programs or arrangements for employees, officers or
directors, including vacation plans, health and life insurance plans,
deferred compensation plans, and retirement or savings plans and similar
plans or (v) any transaction between the Company and a Wholly Owned
Subsidiary or between Wholly Owned Subsidiaries (v) any transaction between
the Lender and the Company and (vi) any transaction pursuant to and in
accordance with the Liquidating Asset Management Agreement.
SECTION 6.06. Limitation on Liens. The Company shall not, and shall not
permit any Restricted Subsidiary to, directly or indirectly, create or
permit to exist any Lien on any of its property or assets (including
Capital Stock), whether owned on the date of this Agreement or thereafter
acquired, securing any obligation other than Permitted Liens.
SECTION 6.07. Limitation on Lines of Business. The Company shall not, and
shall not permit any Restricted Subsidiary to, engage in any business,
other than (i) those businesses in which the Company or such Restricted
Subsidiary is engaged on the date of this Agreement (or which are directly
related thereto) or (ii) those businesses in which the Company or any of
its Subsidiaries may engage in connection with any Investment made pursuant
to and in accordance with the terms of the Co-Investment Agreement.
ARTICLE 7
Successor Company
SECTION 7.01. When the Company May Merge or Transfer Assets. The Company
shall not consolidate with or merge with or into, or convey, transfer or
lease all or substantially all its assets to, any Person, unless:
(i) the resulting, surviving or transferee Person (the
"Successor Company") shall be a corporation organized and existing
under the laws of the United
43
States of America, any State thereof or the District of Columbia and
the Successor Company (if not the Company) shall expressly assume, by
an agreement supplemental hereto, executed and delivered to the
Lender, in form satisfactory to the Lender, all the obligations of the
Company under the Note and this Agreement;
(ii) immediately after giving effect to such transaction (and
treating any Indebtedness which becomes an obligation of the Successor
Company or any Restricted Subsidiary as a result of such transaction
as having been Incurred by the Successor Company or such Restricted
Subsidiary at the time of such transaction), no Default shall have
occurred and be continuing;
(iii) immediately after giving effect to such transaction, the
Consolidated Coverage Ratio of the Successor Company would be greater
than 1.6:1.0;
(iv) immediately after giving effect to such transaction, the
Successor Company shall have Consolidated Net Worth in an amount which
is not less than the Consolidated Net Worth of the Company immediately
prior to such transaction; and
(v) the Company shall have delivered to the Lender an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture (if
any) comply with this Agreement.
The Successor Company shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Agreement, but
the predecessor Company in the case of a lease of all or substantially all
its assets shall not be released from the obligation to pay the principal
of and interest on the Note.
Notwithstanding, the foregoing clauses (ii), (iii) and (iv), (1) any
Restricted Subsidiary may consolidate with, merge into or transfer all or
part of its properties and assets to the Company and (2) the Company may
merge with an Affiliate incorporated for the purpose of reincorporating the
Company in another jurisdiction to realize tax or other benefits.
44
ARTICLE 8
Defaults and Remedies
SECTION 8.01. Events of Default. An "Event of Default" occurs if:
(1) the Company defaults in any payment of interest or any
other amount (other than those specified in (2) below) with respect to
the Loan when the same becomes due and payable and such default
continues for a period of 10 days;
(2) the Company (i) defaults in the payment of the principal of
the Loan when the same becomes due and payable at its Stated Maturity,
upon redemption, upon declaration or otherwise or (ii) fails to redeem
or purchase the Note when required pursuant to this Agreement or the
Note;
(3) at any time during which the Lender shall own less than 26%
of the outstanding common stock of the Company, or, persons designated
by the Lender or which the Lender shall have the right to appoint
shall constitute less than one-half of the Board of Directors: (i)
any representation or warranty made or deemed made by the Company in
any Credit Document shall prove to have been incorrect in any material
respect on or as of the date, or at any time during the period, that
such representation or warrranty is made or deemed made; (ii) the
facts or circumstances giving rise to such incorrect representation or
warranty would have a material adverse effect on the Company's ability
to pay the amounts outstanding under the Loan (including principal and
interest) as they become due and payable; and (iii) both of the
conditions in preceding subclauses (i) and (ii) continue for 30 days
after the notice specified below;
(4) the Company fails to comply with Section 7.01 at any time
during which the Lender shall own less than 26% of the outstanding
common stock of the Company, or persons designated by the Lender or,
which the Lender shall have the right to appoint shall constitute less
than one-half of the Board of Directors;
(5) the Company shall default in the observance or performance
of any agreement contained in Section 5.08(a) or Article 6 of this
Agreement;
(6) the Company fails to comply with any of its agreements in
the Credit Documents (other than those referred to in (1) through (5)
above) and such failure
45
continues for 30 days after the notice specified below; provided that,
in the case of Sections 5.04, 5.05 and 5.11, the Lender shall then own
less than 26% of the outstanding common stock of the Company, or,
persons designated by the Lender or which the Lender shall have the
right to appoint shall constitute less than one-half of the Board of
Directors;
(7) Indebtedness of the Company or any Subsidiary is not paid
within any applicable grace period after final maturity or is
accelerated by the holders thereof because of a default and the total
amount of such Indebtedness unpaid or accelerated exceeds $2,000,000
or its foreign currency equivalent at the time;
(8) the Company or any Subsidiary pursuant to or within the
meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it
in an involuntary case;
(C) consents to the appointment of a Custodian of it or for
any substantial part of its property; or
(D) makes a general assignment for the benefit of its
creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
(9) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company or any Subsidiary in
an involuntary case;
(B) appoints a Custodian of the Company or any Subsidiary
or for any substantial part of its property; or
(C) orders the winding up or liquidation of the Company or
any Subsidiary;
or any similar relief is granted under any foreign laws and the order
or decree remains unstayed and in effect for 60 days;
(10) any judgment or decree for the payment of money in excess
of $2,000,000 or its foreign currency
46
equivalent at the time is entered against the Company or any
Subsidiary and is not discharged and either (A) an enforcement
proceeding has been commenced by any creditor upon such judgment or
decree or (B) there is a period of 60 days following the entry of such
judgment or decree during which such judgment or decree is not
discharged, waived or the execution thereof stayed;
(11) (i) any Person shall engage in any "prohibited transaction"
(as defined in Section 4.06 of ERISA or Section 4975 of the Code)
involving any Plan which is not otherwise exempted, (ii) any
"accumulated funding deficiency" (as defined in Section 302 of ERISA),
whether or not waived, shall exist with respect to any Plan, (iii) a
Reportable Event shall occur with respect to, or proceedings shall
commence to have a trustee appointed, or a trustee shall be appointed,
to administer or to terminate, any Plan, which Reportable Event or
commencement of proceedings or appointment of a trustee is, in the
reasonable opinion of the Lender, likely to result in the termination
of such Plan for purposes of Title IV of ERISA, (iv) any Single
Employer Plan shall terminate for purposes of Title IV of ERISA, (v)
the Company or any Commonly Controlled Entity shall, or in the
reasonable opinion of the Lender is likely to, incur any liability in
connection with a withdrawal from, or the Insolvency or Reorganization
of, a Multiemployer Plan; and in each case in clauses (i) through (v)
above, such event or condition, together with all other such events or
conditions relating to a Plan, if any, would be reasonably likely to
subject the Company or any of its Subsidiaries to any tax, penalty or
other liabilities in the aggregate material in relation to the
business, assets, condition (financial or otherwise) or results of
operations of the Company and its Subsidiaries taken as a whole; or
(12) any Credit Document shall cease, for any reason, to be in
full force and effect or the Company or any of its Subsidiaries shall
so assert in writing.
The foregoing will constitute Events of Default whatever the reason for any
such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any administrative or
governmental body.
The term "Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Code, or any
similar Federal or state law for the relief of debtors. The term
"Custodian" means any receiver,
47
trustee, assignee, liquidator, custodian or similar official under any
Bankruptcy Law.
A Default under clauses (3) and (6) is not an Event of Default until the
Lender notifies the Company of the Default and the Company does not cure
such Default within the time specified after receipt of such notice. Such
notice must specify the Default, demand that it be remedied and state that
such notice is a "Notice of Default".
SECTION 8.02. Acceleration. If an Event of Default (other than an Event
of Default specified in Section 8.01(8) or (9) with respect to the Company)
occurs and is continuing, the Lender by notice to the Company may declare
the principal of and accrued interest on the Loan to be due and payable.
Upon such a declaration, such principal and interest shall be due and
payable immediately. If an Event of Default specified in Section 8.01(8)
or (9) with respect to the Company (but not any Subsidiary) occurs, the
principal of and interest on the Loan Note shall ipso facto become and be
immediately due and payable without any declaration or other act on the
part of the Lender. The Lender by notice to the Company may rescind an
acceleration and its consequences. No such rescission shall affect any
subsequent Default or impair any right consequent thereto.
SECTION 8.03. Other Remedies. If an Event of Default occurs and is
continuing, the Lender may pursue any available remedy to collect the
payment of principal of or interest on the Note or to enforce the
performance of any provision of the Note or this Agreement.
The Lender may maintain a proceeding even if it does not possess the Note
or does not produce it in the proceeding. A delay or omission by the
Lender in exercising any right or remedy accruing upon an Event of Default
shall not impair the right or remedy or constitute a waiver of or
acquiescence in the Event of Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative.
SECTION 8.04. Waiver of Past Defaults. The Lender by notice to the
Company may waive an existing Default and its consequences. When a Default
is waived, it is deemed cured, but no such waiver shall extend to any
subsequent or other Default or impair any consequent right.
SECTION 8.05. Priorities. If the Lender collects any money or property
pursuant to this Article 8, it shall pay out the money or property in the
following order:
FIRST: to itself in accordance with the priority set forth in
Section 2.08; and
48
SECOND: to the extent of any excess, to the Company.
SECTION 8.06. Undertaking for Costs. In any suit for the enforcement of
any right or remedy under this Agreement a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to
pay the costs of the suit, and the court in its discretion may assess
reasonable costs, including reasonable attorneys' fees, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant.
SECTION 8.07. Waiver of Stay or Extension Laws. The Company (to the
extent it may lawfully do so) shall not at any time insist upon, or plead,
or in any manner whatsoever claim or take the benefit or advantage of, any
stay or extension law wherever enacted, now or at any time hereafter in
force, which may affect the covenants or the performance of this Agreement;
and the Company (to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law, and shall not hinder,
delay or impede the execution of any power herein granted to the Lender,
but shall suffer and permit the execution of every such power as though no
such law had been enacted.
ARTICLE 9
Miscellaneous
SECTION 9.01. Amendments and Waivers. Except as otherwise expressly set
forth in this Agreement, no Credit Document nor any terms thereof may be
amended, supplemented, waived or modified except in accordance with the
provisions of this Section 9.01.
SECTION 9.02. Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy or telex, if one is listed), and, unless otherwise expressly
provided herein, shall be deemed to have been duly given or made when
delivered by hand, or three Business Days after being deposited in the
mail, postage prepaid, or, in the case of telecopy notice, when sent,
confirmation of receipt received, or, in the case of telex notice, when
sent, answerback received, addressed as follows, or to such other address
as may be hereafter notified by the respective parties hereto and any
future holders of the Note:
49
The Company: NRG Generating (U.S.) Inc.
0000 Xxxxxxxx Xxxx
Xxxxxxxxxxx, XX 00000
Attention: President or Chief Executive Officer
Telephone: (000) 000-0000
Telecopier:(000) 000-0000
With a copy to: Xxxxxxxx Xxxxxxx
NationsBank Plaza, Suite 5200
000 Xxxxxxxxx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxxxxx
Telephone: (000) 000-0000
Telecopier:(000) 000-0000
if to Lender NRG Energy, Inc.
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxxx, XX 00000
Attention: Vice President, Business
Development
Telephone: (000) 000-0000
Telecopier:(000) 000-0000
With copies to: NRG Energy Inc.
Legal Department
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxxx, XX 00000
Attention: Vice President and General
Counsel
Telephone: (000) 000-0000
Telecopier (000) 000-0000
provided that any notice, request or demand to or upon the Lender pursuant
to Section 2.05 shall not be effective until received.
SECTION 9.03. No Waiver; Cumulative Remedies. No failure to exercise and
no delay in exercising, on the part of the Lender, any right, remedy, power
or privilege hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of
any other right, remedy, power or privilege. The rights, remedies, powers
and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
SECTION 9.04. Survival of Representations and Warranties. All
representations and warranties made hereunder and in any document,
certificate or statement delivered
50
pursuant hereto or in connection herewith shall survive the execution and
delivery of this Agreement and the Note.
SECTION 9.05. Payment of Expenses and Taxes. The Company agrees (a) to
pay or reimburse the Lender for all its reasonable out-of-pocket costs and
expenses incurred in connection with the development, preparation and
execution of, and any amendment, supplement or modification to, the Credit
Documents and any other documents prepared in connection herewith, and the
consummation of the transactions contemplated hereby and thereby, including
the reasonable fees and disbursements of counsel to the Lender not to
exceed $100,000, (b) to pay or reimburse the Lender for all its costs and
expenses incurred in connection with, and to pay, indemnify, and hold the
Lender harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever arising out of
or in connection with, the enforcement or preservation of any rights under
any Credit Document and any such other documents, including reasonable fees
and disbursements of counsel to the Lender incurred in connection with the
foregoing, (c) to pay, indemnify, and to hold the Lender harmless from any
and all recording and filing fees and any and all liabilities with respect
to, or resulting from any delay in paying, stamp, excise and other similar
taxes (other than withholding taxes), if any, which may be payable or
determined to be payable in connection with the execution and delivery of,
or consummation of any of the transactions contemplated by, or any
amendment, supplement or modification of, or any waiver or consent under or
in respect of, any Credit Document and any such other documents, and (d) to
pay, indemnify, and hold the Lender and its respective Affiliates, officers
and directors harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever (including
reasonable fees and disbursements of counsel) which may be incurred by or
asserted against the Lender or such Affiliates, officers or directors
arising out of or in connection with any investigation, litigation or
proceeding related to this Agreement, the other Credit Documents, the
proceeds of the Loan and the transactions contemplated by or in respect of
such use of proceeds, or any of the other transactions contemplated hereby,
whether or not the Lender or such Affiliates, officers or directors is a
party thereto, including any of the foregoing relating to the violation of,
noncompliance with or liability under, any Environmental Law applicable to
the operations of the Company, any of its Subsidiaries or any of the
facilities and properties owned, leased or operated by the Company or any
of its Subsidiaries (all the foregoing, collectively, the "indemnified
liabilities"); provided that the Company shall have no
51
obligation hereunder with respect to indemnified liabilities of the Lender
or any of its respective Affiliates, officers and directors arising from
(i) the gross negligence or willful misconduct of the Lender or its
respective directors or officers; (ii) legal proceedings commenced against
the Lender by any security holder or creditor thereof arising out of and
based upon rights afforded any such security holder or creditor solely in
its capacity as such; (iii) legal proceedings commenced against the Lender
by any Transferee; or (iv) actions taken by the Company either at the
direction of the Board of Directors of the Company or pursuant to the
Management Agreement at such time as persons designated by the Lender or
which the Lender shall have the right to appoint shall constitute at least
one-half of the Board. The agreements in his Section 9.05 shall survive
repayment of the Note and all other amounts payable hereunder.
SECTION 9.06. Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of the
Company, the Lender all future holders of the Note and the Loan, and their
respective successors and assigns, except that the Company may not assign
or transfer any of its rights or obligations under this Agreement without
the prior written consent of the Lender.
(b) The Company hereby agrees that the Lender may, in accordance with
applicable law, at any time and from time to time assign all or any part of
its rights and obligations under this Agreement and the Note to any Person
(a "Transferee"); provided, however, that any rights the Lender may have
pursuant to Article 3 and Section 8.01(3) shall not survive or be effective
as to any Transferee.
(c) The Company authorizes the Lender to disclose to any prospective
Transferee any and all financial information in the Lender's possession
concerning the Company and its Subsidiaries and Affiliates which has been
delivered to the Lender by or on behalf of the Company, subject to receipt
of a confidentiality agreement from such Prospective Transferee in form and
substance reasonably satisfactory to the Company.
SECTION 9.07. Counterparts. This Agreement may be executed by one or more
of the parties to this Agreement on any number of separate counterparts and
all of said counterparts taken together shall be deemed to constitute one
and the same instrument.
SECTION 9.08. Governing Law; No Third Party Rights. This Agreement and
the Note and the rights and obligations of
52
the parties under this Agreement and the Note shall be governed by, and
construed and interpreted in accordance with, the law of the State of New
York and applicable laws of the United States of America. This Agreement
is solely for the benefit of the parties hereto and their respective
successors and assigns, and, except as set forth in Section 9.06, no other
Persons shall have any right, benefit, priority or interest under, or
because of the existence of, this Agreement.
SECTION 9.09. Submission to Jurisdiction; Waivers.
(a) Each party to this Agreement hereby irrevocably and unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Agreement or any of the other Credit
Documents, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the
courts of the State of New York, the courts of the United States of
America for the Southern District of New York, and appellate courts
from any thereof;
(ii) consents that any such action or proceeding may be brought
in such courts, and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court
or that such action or proceeding was brought in an inconvenient court
and agrees not to plead or claim the same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to such party at its address set forth in Section 9.02; and
(iv) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit
the right to xxx in any other jurisdiction.
(b) Each party hereto unconditionally waives trial by jury in any legal
action or proceeding referred to in paragraph (a) above and any
counterclaim therein.
SECTION 9.10. Interest. Each provision in this Agreement and each other
Credit Document is expressly limited so that in no event whatsoever shall
the amount paid, or otherwise agreed to be paid, by the Company for the
use, forbearance or detention of the money to be loaned under this
Agreement or any other Credit Document or otherwise (including
53
any sums paid as required by any covenant or obligation contained herein or
in any other Credit Document which is for the use, forbearance or detention
of such money), exceed that amount of money which would cause the effective
rate of interest to exceed the highest lawful rate permitted by applicable
law (the "Highest Lawful Rate"), and all amounts owed under this Agreement
and each other Credit Document shall be held to be subject to reduction to
the effect that such amounts so paid or agreed to be paid which are for the
use, forbearance or detention of money under this Agreement or such Credit
Document shall in no event exceed that amount of money which would cause
the effective rate of interest to exceed the Highest Lawful Rate.
Notwithstanding any provision in this Agreement or any other Credit
Document to the contrary, if the maturity of the Loan or the obligations in
respect of the other Credit Documents are accelerated for any reason, or in
the event of any prepayment of all or any portion of the Loan or the
obligations in respect of the other Credit Documents by the Company or in
any other event, earned interest on the Loan and such other obligations of
the Company may never exceed the Highest Lawful Rate, and any unearned
interest otherwise payable on the Loan or the obligations in respect of the
other Credit Documents that is in excess of the Highest Lawful Rate shall
be cancelled automatically as of the date of such acceleration or
prepayment or other such event and (if theretofore paid) shall, at the
option of the holder of the Loan or such other obligations, be either
refunded to the Company or credited on the principal of the Loan. In
determining whether or not the interest paid or payable, under any specific
contingency, exceeds the Highest Lawful Rate, the Company and the Lender
shall, to the maximum extent permitted by applicable law, amortize,
prorate, allocate and spread, in equal parts during the period of the
actual term of this Agreement, all interest at any time contracted for,
charged, received or reserved in connection with this Agreement.
54
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in New York, New York by their proper and duly
authorized officers as of the day and year first above written.
NRG GENERATING (U.S.) INC.
by
/s/ Xxxxxxx Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: President and Chief Executive
Officer
NRG ENERGY, INC.
by
/s/ Xxxxx X. Xxxxxxxxxxx
Name: Xxxxx X. Xxxxxxxxxxx
Title: Vice President, Domestic Business
Development
55
EXHIBIT A
New York, New York
April 30, 1996
NOTE
FOR VALUE RECEIVED, the undersigned, NRG GENERATING (U.S.) INC., a
Delaware corporation (the "Company"), hereby promises to pay to the order
of NRG ENERGY, INC., a Delaware corporation, or registered assigns (the
"Lender"), at the office of the Lender located at 0000 Xxxxxxxx Xxxx, Xxxxx
000, Xxxxxxxxxxx, XX 00000 in lawful money of the United States of America
and in immediately available funds, the principal amount of FORTY FIVE
MILLION DOLLARS ($45,000,000), or, if less, the aggregate unpaid principal
amount of the loan made by the lender pursuant to Section 2.01 of the Loan
Agreement referred to below (in either case, to be paid together with any
accrued interest not required to be paid currently in cash), which sum
shall be due and payable in such amounts and on such dates as are set forth
in the Loan Agreement, dated as of April 30, 1996 between the Company and
the Lender (the "Loan Agreement"; terms defined therein being used herein
as so defined). The undersigned further agrees to pay interest at said
office, in like money, from the date hereof on the unpaid principally
amount hereof from time to time outstanding at the rates and on the dates
specified in Section 2.06 of the Loan Agreement.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
diligence, presentment, demand, protest and notice of any kind whatsoever.
The nonexercise by the holder of this Note of any of its rights hereunder
in any particular instance shall not constitute a waiver thereof in that or
any subsequent instance.
This Note is the Note referred to in the Loan Agreement, which Loan
Agreement, among other things, contains provisions for the acceleration of
the maturity hereof upon the happening of certain events, for optional and
mandatory prepayment of the principal hereof prior to the maturity hereof
and for the amendment or waiver of certain provisions of the Loan
Agreement, all upon the terms and conditions therein specified.
This Note shall be construed in accordance with and governed by the laws of
the State of New York and any applicable laws of the United States of
America.
THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS OF THE
LOAN AGREEMENT. TRANSFERS OF THIS NOTE MUST BE RECORDED IN THE REGISTER
MAINTAINED BY THE LENDER PURSUANT TO THE TERMS OF THE LOAN AGREEMENT.
NRG GENERATING (U.S.) INC.,
by
_________________________
Name: Xxxxxxx X. Xxxxx
Title: President and Chief Executive
Officer
2
