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Exhibit 1.1
NRG SOUTH CENTRAL GENERATING LLC
$800,000,000
8.962% Series A Senior Secured Bonds Due 2016
9.479% Series B Senior Secured Bonds Due 2024
PURCHASE AGREEMENT
March 24, 2000
CHASE SECURITIES INC.
LEHMAN BROTHERS INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
SALOMON SMITH BARNEY INC.
c/o Chase Securities Inc.
270 Park Avenue, 4th floor
New York, New York 10017
Ladies and Gentlemen:
NRG South Central Generating LLC, a Delaware limited liability
company (the "Issuer"), proposes to issue and sell $500,000,000 aggregate
principal amount of its 8.962% Series A Senior Secured Bonds Due 2016, and
$300,000,000 aggregate principal amount of its 9.479% Series B Senior Secured
Bonds Due 2024 (together, the "Bonds"). The Bonds will be issued pursuant to an
Indenture to be dated as of March 30, 2000 (the "Indenture") between the Issuer
and The Chase Manhattan Bank, as bond trustee (the "Bond Trustee"). Payment on
the Bonds will be guaranteed by Louisiana Generating LLC, a Delaware limited
liability company (the "Subsidiary Guarantor" and, together with the Issuer, the
"Obligors") pursuant to the Guarantee to be dated as of March 30, 2000 (the
"Guarantee") between the Subsidiary Guarantor and the Bond Trustee. The Issuer
hereby enters into this agreement with Chase Securities Inc. ("CSI"), Lehman
Brothers Inc. ("LB" and together with CSI, the "Representatives," acting
severally on behalf of themselves and the several Initial Purchasers), Credit
Suisse First Boston Corporation ("CSFB") and Salomon Smith Barney Inc. (together
with CSI, LB and CSFB, the "Initial Purchasers") concerning the purchase of the
Bonds from the Issuer by the several Initial Purchasers.
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The Bonds will be offered and sold to the Initial Purchasers
without being registered under the Securities Act of 1933, as amended (the
"Securities Act"), in reliance upon an exemption therefrom. The Issuer has
prepared a preliminary offering memorandum dated March 14, 2000 (the
"Preliminary Offering Memorandum") and will prepare an offering memorandum dated
the date hereof (the "Offering Memorandum") setting forth information concerning
the Obligors and the Bonds. Copies of the Preliminary Offering Memorandum have
been, and copies of the Offering Memorandum will be, delivered by the Issuer to
the Initial Purchasers pursuant to the terms of this Agreement. Any references
herein to the Preliminary Offering Memorandum and the Offering Memorandum shall
be deemed to include all amendments and supplements thereto, unless otherwise
noted. The Issuer hereby confirms that it has authorized the use of the
Preliminary Offering Memorandum and the Offering Memorandum in connection with
the offering and resale of the Bonds by the Initial Purchasers in accordance
with Section 2.
Holders of the Bonds (including the Initial Purchasers and
their direct and indirect transferees) will be entitled to the benefits of an
Exchange and Registration Rights Agreement, substantially in the form attached
hereto as Annex A (the "Registration Rights Agreement"), pursuant to which the
Issuer will agree to file with the Securities and Exchange Commission (the
"Commission") (i) a registration statement under the Securities Act (the
"Exchange Offer Registration Statement") registering an issue of senior bonds of
the Issuer (the "Exchange Bonds") which are identical in all material respects
to the Bonds (except that the Exchange Bonds will not contain terms with respect
to transfer restrictions) and (ii) under certain circumstances, a shelf
registration statement pursuant to Rule 415 under the Securities Act (the "Shelf
Registration Statement").
Capitalized terms used but not defined herein shall have the
meanings given to such terms in the Indenture.
1. Representations, Warranties and Agreements of the Obligors.
Each Obligor (unless explicitly set forth as relevant to one Obligor only)
represents and warrants to, and agrees with, the several Initial Purchasers on
and as of the date hereof and the Closing Date (as defined in Section 3) that:
(a) Each of the Preliminary Offering Memorandum and the
Offering Memorandum, as of its respective date, did not, and on the Closing Date
the Offering Memorandum will not, contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements
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therein, in the light of the circumstances under which they were made, not
misleading; provided that neither Obligor makes any representation or warranty
as to (i) information contained in or omitted from the Preliminary Offering
Memorandum or the Offering Memorandum in reliance upon and in conformity with
written information relating to the Initial Purchasers furnished to the Obligors
by or on behalf of any Initial Purchaser specifically for use therein (the
"Initial Purchasers' Information") or (ii) the Independent Engineer's Report or
the Independent Market Consultant's Report and information in the Preliminary
Offering Memorandum or the Offering Memorandum relating to matters referred to
in the Independent Engineer's Report or the Independent Market Consultant's
Report.
(b) Each of the Preliminary Offering Memorandum and the
Offering Memorandum, as of its respective date, contains all of the information
that, if requested by a prospective purchaser of the Bonds, would be required to
be provided to such prospective purchaser pursuant to Rule 144A(d)(4) under the
Securities Act.
(c) Assuming the accuracy of the representations and
warranties of the Initial Purchasers contained in Section 2 and their compliance
with the agreements set forth therein and assuming that the purchasers to whom
the Initial Purchasers resell the Bonds receive a copy of the Offering
Memorandum, it is not necessary, in connection with the issuance and sale of the
Bonds to the Initial Purchasers and the offer, resale and delivery of the Bonds
by the Initial Purchasers in the manner contemplated by this Agreement and the
Offering Memorandum to register the Bonds under the Securities Act or to qualify
the Indenture under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act").
(d) Each Obligor is a limited liability company duly organized
and validly existing under the laws of the State of Delaware, is duly qualified
to do business as a foreign limited liability company in each jurisdiction in
which its ownership or lease of property or the conduct of its business requires
such qualification, and has all power and authority necessary to own or hold its
property and to conduct the business in which it is now engaged or proposed to
be engaged, except where the failure to so qualify or have such power or
authority would not, singularly or in the aggregate, be reasonably expected to
result in a material adverse effect on the financial condition, results of
operations, business or prospects of the Obligors, taken as a whole (a "Material
Adverse Effect").
(e) Each Obligor has all rights, powers and authority
necessary to execute, deliver or assume, as applicable, to the extent party to,
this Agreement, the
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Indenture, the Registration Rights Agreement, the Bonds and the other Finance
Documents and material Project Documents in effect as of the closing date of the
Acquisition (collectively, the "Transaction Documents") to which it is a party
and to perform its obligations hereunder and thereunder; and all limited
liability company or other action required to be taken for the due and proper
authorization, execution and delivery of each of the Transaction Documents and
the consummation of the transactions contemplated thereby has been duly and
validly taken.
(f) This Agreement has been duly authorized, executed and
delivered by each Obligor and constitutes a valid and legally binding agreement
of each Obligor.
(g) The Indenture has been duly authorized by the Issuer and,
when duly executed and delivered in accordance with its terms by each of the
parties thereto, will constitute a valid and legally binding agreement of the
Issuer enforceable against the Issuer in accordance with its terms, except to
the extent that such enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws affecting creditors' rights generally and by general equitable principles
(whether considered in a proceeding in equity or at law).
(h) The Registration Rights Agreement has been duly authorized
by the Issuer and, when duly executed and delivered in accordance with its terms
by each of the parties thereto, will constitute a valid and legally binding
agreement of the Issuer enforceable against the Issuer in accordance with its
terms, except to the extent that (x) such enforceability may be limited by
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors' rights generally and by
general equitable principles (whether considered in a proceeding in equity or at
law) and (y) the rights to indemnification and contribution thereunder may be
limited by federal and state securities laws or the public policy underlying
such laws.
(i) The Guarantee has been duly authorized by the Subsidiary
Guarantor and, when duly executed and delivered in accordance with its terms by
each of the parties thereto, will constitute a valid and legally binding
agreement of the Subsidiary Guarantor enforceable against the Subsidiary
Guarantor in accordance with its terms, except to the extent that such
enforceability may be limited by applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws affecting
creditors' rights generally and by general equitable principles (whether
considered in a proceeding in equity or at law).
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(j) The Bonds have been duly authorized by the Issuer and,
when duly executed, authenticated, issued and delivered as provided in the
Indenture and paid for as provided herein, will be duly and validly issued and
outstanding and will constitute valid and legally binding obligations of the
Issuer entitled to the benefits of the Indenture and enforceable against the
Issuer in accordance with their terms, except to the extent that such
enforceability may be limited by applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws affecting
creditors' rights generally and by general equitable principles (whether
considered in a proceeding in equity or at law).
(k) Each of the Transaction Documents to which either Obligor
is a party (other than this Agreement, the Indenture, the Registration Rights
Agreement, the Guarantee and the Bonds referred to above) has been duly
authorized, and upon the closing of the Acquisition will be executed and
delivered by such Obligor, to the extent a party thereto, and will constitute a
valid and legally binding agreement of such Obligor enforceable against such
Obligor in accordance with its terms, except to the extent that such
enforceability may be limited by applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws affecting
creditors' rights generally and by general equitable principles (whether
considered in a proceeding in equity or at law).
(l) Each Transaction Document conforms in all material
respects to the description thereof contained in the Offering Memorandum. To the
best of each Obligor's knowledge, no event of force majeure has occurred under
any material Project Document in effect as of the closing date of the
Acquisition.
(m) The execution, delivery and performance by each Obligor of
each of the Transaction Documents to which it is a party, the issuance,
authentication, sale and delivery of the Bonds and compliance by the Issuer with
the terms thereof and the consummation of the transactions contemplated by the
Transaction Documents will not, upon satisfaction of the condition set forth in
Section 5(s) hereof, conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of either Obligor pursuant to, any material indenture, mortgage, deed of
trust, loan agreement or other material agreement or instrument to which either
Obligor is a party or by which either Obligor is bound or to which any of the
property or assets of either Obligor are subject, except such conflicts,
breaches, violations, defaults, liens, charges or encumbrances as would not
reasonably be expected to result in a Material Adverse Effect, (ii) result in
any violation of the provisions of the
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certificate of formation, membership agreement or other organizational document
of either Obligor or (iii) result in any violation of any statute or any
judgment, order, decree, rule or regulation of any court or arbitrator or
governmental agency or body having jurisdiction over either Obligor or any of
its properties or assets, except such violation as would not reasonably be
expected to result in a Material Effect and except for blue sky laws and federal
securities laws.
(n) All consents, permissions, permits or decrees required by
any applicable law (collectively, the "Requisite Governmental Approvals") which
are required, as of the date of the closing of the Acquisition, to be obtained
by, in the name of or on behalf of either Obligor in connection with (i) the
issuance of the Bonds and (ii) the due execution, delivery and performance of
each of the Transaction Documents by each Obligor party thereto will be duly
obtained other than as may be required to be obtained or made under the
Securities Act and applicable state securities laws as provided in the
Registration Rights Agreement unless the failure to obtain such Requisite
Governmental Approval would not reasonably be expected to result in a Material
Adverse Effect and neither Obligor has received notification of any revocation,
modification or other non-renewal of such Requisite Governmental Approval except
such revocation, modification or non-renewal that would not reasonably be
expected to result in a Material Adverse Effect.
(o) PricewaterhouseCoopers LLP are independent certified
public accountants with respect to each Obligor within the meaning of Rule 101
of the Code of Professional Conduct of the American Institute of Certified
Public Accountants ("AICPA") and its interpretations and rulings thereunder. The
historical carve-out financial statements (including the related notes)
contained in the Offering Memorandum have been prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods covered thereby, except as may be set forth in such financial
statements, and fairly present the financial position of the entities purported
to be covered thereby at the respective dates indicated and the results of their
operations and their cash flows for the respective periods indicated; and the
financial information contained in the Offering Memorandum under the headings
"Capitalization", "Selected Financial Data of Cajun Electric (Cajun Facilities)"
and "Management's Discussion and Analysis of Financial Condition and Results of
Operations" are derived from the accounting records of such entities and fairly
present the information purported to be shown thereby. The pro forma financial
information contained in the Offering Memorandum has been prepared on a basis
consistent with the historical financial statements contained in the Offering
Memorandum (except for the pro forma adjustments specified therein), gives
effect to reasonable assumptions which were
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reasonably arrived at by, and represent the views of, each Obligor and fairly
presents the historical and proposed transactions contemplated by the Offering
Memorandum and the Transaction Documents. The other historical financial and
statistical information and data included in the Offering Memorandum are, in all
material respects, fairly presented.
(p) There are no legal or governmental proceedings pending to
which either Obligor is a party or of which any property or assets of either
Obligor are the subject which would reasonably be expected to result in a
Material Adverse Effect; and to the best knowledge of either Obligor, no such
proceedings are threatened by governmental authorities or threatened by others.
(q) No action, suit or proceeding is pending against or, to
the best knowledge of either Obligor, threatened against or affecting such
Obligor before any court or arbitrator or any governmental agency, body or
official, domestic or foreign, which could reasonably be expected to interfere
with or adversely affect the issuance of the Bonds or in any manner draw into
question the validity or enforceability of any of the Transaction Documents or
any action taken or to be taken pursuant thereto other than such actions, suits
or proceeding which would not reasonably be expected to result in a Material
Adverse Effect; and the Issuer has complied with any and all requests to the
Issuer by any securities authority in any jurisdiction for additional
information to be included in the Preliminary Offering Memorandum and the
Offering Memorandum.
(r) Neither Obligor is (i) in violation of its formation
documents, (ii) in default, and no event has occurred which, with notice or
lapse of time or both, would constitute such a default, in the due performance
or observance of any term, covenant or condition contained in any Finance
Document or material Project Document to which it is a party or by which it is
bound or to which any of its property or assets is subject, or (iii) in
violation of any law, ordinance, governmental rule, regulation or court decree
to which it or its property or assets may be subject, except in the case of
clause (i), (ii) or (iii) as would not reasonably be expected to result in a
Material Adverse Effect.
(s) Each Obligor is a partnership for federal income tax
purposes. Each Obligor has filed or caused to be filed all federal, state, local
and foreign income and franchise tax returns required to be filed through the
date hereof and has paid all taxes, fees, charges and assessments (collectively,
"Taxes") due thereon, other than Taxes the payment of which are subject to a
good faith contest and for which adequate reserves have been established.
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(t) Neither Obligor is (i) an "investment company" or a
company "controlled by" an investment company within the meaning of the
Investment Company Act of 1940, as amended (the "Investment Company Act"), and
the rules and regulations of the Commission thereunder, or (ii) a "public
utility holding company," an "electric utility company" or a "holding company"
within the meaning of the Public Utility Holding Company Act of 1935, as amended
("PUHCA"), nor subject to regulation under PUHCA except pursuant to Section
9(a)(2) or Section 32 thereof. The Subsidiary Guarantor is an "Exempt Wholesale
Generator," as such term is defined in PUHCA.
(u) Each Obligor maintains a system of internal accounting
controls sufficient to provide reasonable assurance that: (i) transactions are
executed in accordance with management's general or specific authorizations;
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(v) All insurance policies that are required to be in place as
of the closing date of the Acquisition, pursuant to the Transaction Documents,
will be in place and will be in full force and effect. Neither Obligor has
received any notice from any insurer or reinsurer that any insurance policy has
ceased to be in full force and effect or claiming that the insurer's or
reinsurer's liability under any insurance policy can be reduced or avoided.
(w) As of the closing date of the Acquisition, each Obligor
will own or possess adequate rights to use all material patents, patent
applications, trademarks, service marks, trade names, trademark registrations,
service mark registrations, copyrights, licenses and know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures) necessary for the operation of the Project
except where the failure to do so would not reasonably be expected to result in
a Material Adverse Effect; and the operation of the Project will not conflict in
any material respect with, and neither Obligor has received any notice of any
claim of conflict with, any such rights of others which would reasonably be
expected to result in a Material Adverse Effect.
(x) As of the closing date of the Acquisition, each Obligor
will have good and marketable title in fee simple to, or will have valid rights
to lease or otherwise
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use, the Mortgaged Property and personal property which are material to the
business of such Obligor, in each case free and clear of all liens,
encumbrances, claims and defects and imperfections of title except such as (i)
do not materially interfere with the use made and proposed to be made of such
property by such Obligor or (ii) would not reasonably be expected to have a
Material Adverse Effect.
(y) Neither Obligor sponsors, maintains, administers,
contributes to, participates in or has any obligation to contribute to or any
liability under, any Plan, nor since the date which is six (6) years immediately
preceding the Closing Date has either Obligor established, sponsored,
maintained, administered, contributed to, participated in or had any obligation
to contribute to or any liability under, any Plan. No accumulated funding
deficiency (as defined in Section 412 of the Code or Section 302 of ERISA) or
Reportable Event has occurred with respect to any Plan. There are no Unfunded
Benefit Liabilities under any Plan. Each Obligor and each member of its ERISA
Controlled Group have complied with the requirements of Section 515 of ERISA
with respect to each Multiemployer Plan and are not in "default" (as defined in
Section 4219(c)(5) of ERISA) with respect to payments to a Multiemployer Plan.
The aggregate potential total withdrawal liability, and the aggregate potential
annual withdrawal liability payments of each Obligor and the members of its
ERISA Controlled Group as determined in accordance with Title IV of ERISA as if
each Obligor and the members of its ERISA Controlled Group had completely
withdrawn from all Multiemployer Plans is not greater than $500,000 and $50,000,
respectively. To the best knowledge of each Obligor and each member of its ERISA
Controlled Group, no Multiemployer Plan is or is likely to be in reorganization
(as defined in Section 4241 of ERISA or Section 418 of the Code) or is insolvent
(as defined in Section 4245 of ERISA). No material liability to the PBGC (other
than required premium payments), the Internal Revenue Service, any Plan or any
trust established under Title IV of ERISA has been, or is expected by either
Obligor or any member of its ERISA Controlled Group to be, incurred by such
Obligor or any member of its ERISA Controlled Group. Neither Obligor nor any
member of its ERISA Controlled Group has any contingent liability with respect
to any post-retirement benefit under any "welfare plan" (as defined in Section
3(1) of ERISA), other than liability for continuation coverage under Part 6 of
Title I of ERISA. No Lien under Section 412(n) of the Code or 302(f) of ERISA or
requirement to provide security under Section 401(a)(29) of the Code or Section
307 of ERISA has been or is reasonably expected by either Obligor or any member
of its ERISA Controlled Group to be imposed on the assets of such Obligor or any
member of its ERISA Controlled Group.
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(z) Neither Obligor has received any notices, claims, demands
or similar communications by any Person alleging potential liability (including,
without limitation, potential liability for investigatory costs, cleanup costs,
governmental response costs, natural resources damages, property damages,
personal injuries, fines or penalties) arising out of, based on or resulting
from (i) the presence, or release into the environment, of any chemicals,
pollutants, contaminants, wastes, toxic substances, petroleum and petroleum
products at any location, whether or not owned by such Person or (ii)
circumstances forming the basis of any violation, or alleged violation, of any
environmental law of environmental approval which would reasonably be expected
to result in a Material Adverse Effect.
(aa) Except as provided in this Agreement, neither Obligor is
a party to any contract, agreement or understanding with any person that would
give rise to a valid claim against either Obligor or the Initial Purchasers for
a brokerage commission, finder's fee or like payment in connection with the
offering and sale of the Bonds.
(ab) The Bonds satisfy the eligibility requirements of Rule
144A(d)(3) under the Securities Act.
(ac) None of the Obligors, any of their affiliates or any
Person acting on its or their behalf has engaged or will engage in any directed
selling efforts (as such term is defined in Regulation S under the Securities
Act ("Regulation S")), and all such persons have complied and will comply with
the offering restrictions requirement of Regulation S to the extent applicable.
(ad) Neither Obligor has, directly or through any agent (other
than the Initial Purchasers as to which the Issuer makes no representation),
sold, offered for sale, solicited offers to buy or otherwise negotiated in
respect of, any security (as such term is defined in the Securities Act), which
sale, offer, solicitation or negotiation will be integrated with the sale of the
Bonds in a manner that would require registration of the Bonds under the
Securities Act.
(ae) None of the Obligors or any of their affiliates or any
other person acting on its or their behalf has engaged, in connection with the
offering of the Bonds, in any form of general solicitation or general
advertising within the meaning of Rule 502(c) under the Securities Act.
(af) There are no securities of either Obligor registered
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
listed on a
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national securities exchange or quoted in a U.S. automated inter-dealer
quotation system.
(ag) Neither Obligor has taken and will not take, directly or
indirectly, any action prohibited by Regulation M under the Exchange Act in
connection with the offering of the Bonds.
(ah) No forward-looking statement (within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act) contained
in the Preliminary Offering Memorandum or the Offering Memorandum has been made
or reaffirmed without a reasonable basis or has been disclosed other than in
good faith.
(ai) Since the date as of which information is given in the
Offering Memorandum, except as otherwise stated therein, (i) there has been no
material adverse change, and there has not been any development involving a
prospective material adverse change, in the financial condition, or in the
earnings, business affairs or management of either Obligor, whether or not
arising in the ordinary course of business, (ii) neither Obligor has incurred
any material liability or obligation, direct or contingent, other than in the
ordinary course of business, (iii) neither Obligor has entered into any material
transaction other than in the ordinary course of business, (iv) there has not
been any change in the equity interest or long-term debt of either Obligor, or
any dividend or distribution of any kind declared, paid or made by either
Obligor on any of its equity interests or (v) there has been no material adverse
change in the financial condition, or in the earnings, business affairs,
management or prospects of NRG Power Marketing, whether or not arising in the
ordinary course of business, which, solely with respect to clause (v), would
reasonably be expected to have a Material Adverse Effect.
(aj) Upon closing of the Acquisition, the Security Documents
will create, as security for the Bonds, valid and enforceable perfected Liens on
all of the Collateral, in favor of the Collateral Agent for the ratable benefit
of the Secured Parties, subject to no Liens other than Permitted Liens. All
governmental filings or approvals necessary or desirable to perfect such Liens
have been duly effected or taken or will be duly affected or taken on or before
the closing date of the Acquisition.
(ak) The sale price of the Acquired Assets was not established
through means of collusion or fraud and the confirmation order was not obtained
through means such as mistake, inadvertence or fraud.
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2. Purchase and Resale of the Bonds. (a) On the basis of the
representations, warranties and agreements contained herein, and subject to the
terms and conditions set forth herein, the Issuer agrees to issue and sell to
each of the Initial Purchasers, severally and not jointly, and each of the
Initial Purchasers, severally and not jointly, agrees to purchase from the
Issuer, the principal amount of Bonds set forth opposite the name of such
Initial Purchaser on Schedule 1 hereto at a purchase price equal to 99.125% of
the principal amount thereof. The Issuer shall not be obligated to deliver any
of the Bonds except upon payment for all of the Bonds to be purchased as
provided herein.
(b) The Initial Purchasers agree with the Issuer that they
will offer the Bonds for resale upon the terms and subject to the conditions set
forth herein and in the Offering Memorandum. Each Initial Purchaser, severally
and not jointly, represents and warrants to, and agrees with, the Issuer that:
(i) it is purchasing the Bonds pursuant to a private sale exemption from
registration under the Securities Act; (ii) it has not solicited offers for, or
offered or sold, and will not solicit offers for, or offer or sell, the Bonds by
means of any form of general solicitation or general advertising within the
meaning of Rule 502(c) of Regulation D under the Securities Act ("Regulation D")
or in any manner involving a public offering within the meaning of Section 4(2)
of the Securities Act; and (iii) it has solicited and will solicit offers for
the Bonds only from, and has offered or sold and will offer, sell or deliver the
Bonds, as part of its initial offering, only (A) to persons whom it reasonably
believes to be qualified institutional buyers ("Qualified Institutional Buyers")
as defined in Rule 144A under the Securities Act, or if any such person is
buying for one or more institutional accounts for which such person is acting as
fiduciary or agent, only when such person has represented to it that each such
account is a Qualified Institutional Buyer to whom notice has been given that
such sale or delivery is being made in reliance on Rule 144A and in each case,
in transactions in accordance with Rule 144A or from institutional Accredited
Investors within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act in minimum denominations of $250,000, and (B) outside the United
States to persons other than U.S. persons in reliance on Regulation S under the
Securities Act ("Regulation S").
(c) In connection with the offer and sale of Bonds in reliance
on Regulation S, each Initial Purchaser, severally and not jointly, represents,
warrants and agrees that:
(i) The Bonds have not been registered under the Securities
Act and may not be offered or sold within the United States or to, or
for the account or benefit
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of, U.S. persons except pursuant to an exemption from, or in
transactions not subject to, the registration requirements of the
Securities Act.
(ii) Such Initial Purchaser has offered and sold the Bonds,
and will offer and sell the Bonds, (A) as part of their distribution at
any time and (B) otherwise until 40 days after the later of the
commencement of the offering of the Bonds and the Closing Date, only in
accordance with Regulation S or Rule 144A or any other available
exemption from registration under the Securities Act.
(iii) None of such Initial Purchasers or any of its affiliates
or any other person acting on its or their behalf has engaged or will
engage in any directed selling efforts with respect to the Bonds, and
all such persons have complied and will comply with the offering
restrictions requirement of Regulation S.
(iv) at or prior to the confirmation of sale of any Bonds sold
in reliance on Regulation S, it will have sent to each distributor,
dealer or other person receiving a selling concession, fee or other
remuneration that purchase Bonds from it during the restricted period a
confirmation or notice to substantially the following effect:
"The Bonds covered hereby have not been registered under the
U.S. Securities Act of 1933, as amended (the "Securities
Act"), and may not be offered or sold within the United States
or to, or for the account or benefit of, U.S. persons (i) as
part of their distribution at any time or (ii) otherwise until
40 days after the later of the commencement of the offering of
the Bonds and the date of original issuance of the Bonds,
except in accordance with Regulation S or Rule 144A or any
other available exemption from registration under the
Securities Act. Terms used above have the meanings given to
them by Regulation S."
(v) it has not and will not enter into any contractual
arrangement with any distributor with respect to the distribution of
the Bonds, except with its affiliates or with the prior written consent
of the Issuer.
Terms used in this Section 2(c) have the meanings given to them by Regulation S.
(d) Each Initial Purchaser, severally and not jointly,
represents, warrants and agrees that (i) it has not offered or sold and prior to
the date six months after the Closing Date will not offer or sell any Bonds to
persons in the United Kingdom except
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to persons whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for the purposes of
their businesses or otherwise in circumstances which have not resulted and will
not result in an offer to the public in the United Kingdom within the meaning of
the Public Offers of Securities Regulations 1995; (ii) it has complied and will
comply with all applicable provisions of the Financial Services Act 1986 and the
Public Offers of Securities Regulations 1995 with respect to anything done by it
in relation to the Bonds in, from or otherwise involving the United Kingdom; and
(iii) it has only issued or passed on and will only issue or pass on in the
United Kingdom any document received by it in connection with the issue of the
Bonds to a person who is of a kind described in Article 11(3) of the Financial
Services Act 1986 (Investment Advertisements) (Exemptions) Order 1996 or is a
person to whom such document may otherwise lawfully be issued or passed on.
(e) Each Initial Purchaser, severally and not jointly, agrees
that, prior to or simultaneously with the confirmation of sale by such Initial
Purchaser to any purchaser of any of the Bonds purchased by such Initial
Purchaser from the Issuer pursuant hereto, such Initial Purchaser shall furnish
to that purchaser a copy of the Offering Memorandum (and any amendment or
supplement thereto that the Issuer shall have furnished to such Initial
Purchaser prior to the date of such confirmation of sale). In addition to the
foregoing, each Initial Purchaser acknowledges and agrees that the Issuer and,
for purposes of the opinions to be delivered to the Initial Purchasers pursuant
to Sections 5(d) and (e), counsel for the Issuer and for the Initial Purchasers,
respectively, may rely upon the accuracy of the representations and warranties
of the Initial Purchasers and their compliance with their agreements contained
in this Section 2, and each Initial Purchaser hereby consents to such reliance.
(f) The Issuer acknowledges and agrees that the Initial
Purchasers may sell Bonds to any affiliate of an Initial Purchaser and that any
such affiliate may sell Bonds purchased by it to an Initial Purchaser; provided
that such sale is in compliance with clause (b) of this Section 2 and such
affiliate complies with such clause.
3. Delivery of and Payment for the Bonds. (a) Delivery of and
payment for the Bonds shall be made at the offices of Skadden, Arps, Slate,
Meagher & Flom LLP, New York, New York, or at such other place as shall be
agreed upon by the Initial Purchasers and the Issuer, at 10:00 A.M., New York
City time, on March 30, 2000, or at such other time or date, not later than
seven full business days thereafter, as shall be agreed upon by the
Representatives and the Issuer (such date and time of payment and delivery being
referred to herein as the "Closing Date").
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(b) On the Closing Date, payment of the purchase price for the
Bonds shall be made to the Issuer by wire or book-entry transfer of same-day
funds to such account or accounts as the Issuer shall specify prior to the
Closing Date or by such other means as the parties hereto shall agree prior to
the Closing Date against delivery to the Initial Purchasers of the certificates
evidencing the Bonds. Time shall be of the essence, and delivery at the time and
place specified pursuant to this Agreement is a further condition of the
obligations of the Initial Purchasers hereunder. Upon delivery, the Bonds shall
be in global form, registered in such names and in such denominations as CSI on
behalf of the Initial Purchasers shall have requested in writing not less than
two full business days prior to the Closing Date. The Issuer agrees to make one
or more global certificates evidencing the Bonds available for inspection by CSI
on behalf of the Initial Purchasers in New York, New York at least 24 hours
prior to the Closing Date.
4. Further Agreements of the Issuer. The Issuer agrees with
each of the several Initial Purchasers:
(a) at any time prior to the completion of the initial resale
of the Bonds by the Initial Purchasers, (i) to advise the Initial Purchasers
promptly and, if requested, confirm such advice in writing, of the happening of
any event which makes any statement of a material fact made in the Offering
Memorandum untrue or which requires the making of any additions to or changes in
the Offering Memorandum (as amended or supplemented from time to time) in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; and (ii) to advise the Initial Purchasers
promptly of any order preventing or suspending the use of the Preliminary
Offering Memorandum or the Offering Memorandum, of any suspension of the
qualification of the Bonds for offering or sale in any jurisdiction and of the
initiation or threatening of any proceeding for any such purpose; and to use its
reasonable best efforts to prevent the issuance of any such order preventing or
suspending the use of the Preliminary Offering Memorandum or the Offering
Memorandum or suspending any such qualification and, if any such suspension is
issued, to use its reasonable best efforts to obtain the lifting thereof as soon
as is practicable;
(b) to furnish promptly to each of the Initial Purchasers and
counsel for the Initial Purchasers, without charge, prior to the completion of
the initial resale of the Bonds by the Initial Purchasers or the date which is
six months following the Closing Date, whichever is earlier, as many copies of
the Preliminary Offering Memorandum and the Offering Memorandum (and any
amendments or supplements thereto) as may be reasonably requested;
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<PAGE> 16
(c) prior to making any amendment or supplement to the
Offering Memorandum, to furnish a copy thereof to each of the Initial Purchasers
and counsel for the Initial Purchasers and not to effect any such amendment or
supplement to which the Initial Purchasers shall reasonably object by notice to
the Issuer after a reasonable period to review;
(d) if, at any time prior to the completion of the resale of
the Bonds by the Initial Purchasers, any event shall occur or condition exist as
a result of which it is necessary, in the opinion of counsel for the Initial
Purchasers or counsel for the Issuer, to amend or supplement the Offering
Memorandum in order that the Offering Memorandum will not include an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances existing at
the time it is delivered to a transferee of any Initial Purchaser, not
misleading, or if it is necessary to amend or supplement the Offering Memorandum
to comply with applicable law, to promptly prepare such amendment or supplement
as may be necessary to correct such untrue statement or omission or so that the
Offering Memorandum, as so amended or supplemented, will comply with applicable
law;
(e) for so long as the Bonds are outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act, to furnish to holders of the Bonds and prospective purchasers of
the Bonds designated by such holders, upon request of such holders or such
prospective purchasers, the information required to be delivered pursuant to
Rule 144A(d)(4) under the Securities Act, unless the Issuer is then subject to
and in compliance with Section 13 or 15(d) of the Exchange Act (the foregoing
agreement being for the benefit of the holders from time to time of the Bonds
and prospective purchasers of the Bonds designated by such holders);
(f) to promptly use its reasonable best efforts to take from
time to time such actions as the Initial Purchasers may reasonably request to
qualify the Bonds for offering and sale under the securities or Blue Sky laws of
such states of the United States as the Initial Purchasers may designate and to
continue such qualifications in effect for so long as required for the resale of
the Bonds by the Initial Purchasers, and to arrange for the determination of the
eligibility for investment of the Bonds under the laws of such states of the
United States as the Initial Purchasers may reasonably request; provided that
the Issuer and its subsidiaries shall not be obligated to qualify as foreign
corporations or as a dealer in securities in any jurisdiction in which they are
not so qualified or to file a general consent to service of process in any
jurisdiction or take any other action that will subject the Issuer to any tax it
would not otherwise be subject to;
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<PAGE> 17
(g) to assist the Initial Purchasers in arranging for the
Bonds to be designated Private Offerings, Resales and Trading through Automated
Linkages ("PORTAL") Market securities in accordance with the rules and
regulations adopted by the National Association of Securities Dealers, Inc.
("NASD") relating to trading in the PORTAL Market and for the Bonds to be
eligible for clearance and settlement through The Depository Trust Company
("DTC");
(h) not to, and to cause its affiliates not to, sell, offer
for sale or solicit offers to buy or otherwise negotiate in respect of any
security (as such term is defined in the Securities Act) the offer or sale of
which could be integrated with the sale of the Bonds in a manner which would
require registration of the Bonds under the Securities Act;
(i) except following the effectiveness of the Exchange Offer
Registration Statement or the Shelf Registration Statement, as the case may be,
not to, and to cause its affiliates not to, authorize or knowingly permit any
person acting on their behalf to, solicit any offer to buy or offer to sell the
Bonds by means of any form of general solicitation or general advertising within
the meaning of Regulation D or in any manner involving a public offering within
the meaning of Section 4(2) of the Securities Act; and not to offer, sell,
contract to sell or otherwise dispose of, directly or indirectly, any securities
under circumstances where such offer, sale, contract or disposition would cause
the exemption afforded by Section 4(2) of the Securities Act to cease to be
applicable to the offering and sale of the Bonds as contemplated by this
Agreement and the Offering Memorandum;
(j) except as required by the Registration Rights Agreement,
for a period of 180 days from the date of the Offering Memorandum, not to offer
for sale, sell, contract to sell or otherwise dispose of, directly or
indirectly, or file a registration statement for, or announce any offer, sale,
contract for sale of or other disposition of, any debt securities issued or
guaranteed by either Obligor (other than the Bonds) without the prior written
consent of the Initial Purchasers;
(k) during the period from the Closing Date until two years
after the Closing Date, without the prior written consent of the Initial
Purchasers, not to, and not permit any of its affiliates (as defined in Rule 144
under the Securities Act) to, resell any of the Bonds that have been reacquired
by them, except for Bonds purchased by the Issuer or any of its affiliates and
resold in a transaction registered under the Securities Act;
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<PAGE> 18
(l) in connection with the offering of the Bonds, until CSI on
behalf of the Initial Purchasers shall have notified the Issuer of the
completion of the resale of the Bonds, not to, and to cause its affiliated
purchasers (as defined in Regulation M under the Exchange Act) not to, either
alone or with one or more other persons, bid for or purchase, for any account in
which it or any of its affiliated purchasers has a beneficial interest, any
Bonds, or attempt to induce any person to purchase any Bonds; and not to, and to
cause its affiliated purchasers not to, make bids or purchase for the purpose of
creating actual, or apparent, active trading in or of raising the price of the
Bonds;
(m) in connection with the offering of the Bonds, to make its
representatives, including independent accountants and legal counsel, reasonably
available upon request by the Initial Purchasers;
(n) to do and perform all things required to be done and
performed by it under this Agreement that are within its control prior to or
after the Closing Date, and to use its reasonable efforts to satisfy all
conditions precedent on its part to the delivery of the Bonds;
(o) except for actions described in the Offering Memorandum,
to not take any action prior to the execution and delivery of the Indenture
which, if taken after such execution and delivery, would have violated any of
the covenants contained in the Indenture;
(p) prior to the Closing Date, not to issue any press release
or other communication, directly or indirectly, or hold any press conference
with respect to either Obligor, its condition, financial or otherwise, or
earnings, business affairs or business prospects (except for routine oral
marketing communications in the ordinary course of business and consistent with
the past practices of the Obligors and of which the Initial Purchasers are
notified), without the prior written consent of the Initial Purchasers, unless
in the judgment of the Issuer and its counsel, and after notification to the
Initial Purchasers, such press release or communication is required by law; and
(q) to apply the net proceeds from the sale of the Bonds as
set forth in the Offering Memorandum under the heading "Use of Proceeds".
(r) The Subsidiary Guarantor shall use its best efforts to
obtain third party consents to assignment from each of the parties contracting
under any Project Document listed on Part A of Schedule II hereto with the
Subsidiary Guarantor, in each case to the reasonable satisfaction of each of the
Initial Purchasers.
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<PAGE> 19
5. Conditions of Initial Purchasers' Obligations. The
respective obligations of the several Initial Purchasers hereunder are subject
to the accuracy, on and as of the date hereof and the Closing Date, of the
representations and warranties of each Obligor contained herein, to the accuracy
of the statements of the each Obligor made in any certificates delivered
pursuant hereto, to the performance by each Obligor of its obligations
hereunder, and to each of the following additional terms and conditions:
(a) The Offering Memorandum (and any amendments or supplements
thereto) shall have been printed and copies distributed to the Initial
Purchasers as promptly as practicable on or following the date of this Agreement
or at such other date and time as to which the Initial Purchasers may agree; and
no stop order suspending the sale of the Bonds in any jurisdiction shall have
been issued, and no proceeding for that purpose shall have been commenced or
shall be pending or threatened.
(b) None of the Initial Purchasers shall have discovered and
disclosed to the Issuer on or prior to the Closing Date that the Offering
Memorandum or any amendment or supplement thereto contains an untrue statement
of a fact which, in the reasonable opinion of counsel for the Initial
Purchasers, is material or omits to state any fact which, in the reasonable
opinion of such counsel, is material and is required to be stated therein or is
necessary to make the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident
to the authorization, form and validity of each of the Transaction Documents and
the Offering Memorandum, and all other legal matters relating to the Transaction
Documents and the transactions contemplated thereby, shall be satisfactory in
all material respects to the Initial Purchasers, and each Obligor shall have
furnished to the Initial Purchasers all documents and information that they or
their counsel may reasonably request to enable them to pass upon such matters.
(d) (i) Gibson, Dunn & Crutcher LLP shall have furnished to
the Initial Purchasers their written opinion, as special New York counsel for
each Obligor and certain other parties specified therein, addressed to the
Initial Purchasers and dated the Closing Date, in form and substance reasonably
satisfactory to the Initial Purchasers, substantially to the effect set forth in
Annex A-1 hereto.
(ii) Jones, Walker, Waechter, Poitevent, Carrere and Denegre,
shall have furnished to the Initial Purchasers their written opinion,
as counsel to each Obligor, addressed to the Initial Purchasers and
dated the Closing Date, in form
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<PAGE> 20
and substance reasonably satisfactory to the Initial Purchasers,
substantially to the effect set forth in Annex A-2 hereto.
(iii) Van Ness Feldman shall have furnished to the Initial
Purchasers their written opinion, as federal regulatory counsel to the
Obligors, addressed to the Initial Purchasers and dated the Closing
Date, in form and substance reasonably satisfactory to the Initial
Purchasers, addressing federal regulatory issues related to each
Obligor.
(e) (i) The Initial Purchasers shall have received from
Skadden, Arps, Slate, Meagher & Flom LLP, special New York counsel for the
Initial Purchasers, such opinion or opinions, dated the Closing Date, with
respect to such matters as the Initial Purchasers may reasonably require, and
each Obligor shall have furnished to such counsel such documents and information
as they reasonably request for the purpose of enabling them to pass upon such
matters.
(ii) The Initial Purchasers shall have received from Liskow &
Lewis, Louisiana counsel for the Initial Purchasers, such opinion or
opinions, dated the Closing Date, with respect to such matters as the
Initial Purchasers may reasonably require, and each Obligor shall have
furnished to such counsel such documents and information as they
reasonably request for the purpose of enabling them to pass upon such
matters.
(f) The Issuer shall have furnished to the Initial Purchasers
a letter (the "Initial Letter") of PricewaterhouseCoopers LLP, addressed to the
Representatives and dated the date hereof, in form and substance satisfactory to
the Initial Purchasers, substantially to the effect set forth in Annex B hereto.
(g) The Issuer shall have furnished to the Initial Purchasers
a letter (the "Bring-Down Letter") of PricewaterhouseCoopers LLP, addressed to
the Representatives and dated the Closing Date, (i) confirming that they are
independent public accountants with respect to each Obligor within the meaning
of Rule 101 of the Code of Professional Conduct of the AICPA and its
interpretations and rulings thereunder, (ii) stating, as of the date of the
Bring-Down Letter (or, with respect to matters involving changes or developments
since the respective dates as of which specified financial information is given
in the Offering Memorandum, as of a date not more than three business days prior
to the date of the Bring-Down Letter), that the conclusions and findings of such
accountants with respect to the financial information and other matters
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covered by the Initial Letter are accurate, and (iii) confirming in all material
respects the conclusions and findings set forth in the Initial Letter.
(h) Each Obligor shall have furnished to the Initial
Purchasers a certificate, dated the Closing Date, executed on behalf of such
Obligor, stating that (A) such Obligor has examined the Offering Memorandum, (B)
in its opinion, the Offering Memorandum, as of its date, did not include any
untrue statement of a material fact and did not omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, and since the date of the Offering Memorandum, no event has occurred
which should have been set forth in a supplement or amendment to the Offering
Memorandum so that the Offering Memorandum (as so amended or supplemented) would
not include any untrue statement of a material fact and would not omit to state
a material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, (C) as of the Closing Date, the representations and
warranties of such Obligor in this Agreement are true and correct in all
material respects, such Obligor has complied in all material respects with all
agreements and satisfied in all material respects all conditions on its part to
be performed or satisfied hereunder on or prior to the Closing Date, and
subsequent to the date of the most recent financial statements contained in the
Offering Memorandum, there has been no material adverse change in the financial
position or results of operation of the Obligors, taken as a whole, or any
change, or any development including a prospective change, in or affecting the
financial condition, results of operations, business or prospects of the
Obligors, taken as a whole, except as set forth in the Offering Memorandum and
(D) no Default or Event of Default under any Finance Document shall have
occurred and be continuing.
(i) On or prior to the Closing Date, each Finance Document and
material Project Document shall have been executed and a copy thereof delivered
to the Initial Purchasers in form and substance reasonably satisfactory to the
Initial Purchasers. The Bonds shall have been duly authenticated by the Bond
Trustee.
(j) If any event shall have occurred that required the Issuer
under Section 4(d) to prepare an amendment or supplement to the Offering
Memorandum, such amendment or supplement shall have been prepared, the Initial
Purchasers shall have been given a reasonable opportunity to comment thereon,
and copies thereof shall have been delivered to the Initial Purchasers
reasonably in advance of the Closing Date.
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(k) There shall not have occurred any invalidation of Rule
144A under the Securities Act by any court or any withdrawal or proposed
withdrawal of any rule or regulation under the Securities Act or the Exchange
Act by the Commission or any amendment or proposed amendment thereof by the
Commission which, in the reasonable judgment of the Initial Purchasers, would
materially impair the ability of the Initial Purchasers to purchase, hold or
effect resales of the Bonds as contemplated hereby.
(l) Except as contemplated in the Offering Memorandum or any
Finance Document, subsequent to the execution and delivery of this Agreement or,
if earlier, the dates as of which information is given in the Offering
Memorandum (exclusive of any amendment or supplement thereto), there shall not
have been any change in either Obligor's equity or long-term debt or any change,
or any development involving a prospective change, in or affecting the financial
condition, results of operations, business or prospects of the Obligors taken as
a whole, the effect of which, in any such case described above, is, in the
reasonable judgment of the Initial Purchasers, so material and adverse as to
make it impracticable or inadvisable to proceed with the sale or delivery of the
Bonds on the terms and in the manner contemplated by this Agreement and the
Offering Memorandum (exclusive of any amendment or supplement thereto).
(m) No action shall have been taken, and no statute, rule,
regulation or order shall have been enacted, adopted or issued, by any
governmental agency or body which would, as of the Closing Date, prevent the
issuance or sale of the Bonds; and no injunction, restraining order or order of
any other nature by any federal or state court of competent jurisdiction shall
have been issued as of the Closing Date which would prevent the issuance or sale
of the Bonds;
(n) Subsequent to the execution and delivery of this Agreement
(i) no downgrading shall have occurred in the rating accorded the Bonds by any
Rating Agency, and (ii) no such organization shall have publicly announced that
it has under surveillance or review (other than an announcement with positive
implications of a possible upgrading), its rating of the Bonds.
(o) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange, the American Stock Exchange or the
over-the-counter market shall have been suspended or materially limited, or
minimum prices shall have been established on any such exchange or market by the
Commission, by any such
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<PAGE> 23
exchange or by any other regulatory body or governmental authority having
jurisdiction, or trading in any securities of the Issuer on any exchange or in
the over-the-counter market shall have been suspended, or (ii) any general
moratorium on commercial banking activities shall have been declared by federal
or New York state authorities, or (iii) an outbreak or escalation of hostilities
or a declaration by the United States of a national emergency or war, or (iv) a
material adverse change in general economic, political or financial conditions
(or the effect of international conditions on the financial markets in the
United States shall be such) the effect of which, in the case of this clause
(iv), is, in the reasonable judgment of the Initial Purchasers, so material and
adverse as to make it impracticable or inadvisable to proceed with the sale or
the delivery of the Bonds on the terms and in the manner contemplated by this
Agreement and in the Offering Memorandum (exclusive of any amendment or
supplement thereto).
(p) Stone & Webster (the "Independent Engineer") shall have
consented to the references to it in the Offering Memorandum and the inclusion
of the Independent Engineer's Report prepared by the Independent Engineer in
Appendix A to the Offering Memorandum; and shall have provided a certificate,
dated as of the Closing Date, confirming that since the date of the Independent
Engineer's Report, no event affecting the Independent Engineer's Report or the
matters referred to therein shall have occurred (i) which shall make untrue or
incorrect in any material respect, as of the Closing Date, any information or
statement contained in the Independent Engineer's Report or in the Offering
Memorandum relating to matters referred to in the Independent Engineer's Report,
or (ii) which shall cause the Offering Memorandum to omit to state a material
fact necessary in order to make the statements and information contained in the
Independent Engineer's Report, or in the Offering Memorandum relating to matters
referred to in the Independent Engineer's Report, in light of the circumstances
under which they were made, not misleading.
(q) Pace Global Energy Services (the "Independent Market
Consultant") shall have consented to the references to it in the Offering
Memorandum and the inclusion of the Independent Market Consultant's Report
prepared by the Independent Market Consultant in Appendix B to the Offering
Memorandum; and shall have provided a certificate, dated as of the Closing Date,
confirming that since the date of the Independent Market Consultant's Report, no
event affecting the Independent Market Consultant's Report or the matters
referred to therein shall have occurred (i) which shall make untrue or incorrect
in any material respect, as of the Closing Date, any information or statement
contained in the Independent Market Consultant's Report or in the Offering
Memorandum relating to matters referred to in the Independent Market
Consultant's Report, or (ii) which shall cause the Offering Memorandum to omit
to state a material
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<PAGE> 24
fact necessary in order to make the statements and information contained in the
Independent Market Consultant's Report, or in the Offering Memorandum relating
to matters referred to in the Independent Market Consultant's Report, in light
of the circumstances under which they were made, not misleading.
(r) Marsh USA, Inc. (the "Insurance Consultant") shall have
consented to the references to it in the Offering Memorandum; and shall have
provided a certificate, dated as of the Closing Date, confirming that since the
date of the Insurance Consultant's Report, no event affecting the Insurance
Consultant's Report or the matters referred to therein shall have occurred (i)
which shall make untrue or incorrect in any material respect, as of the Closing
Date, any information or statement contained in the Insurance Consultant's
Report or in the Offering Memorandum relating to matters referred to in the
Insurance Consultant's Report, or (ii) which shall cause the Offering Memorandum
to omit to state a material fact necessary in order to make the statements and
information contained in the Insurance Consultant's Report, or in the Offering
Memorandum relating to matters referred to in the Insurance Consultant's Report,
in light of the circumstances under which they were made, not misleading.
(s) On or prior to the Closing Date, each of the UCC-1
financing statements describing the Collateral and naming the Collateral Agent
as secured party (the "Financing Statements") shall have been delivered to the
Collateral Agent for filing, recordation and/or registration in each office and
in each jurisdiction where required to create and perfect a valid and
enforceable security interest in the Collateral covered or purported to be
covered by the Security Documents, with the priority purported to be created
thereby. All taxes and recording and filing fees required to be paid with
respect to the execution, recording or filing of the Financing Statements shall
have been paid or provided for.
(t) The Subsidiary Guarantor shall have obtained third party
consents to assignment from each of the parties contracting under any Project
Document listed on Part B of Schedule II hereto with the Subsidiary Guarantor,
in each case to the reasonable satisfaction of each of the Initial Purchasers
and including, without limitation, a legal opinion from such third party's
counsel with respect to such consent.
(u) NRG shall have made a cash equity contribution to the
Issuer of at least $247 million which shall be deposited by the Issuer into the
Escrow Account.
(v) The Subsidiary Guarantor shall have furnished to the
Initial Purchasers a certificate, dated the Closing Date, executed on behalf of
the Subsidiary
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<PAGE> 25
Guarantor, stating that the Acquisition Agreement, as amended, is in full force
and effect and no material term or condition thereof has been amended, modified
or waived since the date hereof (without the consent of the Initial Purchasers
(such consent not to be unreasonably withheld or delayed)).
(w) The Subsidiary Guarantor shall have furnished to the
Initial Purchasers a certificate, dated the Closing Date, executed on behalf of
the Subsidiary Guarantor, stating that there is no order, writ, judgment,
injunction, decree or determination of any governmental authority that directs
that the Acquisition not be consummated.
(x) The Subsidiary Guarantor shall have furnished to the
Initial Purchasers a certificate, dated the Closing Date, executed on behalf of
the Subsidiary Guarantor, stating that simultaneously with the closing of the
Acquisition, the Acquired Assets will be transferred free and clear of all
liens, encumbrances and other charges other than Permitted Liens.
(y) The Bonds shall have received a rating no lower than
"BBB-" from S&P and "Baa2" from Moody's.
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Initial Purchasers.
6. Termination. The obligations of the Initial Purchasers
hereunder may be terminated by the Initial Purchasers, in their absolute
discretion, by notice given to and received by the Issuer prior to delivery of
and payment for the Bonds if, prior to that time, any of the events described in
Section 5(k), (l), (m), (n) or (o) shall have occurred and be continuing.
7. Defaulting Initial Purchasers. (a) If, on the Closing Date,
any Initial Purchaser defaults in the performance of its obligations under this
Agreement, the non-defaulting Initial Purchaser shall make arrangements for the
purchase of the Bonds which such defaulting Initial Purchaser agreed but failed
to purchase; provided, however, that in the event the aggregate principal amount
of Bonds which the defaulting Initial Purchaser or Initial Purchasers agreed but
failed to purchase shall exceed one-eleventh of the aggregate principal amount
of Bonds set forth on Schedule I hereto, the non-defaulting Initial Purchasers
shall have the right to purchase all, but shall not be
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<PAGE> 26
under any obligation to purchase any of the Bonds. If such non-defaulting
Initial Purchasers do not purchase all of the Bonds, or if no such arrangements
are made within 36 hours after such default, this Agreement shall terminate
without liability on the part of the non-defaulting Initial Purchaser or the
Issuer, except that the Issuer will continue to be liable for the payment of
expenses to the non-defaulting Initial Purchasers to the extent set forth in
Sections 8 and 12 and except that the provisions of Sections 9 and 10 shall not
terminate and shall remain in effect. As used in this Agreement, the term
"Initial Purchasers" includes, for all purposes of this Agreement unless the
context otherwise requires, any party not listed in Schedule 1 hereto that,
pursuant to this Section 7, purchases Bonds which a defaulting Initial Purchaser
agreed but failed to purchase.
(b) Nothing contained herein shall relieve a defaulting
Initial Purchaser of any liability it may have to the Issuer or any
non-defaulting Initial Purchaser for damages caused by its default. If other
persons are obligated or agree to purchase the Bonds of a defaulting Initial
Purchaser, either the non-defaulting Initial Purchaser or the Issuer may
postpone the Closing Date for up to seven full business days in order to effect
any changes that in the opinion of counsel for the Issuer or counsel for the
non-defaulting Initial Purchaser may be necessary in the Offering Memorandum or
in any other document or arrangement, and the Issuer agrees to promptly prepare
any amendment or supplement to the Offering Memorandum that effects any such
changes.
8. Reimbursement of Initial Purchasers' Expenses. If (a) this
Agreement shall have been terminated pursuant to Section 6 or 7, (b) the Issuer
shall fail to tender the Bonds for delivery to the Initial Purchasers for any
reason permitted under this Agreement or (c) the Initial Purchasers shall
decline to purchase the Bonds for any reason permitted under this Agreement, the
Issuer shall reimburse the Initial Purchasers for such out-of-pocket expenses
(including reasonable fees and disbursements of counsel) as shall have been
reasonably incurred by the Initial Purchasers in connection with this Agreement
and the proposed purchase and resale of the Bonds. If this Agreement is
terminated pursuant to Section 7 by reason of the default of one or more of the
Initial Purchasers, the Issuer shall not be obligated to reimburse any
defaulting Initial Purchaser on account of such expenses.
9. Indemnification. (a) The Issuer shall indemnify and hold
harmless each Initial Purchaser, its affiliates, their respective officers,
directors, employees, representatives and agents, and each person, if any, who
controls any Initial Purchaser within the meaning of the Securities Act or the
Exchange Act (collectively referred to for purposes of this Section 9(a) and
Section 10 as an Initial Purchaser), from and
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<PAGE> 27
against any loss, claim, damage or liability, joint or several, or any action in
respect thereof (including, without limitation, any loss, claim, damage,
liability or action relating to purchases and sales of the Bonds), to which that
Initial Purchaser may become subject, whether commenced or threatened, under the
Securities Act, the Exchange Act, any other federal or state statutory law or
regulation, at common law or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in the Preliminary
Offering Memorandum or the Offering Memorandum or in any amendment or supplement
thereto or in any information provided by the Issuer pursuant to Section 4(e) or
(ii) the omission or alleged omission to state therein a material fact required
to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading, and
shall reimburse each Initial Purchaser promptly upon demand for any legal or
other expenses reasonably incurred by that Initial Purchaser in connection with
investigating or defending or preparing to defend against or appearing as a
third party witness in connection with any such loss, claim, damage, liability
or action as such expenses are incurred; provided, however, that the Issuer
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of, or is based upon, an untrue statement
or alleged untrue statement in or omission or alleged omission from any of such
documents in reliance upon and in conformity with any Initial Purchasers'
Information; and provided, further, that with respect to any such untrue
statement in or omission from the Preliminary Offering Memorandum, the indemnity
agreement contained in this Section 9(a) shall not inure to the benefit of any
such Initial Purchaser to the extent that the sale to the person asserting any
such loss, claim, damage, liability or action was an initial resale by such
Initial Purchaser and any such loss, claim, damage, liability or action of or
with respect to such Initial Purchaser results from the fact that both (A) to
the extent required by applicable law, a copy of the Offering Memorandum or any
amendment or supplement to the Offering Memorandum was not sent or given to such
person at or prior to the written confirmation of the sale of such Bonds to such
person and (B) the untrue statement in or omission from the Preliminary Offering
Memorandum or any amendment or supplement to the Offering Memorandum was
corrected in the Offering Memorandum or any amendment or supplement to the
Offering Memorandum, unless, in either case, such failure to deliver the
Offering Memorandum was a result of non-compliance by the Issuer with Section
4(b).
(b) Each Initial Purchaser, severally and not jointly, shall
indemnify and hold harmless the Issuer, its affiliates, their respective
officers, directors, employees, representatives and agents, and each person, if
any, who controls the Issuer within the
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<PAGE> 28
meaning of the Securities Act or the Exchange Act (collectively referred to for
purposes of this Section 9(b) and Section 10 as the Issuer), from and against
any loss, claim, damage or liability, joint or several, or any action in respect
thereof, to which the Issuer may become subject, whether commenced or
threatened, under the Securities Act, the Exchange Act, any other federal or
state statutory law or regulation, at common law or otherwise, insofar as such
loss, claim, damage, liability or action arises out of, or is based upon, (i)
any untrue statement or alleged untrue statement of a material fact contained in
the Preliminary Offering Memorandum or the Offering Memorandum or in any
amendment or supplement thereto or (ii) the omission or alleged omission to
state therein a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, but in each case only to the extent that
the untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with any Initial Purchasers'
Information, and shall reimburse the Issuer for any legal or other expenses
reasonably incurred by the Issuer in connection with investigating or defending
or preparing to defend against or appearing as a third party witness in
connection with any such loss, claim, damage, liability or action as such
expenses are incurred.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party pursuant to Section 9(a) or 9(b), notify the indemnifying
party in writing of the claim or the commencement of that action; provided,
however, that the failure to notify the indemnifying party shall not relieve it
from any liability which it may have under this Section 9 except to the extent
that it has been materially prejudiced (through the forfeiture of substantive
rights or defenses) by such failure; and, provided, further, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have to an indemnified party otherwise than under this Section 9. If any
such claim or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 9 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that an
indemnified party shall have the right to employ its own counsel in any such
action, but
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<PAGE> 29
the fees, expenses and other charges of such counsel for the indemnified party
will be at the expense of such indemnified party unless (1) the employment of
counsel by the indemnified party has been authorized in writing by the
indemnifying party, (2) the indemnified party has reasonably concluded (based
upon advice of counsel to the indemnified party) that there may be legal
defenses available to it or other indemnified parties that are different from or
in addition to those available to the indemnifying party, (3) a conflict or
potential conflict exists (based upon advice of counsel to the indemnified
party) between the indemnified party and the indemnifying party (in which case
the indemnifying party will not have the right to direct the defense of such
action on behalf of the indemnified party) or (4) the indemnifying party has not
in fact employed counsel reasonably satisfactory to the indemnified party to
assume the defense of such action within a reasonable time after receiving
notice of the commencement of the action, in each of which cases the reasonable
fees, disbursements and other charges of counsel will be at the expense of the
indemnifying party or parties. It is understood that the indemnifying party or
parties shall not, in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the reasonable fees, disbursements and
other charges of more than one separate firm of attorneys (in addition to any
local counsel) at any one time for all such indemnified party or parties. Each
indemnified party, as a condition of the indemnity agreements contained in
Sections 9(a) and 9(b), shall use all reasonable efforts to cooperate with the
indemnifying party in the defense of any such action or claim. No indemnifying
party shall be liable for any settlement of any such action effected without its
written consent (which consent shall not be unreasonably withheld), but if
settled with its written consent or if there be a final judgment for the
plaintiff in any such action, the indemnifying party agrees to indemnify and
hold harmless any indemnified party from and against any loss or liability by
reason of such settlement or judgment. No indemnifying party shall, without the
prior written consent of the indemnified party (which consent shall not be
unreasonably withheld), effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
The obligations of the Issuer and the Initial Purchasers in
this Section 9 and in Section 10 are in addition to any other liability that the
Issuer or the Initial Purchasers, as the case may be, may otherwise have,
including in respect of any breaches of representations, warranties and
agreements made herein by any such party.
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<PAGE> 30
Exhibit 1.1
10. Contribution. If the indemnification provided for in
Section 9 is unavailable or insufficient to hold harmless an indemnified party
under Section 9(a) or 9(b), then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable
by such indemnified party as a result of such loss, claim, damage or liability,
or action in respect thereof, (i) in such proportion as shall be appropriate to
reflect the relative benefits received by the Issuer on the one hand and the
Initial Purchasers on the other from the offering of the Bonds or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Issuer on
the one hand and the Initial Purchasers on the other with respect to the
statements or omissions that resulted in such loss, claim, damage or liability,
or action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Issuer on the one hand
and the Initial Purchasers on the other with respect to such offering shall be
deemed to be in the same proportion as the total net proceeds from the offering
of the Bonds purchased under this Agreement (before deducting expenses)
received by or on behalf of the Issuer, on the one hand, and the total
discounts and commissions received by the Initial Purchasers with respect to
the Bonds purchased under this Agreement, on the other, bear to the total gross
proceeds from the sale of the Bonds under this Agreement, in each case as set
forth in the table on the cover page of the Offering Memorandum. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to the Issuer or information
supplied by the Issuer on the one hand or to any Initial Purchasers'
Information on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Issuer and the Initial Purchasers agree that
it would not be just and equitable if contributions pursuant to this Section 10
were to be determined by pro rata allocation (even if the Initial Purchasers
were treated as one entity for such purpose) or by any other method of
allocation that does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, damage or liability, or action in respect thereof,
referred to above in this Section 10 shall be deemed to include, for purposes
of this Section 10, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending or preparing to
defend any such action or claim. Notwithstanding the provisions of this Section
10, no Initial Purchaser shall be required to contribute any amount in excess
of the amount by which the total discounts and commissions received by such
Initial Purchaser with respect to the Bonds purchased by it under this
Agreement exceeds the amount of any damages which such Initial Purchaser has
otherwise paid or become liable to pay by reason of
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<PAGE> 31
any untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Initial Purchasers'
obligations to contribute as provided in this Section 10 are several in
proportion to their respective purchase obligations and not joint.
11. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Initial Purchasers, the
Issuer and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except as
provided in Sections 9 and 10 with respect to affiliates, officers, directors,
employees, representatives, agents and controlling persons of the Issuer and the
Initial Purchasers and in Section 4(e) with respect to holders and prospective
purchasers of the Bonds. Nothing in this Agreement is intended or shall be
construed to give any person, other than the persons referred to in this Section
11, any legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision contained herein.
12. Expenses. The Issuer agrees with the Initial Purchasers to
pay (a) the costs incident to the authorization, issuance, sale, preparation and
delivery of the Bonds and any taxes payable in that connection; (b) the costs
incident to the preparation, printing and distribution of the Preliminary
Offering Memorandum, the Offering Memorandum and any amendments or supplements
thereto; (c) the costs of reproducing and distributing each of the Transaction
Documents; (d) the costs incident to the preparation, printing and delivery of
the certificates evidencing the Bonds, including stamp duties and transfer
taxes, if any, payable upon issuance of the Bonds; (e) the fees and expenses of
the Issuer's counsel and independent accountants; (f) the fees and expenses of
qualifying the Bonds under the Bonds laws of the several jurisdictions as
provided in Section 4(f) and of preparing, printing and distributing Blue Sky
Memoranda (including reasonable related fees and expenses of counsel for the
Initial Purchasers); (g) any fees charged by rating agencies for rating the
Bonds; (h) the reasonable fees and expenses of the Initial Purchasers, the Bond
Trustee, the Collateral Agent, the Depositary Bank and any paying agent
(including reasonable related fees and expenses of any counsel to such parties
(provided that the payment obligations with respect to fees of New York legal
counsel shall be in accordance with that certain letter, dated February 14,
2000, from Harold F. Moore to Christopher Lowe)); (i) all expenses and
application fees incurred in connection with the application for the inclusion
of the Bonds on the PORTAL Market and the approval of the Bonds for book-entry
transfer by DTC; (j) fees and expenses relating to the engagement of the
Independent
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<PAGE> 32
Consultants; and (k) all other costs and expenses incident to the performance of
the obligations of the Issuer under this Agreement which are not otherwise
specifically provided for in this Section 12.
13. Survival. The respective indemnities, rights of
contribution, representations, warranties and agreements of the Issuer and the
Initial Purchasers contained in this Agreement or made by or on behalf of the
Issuer or the Initial Purchasers pursuant to this Agreement or any certificate
delivered pursuant hereto shall survive the delivery of and payment for the
Bonds and shall remain in full force and effect, regardless of any termination
or cancellation of this Agreement or any investigation made by or on behalf of
any of them or any of their respective affiliates, officers, directors,
employees, representatives, agents or controlling persons.
14. Notices, etc.. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Initial Purchasers, shall be delivered or sent
by mail or telecopy transmission to Chase Securities Inc., 270 Park Avenue, New
York, New York 10017, Attention: Stephen B. Grant (telecopier no.: (212)
270-7487);
(b) if to the Issuer, shall be delivered or sent by mail or
telecopy transmission to NRG South Central Generating UC, 1221 Nicollet Mall,
Suite 700, Minneapolis, Minnesota 55403, Attention: General Counsel (telecopier
no.: (612) 373-5391); or
(c) if to the Subsidiary Guarantor, shall be delivered or sent
by mail or telecopy transmission to Louisiana Generating LLC, P.O. Box 15540,
Baton Rouge, Louisiana 70895, Attention: Alan Williams (telecopier no.: (225)
296-1746);
provided that any notice to an Initial Purchaser pursuant to Section 9(c) shall
also be delivered or sent by mail to such Initial Purchaser at its address set
forth on the signature page hereof. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Issuer shall be
entitled to act and rely upon any request, consent, notice or agreement given or
made on behalf of the Initial Purchasers by CSI.
15. Definition of Terms. For purposes of this Agreement,
(a) the term "business day" means any day on which the New York Stock Exchange,
Inc. is open for trading, (b) the term "subsidiary" has the meaning set forth in
Rule 405 under the
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Securities Act, and (c) except where otherwise expressly provided, the term
"affiliate" has the meaning set forth in Rule 405 under the Securities Act.
16. Initial Purchasers' Information. The parties hereto
acknowledge and agree that, for all purposes of this Agreement, the Initial
Purchasers' Information consists solely of the following information in the
Preliminary Offering Memorandum and the Offering Memorandum: (i) the last
paragraph on the front cover page concerning the terms of the offering by the
Initial Purchasers; (ii) the paragraph under the heading "Plan of Distribution"
concerning over-allotment and trading activities by the Initial Purchasers; and
(iii) the statements concerning the Initial Purchasers contained in the first
four and last two paragraphs under the heading "Plan of Distribution".
17. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.
18. Submission to Jurisdiction. (a) Any legal action or
proceeding against either Obligor with respect to this Agreement may be brought
in the courts of the State of New York in the County of New York or of the
United States for the Southern District of New York and, by execution and
delivery of this Agreement, each Obligor hereby irrevocably accepts for itself
and in respect of its property, generally and unconditionally, the jurisdiction
of the aforesaid courts. Each Obligor agrees that a judgment, after exhaustion
of all available appeals, in any such action or proceeding shall be conclusive
and binding upon such Obligor, and may be enforced in any other jurisdiction by
a suit upon such judgment, a certified copy of which shall be conclusive
evidence of the judgment. Each Obligor irrevocably consents to the service of
process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to such Obligor, at its address referred to in Section 14,
such service to become effective thirty (30) days after such mailing. Nothing
herein shall affect the right of the Bond Trustee or any other Person to serve
process in any other manner permitted by law or to commence legal proceedings
or otherwise proceed against either Obligor in any other jurisdiction.
(b) Each Obligor hereby irrevocably waives any objection which
it may now or hereafter have to the laying of venue of any of the aforesaid
actions or proceedings arising out of or in connection with this Agreement in
the courts referred to in clause (a) above and hereby further irrevocably
waives and agrees not to plead or claim in any such court that any such action
or proceeding brought in any such court has been brought in an inconvenient
forum.
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19. Counterparts. This Agreement may be executed in one or
more counterparts (which may include counterparts delivered by telecopier), and,
if executed in more than one counterpart, the executed counterparts shall each
be deemed to be an original, but all such counterparts shall together constitute
one and the same instrument.
20. Amendments. No amendment or waiver of any provision of
this Agreement, nor any consent or approval to any departure therefrom, shall in
any event be effective unless the same shall be in writing and signed by the
parties hereto.
21. Headings. The headings herein are inserted for
convenience of reference only and are not intended to be part of, or to affect
the meaning or interpretation of, this Agreement.
[The remainder of this page has been intentionally left blank.]
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If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return to us a counterpart hereof, whereupon this
instrument will become a binding agreement between the Obligors and the several
Initial Purchasers in accordance with its terms.
Very truly yours,
NRG SOUTH CENTRAL GENERATING LLC
By: /s/ Craig A. Mataczynski
________________________
Name: Craig A. Mataczynski
Title: President
LOUISIANA GENERATING LLC
By: /s/ Craig A. Mataczynski
________________________
Name: Craig A. Mataczynski
Title: Vice President
Agreed and Accepted:
CHASE SECURITIES INC.
By /s/ [illegible]
--------------------
Authorized Signatory
LEHMAN BROTHERS INC.
By /s/ [illegible]
--------------------
Authorized Signatory
<PAGE> 36
SCHEDULE 1
<TABLE>
<CAPTION>
Principal
Amount
Initial Purchasers of Bonds
------------------ --------
<S> <C>
Chase Securities Inc. $440,000,000
Lehman Brothers Inc. $280,000,000
Credit Suisse First Boston Corporation $ 40,000,000
Salomon Smith Barney Inc. $ 40,000,000
------------
Total $800,000,000
</TABLE>
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SCHEDULE II
PART A
SWEPCO PPA
MEAM PPA
SMEPA PPA
PART B
Power Marketing Agreement
Corporate Services Agreement (Issuer)
Corporate Services Agreement (Subsidiary Guarantor)
Operation and Management Services Agreement
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ANNEX A-1
[Form of Opinion of Special New York counsel for the Obligor]
(i) each Obligor, NRG Central U.S. LLC and South Central
Generation Holding LLC (collectively, the "Companies") is an existing
limited liability company in good standing under the laws of the State
of Delaware;
(ii) the Indenture and the other Documents specified on a
schedule to the opinion (the "Transaction Documents") to which any of
the Companies is party have been duly authorized, executed and
delivered; the issuance and sale of the Bonds have been duly
authorized, executed and delivered by the Issuer; making customary
assumptions regarding parties thereto other than the Companies, the
Indenture, the Bonds and such other Transaction Documents constitute
valid and legally binding obligations of such Company party thereto
enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors'
rights and to general equity principles except that the waiver set
forth in Section 5.11 of the Indenture may be unenforceable;
(iii) the Power Marketing Security Agreement is, with respect
to NRG Power Marketing, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles;
(iv) no Company is or, after giving effect to the offering and
sale of the Bonds and the application of the proceeds thereof as
contemplated by the Transaction Documents will be, an "investment
company" as defined in the Investment Company Act;
(v) to the best of our knowledge, no Governmental Approval is
required in connection with (x) the issuance of the Bonds and (y) the
execution, delivery and performance by any Company of the Transaction
Documents except for Governmental Approvals which have been obtained or
made prior to the date hereof or, that, if not made or obtained, would
not have a material adverse effect on the Obligors and their
subsidiaries, taken as a whole;
A-1-1
<PAGE> 39
(vi) the execution, delivery and performance by each Company
of each of the Transaction Documents to which it is a party and the
issuance and sale of the Bonds and compliance with the terms and
provisions thereof will not result in a breach or violation of any of
the terms and provisions of, or constitute a default under, to our
actual knowledge any statute, any rule, regulation or order of any
governmental agency or body or any court having jurisdiction over any
Company or any of their properties, or, based solely upon review of the
documents identified to us by officers of each Company as constituting
all material contracts of such Company, which are listed on a Schedule
to this opinion (the "Material Contracts"), any material agreement or
instrument to which any Company is a party or by which any Company is
bound or to which any of the properties of any Company is subject, or
the certificate of formation, limited liability company agreement,
certificate of incorporation or by-laws, as applicable. Each Company
has the power and authority to execute and deliver each of the
Transaction Documents to which it is a party and to perform its
obligations thereunder;
(vii) upon delivery to the Collateral Agent in the State of
New York of the membership certificates described in and in accordance
with the provisions of the Pledge Agreements (the "Pledged Shares"),
the Collateral Agent will have a valid and perfected security interest
in the Pledged Shares, securing the performance of the obligations of
the respective Obligors under the Finance Documents;
(viii) each Obligor has granted a valid security interest in
favor of the Collateral Agent in the Collateral described in the
Security Agreements and the Pledge Agreements securing the performance
of the obligations of such Obligor under the Finance Documents, to the
extent a security interest can be created therein under Article 9 of
the New York UCC;
(ix) the relevant provisions of the Indenture are effective to
perfect such security interests by control (as defined in Section
8-106) of the New York UCC), to the extent the Collateral constitutes
"security entitlements" and "securities accounts" (each as defined in
Article 8 of the New York UCC);
(x) upon the filing of the Financing Statements with the
governmental offices indicated on Schedule A, such security interest
in such Collateral will be perfected to the extent security interests
therein can be perfected by filing UCC-1 financing statements under
Article 9 of the New York UCC;
A-1-2
<PAGE> 40
(xi) assuming the Issuer uses the proceeds from the sale of
the Bonds as described under the caption "Use of Proceeds" in the
Offering Memorandum, neither the consummation of the transactions
contemplated by the Purchase Agreement nor the sale, issuance,
execution or delivery of the Bonds by the Issuer will violate
Regulation T, U, or X of the Federal Reserve Board;
(xii) to our actual knowledge, there exists no current or
pending legal or governmental actions, suits or proceedings against any
Obligor which would be required to be described in the Offering
Memorandum pursuant to Item 103 of S-K under the Securities Act of
1933, as amended (the "Securities Act"), if the Offering Memorandum
were a prospectus included in a registration statement on Form S-1
which are not described as so required;
(xiii) no registration of the Bonds under the Securities Act
or qualification of the Indenture under the Trust Indenture Act is
required in connection with the issuance and sale of the Bonds by the
Issuer and the offer, initial resale and delivery of the Bonds by the
Initial Purchasers in the manner contemplated by the Purchase Agreement
and the Offering Memorandum, it being understood that we do not express
any opinion as to any subsequent resale of any Bonds.
(xiv) the statements contained in the Offering Memorandum
under the captions "Summary of Certain Principal Agreements" and
"Description of Principal Financing Documents," insofar as they
constitute summaries of the documents referred to therein, fairly
summarize in all material respects the matters referred to therein; the
statements in the Offering Memorandum under the heading "Certain U.S.
Federal Tax Considerations for Non-U.S. Holders", to the extent that
they discuss matters of law or legal conclusions are correct in all
material respects;
Such counsel shall also state that such counsel has
participated in conferences with officers and other representatives of the
Companies, representatives of the independent auditors of the Obligors and your
representatives and counsel at which the contents of the Offering Memorandum
and related matters were discussed. Because the purpose of such counsel's
professional engagement was not to establish or confirm factual matters and
because the scope of such counsel's examination of the affairs of the Companies
did not permit such counsel to verify the accuracy, completeness or fairness of
the statements set forth in the Offering Memorandum, such counsel is not
passing upon and does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in such documents, except
to the
A-1-3
<PAGE> 41
extent set forth in the next sentence or in the preceding paragraphs of the
opinion. On the basis of the foregoing, and except for the financial statements
and schedules and other financial and statistical data included therein, as to
which such counsel expresses no opinion or belief, no facts have come to such
counsel's attention that lead such counsel to believe that the Offering
Memorandum, as of its date and as of the closing date, contained or contains an
untrue statement of a material fact or omitted or omits to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
A-1-4
<PAGE> 42
ANNEX A-2
[Form of Opinion of Louisiana counsel for the Obligors]
(i) each of the Transaction Documents governed by the laws of
the State of Louisiana (collectively, the "Louisiana Documents")
executed as of the Closing Date has been duly executed and delivered by
the Subsidiary Guarantor and each of the Louisiana Documents constitute
or, if executed in a form substantially similar to the applicable form
we have reviewed, will constitute a legally valid and binding
obligation of the Subsidiary Guarantor, enforceable in accordance with
its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles;
(ii) the Louisiana Public Service Commission Approval ("LPSC
Approval") that is required or will become required under applicable
Louisiana law for the ownership or operation of the Project is in full
force and effect and is not subject to any appeals or further
proceedings or to any unsatisfied condition that may allow modification
or revocation. The Subsidiary Guarantor is in compliance with the LPSC
Approval referred to in the immediately preceding sentence. LPSC
Approval is not required to be obtained by, in the name of, or on
behalf of either Obligor in connection with (x) the issuance of the
Bonds and (y) the execution, delivery and performance by each Obligor
of the Finance Documents;
(iii) the execution and delivery of each Transaction Document
to which the Subsidiary Guarantor is a party will not conflict with or
constitute a breach or violation of any Louisiana state statute, rule
or regulation applicable to the Subsidiary Guarantor;
(iv) the Mortgage is in an appropriate form for recordation
with the Clerk of Court and Recorder of Mortgages for the Parishes
listed on a schedule to the opinion for encumbering real property and
interests in real property;
(v) the recording of the Mortgage with the Clerk of Court
Offices listed on a schedule to the opinion is the only recording
necessary to give constructive notice to third parties of the lien of
the Mortgage on the real property interests described therein;
A-2-1
<PAGE> 43
(vi) there are no mortgage taxes or filing fees payable to the
State of Louisiana or any of its political subdivisions as a
consequence of the execution or delivery of the Louisiana Documents or
the creation of the indebtedness evidenced or secured by any of the
Louisiana Documents or the filing or recording of any of the Louisiana
Documents, except (i) normal filing fees payable to the Clerk of Court
Offices for normal recording fees; and (ii) any fee or charge payable
to any entity whose services may have been used to assist in such
filing and recordation;
(vii) each Financing Statement is in appropriate form for
filing in each jurisdiction where required to create and perfect a
valid and enforceable security interest in the collateral covered or
purported to be covered by the Guarantor Security Agreement. Upon the
proper filing of each such Financing Statement in such jurisdiction,
the security interest in favor of the Collateral Agent in the
collateral described in each Financing Statement which is subject to
Article 9 of the LAUCC will be perfected to the extent a security
interest in such collateral can be perfected by filing a Financing
Statement under the provisions of the LAUCC. Each LAUCC fixture filing
is in an appropriate form for recordation in the appropriate
jurisdiction as a fixture filing encumbering interests in any
"fixtures" (as such terms are defined in Article 9 of the LAUCC)
described in the fixture filing; and
(viii) such counsel has no reason to believe that the section
of the Offering Memorandum addressing state regulatory approvals, or
any amendment or supplement thereto, as of the date hereof and as of
the Closing Date, contained or contains any untrue statement of a
material fact or omitted or omits to state any material fact necessary
to make the statements therein not misleading; the descriptions of
statutes, legal and governmental proceedings and contracts and other
documents in the section of the Offering Memorandum addressing state
regulatory approvals are accurate and fairly present the relevant
information; it being understood that (a) such counsel need only
express an opinion insofar as the Offering Memorandum relates to
matters of Louisiana law or the Louisiana Documents and (b) such
counsel need express no opinion as to the financial statements or other
financial data contained in the Offering Memorandum.
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<PAGE> 44
ANNEX B
[Form of Initial Comfort Letter]
(i) they are independent certified public accountants with
respect to the Obligors within the meaning of Rule 101 of the Code of
Professional Conduct of the AICPA and its interpretations and rulings;
(ii) in their opinion, the audited financial statements
included in the Offering Memorandum and reported on by them comply in form in
all material respects with the accounting requirements of the Exchange Act and
the related published rules and regulations of the Commission thereunder that
would apply to the Offering Memorandum if the Offering Memorandum were a
prospectus included in a registration statement on Form S-1 under the
Securities Act (except that certain supporting schedules are omitted);
(iii) based upon a reading of the latest unaudited financial
statements made available by the Obligors, the procedures of the AICPA for a
review of interim financial information as described in Statement of Auditing
Standards No. 71, reading of minutes and inquiries of certain officials of the
Obligors who have responsibility for financial and accounting matters and
certain other limited procedures requested by the Initial Purchasers and
described in detail in such letter, nothing has come to their attention that
causes them to believe that (A) any unaudited financial statements included in
the Offering Memorandum do not comply as to form in all material respects with
applicable accounting requirements, (B) any material modifications should be
made to the unaudited financial statements included in the Offering Memorandum
for them to be in conformity with generally accepted accounting principles
applied on a basis substantially consistent with that of the audited financial
statements included in the Offering Memorandum or (C) the information included
under the headings "Capitalization", "Selected Financial Data of Cajun Electric
(Cajun Facilities)", "Management's Discussion and Analysis of Results of
Operations and Financial Condition" is not in conformity with the disclosure
requirements of Regulation S-K that would apply to the Offering Memorandum if
the Offering Memorandum were a prospectus included in a registration statement
on Form S-1 under the Securities Act;
(iv) based upon the procedures detailed in such letter with
respect to the period subsequent to the date of the last available balance
sheet, including reading of minutes and inquiries of certain officials of the
Obligors who have responsibility for
B-2
<PAGE> 45
financial and accounting matters, nothing has come to their attention that
causes them to believe that (A) at a specified date not more than three business
days prior to the date of such letter, there was any change in capital stock,
increase in long-term debt or decrease in net current assets as compared with
the amounts shown in the _________, __ unaudited balance sheet included in the
Offering Memorandum or (B) for the period from ___________, __ , to a specified
date not more than three business days prior to the date of such letter, there
were any decreases, as compared with the corresponding period in the preceding
year, in net sales, income from operations, EBITDA or net income, except in all
instances for changes, increases or decreases that the Offering Memorandum
discloses have occurred or which are set forth in such letter, in which case the
letter shall be accompanied by an explanation by the Obligors as to the
significance thereof unless said explanation is not deemed necessary by the
Initial Purchasers;
(v) they have performed certain other specified procedures as
a result of which they determined that certain information of an accounting,
financial or statistical nature (which is limited to accounting, financial or
statistical information derived from the general accounting records of the
Obligors set forth in the Offering Memorandum agrees with the accounting
records of the Obligors, excluding any questions of legal interpretation.
B-3
